ISSN : 0974-908X

Volume: 3 Issue: 1March 2011

A bi-annual journal from GRG School of Management Studies

Coimbatore, India

Journal of Management Thought and Practice

A Study on Investment Preference among Urban Investors in OrissaGiridhari Mohanta and Sathy Swaroop Debasish

How Students Perceive Online Advertisement ? A Study Focusing on Different types of Online AdvertisementsP. Raghunadha Reddy and E. Krishna Karthik

Technical Analysis - A Tool for Predictingthe movement of Stock Prices with thehelp of candlestick chartsP. Vikkraman and P. Varadharajan

A Study on Strategies for Promoting Technical Textiles - Lateral Diversification:With Special Reference to Tirupur Knit Wear ExportersP. Suguna, Rameshwari Ramachandra and N. Krishnaveni

Role Stress and Job Performance in Banks- A Critical AnalysisVishal Samartha, Lokesh and N. Ashwitha Karkera

Subhiksha - The Retail Phenomenonthat Flattered to DeceiveS. Mani and A. Sridharan

Rural Paradigm Shift: Exploring BrandingStrategies for Rural Insurance IndustrySangeetha Natarajan and S. Poornima

PRERANA in Sanskrit means hope and inspiration. The primary objective of PRERANA journal is to enhance the standard of management education by drawing from conceptual and empirical research based articles reflecting current industry practices. PRERANA shall include contributions from eminent members of the academia and sharing of practices by experts from industry. The Journal will also contain book reviews, editorial abstracts and executive summaries of recent publications in management.

Prof. S. Balasubramanian, DirectorGRGSMS, Coimbatore

Dr. D. Dhanapal, Group Director KPR Institutions, Coimbatore

Mr. P.M. Jagatheesan, Vice President-HR Sara ELGI Group, Coimbatore

Dr. Rajesh Haldipur, Dean and Professor SDM Institute for Management Development, Mysore

Mr. Rajeev Kamineni, DirectorKamineni Retail Enterprises, Coimbatore

Dr. R. Mahadevan, DirectorIndia Pistons, Chennai

Dr. R. Nandagopal, DirectorPSG Institute of Management, Coimbatore

Dr. Gail K Naughton, Dean College of Business, San Diego State University, USA

Executive Editor: Dr. B. Sripirabaa, Faculty, GRG School of Management Studies

Dr. Alford H Ottley, ProvostNorthwestern College, USA

Mr. Benedict Paramanand, DirectorManagement Next, Bangalore

Dr. T.S. RagunathanChair, Informations Operations Technology ManagementCOBA, University of Toledo, USA

Dr. Ms. Sheela Ramachandran, Vice ChancellorAvinashilingam University for Women, Coimbatore

Dr. A. Senthil Kumar Associate Professor of Mechanical EngineeringNational University of Singapore, Singapore

Dr. Monideepa Tarafdar, Associate Professor, Informations Operations Technology ManagementCOBA, University of Toledo, USA

Dr. Ms. N. Yeshodha Devi, PrincipalPSGR Krishnammal College for Women, Coimbatore

The Editorial Board

ISSN : 0974-908X

Volume: 3 Issue: 1 March 2011PRERANA

Journal of Management Thought and Practice

A bi-annual journal from GRG School of Management Studies

Coimbatore, India

CONTENTS

Title

A Study on Investment Preference among Urban Investors in Orissa

How Students Perceive Online Advertisements ? A Study Focusing on Different types of Online Advertisements

Technical Analysis - A Tool for Predictingthe movement of Stock Prices with thehelp of candlestick charts

A Study on Strategies for Promoting Technical Textiles - Lateral Diversification:With Special Reference to Tirupur Knit Wear Exporters

Role Stress and Job Performance in Banks- A Critical Analysis

Subhiksha - The Retail Phenomenonthat Flattered to Deceive

Rural Paradigm Shift: Exploring BrandingStrategies for Rural Insurance Industry

CXO Interview

PRERANA March 2011

Author(s)

Giridhari Mohanta and Dr. Sathy Swaroop Debasish

Dr. P. Raghunadha Reddy and E. Krishna Karthik

Dr. P. Vikkraman and P. Varadharajan

P. Suguna, Dr. Rameshwari Ramachandra and N. Krishnaveni

Vishal Samartha, Lokesh and N. Ashwitha Karkera

Dr. S. Mani and A. Sridharan

Sangeetha Natarajan and Dr. S. Poornima

Page No.

1

11

19

27

39

47

51

65

i

PRERANA March 2011

ii

PRERANA March 2011

From the Executive Editor

It is my pleasure to place before you the first issue of the third volume of 'PRERANA: Journal of Management Thought and Practice'. The objective of PRERANA is to disseminate contemporary developments in the field of management in the form of empirical research that tests, extends or builds management theory and contributes to management practice. PRERANA encourages manuscripts that present strong empirical and theoretical contributions to the management field. Preference is given to submissions that test, extend, or build strong theoretical frameworks while empirically examining issues with high importance for management theory and practice. The Journal will also enable industry in applying the most recent developments in the evolution of management thought.

PRERANA's international and multi-disciplinary review team ensures maintenance of standards of excellence with regard to the quality of contents. The current issue publishes seven articles in the areas of Finance, Marketing and Human Resources.

Giridhari Mohanta and Sathya Swaroop Debasish in their article have explored the psychological concept of the urban investors' individual attachment style to different available investment avenues and their investment preference process. The study revealed that male investors turned to be active participant in avenue selection than female investors.

Raghunadha Reddy and Krishna Karthik in their study examined the internet users' perception towards different forms of online advertisements while browsing for their task oriented Information Search among college students. Their study reveals that nearly all kinds of online advertisements cause annoyance to a certain level. Marketers and advertisers need to restrict the annoyance or disturbance of online advertisements to an acceptable level to reduce the opportunities of being ignored or terminated by internet users.

Vikkraman and Varadharajan in their article have portrayed the use of Candlestick Charts for traders and investors to understand and analyze the stock price movements and to predict the future price of the stocks to make appropriate investment decisions.

Suguna, Rameshwari Ramachandra and Krishnaveni in their article have brought out the opportunities and risks technical textiles offers to the Indian textile industry in the current global scenario. The study focused on understanding the preference of exporters in Tirupur district towards functional textile product, government scheme and strategies that could be adopted to reduce risks. The study highlighted that many exporters have selected technical textile sector due to a passion towards entering new business venture .

Vishal Samartha, Lokesh and Ashwitha Karkera in their article have brought to limelight the role stress and its impact on job performance of the employees of banks due to the tremendous changes undergone by the Indian Banking sector in the last two decades. The study reveals significant difference between Role Stress with Gender, Education levels, Designation, Income levels and Age groups of respondents.

iii

PRERANA March 2011

iv

Mani and Sridharan have critically investigated the reasons for the growth and fall of Subhiksha a retail outlet. Their study portrays the guidelines retail outlets need to look into and lessons for young entrepreneurs.

Sangeetha Natarajan and Poornima in their study attempted to introspect the level of expectations from customers of rural India with respect to insurance. Their study adopted both quantitative and qualitative analysis to compare the actual performance of insurers with the expectations of the customers. The study brings out the gaps between the expectations of the customers against the performance of insurers in varied dimensions.

I thank all the authors for their contributions towards the first issue of the third volume of PRERANA. I look forward for novel, insightful and crafted conceptual work that challenges conventional wisdom concerning all aspects of organizations from academicians, bureaucrats and business executives for publishing in PRERANA. The focus of the articles could be on diverse aspects of management focusing on contemporary issues and future challenges.

- Dr. B. Sripirabaa

PRERANA March 2011

1Giridhari Mohanta and Sathya Swaroop Debasish

A STUDY ON INVESTMENT PREFERENCES AMONG URBAN INVESTORS IN ORISSA

1 2 Giridhari Mohanta and Dr. Sathya Swaroop Debasish

1 Mr. Giridhari Mohanta, Lecturer, Rajdhani College of Engineering and Management, Bhubaneswar. E-mail: girifmu@yahoo.co.in

2 Dr. Sathya Swaroop Debasish, Reader, P.G. Department of Business Administration, Utkal University, Bhubaneswar. E-mail: sathyaswaroop2000@yahoo.com

ABSTRACTThe advent and evolution of behavioral finance has brought with it a revolution

in the finance industry. Investors do not act rationally in taking decisions relating to investment. They have certain weaknesses like cognitive and emotional which take a predominating role in taking investment decision of individuals. They have behavioral biases in the event of taking investment decision. They simply react to the information available with them and accordingly react to the environment. Investment decisions also depends on the types of investors, risk tolerance capacity, education, occupation, age, sex, income, marital status, family back ground, living area and environment and attachment with the financial advisor etc.

