Consumer Behavior Research

Research Paper
Course Name:

Consumer Behavior
Course Title: MKT 344; Sec 04

Prepared for: Samy Ahamed Prepared by: Sameer Irfan Ali 082 339 030 Kazi Naqui Ismail 082 437 030 Rahima Akter Lubna 0920131030 Sangeet Khisa 1010782030 Abid Hossain 1030025030

North South University

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Submitted Date : 4th April, 2012

April 4, 2012 Samy Ahamed Lecturer North South University School of Business Subject: Submission of the Research Paper on Consumer Behavior Dear Sir, We humbly seek your permission to submit our research paper on the topic "Decision making criteria for Banking sector ", for the course Consumer Behavior (MKT 344). This research topic is very much relevant to what we have learnt in this course. Since this was a new course for us, the research has helped us a lot in understanding the practical aspects of consumer behavior. Therefore, we would be obliged if you kindly approve our research paper. For further clarification, please contact us at hasibmail@gmail.com. Sincerely yours, Sameer Irfan Ali Kazi Naqui Ismail Rahima Akter Lubna Sangeet Khisa Abid Hossain 082 339 030 082 437 030 0920131030 1010782030 1030025030

Table of content
1) Executive Summary 2) Introduction a) Abut Prime Bank b) Vision c) Mission d) Corporate policy 3) Literature Review a) Levels of decision-making b) Extensive Problem Solving c) Limited Problem Solving d) Routinized Response Behavior 4) Four views of Consumer Decision Making a) An Economic View b) A Passive View c) A Cognitive View d) An Emotional View 5) Consumer Decision Rules a) Compensatory and Non Compensatory Decision Rules 6) Under Non-compensatory rules, there are following distinct rules a) Conjunctive Decision Rule b) Disjunctive Rule c) Lexicographic Decision Rule d) Affect-referral Decision Rule

7) Research Methodology
8) Limitations 9) Findings and analysis 10) Leading in Consumer Banking 11) Foreign Exchange Business (Prime Bank Limited) 12) Automation in Banking Operation 13) Prime Bank Training Institute

Executive Summary
For the requirement of the MKT344 course the purpose of this project is to figure out the Decision making criteria for banking sector. For a narrow focus, this project is primarily focused on some of the main factors that are currently considered to have the most effect on selection of banking facilities in Bangladesh like interest, account system and ATM facilities. In order to accomplish the primary objective, this project breaks down the topic into the following sequences, which have been followed by a thorough analysis. The sequences that have been included in this project are as follows:

An overview about the banking industry in Bangladesh and the factors that are currently considered to be affecting the selection of banking sector in Bangladesh. Analysis about the methodology of the report, data sources and the main objectives of the report. An overview about the related articles that are considered to be invaluable to get an insight about many related factors. Findings and analysis of the report based on data of some important survey questions. Findings and analysis of the report based on using statistical tools like correlation, regression. Recommendations suggesting about the preferable measures that can be taken by the operators to attract and satisfy subscribers which in turn will increase their market share. The following pages will explain these sequences with ample data that was available for this plan.

Introduction
Banking sector is a very promising sector in country now-a-days. This sector is growing very vastly with a huge opportunity for the customers. The whole country contains more than fifty registered bank most of which are private. Among the private banks some are from foreign countries. We have chosen PRIME BANK for our project. This is a very growing one among the private banks. They are providing different types of account facilities, high percentage of interest, ATM facilities, Credit card facility, and some other new facilities. This bank is connected with DBBL which have the greatest amount of ATM booth in our country. We are surveying that whether the customers are satisfied or not with the provided service of the bank. About Prime Bank

