EQUITY INVESTORS EXPECTATION AND EXPERIENCE A GAP ANALYSIS

46 ABSTRACT EQUITY INVESTORS EXPECTATION AND EXPERIENCE A GAP ANALYSIS TARAK PAUL*; EKTA GARODIA** *Assistant Professor, Royal School of Business, Betkuchi, Guwahati. **Research Scholar, Royal School of Business, Betkuchi, Guwahati. As we all know, the Indian economy is an inflationary economy. The loss of money value caused by inflation can not be stabilized by putting the surplus money in traditional investment avenues. Stock markets are considered as the perfect place for investment which can hedge such losses. Right choice of securities can produce handsome return and thereby investors can generate surplus. In a nation like India with huge population, only a handful of them invest in stock markets in general and in equity shares in particular. The study was carried with the objective of understanding the level of gap exists between equity investors expectation and experience and hypothesis were set accordingly. The study was conducted in Guwahati city and confined to individual investors only. The study is based on 4Cconcept of marketing mix. 4C s represent customer solution, customer cost, customer convenience and customer communication. Items on investors expectation and experience in relation to 4C dimension of marketing mix were developed to design the questionnaire. A sample (equity investors) of 164 was taken for the study. Data collected have been analysed and tested using SPSS. The finding of the study showed that there exist gap between investors expectation and experience. KEYWORDS: Investors expectation, Investors experience, Customer solution, Customer Cost, Customer convenience and Customer communication. INTRODUCTION Investors have a wide array choice while making investment decision relating to avenues of investment. Stock market is very good option through which a retail investors can park their surplus money. Indian share market is the oldest share market in India. Pathak stated that to an investor, investment decision, whether the investment is equity, bond or mutual fund is the most difficult decision. A typical investor may not possess the knowledge, time or desire to undertake necessary research to avoid wrong decisions. Research has revealed some major reason why investors, particularly retail investors, often makes wrong decisions- failure to develop a sound strategy, bearing either too much or too little risk, poor investment selection, inadequate diversification, failure to control emotions- especially greed and fear (Pathak, 2009). Investors main motive behind investing is high return and customers choose broking firm based on their customer service and brand name. Investors generally prefer brokers advice for purchase and

47 sell of shares and therefore broker should suggest most profitable share to the clients (Sahoo, 2012). This study was conducted to see whether there is any significant difference between level of expectation and level of experience of the equity investors in respect of 4C dimension of marketing mix. CUSTOMERS EXPECTATION AND EXPERIENCE There is a growing managerial interest in customers satisfaction as a means of evaluating quality. High Customers rating are widely believed to be the best indicator of a company s future profit. Customers expect to get the desired need fulfilled from the purchase of a product or services (Anderson & Sullivan, 1993). A Customer forms expectations from many sources such as previous experience, word of mouth and advertising. Demand for a product is based on expectation rather than complete information. Demand shift with the change in expectation of customers (Goering, 1985).On the other hand Customers experience is an interaction between an organization and customer as perceived through a customer s conscious and sub-conscious mind. It is the blend of an organization s rational performance, the senses stimulated and the emotions evoked and intuitively measured against customers expectations all across all moments contact. 4C MODEL OF MARKETING MIX Marketing mix refers to a set of controllable, tactical marketing tool that firms blend to produce the response that it wants in the target market (Kotler & Armstong, 2008). According totellis, marketing mix refers to variables that a marketing manager can control to influence a brands sale or market share (Tellis).The term "marketing mix" was coined in 1953 by Neil Borden in his American Marketing Association. Traditionally these considerations were known as 4Ps of marketing mix. The 4Ps classification was first suggested by McCarthy. Marketing Mix model (also known as 4 Ps) can be used by marketers as a tool to assist in implementing marketing strategy. Marketing managers use this method to attempt to generate optimum response from the target market by blending these four variables. Traditionally, the marketing specialists relied on marketing mix or 4Ps- product, price, place and promotion to develop marketing plans. But this approach is unidirectional in the sense that that it comes from the organisation and imposed on the customer. That is why Schultz, Tannenbaum, Lauterborn proposed a consumer oriented four Cs classification in 1993 for the movement from mass marketing to niche marketing (Schulz, Tannenbaum, & Lauterborn, 1993).They suggested that marketers must think in terms of 4Cs instead of 4 Ps: Customer solution (Not product), Customer cost (Not price alone), Convenience (Not Place), and Communication (Not promotion). Marketers sees themselves as selling products, customers see themselves as buying value or solution to their problems. Customers are interested in cost rather than cost of obtaining, using and disposing the products. Customers want the products and services as conveniently as possible. Finally they want two way communications. These has resulted a shift of 4P model of marketing mix to 4C model. Nezakati, Abu and Toh mentioned that 4C s imply more emphasis on customers want and concern than 4P s. Consumer value as a complexity approach allows the product to develop as the customer uses it with the perfect product emerging from the inter-relationship between product and customer use. Price may be somewhat companies decided to charge for their product, customer cost represent the real cost that customers will to pay. Implying management s method of placing product where they want to be as customer convenience recognizing

