VinayK-0305-Consumer Satisfaction Mesurement of Using Credit Cards

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Consumers Satisfaction Measurement In Using Credit Cards

________________________________________________________________________M P BIRLA INSTITUTE OF MANAGEMENT Page 1 of 79

CONSUMERS SATISFACTION MEASUREMENT IN USING

CREDIT CARD IN BANGALORE CITY

A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF

THE REQUIREMENTS FOR THE AWARD OF MBA DEGREE OF

BANGALORE UNIVERSITY.

Submitted By

Mr. VINAY.K

Reg.No-03XQCM6121

UNDER THE GUIDANCE OF

DR. K.V. PRABHAKAR

ADJUNCT PROFESSOR

M.P.BIRLA INSTITUTE OF MANAGEMENT

ASSOCIATE BHARTIYA VIDYA BHAVAN.

BANGALORE-560001

2003-2005


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DECLARATION

I hereby declare that this dissertation entitled Consumers Satisfaction

Measurement in Using Credit Cards in Bangalore City is the result of research work

carried out by me under the guidance ofDr.K.V.Prabhakar, Adjunct Professor, M P Birla

Institute of Management, Bangalore.

I further declare that this dissertation reflects my own efforts and that it has not been

submitted earlier to any other University or Institution for the award of any Degree or

Diploma or any other title of recognition.

Place: Bangalore

Date: 15th June 2005 (Mr. Vinay.K)


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CERTIFICATE

This is to certify that this dissertation entitled Consumers Satisfaction

Measurement in Using Credit Cards in Bangalore City is the result of the research work

carried out by Mr.K.Vinay under the guidance me.

Place: Bangalore (Dr.K.V.Prabhakar)

Date: 15th June 2005


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CERTIFICATE

This is to certify that this dissertation entitled Consumers Satisfaction

Measurement in Using Credit Cards in Bangalore City is the result of the research work

carried out by Mr.K.Vinay under the guidance of Dr.K.V.Prabhakar, Adjunct Professor,

MPBIM, Bangalore.

Place: Bangalore (Dr.Nagesh.S.Malavalli)

Date: 15th

June 2005 Principal


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ACKNOWLEDGEMENT

I extremely thankful to all those who have shared their views, opinions, ideas and

experiences with me in carrying out this research work. I am particularly indebted toDr.K.V.Prabhakar, Adjunct Professor, MPBIM Bangalore for his guidance.

I extend grateful thanks to Dr. Nagesh.S.Malavalli, Principal, MPBIM Bangalore

for providing me with the necessary academic support.

I also extend my warm debt of gratitude to my family, friends and well wishers for

their tremendous support and valuable suggestions.

(Vinay.K)


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LIST OF TABLES, CHARTS, DIAGRAMS AND GRAPHS:

Page no.- 6 Fig no. 1 Graph showing market share of credit cards

Page no.-21 Fig no. 2 Pie chart showing Sources of data collectionPage no.-22 Fig no. 3 Graph showing consumers awareness about

types of credit card

Page no.-23 Fig no. 4 Graph showing consumers actual holding of

type of card

Page no.-25 Fig no. 5 Graph showing consumers awareness about

terms of credit card

Page no.-26 Fig no. 6 Graph showing consumers overall ranking

on criteria being considered for issuing credit

card by credit card agencies

Page no.-28 Fig no. 7-12 Graph showing various reasons for buying

credit card.

Page no.-34 Fig no. 13 Pie chart showing Actual uses of credit card

by consumers

Page no.-35 Fig no. 14 Graph showing problems faced by

consumers as the credit card holders

Page no.-37 Fig no.15-18 Graph showing Consumers overall

experience as credit card holder

Page no.-41 Fig no.19-21 Graph showing Post purchase behavior of the

credit card holdersPage no.-44 Fig no.22-34 Graph showing overall satisfaction or

dissatisfaction as credit card holders


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CONTENTS:

Declaration ( I )

Certificate from internal guide ( II )

Certificate from principal (III)

Acknowledgement (IV)

List of tables, chart, diagram graph (V)

Executive summary (VI)

PART A (Theoretical frame work) Page no.

Chapter 1: Introduction .. 2

Chapter 2: Consumers satisfaction measurement (CSM).. 10

Chapter 3: Research objective 12

Chapter 4: Research methodology.. 13

Chapter 5: Data collection tools.. 15

Chapter 6: Research limitation 16

PART B (survey findings)

Chapter 7: Industry profile.. 18

Chapter 8: Data analysis and interpretation 21

A. Source of data collection 21

B. Consumers awareness about types of credit card 22

C. Consumers actual holding of type of card 23

D. Consumers awareness about the terms of credit card . 24

E. Consumers overall ranking on criteria being considered

for issuing credit card by credit card agencies 26


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Page no

F. Reasons for buying credit card 28

G. Actual uses of credit card by consumers 34

H. Problems faced by consumers as the credit card holders... 35

I. Consumers overall experience as credit card holder.. 37

J. Post purchase behavior of the credit card holders 41

K. Overall satisfaction or dissatisfaction as credit card holders.. 44

PART C (Conclusion and Recommendation)

Chapter 9: Major findings of research. 58

Chapter 10: Recommendations 60

Chapter 9: Directions for further research.. 62

Annexure:

Select Bibliography

Questionnaire


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PART A (THEORITICAL FRAMEWORK)

INTRODUCTION

CONSUMERS SATISFACTION MEASUREMENT

RESEARCH OBJECTIVE

RESEARCH METHODOLOGY

DATA COLLECTION TOOLS

RESEARCH LIMITATION

CHAPTER-1


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INTRODUCTION

Credit card is the most popular version of plastic money. It has beendefined as rectangular thin sheet of plastic, about the size of visiting card,

which enables the holders which enables the holder to products/services

without having to pay for them immediately.

Credit card originated in USA in 1930.Its use was widespread by 1950s.