In the backdrop of economic liberalization and financial sector reforms, a group of highly successful local entrepreneurs conceived an idea of floating a commercial bank with different outlook. For them, it was competence, excellence and consistent delivery of reliable service with superior value products. Accordingly, Prime Bank was created and commencement of business started on 17th April 1995. The sponsors are reputed personalities in the field of trade and commerce and their stake ranges from shipping to textile and finance to energy etc. As a fully licensed commercial bank, Prime Bank is being managed by a highly professional and dedicated team with long experience in banking. They constantly focus on understanding and anticipating customer needs. As the banking scenario undergoes changes so is the bank and it repositions itself in the changed market condition. Prime Bank has already made significant progress within a very short period of its existence. The bank has been graded as a top class bank in the country through internationally accepted CAMELS rating. The bank has already occupied an enviable position among its competitors after achieving success in all areas of business operation. Prime Bank offers all kinds of Commercial Corporate and Personal Banking services covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by our central bank. Diversification of products and services

include Corporate Banking, Retail Banking and Consumer Banking right from industry to agriculture, and real state to software. Prime Bank, since its beginning has attached more importance in technology integration. In order to retain competitive edge, investment in technology is always a top agenda and under constant focus. Keeping the network within a reasonable limit, our strategy is to serve the customers through capacity building across multi-delivery channels. Our past performance gives an indication of our strength. We are better placed and poised to take our customers through fast changing times and enable them compete more effectively in the market they operate.

Vision
To be the best private commercial bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability having strong liquidity.

Mission
To build Prime Bank Limited into an efficient, market-driven, customer focused institution with good corporate governance structure. Continuous improvement of their business policies, procedures and efficiency through integration of technology at all levels.

Corporate Philosophy
For Customers
To provide the most courteous and efficient service in every aspect of its business. to be innovative in the development of new banking products and services.

For Employees
by promoting their well-being through attractive remuneration and fringe benefits. By promoting good staff morale through proper staff training and development and provision of opportunities for career development.

For Shareholders
By forging ahead and consolidating its position as a stable and progressive financial institution. By generating profits and fair return on their investment.

For Community
By upholding ethical values and best practices.

 Constantly seeking to improve performance by aligning their goals with stakeholders expectations because they value their community.

Literature Review
Levels of decision-making:
Not all consumer decision-making situations receive the same degree of information research, either extensive research or monotonous routine seeking. On a continuum of effort ranging from very high to very low, we can distinguish three levels of consumer decision-making. These levels of decision-making are explained below:

Extensive Problem Solving

When consumers have no established criteria for evaluating a product category or specific brands in that category or have not narrowed the number of brands they will consider to a small, manageable subset, their decision-making efforts can be classified as extensive problem solving. At this level, the consumer needs a great deal of information to establish a set of criteria on which to judge specific brands and a correspondingly large amount of information concerning each of the brands to be considered. (Schiffman & Kanuk, 200708, pg 546)

Limited Problem Solving

As the level of problem solving, consumers already have established the basic criteria for evaluating the product category and the various brands in the category. However, they have not fully established preferences concerning a select group of brands. Their search for additional information is more like fine-tuning; they must gather additional brand information to discriminate among the various brands. (Schiffman & Kanuk, 2007-08, pg 546-47)

Routinized Response Behavior

At this level, consumers have experience with the product category and a well-established set of criteria with which to evaluate the brands they are considering. In some situations, they may search for a small amount of additional information, in others; they simply review what they already know. Clearly, extensive problem solving implies that the consumer must seek more information to make a choice, whereas routinized response behavior implies little need for additional information. (Schiffman & Kanuk, 2007-08, pg 547)

Four views of Consumer Decision Making:

Before presenting an overview model of how consumers make decisions, we will consider several schools of thought that depict consumer decision-making in distinctly different ways.. Specifically, we will examine models of consumers in terms of the following four views are describing below:

An Economic View
In the field of theoretical economics, which portrays a world of perfect competition, the consumer has often been characterized as making rational decisions. To behave rationally in the economic sense, a consumer would have to (1) be aware of all available product alternative, (2) be capable of correctly ranking each alternative in terms of its benefits and disadvantages and (3) be able to identify the one best alternative. Realistically, however, consumers rarely have all of the information or sufficiently accurate information or even an adequate degree of involvement or motivation to make the so-called perfect decision. (Schiffman & Kanuk, 2007-08, pg 548)

