Professional Documents
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The second half of the year brought with it both glory and pain. Despite serious odds, India
put on a great show at the Commonwealth Games with our sportsmen improving the medals
tally to an all time great. On the other hand, the CWG organizers were plagued with charges
of corruption and the blame game still continues.
The economic recovery had barely begun when Greece’s economic crisis affected the whole
of Europe. Nation after nation declared bankruptcy and the world economic order looks
poised for a change. India faces its own economic hardships with galloping inflation - double
digits in over forty years. The industrial growth is however picking up so there is a silver
lining to the darkening clouds.
It was a year of triumphs and a year of scams and scandals. A largely illiterate and religious
populace showed remarkable restraint in accepting the Babri Masjid verdict. It was a victory
of democracy and secularism over communal forces. The judiciary on the other hand became
mired in controversies and even the highest courts and the senior most judges did not escape
unscathed.
The end of the year showed our Sports men and women bringing laurels at the Asian Games
while the nation reeled under one scam or the other. The Czars of the corporate world
showed tremendous magnanimity by endowing educational institutes with large sums of
money to further the cause of education and research. Yet, corruption appears to have become
institutionalized and neither the armed forces, bureaucracy, politicians, corporate nor judges
appear to be above it. It was the best of times and maybe also not the very best of times.
Sharmila Mohapatra
Editor
Abstract Introduction
This paper considers critical success factors The economy of the United States of
exhibited by small businesses in China. America is dependent on the health of small
Comparisons are made to similar prior business and entrepreneurial firms. During
studies performed in the US and Mexico. 1998-2004 small business produced half
The information from China is further of the private, non-farm (US) GDP (Kobe,
examined for changes in critical success 2007). The number of US small firms
factors through firm life cycle. Critical rises every year, energetically moving past
success factors have more similarities 25 million in 2005(US SBA 2006). Small
than differences. Critical Success Factors business employ 52% all US workers
found in common with Mexican Small (Conte, 2001). Other compelling figures
Business are Marketing Effort and include that 44 percent of all sales dollars
Competitive Forces. The study finds are created by small firms. The crucial
that there are differences in the factor role that US small business plays in the US
structure of the critical success factors has parallels in other national economies.
and that the key difference is concerning Estimates gathered by National Bureau of
meeting the financial needs and location Statistics of China (NBS)(2006), indicate
of the small firm in China. Also a lack that there 1,373,128 small enterprises
of support is found for a life cycle effect exist. To put this into proportion, in 1995,
on the importance of the critical success small enterprises accounted for 62.5% of
factors. This new critical success factor is China’s total industrial output and 73.6 %
unique to small business in China, without of its industrial employment (Wang and
counterpart in North American prior work. Yao, 2002).
There is an absence of persuasive support
for a variation in critical success factors Complicating attempts at comparison
with business age in China. Findings and between East and West, China classifies
anomalies are discussed. business not by employees but by output.
Another way of stating this is that; when
the National Bureau of Statistics of
2
Are Small Business Critical Success Factors Same in Different Countries?
the universality of the three groupings Task centers on small business growing pains in
Environment, General Environment and terms of strategies that may be employed
Personal Characteristics): When the Task to successfully avoid the rocky shallows of
Environment and General Environment are small business growth (Quinn and Cameron,
very different, do the ratios of importance, 1983; Gupta and Chin 1994; Thietart and
of the previously enumerated success Vivas 1984; Kazanijan 1988, Dodge and
factors, change or do the factor definitions Robins 1992, Dodge et al 1994).
change. In other word, does environmental
change result in CSF fine tuning or in Pullig and Chawla (unpublished 2007) chose
redefinition? Quinn and Cameron (1983) identification
of organizational life cycle for prior
An examination of large firms in Asia have research on a small business in Mexico.
shown a pattern of employee behaviors The four major stages proposed therein are
in successful enterprises very different equally useful for this study. Quinn and
to the employee behaviors associated Cameron found four major stages: (One)
with successful firms in the United entrepreneurial; (Two) collectivity; (Three)
States (Cunningham 1995). Does this formalization and control; (Four) structure
dissimilarity in nature extend to a possible elaboration and adaptation. These stages
contrast between North American and may also be described as startup, rapid
Asian small businesses? Can Western growth, equilibrium, and evolve or die.
critical success factors be generalized to The gathered information did not seek out
apply to the East? entrepreneurs in the act of creation so only
Critical Success Factors may also be the remaining three stages are dealt with
examined with reference to time. Life cycle here. In order to gather quantifiable data,
stages in Asian small firms may show very the three remaining stages were interpreted
different priorities given a firms position as Collectivity: one to three years in
with reference to important milestones. business, Formalization: 4 to 10 years and
To address time, a reference scale must be Structure elaboration and adaptation: Over
marked out so that the businesses can be 10 years. These choices are informed by
unambiguously classified. The authors are Lippitt and Schmidt (1967) but they do
aware of several systems of partitioning the not comply with a rigorous application of
current state of a firm into a discrete number organizational life cycle interpretation. The
of life stages or cycles. Systems range in the pragmatic reason for using these arguably
number of compartments from three (Quinn arbitrary delineations is in order to increase
and Camaron, 1983) to, with more than three the usefulness of the data when used in
times that, at ten (Gupta and Chinn, 1994). comparison with similar studies performed
Small firms have evolutionary stages that in the past noted above. However, even
they pass through if they are lucky enough with this difficulty in method, the ability
to grow. Greiner (1972) speaks of problems to quantify small business life cycle stages
and their bearing on a firm’s position in an with respect to critical success factors yields
organizational life cycle. Other research an interesting, supportable result.
4
Are Small Business Critical Success Factors Same in Different Countries?
6
Are Small Business Critical Success Factors Same in Different Countries?
30 of the 41 items loading with significance of the variance and has a reliability of .71.
on one of the six factors. The factor This factor is unique to the China study due
contents, rotated factor loadings, Eigen to intensive regulation of the movement of
values, variance explained, reliability, and population.
mean factor values may be seen in Table 2.
Factor 5 is Competitor Analysis explains
The first factor extracted contains ten 4.6 % of the variance and this is similar
items with loadings from .54 to .74 and a to the US study. In addition, this factor
coefficient alpha of .82. Factor 1 explains encompasses the U.S. factor of Purchasing
23.8% of the variance in the data and and Inventory Control.
contains items related to both customer and
Factor 6 contains four items describing
employee concerns. The label given this
Owner Experience/Knowledge. This
factor is Marketing Effort and it is identified
factor explains 4.1% of the variance with
as being a part of the small firm’s task
a reliability coefficient of .77. Owner
environment. This factor combines two areas
Experience/Knowledge is a success factor
found as distinct factors in the U. S. study,
belonging to the personal characteristics
Marketing/Image and Human Resource/
of the small business owner domain of
Personnel. The reason for the difference in
small firm performance as described by
factor structure may be due to our current
Keats and Bracker (1988). The same factor
sample being dominated by manufacturing
was discovered in the U.S. study and past
and other firms. It may be a function of size
research indicates that small firm success
and lack of emphasis yet on the HR due to
is closely linked to management skills,
the nascent stage of the business.
interpersonal skills, and education (Ibrahim
Factor 2 is labeled Market Forces and and Goodwin, 1986; Lussier, 1995). A
explains 6.7% of the variance and has an comparison of US and China critical success
coefficient alpha of .76 which is a part of factors is presented in Table 3.
the US factor of Marketing Effort.
Table 3
Factor 3 is assigned the label of Financing China Study: U.S. Study:
Needs and explains 5.0% of the variance Marketing Effort Marketing/Image;
with a reliability of .61. This was not a Human Resources
factor discovered in the U.S. study. This Competitive Forces Competitor analysis;
factor represents a potentially significant Purchasing/Inventory
difference between the two nations small Control
business sectors. In the U.S. the ability Industry Issues/Trends Industry Issues/Trends
of a credit worthy firm to obtain capital Financial Needs Not a Factor in U.S. Study
is really never questioned while in China Owner Experience and Owner Experience and
Knowledge Knowledge
three related and significant small business
Location Issues Goal Orientation
problems are the inability to obtain credit,
extremely high interest rates, and a heavy Differences between Stages of the
tax burden (Rodriguez 1994). Organizational Life Cycle
Factor 4, Location Issues, explains 5.0% A composite value was created for each
8
Are Small Business Critical Success Factors Same in Different Countries?
factor by calculating the mean of the items firm owner in China is a key participant
loading in excess of .50 on each respective among a complex set of interrelated success
factor. Using this composite value a factors including marketing concerns,
separate analysis of variance with contrasts location, competitive forces, industry
were done for each factor to determine if issues and trends, the availability of capital,
significant differences existed as a small as well as the motivation and ability of the
firm moved through its life cycle as defined owners themselves. One implication of this
by the number of years in business. Firms study is that success factors may be different
were categorized as belonging to one of given the very distinct task environments
three life cycle stages (1) One to Three produced by the variation in cultural,
Years in Business, (2) Four to Ten Years political and economic characteristics
in Business, and (3) Over Ten Years in found in the two nations. Specifically, the
Business. The resulting F-values for the finding of a financial needs factor may be
ANOVA’S and the univariate T-values for due to these differences.
contrasts between the three groups of small
While the China small business owner’s
firms are shown in Table 3.
perception of success factors is somewhat
Examination of the results from the different from their counterparts in
analysis of variance demonstrates a lack USA, there are many similarities. The
of support for the proposition that critical similarities provides evidence that Keats
success factors are perceived as more or and Bracker’s (1983) conceptual model
less important depending upon a China of small firm performance is a useful tool
small firm’s position in their life cycle. for categorization of the factors critical to
This is true for all factors in examining the the success of a small firm in a variety of
F-Values given in the analysis of variance. environments.
Conclusion The absence of a life cycle effect on the
importance of the critical success factors
GLM for Small Firms in China
to the small firm owner indicates that
Critical Success Factor F-Value Pro > F these factors may operate continuously
1-3 Yrs
throughout the life cycle. This may be due
vs.
4-10 Yrs the fact that the small firm sector in China is
Marketing Effort .25 .62 dominated by micro enterprises that do not
Market Forces .28 .59 change in size significantly as they progress
Financial Needs .84 .36 through their life cycle. Thus, these firms
Location Issues .19 .66 may not have the attached implications that
Competitors’ Analysis 1.49 .23 are expected with growth. Future studies
Owner Experience Knowledge 1.5 .22 attempting to compare small firms across
nations should take this into consideration.
Undoubtedly, entrepreneurs or small
business owners are important to society A significant difference between the critical
and commerce in both the United States and success factor structure as perceived by
China. Our findings indicate that the small the entrepreneurs of China and the U.S.
10
Are Small Business Critical Success Factors Same in Different Countries?
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SIES Journal of Management, April - August 2010, Vol.7(1): 13-19
Abstract Introduction
The theory of intraperson games propounded In an attempt to define the predominant
by Ding (2007) proposes internal constructs marketing thought and theory, Sheth,
of consumer decision making that are labeled Gardner, and Garrett (1988) in their
as efficiency agents and equity agents. The seminal work underscore two basic flaws
next important step in theory development is in the development of marketing theory.
the creation of empirically validated scales, One, the inability of marketers to pursue
so that managers may be able to use the knowledge from other disciplines. And,
theory in a strategic and meaningful manner two, upon receiving theories from other
while examining consumer decision making disciplines a failure to subject them to
processes. We operationalize the theoretical rigorous empirical scrutiny. It is generally
constructs of efficiency and equity agents
agreed that a good theory is only rich if it
and proceed to develop multi-item measures
is sound in structure and specification and
of the constructs. We empirically validate the
open to empirical testability thus lending
scales using a national random sample of three
itself to parsimonious richness. Some
hundred respondents and arrive at validated
important steps on the way to appropriate
scales that may be used for future studies. Our
theory development are often incrementally
results will be of interest to academic scholars
miniscule yet significantly vital to future
and marketing practitioners that would like
contributions to the discipline.
to use the theory of intraperson games in their
strategy formulations. The theory of intraperson games proposed by
Min Ding (2007) in the Journal of Marketing
Keywords : Variety Seeking,
promises to be a major breakthrough in
Intraperson Games, Efficiency Agent,
consumer decision making. Ding (2007)
Equity Agent, Intrapersonal Profile
presents a predictive quantitative model based
on his theoretical constructs. Most relevant
to our research, the theory of intraperson
games draws attention to competing internal
factors that impact consumer decisions.
In light of Sheth, Gardner, and Garretts’ of the conflicts that take place within
observations above, Ding relies heavily on one’s mind. Freud believed that there are
knowledge from other disciplines including three interacting components of the mind.
psychology, game theory, economics, and The Id is a self-centered, primitive drive
social psychology. The insights gained guided by a constant pursuit of pleasure.
from this multidisciplinary perspective Another drive, the Superego, counteracts
render the intraperson games theory well the Id, acting as a cautious voice of reason
structured and precisiely specified. The that has been shaped by the morals of an
next logical step in theory development individual’s society. The Ego is an equity
would then be empirical testabilility, before drive that attempts to give each drive a
marketers can apply and use this theory. chance to show through at different times.
Our research provides the first necessary
Ding’s research is also shaped by an
step to ensure empirical testability which is
Artificial Intelligence theory originally
the development of a valid empirical scale
published by Marvin Minsky. Minsky’s
for the constructs proposed in the theory of
“Society of Minds” theory (Minsky 1986)
intraperson games.
proposes that the human mind is comprised
We proceed by reviewing relevant of thousands of agents that each executes a
literature in consumer decision making different task. These agents are arranged in
and subsequently highlighting major a hierarchy where the higher agents choose
constructs of intraperson game (IPG) a lower agent to utilize in a given situation.
theory. We subsequently develop and test
Ding took these concepts and integrated
the validity of operationalized scales. Our
them into a model normally used for
research contributes to the extant theory of
multi-person game theory. The model uses
consumer decision making through the use
two higher level agents, efficiency and
of intraperson constructs of IPG.
equity agents. The Theory of Intraperson
Games successfully quantified the idea
Literature Review
that individuals’ decisions are a result of
In order to build upon the constructs included a battle between competing agents. An
in the theory of intraperson games (Ding empirical study conducted by Ding verified
2007), it is first important to understand the the model’s aptitude for predicting buying
academic disciplines from which Ding has outcomes. The empirical study provided
drawn in his theory development. We then evidence that effectively measuring an
look to variety seeking behavior as an area of individual’s personality could better predict
the marketing literature that could be impacted future buying behavior than by simply
by the exploration of intraperson games. analyzing past purchases. However, Ding’s
study did not provide a comprehensive scale
Min Ding (2007) has proposed a theoretical for measuring an individual’s intrapersonal
model that combines game theory with characteristics. The mathematical model
several famous theories of the human simply shows how each agent would
mind. Freud’s structural theory (Freud interact in the context of game theory.
1923) is the basis for Ding’s understanding
14
Developing Empirical Measures of Intraperson Games Constructs
Intraperson game (IPG) theory can provide like to make this connection more accessible
useful insights into areas of marketing that are to marketers. This research aims to develop
often misunderstood. A good example of such empirical scales for measuring two IPG
an area is variety seeking behavior. Variety constructs theorized by Ding (2007):
seeking behavior is a phenomenon that has Efficiency and Equity Agents. The efficiency
been widely studied in the field of marketing. agent strives for instant gratification while
The study of variety seeking and brand the equity agent considers long term
switching has produced various theories and benefits. We develop multi-item scales to
constructs that attempt to capture this concept measure these constructs of intraperson
in a way that is beneficial to marketers (Bass game theory. A survey based methodology
1973, 1974; Kahn 1995; van Trijp 1996; Ding with a sample of three hundred respondents
2007). A large emphasis has been placed on is used to examine the relevance, validity,
external variables that cause such behavior. and reliability of the empirical scales.
Matters of demographics, branding, pricing,
etc. have been shown to influence such Scale Development
behavior (Chen 2004, Raju 1980). However,
very few studies have analyzed possible Building on the successful inclusion of
internal constructs and processes that could multiple agents of the mind in a previous
have an influence on variety seeking behavior marketing application (Ding 2007),
and consumer decisions. this study proposes that measuring two
distinct and opposite agents is possible. In
A study conducted by Hans van Trijp accordance with recommended procedures
(Van Trijp, Hoyer, and Inman 1996) is the (Sheth, Gardner, Garrett 1988) we have
first to differentiate between internal and taken multidisciplinary theorized constructs
external motivations for variety seeking. and subjected them to empirical study. By
The study blends internal factors such as measuring a respondent’s agreement with
need for variety with external factors such statements of equity and efficiency, effective
as product category. The study is successful scales will be used to classify consumers as
in identifying some key variables that “equity-strong” or “efficiency-strong”.
contribute to a variety seeking decision.
However, once again, these variables The scale (see Table 1 below) contains nine
are mostly driven by external factors. items in which respondents indicated their
The unpredictability of consumer variety level of agreement on a five point scale
seeking behavior is what calls for further from strongly disagree to strongly agree.
investigation. With most external factors The items are designed to bring forth the
already explored by marketers, intrapersonal respondents beliefs concerning various
factors provide a logical area to search for hypothetical situations. The hypothetical
new insights. scenario of decisions involving a restaurant
visit is chosen with the student sample in
The Theory of Intraperson Games fits mind. It is a challenge to find a product
theories of marketing and psychology that demands involvement, experience, and
together effectively into a mathematical considered decisions that also applies to a
context. However, the current study would
large cross-section of the target population. I wait for movies to be released on DVD
Items are either statements that involve or pay per view rather than pay more to
instant gratification, lack of compromise, see them in the theater.
swift action or statements that involve trade-
offs, long-term consideration, and restraint. I put my music on shuffle rather than
listen to my current favorites until I grow
Table 1. tired of them.
During a typical visit to a restaurant… I wait until I have enough cash or money
After eating a high calorie entrée, I order in my account rather than purchasing on
dessert. a payment plan or credit.
If I am hungry, I order appetizers before If a gift for me was hidden in a closet, I
the entrée arrives. would keep it a surprise and not look at it.
I order as much alcohol as I desire with
the meal. Methodology
After eating a high calorie entrée, I order The scales were introduced in a survey that
a low calorie dessert. was distributed to the students, faculty, and
I order what I desire the most, regardless friends of a college in the Northeast USA.
of the calorie content. The survey was approved by the Institutional
Review Board and then administered
If I am hungry, I do not order appetizers
nationally via the web through an online
but wait for the entrée.
survey service. The online survey format
I order items I know I have enjoyed in provided ease of use for the respondents
the past. and more convenient and accurate data
After eating a high calorie entrée, I skip collection for the researchers.
dessert.
Prior to the launch date a pretest survey was
I worry about the price of my meal. conducted with 10 respondents. The pretest
If I have a working day the next morning, survey was performed using the online
I do not drink at all. survey tool to establish face validity of the
scales and also to gain insight into the user
The second scale (see Table 2 below) for experience each respondent would have
measuring the efficiency and equity agent with the survey. With the researchers in the
constructs included five hypothetical items room, the respondents provided immediate
in which the respondent would rate their feedback which was then recorded and
level of agreement on a five point scale. considered during final revisions. In an effort
Table 2. to increase the face validity, reduce ambiguity
in questions and enhance the ease of response
I would prefer to receive low yearly and, redundant scale items were combined or
installments of $10,000 over 15 years deleted. Phrasing was corrected and revised
rather than a onetime payment of to facilitate more accurate statements. Once
$100,000. the survey passed another brief test round, it
16
Developing Empirical Measures of Intraperson Games Constructs
was distributed throughout the course of the sample (27%) reported between $76,000
following weeks. The subsequent analysis and $100,000 annual household income.
is based on a convenience based random Table 3 provides a more detailed view of
sample of 300 individuals. the sample profile for this study.
18
Developing Empirical Measures of Intraperson Games Constructs
agents, efficiency and equity. An individual’s Chen, Junsong. “The Influence of Company
decision is ultimately swayed by one of Name in Variety Seeking.” Journal of Brand
the two agents. The stronger agent is more Management (2004): 219-232.
likely to “win” the argument more often.
Ding, Min. “A Theory of Intraperson
Marketers should be aware of the predictive
Games.” Journal of Marketing (April 2007):
powers that may arise from future research
1-11.
of this topic. The scales created in this study
are an important first step in drawing value Freud, Sigmund. “The Ego and the Id.”
from a deeper understanding of consumer Complete Psychological Works of Sigmund
decision making. Freud (1923): 1-66.
Recognizing the independence of the Kahn, Barbara E. “Consumer Variety-
internal decision making process is critical Seeking Among Goods and Services.”
to understanding the nature of intrapersonal Journal of Retailing and Consumer Services
agents. As competition intensifies, product (1995): 139-148.
offerings and price points become seemingly
homogeneous, and traditional advertising Minsky, Marvin. Society of Minds. New
loses effectiveness, companies should York: Simon & Schuster, 1986.
consider appealing more to a consumer’s Ratner, Rebecca K., Barbara E. Kahn
agents. Considering that all decisions are and Daniel Kahneman. “Choosing Less-
the result of an individual’s perception of Preferred Experiences for the Sake of
external information, it would be useful to Variety.” Journal of Consumer Research
know which agent is on your side. (June 1999): 1-15.
Future research is needed to explore the Raju, P.S. “Optimum Stimulation Level: Its
impact of these intrapersonal agents on Relationship to Personality, Demographics,
consumer behaviors. Another correlation to and Expoloratory Behavior.” Journal of
be considered is the type of brand switching Consumer Research (December 1980):
behavior relative to an individual’s 272-282.
intrapersonal make-up. Will an efficiency-
strong consumer be less likely to switch for Sheth, Jagdish, Gardner, David, Garrett,
extrinsic reasons? Dennis, Marketing Theory: Evolution and
Evaluation,
Bass, Frank and William L. Wilkie “A van Trijp, Hans. “Why switch? Product
Comparative Analysis of Attitudinal category-level explanations for true variety
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of Marketing Research (1973): 262-269. Research (1996): 281-293.