The origin of bank credit has been traced to Jhon.C.Biggins, a consumer

credit card specialist at the Flat Bush National Bank of Brooklyn, New

York. In 1946, he launched a credit plan called charge-It

Different types of credit cards are; Affiliated cards, Charge cards,

Travel cards, Proprietary credit and Debit card. The others are Co-branded

credit card, Smart card, Individual card, Add on card and corporate card. A

credit can be domestic or international one. It can be demarcated as

premium, executive and classic and revolving credit facility as its pivot.

The convenience and the credit facility are the two main reasons behind

the proliferation of credit cards.

Three main steps involving in issuing the credit are:

Marketing

Issuing and approval of credit card

Collection


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The Diners group first brought the credit card to India in 1964. In real

sense, it was not a credit card; it was only a charge card. The central bank set

up first credit card operation in the country with the help of master card in

1981. The first rush into the business came way back in the last 1980s with

Citibank the rush peaked around 1993-94 when Standard Chartered, among

others came in with much flourish. In India credit card culture growing very

fast.

Selected foreign players in credit market in India include:

Citibank

Standard Chartered

HSBC AMEX

ANZ Grindlays.

Citibank offers various credit cards like Gold card, Silver card, Diners

card, and women card and IOC card. Standard chartered bank offers credit

cards like Global credit card, Photo credit card, RASOI for Gold standard and

Executive credit cardholders.

Selected Indian players that offer credit in India are:

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

Dena Bank

State Bank of India

HDFC Bank

ICICI Bank


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BRIEF ON CREDFIT CARD MARKET IN INDIA

Credit cards are gaining ground in India too. More and more banks are

encouraging their people to go in for credit cards. Besides the various freebies

and rewards doled out, customers feel it very convenient to carry a plastic card

rather than bundles of currency. The expected growth rate of credit card

business in India is 25-30%. With the advent of globalization and

privatization, the concept of credit cards is gaining popularity. Customers no

longer have to carry huge sums in their wallet. Most of the bill payments

including utility payments can be taken care by credit cards. Further, in India

at least, people perceive the card as astatus symbol.

In India, Citibank, Standard chartered and HSBC are the main players.

However, various Indian banks, both public and private, are entering into Joint

Ventures with international names like MasterCard and Visa. Recently,

BOBCARDS has launched a credit card, PARAS, in association with the

MasterCard International. Citibank is still the largest card issuer in the country

with the total of 1.5mn cards issued. As the corporate banking margins are

falling, the banks are focusing more on the retail segment. SBI and ICICI are

capturing the market at a very fast pace.

Citibank and ICICI Bank may have identical market share in terms of

credit card issuance but when it comes to spending patterns ICICI bank lags

far behind reveals Infoteks latest card industry survey.

Citibank and ICICI bank have 21% market share in the fast growing

credit card market but in terms of spends at merchant establishment, Citibank

garners a neat 26% while ICICI Bank has a mere 12% which is comparable to

that of SBI which ranks fourth in the issuance tally. These figures have been

compiled in consumer payment processing company; venture Infoteks fourth


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annual industry survey 2004. Total spends in the payment industry for the year

2003-04 was 20,555 crore at merchant establishments reflecting a growth of

28% previous year

Citibank is the leader in capturing 26% of the market share, followed by

standard chartered at 15%, ICICI and SBI at 12%, Amex at 11%, HSBC at 9%

and others 15%. The combined share in terms of spends of foreign bank are

about 66%. The average spend per card is RS 19,789 per annum. Private

Banks have shown phenomenal growth in the credit card market with card

issuance vaulting by 117% with the card base raising from 12.6 lakh to 27.3

lakh.

Foreign Banks followed with a 25% increase in the base, rising from

43.25 lakh to 54 lakh. Foreign banks acco0unted for around 53% of the credit

cards in India. The public sector Bank has shown the least growth of 10%,

rising from 20.23 lakh to 22.17 lakh cards.

In the private sector ICICI Bank and HDFC Bank are the two prominent

players holding a 26% share of market. Public sector banks form 21% of

market with SBI leading the pack.


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Fig no. 1. Graph showing market share of credit cards

0%

5%

10%

15%

20%

25%

30%

Citibank standard

chartered

ICICI SBI Amex HSBC Others

Source: venture Infoteks fourth annual industry survey 2004.


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Types of cards

Debit Card it is account holders mobile ATM. Open an account with

a Bank that offers a debit card, an payment for purchase are deductedfrom customers bank account. The retailer swipes the card over an

electronic terminal at his outlet, customers enter the personal

identification number on a pin pad and the money is immediately

debited at the bank. Citibank and few domestic Banks like times bank

offer this.

Affinity Cards a card offered by two organizations, one a lending

institution, other a non financial group. Schools, non profit groups,

pro wrestlers, popular singers and air lines are among those featured on

affinity cards. Usually, use of the card entitles holders to special

discounts or deals from non financial group.

Standard Card it is the most basic card offered by issuers.

Classic Card brand name for the standard issued by VISA.

Gold Card / Executive Card a credit card that offers a higher line of

credit than a standard card. Income eligibility is also higher. In addition,

issuers provide extra perks or incentives to card holders.

Platinum Card a credit card with a higher limit and additional perks

than a Gold card.


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Titanium Card - a card with an even higher limit than a platinum

card.

Secured Card a credit card that a card holder secures with a saving

deposit to ensure payment of outstanding balance if the card holder

defaults payments. Customers new to credit, or customers trying to

rebuild their poor credit rating use it.

Smart Card smart cards, sometimes called as chip cards, contain a

computer chip embedded in a plastic. Where a typical credit cards

magnetic stripe can hold only a few dozen characters, smart cards arenow available with 16k of memory. When read by special terminals, the

card can perform a number of functions or access data stored in the

chip. These cards can be used as cash cards or as credit cards with a

present credit limit, or used as ID cards with stored-in password.

Charge Card it falls between debit and a credit card. Works like

latter and consumer need not be an accountholder. Just pay up in full

when the bill arrives with the mail. No outstanding are allowed, in other

words, no revolving credit facility either. American express and diners

are providers.

