Factors Influencing

Consumer Behavior
Practical example of Islamic
banking as a product
Wednesday August 18, 2010
Major Factors
Example
You may think that the best way of utilizing
your annual saving is to have a summer
vacation, but your wife thinks it is wisest to
invest in jewellery, while your colleague
considers buying shares as the best way of
spending savings. Thus you would find that
each person has his or her own standards of
judgments and distinct behavior in every
aspect of his role as a consumer.
The Buyer Decision
Process

Internal and External

Stimuli
Why to Study Behavior?
• Product Innovation
• Product Features
• Pricing and Distribution Strategy
• Marketing Plan (Media, artwork,
placement etc.)
• Sales Strategy (PS, Mass, Tele etc.)
Islamic Banking
• A new phenomena introduced in 2002 (Pakistan)

Category December 2009

Assets PKR 366 bn
Financing & Investment PKR 226 bn
Deposit PKR 283bn
Branches 649
Market Share
Assets 5.6%
Financing & Investment 4.5%
Deposit 5.9%
Growth rate -assets 32.6%
 Adoption of
Percentage of Adopters
Innovations

Early Majority Late Majority

Innovators

Early
34% 34% Laggards
Adopters

13.5% 16%
2.5% Time of Adoption
Early Late
IB Growth
IB Customers
• Habitual cynics
• Indifferent Customers
• Allamas
• Guided Moderator
• Sudden Realizers
• Delegators
• Mohala Masjid Loyalist
Factors effecting IB
customers/potential

Motivation(Fear &
Reward) and Culture
House Finance
a) Mass Market Product
b) Evaluation of the target market
c) Buying Decision (Pattern)

• Urban Market (High Ticket size, high pricing,

convenience in payment, high service standards-
Personalized services, quick TAT, Brand equity etc.)
• Rural Market (Low ticket size, low/medium
pricing)
Deposits
Current Account:
• Return insensitive, (Businessmen, traders, Corporate)
• FOC,
• Accessibility
• Reach/Distribution network
Term Deposit:
• High returns sensitive (savers, expats, retired, etc.)
• Levy charges for all services
• No extensive network is required