48 consumers choice for buying in ways convenient to them. Promotion suggest the ways in which companies persuade people to buy, consumers communication is a two a process involving feedback from customers to suppliers (Nezakati, Abu, & Toh, 2011). STATEMENT OF THE PROBLEM Stock market is considered as very much volatile in nature. Therefore, despite having good savings most of the people do not invest directly in share market. Not only its volatility but lack of knowledge, complex decisions to make investment in shares and higher risk are the other factors which restrict the potential investors from making investment in capital market. It is very much important and necessary to understand the expectation and experience level of investors. Nazrari stated that business firms can no longer be indifferent to their customer s need and expectation (Nazari, 2012). Therefore, the study was conducted to understand whether there exist any gap in the expectation and experience level of equity investors. OBJECTIVES OF THE STUDY The objective of the study is to understand whether there exist any gap between the level of expectation and level of experience among equity investors in respect of customer solution, customer cost, customer convenience and customer communication. HYPOTHESIS OF THE STUDY The following hypothesis were formulated for the purpose of the study- 1. There is no significant difference between level of customer solution expected and customer solution experienced. 2. There is no significant difference between level of customer cost expected and customer cost experienced. 3. There is no significant difference between level of customer convenience expected and customer communication experienced. 4. There is no significant difference between level of customer communication expected and customer communication experienced. METHODOLOGY The study used both primary and secondary data. Primary data was collected through a structure questionnaire and secondary data was collected from various websites, books, and journals. Items of the questionnaire relating to 4C dimension of marketing mix were developed through literature survey keeping in mind the objective of the study. Items of the questionnaire were constructed on a 5 point Likert scale to elicit the expectations and perceived experience of the target respondents. The study was conducted in Guwahati City. The questionnaires were served to 200 equity investors. Only 164duly filled questionnaire were found appropriate

49 for data analysis. Data was analysed using SPSS. Paired Samples t Test was used to test the hypothesis DATA ANALYSIS AND INTERPRETATION Data collected through the questionnaire was analysed with the help of SPSS and the results a\were as follows: A. CUSTOMER SOLUTION TABLE-1: MEAN SCORE OF EXPECTATION AND EXPERIENCE ITEMS N Expectation Experience VAR00001 164 3.7744 3.5488 VAR00002 164 4.5 2.6037 VAR00003 164 4.5 2.3963 VAR00004 164 4.2439 3.6951 Valid N (list wise) 164 Source: Compiled from survey data. EXIBIT-1: CUSTOMER SOLUTION ITEMS Item-1 Item-2 Item-3 Item-4 Equity products is a secured form of investment The broking houses provide details regarding equity product(s) Chances of earning profit and facing losses from investment in equity shares are equal Investment in equity shares generates a good percentage of returns. The study showed (Table-1)that in respect of all the items (EXIBIT-1) of consumer solution, the mean experience scores are less than the expectation scores which indicate a gap exist in respect of customer solution among equity investors. The mean expectation score of the providing details regarding equity product(s) [item 2] and chances of earning profit and facing losses from investment in equity shares are equal [item 3] are maximum. Whereas the mean experience scores in respect of these two items are minimum.