Rebate Cards this is card that allows the customer to accumulate

cash, merchandise or service based on card usage.

Co Branded Card this is a marriage of convenience between the

service providers who wants a trade-off with the others strength.

Specific facilities are made to members through these tie ups. So, Times

Bank and Citibank have a co-branded card that allows confessional


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rates for add-on cards or telephone banking. Standard chartered and

Hindustan lever limited have a co-branded card to sell Aviance beauty

products. SBI and GE capital has co-branded card for retail loans.

Cash Card cash cards, similar to pre-paid phone cards, contain a set

amount of value, which can be read by special cash card reader.

Participating retailers will use the reader to debit the card in increments

until the value is gone. The cards are like cash they have no built-in

security, so if lost or stolen, it can be misused by any one.

Travel Card they work mostly as debit cards for the limited purposeof travel. Citibank Dollar card, American Express, Bobcard Global and

HSBC Thomas cook international card are among the players in this

section.

Master Cards are a product of Master card international and along

with VISA are distributed by financial intuitions around the world.

Cardholders borrow money against a line of credit and pay it back with

interest if balance is carried over from month to month. 23,000 financial

institutions in 220 countries and issue its products. In 1998, it had

almost 700 million cards in circulation, whose user spent $ 650 billion

in more than 16.2 million locations.

VISA Card VISA Card is a product of VISA Card USA and along

with Master Card is distributed by financial intuitions around the world.

A VISA card holder borrows money against a credit line and repays the

money with interest if the balance is carrie4d over from month to month

in a revolving line of credit. Nearly 600 million carry one of the VISA

brands and more than 14 million locations accept VISA cards


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CHAPER-2

CONSUMERS SATISFACTION MEASUREMENT (CSM)

Very little has been done to advance the concept of consumers

satisfaction and its useful ness as an operational variable. There is probably no

such significant concept in the marketing that is at once more fundamental and

pervasive but less adequately developed than consumers satisfaction.

Hill (1963) operationally measured satisfaction by asking consumers to

evaluate their satisfaction with the purchase decision they made rather than the

product themselves. Drucker (1969) asserts that marketing concepts is

bankrupt and Ralph Naders success demonstrates that customer satisfaction is

not always the basis of the company policy. Marketing has been described as

Customer Satisfaction Engineering (Kotler and Levy, 1969)

John and sheth (1969) laid important foundations for the process model

of satisfaction and developed buying behavior manner. According to them

customers satisfaction is the point at which expectations and reality coincide.

The concise oxford dictionary defines satisfy as meet the expectations or

desire (notions or perception, etc.). Kotler (2000) described satisfaction as it

is persons feelings of pleasure or disappointment resulting from comparing a

products perceived performance in relation to his or her expectation. Howard

and Sheth (1969) have defined customer satisfaction, as the buyers cognitivestage of being adequately or inadequately rewarded for the sacrifice he/she has

undergone

According to comprehensive review conducted by Youjae (1993)

consumers satisfaction has been defined as either an outcome or as a process.


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The outcome definitions characterize customers satisfaction as the end state

resulting from the consumption experience. Alternatively, satisfaction has

been considered as a process, emphasizing the perceptual, evaluative, and

psychological process that contributes to customers satisfaction. There exist a

several empirical evidences, which confirm the hypothesis of disconfirmation

of expectation on satisfaction. It is important to keep in mind that extent to

which either a product or service fulfils an individual customers desires can

also lay a very significant role in creating feelings on satisfaction.

The various levels of satisfaction identified by contributors mainly

include satisfaction with a product, a purchaser decision experience, aperformance attribute satisfaction with a consumption experience, a store or

institution, and a pre - purchase experience. Finally, a time dimension might

be added. It would be reasonable to assume that satisfaction may change from

the time of purchase through the consumption and final disposal of the

product. Three time frames become relevant: instantaneous, short and long

run.

Certain generalization can be made about the concept of consumers

satisfaction as follows

CS is complex evaluative attitude

Every aspect of the purchasing consumption process determines its

level

CS is measurable

CS can be accessed and/or evaluated.


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CHAPTER-3

RESEARCH OBJECTIVES

The research study was pursued mainly with the following objectives:

To find the consumers awareness regarding the type of credit card,

brand of credit card, the terms of credit cards, benefits of using credit

card, etc.

To evaluate consumers satisfaction or dissatisfaction

To recommend the measures for improving the credit card business in

Bangalore city.


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CHAPTER- 4

RESEARCH METHODOLOGY

A structured non-distinguished questionnaire for the purpose of

collecting necessary data has been used. A non probability, quota cum

convenience sample was drawn that consisted of 50 credit card holders across

Bangalore city of Karnataka state in 2005. It was premised that the respondent

to be drawn should be currently holding status as a credit card holder.

The structured questionnaire consisted of 12 questions relating tovarious key issues sources of information, consumers awareness about

various aspects of using credit card, actual use of credit card and consumers

satisfaction and dissatisfaction on selected criterions.

1) Survey Method: -

Having decided to adopt a survey method to collect data for this study,

the next step is to decide on the type of survey consistence on resources like

time & money which leads to the sample survey. The survey is classified in to

two parts, viz.

Exploratory study.

Descriptive study.


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Exploratory Study: -

The main objective of exploratory study is to get the feel of the market,

products, competitive consumer. This helps in gathering primary information

used for descriptive study.

Descriptive study: -

The exploratory study laid the foundation for the descriptive study & paved

a way to a systematic study which led to achieve the objectives of the study.


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CHPTER-5

DATA COLLECTION TOOLS

Primary data was collected through questionnaire: a structured

questionnaire was used to collect data and questionnaire comprised of

both open and close end questions.

Credit card holders were selected using random sampling method.

Target respondents were credit card holders from whom the research

specific data were collected.

Whatever data source that is available through published source have

been tapped to obtain secondary data which consisted of generic

information like credit card type, industry and market. Source of

information were collected from websites of various banks, credit card

related articles from various magazines.