Despite all the resources and infrastructure, investors adopt some avenues after analyzing different factors which are influenced by internal and external environments. Using the principles of behavioral finance the current study explores the psychological concept of individual attachment style, mainly the urban investors to different available investment avenues and their investment preference process. This study indicates that there is significant role of income and occupation in investment avenue selection by the male and female investors. Mostly male investors are found as active participant in avenue selection than female and generally they are sound in these two respects than female investors. For this a systematic analysis has been made by taking primary data and detail information for analysis has been collected through structured questionnaire. Results also provide valuable information to the financial advisor in detecting and understanding different client characteristics that can help to lead productive, satisfactory advisor-client relationships. They will design and redesign products for different types of investors by seeing their nature, attitude, and investment behavior.

INTRODUCTIONThe personal as well as environmental factors influence investors in

formulating their perceptions on investment avenues. An educated person perceiving an investment differs from an uneducated one. Similarly, the factors such as age, marital status or family size, wield their own influence on the perceptual process. A young and unmarried person, for instance, prefers to invest in risky avenues, where an aged person with a family responsibility prefers less risky and steady income generating avenues. Similarly, rural /urban background of individuals, availability of information, accessibility of avenues, and investment companies/colleagues also

PRERANA March 2011

Giridhari Mohanta and Sathya Swaroop Debasish2

influence individuals in developing their perceptions. Investment behavior is the study of the decision making units and the process involved in acquiring, consuming, and disposing of goods, services, experiences, and ideas.

Two major psychological disciplines come into play when observing and trying to explain Investment Behavior. The first is Cognitive Psychology. Cognitive Psychology is the study of all knowledge related (mental) behaviors. The Attention, Perception, Memory/Comprehension, and Decision Making links are the various aspects of cognitive psychology that play an important role in investment behavior of investors. The second psychological discipline has theories to explain the personality, attitudes, motivations, and behaviors of the individual influence and influences by social groups. Research studies have been carried out to examine the investment preferences and practices of the individual investors, their investment related characteristics and investment avenues.

Behavioral Finance is a new emerging science that studies the irrational behavior of the investors. Behavioral finance attempts to identify the behavioral biases commonly exhibited by investors and also provides strategies to overcome them. This behavior will be tested under different conditions, with restrictions on asset holdings or different information conditions. Basic financial theory suggests that subjects buy and sell according to expectations regarding the future prices of assets. On the other hand, behavioral biases, such as the disposition effect, suggest that subjects are affected by past performance of assets. Since behavioral finance is a new and emerging branch of finance an attempt has taken experimentally to examine the behavior of investors and their preferences specially the urban investors when buying and selling stocks, mutual funds and investing in other financial avenues.

NEED FOR THE STUDYIt is seen that investors are more loyal and attached with a particular type of

investment preferences. So it is very important to study the motivational factors that drive them for selecting the investment avenues. It plays a vital role in determining the behavior of investors and their disposition effect; as a result proper utilization of money or fund can be seen. This study will help not only the investors but also the different financial institutions, organizations and consultants in identifying and understanding the main factors that induces urban investors to invest in different avenues and their decision making process.

OBJECTIVESThe objectives of the study are:

lTo study the factors that influence investment behavior of Urban InvestorslTo study investment decision-making process lTo study the attitude of investors towards different investment avenues lTo analyze the different factors and motives that motivates for acquisition of

investment avenue.

LITERATURE REVIEWBehavioral Finance is a new emerging science that studies the irrational

behavior of the investors. Behavioral economist Martin Weber (1999) makes the

PRERANA March 2011

Giridhari Mohanta and Sathya Swaroop Debasish 3

following observation, “Behavioral finance closely combines individual behavior and market phenomena and uses the knowledge taken from both the psychological field and financial theory” (Fromlet, 2001). Behavioral finance attempts to identify the behavioral biases commonly exhibited by investors and also provides strategies to overcome them. Behavioral finance has two building blocks: cognitive psychology and the limits to arbitrage. Cognitive refers to how people think. There is a huge psychology literature documenting that people make systematic errors in the way that they think: they are overconfident, they put too much weight on recent experience, etc. Their preferences may also create distortions. Behavioral finance uses this body of knowledge, rather than taking the arrogant approach that it should be ignored. Limits to arbitrage refer to predicting in what circumstances arbitrage forces will be effective, and when they won't be.

A comprehensive literature review about behavioral finance in general is beyond the limitations of the researcher as well as the scope of this paper. In fact, we have just tried to incorporate the highlights of some well-known empirical studies regarding investors' psychological biases and their impact on investors' behavior. A number of psychological biases that affect investors' behavior and subsequently their decisions have been dealt with in several previous studies across the world. Such a list of biases include overconfidence, home bias, sensation seeking attitude, competence effect, herding, anchoring, heuristics etc. Hence an attempt was carried out to find out the buying behavior of financial products and services among investors comprising general and professional students.

A few studies have been carried out to examine the investment preferences and practices of the individual investors. Lewellen (1977) found that age, sex, income and education affect investors' preferences. Study by Rajarajan (2000) revealed an association between lifestyle clusters and investment related characteristics. Bandgar (1998) in his study found that investors are educated in investment decision making. Soch and Sandhu (2000) have studied perceptions of bank depositors on quality circles, customer complaint cell, quality, priority banking, telebanking, and customer meets in private banks. Study by Rafael La Porta et al., (2000) reveal that a strong investor protection is a manifestation of the security of property. Karmaker (2000) has found that the life insurance policy is the most popular investment avenue. Huberman (2001) is of the opinion that a person is more likely to invest in companies known to him and shy away from the unknown avenues.

The investment decision making process of individuals has been explored through experiments by Barua and Srinivasan (1986, 1987, 1991). They conclude that the risk perceptions of individuals are significantly influenced by the skewness of the return distribution. This implies that while taking investment decisions, investors are concerned about the possibility of maximum losses in addition to the variability of returns. Thus the mean variance framework does not fully explain the investment decision making process of individuals. Gupta (1991) argues that designing a portfolio for a client is much more than merely picking up securities for investment. The portfolio manager needs to understand the psyche of his client while designing his portfolio. According to Gupta, investors in India regard equity debentures and company deposits as being in more or less the same risk category, and consider mutual funds, including all equity funds, almost as safe as bank deposits.

PRERANA March 2011

Giridhari Mohanta and Sathya Swaroop Debasish4

Bailard et al., (1986) model classifies investors according to two personality traits; level of confidence and the method of action. Level of confidence is reflected in how much an investor may worry about a certain course of action or decision. Investors may range from confident to anxious. Method of action is reflected in how methodical investors are, as well as how analytical and intuitive they are. This can range from careful to impetuous. Within these ranges, the model defines four personalities:

1. Individualist: Careful, confident and often takes a do-it-yourself approach2. Adventurer: Volatile, entrepreneurial and strong-willed3. Celebrity: Follower of the latest investment fad4. Guardian: High risk averse and wealth preserver Kadiyala and Rau (2004) investigated investor reaction to corporate event

announcements. They concluded that investors appear to under-react to prior information as well as to information conveyed by the event, leading to different patterns: return continuations and return reveals, both documented in long-horizon return. They found no support for the overreaction hypothesis.

Tesfatsion (2006) argues, that privately motivated agents in an agent-based framework include economic, social, biological and physical entities, and that agents are able to communicate with each other by using different techniques. It is also important to allow that artificial agents have learning capabilities and are able to develop it in time. People differ in the level of knowledge they have, capacity to think and reason, skills and experiences, emotions, social networks they are involved in, attitude towards risk, time, and different types of assets, wealth, luck and many other characteristics, all of which are important elements in building one's preferences, which are so important for asset markets. Alinvi and Babri (2007) are of view that customers' preferences change on a constant basis, and organizations adjust in order to meet these changes to remain competitive and profitable. Stenner et al., (2007), conclude that advisor's recommendations are more effective when trust between client and advisor allows a mutual understanding of all aspects related to investments.

Changa et al., (2008) carried out a study and examined the association between weather in New York City, intraday returns and trading patterns of the NYSE Stocks. They discovered that, while stock returns are found to be generally lower on cloudy days, cloud cover has a significant influence on stock returns only at the market opening. More significantly, they found that there are more seller-initiated trade transactions when there is more cloud cover during the market opening, which is consistent with the previously-motioned psychological evidence. Generally speaking, their findings suggest that weather has a significant influence on investors' intraday trading behavior.

Fatima Alinvi (2008) suggests that customers change their preferences according to their life circumstances and while certain preferences are well-defined others can be inconsistent. In an increasingly competitive environment, where insurance companies fight for the same customers, having a customer-oriented culture is extremely important not only to retain customers but also to acquire new ones.