20
Key Retail Store Attributes Determining Consumers’ Perceptions
from the present four per cent. In addition, management consultants, business people,
organized retail sector has also grabbed the academicians, trainers, and shoppers.
attention of foreign companies, showing
their interest to enter India. In India, the Review of Literature
organized retail market will touch roughly The consumers are always found with distinct
US$30 billion by the year end of 2010. needs and wants which may be because of
In India, the modern retail formats are their consumption pattern, demographics
operating in different sizes and shapes. They (like age profile, working patterns, income
are quite different in terms of the ownership and expenditure, occupation), lifestyle
of the retail business, the kind of premises changes, buying process, shopping behavior,
(format) used, and the orientation of the shopping motivations and objectives, and
product range. Modern retail outlets have changing consumer etc. In the same regard
provided consumers with new shopping Abercrombie et. al., (1994) mentioned
exposure and constantly evolving choice that the happening consumption culture
for shopping with embracing on wide range is contemporary therefore the evolving
of portfolio. scenario of the consumption pattern over a
It is known that retailing is a process of period of time propels retailers to spotlight
selling goods and services to the final on consumers’ perceptions, attitudes, and
consumers for their personal, or their buying behavior.
family’s consumption. Hence, it is very The consumers’ profile apprehension
essential for the retailers to acquire as explains consumers’ transformations over
much as information and understanding time and constructs predictions about how
about the consumers. This make them well- the consumption pattern will evolve in the
informed and familiar about consumers coming time. For instance, the predictions
on diverse fronts like their demographics, given by India’s National Council for
psychographics and socio-economic status, Applied Economic Research reveals about
identifying the right consumer base that 17 million households – 90 million people
will prove to be significant for retailers. – with annual earnings ranging between
There are many past studies that focus on $4,500 and $22,000 comprise middle class
the consumer behavior and have helped in population currently in India. Moreover,
understanding about the consumers. As it 287 million were identified as ‘aspirers’
is known that consumer behavior is ever or in the near future these consumers are
evolving field of study, this is an attempt expected to join the middle class. Further
to understand consumers’ perceptions, it is expected that these groups will spend
attitudes and buying behavior. On the more on advancing and varying their
basis of literature reviewed on consumers lifestyles and eating habits like, using
in retailing, it was identified that knowing processed and convenience items.
ever changing consumers is very significant It was realized that there are other reasons
for the retailers. Hence this research could than the need to buy the simple physical
be beneficial to researchers, retailers, goods by Tauber (1972) in his research
‘why do people shop? He further stressed through the senses.” It is right that some
that, there are various motivations for of the writers have presented perception
shopping influenced by several factors, in terms of five senses. As Foxall &
many of them are related to personal and Goldsmith (1994) mentioned in their book
social motivations of consumers and a that consumers become aware about the
few of them are associated to the buying environment through the five senses and
of products. It is therefore necessary for therefore sensation is the process with
retailers to research and understand what which perception begins. But perception
makes shoppers highly satisfied. In addition is not synonymous with sensation despite
to this, several consumer researches have their clear interconnectedness.
revealed other psychological motivations
To Perceive = {to see, to hear, to touch,
for shopping.
to taste, to smell, to sense - internally}
Understanding consumer behavior is {some} {thing, event, relation}
incomplete until describing how consumers
Consumer perception is an approximation
make choices, as clarified by Foxall
of reality. Consumer mind tries to make
& Goldsmith (1994) in their book on
sense out of the stimuli to which they are
Consumer Psychology for Marketing.
exposed. Perception is the way in which an
Consumers come to know and learn about
individual interprets stimuli received by the
brands through various communication
senses. Perception is defined as, “A process
vehicles like, packages, promotions,
through which consumers make sense out
advertisements, business talks and word
of the world” by Runyon (1977). In a broad
of mouth. After consumers become aware
sense, Wilkie W. L., (1986) mentioned that
about the brands, their buying decisions are
the topic of perception is concerned with
guided by the perceptions or impressions
the translation from the external, physical
of the brands that they have formed from
world to the internal, mental world that
the information. Therefore, the study of
each of us actually experiences.
consumer perception is an element of
largely unconscious processes of consumer The study carried out by Sinha & Banerjee
behavior. (2004) attempted to know the determinants
of retail store selection based on the
Because consumers make decisions and
perception of consumers on visiting various
take actions based on what they perceive as
types of stores, their observations on the
reality, it is essential to describe the term
levels of various service and physical
perception and the related concepts that
parameters related to the store visited.
influence the consumers to buy. Schiffman
There are three basic functions that are
& Kanuk (2007) described perception
contained in the definition of perception:
as, “the process by which an individual
sensing a stimulus in the external world;
selects, organizes, and interprets stimuli
selecting and attending to certain stimuli
into a meaningful and coherent picture of
and not others; and interpreting the stimuli
the world.” In the simplest term Young
and giving them meaning.
(1961) defined “to perceive is to observe
22
Key Retail Store Attributes Determining Consumers’ Perceptions
Joyce & Lambert (1996) have expressed of the factors determining store related
that evaluation done by individuals of perceptions. Similarly, Peter and Olson
store image could be affected by self- (1990) observed that the most commonly
views developed by them (e.g. type of studied store image dimensions are
store shopped, personnel employed, music merchandise, service, clientele, physical
and videos played, other aesthetic store facilities, promotion, convenience and
dimensions). It lies at the heart of the manner store atmosphere, which closely resemble
in which he responds to his world. Foxall & Lindquist’s proposed dimensions. Sheth
Goldsmith (1994) support that the effective and Mittal (2004) stated that: “Store image,
management of marketing activities of the sum total of perceptions customers
an organization rest on the following two have about a store, is determined by these
fundaments: merchandise, service, and price factors;
it is also determined by atmospherics,
• First, consumers act on their perceptions
advertising, and store personnel.” However,
which basically come from the
as with the definition of store image, no
information that they receive.
consensus has been reached on a set of
• Second, mangers need to understand universal store image dimensions.
the nature of perceptions of their
For the purpose of this study, Lindquist’s
consumers and potential consumers have
framework of store image was selected as
of themselves, their social world, and
a viable point of departure for identifying
products available to them.
store image dimensions and descriptions
The study carried out by Joyce & Lambert (incorporating the relevant attributes for
(1996) has depicted that consumers’ each dimension), since it proves to be
perceptions regarding the store image are the most comprehensive in store image
likely to be affected by the types of stores literature. Cognitive, affective and physical
consumers repeated visited in the past and components of store image are included
the attributes associated with those stores in the proposed store image attribute
(e.g. color, lighting, signage, clientele, dimensions. Therefore, in building on
salespeople). the foundation established by Lindquist
(1974,1975), as well as taking into account
According to O’Connor (1990), the primary what other researchers have identified, the
factual elements or attributes determining following store image dimensions that are
a retailer’s image by forming consumers mostly forming and influencing consumers’
perceptions, include price, variety, perceptions are also considered for the
assortment within product categories, study (Refer Table 1). Thus modern retailers
quality, products, service (or lack thereof) need to examine perceptions of consumers
and location. Type of customer, shop about important aspects of organized retail
location, price levels, service offered, stores.
merchandise mix, advertising and the
characteristics of the physical facilities
are listed by Terblanche (1998) as some
24
Key Retail Store Attributes Determining Consumers’ Perceptions
Research Methodology
For this study, an exploratory research design was considered appropriate. The information
was collected through a sample survey. Data were collected from the consumers visiting
Big Bazaar, D-Mart, Reliance Mart, and Vishal Mega Mart in Ahmedabad (Gujarat state).
Researchers have drawn the samples applying convenience sampling procedure. The sample
size was determined applying proportions (determining the sample size when estimating
proportions). Considering confidence level of 95 per cent, a margin of sampling error (or
precision) of ± 5 per cent, and proportion of a sample for the survey is shown in the following
table. Thus, the final sample size was calculated to be 196. Thus, the study attempted to attain
sample reliability within ± 5 per cent margin of error at the 95 per cent confidence level.
Table: 2 Determination of Sample Size
Age 18-24 79 40
25-34 74 38
35-44 31 16
45-54 12 6
Latest Education 12th Standard 33 17
IIT/ Diploma 13 7
Bachelors Degree 86 44
PG Diploma Course 7 4
Masters Degree 55 28
Ph. D. 5 1
Monthly Family Income Under Rs. 50000 104 53
Rs. 50,001 to Rs. 1,50,000 62 32
Rs. 1,50,001 to Rs. 2,50,000 18 9
Rs. 2,50,001 to Rs. 3,50,000 7 4
Rs. 3,50,001 to Rs. 4,50,000 2 1
Rs. 4,50,001 and above 3 2
Marital Status Single 99 54
Married 97 50
Family Structure Nuclear 102 52
Joint 94 48
No. of Family Members One 4 2
Two 5 3
Three 15 8
Four 55 28
Five 43 22
Six and more than Six 74 38
No. of Children in Family Not any 46 24
One 64 33
Two 77 39
Three 7 4
Four or more than Four 2 1
Vehicles in Family Four-Wheeler 15 8
Two-Wheeler 86 44
Both Two & Four Wheeler 90 46
Not any 5 3
Current Employment Full Time 140 71
Part Time 12 6
Retired 1 1
Unemployed 43 22
Present Occupation Business 39 20
Service 103 53
Both Business & Service 7 4
Study 43 22
Housewife 4 2
Gender Male 171 87
Female 25 13
Total 196 100
26
Key Retail Store Attributes Determining Consumers’ Perceptions
Table: 4 Convenient Shopping Day, Time and Normal Time Spent in Store
Most Convenient Most Convenient Time Normal Time Spent
Day in the Store
Sunday & Saturday Evening Time (4:00 Afternoon Time 1 to 2 hours - 59.2%
- 87% p.m. to 8:00 p.m.) - (12:00 noon to 4:00
51.5% p.m.) - 30.1%
Researchers also tried to find out whether
Chart : 1 customers would be interested in new
Favor to opening oforganized retail stores (modern) retail stores or not. The results
as per Chart-1 show that 69.4% of the
respondents opined for opening the new
60.0%
(modern) organized retail stores. So, we
69.4%
conclude that there is an optimistic future for
40.0%
organized retailers. The survey result also
reflects that 69% of the male respondents
and 72% of the female respondents wanted
20.0% new organized retail stores to be established
16.8% in Ahmedabad. Moreover, it was also found
13.8%
that 78% of the young respondents (18 –
0.0%
Don’t Know Yes No 34 yrs) were in favour of organized retail
stores.
Survey also revealed that 40.82% and
Chart : 2 48.47% of the respondents’ usual shopping
Usual Shopping Place place is organized retail store and both
(organized and traditional) respectively as
given in the Chart - 2. While traditional
store is opted by only 10.71% of the
Both Organized respondents as their usual shopping place
48.47% Retail Store
40.82%
which suggests that consumers are diverting
towards the organized retail stores. The
survey result also pointed out that there are
Traditional only 5% respondents who visits this store
Store
10.71% daily and almost 65.3% people preferred a
cash payment mode.
1) Relationship between Preference of Shopping Place and Demographic Variables:
Based on the literature reviewed the following hypotheses was framed and tested by the
researchers.
H1: There is no significant association between the usual shopping place and the Demographic
variables (Age, Family Income, Marital Status, Gender and Present Occupation).
28
Key Retail Store Attributes Determining Consumers’ Perceptions
The test result shows that asymp.sig. value for product range is less than .01 which implies
that less than 60 % of the consumer perceive product range is not good while for others Store
layout, Shopping convenience, Promotional schemes, Product pricing, customer service,
Employee behavior, Store ambience asymp.sig value is more than .01 which indicate that
more than 60% Consumers perceive Store layout, Shopping convenience, Promotional
schemes, Product pricing, customer service, Employee behavior, Store ambience as good
at the organized retail store.
4) Factor Analysis: Identifying Key Store Attributes Influencing Consumers’ Perceptions
The determinant of correlation matrix calculated for this analysis was 1.14E-004 > 0.00001,
which implies no case of multicollinearity among the selected variables. Moreover Kaiser-
Meyer-Olkin measure of sampling adequacy was 0.824 stating the applicability of factor
analysis. Bartlett’s test of sphericity indicates that the correlation matrix of the selected
variables is not identity matrix.
Before undertaking the factor analysis, variables having less (0.5) commanalities were
removed from the list. When analyzing a covariance matrix, the initial Eigen values were
the same across the raw and rescaled solution and Principal Component Analysis method
was employed for the Extraction of the variables. Here three variables were removed from
the list of 34 variables. Interpretability of the factors was improved through rotating the
factors and rotation maximizes the loading of each factor, so varimax rotation method was
employed in this analysis. Here all 34 factors have been extracted in the 8 components
which are mentioned below.
30
Key Retail Store Attributes Determining Consumers’ Perceptions
Hence, the research suggests that the retailers must focus during these days and
following important factors could be further time of the days.
explored for future research.
The majority (nearly 70%) of the respondents
1) Courteous Staff Members 2) Customer opined for opening new (modern) organized
Attention 3) Offers and Discounts retail stores. So, there is an optimistic
4) Comfort and Elegance 5) Proximity future for organized retailers. Moreover, it
6) Variety 7) Speedy Service 8) Assurance was also found that most (approximately
80%) of the young respondents (18 – 34
The above mentioned factors also state the
yrs) are in favour of organized retail stores.
importance of each. One could interpret
Therefore, to form the ‘Young Shoppers’
that customers visiting shopping malls give
Club’ is a good business strategy and the
utmost importance to the above mentioned
members can be offered special offers,
parameters. Though the study was carried
discounts, organizing contents etc. Thus, it
out in Ahmedabad city, the same could
would help in attracting the young shoppers
be extended to other cities and States as
to visit the retails store.
well to get an exact idea about consumer
perceptions. Less than half (40%) of the respondents’
usual shopping place is organized retail
Major Implications from the Study store. However, most of the consumers
have visited the organized retail stores,
Given below are some of the key implications indicating that there is great future business
which are useful in understanding consumers opportunity. Moreover, majority of people
by the retailers. preferred a cash payment mode.
Many past researchers have revealed Normally, the salesperson is the one who
the demographics of consumers have a interacts much with the shoppers in the store
vital role to play in shaping consumers’ leading to more chances of influencing their
perceptions. However, from the research shopping decision. However, the analysis
it is inferred that usual shopping place and suggested that consumers’ purchase
demographic variables have no significant decision is not influenced by salespersons
or considerable association. At the same while shopping at organized retail store.
time, the findings also showed that the Thus, the role of salesperson is important
demographics variables are insignificantly and therefore well trained and skilled sales
associated with the favoring to opening of staff is a must.
the new (modern) organized retail store.
More than one sixth of the consumers
It is also found that the most convenient perceive product range, store layout,
shopping day is Sunday and Saturday, most shopping convenience, promotional
convenient shopping time is evening (4:00 schemes, product pricing, customer service,
p.m. to 8:00 p.m.). Moreover, consumers employee behavior, and store ambience
normally spent 1 to 2 hours while visiting as good at the organized retail store.
the organized retail stores. Hence, the Moreover, the research suggests that the
32
Key Retail Store Attributes Determining Consumers’ Perceptions
following important factors that one could to frame the store image in the retailing
consider that customers visiting retail store business. Such framed perception of certain
give utmost importance to the hereunder strong attributes increases the ability of the
mentioned parameters. 1) Courteous Staff store to attract consumers. We assume that
Members, 2) Customer Attention, 3) Offers the study would be very useful to retailers
and Discounts, 4) Comfort and Elegance, and researchers as it provides a realistic
5) Proximity, 6) Variety, 7) Speedy Service, replication of the situation consumers
8) Assurance. Thus, retailers must focus on typically encounter when they are exposed
and improve on these store attributes. to attributes of the stores, form a perception
towards the store attributes and subsequently
Limitation of the Study and it affects buying behavior.
Conclusion
References:
Along with the merits, the study also has
some limitations. The data collected is from Abercrombie N., Hill S., & Turner B. S.
Ahmedabad and sample size is restricted (1994). Dictionary of. London: Penguin.
to 196 only. The value of any research
Cooper, D.R. and Schindler, P.S. (1998),
findings depends critically on the accuracy
Business Research Methods, 6th ed.,
of the data collected. Data quality might
McGraw-Hill, New York, NY.
be compromised because of number of
potential errors, e.g., understanding of Engel, James F., Kollat D. T., & Blackwell
questions, length of questionnaire, biased R. D. (1973). Consumer Behavior. New
samples, biased responses etc. The biasness York: Holt, Rinehart & Winston.
in the findings might appear because the
Foxall G. R. & Goldsmith R. E. (1994).
survey was conducted all the retail stores
Consumer Psychology for Marketing. New
during the day time only. Moreover, as the
York: Routledge.
survey was conducted at the exit door of the
store, the samples may be biased towards Joyce M. L & Lambert D. R. (1996).
the organized retail stores. In addition to this Memories of the way stores were and retail
the sampling procedure is non-probability store image. International Journal of Retail
convenience sampling and thus it inherently & Distribution Management, 24 (1), 24–33
brings all the limitations of it.
Lindquist, J.D., (1974-75). Meaning of
This study has shown the consumers’ image: survey of empirical and hypothetical
perceptions towards the organized retail evidence. Journal of Retailing 50 (4), 29–38.
stores which broadly helps to understand the
shopper behavior. The study has revealed Martineau, P. (1958). The personality of the
eight store attributes (1. Courteous Staff retail store. Harvard Business Review, (36)
Members, 2. Customer Attention, 3. Offers pp. 47-55.
and Discounts, 4. Comfort and Elegance, Minshall, B.C. (1994). Apparel
5. Proximity, 6. Variety, 7. Speedy Service, Preferences: Underlying Dimensions and
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Clothing: Advancing Multidisciplinary benefit derived from visits to a super regional
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Behavior and Marketing Strategy (2nd ed.). news/Stock%20News/1069201/)
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Runyon K. E. (1977), Consumer Behavior Journal of Marketing, 36 (4), 46-49
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Schiffman L. G. & Kanuk L. L. (2007).
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34
SIES Journal of Management, April - August 2010, Vol.7(1): 35-45
Abstract Introduction
The study attempts to find out the Service In the current socioeconomic context, the
quality of Banks in Navi Mumbai. It tries to service sector has become increasingly more
look whether there is gap between customer vital, revealing the need to know and study
expectations and perceptions of service offered. the particularities of its operations and to set
One of the most popular models, SERVQUAL, up specific management methodologies that
used in Service marketing is used in the study. fit its context and specificity. It is necessary
SERVQUAL is based on the perception gap to understand that service processes are
between the received service quality and the different from manufacturing processes,
expected service quality, and has been widely especially due to their intangible nature and
adopted for explaining consumer perception the direct participation of clients.
of service quality. An undisguised structured Aiming to make clients loyal, companies
questionnaire, SERVQUAL by (Parasuraman, have made every effort to meet their
et al 1985), was used for the research. The sample needs and exceed their expectations. The
size used was 101 respondents. The study was SERVQUAL scale is one of the tools that
conducted in Navi Mumbai (Maharashtra), can help in this sense.
India. It was observed that there were five
According to Oliver (2005), SERVQUAL is
important factors for service quality analysis
the method that assesses client satisfaction
which are Tangibles, Reliability, Responsiveness,
as a result of the difference between
Assurance and Empathy. The fact is evident that
expectation and the performance obtained.
there is a gap between customer expectations
According to Zeithaml, Parasuraman and
and service perception and it can be reduced
Berry (1990), SERVQUAL is universal and
only by employing effective training methods by can be applied to any service organization
banks. The limitations of the study are that the to assess the quality of services provided.
sample size is limited and it is restricted to Navi
Mumbai Area in Maharashtra. Today, banks have diversified their
activities and are getting into new products
KeyWords : Service Quality, Banks,
and services that include opportunities
SERVQUAL
36
A Study of Service Quality on Banks with Servqual Model
38
A Study of Service Quality on Banks with Servqual Model
40
A Study of Service Quality on Banks with Servqual Model
five dimensions, that is, the final score is factor “Responsiveness” which means that
generated by the difference between the employees have to improve their willingness
respondent’s perceptions and expectations. to help the customers.
We underscore that a negative result must be According to the respondent’s expectations
viewed as an opportunity for improvement safety of transactions, willingness of
and not as a simple problem. employees and interest in solving the
Questions 1 to 4 refer to the tangibility problems of consumers are the most
dimension, which obtained an overall important parameters in deciding service
average of -0.1757. The expectation of quality. According to consumer’s perception,
customers in relation to this dimension safety of transactions, understanding the
is high in questions 1 and 3, whereas the need of consumers and maintaining error
corresponding perceptions are the lowest free records got good feedback.
among the entire table of perceptions. Impact of Gender and Occupation on
The reliability dimension is analyzed in Expectations and Perceptions
questions 5 to 7, which obtained an overall To test the impact of gender on importance
average of -0.3457. given to the parameters Chi Square test is
Questions 8 to 11 of the questionnaire refer applied (Table 3, 4, 5, 6, 7, 8).
to the responsiveness dimension and its
Hypothesis 1:
overall average was -0.5175.
H1O: There is no significant impact of
Questions 12 to 15 in the adapted gender and the expectation of valued
SERVQUAL scale refer to the assurance customers on the parameter, ie, interest of
dimension, which obtained an overall employees in solving the problem.
average of -0.372.
H1A: There is significant impact of gender
The final four questions, 16 to 19, refer to
and the expectation of valued customers on
the empathy dimension, which obtained an
the parameter, ie, interest of employees in
overall average of -0.208.
solving the problem.
The difference between perceptions and
expectations (P-E) for all questions in this Table 3: EXPECTATION ON INTEREST
dimension was negative, revealing there are * GENDER
considerable faults in the service, which are Chi-Square Test
jeopardizing the quality of the service being Value df Asymp. Sig.
(2 sides)
offered.
Pearson Chi-Square 6.466a 6 .373
The overall average for the five dimensions Continuty Correction
was -0.3234. This indicates a great
Likelihood Ratio 7.123 6 .310
opportunity for improvement in the entire
Linear-by-Linear 2.9.3 1 .088
service providing cycle. However, for Association
that to happen, great effort must be made. N of Valid Cases 101
There is a gap between what is expected a. 7 cells(50.0%) have expected countless than 5.
and perceived. The gap is highest in the The minimum expected count is .32.
42
A Study of Service Quality on Banks with Servqual Model
Table 10: Occupation * Perception on the banks have to concentrate and make sure
Interest, Willingness, Safety they inform the customers about the time
taken for each service. Banks have to take
Test Statistics a,b
service given to the consumers as a “P” for
INTERST WILLINGN SAFTEY
their marketing and invest time, resources
Chi-Square 1.341 4.830 1.878 and money on improving the efficiency in
df 2 2 2 this frontier. One strategy is to dedicate one
Asymp. Sig. .512 .089 .391 or two people in each branch to inform the
a. Kruskal Wallis Test customers about the services to be provided
b. Grouping Variable: OCCUPA
and also solve the queries of them.