50 TABLE-2: PAIRED SAMPLES STATISTICS N Deviation Error Expectation 72.1341 164 4.87327 0.38054 Experience 56.878 164 3.96577 0.30967 TABLE-3: PAIRED SAMPLE TEST Paired Differences Deviation Error 95% Confidence Interval of the Difference Lower Upper t df Sig. (2- tailed) Expectation -Experience 15.2561 7.28863 0.56915 14.13225 16.37995 26.805 163 0.000 The above table (Table-3) shows that the sig. (2-tailed) value at 95% level of significance is 0.000 which is less than.05, so the null hypothesis is rejected i.e. there is significant difference between the level of customer solution expected and level of customer solution experienced. Thus, we can conclude that there exist gap between the experience and expectation level of equity investors in respect of customer solution. B. CUSTOMER COST ITEMS TABLE-4: MEAN SCORES OF EXPECTATION AND EXPERIENCE ITEMS N Expectation Experience VAR00001 164 4.6768 3.3415 VAR00002 164 4.1037 2.9146 VAR00003 164 4.0915 3.0244 Valid N (list wise) 164

51 Source: Compiled from survey data. EXIBIT-2: CUSTOMER COST ITEMS Item-1 Item-2 Item-3 The brokerage charges are reasonable The returns which I get are justified to the charges that I have been charged The other charges which are been charged on transactions are satisfactory The study showed (Table -4) that in respect of all the items relating to customer cost (EXIBIT- 2), mean experience scores are less than the mean expectation scores which indicate a gap exist in respect of customer cost item among equity investors. However, maximum gap exists between mean expectation and experience scores among equity investors respect of return justified by cost associated with equity investment [Item-2]. TABLE-5: PAIRED SAMPLES STATISTICS N Deviation Error Expectation 12.872 164 1.01616 0.07935 Experience 9.2805 164 1.83874 0.14358 TABLE-6: PAIRED SAMPLE TEST Deviation Paired Differences t df Sig. Error 95% Confidence Interval of the Difference (2- tailed) Lower Upper Expectation - Experience 3.5914 2.1186 0.16544 3.2647 3.9181 21.709 163 0.000 The above table shows that the sig. (2-tailed) value at 95% level of significance is 0.000 which is less than 0.05, so the null hypothesis is rejected, i.e. there is significant difference between the level of customer cost expected and level of customer cost experienced. Thus, we can conclude

52 that there exist gap between the experience and expectation level of equity investors with respect to customer cost associated with equity investment. C. CUSTOMER CONVINIENCE ITEMS TABLE-7: MEAN SCORE OF EXPECTATION AND EXPERIENCE AND EXPERIENCE ITEMS N Expectation Experience VAR00001 164 3.0549 4.3841 VAR00002 164 4.6463 3.9024 VAR00003 164 4.4451 3.4024 VAR00004 164 4.6098 4.1463 VAR00005 164 4.2012 4.2012 VAR00006 164 4.25 4.25 Valid N (list wise) 164 EXIBIT-3: CUSTOMERS CONVENIENT ITEMS Item-1 Item-2 Item-3 Item-4 Item-5 Item-6 The process of opening of Demat and trading account is lengthy I can withdraw the investment amount as and when I required At the time of any dispute, I can easily get in touch with compliance team The way to transfer funds to trading account is easy The services provided by the broking houses is enough to manage my investment I can avail the services of broking houses when required. The study showed (Table -7) that the mean experience scores of item-1 (EXIBIT-3) is more than the mean expectation and in respect of item 5 and item 6, the mean score of expectation are equal which indicate that in respect of services of broking houses they experienced what they expected. In respect of all other items of customer convenience, mean experience scores are less than expectation scores

53 TABLE-8: PAIRED SAMPLES STATISTICS N Deviation Error Expectation 25.2073 164 1.83181 0.14304 Experience 21.7927 164 1.4206 0.11093 TABLE-9: PAIRED SAMPLE TEST Paired Differences t df Sig. Deviation Error 95% Confidence Interval of the Difference Lower Upper (2- tailed) Expectation - Experience 3.41463 2.3259 0.18162 3.056 3.77327 18.801 163 0.000 The above table shows that the sig. (2-tailed) value at 95% level of significance is 0.000 which is less than 0.05, so the null hypothesis is rejected i.e. there is significant difference between the level of customer convenience expected and level of customer convenience experienced. Thus, we can conclude that there exist gap between the experience and expectation level of equity investors in respect of customer convenience. D. CUSTOMER COMMUNICATION TABLE-10: MEAN SCORE OF EXPECTATION AND EXPERIENCE ITEMS N Expectation Experience VAR00001 164 4.5061 2.6341 VAR00002 164 4.1646 3.4146 VAR00003 164 3.8293 3.7622 VAR00004 164 4.4512 3.75 Valid N (listwise) 164