PRERANA March 2011

Giridhari Mohanta and Sathya Swaroop Debasish 5

HYPOTHESISThe two major null hypotheses tested and analysed in this study are:

H1: There is no significant difference in income and investment avenue selection

H2: There is no significant difference in occupation and investment avenue selection

METHODOLOGYThis study was based on primary data obtained through a structured

questionnaire containing 35 questions. The first part of the questionnaire relating to socio-economic background of employees consisted of 12 questions relating to age, educational qualification, income etc. The second part of the questionnaire consisted of 23 statements relating to various factors of avenue selection for the study. The sample size was 210 and the respondents were randomly selected from the two leading districts of Orissa state namely Cuttack and Khurda. The Primary data obtained from the questionnaire was analyzed by using the simple descriptive tools like average and percentage. The analysis was performed using Microsoft Excel application package. Further, the secondary data from various internet websites, journals, magazines and other published sources was obtained to gain a better understanding of the concerned subject.

LIMITATION OF THE STUDY The limitations of the study are:

a) This study considered the sample respondents only from the urban investors of Cuttack and Khurda districts of Orissa

b) The study has taken a few limited but representative investment avenues like Mutual Funds, Insurance, Recurring deposits in Banks and Post Offices and Share market

DATA ANALYSIS AND INTERPRETATION It is observed from table 1 that the respondents vary in age, occupation, gender,

income, risk bearing capacity etc. A total of five investment avenues namely equity shares, mutual funds, insurance, bank recurring deposit (BRD) and post office recurring deposit(PORD) were taken for study It can be observed that the investors take different investment avenues for meeting their Psychological, Social and Financial need. Table-1 as provided below presents the demographic details of different investor varying in age, occupation, education, gender and their preferences to different investment avenues.

In the above table out of five avenues, investment in equity share is regarded as the risky avenue as compared to other available avenues as it is directly associated with the capital or stock market. It shows that the field workers or the daily workers are more involved in safety investment avenues like recurring deposits in banks and post offices instead of preferring investment in share market. Table 2 also shows that 'income' factor also affects in fund selection behavior of investors. The analysis of the null hypothesis is presented below.

PRERANA March 2011

Giridhari Mohanta and Sathya Swaroop Debasish6

Table1: Demographic Details of the Respondents

Preference in Investment AvenuesDemographic

factorVariable

Number of respondents

Equity Share

Mutual Funds (MF)

InsuranceBank RD

Post Office

RDMale

110

15

30

25

28 12GenderFemale

100

10

25

34

12 1918-25

33

4

5

6

8 1025-35

65

24

13

11

9 835-45

55

19

13

10

6 7

Age (years)

Above 45

57

10

11

9

12 15< 1.2

22

3

4

4

7 4

1.2-3.0

23

5

4

5

6 33.0-5.0

36

12

8

6

6 4

5.0-10.0 58 18 14 12 10 4

Annual income (in Rs. Lakh)

10-above 71 24

15

16

12

4

Under Matriculation

40

1

1

12

16 10

HSC

43

2

10

11

14 6Graduate

50

10

18

12

6 4

Education

Post Graduate

77

25

20

20

8 4Daily worker

35

-

2

10

12 11Private job holder

52

9

13

14

10 6

Government. job holder

61 10 18 20 9 4

Occupation

Business men 62 13 17 19 10 3

H1: There is no significant difference in income and investment avenue selection

The investors having high income prefer to invest in share market even though it involves more risk as compared to other available investment avenues. Among the investors with income above 10 lakh, 11.42% of them prefer investing in shares, 7.14% in mutual funds 7.62%, in insurance 5.71% on bank RD, and only 1.9% in post offices which is much higher than other income group except post offices investment.

Out of the investors whose income is between 5 to 10 lakh p.a., it was found that 8.57% invest in equity share, 6.67% in mutual funds, 5.71% in insurance products, 4.76% in RDs of banks, and just 1.9% invests in post offices RD. Similarly analyzing the investor preference in the income group of Rs. 3 to 5 lakh per annum, revealed that 5.71% of investors invest in shares, 3.81% in mutual fund, 2.85% in insurance, 2.85% in RD of banks, 1.9 % in post offices RD.

Thus, it was observed that investor group with income level less than Rs.3 lakh per annum invest in these investment avenues in a lesser rate or percentage than the investors having high income level. So there is great impact or influence of income level of investors on investment avenue selection.H2: There is no significant difference in Occupation and Investment

It was found that out of investors who were in the business class 7.14% invest in equity share, 8.57% in mutual fund, 9.52% in insurance, 4.29% in bank RD and 0.5% in post office RD. Among those investors who were government employees 5.23% of them invest in share, 8.57% in mutual fund, 9.9% in insurance, 3.8% in

PRERANA March 2011

Giridhari Mohanta and Sathya Swaroop Debasish 7

bank RD and 0.95% in post office RD. Further, it was found that 4.28% of investors who are private employee invest in equity share, 7.62% in mutual fund, 8.09% in insurance, 5.23% in bank RD and 2.38% in post office RD. Analysis revealed that none of the of investors who were daily worker invested in share, while 0.5% invest in mutual fund, 4.29% in insurance, 7.14% in bank RD, and 5.23% in post office RD.

On the whole, it may be concluded that investment in mutual funds is highest among each of the investor class segregated on the basis of income, while there are wide variation among investment preferences for other investment avenues for the different occupation class of investors. Thus, occupation affects the preference of investors in their investment avenue selection.

Table-2: Factors and Scores Influencing the Investment Decisions

Score Score Score Score ScoreS.No Factor

Share MF Insurance RD(Bank) RD(PO)10 10 100 100 10

1 Safety

4.76%

4.7 6%

47.61%

47.61%

4.76%

20

10

30

30

102 Periodic return/Dividends

9.52%

4.76%

14.28%

14.28%

4.76%

40

30

20

20

203 High Capital Gain

19.05%

14.28%

9.52%

9.52%

9.52%

10

20

90

60

104 Secured Future

4.76%

9.52%

42.85%

28.57%

4.76%

10 10 20 10 305 Ease of Purchase

4.76% 4.76% 9.52% 4.76% 14.28%30

20

10

50

106 Liquidity

14.28%

9.52%

4.76%

23.81%

4.76%

10

10

10

20

207 Easy Marketability

4.76%

4.76%

4.76%

9.52%

9.52%0

20

50

10

108 Tax Benefit

0

9.52%

23.81%

4.76%

4.76%10

20

20

20

109 Mortgage need

4.76% 9.52% 9.52% 9.52% 4.76%

20 20 50 40 3010 To meet future contingency

9.52% 9.52% 23.81% 19.05% 14.28%

It was found from table 2 that investors preferred those types of avenues which are safe, lead to secured future, liquidity and meet future contingency etc. It was observed that 47.61% of investors preferred insurance and bank RD for safety purpose, 42.85% preferred insurance and 28.57% towards bank RD for secured future, 23.81% preferred insurance to meet future contingency and 23.81% for getting tax benefits. Similarly, 19.05% of investor preferred bank RD and 14.28% towards post office RD primarily to meet future contingency. This is probably because they assume that equity shares are more risky investment avenues than other four investment options namely mutual funds, insurance, bank RD, and post office RD. Column 3 of table 2 shows that 19.05% investors prefer investing in equity share in order to obtain high returns in the form of capital gains,14.28% for the liquidity purpose, and 9.52% investors for meeting future contingency and also for higher returns.

PRERANA March 2011

Giridhari Mohanta and Sathya Swaroop Debasish8

It can be found from table 2 (column 4) that 14.28% investors select mutual fund for getting more return as compared to other avenues with single exception of equity share since investing in mutual funds carry relatively less risk as it is invested in a well diversified portfolio by the well qualified professionals. But, in case of investing in insurance products it is observed that, in general, the investors (irrespective of any demographic class) select it for reasons of safety, secured future, tax benefit, meeting future contingency, getting periodic return, mortgaged need, easy to purchase capital appreciation, liquidity and marketability, etc. Among these 47.61% investors select for safety needs, 42.85% for secured future, 23.81% for tax benefits and meeting future contingency.

It can also be found from table 2 (column 4 and 5) that investors prefer to invest their funds in recurring deposit (RD) in bank than those that of RD in Post office. Further, it is observed that 47.61% investors select RD in bank and 4.76% in post office RD, and this primarily is for safety needs. Other reasons for investing in banks are to secure their future (28.57%), liquidity needs (23.81%), to meet future contingency (19.05%), to obtain periodic return/dividends (14.28%), high capital gain (9.52%), easy marketability of the securities (9.52%), mortgage need (9.52%), ease of purchase (4.76%) and tax benefit (4.76%).

