IRJC
Asia Pacific Journal of Marketing & Management Review
Vol.1 No. 3, November 2012, ISSN 2319-2836
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.
ABSTRACT
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.
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
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INTRODUCTION
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KEYWORDS: Investors’ expectation, Investors’ experience, Customer solution, Customer
Cost, Customer convenience and Customer communication.
___________________________________________________________________________
IRJC
Asia Pacific Journal of Marketing & Management Review
Vol.1 No. 3, November 2012, ISSN 2319-2836
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.
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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
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4C MODEL OF MARKETING MIX
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Asia Pacific Journal of Marketing & Management Review
Vol.1 No. 3, November 2012, ISSN 2319-2836
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 study1. 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.
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
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4. There is no significant difference between level of customer communication expected
and customer communication experienced.
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3. There is no significant difference between level of customer convenience expected and
customer communication experienced.
IRJC
Asia Pacific Journal of Marketing & Management Review
Vol.1 No. 3, November 2012, ISSN 2319-2836
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.
Equity products is a secured form of investment
Item-2
The broking houses provide details regarding equity product(s)
Item-3
Chances of earning profit and facing losses from investment in equity shares are
equal
Item-4
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.
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Item-1
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EXIBIT-1: CUSTOMER SOLUTION ITEMS
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Asia Pacific Journal of Marketing & Management Review
Vol.1 No. 3, November 2012, ISSN 2319-2836
TABLE-2: PAIRED SAMPLES STATISTICS
Mean
N
Std. Deviation
Std. Error Mean
Expectation
72.1341
164
4.87327
0.38054
Experience
56.878
164
3.96577
0.30967
TABLE-3: PAIRED SAMPLE TEST
Paired Differences
Mean
Std.
Deviation
Std.
Error
Mean
95% Confidence
Interval of the
Difference
Lower
Expectation
15.2561
-Experience
7.28863
t
df
Sig. (2tailed)
Upper
0.56915 14.13225 16.37995 26.805 163
0.000
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
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B. CUSTOMER COST ITEMS
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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.
IRJC
Asia Pacific Journal of Marketing & Management Review
Vol.1 No. 3, November 2012, ISSN 2319-2836
Source: Compiled from survey data.
EXIBIT-2: CUSTOMER COST ITEMS
Item-1
The brokerage charges are reasonable
Item-2
The returns which I get are justified to the charges that I have been charged
Item-3
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 (EXIBIT2), 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
Mean
N
Std. Deviation
Std. Error Mean
Expectation
12.872
164
1.01616
0.07935
Experience
9.2805
164
1.83874
0.14358
Mean
Expectation
Experience 3.5914
Std.
Std. Error
Deviation
Mean
2.1186
0.16544
t
df
Sig.
(2tailed)
21.709
163
0.000
95% Confidence
Interval of the
Difference
Lower
Upper
3.2647
3.9181
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
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Paired Differences
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TABLE-6: PAIRED SAMPLE TEST
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Asia Pacific Journal of Marketing & Management Review
Vol.1 No. 3, November 2012, ISSN 2319-2836
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
The process of opening of Demat and trading account is lengthy
Item-2
I can withdraw the investment amount as and when I required
Item-3
At the time of any dispute, I can easily get in touch with compliance team
Item-4
The way to transfer funds to trading account is easy
Item-5
The services provided by the broking houses is enough to manage my investment
Item-6
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
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Item-1
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EXIBIT-3: CUSTOMERS’ CONVENIENT ITEMS
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Asia Pacific Journal of Marketing & Management Review
Vol.1 No. 3, November 2012, ISSN 2319-2836
TABLE-8: PAIRED SAMPLES STATISTICS
Mean
N
Std. Deviation
Std. Error Mean
Expectation
25.2073
164
1.83181
0.14304
Experience
21.7927
164
1.4206
0.11093
TABLE-9: PAIRED SAMPLE TEST
Mean
Expectation
Experience
3.41463
Paired Differences
Std.
Std.
95% Confidence
Deviation Error
Interval of the
Mean
Difference
Lower Upper
2.3259
0.18162
3.056
3.77327
t
df
Sig.
(2tailed)
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
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
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N
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TABLE-10: MEAN SCORE OF EXPECTATION AND EXPERIENCE ITEMS
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Asia Pacific Journal of Marketing & Management Review
Vol.1 No. 3, November 2012, ISSN 2319-2836
EXIBIT-4: CUSTOMER COMMUNICATION ITEM
Item-1
The broking houses provide information about my daily trade
Item-2
The research report provided by broking houses is reliable
Item-3
The information provided by the media about the market are correct
Item-4
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
Mean
N
Std. Deviation
Std. Error Mean
Expectation
16.9512
164
2.48135
0.19376
Experience
12.2439
164
2.08448
0.16277
Mean
Expectation
Experience
4.7073
Std.
Deviation
3.7086
Std.
Error
Mean
0.2896
t
df
Sig.
(2tailed)
16.255
163
0.000
95% Confidence
Interval of the
Difference
Lower
Upper
4.1354
5.2791
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.
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Paired Differences
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TABLE-12: PAIRED SAMPLE TEST
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Asia Pacific Journal of Marketing & Management Review
Vol.1 No. 3, November 2012, ISSN 2319-2836
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.
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