A Passive View
Quite opposite to the rational economic view of consumers is the passive view that depicts the consumer as basically submissive to the self-serving interests and promotional efforts of marketers. In the passive view, consumers are perceived as impulsive and irrational purchasers, ready to yield to the aims and into the arms of marketers. At least to some degree, the passive model of the consumer was subscribed to by the hard-driving super

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salespeople of old, who were trained to regard the consumer as an object to be manipulated. (Schiffman & Kanuk, 2007-08, pg 548)

A Cognitive View
The third model portrays the consumer as a thinking problem solver. Within this framework, consumers frequently are pictured as either receptive to or actively searching for products and services that fulfill their needs and enrich their lives. Within the context of the cognitive model, consumers are viewed as information processors. Information processing leads to the formation of preferences and ultimately to purchase intentions. The cognitive view also recognizes that the consumers are likely to cease their informationseeking efforts when they perceive that they have sufficient information about some of the alternatives to make a satisfactory decision. (Schiffman & Kanuk, 2007-08, pg 548-49)

An Emotional View
In emotional decision-making, each of us is likely to associate deep feelings or emotions, such as joy, fear love, and even a little magic with the certain purchases or possessions. These feelings or emotions are likely to be highly involving. Possessions also may serve to preserve a sense of the past and act as familiar transitional objects when one is confronted with an uncertain future. When a consumer makes what is basically an emotional purchase decision, less emphasis is placed on the search for pre-purchase Information. Instead, more emphasis is placed on current mood and feelings. (Schiffman & Kanuk, 2007-08, pg 54950)

Consumer Decision Rules:

Consumer decision rules, often referred to as heuristics, decision strategies, and information processing strategies, are procedures used by consumers to facilitate brand choices. These rules reduce the burden of making complex decisions by providing guidelines or routines that make the process less taxing. Consumer decision rules have been broadly classified into two major categories:

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Compensatory and Non Compensatory Decision Rules

In following a compensatory decision rule, a consumer evaluates brand or model options in terms of each relevant attribute and computes a weighted or summated score for each brand. The computed score reflects the brands relative merit as a potential purchase choice. The assumption is the consumer will select the brand that scores highest among the alternatives evaluated. A unique feature of a compensatory decision rule is that it allows a positive evaluation of a brand on an attribute to balance out a negative evaluation on some other attribute. (Schiffman & Kanuk, 2007-08, pg 559) Under Non-compensatory rules, there are following distinct rules:

Conjunctive Decision Rule

In following a Conjunctive Decision Rule, the consumer establishes a separate, minimally acceptable level as a cutoff point of each attribute. If any particular brand or model falls below the cutoff point on any one attribute, the opinion is eliminated from further consideration.. (Schiffman & Kanuk, 2007-08, pg 559-60)

Disjunctive Rule
The Disjunctive rule is the Mirror Image of the conjunctive rule. In applying this decision rule, the consumer establishes a separate, minimally acceptable cutoff level for each attribute. In this case, if an opinion meets or exceeds the cutoff established for any one attribute, it is accepted. Here, again a number of brands might exceed the cutoff point, producing a situation in which another decision rule is required. When this occurs, the consumer may accept the first satisfactory alternative as the final choice or apply another decision rules that is perhaps more suitable. (Schiffman & Kanuk, 2007-08, pg 560)

Lexicographic Decision Rule

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In following a lexicographic decision rule, the consumer first ranks the attributes in terms of perceived importance. The consumer then compares the various alternatives in terms of the single attribute that is considered most important. If one option scores sufficiently high on this top-ranked attribute, it is selected and process ends. When there are two or more surviving alternatives, the process is repeated with the second highest-ranked attribute, until reaching the point that one of the options is selected because it exceeds the others on a particular attribute. (Schiffman & Kanuk, 2007-08, pg 560)

Affect-referral Decision Rule

A simplified decision rule by which consumers make a product choice on the basis of their previously established overall ratings of the brands considered, rather on specific attributes. (Schiffman & Kanuk, 2007-08, pg 560)