CONCLUSION The study reveals that investors invest in different investment avenues for

fulfilling financial, social and psychological need. While selecting any financial avenue they also expect other type of benefits like, safety and security, getting periodic return or dividends, high capital gain, secured future, liquidity, easy purchase, tax benefit, meeting future contingency etc. The study found that males are more interested to invest in risky avenues like shares (7.14%) in this study than females (4.76%) investors. But female investors are not more exposed with share and mutual fund. Educated, unmarried male investors falling under the age group of 25-35, having more income (Employee or business men) are more interested with the risky avenues like share and mutual fund. They also make a good portfolio for them and think for their future with an objective of getting high capital gain from a particular avenue. It is seen that there is significant relationship between income and occupation on investment avenues in order to satisfy safety, periodic return, liquidity, better future and future contingency needs, etc. Risk bearing capacity and educational level of investors is also the two main factors which affect in investment avenues selection. Male urban investors are more participative in nature with regard to investment avenues selection as against their female counterparts, as they are more exposed with the environment and market knowledge.

Hence it can be suggested that the financial investment avenues should be designed by seeing the geographical horizon of the investors, their age, income, occupation, gender and risk tolerance capacity etc, as investors or customers are the key of success for any business. Agents and consultants should give prompt service and advice as and when needed by the investors, so that they will become the loyalty customer of that type of avenues because urban investors are educated and aware of different avenues as compared to other investors.

PRERANA March 2011

Giridhari Mohanta and Sathya Swaroop Debasish 9

References

Basu, Sudipta (1997), The Conservatism Principle and the Asymmetric Timeliness of Earnings. Journal of Accounting and Economics, 24(1), 3–37

Brown, Donalee and Brown E. Zane (2008), The Relationship Between Investor Attachment Style and Financial Advisor Loyalty. Journal of Behavioral Finance, 9(4), 232 – 239

Brown, Donalee and Brown, E. Zane (2008),The Relationship Between Investor Attachment Style and Financial Advisor Loyalty. Journal of Behavioral Finance, 9(4), 232 - 239

Durand B. Robert, Newby Rick and Saghani, Jay (2008), An Intimate Portrait of the Individual Investor. Journal of Behavioral Finance, 9 (4), 193 - 208

Mittal, Manish and Vyas R. K. (2008), Personality Type and Investment Choice: An Empirical Study. The ICFAI University Journal of Behavioral Finance, 5(3),7-22

Rajakumar, J. Dennis, (2008), Studies of Corporate Financing and Investment Behavior in India: A Survey. The ICFAI University Journal of Applied Finance, 14(12), 5-29

Shollapur, M. R. and Kuchanr (2008), Identifying Perceptions and Perceptual Gaps: A Study on Individual Investors in Selected Investment Avenues. The ICFAI University Journal of Behavioral Finance, 5(2), 47-64

Singh, Ranjit (2009), Behavioral Finance-The basic Foundations. The ASBM Journal of Management, 2(1), 89-98

Versa, Meenu (2008), Wealth Management and Behavioral Finance: The Effect of Demographics and Personality on Investment Choice among Indian Investors. The ICFAI University Journal of Behavioral Finance, 5(4), 31-57

PRERANA March 2011

10

PRERANA March 2011

P. Raghunadha Reddy and E. Krishna Karthik 11

HOW STUDENTS PERCEIVE ONLINE ADVERTISEMENTS?A STUDY FOCUSING ON DIFFERENT TYPES OF

ONLINE ADVERTISEMENTS1 2Dr. P. Raghunadha Reddy and E. Krishna Karthik

1 Dr. P. Raghunadha Reddy, Professor and Head, Centre for Urban Studies, Andhra Pradesh Academy of Rural Development, Hyderabad. E-mail: sairaghubhanu@yahoo.co.in Handset: 91 – 93462 34167

2 Mr. E. Krishna Karthik, Associate Professor, Department of Management Studies, Rayalaseema Institute of Information and Management Sciences, Tirupati - 517 502, Andhra Pradesh. E-mail: karthikrishna@yahoo.com Handset: 91 - 97047 97779

ABSTRACTThe objective of this study is to examine the internet users' perception

towards different forms of online advertisements while browsing for their task oriented Information Search. The data was gathered by conducting survey to college students in Sri Venkateswara University and its affiliated colleges. The total valid samples were 207, out of 250 surveyed respondents.

Owing to the characteristics of the Internet, advertisers are able to utilize animated, colored and interactive advertisements on websites to draw attention of users. The concern is that certain advertisements disturb or irritate the users. This study intends to examine the reactions to different forms of online advertisements and to reveal whether respondents express feelings of annoyance for certain forms of online advertisements during information searching activities. Subsequent behavior of the respondents after verifying whether they are annoyed upon viewing certain types of online advertisements is examined.

Respondents are categorized into two clusters, ad-neutral and ad-annoyed, using variables measuring annoyance of online advertisements while searching information. Nearly all kinds of online advertisements cause annoyance to a certain level. For those young adults who do not have reactions of being disturbed by online advertisements, they tend to have subsequent behavior of ignoring the online advertisements. These results indicate Internet users are aware of online advertisements and understand that the disturbance caused by online advertisements is unavoidable. In sum, if marketers or advertisers intend to design online advertisements that do not cause too much annoyance to the majority of Internet users, the banners or interstitials should be ideal. Marketers and advertisers not only try to attract attentions of online users with advertisements, but also need to restrict the annoyance or disturbance of online advertisements to an acceptable level to reduce the opportunities of being ignored or terminated.

INTRODUCTIONIn the contemporary business environment, consumers are exposed to a

huge amount of information on a daily basis, more than typical consumers are able to handle. This situation results in information overloading (Herbig and Kramer, 1994). Consumers have tendencies to skip or ignore certain irrelevant information due to limited capabilities in information processing. Hence, it is imperative for companies to disseminate information the way consumers prefer so the targeted customers are reached without being in the conditions of information overloading. Advertising

PRERANA March 2011

P. Raghunadha Reddy and E. Krishna Karthik12

provides information to consumers. In designing advertisements, the targeted audiences need to be specified in advance so the information included in advertisements is what the targeted customers would be interested in.

As for online advertising, consumers have certain control over what to browse in information searching. Online advertising can be designed interactively. Internet users are able to choose whether to interact with the advertisements or not, by clicking, browsing, or even ignoring. The contents and the forms of Internet advertising influence whether consumers pay attention to the information in advertisements or not.

Online advertisements have various formats. Banner advertisements are placed at the top or bottom of web pages. Some online advertisements have the appearances floating up or down along the sides of web pages. Different forms of advertisements may have distinct impacts on the way consumers perceive the information. Hence, this study intends to investigate whether different types of information in online advertising would have influences on consumer preferences.

OBJECTIVES OF THE STUDYInternet has become an important medium for firms to provide information and

for consumer to seek for information. Marketers consider Internet as one of the most important instruments to communicate with customers. How to provide valuable information to users in online advertisements can be critical for firms to generate effective communications with potential or existing customers. The objectives of this study are

1. To examine the effectiveness of different types of online advertising, specifically, Banner, Pop-up, Interstitial and Floating Ads

2. To examine whether different forms of online advertisements would cause disturbance to Internet users in their information searching

REVIEW OF LITERATUREInternet is an important instrument for advertising and has affected how the

advertising industry functions upon gradual adoption of Internet (Ducoffe, 1996). The effectiveness of Internet advertising has been a debatable issue due to a lack of a thorough method in evaluation. The number of clicks has been used as one of the calculations in estimating online advertising effectiveness. However, clicking on the online advertisements does not indicate that users have received the information contained in advertising, not even further infer that users are influenced by online advertising.

Attitudes toward advertising have been used as a measure to evaluate how consumers perceive the advertisements. Attitudes toward online advertising have certain impacts on consumer behavior (Wolin and Korgaonkar, 2003). Positive attitudes toward online advertisements are more likely to generate subsequent behavior in purchasing the advertised brands. Consumers' attitudes toward advertisements of personally favored products or brands are linked to the attitudes toward advertisements in general (Baucer and Greyser, 1968). Consumers with favorable attitudes toward general advertisements may find particular advertisements of interests relatively acceptable, informative, or enjoyable.