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CHAPTER-6

RESEARCH LIMITATIONS

The study is not proposed to be an expert study as it was done by a

student for the purpose of a partial fulfillment of the course, which is an

integral part, in completion of and award of MBA degree. The study was

conducted in a short period of six weeks, and so the findings cannot be

generalized for all times. Some of the information sought being confidential

was not included in the study. The scope of the study, by and large is very

vast. It is difficult to satisfy all the areas; therefore an attempt is made to cover

significant aspects.

A Few noticeable limitations of the study were:

Time and cost constraints.

There was a problem with generalization as the investigation is

restricted to credit card holders in Bangalore city.

Research findings were susceptible to respondents bias/prejudice.


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PART B (SURVEY FINDINGS)

INUSTRY PROFILE.

DATA ANALYSIS AND INTERPRETATION.


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CHAPTER-7

INDUSTRY PROFILE

Credit bureaus have been in the news in India as one of the many

reasons why the credit card market is finally seeing some drop in interest

rates. Also for the first time credit card issuers are talking of differential

interest rates for different consumers depending on the consumer's credit

profile. The interest rate on credit cards had stubbornly refused to drop despite

a sharp drop in rates in other retail lending markets such as home loans and

personal loans and intensifying competition among the credit card issuers, due

to the relatively higher delinquency rates experienced by them in their credit

card portfolios. All this is slated to change now as the credit bureau(s) in India

is operationalised. So what are Credit Bureaus? What do they do?

Credit bureau's are independent organizations (mostly commercial, for

profit organizations) which collate records from the various lending

organizations like Banks, credit card companies, housing finance companies

and even keep track of any Bankruptcy proceedings in the courts. The records

are collated based on a common identifier such a social security number,

citizenship number, PAN card no. etc. The collated records track your

repayment history in terms of timely payments for the last few years (typically

the last 24-60 months). It also keeps track of any adverse judgments passed in

Bankruptcy courts. In other words your credit history is available on request.

Credit bureaus also keep track of the number of requests made for your credit

history.


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All this information is available to prospective creditors or others like

potential landlords, life insurance companies, etc. This is also available online

and most credit bureau's would categories your credit (as A, B, C or D much

like credit rating agencies do for corporate borrowers) depending on the period

for which you have had a credit history, your repayment track record, absence

of any adverse judgments, period over which the repayments have to be made,

etc. This enables you to leverage your good track record of payment for

getting better and easier credit terms such as lower interest rates, higher loan

eligibilities, longer tenures, etc. Besides Banks can also judge your recent

credit appetite (or how many potential lenders you have approached

simultaneously) by studying the number of requests for your credit history inthe immediate past. Thus where objective third party credit information is

available the people with good credit track records stop subsidizing the

consumers with no or bad credit track record. A credit bureau helps banks to

take quick decisions on credit requests as they have a objective source of your

credit repayment history and total credit availed by you. It also enables you to

benefit from your excellent credit track record and brings down the cost of

credit substantially. It does raise privacy issues in terms of unauthorized

access to your credit records by outsiders but the benefits for consumers far

outweigh any possible disadvantages.


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Indian Scenario

Realizing the importance of a credit bureau in strengthening the retail

credit scenario the regulator is encouraging the Banks to pool informationabout their customers with credit bureaus. A joint venture of various Banks led

by HDFC and State Bank of India called Credit Bureau of India Limited has

been formed and has launched initial operations in May 2004. A bill is also

pending before the parliament to provide statutory and regulatory oversight to

this most important credit infrastructure. Meanwhile some credit card

companies have formed an association to share information about defaulting

consumers. This is currently used by most Banks to find out if any of their

new credit applicants are on that list to avoid providing credit limits to

consumers with a known history of bad credit track payments.

Impact of a well functioning Credit Bureau:

The biggest impact of a credit bureau is that maintaining good credit history

becomes an economic asset for most consumers in terms of easier access to

credit in the future and hence the temptation to default even where means exist

reduces dramatically. This substantially brings down the cost of bad debts for

the economy as a whole which in turn leads to a reduction in general interest

charged to you. Secondly the intrusive and expensive physical investigations

that happen today are not needed and hence the speed of decision making as

well as the cost of taking credit decisions comes down which again means that

the interest rates are lowered for good consumers while defaulters pay higher

prices or are denied credit altogether.


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CHAPTER-8

DATA ANALYSIS AND INTERPRETATION

Based on the feedback received data were analyzed, interpreted, inferred and

has been reported as follows:

A. Source of data collection

Fig no.2. Pie chart showing Sources of data collection

20%

16%

64%

Fiends

Relations

Others

Interpretation:

Information by friends (64%) includes School, College, PG and other

personal friends; information by relations (20%) was the major source of

information from the credit card holders. Information from others contributed

to the extent of (16%) (family friends, faculties, friends parents).

Friends Relations Others

32 10 8

Source- field investigation


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B. Consumers awareness about types of credit cards:

Banks Citibank

1

ICICI

2

SBI

3

HSBC

4

Stan

char

5

AMEX

6

ANZ

Grindlays

7

ABN

Amro

8

Percentage 97 91 86 46 53 55 15 6

Samples 48 45 43 23 26 27 7 3

9 7 % 9 1 %8 6 %

4 6 %5 3 % 5 5 %

1 5 %

6 %

0 %

2 0 %

4 0 %

6 0 %

8 0 %

1 0 0 %

1 2 3 4 5 6 7 8

B a n k s

Interpretation:

Consumers awareness were found highly aware of Citibank, ICICI, SBI,

97%, 91%, 86% respectively. Consumers were moderately aware ofHSBC,

Standard chartered, AMEX 46%, 53% and 55% respectively. Awareness

level was found very low in the case ofANZ Grindlays 15% and ABN Amro

6%.

Source- field investigation.