The Chi-Square values are above 0.05, so
in all the above cases HO is accepted. Limitations of the Study
The sample size is only 101 respondents
In all cases we can see that Gender and
and so the results may not be accurate.
Occupation do not have any impact on both
The study measures the gap between
Expectations and Perceptions of the valued
expectations and a perception of customers
customers on most important parameters
which is only one part of the service quality
considered, ie, Safety of transactions,
gaps. The reliability of the data is not
Willingness to help and Interest in solving
verified. Also the questionnaire does not
consumer problems in bank in Navi
have the questions for understanding the
Mumbai.
weightage of the 5 factors in SERVQUAL
Conclusion and so weighted index cannot be found out.
A better tool could be SERVPERF but here
Service Quality plays an important role in we are using the traditional SERVQUAL
assessing a bank in today’s world of cut- model. The geographic scope is limited to
throat competition. In this regard the banks Navi Mumbai only.
in Navi Mumbai have to improve in a lot
of areas before they can compete with other References
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from the fact that there is a gap between what A. Information technology center service
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required to give adequate help to customers. ale tranzitiei, Analiza modelelor”. Ed.
Most of the banks do not have the facilities Economica, Bucuresti
to inform the consumers when the services
Dr. Arash Shahin SERVQUAL and Model
will be performed. This is one area where
of Service Quality Gaps:A Framework
44
A Study of Service Quality on Banks with Servqual Model
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A Conceptual Paper
Should Marketers Consider Religiosity in
Understanding Consumer Purchase Behavior?
Abstract 1. Introduction
Religion has been an area of study of
Purpose: Study was confined to measure
sociologists for several decades (Durkheim
purchase criteria and purchase process in
1951) and consumer behavior experts have
consumer durable especially in emerging
started studying religion and religiosity only
market like India keeping religiosity
in the last three decades (Hirshman 1982). It
as a factor. Religion has not been very
is commonly known that eating habits differ
important area of consumer study across different religious groups (Durkheim
Design/ Methodology/ Approach: It 1976, Appadurai 1996, Srinivas 1996, Scott
was based on secondary data .It was to et al 2005). Religion could play a role in
develop a model which can explain the some cultural landscapes and behaviors.
purchase process of consumer durables Will there be different behavior between
keeping religion in the back ground. devout and not so devout consumer? Engel
Findings: This study is an attempt to
et al (1993) points out that individual values
that a consumer internalizes are actually
link religion and its belief with consumer
transmitted to him through three key media:
durable purchase criteria. Religiosity and
family, religious institutions and school.
its intensity could influence the purchase
On a macro level, religion could influence
behavior. This needs to be measured and
group’s value. Infact, Sheth et al (1999),
main factor analysis will throw better
points out that like family, religion is a
information. reference group that exercises substantial
Originality: This study has been done influence on customers, their values,
for the first time where religiosity in customer and habits. Religious institutions
understanding consumer purchase influence customer values, both with
behavior has been studied respect to importance and value of material
Key Words: Religiosity, purchase possessions and the goals. Jain (2000) points
behavior, Consumer behavior
out that religion shapes several aspects such
as our belief of cleanliness, Puritanism etc.
Western culture can trace its set of value
and belief to the Judeo-Christian heritage
46
A Conceptual Paper, Should Marketers Consider Religiosity in Understanding Consumer Purchase Behavior?
of family decision making with Jewish and Esso and Dibb (2004). The recent one
households giving a more dominant role to was by Worthington (2003) on religious
the husband. However, it is not studied. commitment. However, a study which could
In fact, Mokhlis (2006) points toward the measure purchase criteria and purchase
fact those more religious consumers tend process in consumer durable especially
to be different in their purchase behavior in emerging market like India needs to be
as compared to less devout consumers. Is carried out.
it due to intensity of religiosity? Therefore,
it is necessary to understand the importance 3. Literature Review:
of several purchase criteria and other Buyer behavior models have postulated the
influencing factors (Esso and Dibb 2004) many influences on a consumer ranging
from external influence, internal influence
2. Problems and Issues and marketing related influences (Howard
Study of Mokhlis (2006) based on and Sheth 1969, Kollat and Blackwell 1986).
Worthington et al (2003) showed that However, consumer behavior is shaped
quality consciousness, impulsive shopping, by consumer psychology and consumer
price consciousness were consistently characteristics too (Kotler and Keller 2006).
related to religiosity. However, impact of When it comes to purchase of durable experts
culture and intensity of religiosity requires point out that it is often a high involvement
a fresh study as intensity of religiosity could decision (Assael 1995). Purchase of durable
affect the purchase behavior. Religiosity as is determined by several socioeconomic
pointed out by earlier by Delener’s study factors. According to Slowikoski and Jarrat
(1994), Mokhlis (2006), Gur (2005) could (1996) adoption of high technology product
affect the behavior. in consumer durable could be influenced by
traditionalism, fatality and religion.
Consumer behavior as a science is only
forty years old with oldest buying behavior Cross-neutral brands adaptation:
model unveiled in the late 60’s. Internal Emergence of culture – neutral brands
variables like personality attitude, belief and their positioning strategies have been
and opinions have been studied across the studied across the world (Erden et al 2006,
globe. Among the external variables culture Alden et al 1999, Aakar and Maheshwaran
and religion have emerged as key external 1997) Acceptance of such brand is greater
variables. in culture with high degree of collectivism
The real challenge is to ascertain the level and uncertainty avoidance as it signals lower
of religiousness and religiosity. Studies risk information. How religiosity could
have shown that there can be six dimensions affect acceptance in consumer durables
of religiousness: belief, experience needs to be studied for cross neutral brand
religious practice religious knowledge, adaptation. Alden et al (1999) mentioned
individual moral consciousness and social that Global consumer culture positioning
consciousness (Dejong et al 1976, Wikes (GCCP) needs to be examined in context
et al 1986). Allport and Ross (1967) took of country specific cultural issue. This
20 statements to measure religiosity. This could be affected by religiosity as culture
was subsequently used by Delener (1990) does get affected by religion adaptation and
48
A Conceptual Paper, Should Marketers Consider Religiosity in Understanding Consumer Purchase Behavior?
intensity. Cayle and Arnold (2008) point reported in emerging market especially in
out that international branding will have India. At the same time religious intensity
to be culturally relative and contextually and its impact on consumer behavior
sensitive. Individual values are transmitted towards purchase decision could the missing
through key media like family religious link. Religious belief could be another area
institutions and school. These along with of research which could affect the purchase
early lifetime experience shape air values decision and is not studied in detail.
Sheth et al (1999) point out that religious India is going to become one of the biggest
institutions influence customer value both markets for consumer durable as the country
with respect to importance and value of becomes one of the top five economics in the
material possessions and goal benefits of world. (Nagraj 2000, Sengupta et al 2008)
the products. Jain (2000) also point out on The market for durables will significantly
how religion shapes several aspect of belief increase for studying this market and
in cleanliness, Puritanism etc. how religiosity could affect the consumer
Religion in Indian study (Dholakia et al purchase behavior in this segment is
1978, Saxena 1997, Parameshwran and important. India is a multi religious country.
Srivastava 2008) could affect acceptance It could be interesting to find out if there
of cross-neutral brands and also purchase are any differences in buyer behavior with
behavior. However, religiosity with respect respect to durable.
to intensity and belief were not studied on
consumer purchase behavior. 4. Theoretical construct
Effect of Religious factor on consumer Consumer durable purchase is a high
behavior: involved decision making process due to
Assael (1995) refers to how culture and higher investment. It is also influenced
sacred or secular consumption could affect by income level of household. We could
consumer behavior towards purchase also see the difference due to consumer
decision. According to Schiffman and religious orientation (Hindu, Muslim,
Kaunk (1994), consumer behavior does Christian etc.) and intensity (Blind believer
get influenced by family values and rational believer) and also religious belief
religious system. Religion was identified highly religious and not so religious. Will
as a composite subculture that formed a consumer evaluate durable differently if
part of environmental influence on buying they belong to different religious faith? For
decision. Not much research has been example, will Hindu consumer give more
done on religion and consumer behavior importance to price as compared to Muslim
(Hirschman 1982). According to same consumer in the same income group?
author (1982), consumption process is Similarly, to what extent of religious belief
affected by religion and its affiliation. or consumer religiosity (intensity) have an
influence on consumer’s behavior to wards
Effect of religious affiliation on consumer
consumer durable products. For instance,
behavior were reported later by Esso and
will a more religious consumer give more
Dibb (2004) Mokhlis (2006), Kalliny and
importance to price compared to a less
Hansman (2007) but no similar study was
religious consumer?
Purchase of consumer durable such as automobile or television could consist of many stages
of evaluation. Consumer’s decision could be influenced by wife (Srivastava 2010) Price
(Assael 1995), Religion (Bijapurkar 2007, Baily and Sood 1993, Delener 1990) Country
of origion (Gopal and Srinivasan, 2006), Family Decision (Delener 1994) Brand name and
advertising (Esso and Dibb 2004), Technology after sales service, Finance scheme etc, using
Religious dimension and Religiousness as one of the key factor in decision the following
can be constructed
A
• Religious orientation and belief (Hindu, Muslim, Christian) = ro
Strong belief in religion orientation = sro
Week belief in religion orientation = wro
• Religiousness or Intensity = ri
Blind Religiousness = bri
Rational Religiousness = rri
Determined by his visit to places of worship, following rituals, religious reading, prayer and
belief in god.
B
• Purchase criteria affecting the purchase decision = pd
Brand name = b Country origin = co
Education = c Quality = q
Novelty = n Price = p
Techn ology = t After sales service = s
Finance scheme = fs
C
• Purchase Process = Pp
Friends = f Role of dealer = rd
Advertising = a World of mouth = wm
Seasonality = s Income level = i
50
A Conceptual Paper, Should Marketers Consider Religiosity in Understanding Consumer Purchase Behavior?
Purchase Decision
The above could be measured by scale measurement and evaluated through factor analysis to
measure the impact of this factor on consumer decision on purchase of a consumer durable.
Consumer behavior is shaped by consumer psychology (Kotler and Kelly 2006)
52
A Conceptual Paper, Should Marketers Consider Religiosity in Understanding Consumer Purchase Behavior?
Glazer and Kent Nakaoroto, Massachusettes Newman Bruce I. (1999), Customer Behavior
Reading: Addison-Wesley 1997 –consumer Behavior and Beyond, Florida:
The Dryden Press.
Jain Subhash C (2000), Marketing Planning
& Strategy, Ohio: Cincinati: South Western Slowikowski Sue and Jarratt Denise G.,
College Publishing. (1996), The Impact of Culture on Adoption
of High Technology Products, Asia Pacific
Kotler Philip and Keller Kevin Lane (2006),
Journal of Marketing and Logistics, 1996,
Marketing Management , 12th edn, New
vol.8, no.3, pp.14-31.
York: Person
Sood James and Yukio Nasu (1995),
Mohkils S. C. (2006), “The Effect of
Religiosity and Nationality-An Explanatory
Religiosity on Shopping Orientation-An
Study of their Effects on consumer Behavior
Exploratory Study in Malaysia”, - The
in Japan and United States”, Journal of
Journal of American Academy of Business,
Business Research, vol.34, pp.1-9
Cambridge, vol.6, no.1, March 2006, pp.64-
74. Srinivas M. N., Indian Society through
Personal Writings, New Delhi: Oxford
Nagaraj R., (2000), Indian Economy Since
University Press, 1998.
1990-Virtuous Growth or Polarization,
Economic and Political Weekly August 5, Wilkes, Robert E., Burnett John J., Howell
2000, pp.2831-2839 Roy D., (1986), Meaning and Measurement of
Religiosity in Consumer Research, Academy
Parameswaran M.G. and Srivastava R. K.
of Marketing Science, Journal, Green Vale,
(2006), Influence of Religious Factor on
spring, vol.14, 1551, pp.47-57.
Investment Behavior-An Exploratory Study,
Synergy-SIMSR Journal January 2008 Worthington E.L. Jr. Wade N.G., Plight
T.L., McCullough, M.E., Berry J.T., Ripley
Saxena Rajan (1997) Marketing Management,
J.S., Berry J.W. Schimitt M.M. and Bursley
New Delhi: Tata McGraw Hill, 1997
K.M., (2003), The Religious Commitment
Schiffman L.G., Kanuk L.L. (1997), Inventory -10: Development Refinement
consumer Behavior 5th edn Prentice-Hall of and Validation of a Brief-scale for Research
India, pp.646-8 and counseling, Journal of counseling
Psychology, vol. 50, no.1, pp.84-96
Scott. J. Vitell, Paolillo J.G.P. Singh J.J.
(2005), “Religiosity and Consumer Ethics”,
Journal of Business Ethics, vol.57, pp.175-
181.
Sengupta Arjun, Kannan K. P. and Raveendran
G (2008), India’s Common People: Who are
they, how many are they and how do they
live, Economic and Political Weekly, March
15, 2008
Sheth Jagdish N., Mittal Banwari and
54
SIES Journal of Management, April - August 2010, Vol.7(1): 55-64
56
Customer Acceptance of Mobile Banking: A Conceptual Framework
between accounts and order for electronic explains the adoption decision of individual
bill payments. The mobile phone especially end users applying cognitive and social
supports the provision of time-critical theories of decision making. Most of the
information, for example, for trading in adoption studies are based on these three
stocks or if of acute need for money transfer models which are Theory of Reasoned
or request of account balance. The device Action (Ajzen,1980),Theory of Planned
manufacturers for both mobile devices and Behavior(Ajzen,1991) and Technology
handheld devices like PDA and software Acceptance Model.(Davis,1989).These
vendors to enable services are required to models are used to explain end users’
create the infrastructure. The key players for adoption and acceptance of different kinds
mobile financial applications include banks of ICT systems and applications(Venkatesh
and other financial institutions such as and Davis,2000).
credit card companies, mobile operators and
Most of the information systems (IS) usage
retailers (Mallat et al, 2004). The customer
and adoption relied on models derived from
considers banks as outstanding trustful
Theory of Reasoned Action (Ajzen, 1980)
service providers compare to other financial
and its extensions. This theory specifies that
institutions (Mallat and Tuunainen, 2008).
human behavior is preceded by intentions,
Cost, usability, convenience, security which are formed based on the individual’s
and privacy are the main factors for the attitude towards the behavior and on perceived
success of mobile banking (Herzberg, subjective norms. In TRA it explains more
2003). Success will ultimately rely on how about behavior rather than about adoption of
secure the payment transactions are. The technology. Attitude refers to an individual’s
end users must be confident in the financial positive or a negative evaluative effect
institution carrying out the transaction, the about performing a particular behavior
network operator transmitting the data, the .Attitude reflects the individual’s feelings of
technology used for transaction, and in the favorableness or un-favorableness towards
retailer itself (Song, 2001). performing a behavior.
adoption models can be used to study the TPB to be further modified while explaining
adoption of mobile commerce (Pederson, the adoption of mobile commerce services
2005, Khalifa and Shen, 2008). The factors (Pederson, 2005).
contributing to the adoption of mobile
services in the context of wireless finance Construction of Theoretical
are perceived ease of use, perceived Model
usefulness, cost, system quality and social
influence (Kleijnen at al, 2004). The user The theoretical model of all constructs in
intention to adopt wireless technology has this study and their proposed relationships
different determinants for different types of is shown in Figure 1.
tasks like general tasks, gaming tasks and
Figure1: Conceptual model
transactional tasks (Fang et al, 2005). In
the study of understanding the acceptance
of mobile service by individuals it is Perceived
Usefulness
identified that perceived usefulness, ease of
use, credibility, self-efficacy and financial
resources have positive influences on Perceived Ease
behavioral intentions (Wang et al, 2006). of Use
All adoption studies are so far related with
technology and service characteristics and Subjective Intention
its use. The technological characteristics norms to use
of mobile devices are limited memory,
limited user interface and low computing Self-Efficacy
power (Misra and Wickamasinghe,
2004). The service characteristics include Perceived Cost
limited bandwidth, network connectivity,
transactional cost, privacy etc. (Tarasewich
Security Trust
and Nickerson, 2002).
Mobile service users are normally customers
Existing literature shows Technology
of a business and pay fees to receive
Acceptance Model (Davis, 1989) is the
services, in order to continue as customers
predominant model used in information
of the business. There is therefore, a
systems to study the adoption pattern.
continual interaction between the mobile
According to TAM model, perceived
customer and his/her service provider(s).
usefulness and perceived ease of use are
Such interaction opens the door to a wide
the primary drivers of new technology
range of adoption causes that might not
acceptance.
be as crucial for traditional technology
adoption. Existing studies found the need Perceived usefulness is defined by Davis
to extend the TAM model with behavioral (1989) as “the degree to which a person
control and it also found the decomposed believes that using a particular system
58
Customer Acceptance of Mobile Banking: A Conceptual Framework
would enhance his or her performance”. In and anywhere makes mobile banking very
mobile service context perceived usefulness attractive to the customer. If the service is
can be how well mobile services can be complex and difficult to learn, the customer
integrated in to their daily activities. When will fail to recognize the usefulness of
this belief increases the intention to use the service. Therefore, it is necessary
these services would increase (Kleijnen et that mobile banking technology should
al., 2004).With the help of mobile banking be simple and easy to understand by the
service, a customer can perform the banking customer. If the service is easier to use and
operation at anytime and anywhere. If a operate, it would enhance the usefulness
customer feels this service is beneficial of the service. The following proposition
to his personal and business life, it will can be formulated based on the relation
positively influence him to use this service. between the constructs perceived ease of
The following proposition is formulated use and perceived usefulness.
based on this construct.
P3: Perceived ease of use will have a
P1: Perceived usefulness will have a positive effect on perceived usefulness.
positive effect on the intention to use mobile
Most information systems (IS) usage and
banking.
adoption relies on models derived from
Perceived ease of use is defined by Davis Theory of Reasoned Action (TRA) and
(1989) as “the degree to which a person its extensions (Ajzen, 1980). This theory
believes that using a particular system specifies that human behavior is preceded
would be free of effort”. Perceived ease by intentions, which are formed based on the
of use is the extent to which a customer individual’s attitude towards the behavior
believes a system is easy to learn or to use. and perceived subjective norms. Subjective
If the mobile banking service is easy to norms refer to an individual’s perceptions of
learn and use, it will positively influence other people’s opinions on if he or she should
the customer to use the service. In mobile perform a particular behavior. Subjective
services many factors can increase the norms capture the individual’s perceptions
complexity such as navigation problems, of the influence of significant others (e.g.,
small screen size, transactional issues etc. family, peers, authority figures, and media).
The construct perceived ease of use is An individual’s decisions and behaviors are
adapted in this model since it will be valid not made solely by him/her, but influenced
in the study of customer acceptance of by the opinions, recommendations and
mobile banking. The following proposition suggestions of other important people
is formulated based on this construct. (friends, colleagues’ family and society).
Therefore, this construct is relevant in the
P2: Perceived ease of use will have a
study of customer acceptance of mobile
positive effect on the intention to use mobile
banking.
banking.
P4: Subjective norms will have a positive
The always-on functionality of the mobile
effect on the individual’s intention to use
phone and the option to bank at anytime
mobile banking.
According to TPB (Ajzen, 1991) an mobile services. Prior studies have extended
individual’s behavior can be explained by this model by adding the constructs such
his/her behavioral intentions that are jointly as trust (Gefen et al, 2003; Pavlou, 2003)
influenced by attitude, subjective norms and and perceived consequence (Khalifa and
perceived behavioral control. The perceived Shen, 2008).Trust is an important factor
behavioral control refers to an individual’s in the adoption of mobile services (Lee,
perceptions of the presence or absence of 2005). This type of application has to
required resources, or opportunities necessary solve problems like hostility, information
for performing behavior. The behavioral security, and vulnerability. Since we cannot
control in TPB has two components. The assume that all participants in mobile
first component specifies the resources commerce are honest, the mobile commerce
required to use a specific system. The second system should provide enough mediated
component is self efficacy that is defined as and stored information so that dishonest
an individual’s self confidence to perform a merchants, customers or other players can
behavior. In the context of mobile banking, be found later. In financial transactions,
the customer segments that are technology each party involved needs to authenticate
innovative have higher chances to attempt its counterparts. There are chances of
the new service. losing data during the transaction due to
mobile device malfunctions, connectivity
P5: The higher self-efficacy will positively
problems (Siau et al., 2001). The success
influence an individual’s intention to use
of mobile commerce application depends
the mobile banking.
on customers trust, for this technology
In addition to the traditional constructs trust and vendor trust is equally important
taken from TAM, TRA and TPB, it is also in securing customer trust (Siau and Shen,
essential to consider the effects of financial 2002).Hence, the following proposition can
cost which is incurred during mobile banking be formulated by this construct.
transactions. In mobile commerce context
P7: Customers trust will positively influence
the cost has been found to be an important
the intention to use mobile banking.
factor for the adoption of m-commerce
(Khalifa and Shen, 2008; Wang et al, 2006). Security is an important element which is
The cost incurred includes equipment cost, to be considered while carrying out mobile
subscription charges and transactional cost commerce applications. The major security
that make mobile commerce costlier than factors which are required for the successful
e-commerce. mobile financial transaction are identified
as confidentiality, authentication, integrity,
P6: The financial cost incurred has a
authorization and non-repudiation (Pousttchi
negative effect on the intention to use
and Wiedemann, 2003; Varshney, 2003).
mobile banking.
Two broad types of security challenges the
TAM’s fundamental constructs do not fully mobile device can account are content and
reflect the influence of technology and channel security (Misra and Wickamasinghe,
usage factors especially in the context of 2004). The wireless (mobile) security can
60
Customer Acceptance of Mobile Banking: A Conceptual Framework
62
Customer Acceptance of Mobile Banking: A Conceptual Framework
64
SIES Journal of Management, April - August 2010, Vol.7(1): 65-96
Abstract 1. Introduction
Over the counter medicines are primarily OTC Medicines means medicines legally
used to treat the conditions that do not allowed to be sold “Over the Counter”, i.e.
require the direct supervision of a doctor without the prescription of a Registered
and proves to be reasonably safe and well
Medical Practitioner. In India, though the
tolerated. The consumers are changing
phrase has no legal recognition, all the
world over. Today they are more informed.