PRERANA March 2011

P. Raghunadha Reddy and E. Krishna Karthik 13

Advertisements generating positive consumer attitudes may effectively increase consumer preferences for certain products or services, further leading to augmented purchasing intentions. Certain characteristics, informativeness or annoyance, of advertisements influence consumer attitudes toward the advertisements during searching processes. Informativeness refers to the type of advertisements that carries messages with certain product or service-related information consumers can use in subsequent decisions. In contrast, conceptual advertisements often carry limited information in an attempt to enhance consumer awareness. Consumers may find informative advertisements useful in obtaining information prior to product purchases or for the purposes to accumulate knowledge. However, the way advertisements presented or executed in order to attract or to interrupt audiences causes annoyance somehow. Annoyance indicates the disturbance consumers perceive by the time advertisements are presented. Rotfeld (2002) pointed out most of the bad advertising shared the same problem- “fail to focus on potential end customers and what they need to see and hear.” Preferences of customers and the way they perceive advertisements need to be taken into considerations in marketing strategies, especially in designing advertisements targeted at certain segments of customers. Mittal (1994) mentioned that public attitudes toward advertising worsened over time. Advertisements often include factual data about the products or services that are advantageous to companies in a persuasive appeal to influence consumers' purchasing decisions (Beales et al., 1981). Although advertising is commonly considered as an external information source for consumers, consumers distrusted the information in advertisements and further generated negative attitudes towards the advertised brands once consumers believed advertising was exaggeration.

INFORMATION SEARCHING BEHAVIORThe majority of Internet users are active information seekers (Okazaki and

Rivas, 2002). Since Internet has been an important source for consumers in gathering relevant information during the decision-making process (Jayawardhena et al., 2003), providing valuable information with the contents that is easy to search can be imperative for companies with intentions to disseminate certain information. Since acquiring or processing a relatively large amount of information is time consuming, the information searching behavior usually occurs when consumers believe they can benefit from the actions even though the technological improvements make information searching easy and accessible. Consumers engage in information searching when the expected benefits (knowledge accumulation or obtaining specific information) are larger than the expected costs (value of time) of searching (Lowengart and Mizrahi, 1999).

In order for advertisements to be effective, the repetitions are exercised to create strong memories or as a way to remind consumers certain characteristics of products or services, and further decrease the willingness to seek for alternatives. Moreover, if the repetitions are activated using different advertising contents for the same products, the decreasing effect is much stronger (Tan, 2000). However, frequent repetitions make consumers feel annoyed, leading negative attitudes toward the advertisements. How annoyance consumers feel in terms of various types of online advertising is not exclusively studied in the literature and provides an opportunity for this study to explore.

PRERANA March 2011

P. Raghunadha Reddy and E. Krishna Karthik14

RESEARCH METHODOLOGYThis study investigates the consumers' perceptions toward online advertising

during the information searching phase. A questionnaire was designed and a survey was conducted. Information searching behavior, attitude toward advertising, and perceived annoyance of various types of Internet advertisements are included in the questionnaire. Since college students are frequent users of Internet and are knowledgeable to search online information, college students are considered appropriate to be potential respondents of the survey.

A set of nested questions was designed to measure annoyance of online advertisements. Five questions are included to describe various forms of online advertisements (Table 1). Upon answering to whether certain forms of online advertisements can be annoying or not, respondents are further questioned about the subsequent behavior in response to the annoyance. If respondents are affirmative to annoyance of a certain type of online advertisements, questions were then asked to determine whether they terminate the searching behavior or they continue searching for what they intend to. If respondents do not feel annoyed upon seeing certain types of online advertisements during searching processes, then questions were asked to find whether respondents ignore the advertisements or click on the advertisements.

Table 1 Questions used to measure annoyance of online advertisements

When I search for Online Information

1. Banner advertisements can be annoying. 2. Floating advertisements on the sides of Web pages can be annoying.3. Interstitial advertisements (displayed between web pages) can be annoying.4.

Pop-up advertisements can be annoying.

The formal survey was conducted during September'2010 in Sri Venkateswara

University campus and its affiliated colleges, located in the Andhra Pradesh state (India). Convenient sampling was applied in conducting the survey. The respondents of the survey were Post graduate students (MBA and MCA courses). A total of 250 respondents were surveyed and the valid samples were 207. Descriptive statistics was used in this study to describe the general demographic characteristics and the patterns of internet usage of students. Chi square test was used to analyze the data completely.

ANALYSIS AND DISCUSSION This section presents the analysis of the data collected from the respondents. In

the data set, the percentage of male respondents (55.12%) is more than female respondents (44.88%). The average age of respondents was 21.76 years old (table 2).

Table 2: Demographic Profile of respondents

Demographic factor Variables Age Average age of respondents

21.76 years

Male

114 (55.07 %)Gender

Female

93 (44.93 %)Average time spent on Internet 2.12 hours/day

Cluster analysis was used in this study to segment observations. Respondents are categorized into two clusters, ad-neutral and ad-annoyed, using five variables measuring annoyance of online advertisements while searching information. The ad-annoyed cluster includes respondents who have stronger feelings of disturbance

PRERANA March 2011

15

towards online advertisements during information searching than respondents in the other cluster have. Respondents classified in the ad-neutral cluster do not sense online advertisements as irritating as those in the ad-annoyed cluster do. Due to the nature of online advertisements to be interactive, Internet users have certain control over whether they intend to ignore, browse, or click on the online advertisements. Internet users may feel annoyed somehow if the online advertisements are interruptive, especially when users are in the middle of acquiring certain needed information.

This study intends to clarify the forms of online advertisements causing annoyance to young adults in the stage of information searching. Various types of online advertisements are described in the questionnaire in an attempt to verify whether respondents would feel that certain types of online advertisements would have caused annoyance in information searching. Furthermore, if respondents reply affirmatively in the reactions of annoyance, subsequent behavior of terminating information searching or continuing information searching needs to be verified in the questionnaire for each type of online advertisements. If respondents reply affirmatively in the reactions of not feeling annoyed upon seeing a certain type of online advertisement, subsequent behavior of ignoring or clicking on the advertisements are choices for respondents to specify. This set of nested questions is designed to measure annoyance of online advertisements at a relatively broad sense.

Table 3 lists the differences in reactions to various types of online advertisements in the clusters of ad-neutral and ad-annoyed. The proportion of respondents in the ad-annoyed cluster is 57.49 % (119/207), and in the ad-neutral cluster is 42.51 % (88/207). The proportional differences in two clusters reveal that when young adults surf online for information, online advertisements are more likely to be perceived as annoyance.

Table 3: Reactions to Online Advertisements

Cluster

Ad Neutral

Ad Annoyed

Proportion

88 (42.51 %)

119 (57.49 %)Reaction to:

Annoyed

Not Annoyed

Annoyed Not Annoyed Chi SquareBanner Ads

16 (18.18 %)

72 (81.82 %)

99 (83.19 %) 20 (16.81 %) 86.595 **Floating Ads

31 (35.23 %)

57 (64.77 %)

113 (94.96 %) 6 (5.04 %) 85.250 **Interstitial Ads

37 (42.05 %)

51 (57.95 %)

107 (89.92 %) 12 (10.08 %) 54.756 **

Pop-up Ads

78 (88.64 %)

10 (11.36 %)

116 (97.48 %) 3 (2.52 %) 6.721 *

* DF = 1, P = 0.010 ** DF = 1, P = 0.000

P. Raghunadha Reddy and E. Krishna Karthik

Certain types of online advertisements are considered more annoying than other types. The study reveals that the pop-ups are considered more irritating. Even respondents in the ad-neutral cluster express feelings of annoyance toward pop-ups (88.64%) and in the ad-annoyed cluster, almost all of them felt annoyed upon seeing the pop-ups (97.48%) while searching information with respect to their tasks. This result reveals the forms of online advertisements that have the effects of blocking windows in action may cause negative sensations of online advertisements. For respondents in the ad-neutral cluster, banner advertisements and ads floating at sides of Web pages seem to cause less annoyance. Only 18.18 % and 35.23 % of respondents indicated that banner ads and floating type ads, respectively, would have

PRERANA March 2011

P. Raghunadha Reddy and E. Krishna Karthik16

caused annoyance while browsing Internet. This result confirms that online advertisements not interrupting users at their current tasks are considered less annoying.

In considering the subsequent behavior of respondents, over 94.44% of the respondents who do not feel annoyed upon seeing banner advertisements in the ad-neutral cluster have intentions of ignoring the banner advertisements. Although banner advertisements cause less negative attitudes toward online advertising in the ad-neutral cluster, respondents in this cluster lack for motivations to click on the banner advertisements.

Respondents who do not feel annoyed upon seeing advertisements floating at sides of Web pages in the ad-neutral cluster also have intentions of ignoring (96.49%) the advertisements. The same situation applies to the ignorance of respondents in the ad-neutral cluster for the interstitial ads (94.12%), and pop-up ads (90.00%).