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C. Consumers actual holding of type of card:

Fig no.4. Graph showing consumers actual holding of type of card

7 0 %

4 0 %

2 0 %1 4 %

4 %

2 %0 %

1 0 %

2 0 %

3 0 %

4 0 %

5 0 %

6 0 %

7 0 %

1 2 3 4 5 6

B a n k s

Interpretation:

Majority of the consumers were holding Citibank credit card (70%)

followed by ICICI Bank credit card (40%), SBI credit card (21%), StandardChartered (14%), AMEX credit card were held by (3%), and HSBC credit

card by (1%) of the sample.

Bank Citibank

1

ICICI

2

SBI

3

Stan

char

4

AMEX

5

HSBC

6

Percentage 70 40 20 14 4 2

sample 35 20 10 7 2 1

Source field investigation


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D. Consumers awareness about the terms of credit card:

Sl no Terms Percentage Sample

1 Joining fee 100 50

2 Annual fee 100 50

3 Repayment 96 48

4 Interest on cash with drawals 92 46

5 Interest on free period 60 30

6 Point of sale terminal 32 16

7Electronic data capture

terminal20 10


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Fig. no.5. Graph showing consumersawareness about terms of credit card

100% 100%96%

92%

60%

32%

10%

0%

20%

40%

60%

80%

100%

120%

1 2 3 4 5 6 7

Terms of credit card

%ofrespondent

1

2

3

4

5

6

7

Interpretation:

Consumers overall awareness about the terms of credit card was found

reasonably high. Cent percent awareness was found about the terms, i.e.

joining fee and annual fee. Other familiar terms were repayment (96%),

interest on cash withdrawals (92%), interest on free period (60%); the level of

awareness was low in terms of point of sale terminal (32%), and electronic

data capture terminal (20%).



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E. Consumers overall ranking on criteria being considered for issuing

credit card by credit card agencies:

Fig no. 6. Graph showing consumers overall ranking on criteria being

considered for issuing credit card by credit card agencies

96%

80%

30%

12%6%

0%

20%

40%

60%

80%

100%

120%

1 2 3 4 5 6 7

Consumers' overall ranking criteria

%

ofrespondents 1

2

3

4

5

Serial number Criteria Percentage No of respondents

1 Annual income 96 48

2Repayment

capacity80 40

3 Profession 30 15

4

Past credit

history 12 6

5Ownership of the

residence6 3



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Interpretation:

Annual income was perceived by consumers as the most important

criterion followed by repayment capacity, profession, past credit history,

educational achievements of applicants in issuance of credit card by the credit

card agencies. The ownership of the residence was found to be the least

important criterion.


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F. Reasons for buying credit card

Reasons for buying credit card Yes % yes No % no

It is easier for me to buy 41 82 8 16

Fig no. 7 Reasons for buying credit card

82%

16%

0%

10%

20%

30%

40%

50%

60%70%

80%

90%

Yes No

Yes

No

.

Interpretation:

Majority of the respondents i.e. (82%) felt that buying the credit card would

help them to purchase anything of their choice quite easily. Respondents also

felt that owning a credit card would help to make the transaction simple.

Source-field investigation


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Reasons for buying credit card continued...


It dose not require carrying cashin person

44 88 6 12

.


88%

12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Yes No

Yes

No

Interpretation:

Majority of the respondents (88%) felt carrying credit card was much safer

than carrying cash. It was also found that credit cards provided financial

security. (12%) of the respondents were not confident about credit card

because they felt it can be misused.



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I can arrange parties 3 6 47 94

Fig no. 9. Reasons for buying credit card

Interpretation:

Only (6%) of the respondents agreed that they would use the credit cards to

arrange parties. It was found that these respondents life style was different

from that of the rest of the sample; these respondents were youngsters who did

not have any sort of family commitment. Majority of the respondents who did

not agree with the statement were either having family responsibilities or

married and settled down.

6%

94%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Yes No

YesNo



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I can buy more than one productat a time

32 64 18 36

Fig no. 10 . Reasonsfor buying credit card

64%

36%

0%

10%

20%

30%

40%

50%

60%

70%

Yes No

Yes

No

Interpretation:

As many as (64%) of the respondents agreed that they can buy more than one

product at a time with the help of credit card. It was found that customers need

not wait for their creditworthiness.



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I can make an early purchase ofthe product

29 58 21 42


58%

42%

0%

10%

20%

30%

40%

50%

60%

70%

Yes No

Yes

No

Interpretation:

It was found that (58%) of the respondents felt that they can make early

purchase of the products that has just arrived into the market; they felt that

they need not wait for a long time to arrange the cash and then make the

purchase.



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It results into savings of interestfor stipulated period

39 78 11 22

Fig no. 12. Reasons for buying credit card

78%

22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Yes No

Yes

No

Interpretation:

Majority of the respondents (78%) felt that the greatest advantage of owning a

credit card was that It results into savings of interest for stipulated period

which means consumers can purchase the product of their choice and make

the payment within stipulated period of time which, in turn, will result in

saving the interest.



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G. Actual uses of credit card by consumers:

Fig no.13. Pie chart showing Actual uses of credit card by consumers

31%

14%25%

1%

29%Cash withdrawal

selected shop

PetrolRobbery insurance

Durable products

Interpretation:

Maximum uses of credit card were found for purchases of consumer durable

products (76%) , cash withdrawals through ATMs (92%), discount on selected

shop (40%), and robbery insurance was found to be (4%) respectively.

Uses Percentage Sample

Cash withdrawal 92 46

Discount on selected

shop

40 20

Purchase of petrol 72 36

Robbery insurance 4 2

Purchase of consumer

durable products

84 42



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H. Problems faced by consumers as the credit card holders:

Serial number Problems % yes Sample

1 Very low acceptability of creditcard

50 25

2 Inconvenient location of ATMs 30 15

3 Time taken for issuing credit

cards

74 37

4 Incorrect charges levied 10 5

Fig no. 14 Graph showing problems faced by consumers as the credit card

holders

50

30

74

10

0

10

20

30

40

50

6070

80

Accept

abilit

y

Locatio

nTi

me

ch

arge

s

problems faced by consumers'

%

ofrespondents

Acceptability

Location

Time

charges



44/79



Interpretation:

Majority of the respondents agreed that they are unhappy about time taken in

issuing a new credit card (74%), low acceptability of credit card (50%),

inconvenient location of ATMs (30%); very few respondents agreed that they

had to make follow up for rectifying incorrect charges levied on them (10%).