Consumers undergo a sensory experience medicines that are not included in the list of
every time; they self-administer a drug, ‘prescription only medicines’ are considered
whether it’s swallowing a tablet or a as non-prescription medicines (or OTC
capsule, chewing a tablet, swallowing a Medicines).Pharmaceutical over the counter
liquid, or applying a cream or ointment. products (OTC) are the medicines which can
This paper studies the aspects of aesthetics be sold without prescription of the physician.
and its effect on OTC marketing. They are also termed as “Non Prescription
Medicines”. Over the counter medicines
are primarily used to treat the conditions
that do not require the direct supervision
of a doctor and proves to be reasonably
safe and well tolerated. To simplify, any
medicine that can be sold over the counter
for symptomatic relief of minor or self
limiting ailments without the prescription
of a registered medical practioner is an
OTC Medicine.OTC Medicines differ from
Prescription Medicines in terms of Margin
of Safety, Advertising and Distribution.
Electronic Banking Definition
Source: Nicholas Hall & Company, India, DB6 2009 – 1US$=INR 46.54
In fact, consumer enthusiasm for well-known, time-honored brands, such as Nurofen, Panadol
and Strepsils, among others, has strengthened over the review period (2005 to 2009). Despite
low value growth in the market as a whole, the pharmaceutical companies that manufacture
these powerful brands reaped the rewards of innovation in 2008, achieving strong sales for
products that have extended existing ranges. Moreover, globally, companies such as Johnson
& Johnson and GlaxoSmithKline are seeking to extend the reach of their brands to developing
markets in areas such as India, the People’s Republic of China (PRC) and Central America.
The OTC companies profiled in Asia Pacific’s Leading OTC Medicine Markets are, Australia
(Novartis, Roche, Sigma Pharmaceuticals, Herron Pharmaceuticals),China (GlaxoSmithKline,
Merck & Co, Bayer, Hubei Biocause Heilen Pharmaceutical, Shijiazhuang Pharmaceutical),
Hong Kong (Visa Laboratories, GlaxoSmithKline), India (Pfizer, GlaxoSmithKline, Novartis,
Sanofi-Aventis), Indonesia (Novartis, GlaxoSmithKline, Bayer, PT Kalbe Pharma), Japan
Novartis, GlaxoSmithKline, Eisai), Malaysia (GlaxoSmithKline, Novartis, Bumimedic,
Chemical Company of Malaysia, Kotra Pharma, YSP Southeast Holding), Pakistan (Novartis,
Wyeth), Philippines (GlaxoSmithKline, Pfizer, Novartis, Bristol-Myers Squibb, Wyeth, Unilab,
Pascual Laboratories), Singapore (GlaxoSmithKline, Haw Par Corporation Ltd) , South Korea
(Dong-A, Yuhan Corporation, Daewoong Pharmaceutical, Bukwang Pharmaceutical Company),
66
Aesthetics in Pharmaceutical OTC Marketing
68
Aesthetics in Pharmaceutical OTC Marketing
as good based on the external appearance of consumers and the role it plays or can
of the product. When all other variables play in the purchase behavior of the OTC
are similar, aesthetic elements can make a products selected.
difference to a product’s performance in the
market place and, therefore, can provide 1.6 The OTC Product’s Sensory
that competitive edge. Experience
Aesthetics provides opportunities to appeal In the pharmaceutical industry, formulations
to customers through a variety of sensory are usually characterized by three major
experiences and thereby creating customer features: Physical characteristics, such as
satisfaction and loyalty. size, hardness, friability; chemical aspects,
Yet, surprisingly little attention is paid to such as content and stability of drugs; and
the sensory attributes of a vast majority of sensory attributes, including color, taste
dosage forms in pharmaceutical industry. and odor. Among these three, the sensory
Unfortunately, drug product’s aesthetic characteristics are the ones consumers
characteristics are not fully considered and initially recognize. Consumers have little
utilized by many companies. difficulty telling whether they like or
dislike a product, or which product they
This often leads to the launch of medicines prefer. However, their ability to reliably
unacceptable to many patients/consumers, describe the reason for their likes, dislikes
despite their medical benefits. When and preferences and more importantly
medication compliance is compromised, to offer meaningful suggestions for
health outcomes suffer and medicines fail improvement is notoriously poor. In the
to realize their sales potential. Pharma industry where sensory analysis is
When all other variables are similar, not a core competency, it’s not surprising
aesthetic elements can make a difference to find formulators using a “trial and error”
to a products performance in the market approach to develop palatable formulations.
place and, therefore, can provide the Medicine does not have to taste good to
competitive edge. Therefore products have work! Doctors and pharmacists have long
to stand out in the crowd. The response to held on to this belief. A large percentage
drug treatment is not simply a reflection of the medicine that doctors prescribe is
of its chemical compounds. Extraneous never taken - and this is not just because
factors may considerably influence the size of the medicine’s unwanted side effects.
of a treatment effect (Kleijnen J, 1994). Patients have been refusing to take essential
External appearance has become a key medicines because they tasted bad, were
selling concept. hard to swallow, or packaging was hard to
This study aims to understand the influence open. As long as the doctors continued to
of Aesthetic attributes like Color, Shape, prescribe the drugs, this was a problem that
Packaging and taste on promotion and did not affect the producers of prescription
positioning of pharmaceutical OTC medicines. It could often be some time
product. It attempts to understand the before the doctor might notice the drug’s
aesthetics in terms from the point of view lack of effect on the patient and begin to
70
Aesthetics in Pharmaceutical OTC Marketing
doubt the usefulness of the medicament. in the market to ensure that, the product meets
After all, the patient seldom admits to not the established specifications of sensory
having taken the medicine as prescribed. elements. Companies should also conduct
With over-the-counter medicine, it is a periodic sensory benchmarking of marketed
different situation altogether. products to identify competitive threats.
Just as with supermarket food-stuffs, a A product’s appearance and physical
consumer will not repeatedly buy cough characteristics while it is masticated are
lozenges or water-soluble calcium- important to the overall sensory experience.
carbonate tablets that taste bad. In this The textural attributes of the dosage form
case the pharmacist’s most sincere can have a dramatic effect on patient
recommendations will often be ignored. acceptability. In order to develop patient
acceptable drug products, all aspects
In the case of over the counter preparations
of the sensory experience need to be
and food supplements sold in the
considered. Get any one of them wrong
supermarket, where consumer choice is
and palatability suffers- along with patient
no longer influenced by the advice of an
dosing compliance, health outcomes and
authority in the field, the product with the
product sales. Thus, optimizing the sensory
most acceptable sensory properties will
experience of OTC products needs to
usually win out.
be top priority for Pharmaceutical OTC
The unique selling proposition of companies. Sensory-directed formulation
prescription products can be - “effective,” development can drastically improve a
“mild side effects,” “fast acting” and “long product’s acceptance.
lasting.” Contrast to this for OTC products
it comes down to “great taste,” “refreshing,” 1.7 Influence of Color in the over-
“satisfying,” and “convenient.” the-counter (OTC) Medicine
Consumer packaged goods companies have Market:
developed scientific processes, methods, Historically, Color has always been used
and tools for creating products that can be to fulfill Symbolic & Aesthetic functions.
differentiated based on customer-perceived Color fulfills a role in representing cosmic,
sensory quality. This sensory-directed ethical, & religious symbols (Birren 1978)
approach will represent a potential “best – The symbolism of color influences color
practice” for pharmaceutical companies preference. It is proven fact that physical
faced with overcoming the challenge of changes take place when individuals are
reducing the bitterness of medicine. Thus, exposed to certain colors. Because colors
it is suggested that, following the product have the power to stimulate, excite, or even
introduction in the market, companies depress. A number of variables affect color
should use sensory analysis to ensure preferences, including gender, age, religion,
product consistency. As a part of the quality mood etc. In addition, numerous personality
management program, such analysis may traits have been associated with color, -for
include monitoring the sensory quality of example, it has been suggested that extroverts
each batch of finished product before release prefer warm colors while introverts are
more attracted to cold colors. Color knows no bounds- it is fluid, not static, it intermingles in
unexpected combinations, and it explores many paths to achieve its goal. The color actually
influences mood. Based on the colors selected, it either comes across as vibrant, relaxing, or
depressing. The feelings are evoked when seeing a particular color. Color studies are eclectic
and wide ranging in character. Having a good understanding of color and the way it affects the
mood of the person seeing it can definitely influence business (Marie-Christine Lichtle 2007),
Colors exercise powerful effects and induce reactions based on both instincts and associations.
It induces moods and emotions, influences consumer’s perceptions and behavior and helps
companies position or differentiate from the competition. Inappropriate choice of products color
or package colors may lead to strategic failure (Ricks, 1983). Color is a vital part of products,
services, packages, logos and displays. It is a potent cue for product and brand differentiation
(Schmitt and Pan, 1994) and for creating and sustaining corporate identities (Garber et al.,
2000; Madden et al.,) and consumer perceptions (Grossman and Wisenblit, 1999). Colors alter
the meanings of the objects or situations with which they are associated and color preferences
can predict consumer’s behavior. (Aslam, 2006). Cultural values, marketing objectives and
desired customer relationship levels influence the choice of color in corporate and marketing
communications. OTC products are identified by the product attributes that “position” the
product in the market and distinguish competing products from each other.
Color can be influential factor for purchase. Thus, color is involved in positioning.
Table –4: The cross-cultural spectrum of meanings and associations of color in
Country-Culture cluster
Color A n g l o - Germanic Latin Nordic Slavic Chinese Japanese Korean ASEAN
Saxon
White Purity - - - - Death Death Death Death
Happiness Mourning Mourning Mourning Mourning
Blue H i g h Warm - Cold - High quality High quality High quality Cold
quality Feminine - Masculine - Trustworthy Trustworthy Trustworthy Evil
Corporate - - - - - - - (Malaysia)
Masculine
Green Envy - Envy - - Pure Love Pure Danger
Good taste - - - - Reliable Happy Adventure Disease
- - - - - - - (Malaysia)
Yellow Happy Envy Envy - Envy Pure Envy Happiness -
Jealousy Jealousy Infidelity - - Good taste Good taste Good taste -
- - - - - Royal - - -
- - - - - Authority - - -
Red Masculine Fear Masculine - - Love Love Love Love
Love Anger - Positive Fear Happiness Anger Adventure Adventure
Lust Jealousy - - Anger Lucky Jealousy Goods taste -
Fear - - - Jealousy - - - -
Anger - - - - - - - -
72
Aesthetics in Pharmaceutical OTC Marketing
(Hupka8 et al., 1997), Grossman and Wisenblit, 1999), Ricks (1998), Jacobs et al. (1991),
Schmitt (1995), Schiffman et al. (2001) and Neal et al. (2002) and More and Srivastava
(2006). The absence of any concrete reported research findings for particular cultural clusters
is denoted by dashes.
According Mapelli and Behrmann (1977) color may play a greater role in implicit recognition.
Choungourin (1968) showed that color preferences are not identical across countries. He
found that red was the most preferred color by Americans, green by the Lebanese and blue-
green by Iranians and Kuwaitis. Jacobs et al. (1991) found red to be most strongly related
to China, purple to France, green to both France and Italy and, while the American subjects
associated the USA with blue, other Asian subjects related her with red. Similarly, orange is
the favorite color in The Netherlands, since her monarchy is the House of Orange.
Color combinations or specifically colored packaging are often used in highlighting the
country of origin of products in foreign markets. Madden et al. (2000) found that colors are
paired with other colors of consistent or complementary meanings. Green was paired with
yellow in Canada and China, with blue in Colombia, with white in Austria and also with red
in China. Cultures differ in their aesthetic expressions as colors represent different meanings
and aesthetic appeals in different cultures. There are color associations with festivals,
holidays and consumer rituals.
The marketing data support the premise that color is related in purchasing decision. This study
discusses the power of color in the over-the-counter (OTC) drug market by introducing the
concept of using color as a vital tool in creating a memorable product brand. Color can have
a powerful impact on the purchase decisions of consumers and can positively affect sales
and establish long-term customer loyalty. By communicating a product’s most believable
and desirable attributes through color, customers are likely to purchase the product. A smart
color can give a product a better visual impact and separate itself from the competition.
There are three reasons companies should consider color as an option: contemporary appeal,
greater visual impact, & brand reinforcement or upgrade. : Charlene Rashkow (2004). Color
is useful in creating a different value from the environment or the competition. According
to Lichte (2007) color component may affect the emotions felt by an individual. Therefore,
color is an integral part of product, service, packaging, and logo and can be an effective
means of creating and sustaining brand image in the customer’s mind (Madden et. al. 2000)
Color, is one of the many marketing tools that global managers use to create brand images
in the customer’s mind. Colors are known to posses’ emotional and psychological properties
(Madden et al 2000). Color ranks among the top three consideration along with price and quality
74
Aesthetics in Pharmaceutical OTC Marketing
drug and seeks to determine if color code exist the visual appearance of the tablet. Thus,
for drug categories. Palatability is influenced the importance of both shape and color has
by a combination of sensory perceptions been investigated.
including sight, taste, and smell and to a The shape of a tablet is restricted only by
lesser extent the texture of the products. the imagination of the designer. Apart from
The main objective of this study was also the more popular round or caplet shapes,
to assess the presumed effect of the color all other standard geometric shapes can
of a drug on subjective evaluation. It also be used such as oval, elliptical, square,
examines the impact of sensory attributes diamond, rectangular, polygons and so on.
like color (aesthetic appeal and mood Also special shapes can be employed to
influencer), shape (aesthetic appeal and add to the products brand identity such as
appeal as object of desire) and perception animal shapes, fruit shapes or even shapes
of taste (appealing to basic drives like representative of the ailment. The shape
hunger, thirst etc.) looking at the color in is very important for functional as well
consumption experience of pharmaceutical as aesthetic reasons such as alignment for
OTC products. tablet printing, packaging and for ease
of swallowing by the consumer. (Trevor
1.8 Influence of Shape in the Higgins 2000). The pharmaceutical
over-the-counter (OTC) OTC industry is now relying on product
Medicine Market: appearance to differentiate its products from
the competition. Many companies have
Swallowing Tablets is discomfort for
started using tablet size, shape, and color
many people and both Physical as well
as a competitive tool. This is key, because
as psychological factors may cause this
tablet size and geometry are known to affect
discomfort. If a patient has once experienced
consumer’s ability to swallow a dose.
a Tablet sticking in the esophagus, the
patient may get Unpleasant associations 1.9 Influence of packaging in
by swallowing tablets hereafter. A rugged the over-the-counter (OTC)
surface makes the tablet scratch the
Medicine Market
Esophagus during passage, and some tablets
might have a bad taste or smell. These factors For the purchase of over the counter (OTC)
make the Intake of tablets a discomforting products, the consumer goes to the Chemist/
experience to the Patient, and this might pharmacy. Brand strength and packaging
consequently lead to noncompliance. design play the deciding role. A decade ago,
(Andersen, Zweidorff, Hjelde T, Rødland packaging was often an afterthought, viewed
EA. Problemer 1995). The ability of tablets as merely the final step in manufacturing.
to pass the esophagus is assigned to size, Since long, pharma packaging in India
surface area, shape and coating, and it is remained functional rather than aesthetic.
generally agreed that the most important The only function of packaging was to
factor is size and shape which should be as carry the product and keep it stable; till
small as possible. Patients’ acceptance of it is consumed. However, manufacturers
tablets and their compliance are related to, realized that, they can build credibility and
the user-product bond if consumers could don’t operate. It can boost a shopper’s
‘see’ the product. Patients love to see the confidence in selecting the right product.
product that they are consuming. Thus With the increasing scale of the self-
transparent capsules with colorful beads service areas in pharmacies, attention-
inside are not only attractive but are also getting packaging design becomes a sales
more trustworthy. A syrup in a transparent relevant necessity. Packaging by means
glass bottle is preferred a lot more than of a profound communication concept,
the amber color bottle. Transparent blister optimally convey the key brand values and
packs are liked more than the aluminum product features. OTC marketing needs
strips,” (Gauri Chaudhari), Pharma OTC to head great value on good packaging
companies are responding to this need. design. There are three sound conceptual
They are no longer hiding the medicines platforms for OTC packaging. These are
behind opaque covers. positioning for effectiveness, positioning for
OTC packaging generates “absolute innovation and positioning for naturalness.
trust”, including a strong brand bond Effectiveness is communicated by strong
through emotionally appealing design. shimmering colors, through symbols that
Those packages that through the visual associate power, dynamics and movement,
appearance create a direct connection and name affixes such as Forte, Acute or
to the product achieve the highest brand Effect. Innovation is conveyed through new
and product recognition. The importance packaging shapes and opening mechanisms,
of emotionality in OTC packaging is luster effects, verbal cues for the added
surprisingly high. A succinct and attractive value, and the visual presentation of the
packaging design presents a central innovation through images or symbols.
role in communicating high value and Naturalness is communicated through
optimum effectiveness of the medication. natural appearing colors, smooth typography
A consistently designed packaging will and images and symbols referring to nature.
charge the drug with sympathy and elicit The paperboard packages, with their
the deciding purchase impulse. (Claus colorful inks, holograms, embossed faces,
Kreuzer, 2008). Packaging is accepted and unusual shapes, help to catch consumer
emotionally because it is inventive, and attention. Thus, pharmaceutical companies
has a very elegant appearance and above are eager to enhance the appearance of their
all looks very “modern and progressive”. products, especially those firms marketing
Pharmaceutical companies that make and OTC products.
market OTC products needs to consider how Unfortunately, the packaging for OTCs
they stack up against many competitors on is very similar to what for prescription
the store shelf, where consumers make their products. The marketing value of packaging
own purchase decisions. A well-designed is a largely untapped frontier in OTC
package can make a product easier to find pharmaceuticals.
on crowded store shelves. Great design also “Many pharmaceutical OTC companies
cements the sale on an emotional level, are so focused on equipment stability and
where most pharmaceutical OTC brands regulatory requirements that they haven’t
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Aesthetics in Pharmaceutical OTC Marketing
even begun to think beyond that and about will need to leverage the marketing power
such things as package design,” of packaging. Brands share the approach
If one sees an OTC product, for instance of leveraging packaging to tap the human
Gelusil, although it is an OTC product, it senses and create brand perceptions. From
doesn’t convey that it is one. It looks like a marketing perspective, opportunities then
a normal, typical prescription medicinal emerge for connecting with consumers on
pack. There needs to be a strong branding a much deeper cognitive level. Consumer
and an OTC appeal that reflects what it is confidence improves, and packaging goes
meant for. Color branding needs to be very beyond serving merely as a container.
important in case of OTCs because in India
people still remember and connect with the 1.10 Branding through Aesthetics
color of the pack. However, package should
also play a role in explaining the harmful Aesthetics has a number of important
effects of over-dosing. Internationally, OTC implications for branding. This could be
packaging mimics the FMCG industry. This referred to as the marketing of sensory
could be due to that fact that the modern experiences which contributes to the
retail format is still in its infancy in India. brand’s identity. It has a focus on the
The minute OTC brands come on the health aesthetic gratification of consumers. There
aisles; they will have to sell themselves. is also a possibility that consumers associate
They will not be able to hitch a free ride positive aspects of aesthetics with the
on the chemist’s push. There are different organization marketing a brand. Aesthetics
age groups, different patient conditions or not only enhances visual appeal, but could
lifestyle requirements that need different also create a sensory experience. There are
packaging solutions. Acidity can strike two aspects of aesthetics one is style and the
at any time; hence chronic sufferers tend other is theme. Style refers to quality, form,
to carry antacid tablets in their pockets. color, shape, pattern, taste, smell and touch
Digene’s blister pack is a great help for such (texture & material). A marketer should
patients. A simple and square shaped Digene know (in a given product category) how
pack can be easily carried along. This is a the style elements could be combined and
good example of lifestyle driven packaging. when to adopt a particular style. The second
Designing is significant tool in packaging. aspect of aesthetics, namely theme, refers to
The color of the packaging can play a role in brand names, symbols, slogans and jingles
limiting counterfeiting. If there is a product used in advertisement. Branding is more
which has a material with a unique color that conspicuous at the corporate level than at
can’t be copied, and it becomes registered in the product level, and building a strong
the mind of the consumer, then it becomes a brand identity is still in its nascent stage in
very strong feature with which a consumer Pharma OTC industry. Pharmaceutical OTC
can associate and recognize the product branding is vital as it not only creates public
when he goes to buy it. Today’s healthcare awareness about potential benefits of the
product aisles are stocked with more product but also distinguishes a company
products than ever, and OTC companies and its products from other competitors.
Branding is directly proportional to the Aesthetic attributes and qualities thus can
sales revenue of a company. The higher be frame of reference for associating with
the brand perception and the stronger the a brand. Many a time the focus is primarily
brand value, the greater will be the sales on the price rather than on other points
revenue and profits for the company that of difference (Clancy and Trout, 2002).
owns the brand.” The value of brand is huge Focusing on the aesthetic aspects of the
compared to physical assets” (Lindsay, product can be good option to differentiate
2004). For pharmaceutical OTC brands, position and build brands. Aesthetics is one
positioning must, be based on effectiveness of the physical attributes, which can be
and emotions associated with the product. used to have a positive consumer influence
Beliefs about pharmaceutical OTC brands on the brand.
and their effectiveness occupy a different
corner of brain from that of cola drinks. 1.11 Need for Study
Relief from illness, pain or discomfort
is a far greater need than the recreation Consumers have little difficulty telling
alleviation of thirst. Trust in pharmaceutical whether they like or dislike a product, or
OTC brands, therefore, is a more vital which product they prefer. However, their
and hard-won commodity once gained, it ability to reliably describe the reason for
can be leveraged most successfully in the their likes, dislikes and preferences and
brand building process. Brand personality more importantly to offer meaningful
builds on the emotional appeal of brands suggestions for improvement is notoriously
and is the medium through which these poor. In Pharmaceutical Industry where
are expressed in advertising and through sensory analysis is not a core competency,
visual brand identity. Brand personality is it’s not surprising to find formulators using
therefore an important differentiating factor a “trial and error” approach to develop
in positioning brands. When a consumer palatable formulations. Medicine does not
starts using a branded product, he starts have to taste good to work! Doctors and
associating the attributes of the product pharmacists have long held on to this belief.
with the brand, for example, the size, color, A large percentage of the medicine that
texture, feel, odor, and so on, indicating doctors prescribe is never taken - and this is
different characteristics of the brand. not just because of the medicine’s unwanted
Hence, size represents role, while color side effects. Patients have been refusing
indicates whether the brand exerts positive to take medicines because they tasted
or negative influence on the customer’s bad, were hard to swallow, or packaging
buying decision (Lederer, 2001). Thus, was hard to open. Less attention is given
aesthetics of a product can be made to to the aesthetic aspects of the product, its
represent a brand. function and the brand strength. As long
as the doctors and pharmacist continued
If companies fail to differentiate themselves to recommend the medicines, this was a
at a level beyond functional benefits (product problem that did not affect the producers of
based), they will be unable to sustain brand prescription medicines.
loyalty.