Table 4: Subsequent behavior of respondents

AD – NEUTRAL

AD – ANNOYING

Annoyed

Not Annoyed

Annoyed

Not Annoyed

Chi SquareSubsequent Behaviour Term

(%) Cont

(%) Ignore

(%) Click

(%) Term

(%) Cont

(%) Ignore (%)

Click (%)

Term & Cont

Ignore & Click

Banner Ads 25

75

94.44

5.56

32.32

79.80

40

60

0.101 32.294Floating Ads 25.81

74.19

96.49

3.51

29.20

70.80

33.33

66.67

0.138 25.130

Interstitial 24.32

75.68

94.12

5.88

28.97

71.03

91.67

8.33

0.296 0.098Pop-up Ads 24.36

75.64

90.00

10.00

29.31

70.69

100

0

0.576 0.325

For respondents who feel annoyed upon viewing various types of online advertisements in the Ad-neutral cluster, they tend to continue their current searching activities after being disturbed by the online advertisements. The interesting result is that respondents who are classified into the ad-annoyed cluster have similar subsequent behavior as those who are classified into the ad-neutral cluster when feel annoyed by different forms of online advertisements.

In sum, based on the results of this study, almost all kinds of online advertisements cause annoyance to a certain level. For those young adults who do not have reactions of being disturbed by online advertisements, they tend to have subsequent behavior of ignoring the online advertisements. Majority of the respondents who feel annoyed upon seeing online advertisements have the subsequent behavior of continuing search activities.

CONCLUSIONThe objective of this study was to examine whether different forms of online

advertisements cause disturbance to the Internet Users while information searching for their tasks. These data was gathered by conducting consumer surveys to college students (Post graduate students).

Young adults have tendencies to search information online. Due to the characteristics of the Internet, advertisers are able to utilize animated, colored, and interactive advertisements on the Websites to draw attentions of Internet users. The concern is that certain advertisements disturb what users are currently doing online.

PRERANA March 2011

P. Raghunadha Reddy and E. Krishna Karthik 17

Respondents indicate whether they terminate information searching or continue searching if they are annoyed by certain online advertisements, and whether they ignore or click on online advertisements if they are not annoyed by online advertisements. Nearly all kinds of online advertisements make respondents feel annoyed somehow. However, respondents do not terminate their information searching while being disturbed by online advertisements.

The results of this study indicate Internet users are aware of online advertisements and understand that the disturbance caused by online advertisements is unavoidable. Internet users do not stop doing what they intend to work on the Internet due to annoyance of online advertisement. Hence, chances are for marketers and advertisers to utilize online advertisements in disseminating information as long as the disturbance does not stop users from using the Internet.

MARKETING IMPLICATIONSThe findings in this study reveal that Internet users stay online for a lengthy

period of time and have tendencies to use internet for seeking information. The online advertisements provide useful information for Internet users. However, online advertisements cause disturbance to users, especially the pop-ups and floating types. In understanding how Internet users react to online advertisements and what types of online advertisements cause less disturbance, marketers and advertisers can design marketing strategies more effectively to communicate with consumers in disseminating information online. The marketing strategies for different segments of respondents identified from the study are: the attitudes toward online advertisement of respondents in the ad-neutral cluster are not as negative as those of the ad-annoyed cluster. The forms of online advertisements that can be used for ad-neutral young adults could be banners or interstitials to lessen the annoyance. Although other types of online advertisements cause disturbance to ad-annoyed young adults as well, the subsequent behavior of termination is not definite.

In sum, if marketers or advertisers intend to design online advertisements that do not cause too much annoyance to the majority of Internet users, the banners or interstitials should work. Certain types of online advertisements that need to be used with caution are the types of pop-ups and floating Ads.

The limitation of this research is that the samples are from college students who are generally more acquainted with the Internet. Further research may need to expand sampling to the general public to increase the applicability of the findings. Moreover, more detailed descriptions of various forms of online advertisements and the subsequent behavior can be conducted to get more knowledge of psychological insights of consumers.

References

Bauer, R.A. and S.A. Greyser (1968), Advertising in America: The Consumer View, Boston, MA

Beales, Howard, Michael B. Mazis, Steven C. Salop, and Richard Staelin (1981), Consumer Search and Public Policy. Journal of Consumer Research, 8(1), 11-22.

Cothey, Vivian (2002), A Longitudinal Study of World Wide Web Users'Information-Searching Behavior. Journal of the American Society for Information Science and Technology, 53(2), 67-78.

PRERANA March 2011

P. Raghunadha Reddy and E. Krishna Karthik18

Ducoffe, Robert H. (1996), Advertising Value and Advertising on the Web. Journal of Advertising Research, 36(5), 21-35.

Ekelund, R.B., Jr., F.G. Mixon, Jr. and R.W. Ressler (1995), Advertising and Information: An Empirical Study of Search, Experience and Credence Goods. Journal of Economic Studies, 22(2), 33-43.

Herbig, P.A. and Kramer, H. (1994), The Effect of Information Overload on the Innovation Choice Process. Journal of Consumer Marketing, 11(2), 45-54.

Jayawardhena, Chanaka, Len Tiu Wright, and Rosalind Masterson (2003), An Investigation of Online Consumer Purchasing. Qualitative Market Research: An International Journal, 6(1), 58-65.

Johnson, D.E. (1998), Applied Multivariate Methods for Data Analysis. California: Brooks/Cole Publishing Company.

Johnson, Richard A. and Dean W. Wichern (1998), Applied Multivariate Statistical Analysis. 4th edition, New Jersey: Prentice-Hall.

Kaufman, L. and Rousseeuw, P.J. (1990), Finding Groups in Data-An Introduction to Cluster Analysis. New York: John Wiley and Sons.

McColl-Kennedy, J.R. and Fetter, Jr. R.E. (1999), Dimensions of Consumer Search Behavior in Services. The Journal of Services Marketing, 13(3), 242-265.

Mittal, Banwari (1994), Public Assessment of TV Advertising: Faint Praise and Harsh Criticism. Journal of Advertising Research, 34(1), 35-53.

Rotfeld, Herbert J. (2002), Misplaced Marketing-The Real Reason for the Real Bad Advertising. Journal of Consumer Marketing, 19(4), 299-301.

Tan, Hsueh-Ping (2000), The Effect of the Advertising Repetition on the Variety-Seeking Behavior of Brand Choice. Asia Pacific Management Review, 5: 273-285.

PRERANA March 2011

19P. Vikkraman and P.Varadharajan

TECHNICAL ANALYSIS - A TOOL FOR PREDICTING THE MOVEMENT OF STOCK PRICES WITH THE HELP OF

CANDLESTICK CHARTS1 2Dr. P Vikkraman and P.Varadharajan

1 Dr. P Vikkraman, Assistant Professor, Anna University, Coimbatore, Tamilnadu. E-mail: dr.p.vikkraman@gmail.com

2 Mr. P. VaradharajanAssistant Professor, PSG Institute of Management, Coimbatore, Tamilnadu. E-mail: sktrajan@rediffmail.com

ABSTRACTStock Market is an organized traders' exchange in which various stocks are

bought and sold. Effective trading always needs technical analysis. Investing without looking at a chart is like forecasting the weather without looking outdoors. The study on technical analysis of stock market helps the investor to take decision to buy and sell the stock at right time to get profit and it helps to prevent the loss. This paper on technical analysis studies the price movements of the selected stock. The objectives of the study are, to understand and analyze the stock price movements using Candlestick Charts and to predict the future price of the stocks using the trend patterns. The chart aims to analyze the support and resistance level, identify entry/exit points and to get the trend line of the stock price movement. Eight stocks are analyzed for their price movements and to provide the traders with the right time to buy and sell.

INTRODUCTIONMany people enter into the stock market using strategies that stack the odds

against their success. Market indicators and other market information act as a guide for better investment. Investors and speculators face heavy losses due to lack of adequate awareness of market indicators. The investor or the speculator should have better knowledge and update market news, market indicators and technical system so that he could invest them in best avenues and get back the investment safely and get regular income out of it.

The study on technical analysis of stock market helps the investor to take decision to buy and sell the share at right time to get profit and it helps to prevent the loss. The technical analysis is simple and gives an investor a bird's eye on the future of the security price by measuring the past moves of prices. Further it helps in understanding the price behavior of the stock, the signals given by them and the major turning points of the market price.

Technical analysis is a simple and useful method to find out the fluctuations of price around the intrinsic value of a share. Therefore, technical analysis is:

1. A simple and quick method in forecasting behavior of stock price whereas the fundamental method is tedious in nature.

2. According to the technical analysts, their method is superior to the method adopted by the fundamental analysts because the method of dealing with financial statements is according to them inconsistent with the presentation of data.

PRERANA March 2011

20 P. Vikkraman and P.Varadharajan

Technical analysis is the examination of past price movements to forecast future price movements. It is normally referred by charts. It may be applied to stock, indices, futures, options, commodities, currencies and other tradable instruments. Technical analysis may be analyzed by Bar chart, Line chart, Candle stick, Point and Figure chart.