54 EXIBIT-4: CUSTOMER COMMUNICATION ITEM Item-1 Item-2 Item-3 Item-4 The broking houses provide information about my daily trade The research report provided by broking houses is reliable The information provided by the media about the market are correct I can contact with my advisors at any point of time The study showed (Table -10) that mean experience scores of all the items relating to customer communication (EXIBIT-4) are less than the mean expectation scores which indicate a gap exist in respect of customer communication among equity investors. However, maximum gap exists between mean scores of expectation and experience in respect of information provided by the broking houses. [Item-1]. TABLE-11: PAIRED SAMPLES STATISTICS N Deviation Error Expectation 16.9512 164 2.48135 0.19376 Experience 12.2439 164 2.08448 0.16277 TABLE-12: PAIRED SAMPLE TEST Deviation Paired Differences t df Sig. Error 95% Confidence Interval of the Difference (2- tailed) Lower Upper Expectation Experience 4.7073 3.7086 0.2896 4.1354 5.2791 16.255 163 0.000 The above table shows that the sig. (2-tailed) value at 95% level of significance is 0.000 which is less than 0.05, so the null hypothesis is rejected i.e. there is significant difference between the level of customer communication expected and level of customer communication experienced.

55 Thus we can conclude that there exist gap between the experience and expectation level of equity investors in respect of customer communication. CONCLUSION It is evident from the above there exist gap between equity investors expectation and experience. The investors expectation must be taken care of and try to bridge the gap between the level of expectation and experience perceived. Past studies showed that there are several reasons like lack of knowledge and confidence, complexity involved in investing and fear of losing money etc. why investors hesitates to invest in stock markets. One of the reasons is the mismatch of expectation and experience level. The study showed gap between expectation and experience among equity investors which need to be minimised. Any market cannot grow unless the expectations of the customers are fulfilled to a certain level. More participation is required from retail investors in capital market for capital formation in country. Strong marketing campaign, especially by the broking houses, is required to popularize equity investment among retail investors and the broking houses in different parts of the country can play an important role in this aspect. BIBLIOGRAPHY Anderson, W. E., & Sullivan, M. W. (1993). The Antecedent and Consequence of Customer Satisfaction for Firms. Marketing Science, 12 (2), 125-138. Gerdvdc. (2011). How marketing mix Changed from 4P's to 4C's. Retrieved May 12, 2011, from http://www.olivedia.com/2011/07/how-the-marketing-mix-changed-from-4-ps-to-4-cs/ Goering, P. A. (1985). Effect of Product Trial on Consumers' Expectation, Demand and Prices. Journal of Consumer Research, 12 (1), 74-82. Kotler, P., & Armstong, G. (2008). Principles of Marketing (13th ed.). Delhi: Dorling Kinderley. Nazari, M. (2012). Prioritizing the Effective Factors of Customer's Satisfaction. International Journal of Business Management, 7 (2), 236-242. Nezakati, H., Abu, L. M., & Toh, C. (2011). 2011. World Applied Science Journal, 15 (8), 1157-1167. Pathak, B. V. (2009). Indian Financial System (3rd ed.). Delhi: Dorling Kindersley Pvt Ltd. Sahoo, J. S. (2012). Customers' Perception Towards Secondary Market Trading in India. International Journal of Business and Management for Tomorrow, 2 (3), 1-10. Schulz, D. E., Tannenbaum, S. I., & Lauterborn. (1993). Integrated Marketing Communication. McGraw Hill Professional. Tellis, G. J. (n.d.). Marketing mix modeling. Retrieved May 5, 2012, from http://wwwbcf.usc.edu/~tellis/mix.pdf