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Aesthetics in Pharmaceutical OTC Marketing
The traditional pharmaceutical branding The specific objectives of this study are:
model was developed around product
1. To investigate the consumers Perception
features and related directly to the product’s
for Aesthetic attributes like Color, Shape, and
positioning rather than any consistent brand
Packaging while buying a Pharmaceutical
essence. However, the problem is that
OTC Product.
markets are now becoming so competitive
that one may have to change positioning 2. To evaluate the impact of these factors
statement if required. The traditional model in promotion and positioning of an
worked very well but was very functional Pharmaceutical OTC product.
and focused only on what the drug did. It
is therefore important to know what are the 3. To study the influence of demographic
attributes of aesthetics as perceived by the factors in context of aesthetic attributes
marketers and consumers, what role it plays and its influence on purchasing behavior of
at different stages of purchase and how pharmaceutical OTC products.
aesthetics is related to various aspects of Understanding the above objectives and
marketing like brand identity, brand image, factors associated with it would certainly
brand equity, corporate image, and so on. help pharmaceutical companies to a large
extent in designing a product before
2. Research Objectives launching it in the market
One of the factors which ensure customer 2.1 Hypothesis
satisfaction is the “look” and “feel of the
product. This is particularly true for a In today’s world where the customers are
Pharmaceutical OTC like product, which bombarded with communications with
supports various dimensions of social and more and more products and where tradition
emotional requirements other than only based differentiation becomes less and less
functional. One of the important aspects useful, aesthetics is perhaps one of the most
of the product is the “Look” – acceptance important elements of the product.
of shape or color of the product, and its Products physical properties can play
‘user friendly’ nature. These aspects have an important role in perception and can
always posed a challenge for companies to have an effect on product’s acceptability.
arrive at the right aesthetics, determining Therefore, the following hypotheses can be
success or failure in the market. The study formulated:
on how aesthetics play a role in marketing
and how these elements can be captured in H-1: Influence of Aesthetic attributes play a
the product and eventually in the mind of significant role on consumer’s compliance
customer is the basic objective of this study. for pharmaceutical OTC products.
An attempt is made to understand aesthetics H-2: Preferences for Pharmaceutical
from the point of view of the consumers OTC products shows Demographic
and role it plays or can play in the purchase based differences viz-a-viz for aesthetic
behavior of the products selected. attributes.
3. Research Methodology
Theoretical Frame Work
Various sensory attributes like Color, Taste, Shape, Texture and Packaging either in isolation
or in combination with each other cause array of sensory experiences which range from
repugnant to extremely elating. Also, human beings, belonging to different age groups,
different religions and socio-cultural backgrounds and different genders, perceive and respond
to these experiences in different ways. The above phenomenon, assuming economic factors
unchanged when compared with traditional looks of medicines, does contribute in building
brand image of the OTC products and also does influence decision to buy certain medicines.
Conceptual Model
Sensory
Attributes
Sight Gestation
Consumer perception
Positive Negative
Consumer decision
making process
Yes No
Consumers remember the most when they see the product i.e. sight is most important i.e.
58% followed by smell-45%, taste-31% and touch 25%.
The above framework suggests that products sensory attributes moderate the effects on
perceived aesthetic qualities of the product on consumer’s decision process. Color choice can
influence perception as color signals individual’s personality too (Aslam 2006) Berg-Weitzed
et.al (2001) found that packages for deodorants for women should be attractive. A bright
colored package is likely to draw more attention than a dull package (Neal et. al 2002)
80
Aesthetics in Pharmaceutical OTC Marketing
topic and also provided insights about the 3.4 Population and Sample
sensory attributes that can be leveraged
for positioning of OTC drug products. It Consumer sample was 1000. Sample
provided an impetus to further narrow down was taken from 3 cities i.e. A-Class city
the research and test the hypothesis. Study of Mumbai, B-Class City Nasik, and C-Class
sensory attributes helped to understand the city Igatpuri of different Age Groups,
consumer’s acceptability and brand recall Gender and Religions.
for pharmaceutical OTC products. The
Table No 5: Distribution of Age and Gender
primary research was conducted through
Wise Respondents
survey. Supportive data was also taken from
Chemists and Medical Representatives. Age Group Gender Total
Male Female
3.2 Questionnaire Development 18-34 259 191 450
Instrument (45%)
35-54 205 171 376
The well structured Questionnaire was (33%)
designed to identify general perception 55-65 86 88 174
of OTC medicines and the preference for (22%)
color, shape, packaging and perception Total 550 450(45%) 1000
of taste of OTC drugs. The questionnaire (55%) (100%)
focused on identifying the perception
for aesthetic attributes like color, shape Table No 6: Distribution of A Class, B
and packaging and to a little extent for Class, and C Class City Wise Respondents
taste while looking at the OTC products. A Class City B Class City C Class City
Supportive data was also derived from
Mumbai Nasik Igatpuri
Chemists through questionnaire. It focused
on reveling weather consumers demand 300 400 300
pharmaceutical OTC products keeping in Table No 7: Distribution of Religion Wise
mind their aesthetic attributes like Color, Respondents
Shape, Packaging and taste.
Hindu Muslim
3.3 Pre- test 600 400
Initially, pilot study involving 100 consumers Data analysis was done using SPSS,
of different Gender and Age groups with well- Microsoft Excel sheets, etc
designed questionnaire was conducted for
phase I and phase II study. The study gave 3.5 Data Collection Procedures
the data of preferences of product color of
The data collection method was direct
pharmaceutical OTC products. It was then
structured questionnaire to consumers.
realized that the other aesthetic attributes like
This was done in two phases. Respondents
shape, taste and packaging are also important
were exposed to face to face interview. The
as far as positioning and promotion of
Questionnaire was designed to identify
Pharmaceutical OTC Products are concerned.
general perception of OTC drugs and the mind (Madden et al, 2000). This study
preference for color, shape, packaging and reveals that Color, Shape and Packaging
perception of taste of OTC drugs. can help in improving brand recall and
increase compliance for medicine uptake.
Under Phase I: The respondents were
It is important especially when medicine
asked to reply to the questions in the
consumption is an unwilling act. .This
questionnaire which were related to general
becomes more important where education
perception for sensory attributes like Color,
level is low. This is given in table –9
Shape and Taste by looking at the color of
pharmaceutical OTC products. Consumer’s perception for Attributes of
Aesthetics like Color, Shape and Packaging
Under phase-II: Same respondents then
as a memory tag for compliance (Obedient
were directed to a simulated display
to take the Medicine on time)
of products at the chemist and his/her
perception was sought again. Display at Table No 8 Attributes of Aesthetics which
the chemist counters and a mock room forms a Memory Tag for Compliance
was specially created for this study. OTC
Sr.No Attributes Total Percentage of Ranking
Products of different Colors, Shapes,
Scored Grand Total
Texture and packaging were displayed in
1 Color 750 75 1
different dosages. 2 Shape 134 13.4 2
3 Packaging 116 11.6 3
The consumers were asked to imagine that
they were interested in purchasing a single The research found out that, for 75% of
product and were asked to answer the consumers, color is a memory tag for
questions in the questionnaire; which were compliance.
similar to the questions in the previous
questionnaire. Purchasing scenarios were Color of the product, a visual attribute is
developed in the questionnaire to identify ranked 1st and external visible parts like
the sensory factors, which influence the Shape and Packaging are ranked 2nd
purchase intentions of OTC products. and 3rd. Consumers remember color for
Thus, it gave the direction to measure consuming medicines, if medicines are to
the perception of a product, consumer’s be taken at specific intervals. This was also
purchase intention, which was not done reported earlier by Goldman study (2005)
previously in India. which says that headache pill has to have
aesthetic appeals. This study can aid OTC
3.5 Data Analysis: marketers on this aspect.
Color, Shape and Packaging do enhance the The aim of the second part of the
brand recall Mapelli and Behrmann (1997) questionnaire was to study the general
did mention in their study, the role of perception of taste and color i.e. How color
color in recognition. Color perception can is perceived with respect to taste? No doubt
play a role in the treatment effectiveness a medicine can be ingested irrespective of
(Worthington, 2007). It may be due to color taste (Madrid, 2005). However, if all the
which creates an image in the customers’ sensory elements are taken in to account,
82
Aesthetics in Pharmaceutical OTC Marketing
compliance of the medicine intake can go up multifold. The general perception of taste in
relation to color is given in table –10
Table No 9 Consumer’s perception of taste looking at color of OTC medicine
Color/ Red Blue Green Orange Pink Yellow White Total
Taste perception
Bitter 17 98 8 9 42 12 38 224
Sweeter 101 17 13 7 152 10 5 305
Sour 27 13 7 81 37 42 10 217
Salty 22 9 9 12 17 21 8 98
Neutral 12 30 19 6 33 4 52 156
Total
179 167 56 115 281 89 113 1000
Table was analyzed using chi square test, using SPSS tool which determined the Association
of two variables (Color and Taste).
Chi Square Value Degrees of Freedom Table Value Interpretation
at 0.1% Significance Level
639.86 24 37.566 Significant association between
Color and Taste
The table 8 and 9 can be interpreted as; attributes like color, shape, packaging and taste play
a significant role on consumer’s compliance for OTC Product’s uptake.
Therefore Hypothesis H-:1 Influence of Aesthetic attributes (Color, Shape and Packaging) play
a significant role on consumer’s compliance for pharmaceutical OTC products is accepted.
Pink is considered to be sweeter compared to Red. Similarly, Orange has emerged as a
symbol of sour taste. White and Blue are associated with bitter taste. Yellow is considered
to be salty as per this study. This research data can be extremely useful to marketers. As per
Aslam (2007) yellow is considered to reflect good taste in china, Japan, Korea. There was
no such study in SARC countries on color and taste. Color and drug potency was studied
early by Routcet and Droulers (2005). However, on taste and color this study can be useful
to pharmaceutical marketing personnel.
84
Aesthetics in Pharmaceutical OTC Marketing
86
Aesthetics in Pharmaceutical OTC Marketing
Since the calculated probability value is The phi value of 0.48 indicates that there
0.035 which is less than 0.05, is a strong association between gender and
Hence, there is no impact on color preference for shape of OTC medicine, and
preference. Therefore, there is no influence this correlation is statistically significant.
of class of city on product color while Therefore, there is influence of Gender
preferring a Pharmaceutical OTC Product. on Product Shape while preferring a
pharmaceutical OTC Product.
The study was also further carried
out to reveal the shape preference for Table 22: Shape Preference for OTC
Pharmaceutical OTC Products. Shape Medicines based on Age
is considered to be one of the important
Shape Age Age Age Total
attribute while consuming the OTC
Group Group Group
Medicine.
18-34 (f) 35-54(f) 55-65(f)
Table 21: Shape Preference for OTC Round 198 187 101 486
Medicines based on Gender (Phase –II) Oval 108 105 51 264
Square 79 52 13 144
Shape Male(f) Female(f) Total Rectangular 65 32 09 106
Round 192 209 401 Total 450 376 174 1000
Oval 217 162 379 The table was analyzed using Phi
Square 96 67 163 – Correlation Coefficient. The Chi
Rectangular 45 12 57 Square(X2) value is 28.781 for 6 degrees
Total 550 450 1000 of freedom. The table value for the same is
12.592 at 0.05 level of significance. Since
The table was analyzed using Phi –
the calculated chi – square value is greater
Correlation Coefficient. The Chi Square(X2)
than the table value, it can be interpreted
value is 23.199 for 3 degrees of freedom.
that, there is significant association between
The table value for the same is 7.815 at 0.05
the Age and the preference for the shape of
level of significance. Since the calculated
OTC Medicine.
chi – square value is greater than the table
value, it can be interpreted that, there is Further it was computed for phi – correlation
significant association between the Gender coefficient for assessing the degree or
and the preference for the shape of OTC strength of association between Preference
Medicine. for shape and age.
Further it was computed for phi – correlation Ф (Phi) = √ X2 = √28.781
coefficient for assessing the degree or N 100
strength of association between Preference Ф (Phi) = √ 0.287
for shape and gender. Ф (Phi) = 0.53
Ф (Phi) = √ X2 = √23.199 The phi value of 0.53 indicates that there
N 100 is a strong association between age and
Ф (Phi) = √ 0.231 preference for shape of OTC medicine, and
this correlation is statistically significant.
Ф (Phi) = 0.48
Therefore, there is influence of Age Table 24: Shape Preference for OTC
on Product Shape while preferring a Medicines based on Class of City
pharmaceutical OTC Product.
Shape A- B-Nashik C- Total
Table 23: Shape Preference for OTC Mumbai Igatpuri
Medicines based on Religion Round 105 135 79 319
Oval 92 98 67 257
Shape Hindu(f) Muslim(f) Total Square 71 110 85 266
Rectangular 32 57 69 158
Round 212 158 370
Total 300 400 300 1000
Oval 185 98 283
Square 152 86 238 The table was analyzed using Phi
Rectangular 51 58 109
– Correlation Coefficient. The Chi
Square(X2) value is 25.560 for 6 degrees
Total 600 400 1000
of freedom. The table value for the same is
The table was analyzed using Phi 12.592 at 0.05 level of significance. Since
– Correlation Coefficient. The Chi the calculated chi – square value is greater
Square(X2) value is 13.936 for 3 degrees than the table value, it can be interpreted
of freedom. The table value for the same is that, there is significant association between
7.815 at 0.05 level of significance. Since the the class of city and the preference for the
calculated chi – square value is greater than shape of OTC Medicine.
the table value, it can be interpreted that,
Further it was computed for phi – correlation
there is significant association between the
coefficient for assessing the degree or
Religion and the preference for the shape of
strength of association between Preference
OTC Medicine.
for shape and class of city.
Further it was computed for phi – correlation
Ф (Phi) = √ X2 = √25.560
coefficient for assessing the degree or
N 100
strength of association between Preference
Ф (Phi) = √ 0.255
for shape and Religion.
Ф (Phi) = 0.50
Ф (Phi) = √ X2 = √13.936
The phi value of 0.50 indicates that there is a
N 100
strong association between class of city and
Ф (Phi) = √ 0.139 preference for shape of OTC medicine, and
Ф (Phi) = 0.37 this correlation is statistically significant.
Therefore, there is influence of class of
The phi value of 0.37 indicates that there is city on Product Shape while preferring a
a strong association between Religion and pharmaceutical OTC Product.
preference for shape of OTC medicine, and
this correlation is statistically significant. Further it was tried to understand whether the
Therefore, there is influence of Religion robust looking and multicolored packaging
on Product Shape while preferring a of OTC medicines depicted the promise of
pharmaceutical OTC Product. cure by the concerned medicines (Question
No 15), majority of the responses to same
88
Aesthetics in Pharmaceutical OTC Marketing
(see Table No) is in affirmative. SARC countries on color and taste. Color
and drug potency was studied early by
Table No 25:
Routcet and Droulers26 (2005). However,
Robust looking and multicolored on taste and color this study can be useful
packaging of OTC medicines depicted to pharmaceutical marketing personnel.
the promise of cure by the concerned In terms of percentage there was 100%
medicines positive shift in females as compared to
Frequency 44% in males for Red color. Similarly
for Pink color positive shift was 43%
Yes, it does 552
and 20% for male & female respondents
Yes, sometimes 448 respectively. White color saw a sharp fall
Looking at the Product’s packaging and under simulation in both sexes. Both male
importance the consumer’s attaches to it & female showed difference between
confirms that non functional aspect in a simulation & non simulation cases on color
product is important. influencing their purchase intention.
Hence, the hypothesis H-2.3.1- There This finding could help in packaging and
is influence of customers/consumers on color of Tablets of OTC products. After
Product Packaging while preferring a exposure to simulation it shows highest
Pharmaceutical OTC Product is accepted. decrement in color preference for white.
Therefore, attractive colors like Red, Pink,
Therefore Hypothesis, H2 – Consumption Blue and White can influence purchase
of OTC products shows demographic intentions.
based differences viz-a-viz for aesthetic
attributes like Color, Shape and Given a choice, Males will prefer Oval Shape
packaging is accepted. while Females will prefer Round Shape
for the OTC Medicines. Older consumers
3.6 Detailed Findings were more inclined towards small rounded
tablets due to their swallowing discomfort.
This study reveals that color and shape Apart from preference for color of the
can help in improving brand recall and medicine, the study also revealed the
increase compliance for medicine uptake. motive for preferring the particular color.
It is important especially when medicine It was found that, for young age group
consumption is an unwilling act. Pink pink was most preferred color due to its
is considered to be sweeter compared to soothing effect impression. While blue
Red. Similarly, Orange had emerged as was most preferred color for middle age
a symbol of sour taste. White and Blue and old age group due to its impression
are associated with bitter taste. Yellow is of cooling down. Educational level does
considered to be salty as per this study. matter for preferences and consumption
This research data can be extremely useful of OTC medicines was also one of the
to marketers. As per Aslam (2007) yellow important findings of this research. The
is considered to reflect good taste in china, supportive data from chemists was also
Japan, Korea. There was no such study in
sought which exposed few interesting aroma, flavor, texture, feel, and its impact
information. They stated that, consumers on emotional connection with the product
remember and demand the OTC products can have a dramatic effect on patient
due to their aesthetic attributes. They were compliance and can subsequently increase
of the opinion that, if pharmaceutical OTC brand loyalty. Aesthetics is one of the
companies take interest in these sensory physical attributes, which can be used to
elements, the sales can definitely increase. have a positive consumer influence on the
brand. (Baisya and Ganesh Das, 2008).
3.7 Ethical Considerations When a consumer starts using a branded
The research took one and half years to product, he/she starts associating the
complete. Care was taken to ensure that attributes of the product with the brand, for
mobile numbers were noted down for example, the size, color, texture, feel, odor,
further follow up and verification from and so on, indicating different characteristics
consumers. Questionnaires were filled up of the brand. Hence, size represents role,
on one to one basis. After selecting the while color indicates whether the brand
brands of pharmaceutical OTC medicines exerts positive or negative influence on
of different dosage forms and of different the customers buying decision (Lederer,
color, shape, texture and packaging, each 2001). According to Lichte (2007) color
participant was asked about their perception component may affect the emotions felt
of products aesthetic attributes like color, by an individual. Therefore, color is an
shape, taste, looking at color and their integral part of product, service, packaging,
purchase intentions. The general perception and logo and can be an effective means
of consumers about OTC Medicines was of creating and sustaining brand image
researched in the I Phase of study. The second in the customer’s mind (Madden et. al.
set of questionnaire focused on purchase 2000) Color, is one of the many marketing
intention for OTC medicines due to product tools that global managers use to create
attributes like color, shape, packaging, etc. brand images in the customer’s mind.
as four purchasing scenarios (color, shape, Colors are known to posses’ emotional
texture, and packaging) were administered and psychological properties (Madden et
to them through questionnaire. Data was al 2000). Color ranks among the top three
analyzed using SPSS and Microsoft excels consideration along with price and quality
stat. data. Care was taken to ensure the ( Cooper, 1994) According to Madden et al
same set of respondent was administered (2000) Red color means excitement, Orange
questionnaire in phase II study. signifies disturbed mind, Blue indicates
tender and smooth, Purple means dignified
3.8 Literature Review mood and Yellow is a cheerful color, with
Black being used for powerful symbolism.
Pharma companies grapple with strict Same author says that Yellow and Blue are
legislation and there is a need for greater happy color Thus the role of color helps in
brand promotion in pharmaceutical memory performance in implicit or explicit
marketing. (Biradar et. al (2007). The ways (Vernon and Lloyd-Jones 2003)
product’s aesthetics – appearance i.e. Color red is perceived as implying a high
90
Aesthetics in Pharmaceutical OTC Marketing
level of hazard followed by colors such of package color may lead to failure.
as orange and yellow rather than blue and Packaging is a silent salesman in OTC
green; with white implying the least hazard segment (Srivastava, 2007). Color definitely
(Chapan 1994, Adam and Edworth 1995, can enhance the effectiveness of packaging.
Costello et al. 2002) Color has obvious However, cultures may differ in their
potential to aid the discriminate ability aesthetic expression as colors represent
and categorization of label and package different meanings and aesthetic appeals in
(Vernon and Lloyd-Jones, 2003) In medical different cultures (Aslam 2006).
domain, use of color as an identification
A rugged surface makes the tablet scratch
and classification aid, to reduce medication
the esophagus during passage, and some
error has been in practice. (Stuth 2002,
tablets might have a bad taste or smell.
Frush et al. 2004, and McCoy 2005).Color,
These factors make the intake of tablets
therefore, helps in categorization of label
a discomforting experience to the patient
and package (Hellier et al 2006). Color
and this might consequently lead to
also has significant influence on perceived
non-compliance (Overgaard, J.Hojsted,
drug potency (Routcet and Droulers 2005).
R.Hansen, L.L.Christrup 2001). The ability
Color is also a powerful cue assisting brand
of tablets to pass the oesophagus is assigned
recall (Tavassoli and Han, 2002) Red is
to size, surface area, shape and coating and
associated with coke, Blue with IBM, Pink
it is generally agreed that the most important
with Barbie dolls, Green with 7 up and
factor is size, which should be as small as
Unienyme with black color tablet color
possible (Overgaard, J.Hojsted, R.Hansen,
also communicates corporate position. At
L.L.Christrup 2001). Despite the fact that
the same time Blue color stands for solid
difficulties in swallowing tablets seem to be
responsible financial service, green for
a well known problem among patients, only
innovative, caring organization. (Cheskin
few and desultory investigations have been
and Masten, 1987). The same holds true
made on the subject (Overgaard, J.Hojsted,
for color of pharmaceutical OTC products.