Research Methodology
We have used almost primary data totally for our research purpose. We have used quantitative research methodology to expose of consumers Decision making criteria: their level, view & rules of decision making in case of choosing a particular mobile operator or accepting a particular package. We have designed the quantitative research study into three different parts, and each these parts has described separately in the following: The Method of Data Collection: For the primary data collection we have selected the questioner survey method, means we have asked questions to a sample of 45 people. There are about 14 questions including socio-demographic questions, MCQS, semantic differential & likert scale for ranking comments. We did the survey on how people are feeling about the purchase or selection factors of mobile phone operators in Bangladesh. For collecting the survey data, we went through personal interview and field intercepts survey procedure.

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We also have conducted few informal interviews except survey to learn more about the consumer perception about decision criteria preferences while choosing cell phone operators in Bangladesh. For this purpose we demeanor with our relatives, friends and few general people to understand the actual fact here. The Data Collection Instrument:

The primary data collection instrument for our research is mainly the multiple-choice questionnaire. The way we have designed our questionnaire is moderate to understand and complete, interesting, specific to our purpose, objective, and meaningful. In our questionnaire, we have also used the likert scale, which corresponds to the level of consumers agreement and disagreement, and semantic differential scale, in which subjects are asked to rank items in order of what they think most appropriate, to understand consumers attitude. The Sample Design: We have designed our sampling plan into three following categories:
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The sampling unit: Our target consumers were those people who actually use mobile phone, use different packages & seems choose best choice for them. The sample size: We survey broadly from total five categories: Young student, Teenager, Executive, Housewife, and Other type professions people i.e. like teacher, broker, unemployed young people etc. Total sample size is 45. It is noticeable that except housewife & some professions like executive, maximum category we take sample, includes both gender-male & female. We performed our survey on different locations like University campus, School campus, Shopping center, Office room (in case of executives), public locations like roads & parks, & in familiar respondent cases, sometimes at their own houses. The sampling procedure: As it was not possible to get the findings on the total population, we took random sample from above five categories to

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have the findings representative of the population. So, our sampling procedure we can tell stratified random sample as divide population into different categories & choose sample randomly from each category. Secondary data source:

We didnt use any of secondary data sources to find our actual research result. . However, in the secondary data resources we basically use the book Consumer Behavior for our literature review part, related to our projects that we have discussed previously.

Limitations
Inadequate time: As time is limited for project submission, we have to shrink many of our working plans, which may lead to wider results. Inadequate sample size: As our sample size is too small, compare to too big population & our short period for doing project, result may lack proper accuracy, if sample size would much bigger, a chance of more reliable result. Lack of respondents concentration: Many respondents from each sample category put answers sometimes without much concerning, due to either their business at that time or not properly understanding, this may lead to lack of accuracy to some extent in our project. Lack of viable information: We found very much lack of viable information, no other sources we could use rather than responds of samples for getting our actual project result.

Findings and analysis

Our findings that are what we can get from our research, broadly, detail discuss here with charts & figures. Our total findings we discuss here by dividing it into separate parts through respondent category:

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Consum S er aticfactionChart

80% 70% 60% 50% 40%

e l t T s i x A

30% 20% 10% 0% Male Fem ale satisfied 80% 72% dissatisfied 20% 28% Male

Fem ale

Descriptive: in here we can see that male satisfaction level is greater than female
satisfaction level. From the chart we can see that the male satisfaction is 80% whereas the female satisfaction level is 72% which is 8% less compare to the male percentage. But dissatisfaction level of female is higher than the male which is 28% where male dissatisfaction level is 20%.

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F acilitiesof B ank

100% 80% 60%

e l t T s i x A

40% 20% 0% loan facilities O/Dfacilities Fem ale atm facilities Male

loan facilities Male Fem ale 95% 90%

O/Dfacilities 86% 78%

atm facilities 90% 85%

Descriptive: In the chart we can see that between the 3 facilities the prime banks loan
facility has the highest vote that consumers think the best facility that bank can give them which is 95% and 90% respectively. The lowest of them is the O/D facility which male and female both consumers gave the lowest vote. From the chart we can also see that there atm service facility leads the second best facilities that they provides to their consumers which is 90% and 85% respectively.