45/79



I. Consumers overall experience as credit card holders:

Fig no. 15. Graph showing Consumers overall experience as credit card

holder

76%

16%8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Agree Undecided Disagree

consumers' overall experience of credit card

holder

%

ofrespondent

Agree

Undecided

Disagree

Interpretation:

Majority of the respondents (76%) agreed that the discount offered at sale

were less when purchases were made with the help of credit card. It was found

that when cash purchases were made discount availed was higher as there

were no commission and extra charges involved in the transaction.

Customers overall experience as creditcard holders


Discount offered at sale are less when

purchases are made with the help of

credit card

76% 16% 8%



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Consumersoverall experience as credit card holders:

46%

20%

34%

0%

5%

10%

15%

20%

25%

30%

35%

40%45%

50%

Agree Undecided Disagreeconsumers' overall experience of credit card

holder

%ofrespondent

Agree

Undecided

Disagree

Interpretation:

Majority of the consumers (46%) felt that it made them to buy more when

purchases were made with the help of credit card, as the payments were not

made immediately by the consumers to the credit card companies they felt like

purchasing more. (34%) of the respondents said that they would not be

influenced by this factor; they would rather plan the purchases according to

requirements.

Customers overall experience as creditcard holders Agree Undecided Disagree

It makes me to buy more when purchasesare made with the help of credit card 46% 20% 34%



47/79




Fig no. 17. Graph showing Consumersoverall experience as credit card

holder

72%

22%

6%

0%

10%

20%

30%

40%

50%

60%

70%

80%



holder

%ofrespondent

Agree

Undecided

Disagree

Interpretation:

As high as (72%) of the respondents agreed with the statement it always costme more to withdraw the cash from ATM with the help of credit card, the

reason being the high service charges and other taxes which were levied on

consumers for each transaction and also rate of interest charged on the

withdrawals was quite high.

Customers overall experience as credit

card holders Agree Undecided Disagree

It always cost me more to withdraw thecash from ATM with the help of creditcard

72% 22% 6%



48/79




56%

34%

10%

0%

10%

20%

30%

40%

50%

60%



holder

%ofrespondent

Agree

Undecided

Disagree

Interpretation:

Number of respondents who agreed to this statement was to the extent of

(56%). They felt that credit card agencies offer more than what they can

actually provide this ultimately leading to consumers dissatisfaction. (34%)of the respondents were not able to decide on this. (10%) of the respondents

disagreed with the statement.

Customers overall experience as credit

card holders Agree Undecided Disagree

The credit card agency offers nothingfree of cost as being claimed by them

56% 34% 10%



49/79



J. Post purchase behavior of the credit card holders:

Post purchase behavior of the credit card

holders


I would recommend this credit card to

others70% 14% 16%

Fig no. 19 Graph showing Post purchase behavior of the credit card holders

70%

14%

6%

0%

10%

20%

30%

40%

50%

60%

70%80%


post purchase behavior of credit card holder

%

ofrespondent

Agree

Undecided

Disagree

Interpretation:

Majority of the respondents (70%), were quite happy with their credit cards.

Reasons were quality of service, friendly employees, location of ATMs and

brand name of the credit card.



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Post purchase behavior of the credit card holders continued..


holdersAgree Undecided Disagree

I intended to change my credit card next

year14% 23% 63%


14%

23%

63%

0%

10%

20%

30%

40%

50%

60%

70%



%ofrespondent

Agree

Undecided

Disagree

Interpretation:

Only (14%) of the credit card holders agreed to the statement I intended to

change my credit card next year. This is because such reasons as: very lowacceptability of credit card, inconvenient location of ATMs, Time taken for

issuing credit cards, incorrect charges levied and high interest rates.



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Post purchase behavior of the credit card holders continued..


holders Agree Undecided Disagree

I would continue to use credit card in future 95% 2% 3%


95%

3%2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



%

ofrespondent

Agree

Undecided

Disagree

Interpretation:

As high as (95%) of the respondents agreed to the statement I would

continue to use credit card in future. The reasons were customers had made

credit card as part of their life styles and they were fully aware of all the

benefits of the credit cards.



52/79



K. Overall satisfaction or dissatisfaction as credit card holders:

Overall satisfaction or dissatisfaction

as credit card holders

Satisfied Cant say Dissatisfied

Information about various charges 70% 8% 22%

Fig no. 22 Graph showing overall satisfaction or dissatisfaction as credit card

holders

70%

8%

22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Satisfied Can't say Dissatisfied

Overall satisfaction or dissatisfaction as credit

card holder

%ofrespondent

Satisfied

Can't say

Dissatisfied

Interpretation:

It was found that most of the respondents were quite happy about the

information that was given to them by the sales associates. (70%) of the

respondents were satisfied with the information they received. (8%) of the

respondents could not decide upon information given to them. (22%) of them

were not satisfied with the information they received.



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Overall satisfaction or dissatisfaction as credit card holders continued




Information provided by brochures /

leaflets

74% 18% 8%


holders

74%

18%

8%

0%

10%

20%

30%

40%

50%

60%

70%

80%



card holder

%ofrespondent

Satisfied

Can't say

Dissatisfied

Interpretation:

Majority of the respondents were satisfied with the information

provided by brochures and leaflets. (74%) of the respondents agreed that

brochures / leaflets provide good information because they were able to store

the information and retrieve it.



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Advantages of credit card 86% 12% 2%


holders

86%

12%

2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



card holder

%ofrespondent

Satisfied

Can't say

Dissatisfied

Interpretation:

Majority of the credit card holders were satisfied with the advantages of

credit card. It was also found that most of the consumers were fully aware of

advantages of owning a credit card. There were only (2%) of dissatisfied

consumers and the satisfied consumers amounted to (86%).