R.Hansen, L.L.Christrup 2001). In addition,
However, cross-cultural differences in
the aging population and growing number
color perception do exist29 (Jameson and
of new treatments available have led to
Alvarado 2003). Therefore, color is an
an ever-increasing number of medicines
integral part of product and packaging
being prescribed, compounding the risk of
(Madden et.al 2000) Color can influence
mistaken tablet identification and subsequent
and build emotion in advertising according
noncompliance. As a result, pharmacists
to Lichtle (2007). Gender, age, extrovert
have had to become increasingly skilled
or introvert behavior could influence the
at trying to identify those (E Graham-
packaging? Color preference can predict
Clarke and N Langford 2004). Factors
consumer behavior (Aslam, 2006). The
related to ease of swallowing (dosage form,
same author also mentions that it can help
shape, size and number of units per dose)
companies to influence the consumer’s
were the most important attributes in the
perception and differentiate a product
selection of an antacid, laxative, vitamin
from competition. Inappropriate choice
or product of headache, chronic pain, cold,
flu, or allergy (William J. Jones III, John J. increases (Hollins and Pugh, 1990). It is
Francis 2000). A picture of the soft gel on seen that an aesthetically likeable product
the package for over the counter products can excite all our sensory perceptions and
may enhance consumer’s recognition of give pleasure, while at the same time, an
this dosage form and its advantages over aesthetically inferior product can evoke
conventional forms (William J. Jones III, distaste (Lawson,1983). Understanding the
John J. Francis 2000). Sensory directed perception of the consumer related to various
formulation development can drastically aspects of consumer aesthetics is important
improve a product’s flavor quality and (Holbrook and Huber, 1979). It is also seen
thereby, its sales (Jeff Worthington 2001). in advertising that by using substance with
Aesthetics and perceived overall value aesthetic value can affect the perception
are critical to sales success in competitive of the consumer, even to the promotional
commercial range market models. (Remich message to a great extent (Holbrook and
and Norman, 1997). The design of a product Schindler, 1994). Design, which refers to
inherently involves aesthetics. Moreover, the organization of elements of an object,
the aesthetic aspects of a product are a and aesthetics are inherently linked since
potential source of pleasure for the consumer the design or physical form of a product
(Holbrook and Zirlin, 1985). As a result, encompasses the aesthetic aspects of the
the influence of aesthetics is increasingly product (e.g., shape, color, texture, and
being acknowledged as an important part of so on) (Veryzer, 1995). Product aesthetics
new product development (Whitney, 1988), influences the judgment on product quality
marketing strategy (Kotler and Rath, 1984), and brand strengths (Page and Hen, 2002).
product quality (Garvin, 1984; Zeithaml, In a survey of product designs in five
1988), product differentiation (Dickson and developed countries of Europe and North
Ginter, 1987) and competitive advantage America, aesthetics was declared as a key
(Holt, 1985; Kotler and Rath, 1984). aspect of design by more than 75 percent of
Shusterman (1998) says if aesthetic value the respondents (Walker, 1995). The visual
cannot be separated from understanding, appearance of a product is considered as a
and understanding requires interpretation, key factor in initiating consumer attention
and interpretation cannot be separated and interest (Berkowitz, 1987; Bloch,
from experience, then it follows that 1995; Dumaine, 1991), and subsequently
aesthetic value cannot be separated from generating positive response from the
experience either. Aesthetic factors in a consumer towards a product (Veryzer,
product have started gaining importance 1993, 1995; Holbrook and Zirlin, 1985).
and are mentioned as an important factor Color influences perceptions of size (Bevan
in product designing (Cushman and & Dukes 1953), weight (Warden & Flynn
Rosenberg, 1991; Lee, 1993). Product 1926), warmth (Tinker 1938) and taste
design, particularly aesthetic attributes, can (Ough & Amerine 1970; Tom et al. 1987).
be used to influence consumer behavior The color of a product’s packaging influences
in a big way (Veryer, 1993). Aesthetics is brand choice (Gordon et al. 1994) and blue
a dynamic discipline. When the product produces a stronger buying intention than
design is static, the importance of aesthetics red (Bellizzi & Hite 1992). A large section
92
Aesthetics in Pharmaceutical OTC Marketing
of the color research on products, packages effect on patient compliance and increase
and advertisements remains unpublished brand loyalty (Jeff Worthington 2003). A
because of competitive concerns (Bellizzi et product’s physical properties can play an
al., 1983). Inappropriate choice of product important role in flavor perception and have
or package colors may also lead to strategic a dramatic effect on product acceptability
failure (Ricks, 1983). Assuming a narrow (Jeff Worthington 2003).
Western perspective of colors as ‘universal’
and applying it to alien markets has often 3.9 Conclusion
led to cultural faux pas and there is need The study showed that there is an
for a systematic color theory in marketing influence of products aesthetic attributes
(Mubeen M. Aslam 2006). Cultures differ on pharmaceutical OTC products and the
in their aesthetic expressions as colors consumption desire of consumers. The
represent different meanings and aesthetic greater the number of senses a product
appeals in different cultures (Mubeen M. appeals to, the greater will be the potential
Aslam 2006With prescription products, for creating an emotional attachment to
there are no visuals, such as color or shape. the product. This can translate in to brand
The product itself lacks organoleptics loyalty and ultimately to sales. Red and Pink
or an appeal to the senses, such as taste, emerged as the most preferred colors. Blue
touch, or smell. These sensory appeals and White are other two preferred colors.
are essential to develop a brand because Color and Shape affects the perceived
they help to build brand personality (Mark action of pharmaceutical OTC Product
Seveini, 2002). Sensory analysis provides and seems to influence the effectiveness of
an objective way to identify the taste a drug. With large number of OTC drugs
challenge; benchmark a product against currently circulating in the market, products
its competitor’s and identifies a reasonable can easily get lost in cluttered OTC aisles
flavor target to lead the formulator (Iman of supermarkets. Through proper study of
Alashkar, 2006). Pharmaceutical OTC a product aesthetic attributes, a memorable
companies can save themselves by brand can be initiated to separate from the
addressing the taste factor early in clinical competitors in an attempt to gain a bigger
development. In so doing, they can get their market share in the OTC drug industry.
medications to market more quickly, ensure Thus, pharmaceutical branding today
patient compliance, gain market leadership is about expressing brand value that is
– and reap generous economic rewards valuable to the consumers.
(Jeff Worthington 2003). Sensory directed
formulation development can drastically
4.0 Managerial Implications:
improve a product’s favor quality and, The information from study can be used to
thereby, its sales (Jeff Worthington 2003). help marketers for launching, positioning
The product’s aesthetics – appearance, and promoting OTC products effectively.
aroma, flavor, texture, skin feel, sound, and Research of this type is relevant, as marketers’
more can build an emotional connection need information about possible factors that
with the product. This can have a dramatic may influence product selection decisions.
The study can be helpful for investigating to Marketers in understanding the attitudes
influence of product’s aesthetic attributes and consumer behavior by investigating
on consumers cutting across diverse sectors attributes and preferences as they form a
of society for its positioning and promotion prominent factor affecting actual buying
of pharmaceutical OTC products. Also, the behavior. There is the larger opportunity
findings of this study will provide insights to discover the sensory attributes that can
concerning sensory attributes of the product be leveraged for the many drug products
and attitude of consumers towards it in differentiated solely by price (generics)
terms of buying preference. or those that offer little by the way of an
emotional connection to the patient.
This type of study presents insights that
might help organizations to develop effective 4.2 Limitations of the Study
marketing strategies leading to better sales.
The study can also be helpful to Marketers The research was limited in scope to
in understanding the attitudes and consumer examine the buyer behavior of the targeted
behavior by investigating attributes and population only in 3 cities from western
preferences as they form a prominent factor Maharashtra, which limited the results
affecting actual buying behavior. from being generalized to other population.
More studies including larger demographic
4.1 Suggestions & group/s should have been conducted to help
Recommendations validate the findings. This study did not cover
The conclusions of the study can be used the human randomness of choices made by
to help marketers for launching, positioning customers. Also it does not delved in to the
and promoting OTC products effectively. influences of complex processes at work in
Research of this type is relevant, as the human mind and intellect while making
marketers’ need information about possible everyday myriad decisions such as buying
factors that may influence product selection the OTC medicines. This study reflects and
decisions. The study can be helpful for is strictly limited to the consumer response-
investigating the influence of a product’s as reported by consumers-to diverse sensory
aesthetic attributes on consumers, attributes of OTC medicines.
cutting across diverse sections of society
for the positioning and promotion of 4.3 Future Scope of the Study
pharmaceutical OTC products. Also, the
More studies including larger demographic
findings of this study will provide insights
group/s should be conducted to help validate
concerning sensory attributes of the product
the findings. There is the larger opportunity
and attitude of consumers towards them in
to discover the sensory attributes that can
terms of buying preference.
be leveraged for the many drug products
This type of study presents insights that differentiated solely by price (generics)
might help organizations to develop or those that offer little by the way of an
effective marketing strategies leading to emotional connection to the patient. In the
better sales. The study can also be helpful OTC pharmaceutical sector, the sensory
94
Aesthetics in Pharmaceutical OTC Marketing
optimization of products is on the march. Madden T J., Hewett K and Roth M S.,
The advantages for both manufacturer (2000) Managing images in different
and customer can no longer be ignored. culture: Across national study of color,
Powerful insights can be explored from Journal of International Marketing, Vol. 8,
true understanding of consumer beliefs, No. 4, 90-107.
perceptions, and behaviors’. Many Hupka R. B., Zaleski Z., Otto J., Reidl
consumer research techniques, ranging L., & Tarabrina N. V., (1997) The colors
from traditional surveys and focus groups of anger, envy, fear, and jealousy: a cross-
to ethnographic studies, can be used to cultural study, Journal of Cross-cultural
support this exploration. The study exhibits Psychology, Vol. 28, No. 2, pp. 156-171.
that demographics have to be looked
Grossman, R. P. and Wisenblit J. Z., (1999)
into with more seriousness and product
what we know about consumers colour
attributes like aesthetic features should be
choices, Journal of Marketing Practice:
used as a unique selling proposition for
Applied Marketing Science, Vol. 5, No. 3,
various segments as it is also seen that
pp. 78-88.
‘conventional demographic variables, such
as occupation, income and education and Ricks,D.A, (1983),Big business blunders,
to less extent consumer modernism can be Mistake, Multinational Marketing
used to classify groups of consumers in to ,(Homewood, H Dow Jones-Irwin)
potentially profitable market segments’. Schmitt,B.H, (1995),Language and visual
imagery, Journal of of business world
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96
SIES Journal of Management, April - August 2010, Vol.7(1): 97-108
Review Paper
“Analysis of Impact of Promoters’ Stake on the
Firm Value in the Indian Corporate Sector”
Sujata Chincholkar
SujataChincholkar,is Finance faculty at Fr.C. Rodrigues Institute of Management.
1. Introduction:
Abstract
The proposed research will try to study the The proposed research will try to study the
relationship between the changes in the relationship between the changes in the
promoters’ stake and the performance of promoters’ stake and the performance of
the company in the Indian corporate sector. the company in the Indian corporate sector.
It will try to compare the performance of It will try to compare the performance of
those companies who witnessed changes in those companies who witnessed changes in
promoters’ stake against those who did not promoter’s stake against those who did not
witness any. It will also examine whether witness any. It will also examine whether
presence of foreign promoters brings any presence of foreign promoters brings any
change in the performance of the company change in the performance of the company
against those which are completely owned against those which are completely owned
by Indian promoters only. The proposed by Indian promoters only. The proposed
study will fill the gap in our knowledge study will fill the gap in our knowledge about
about what is the effect of changes in what is the effect of changes in promoter’s
promoters’ stake on the performance of the stake on the performance of the company.
company.
1.1 Promoters’ Contribution to
the Business
A Corporation, in theory is owned by its
shareholders. The shareholders contribute
some of their money – often a paltry amount
– to the equity capital of the corporation.
They are presumed to bear the greater
portion of the risk of running a firm (as
compared to the lenders, bondholders etc.)
and hence expect to be rewarded for this risk.
They are supposed to own the corporation,
(Balasubramanium et al, 2006).
Promoter of the business is an entity that governance literature has two dimensions. In
plans a project or formation of a new the first case, insider ownership can be defined
company and then sells or promotes the as managerial ownership (manager-owner),
plan or idea to others. They conceive the where managers are assigned ownership as
company and invest the initial funds. The an incentive mechanism by owners. In the
promoters play an important role in any second case the insider ownership is defined
business organization. Promoter when as ownership rights held by an insider
decides to create a firm, needs to establish who promotes and also manages (owner-
contractual relations with other investors, manager). The behaviour of the insider due
employees, suppliers, creditors, customers, to a discrepancy in cash flow and control
and so on. Furthermore he needs to decide rights in both the cases need not be similar
whether to sustain the firm’s control or to due to a divergence in both motivation and
hire a professional manager. Maintaining expectations. (Phani et al, 2004). The Indian
the firm’s control has private benefits, with governance mechanism particularly the
the production of value to the shareholder, insider ownership of firms follows the latter
but it also generates costs because the pattern where owners are promoters as well
shareholder has to acquire information about as managers. (Phani et al, 2004)
manager’s effort to produce output [(Dyck
Company’s performance may be affected
and Zingales, 2004) in Ines Lisboa, and
by manager’s decisions as he can use its
Jose Paulo Esperanca (2008)]. Likewise,
resources to maximize his wealth at the
some shareholders prefer to contract a
expense of the firm. If for one side, the
manager, establishing with him a contract,
manager receives a salary to do this function
which Jensen and Meckling (1976) define
in ways consistent with the maximization
as “agency relationship”; The shareholder
of the performance, for another side, he
who acts as principal hires a person (the
may feel not fully compensated for the
agent) to control the firm and, to increase
risk he faces and so he can take decisions
his performance, while the agent receives a
that satisfy his self-interests, rather than
pecuniary salary and some other amenities
the firm’ ones . To avoid a decline of the
for doing that job [(Demsetz, 1983) in Ines
performance, the shareholder needs to use
Lisboa, and Jose Paulo Esperanca (2008)].
internal and external mechanisms to control
With this contract, in which the parties
managers. One way to align managers’
define each other’s rights and obligations,
interests with those of shareholders is to
their protection and the accomplishment of
lure them to acquire the firm’ shares. In
their goals are guaranteed.
that case, as managers are at the same time
1.2 Promoters’ Role in the shareholders, they may want to maximize
performance of the company the performance. Moreover, there are
other mechanisms, external mechanisms,
Insider ownership reflects the governance which depend on the market force to
problem arising due to variance in the cash control manager, namely the importance of
flow and the control rights such ownership takeovers, the facility to replace managers,
entails. Insider ownership as defined in the the enforcement of the legal law, and others
98
Review Paper “Analysis of Impact of Promoters’ Stake on the Firm Value in the Indian Corporate Sector”
[Fama and Jensen, 1983, Jensen and Ruback, effect, when the company’s ownership
1983, Jensen, 1986, Morck et al., 1989, and and voter’s concentration takes place. In
Agrawal and Knoeber, 1996 in Ines Lisboa, the entrenchment effect, the increase of
and Jose Paulo Esperanca (2008)]. the share of votes and of the company’s
ownership withheld by the controller, lets
1.3 Role of Controlling the same to be less dependent and subject
Shareholders to the decisions of the board of directors
and of the mergers and acquisitions market,
The existence of controlling shareholder
allowing the expropriation of the wealth for
can have deleterious effect for a company
the private benefit, while the cost would be
due to the possibility of the interests of the
shared among all the shareholders.
controlling shareholders not being lined up
with the interest of the other shareholders, The most important advantage related to
(Shleifer and Vishny, 1997 in Pablo et the stock concentration is linked to the
la (2007)). The controlling shareholders possibility of the owner to monitor the
can expropriate the wealth of the other management with the probable reduction
shareholders in several ways. of conflict and the cost of agency. Classens
et al (2002) in Pablo (2007) summarized
They may reward themselves by payment
the benefits of stock concentration as an
of wages in excess for itself. They may
alignment effect, in which as the amount of
nominate themselves for privileged
shares withheld by the controller increases,
executive positions and positions on the
it increases incentive for monitoring, at
board. They might pay or receive high
the same time the expropriation cost also
transfer prices for their own companies.
increases. At this point, the ownership
They may transfer the shares to their
of a great amount of shares brings the
beneficiaries at a good discount or may
controller commitment of not devaluing the
indulge in the acts of insider trading. They
company’s shares
may use company’s assets as a pledge
to personal transactions or to borrow 1.4 Importance of Ownership
fund from the company with commercial
issue and Firm value in the
advantage. They may also follow the
Indian Corporate Sector
practice of underinvestment, because if the
investments are not recovered, the costs The issue of ownership, control rights and
will be divided in equal parts with all the firm value has been widely researched in
shareholders (Jensen and Meckling (1976) advanced countries. In India, ownership
in Pablo et al (2007)).They may allocate structure is highly concentrated in the hand
the resources in investment projects that of family members and their acquaintances
reduces its risk and do not maximize the (Phani et al, (2004)). Post- liberalization,
company’s wealth. capital market in India is showing a
steady progress with large number of
Claessens et al (2002) [in Pablo et al
small shareholders participating in the
(2007)] summarize the costs of the
equity market. When so much fortune is
stock concentration as an entrenchment
concentrated in the hand of so few people significantly which was in sharp contrast
(promoter group), it draws researcher’s with the other existing studies with respect
attention. Typically majority shareholders to India and other developing countries.
are managers. Monitoring implies an Saikat and Chakrapani (2003) observed
external constraint. This is not to say that increase in holdings of the institutional
that their block ownership provides no investors in the firm increases value but
incentives. Clearly it does. But we should increase in individual investors holding in
not expect large shareholders to constrain a firm is found to be negatively related to
themselves on behalf of small shareholders the firm value implying that dispersion of
(Holderness and Sheehan, 1998) thus the ownership affects firm value negatively.
lack of relationship between ownership It confirms the evidence of “convergence
concentration and legal protection for of interest” and “entrenchment effects”
shareholder is not surprising. The East supporting Morck, et al (1988). However
Asian crisis reminds people how a poor the evidence for “entrenchment effect” is
governance structure can ruin an economy in contrast with that of Sarkar and Sarkar
within no time. The family based governance (2000). Karl V. Lins (2002) observed that
model failed the Economy of East Asian when managers have control rights that
countries and created chaos around the exceed their proportional ownership, firm
world, (Claessens, (2000) in Manoranjan, values are significantly lower in countries
(2008)). Therefore it is imperative to study with low shareholder protection.
the performance of firms in India where
Indian economy, being an emerging
family and kinship ties still dominate
economy with the stock markets scaling
business decisions. The altercation between
new heights is attracting a steady flow
the Reliance and Reliance ADAG is the
of money into it and reporting stronger
best example of how family feuds can harm
volumes of transaction and reaching newer
the larger interests of the companies.
heights of market capitalizations. Keeping
The relationship between ownership in mind, the speed with which the markets
structure and corporate performance is one are expanding, the market regulators need
that has received considerable attention in to be more watchful towards the happenings
the finance literature. However, a notable in the market.
feature of this body of literature is its failure
to reach a consensus regarding the nature 2. Need for the study
of the relationship. Joshua (2002) in Korea, Recent ups and downs in the market have
Manoranjan (2008) observed significant witnessed many promoters enhancing their
non monotonic relationship between the stake in the market or cashing their stake
insider ownership and corporate value. in the market. It becomes important from
Sabri (2003) findings did not support the regulator’s point of view to watch these
the contention that the ownership types movements carefully to be alert for the
influence the firm’s valuations. Jayesh outcome of these movements. In Satyam
(2004), found that foreign ownership Computers, the promoter’s stake in the year
does not influence the firm performance 2001 was 25.6% and on 3rd Jan 2009(when
100
Review Paper “Analysis of Impact of Promoters’ Stake on the Firm Value in the Indian Corporate Sector”
the promoter wrote to SEBI regarding the He investigated whether the effect of the
scam) it was 5.13%. The proposed study amount of insider ownership on corporate
will try to find out whether actions taken by value is non –monotonic by using data from
the companies in the past actually helped Korean firms. He used switching regression
the company and meant for the purpose in its empirical process, with price to book
disclosed by them if any. The results might value ratios as its corporate value measure.
be useful for lawmakers in the protection of When the functional forms of insider
small shareholders, in the implementation share ownership on company value were
of corporate governance best practices and considered, no evidence could be found of
in safeguarding trust in financial markets, their influence on corporate value in any
especially in gloomy periods. linear, quadratic, or cubic forms, countering
claims in the incentive alignment,
As the outcome of the earlier studies show
entrenchment, and combined theories. The
no uniformity in the results, the proposed
study examined the issue of the Integrated
study will fill the gap in our knowledge
Theory and Combined Hypothesis. They
about what is the effect of changes in
could not confirm the existence of theory
promoter’s stake on the performance of the
using Korean data.
company in the Indian corporate sector.
In another study, Sabri (2007) discussed
The project may also find its utility among
the issue of the divergence between
the corporate as any decision of the company
ownership and control as one of the major
should be in the interest of the shareholder.
cause of minority expropriation in France.