STATEMENT OF PROBLEMSimply buying and selling shares without any market knowledge or indicators

are not a good thing for investors. It may lead to heavy loss. Therefore there is a strong need for the investors to know about the market and other investors' sentiments towards a stock. The market and stocks can be easily studied using technical indicators. Technical analysis deals more with the psychological component of trading a stock, and is influenced for the most part on emotionalism. The technical analyst is seeking to answer the question "how are other traders viewing this stock, and how will that affect the price in the immediate future". The candlestick chart is the most effective way to gauge the sentiments of other traders.

SIGNIFICANCE OF THE STUDY The investors need a clear idea on how to select stocks and when to buy or sell a

particular stock. Technical analysis is a tool for this purpose. There are various indicators in technical analysis like bar chart, line chart, candlestick chart, etc. The candlestick charts need to be studied since they are more advantageous than other charts and their patterns need a deep learning to get well versed on them.

Utilizing just the major Japanese Candlesticks trading signals will provide more than enough trade situations for most investors. They are the signals that investors should contribute most of their time and effort. However, this does not mean that the remaining patterns should not be considered. Those signals are extremely effective for producing profits. Reality demonstrates that some of them occur very rarely. Other formations, although they reveal high potential reversals, may not be considered as strong a signal as the major signals.

OBJECTIVES OF THE STUDY The main objective of the study is to help the investor in selecting the stock using

technical analysis i.e. Candlestick charts. The secondary objectives are to understand the various patterns in the candlestick chart and to suggest investors on when to buy and sell a stock.

THEORETICAL FRAMEWORK Warren Buffet has said, "I realized technical analysis didn't work when I turned

the charts upside down and didn't get a different answer" and "If past history was all there was to the game, the richest people would be librarians" and this statement was about Dow Theory.

Yatrakis and Williams (2005) performed a research based on candlesticks in an effort to assess whether they contain predictive information. The research utilizes a sample of 257 NYSE stocks drawn from a universe of 84,000 observations during the period of March-April 2005 period. Each stock exhibiting a specific candlestick

PRERANA March 2011

21P. Vikkraman and P.Varadharajan

pattern called the shooting star was analyzed for their returns for 20 subsequent trading days. The results indicated a small but statistically significant excess return over the five days following the appearance of the candlestick pattern. They concluded that the candlestick pattern conveys information to predict future stock prices at least in the short run.

Welles J. Wilder said that the technical analysis relies on empirical evidence and common sense to assert that prices do trend. To a technician, markets are trending up, trending down, or trending sideways (flat). This definition of a price trend is essentially the one put forward by Dow Theory. A person who does not believe that prices move in trends will find little use for technical analysis. The assumption that prices must trend is probably the most important concept in technical analysis. John J. Murphy (1994) has categorized the empirical literature into two groups, "early" and "modern" studies, according to the characteristics of testing procedures. Early studies indicated that technical trading strategies were profitable in foreign exchange markets and futures markets, but not in stock markets before the 1980s. Modern studies indicated that technical trading strategies consistently generated economic profits in a variety of speculative markets at least until the early 1990s. Among a total of 92 modern studies, 58 studies found positive results regarding technical trading strategies, while 24 studies obtained negative results. Ten studies indicated mixed results. Despite the positive evidence on the profitability of technical trading strategies, it appears that most empirical studies are subject to various problems in their testing procedures, e.g., data snooping, ex post selection of trading rules or search technologies, and difficulties in estimation of risk and transaction costs. Future research must address these deficiencies in testing in order to provide conclusive evidence on the profitability of technical trading strategies (Cheol-Ho Park and Irwin, 2004). Stock market analysis and prediction has been one of the widely studied and most interesting time series analysis problems till date. Many researchers have employed many different models, some of them are linear statistic based while some non linear regression, rule, ANN, GA and Fuzzy logic based. In this paper we have proposed a novel model that tries to predict short term price fluctuation, using Candlestick Analysis. This is a proven technique used for short term prediction of stock price fluctuation and market timing since many years. Our approach has been hybrid that combines Self Organizing Map with Case Based Reasoning to indentify profitable patterns (candlestick) and predicting stock price fluctuation based on the pattern consequences.

Studies reported on research performed with Japanese candlestick charts in an effort to assess whether they contain predictive information in violation of the weak form of the Efficient Market Hypothesis (EMH). The paper begins with a brief review of the empirical and theoretical arguments in favour of exceptions to EMH that collectively comprises the behavioural finance school of thought. An introduction to the history and practice of Japanese candlestick charting follows, along with a discussion of its originators' belief that it reflects the influence of sometimes irrational human emotion in the marketplace. The present research utilizes a sample of 257 NYSE stocks drawn from a universe of 84,000 observations during the March-April 2005 period. Each stock exhibiting a specific candlestick pattern during that period is analyzed for excess returns on twenty subsequent trading

PRERANA March 2011

P. Vikkraman and P.Varadharajan22

results indicate a small but statistically significant excess return over the five days following the appearance of the candlestick pattern and suggest the existence of a short-lived anomaly in the weak form of the EMH.

Although there have been numerous studies of the effectiveness of technical analysis only one academic paper has focused specifically on candlestick charting. The dearth of academic research on technical analysis in general may have been the result of the findings of the earlier studies, which concluded that transaction costs nullify any advantage that traders may obtain from the use of charting techniques. Despite the wealth of technical and practitioner literature on candlestick charting, the sole academic treatment of the subject is contained in a recent paper by Marshall et al., (2008). The authors tracked the individual component stocks of the Dow Jones Industrial Index between 1992 and 2002, a universe of about 66,000 data points. They examined trades held open for ten days following the appearance of 28 candlestick patterns, and concluded that a trading strategy based on candlestick charting would not have been profitable for those stocks during the study period.

Empirical studies such as this one are potentially susceptible to data snooping bias and suggest that such bias may increase as more studies are performed on the same data. Marshall, Young and Rose (2006) propose that, since candlesticks were developed in the context of the Japanese rice market in the seventeenth century, testing candlestick charts on recent U.S. stock data is an out-of-sample test and is, therefore robust to such criticism. However, this assertion is arguable since many other studies also use recent U.S. data. Another potential pitfall of empirical researchers is the ex-post selection of trading rules or search technologies. Once again, however, the existence of candlestick trading rules for 250 years and their use of open, high, low and close prices in place of closing price data alone differentiate candlesticks from other trading rules, which rely just on closing prices. Moreover, the use of an external source such as Stock Charts™ to identify stocks displaying the shooting star pattern eliminates bias that could potentially arise through endogenous definition of the pattern. Caginalp and Balenovich (2003) also confirm that the candlestick has predictive power.

The purchasing and selling short after a day pattern and selling one-third of the shares on each of the next three days has led to substantial profits. Even the short sales during the rising market led to profits for two trading days. They also stated that the difficulty that afflicts technical analysis is that the rules and conclusions seem arbitrary and consequently unscientific. Marshall (2005) analyzed the movement of stock prices using an innovative technique called bootstrap methodology. This allows the generations of the open, close, high and low prices to test the profitability of the candlestick trading strategies. The author concluded that the candlestick trading strategies have no value and that a trader using this technique cannot outperform the market. He also suggested that there is no evidence that candlestick single line or patterns signal abnormal results for the stocks for the period studied. Goswami et al., (2009) proposed a novel model to predict the short term fluctuations of the stock market using candlestick analysis. The authors have used Self Organizing Map (SOM) and Case Based Reasoning (CBR) to identify profitable patterns and predict the stock price movement. The authors identified the use of candlestick technique as a tool for technical indicators for the short term prediction of

PRERANA March 2011

P. Vikkraman and P.Varadharajan 23

stock prices fluctuations. They have also proposed a hybrid model for candlestick analysis using SOM and CBR.

METHODOLOGY The study describes the existing facts and figures given in the price movements

of selected company's stocks. Hence the research design followed was descriptive in nature. Data were collected from secondary sources, which include websites like www.nseindia.com. Open, high, low and close price are collected for each stock. Stocks were at random ignoring the sector the company is listed in and the performance of the company. The period of collection was from April 2009 to March 2010. Sampling technique used is Probability Random Sampling Technique.

ANALYSIS AND DISCUSSION This section presents the candlestick charts for select stocks.

The Candlestick Chart for Glenmark has an upward trend considering long-term. The chart has an inverted hammer pattern in the month of February 2009.This shows that stock will move in an upward trend in the months to follow. This upward trend is confirmed by the domination of buyers in the month of March 2009.The investors can be recommended to go buying for this stock.