Leading in Consumer Banking

Prime Bank Limited is a leading Bank for consumers and small business with a commanding presence in Consumer Credit, Hire Purchase and Lease Finance. The Consumer Credit Scheme of the Bank, which aims to help the fixed income group in raising standard of living, has been widely appreciated. Total 10618 customers have enjoyed Credit facility to the extent of Tk. 480.41 million under the Scheme. The rate

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of recovery of loan under the scheme is 96%. The Bank also introduced Credit Card both domestic and international as principal member of Master Card International.

Foreign Exchange Business (Prime Bank Limited)

In the year under review, Foreign Trade Operation of the Bank played a pivotal role in the overall business development of the Bank. they have established relationship with as many as 30 new foreign correspondents abroad thereby raising the total number of correspondents to 230. the Bank handled Foreign Exchange transactions amounting to Tk. 17855.40 million which is an increase of 67% over the last year. The Bank has also entered into remittance arrangements with several Banks and Exchange Houses and expects to handle increased volume of Remittance Business.

Treasury
Prime Bank Limited is one of the first local banks in Bangladesh to integrate treasury dealings of local Money-Market and Foreign Currency under one Treasury umbrella. Theban has handled significant volume of Treasury transactions. Prime Banks Dealing Room is connected with automated Reuters Terminal facility thus enabling the bank to provide forward / future facilities to its corporate clients at a very competitive rate.

SWIFT
Prime Bank Limited is one of the first few Bangladeshi Banks who have become member of SWIFT (Society for Worldwide Interbank Financial Telecommunication) in 1999.SW IFT is members owned co-operative, which provides a fast and accurate communication network for financial transactions such as Letters of Credit, Fund transfer etc. By becoming a member of SWIFT, the Bank has opened up possibilities for uninterrupted connectivity with over 5,700 user institutions in 150 countries around the world.

Automation in Banking Operation18

 Information Technology in Banking Operation Prime Bank Limited adopted automation in banking operation from the first day of its operation. The main objective of this automation is to provide efficient and prompt services to our valued clients. At present all the branches of the Bank are computerized. At branch level, we are using server based multi-user software under UNIX operating system to provide best security of information. Prime Bank Limited is providing comprehensive range of Banking Services with utmost care and efficiency to its customers. The customers can draw cash from their accounts in just within a minute. On-line Branch Banking The Bank has set up a Wide Area Network (WAN) across the country to provide Online branch banking facility to its valued clients. Under the scheme, clients of one branch shall be able to do banking transaction at any other branch of the Bank. The Bank also hosted its own Web Site to facilitate dissemination of information about its banking services & facilities to outside world. The Bank is lassoing to provide 24 hour customer services by installing Automated Teller Machine(ATM) in the near future.

Credit Card
Prime Bank Limited obtained Principal Membership of Master-Card International in the month of May 1999. Within a period of 6 months, the Bank successfully launched Master Card-Credit Card which created a new dimension in its customer service and consumer financing. The special feature of the Prime Bank Master Card is that its bears the card holder's photo on the card, which is the first of its kind in Bangladesh and adds security against misuse. Prime Bank Limited issues 4 types of cards. These are Gold Local &International and Silver Local & International. Local cards can be used in Bangladesh only.

Prime Bank Training Institute

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Prime Bank Training Institute was set up in July 22, 1998 with the aim to build up strong and skilled workforce. The Institute is located at 19, Dilkusha C/A, Dhaka. During the year, the Institute organized 4 (four) training courses on basic foundation of Banking, International Trade Finance and Foreign Exchange and Lending Risk Analysis which were participated by 96 participants. The Institute also conducted 7 (seven)workshops where a total of 245 participants attended. Apart from the Senior Executives of the Bank, eminent educationists and professionals were invited as guest speaker. Reference www.primebank.com

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