The results of the research may help in
He showed that the large controlling
answering whether the decisions in the past
shareholders maintaining grips on control
actually helped the company to add value
while holding only a small fraction of a
to the shareholders and learn few lessons
cash flow rights are inclined to expropriate
for the future.This project will be useful to
minority shareholders, which in turn
the investing community at large as every
detrimentally affects the firm’s valuation.
change in the stake of the promoter brings
His findings did not support the contention
many questions to their mind. The outcome
that the ownership types influence the firm’s
of this research may help to answer some of
valuations. The evidence also indicated that
their questions.
pyramiding is the main device set to unduly
3 Review of the related entrench the large controlling shareholder.
Additional analysis revealed that
Literature:
irrespective of its type, sharing control with
3.1 Research done by Foreign a family constrains the largest controlling
Researchers shareholder to steer clear of self serving
behavior whereas a widely held firm or a
Joshua (2002) conducted a study in Korea, financial institution, as a second largest
a country with corporate governance controlling shareholder tend to collude.
characteristics markedly different from
those of more developed western economies. In similar spirit, Harold Demsetz and Belén
Villalonga (2001) examined the roles played the coefficient on the change in ownership
by two aspects of ownership structure, the is positive, the coefficient on the change in
fraction of shares owned by the five largest insider ownership squared is negative, and
shareholding interests and the fraction of the coefficient on the interaction is negative.
shares owned by management. An adequate These results are consistent with the causal
study of the corporate control problem may interpretation of the relation between insider
call for more than is provided there, but the ownership and firm value.
estimates of the two equation model they
Karl V. Lins (2003) investigated the relation
used give no evidence to support the notion
between ownership structure and firm
that variations across firms in observed
value across 1433 firms from 18 emerging
ownership structures result in systematic
markets. He examined management and
variations in observed firm performances.
family ownership across all of the sample
John J, et al (2005), examined stock price firms and whether large non-management
responses to announcements of share block holders provide monitoring. He also
purchases by corporate insiders for a investigated whether the relation between
sample of U.S. firms over the interval 1994 ownership and value depends upon the
through 1999. They investigate whether level of external shareholder protection in
the stock price reaction is consistent with a country. First, he found that management
the curvilinear relationship between insider group control in excess of its proportional
ownership and firm value documented by ownership is negatively related to Tobin’s Q
McConnell and Servaes (1990, 1995) in in emerging markets. Managerial control in
John J, et al (2005). Their interpretation of the 5% to 20% range is also negatively related
the relationship estimated by McConnell to Q. He also provided evidence that large
and Servaes (1990, 1995) in John J, et al non-management block holders can mitigate
(2005), and others is that insider ownership the valuation discount associated with these
can be used to increase firm value up to a expected agency problems. Managerial
point, after which additional ownership control in the 5% to 20% range is only
actually reduces firm value. Such an associated with lower firm values when the
interpretation has been criticized because management group is also the largest block
it ignores the endogeneity that might holder. When a larger non-management block
arise when other factors cause both value holder is present, managerial control in the
and ownership to evolve optimally and in 5% to 20% range does not affect firm value.
harmony one with one another. They asked Regressions also showed that large non-
whether the changes in firm value that management block holdings are positively
occur when share purchases by insiders are related to Tobin’s Q values.
announced are consistent with the model of
Omar et al (2007) studied the corporate
the non-linear relationship between share
ownership and performance relationship
ownership and firm value documented
in Bangladesh listed firms using a
by many prior studies. Consistent with
simultaneous equation approach. Despite
the curvilinear relation between insider
the differences in the governance system
ownership and firm value, they found that
102
Review Paper “Analysis of Impact of Promoters’ Stake on the Firm Value in the Indian Corporate Sector”
104
Review Paper “Analysis of Impact of Promoters’ Stake on the Firm Value in the Indian Corporate Sector”
The variables can be grouped in to three 3. Control Variable: - These are the
categories. variables that describe the characteristics
of the company which might also affect
1. Variables of Interest- The main variables its performance. The important control
of interest for the proposed study are variables will be Sales, Age of the
the amount of the share ownership by company, Leverage, Operating Income,.
promoters. Capital expenditure to assets,. Research
a) Indian Promoters: - The fraction of equity and development expenditure to Gross
shares held by the Indian promoter or Sales, Advertising and promotional
group of promoters. expenditure to Gross Sales, Liquidity of
the share , Export intensity, Marketing
b) Foreign promoters:-The fraction of intensity, Distribution intensity and
equity shares held by the foreign Return on capital employed.
H1
Sales
Age of the company Changes in
Leverage Indian
I
Operating Income Promoters’ Performance
n
Capex stake
f
R&D expenses l of the
Advertising and sales u
promotion expenses e
Liquidity n company
Export Intensity c
e Foreign
Marketing Intensity H2
s
Distribution Intensity promoters’
Return on Capital stake
employed
The above model will study the effect The proposed study will also try to find out
of changes in promoters’ stake on the whether foreign promoters bring in better
performance of the company. It will also value to the firm and if it is so, policymakers
study whether the presence of foreign can try to attract more and more foreign
promoters in the company helps to add capital.
more value to the company than those
The outcome of the study will fill the gap in
companies where foreign promoters’
our knowledge about the effect of changes
are absent. Performance of the company
in promoter’s stake on the performance of
will be measured using Tobin’s Q. Other
the company. In case it is observed that
variables mentioned in the model will be
promoters are misusing the markets for their
controlled to study the relationship between
personal gains then, it may try to highlight
the performance variables and the variables
the situations which will act as a whistle
of interest.
blower for the entire system.
7. Conclusion
References
The proposed study will try to find out
Agrawal and Mandelker (1990). “Large
whether there is any relationship between
Shareholders and the Monitoring of
the changes in promoter’s stake on the
Managers: The Case of Ant takeover
performance of the company. It will try to
Charter Amendments,” Journal of Financial
see whether the Indian corporate actions
and Quantitative Analysis, 25, 2, 143-161.
yield similar results as observed in some
of the overseas studies. Which theory best Balsubramanium N, Seddil Ethiraj,
suits the Indian scenario, convergence Romie Litrell, Sebastian Morris, DVR
of interest or entrenchment? India, a Sheshadri, Jayanth Verma,Srilata
developing economy has yet to come up Zaheer(2006),”Corporation and its
with high corporate governance standards Shareholders: What should B-School
compared to the western economies. Hence Teach?, Vikalp the journal for Decision
understanding the effects of the actions of Makers,Volume 31 April-June 2006Number
the corporate on the firm value will bring out 2, pp99-130.
some issues like whether we need to have
a business model like western economies Brigham and Ehrhardt (2002), Financial
where the promoter’s stake are quiet low, Management, 10th edition, pp 646-647.
and acquisition and takeover markets are Chilin Lu, Grace M. Liao, Yung-Cheng
very active. Yang (2007), proceedings of the 13th
The proposed study will try to find out Asia Pacific Management Conference,
the performance of the companies where Melbourne, Austraia, 2007, pp 698-704
promoter’s stake changed against those Chuan-San Wang, Norman strong,
who did not change the promoter’s stake. It Samuel Tung and Steve Lin(2009) “Share
will bring out whether changing promoter’s Repurchases , the Clustering Problem, and
stake helps them in any way or not. the Free Cash Flow Hypothesis” Journal of
Financial Management Volume 38 ,Issue 3
106
Review Paper “Analysis of Impact of Promoters’ Stake on the Firm Value in the Indian Corporate Sector”
108
SIES Journal of Management, April - August 2010, Vol.7(1): 109-113
Review Paper
Electronic Media and Reading Habits
Abstract Introduction
This article deals with Electronic Media Reading is an integral part of human life.
and its impact on Higher Education. It As food is necessary for our body so is
describes different kinds of Electronic reading for the mind. “An idle mind is a
Media. It also briefly describes the Reading devil’s workshop” says a proverb. To keep
Habits in Digital media. our mind full of positive ideas, we must
develop a habit of reading quality books.
The practice of reading good books will
develop our personality in a constructive
way. To, read in common parlance means,
going through a book or paper, printed or
otherwise, for deep understanding or just
for pleasure. A person who is not able to
read and write may be compared to a blind
person. But today, the technology has
enabled even a blind person to learn how
to read and understand the subject in the
book. Now the literacy rate in the country
is increasing gradually and the day is not
far away when we can achieve the dream of
being a completely literate nation.
With an increasing amount of time spent on
reading electronic documents, a screen-based
reading behavior is emerging. The screen –
based reading behavior is characterized by
the long duration of time spent on browsing
and scanning, keyword spotting, one – time
reading, non-linear reading, and reading
more selectively, while less time is spent of years. Some of the country’s universities
on in – depth and concentrated reading. are coming at par with the world’s well-
Decreasing sustained attention is also renowned top universities. The advent of
noted. Annotating and highlighting, while UGC – INFONET has given a momentum
reading, is a common activity in the printed to accessing the e-resources by faculty,
environment. However, this “traditional” students and researchers. Most of the
pattern has not yet migrated to the digital University Libraries are well equipped
environment where people read electronic with modern gadgets like computers,
documents. e-resources, etc.
The advent of electronic media and the Internet-World Internet User
growing collection of electronic documents Statistics
have had a profound impact on reading. It
was argued that the development of digital Internet is perhaps the most important
libraries”is participating in a general societal development in the field of information
trend towards shallower, more fragmented technology that has been described as
and less concentrated reading”. arguably the most complex structure yet
discovered in the world. Internet is an open
Impact of Electronic Media on computer communication infrastructure and
Higher Education a network of networks. It is also known as
Cyberspace, Information Superhighway,
Electronic media (E-Media) is changing
and the Net etc. Internet has enabled global
the way faculties teach and students learn.
level inter-connectivity of computers and
As technological advances are introduced
computer networks. It is a traditional avenue
into the academy, campuses are more
for sharing research data and information.
and more attracted by the promise and
Internet has brought in a new era in global
potential E-media for enhancing access and
communications. Internet usage in India is
learning. Faculty, Staff and Administrators
growing in steady pace. The following table
need to understand what technology can
shows the number of internet users in India:
and cannot do. E-media is seen by some
as the panacea for budgets cuts: some see Internet Usage and Population
visions of hundreds of students sitting Statistics
in front of monitors, with talking heads
providing cheap, mass education. Others YEAR Users Population % Pen.
see technology as a critical complement to 1998 1,400,000 1,094,870,677 0.1 %
the educational experience, opening more 1999 2,800,000 1,094,870,677 0.3 %
opportunities for the learner than can be 2000 5,500,000 1,094,870,677 0.5 %
encompassed by one campus. Both visions 2001 7,000,000 1,094,870,677 0.7 %
are possible, but the first not particularly 2002 16,500,000 1,094,870,677 1.6 %
desirable. The internet is changing the way 2003 22,500,000 1,094,870,677 2.1 %
universities teach and do research. India has 2004 39,200,000 1,094,870,677 3.6 %
been a major seat of learning for thousands 2005 50,600,000 1,112,225,812 4.5 %
110
Review Paper, Electronic Media and Reading Habits
112
Review Paper, Electronic Media and Reading Habits
revolution which springs from a sensitivity depth reading usually involves annotating
to surroundings, resulting in transformation and highlighting. People’s preference of
with reference to ideals, progress and paper as a medium for reading (especially
civilization apprehended by imagination in–depth reading) also implies that paper
and sensibility nurtured by the best of books is unlikely to disappear in the digital age.
enshrined in the greatest literature. The In the digital age, printing for reading
oxford Dictionary (2003) defines Reading remains one of the major driving forces
as a “Way of Interpreting Something”. for the increasing consumption of paper.
A number of digital reading devices have
Reading Habit in Digital Media been designed to support reading electronic
The Impact of Digital media on reading has documents efficiently.
increasingly been the object of empirical Since, an entire generation that has grown
and theoretical exploration by researchers up with new technology is likely to have
from a wide range of disciplines, notably different behavior towards the use of digital
psychology, computer science, education, media; studies on the demographic variables
literacy studies, and library and information are needed to fully validate the findings.
science. Each discipline has developed its Thus, today’s world provides the easiest and
unique research focus and methodology. It fastest access to knowledge overcoming
is not the purpose of this study to review time and distance constraints through the
all the different approaches and studies. electronic media. An analysis of relevant
Nevertheless, an examination of the related indicators would provide a sensitive
literature reveals that there are some essential yardstick for anticipating reading behavior
studies that deserve closer attention. in the digital environment.
With the growing amount of digital
References:
information available and the increasing
amount of time that people spend reading Ali, Amjad. 2001. Internet and University
electronic media, the digital environment has libraries, University News, 39 (17), p.6.
begun to affect people’s reading behavior. Elisabeth, Anderson. 2004. Reading and
Libraries, Guest editorial. Quarterly Bulletin
Conclusion
o f the National Library of South Africa, 58
In an increasingly digital environment, (1), p. 2-4.
readers (especially younger readers) are ILA- TISS 2008, International Conference.
likely to gradually develop the screen –
http:// Google.com
based reading behavior, and to increasingly
use a variety of strategies (e.g. browsing http://www.urch.com/forums/gre-analysis-
and keyword spotting) to cope with the issue/47225-electronic-media-vs-reading-
information –abundant environment. At habits.html
the same time, readers will continue to use http://www.internetworldstats.com/asia/
printed media for much of their reading in.htm
activities, especially in-depth reading. In-
Review Paper
Special Economic Zones in China
Koel RoyChoudhury
Koel RoyChoudhury is Faculty for Economics, S.I.E.S (Nerul) College of Arts, Science and Commerce,
Navi Mumbai.
114
Review Paper Special Economic Zones in China
products such as consumer electronics and introducing foreign capital, technology, and
office and communications equipment. knowledge and management knowhow.
Since 2002, for example, China has been the These SEZs were located along the coasts
largest supplier of U.S consumer products to gain easy access to markets like Hong
like DVD players, notebooks, computers, Kong, Macao and Taiwan. As part of the
mobile phones and information technology open door policy package announced in
hardware. 1984, SEZs were extended to large areas
inside the country and fourteen coastal
The phenomenal growth witnessed by
open port cities. In 1985, three coastal areas
China has been the result of ‘reforms and
(Pearl River Delta, Southern Fujian Delta,
opening-up’ strategy adopted by China in
and Yangtze River Delta) were designed
the 1970s.
as Open Economic Zones (OEZs) with
Prior to 1979, China had a centrally planned special incentives to promote exports and
economy. A large share of the country’s attract foreign capital. The SEZs were
output was directed and controlled by created with the objective of attracting
the state. The state set production goals, foreign investment in various industries
controlled prices and allocated resources in with preferential measures and incentives
the economy. Private enterprises and foreign such as lower tariffs, tax incentives to
firms were totally nonexistent. Chinese foreign investors, better infrastructure,
living standards were substantially lower more flexible labour markets and less
than those of other developing countries. bureaucratic control. Variety of industries
The inward looking strategy adopted by including manufacturing industries,
China kept her stagnant and underutilized. service industries like hotels, retails,
housing constructions and infrastructural
In 1979, several reforms were introduced to development were encouraged and open to
expand the Chinese economy by infusing foreign investment.
foreign capital and technology. One of
the important measures adopted was the In the words of Deng Xiaoping, the
establishment of four Special Economic objectives of creating the SEZs can be
Zones along the coast for the purpose summarised as follows,
of boosting exports, attracting foreign
“SEZ is a window, a window of technology,
investments and importing high technology
a window of management, a window
products into China. The open door policy
of knowledge, as well as a window of
was put into practice in order to attain
international policy.”
socialist modernisation.
Four Special Economic Zones were Growth of SEZs
established in Shenzhen, Zuhai and Shantou The Special Economic Zones are considered
in the province of Guangdong and Xiamen in as engine of growth for the Chinese
the region of Fujian. The main objective of economy. These SEZs have played an
setting up the zones were to delimit special important role in transforming China from
areas to serve as a bridge or “windows” for a stagnant and inward looking economy to
the world’s fastest growing economy in the world. According to a World Bank Report on
SEZs published in April 2008, there were 157 zones in China employing 50,000 thousand
people and generating exports worth $145,000 million.
The following data show the growth of the five SEZs established in China.
Shenzhen
Shenzhen, a Special Economic Zone located in South China’s Guangdong province has
turned out to be the most successful among the SEZs established in China. The city’s annual
growth rate has averaged 28% since 1980. Shenzhen has developed into an important high-
tech R&D and manufacturing base in China, the world’s fourth largest container port, the
fourth largest airport and the fourth largest tourism city of China. Some of the important
reasons cited for Shenzhen’s success are as follows
1) Special privileges: In 1980, the central government of China granted special privileges to
Shenzhen as a Special Economic Zone placing it literally in a class of its own.
2) Foreign Direct investment: Initially Shenzhen lacked capital and other resources.
In 1979 Shenzhen attracted foreign investment worth 0.005 billion dollars. But in 2008
Shenzhen actually used foreign investment worth 4.03 billion dollars. 113 of the top global
multinationals maintain offices in the city. Buying foreign brands have become part of the
daily life for Shenzhen residents. The major shopping districts are packed with foreign
retailers like Wal-mart, Carrefour, H&Q. Countless global brands like P&G, Unilever, Mars,
Coke, Nestle, Sony, LG, Nokia, SIEMENS and Phillips can be found in these stores. The
city is connected to the outside world by a number of ways. Tens of thousands of foreign
nationals now live and work in Shenzhen.
3) Entrepreneurship: The city’s greatest strength is its entrepreneurship, which have flocked
to the cities from all over China. Out of 170,000 registered companies in the Sez in 2005,
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Review Paper Special Economic Zones in China
more than 135,000 were private companies. the urban and rural areas. According to the
The private sector employs about half of the National Bureau of Statistics, Majority of
city’s workforce and contributes about half the migrant workers are forced to work
of its economic output. It is the city’s high overtime. In 2009, migrants worked on an
tech sector which has made a huge progress, average 26 days a month or 58.4 hours a
growing at an annual rate of 46.5% over week, 14.4 hours a week more than the legal
the past two decades. Shenzhen also has a limit of 44 hours a week according to the
large pool of small business owners who country’s new labour law. It is also reported
are engaged in a variety of industry all over that the average monthly salary of migrant
the city. workers grew by 77 Yuan ($11.28) in 2009
4) The middle class: Large numbers of from the year before. According to the NBS
people have migrated to the city from the report, only 42.8% of the migrant workers
adjoining areas leading to the emergence have a formal contract with their employees
of a new middle class. Tens of millions of and in the construction industry, the figures
Chinese have tried their luck in this city are as low as 26%. The situation for migrant
and some 12 million now call it home. This workers social insurance is even worse. Only
middle class is the key consumption force 21.8% have employment injury insurance
in the city. while 12.2% have medical insurance and
7.6% have pension insurance.
Chinese Success Story Chokes on Its Own
Growth Rural stagnation:
According to the National Bureau of
The New York Times, December19, 2006
Statistics, during the first half of 2010,
This article published in the New York the per capita total incomes of urban
Times highlights the deplorable conditions households was 10,699 Yuan, while the per
in which workers live in Shenzhen. SEZs capita cash income of rural population was
like Shenzhen have created tremendous 3,078 Yuan. China‘s economic growth has
economic prosperity. Yet there are some been rather uneven with the agricultural
winners and losers. If on one side these sector languishing and the rural population
SEZs are dotted with huge factories and suffering from lack of job opportunities.
commercial complexes, there are also Lack of agricultural development has forced
millions of workers who live in small millions of people from the rural areas
dormitories working long hours in the to migrate to the cities. They are a cheap
factories. source of labour for the various factories in
China. They are forced to love in the most
Migrant workers: Majority of the workers deplorable conditions.
working in the SEZs in China are migrant
workers who receive as little as $100 per Growing level of unemployment:
month. The migrant workers come from It is estimated by the China Labour Bulletin
some of the poorer regions in China and are that between 2003 and 2020, 15 million new
driven to the cities by lack of opportunities in people will enter the Chinese labour market
the villages and the increasing gap between each year, while only 8 million new jobs
will be created at the current growth of 9%. personal abuse often occur at the working
China has virtually inexhaustible supply of place. Women are often made to work for
migrant labourers who are willing to work long hours lasting up to 12 hours in a day.
under any conditions without protest. Despite provision in the Chinese labour
laws regarding maternity leave, many
Child labour:
factories refuse to abide by the law.
There is increasing evidence of usage of
child labour in factories in China. School Hukou system:
children are increasing becoming part of Hukou is a system of residency permits
the required workforce. In some coastal and adopted by the Communist government
particular economic zones, such as Fujian used to minimize the movement of people
and Guangdong, there are reported to be between rural and urban areas. Under the
approximately four to five million child Hukou system, Chinese citizens were
labourer under the age of 16. In Shenzhen, classified as urban and rural based. While
children between the ages of 10 to 16 work urban residents received state allocated
for up to 14 hours a day in factories. It is jobs, the rural residents were to be self
recorded that girls work in awful conditions reliant. The hukou system operated as an
for 13 to 14 hours a day from 7 am to 10 p.m internal passport system. The industrial
with two one-hour breaks. According to the growth witnessed by China has led to a huge
International Labour Organization, education migration of rural people to the factories.
is compulsory up to the age of 16, yet children However, the rural-Hukou Chinese who
are reported to be dropping out of school at migrate to the cities are not eligible for basic
increasing rates. An article in the Telegraph in urban welfare and social service program
February 2010 revealed that child labour was including public education. Though the
used in factories for manufacturing Apple government has introduced a number of
computers, iPods and mobile phones. reforms in recent years, the basic structure
has remained intact. The migrant worker
Feminisation:
continues to face discrimination in the job
SEZs have played an important role market and remain as second class citizens
in creating employment opportunities in the cities. During the recent global crisis,
for Chinese women. Today 60% of the when Chinese exports fell and factories
workers engaged in the SEZs are females. closed, the migrant workers became jobless
According the China Labour Statistical year with little protection.
book (2005), manufacturing is the largest
sector to employ women. Discrimation Labour unrest:
against women is a common feature in In recent times, China has seen a number
the Chinese factories. Most of the female of labour unrest, with workers demanding
workers are employed in unskilled, low higher wages and better working conditions.
paying and labour intensive factories. In June, 2010, Honda, a Japanese automaker
Young, single women are preferred as they saw a series of strikes at its Chinese factories
can be easily controlled and are ignorant demanding higher wages. On June10, 2010,
about their rights. Sexual harassment and Time reported that in Kushan, a city near
118
Review Paper Special Economic Zones in China
Sherry Tao Kong, ANU. China’s migrant Xiaolan Fu (University of Oxford) and
problems: the need for hukou reform East Yuning Gao (University of Cambridge).
Asia Forum .January 29, 2010 (31/10/2007). Export processing zones in
China; A survey. A report submitted to ILO
Special Economic Zones. Performance,
lessons learned, and implications for zone Xu Dixin. (May-26-2009).China’s Special
development. April 2008. FIAS. www.fias. Economic Zone .BEIJING REVIEW.com.
net cn www.bjreview.com.cn
Sylview De Murger, Jeffrey Sachs, Wing Zhang Yansheng, China’s SEZs and Cluster
Thye Woo, Shuming Bao, Gene Chang, development. Government strategies
Andrew Mellinger (2002). Geography, and policies. Institute for international
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120
SIES Journal of Management, April - August 2010, Vol.7(1): 121-131
Review Paper
Competencies and Competency Model-A Brief
overview of its Development and Application
Nitin Vazirani
Nitin Vazirani is Dean-HR,SIES College of Management Studies,Nerul.
vazirani.nitin@gmail.com
by the Hay Group. Although different representing the visible tip of the iceberg,
sets of competencies predict success in while the underlying and enduring personal
different roles, there are certain consistent characteristics or self concepts, traits and
patterns as well. According to McClelland, motives (for example, self-confidence,
competencies are best described as an initiative, empathy, achievement orientation,
iceberg (as shown in the diagram below) etc.) which represent the larger portion of
with a person’s knowledge and skills the iceberg, hidden below the waterline.