55/79




Forms are easier to fill in by me 84% 6% 10%

.

Fig no. 25 Graph showing overall satisfaction or dissatisfaction as credit

card holders

84%

6%10%

0%

10%

20%

30%

40%

50%

60%

70%80%

90%



card holder

%

ofrespondents

Satisfied

Can't say

Dissatisfied

Interpretation:

Majority of the respondents (84%) felt that it was easier for them to fill

the forms by themselves. They felt there was not much ambiguity while filling

up these forms.(6%) of the respondents were not able to decide. (10%) of the

respondents were not happy with the forms.






56/79




Employees are help full 92% 4% 4%


holders

92%

4% 4%

0%

10%

20%

30%

40%

50%

60%

70%80%

90%

100%



card holder

%ofrespondent

Satisfied

Can't say

Dissatisfied

Interpretation:

Majority of the respondents felt that employees working in the sales

outlets and direct sales agent were helpful and co-operative. (92%) 0f the

respondents felt that employees were customer- friendly and they were present

to deliver whenever required. The major finding was employees received most

of the complaints and queries through telephone and e-mail services, they

were quick to identify and solve the problem of customers in very short period

of time.






57/79




Joining fee 90% 6% 4%


holders

90%

6% 4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Satisfied Can't say DissatisfiedOverall satisfaction or dissatisfaction as credit

card holder

%ofrespondent

Satisfied

Can't say

Dissatisfied

Interpretation:

Most of the respondents felt joining fee was reasonable. (90%) of the

respondents had no encounters with the joining fee; however, there were only

(4%) of the respondents who were not happy with the joining fee.(6%) of the

respondents were unable to decide.

Overall satisfaction or





58/79




Annual fee 82% 4% 14%


holders

82%

4%

14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%



card holder

%ofrespondent

Satisfied

Can't say

Dissatisfied

Interpretation:

Majority of the respondents were satisfied with annual fee. (82%) of the

respondents felt that annual fee charged was reasonable and were willing to

pay it because of quality of service and advantages of credit card. (4%) of the

respondents were unable to decide whether annual fee was reasonable or

unreasonable. Only (14%) of the respondents felt that annual fee was too high.






59/79




Rate of interest 10% 30% 60%


holders

10%

30%

60%

0%

10%

20%

30%

40%

50%

60%

70%



card holder

%ofrespondent

Satisfied

Can't say

Dissatisfied

Interpretation:

It was found that majority i.e. (60%) of the respondents were not happy

with the rate of interest that is being charged on them and any delay in

payment of interest would add on to more interest; this was the one of the

main factor for majority of the consumers dissatisfaction. Only (10%) of the

respondents were satisfied with the interest rate.






60/79




Interest free period 58% 34% 8%


holders

58%

34%

8%

0%

10%

20%

30%

40%

50%60%

70%



card holder

%ofrespondent

Satisfied

Can't say

Dissatisfied

Interpretation:

Form the findings there were only (60%) of the respondents were aware of the

term interest free period; out of which (58%) of the respondents were

satisfied with interest free period. (34%) of them were not able to decide. (8%)

of the respondents were dissatisfied.






61/79




Mode of payment 92% 2% 6%


holders

92%

2%6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



card holder

%

ofrespondent

Satisfied

Can't say

Dissatisfied

Interpretation:

Majority of the respondents were quite happy with the mode of paymentand were fully satisfied with it, at the same time it was found that these (92%)

of the respondents were aware of all the terms and conditions of the payment.

(2%) of the respondents were not able to decide and (6%) were dissatisfied.


Overall satisfaction or





62/79




holders

84%

4%12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%



card holder

%ofrespondent

Satisfied

Can't say

Dissatisfied

Interpretation:

Only (4%) of the respondents were not able to decide weather they were

satisfied with the location of ATMs and other facilities in the ATMs. (84%) of

the respondents were satisfied with the ATM facilities; some of the

respondents who were satisfied did feel that the facilities of ATMs could be

improved. Only (12%) were dissatisfied.




ATM Facility 84% 4% 12%



63/79




Location of ATMs 54% 16% 30%


holders

54%

16%

30%

0%

10%

20%

30%

40%

50%

60%



card holder

%ofrespondent

Satisfied

Can't say

Dissatisfied

Interpretation:

There were over fifty percent of the respondents who were happy with

the location of ATMs; majority of them resided in the urban part of the city.

However, respondents residing in semi-urban areas and rural areas of

Bangalore metropolitan area were facing serious problems to get access to

ATMs.






64/79



Overall satisfaction or dissatisfaction as credit card holders (Aggregate):


holders

86%

12%

2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



card holder

%ofrespondent

Satisfied

Can't say

Dissatisfied

Interpretation:

Majority of the credit card holders were satisfied (86%) with their current

usage of credit card and (12%) of the credit card holders were dissatisfied

Satisfied Dissatisfied Undecided

Percentage 86 12 2

Sample 43 6 1



65/79



PART C (CONCLUSION AND RECOMENDATION)

MAJOR FINDINGS OF RESEARCH.

RECOMMENDATIONS.

DIRECTIOMS FOR FURTHER RESEARCH.


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CHAPETR- 9

MAJOR FINDINGS OF THE RESEARCH

Consumers were found highly aware about Citibank, ICICI, SBI,

97%, 91%, 86% respectively.

Majority if the consumers were holding Citibank credit card (70%)

followed by ICICI Bank credit card (40%), SBI credit card (21%),

Standard Chartered (14%), AMEX credit card were held by (3%),

HSBC credit card were held (1%) of the sample

Consumers overall awareness about the terms of credit card was found

reasonably high. Cent percent awareness was found about the terms, i.e.

joining fee and annual fee. Other familiar terms were repayment (96%),

interest on cash withdrawals (92%).

Annual income was perceived by consumers as the most important

criteria followed by repayment capacity.