COMPETENCIES
Behavioral demonstration
Information that a person of expertise
has in a particular area Knowledge
Motives
With the ‘shelf-life’ of knowledge and skills (c) Tests and academic performance only
becoming shorter and shorter in today’s predicted job performance because of
ever-changing world, the long enduring, an underlying relationship with social
‘below the water-line’ competencies have a status.
more substantive impact on how effectively (d) Such tests were unfair to minorities, and
an individual performs on the job.
(e) ”Competencies” would be better able to
David C. McClelland’s 1973 article deeply predict important behaviors than would
influenced both professional and public more traditional tests.
opinion in which he presented five major
After 18 years Gerald V Bareeett and
themes.
Robert L Depinet in the year 1973 came
(a) Grades in school did not predict out with their paper “A Reconsideration
occupational success. for Testing for competence Rather than
(b) Intelligence tests and aptitude tests did for Intelligence,” in which, they argued
not predict occupational success or that though Mc Clelland and his associates
other important life outcomes. believed that Intelligence testing should
122
Competencies and Competency Model-A Brief overview of its Development and Application
to Richard E. Boyatzis (1982) and his book as is self control is an ability to remain
The Competent Manager. Boyatzis defines calm under stress.
competency as ‘an underlying characteristic 5. Motives-Motives are emotions, desires,
of a person which results in effective and/ physiological needs or similar impulses
or superior performance in a job’. An that prompt action. For example surgeons
underlying characteristic, it is suggested, with high interpersonal orientation take
could include a motive, trait, skill, an aspect personal responsibility for working well
of one’s self image or social role, or a body with other members of the operating
of knowledge. Spencer and Spencer, who team.
furthered Boyatzis’ original work define
competency as an ‘underlying characteristic Motives and Traits may be termed as
of an individual that is causally related to initiators what people will do on the job
criterion referenced effective and/or superior without close supervision.
performance in a job or situation’ (1993: 9).
Competencies and Workplace
Competencies are thus underlying
characteristics of people that indicate ways Spencer and Spencer (1993) emphasize the
of behaving or thinking, which generalizes point that competencies must be related
across a wide range of situations and endure to performance in the workplace and not
for long periods of time. what would be desirable to have. The
simplest example they provide of relating
There are at least five terms in this definition competencies to performance is the studies
which require understanding:- they conducted with salespersons where
1 Knowledge-This refers to information they were able to relate competencies to
and learning resting in a person, such sales performance.
as surgeon’s knowledge of Human Unfortunately most jobs do not allow for
Anatomy. such accessible criterion measures. This
2 Skill-This refers to a person’s ability to type of competency Spencer and Spencer
perform a certain task, such as surgeon’s (1993) argue has practical implications for
skill to perform a surgery. human resource planning. Knowledge and
3 Self Concepts and Values-This refers skill competencies are seen as relatively
to a persons attitudes ,values and self easy to develop compared to self-concept,
image .An example is self confidence traits and motives (personal competencies).
,a persons belief that he or she can be They suggest it is more cost effective
successful in a given situation ,such as a to select for these competencies while
surgeons self confidence in carrying out training for knowledge and skills. Many
a complex surgery. organizations, they argue, hire on the basis
of skills and knowledge and assume that
4. Traits-Traits refers to physical good management can instill traits and
characteristics and consistent responses motives. The converse, they argue, is more
to situations or information .Good cost effective: organizations should select
eyesight is a necessary trait for surgeon, for core motive and trait competencies and
124
Competencies and Competency Model-A Brief overview of its Development and Application
teach the knowledge and skills required to with the higher score on optimism will have
do specific jobs. a greater chance of obtaining a position.
To quote Spencer and Spencer: “In complex Competencies at work is however not simply
jobs, competencies are relatively more about developing readiness or having the
important in predicting superior performance skills, knowledge and attribute to perform.
than are task-related skills, intelligence, or Competence also involves the willingness
credentials. This is due to a ‘restricted range and desire to perform. These factors are
effect’. In higher level technical, marketing influenced by daily experience at work and
professional and managerial jobs, almost the perceived nature of the organization team.
everyone has an I.Q of 120 or above and an Competence thus requires developing skills
advanced degree from a good University. and knowledge and designing appropriate
What distinguish superior performers in Competency Models that tie to current roles
these jobs are motivation, interpersonal and anticipate future skill requirement.
skills, and political skills, all of which are
Competency Based HRM Models
competencies”
Typically a model is defined as an imitation
An example of selecting for key personal
or an abstraction from reality that is intended
competencies is provided by Seligman (1991).
in order to understand and simplify our
Seligman established that the competency that
view of that reality while still capturing its
differentiated superior insurance salespersons
essential characteristics.
from poor salespersons was the personal
characteristic of optimism. Optimistic A competency model is a descriptive tool
insurance salespersons explained or that identifies the competencies needed
rationalized ‘rebuffs’ in ways that meant they to operate in a specific role within a(n)
would continue making calls to sell insurance. job, occupation, organization, or industry.
Traditionally, insurance salespersons were Simply stated, a competency model is a
selected on the basis of technical insurance behavioral job description that must be
knowledge. With turnover at approximately defined by each occupational function and
50 per cent per year recruitment, selection each job (Fogg, 1999). Depending on the
and training were costing Metropolitan Life work and organizational environment, a
75 million dollars a year. group of 7 to 9 total competencies are usually
The results of Seligman’s intervention required of a particular job and depicted in
proved startling, with turnover cut by half a competency model (Shippman, 2000).
and sales increased by as much as 20 per Dubois in defining competency models
cent in the first year. Metropolitan Life still states that they provide the adhesion
includes a test of industry knowledge on the or “glue” that is necessary among the
basis that a minimum level of knowledge elements of an organizations human
is still important for any salesperson, the resource management system. It means
difference being that, in differentiating that competency models help organizations
between two applicants with similar take a unified and coordinated approach to
industry-knowledge test scores, the applicant designing the human resource management
126
Competencies and Competency Model-A Brief overview of its Development and Application
128
Competencies and Competency Model-A Brief overview of its Development and Application
for that particular organization, there will by choice or due to market changes,
be an organizational expectation of what competencies and Competency models are
makes the company succeed. For the an assistive device for individuals to focus
gaps in competency acquisition, further on their current competencies and refocus
training and development can be offered or enhance their competencies as necessary.
and provided to aid in acquisition of the With the knowledge and use of the
desired skill, knowledge, behavior, trait, information contained within a competency
etc. Allowance for some less needed or model and awareness of their individual
desired competencies should be considered competency strengths and weaknesses,
as well to perhaps enrich the talent pool. individuals may manage their future job or
For occasions when these competencies career success, navigate their current chosen
are not developed, it is likely that inaction career pathway, or apply the information to
or an ineffective behavior may prevent the examine new career opportunities.
worker from accomplishing job tasks and
organizational goals. While not usually the References:
most cost-effective option for businesses Ashworth, P.D., & Saxton, J. (1990). On
after investing in an employee, it may be ‘competence.’ Journal of Further and
most appropriate for the company to re- Higher Education, - 27
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individual and his or her acquisition for Batrushollweg International’s model: http://
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the organization. With the results of this Manager. A model for effective Performance.
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can determine the individual’s future
within that organization. The employee Cascio. W.F. (1998) Applied Psychology in
might benefit far greater in the long run Human Resource Management. Englefield
knowing that other organizations within Cliffs; N.J. Prentice Hall - 9
that industry or across industries would be
Cockerill, T., Hunt, J., & Schroder, H.
a better career fit.
(1995). Managerial competencies: Fact or
Conclusion fiction? Business Strategy Review. - 26
As noted above, with certain exceptions David C Mc Clelland (1973) Testing for
considered, Competencies and competency Competence Rather than for Intelligence.
models are a viable tool that can be utilized American Psychologist - 2
to prepare the current and future workforce Dubois (1993) Competency Based
and retain skilled incumbent workers to performance improvement: a strategy for
meet the job requirements and other needs organizational Change .Amherst: HRD- 12
of employers. Furthermore, for career
exploration and development purposes Fogg, CD (1994) .Implementing your strategic
and during times of job change, whether plan: How to turn intent into effective action
for sustainable change. New York. American Competencies in New Zealand. On the
Management Association - 10 inside looking in. Wellington. Ministry of
Commerce. - 5
Furnham (1970) A question of time
Competency, Personnel Management. Patty Grigorgev (2006) Hiring b
P. 37 -1 Competency Models. (2006) The Journal
for Quality and Participation. - 16
Gerald V Barrett. (1982) A Reconsideration
of Testing for competence Rather than for Richard Montier, David Alai. (2008)
Intelligence. - 3 “Competency Models: Develops Top
Performers.ASTD - 20
Hewitt associates. {2005} .Research
Highlights: How the top 20 companies Robert M Fulmera and Jay A Conger
Grow Leaders” http:\\was4.hewitt.com\ (April 2004). Identifying Talent. Executive
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top-companies-2005.pdf - 14
Scott Cooper, Eton Lawrence. (1998)
Karen Tabet, (Feb 2004) .Benchmarking Best Competencies – A Brief overview of
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and Private Sectors. Research directorate
King. S.B King, M & Rothwell, WJ. (2001)
Policy, Research and Communications
.The complete guide to training delivery:
Branch, Public Service Commission of
A complete – based approach .New York:
Canada - 13
American Management Association - 24
Seligman. (1991) M, Learned Optimism.
Lucia, A. D., & Lepsinger, R. (1999). The
New York: Knoff - 8
art and science of competency models:
Pinpointing critical success factors in Shipman, J S Ash; R A (2000) The practice
organizations New York: Pfeiffer - 28 of competency modeling. Personnel
Psychology. - 11
M ontier. R. Alai D. & Kramer. D (2006).
Measuring and Evaluating: Competency Spencer, L.M and Spencer, S.G (1993).
Models develop top performance. Training Competence at work: Models for superior
and Development. - 17 performance. New York: Wiley - 7
Marjorie D (2008) Lessons Learned – Using TG’s model: http://competencymodels.net/
Competency Models to Target Training products/ - 22
Needs. Training and Development. - 19
William Rothwell (2004) .Mapping the
Michelle R Ennis (2008) Competency future: Shaping new workplace learning and
Models: A review of literature and Performance Competition. ASTD - 25
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130
Competencies and Competency Model-A Brief overview of its Development and Application
Abstract Introduction
The primary difference between human beings
and other forms of living beings is the ability Communication is an essential part of
to communicate. As mankind has evolved, the human interaction. The benefits of effective
way humans communicate has also undergone communication are many and obvious as
a change. This change has been phenomenal they enhance all aspects of our personal and
in the last two decades due primarily to the professional lives. So what is communication?
advents made by the electronic media, more If it is so important, how do we ensure
specifically the internet. that when one person talks to another, that
the other person listens and understands?
It is observed that the language changes, How do we know if the message (or sign)
usually slowly, sometimes very rapidly, has not only been heard (or read) but also
but in this century, language has shown a
understood? What can be done to limit the
transformation. To a large extent this change
opportunities for mistakes and to enhance
has been due to the immense impact of the
the effectiveness of communications?
internet and e-mail used for communication.
Keeping the above in the frame of reference, a It is a self-evident fact that people speaking
primary research was conducted on a sample different languages can generally not
size of 100 students, 20 senior citizens and 30 converse at all and even people speaking
people from the workforce in Nerul, a satellite their own language can misinterpret spoken
township situated east of Mumbai. messages. Many will recall playing games
where a message passed through a series of
Key words: Communication, e-learning,
people can become quite unrecognizable
language,
from the original message after being
re-worded or abbreviated by individuals
passing a message one to the other. And
the reason these messages become garbled
is probably because we probably have too
many ways of passing ideas one to another.
132
Impact of Electronic Media on the Language Used for Communication- An Exploratory Study
For effective communications, when the way physically resemble the object it stands
sender of a message communicates with for. An advantage of human language is
the intended that it is a learned symbolic communication
system that is infinitely flexible.
recipient, there has to be a correlation
between what the sender is thinking about Meanings can be changed and new symbols
and what the receiver is thinking about. can be created. New words are invented
Text or words must therefore be used in a daily and the meaning of old ones can
consistent way, and the first requirement for change. When people learn new words they
communication is a set of messages that are do not remember the unique voice qualities
used consistently. when they heard the new words. This
allows people to respond linguistically to
The essence of communication is sharing, major environmental, historical, and social
providing data, information, insights in an changes and able to understand the world
exchange that benefits both you and the better as the years go by.
people with whom you are communicating
A language is a systematic means of
Effective communication strengthens the communication by the use of sounds or
connection between the sender and the conventional symbols. It is the code we all
receiver. Conversely, when communication use to express ourselves and communicate
breaks down, the results can be any thing to others. It is a communication by word
from wastage of time to catastrophic. The of mouth. It is the mental faculty or power
most obvious case in point is the tragic case of vocal communication. It is a system for
of the Titanic. communicating ideas and feelings using
Human communication has several key sounds, gestures, signs or marks. Any
characteristics. means of communicating ideas, specifically,
• The process of communication is human speech, the expression of ideas by the
continuous, ongoing, and dynamic. voice and sounds articulated by the organs
• Communication begins with the self. of the throat and mouth is a language. This
• Communication is irreversible, is a system for communication. A language
• Communication is reciprocal. is the written and spoken methods of
• Communication is unrepeatable. combining words to create meaning used
• Communication is transactional. by a particular group of people.
• Communication exists in some kind of Language, so far as we know, is something
context, or setting. specific to humans, that is to say it is the basic
Human language is unique because it is a capacity that distinguishes humans from
symbolic communication system that is all other living beings. Language therefore
learned instead of biologically inherited. remains potentially a communicative medium
Symbols are sounds or things which capable of expressing ideas and concepts as
have meaning given to them by the users. well as moods, feelings and attitudes.
The meaning is arbitrarily assigned. For A set of linguists who based their assumptions
example, the word “book” does not in any of language on psychology made claims that
language is nothing but ‘habit formation’. email use has boomed all across the globe
According to them, language is learnt as a way of communication, but maybe
through use, through practice. In their they should look at other factors like the
view, ‘the more one is exposed to the use of accessibility and availability as well as
language, the better one learns’. the practicality of using email service for
communication. The latter sounds weightier.
Written languages use symbols (characters)
The internet gives individuals as well as
to build words. The entire set of words is the
companies addresses which they can use.
language’s vocabulary. The ways in which
the words can be meaningfully combined
is defined by the language’s syntax and Review of Literature
grammar. The actual meaning of words and
combinations of words is defined by the The electronic media has had far reaching
language’s semantics. effects on multiple aspects of our lives
including the way we use language for
The Internet and electronic communications communication. Although language has
(also called computer mediated always been changing ( Biesenbach-Lucas
communications, or CMC) doesn’t just and Wiesenforth 2001), due to developments
mean new tools for communication; it in communication technology, its change has
means new ways to communicate. Today recently accelerated and led to interesting
an organization interacts with its various variations in written language use. (Danet
constituents differently - employees, 2001) found a tendency toward playfulness
board members, customers, partners and in email greetings and concluded that email
others - depending upon the nature of the
message, the goals it is trying to achieve communication is more informal in
and the strengths (and weaknesses) of the comparison to traditional norms governing
available media - telephones, voice mail, the form of official letters. (Trupe 2002)
fax machines, print, etc. also found an emergent diversity in written
communication in terms of word choice
The world today has become highly and syntax.
competitive and complex, and the ability
In one of the first studies done of non-native
to communicate with clarity, confidence
speakers communicating in their second
and credibility is essential for success. Still,
language, (Hartford and Bardvi-Harglig
this ability is overlooked rather frequently,
2006) compared the email communications
and people tend to forget that any logical
of native and non native speakers in various
conclusions, sound reasoning, innovative
graduate programs. They discovered that in
solutions are rendered meaningless if
non-native speaker’s emails there was an
they’re not communicated in a persuasive,
overall lack of socio-culturally accepted
motivational way that inspires the receiver.
guidelines. This is most likely due to the fact
Email is now the favourite way of that online communication requires more
communication all over the world - than simply language proficiency. It requires
irrespective of gender, age or color. Many users to have an intimate sense of not only
people see the internet as the reason the how language is used but also to have a
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Impact of Electronic Media on the Language Used for Communication- An Exploratory Study
sense of the culturally accepted standards Electronic medium has not only affected
of that language that many native speakers the way we read and write English but also
are still not aware of. A circumstance all of has enhanced the increased usage of the
us in India are familiar with. indigenous languages.
More and more teachers in India are
beginning to see creeping abbreviations as Objectives
part of a continuing assault of technology The objective of this study is to ascertain
on formal written English (Lee, 2002). (a) the impact of electronic communication
According to Lee, “teachers say that papers on the written language of students, people
are being written with shortened words, in the workforce and senior citizens (b)
improper capitalization and punctuation, the perceptions of the target groups about
and characters like &, $ and @”. However, the effect of electronic communication on
something that is not always considered is written language.
that these mistakes are often unintentional
– when students use IM frequently, they Methodology
reach a saturation point where they no
longer notice the IM lingo because they Secondary Research
are so used to seeing it say Brown-Owens,
This includes research articles, journals,
Eason, & Lader (2003).
answer books of students, emails of
Crystal (2001) says that the impact of workforce and letters received by the
the worldwide web on language remains researchers.
minimal - “When we look at the specific
effect of the Internet on language, languages Primary Research
asking the question, has English become a The target population for the student e-mail
different language as a result of the Internet, data collection was the post graduate
the answer has to be no,”. Crystal says students of SIES College of Management
linguistic changes caused by the Internet run Studies, Nerul, Navi Mumbai. More than
parallel to changes in the existing lexicon. 150 e-mails were sent to the researcher
What we are not seeing is an alteration, but but for the purpose of the study only 100
additions to the language. random e-mails were considered. All 100
students received a reply to their e-mail
Statement of the Problem with the corrections marked in red, along
with the teacher’s comments.
The standard of the language used in
organization, as well as, schools, colleges, The target population of senior citizens for
work place has steadily declined as a result data collection was selected from the family
of the increased effect of the electronic members of faculty at SIES Nerul campus
media on our lives. On the other hand the as well as the senior citizens home at Nerul.
programs and the impact of electronic A total number of 20 senior citizens were
media have generally received a great interviewed using a questionnaire with a blend
deal of appreciation and applause. The of open ended and close ended questions.
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Impact of Electronic Media on the Language Used for Communication- An Exploratory Study
4. Seventy percent of the senior citizens social networking sites, if not more. All
interviewed were of the opinion of them were of the opinion that written
that correctness of language matters communication should only happen through
significantly in communication. the electronic medium in view of its speed
According to them, not only was it and ease of use. Instant Messaging (IM)
important to get the message across, it and SMS appear to be the preferred modes
was also important how it was achieved. of communication. Most of the students
Form mattered significantly. “Butchering” seem to be highly influenced by IM and
the language was unacceptable to them. SMS. Less is more. Hundred percent of
Most of the senior citizens were unified them preferred to send an e-mail to the
in their opinion with regard to the effect researcher in lieu of writing a letter.
these modern media of communication
6. Approximately fifty percent of the
was having on the language of the
students were unable to recognize a
younger generations. They felt that since
spelling mistake when shown an e-mail
achieving perfect understanding is the
with incorrect spellings, even after
aim of communication, it ought to be
promptings. Similarly, incorrect forms of
attempted in the perfect manner – keeping
address and grammatical structures were
the spellings, grammar and punctuation
also not noted by about fifty percent of
as per the norms established by tradition.
the students. An “ i “ in the middle of
Not a single one of them was willing to
a sentence appeared to be the norm not
write using abbreviations such as “asap”
only in e-mails but also in all forms of
for “as soon as possible” or “FYI” for
written communication, including answer
“for your information” as is popular with
booklets of examinations.
people in the workforce today.
Table 3: Distribution of types of errors in
Graph II: Importance of language in the e-mails (N= 100)
communication for the target population in
Types Frequency
percentages.
Spelling errors 49
Incorrect grammar 51
80
70 Inappropriate punctuation 35
60 Incorrect capitalization 33
Yes
50 Incorrect salutation 12
No
40 Use of abbreviations and acronyms 53
30 Lack of paragraphing 24
20
SMS/ IM language 57
10
No signature 03
0
Senior workforce Students All capitals 03
citizens
All small letters 02
5. Hundred percent of the students surveyed Garbled messages 13
had an e-mail ID and were on at least two Emoticons 14
SMS/IM
Lack of Paragraphing
Use of abbreviation and
incorrect capitalization
errors
inappropriate punctuation
incorrect grammar
spelling errors
0 10 20 30 40 50 60
7. Eighty percent of the students were of but were of the view that this was quite
the opinion that the internet and e-mail acceptable in the e-mail/ IM format.
makes communicating easier as they However, they were extra careful with
don’t really have to watch the spellings, abbreviations when writing the hard
grammar or punctuation while writing an copy of a letter and refrained from using
e-mail. The language they feel is much such terminology in letters.
more lively and communicative today as
compared to the pre-internet era. Conclusion
8. Sixty percent of the people surveyed Language and writing always change
amongst the workforce category, generationally. The English of Shakespeare’s
felt that correctness of language was day was completely different from our
important in communication. They everyday speech. Language which is
however segregated the language used dynamic and alive is prone to change. The
in communication based on context, internet has brought profound changes
format and recipient. not only to the way we speak, write, and
9. Most people among working professionals spell, but to everything we do....even the
admitted that terms like “FYI”, “PFA”, way we think. At this point in time, it is not
“BTW”, “FWIW” and “TIA” have made possible to determine the complete extent
life easier for them by reducing the effort of the effects of electronic media on formal
required to type the full forms of these writing. However, we need to realize
abbreviations in e-mails. that the e-mail and instant messaging are
the new and the most popular media of
10. About eighty percent of the people communication and as teachers recognize
surveyed among the workforce were its impact and significance.
quite aware that they were using
abbreviations, incorrect grammar and Probably the most important thing that
punctuation while writing an e-mail teachers can do is to emphasize to students
138
Impact of Electronic Media on the Language Used for Communication- An Exploratory Study
Title of article:
Signature of the corresponding author:
Name of the corresponding author:
Mailing address:
Phone:
Email:
140