Majority of the respondents i.e. (82%) felt that buying the credit card

would help them to purchase any thing of their choice quite easily.

Respondents also felt that owning a credit card would help to make the

transaction simple.


67/79



Sources of information were friends, information provided by direct

sales associates and advertisement in magazine, newspaper and

information from internet are the most important sources for consumer

in choosing a credit card.

They are well aware about the benefits of credit card. They mainly use

credit card to use credit card to buy consumer durable products but

frequency of using credit card is not as high as other developed nations.

It has therefore been suggested that credit agency reduce annual fee,

improve the acceptability of credit card via wider merchantestablishments network, improve consumer education, as well as

ethical promotion and marketing communication of credit cards.

Increase ATMs and minimizing of levies on credit card by government,

will go on in a long way to strengthen the credit card industry in

Bangalore in near future.

Majority of the respondents agreed that they are unhappy about time

taken in issuing a new credit card (74%).

78% of the respondents felt that greatest advantage of owning a credit

card was It results into savings of interest for stipulated period which

means consumers can purchase the product of their choice and make

the payment within stipulated period of time which in turn will result in

saving the interest.


68/79



CHAPTER- 10

RECOMMENDATIONS

Based on our research findings, the following recommendations have been

offered:

Annual fee should be reduced.

Number of merchant establishments should be increased, most of the

establishments are located in the heart of the city i.e. only in the urbanpart of Bangalore. Number of merchant establishments has to be

increased in semi developed areas and as well as rural parts of the city.

Educating employees at the credit cards accepting outlet on handling

credit card transaction and benefits involved there in is highly essential

to increase the growth rate of credit card market.

To expand the business, credit card issuers should focus on semi

developed areas as well as rural parts of the city i.e. by setting up outlets

and ATMs in these areas, most of the credit cards have been issued to

customers residing in urban areas only.

Government should play a positive role to increase the spending on

credit card.


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State government should minimize levies charged on credit card

transactions.

More number of ATMs should be installed. They should be installed.

They should be networked so that a customer having card issued from

one agency can also make use of it at ATMs of any other agency.


70/79



CHAPTER- 11

DIRECTIONS FOR FURTHER RESEARCH

We have identified the following areas for further research:

Use of metric in measurement of consumer Satisfaction/ Dissatisfaction

in respect of credit card holder --- A Quantitative analysis.

Performance indicators of customers preference towards credit card---

A Diagnostic study.

Customer loyalty in respect of credit card holders ----- A Analytical

study.

Market share analysis in credit card market ----- A Quantitative

analysis

Customer relation management in respect of credit card holders

Service Magic and Magnetic Service for credit card holders --- An In-

depth study.

Innovative marketing products with special reference to Product

Innovation and acceptance in credit card market ----- An explorative

study.


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Annexure:

SELECT BIBLIOGRAPHY

QUESTIONNAIRE


72/79



SELECT BIBLIOGRAPHY

BOOKS:

1. Marketing by Michael J Etzel, Bruce J Walker, and William J Stanton

13th

Edition, Tata McGraw-Hill Publications.

2. Shopper, Buyer, and Consumer Behavior by Jay D Lindquist and M

Joseph Sirgy 2nd Edition, Bizantra Publications

3. Consumer Behavior by James P Engel, David T Kollat and Roger D

Blackwell 2nd

Edition, Holt, Rinehart and Winston publications

4. Marketing Management and Research by P.K.Gupta, 2nd Edition,

Everest Publications.

JOURNALS:

1. Journal of Marketing Research

2. Journal of Consumer Research

3. Journal of Academy of Marketing Science

4. Journal of Marketing

BUSINESS MAGAZINES:

1. Business World

2. Business Today

3. Business Standard4. Financial express

5. Harvard Business Review


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WEBSITES USED:

1. www.google.com

2. www.knowthestuff.com

3. www.moneycontrol.com
http://www.google.com/http://www.knowthestuff.com/http://www.moneycontrol.com/http://www.moneycontrol.com/http://www.knowthestuff.com/http://www.google.com/


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QuestionnaireName: _____________

(Optional)

1. Source of information

2. Consumers awareness about types of credit card ( 1- 5)1- Strong awareness, 2- somewhat aware, 3-not sure, 4 somewhat notsure, 5- unaware

a. Citibank e. HSBC

b. AMEX f. Standard Chartered

c. ICICI g. SBI

d..ANZ Grindlays

h. others please specify____________________________

3. Consumers actual holdinga. Citibank e. HSBC

b. AMEX f. Standard Chartered

c. ICICI g. SBI

d. ANZ Grindlays

h. others please specify____________________________

Friends Relation Others


75/79



4. Consumers awareness about the terms of credit card (1- 5). 1-

Strong awareness, 2- somewhat aware, 3-not sure, 4 somewhat not sure,

5- unaware

a. Joining fee b. Annual fee

c. Repayment d. Interest on cash withdrawals

e. Interest free period f. Point of sale terminal

g. Electronic data capture terminal i. Others __________________

5. Consumers overall ranking on the criteria being considered for issuing the

credit card by credit card agencies (1- 5).

1-strongly agree, 2-somewhat agree, 3-not sure, 4-somewhat disagree,

5- strongly disagree

a. Annual income b. Repayment capacity

c. Profession d. Past credit history

e. Educational achievements f. Ownership of residence

i. Others please specify___________________________________

6. Reason for buying credit card

Reasons for buying credit card Yes No

It is easier for me to buy

It dose not require carrying cash in person

I can arrange parties

I can buy more than one product at a time


76/79



I can make an early purchase of the

product

It results into savings of interest for

stipulated period

7. Actual benefits availed by consumers using credit cards (1-5)

1-strongly agree, 2-somewhat agree, 3-not sure, 4-somewhat disagree,

5- strongly disagree

a. Cash withdrawals b. Discount on selected shop

c. Purchase of petrol d. Robbery insurance

e. Purchase of consum

VinayK-0305-Consumer Satisfaction Mesurement of Using Credit Cards

Documents