The Candlestick Chart for ABB shows that there has been a flat trend recently. In the month of May, the presence of a long white candle has led to an upward trend till June. The occurrence of Doji in the months of September to December and in February indicates the indecisive nature of the investors. The investors holding stocks are advised to hold the stocks. New buyers have to wait to see the movement in the next candle. If there occurs a white candle, the investors can buy since buyers dominate if there occurs a black candle, the investors can short sell and exit their positions if any stocks held by selling.

The Candlestick Chart for ACC shows an upward trend pattern in long term. There has been an occurrence of Gravestone Doji in the month of January 2010.Therefore, the bulls are able to press price upward. Though the resistance was found and price fell down in the month of January due to the sellers, the trend did not follow in the month of Febuary. After that there has been dominance of buyers. The stocks will go upward in future. The investors are asked to go long in this position and hold the stocks if they have any

PRERANA March 2011

24

The Candlestick Chart for CADILA shows that there has been a strong upward trend in this stock for the past one year. There has been occurrence of Doji in some places. The decision made by the investors at those points support further buying. This is a safer stock to invest into.

The Candlestick Chart for GMRINFRA shows that there has been frequent occurrence of Doji and Hammers in this chart for the past one year. The first place of Doji led to inverted hammer pattern and a downfall in the price of the stock. The reversal pattern was found from the inverted hammer and the decision made by the investors was to sell at that point leading to price fall. Resistance was found in the month of September. Still there has been continuous occurrence of Doji and Hammers. In the month of March 2010, the buyers support has gained a little strength. But the investors are asked to wait and watch the pattern for next month and decide on further buying or selling. These indecisive states are dangerous and no buying or selling is encouraged at this point.

The Candlestick Chart for Piramal Health has a morning Doji star pattern. The buyers have dominated the market recently and there has been an upward trend recently. The investors are asked to buy the stocks in this situation. The buy position has been still supported by the occurrence of two white candles in recent months. The stocks are for sure to move in the upward trend.

The Candlestick Chart for Renuka Sugars shows that the stock had smooth upward trend at the start. But the occurrence of Doji in the month of September depicts the indecisive state of investors. The indecisive state continued for some time and there had been a white candle. But the buyers are suppressed by the strong sellers in the next months. This led to the downfall in the price of the stock. The sellers

P. Vikkraman and P.Varadharajan

PRERANA March 2011

25

dominate the market still, making a higher price near open price and suppressing the small amount of buyers that exist in market. The investors are advised to exit positions if any and go for short sell. Buying is not a good option now.

P. Vikkraman and P.Varadharajan

The Candlestick chart of Sterlite Industries has Doji pattern followed by the seller's domination. There is an occurrence of evening star pattern in the months of November to January. This should have led to a downward trend. But the buyers have suppressed the sellers in later months. The pattern is upward now. The investors are advised to buy the stock and may wait sometime (i.e. next candle) to confirm on buying the stock.

FINDINGS lGlenmark has an inverted hammer pattern and the stock is expected to move up

in the future. It may have an upward trend.lABB has a flat trend recently. The hammer and Doji situations continue. The

upward or downward movement cannot be predicted fully. lACC has an occurrence of Gravestone Doji. Resistance was found and sellers

took over. But the trend did not follow further. There is an upward trend now.lCadila has a continuous upward trend in the past year and it will follow the same

pattern unless the stock reaches the resistance point from the previous charts.lGMR Infra has occurrence of Doji and hammers in the past. The Resistance level

has been found and the price has fallen. The price may or may not go up. lPiramal Health has a morning Doji Star pattern. The buyers dominate the sellers

at present and there is an upward trend.lRenuka sugars have a downward trend after the occurrence of Doji. The fall of

price has been continuous over past three months.lSterlite Industries have an evening Star pattern and it is at present in an upward

trend.Since there is a long term upward trend in the Glenmark Stock, investors can buy

the stock. On the other hand investors holding ABB are advised to hold the same. They can short sell or further buy the stock depending on the movement in the next month. Cadila is one of the safest stock to invest in as for now. The investors can hold the stock if they already have Cadila.

It is not advisable to invest in GMR Infra now. Therefore no buy position holds for GMR Infra. The upward trend of Piramal Health makes it one of the stocks to buy. Investors are advised not to buy the stocks of Renuka Sugars stocks because of its

PRERANA March 2011

P. Vikkraman and P.Varadharajan26

downward trend. The pattern of Sterlite Industries is upward now. The investors are advised to buy the stock or may wait sometime (i.e. next candle) to confirm on buying the stock.

CONCLUSION The current study has the objective to advise the investors on choosing from the

selected eight companies. The patterns present in the candlestick charts are analysed and the resulting findings meet the objective. Stocks of Cadila Health Care are very good and are strongly recommended to be bought. Stocks of Renuka Sugars are very poor and they are strongly not recommended for buying. The investors can go short selling on Renuka Sugars. Other stocks like Glenmark, ACC and Piramal Health stocks can be bought. Sterlite, GMR Infra and ABB stocks are kept indecisive and the future movements should be watched before buying or selling. The candlestick charts have been of great use in reading the movement of stock prices. The various patterns are clearly predicted and the investors can use these suggestions to buy or sell the given stocks.

ReferencesCaginalp, G and Balenovich, D. (2003), A Theoretical foundation for Technical Analysis. Journal of Technical Analysis, 5-21.

Caginalp, G. and Laurent, H. (1998), The Predictive Power of Price Patterns. Applied Mathematical Finance, 5, 181-205

Cheol-Ho Park and Irwin, H. Scott (1970), The Profitability of Technical Analysis. Department of Agricultural and Consumer Economics.

Goswami, M.M., Bhensdadia, C. K. and Ganatra, A. P. (2009), Candlestick analysis based short term prediction of stock price fluctuations using SOM-CBR. IEEE International Advance Computing Conference (IACC),1448-1452

http://en.wikipedia.org/wiki/Technical_analysis#_note-5, Retrieved on October 8, 2010

http://Price Data, www.nseindia.com, Retrieved on October 8, 2010

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:introduction_to_candlesticks, Retrieved on October 8, 2010

http://www.candlestickchart.com/books.html, Retrieved on October 8, 2010

http://www.nseindia.com/content/equities/histHighLowSearch.htm

http://www.onlinetradingconcepts.com/TechnicalAnalysis/Candlesticks/CandlestickBasics.html, Retrieved on October 8, 2010

http://www.scribd.com/doc/24381315/Candlestick-Charts-Explanation, Retrieved on October 8, 2010

John (1994), Bollinger band and trend. Technical Analysis of Stocks and Commodities, 12

Marshall, B.R., M.R. Young and R. Cahan. (2008), Are Candlestick Technical Trading Strategies Profitable in the Japanese Equity Market? Review of Quantitative Finance and Accounting, 31, 191-207

Marshall, B.R., Young, M.R. and Rose, L.C. (2005), Candlestick Technical Trading Strategies:Can They Create Value for Investors? Journal of Banking and Finance, 30(14), 2303-2323

Nison, S. (2002), Japanese Candlestick Charting Techniques, 2nd edition, New York Institute of Finance

Park, C.H., and Scott H. I. (October 2004), The Profitability of Technical Analysis. Department of Agricultural and Consumer Economics.

www.investopedia.com/candlestickcharts, Retrieved on October 8, 2010

Yatrakis and Williams (2005), Information conveyed by Japanese Candlestick Patterns, Nova Southeastern University, 5-7, 13.

PRERANA March 2011

27P. Suguna, Rameshwari Ramachandra and N. Krishnaveni

A STUDY ON STRATEGIES FOR PROMOTING TECHNICAL TEXTILES-LATERAL DIVERSIFICATION:

WITH SPECIAL REFERENCE TO TIRUPUR KNIT WEAR EXPORTERS1 2 3P. Suguna , Dr. Rameshwari Ramachandra and N. Krishnaveni

1 Ms. P. Suguna, Lecturer, Tiruppur Kumaran College for Women, Tirupur-641687. E-mail: damosugi@bsnl.in

2 Dr. Rameshwari Ramachandra, P.S.G.R.Krishnammal College for Women, Coimbatore. E-mail: rameshwariramchandra@gmail.com

3 Ms. N. Krishnaveni, Lecturer, PSG College of Arts and Science, Coimbatore. E-mail: krishnaveni.narayanaswamy@gmail.com

ABSTRACTTechnical Textiles offers new ways, means and opportunity to the Indian textile

industry to sustain the present growth as well as progress in the near future. Technical textiles include application areas of the textile products in the industrial sectors, services and administrations. Indigenization of technical textiles will minimize import of raw materials and technical products. It would also minimize the import of the state-of art technology to achieve strategic self sufficiency in sensitive and emerging areas of applications, and also provide new avenues of value added exports. The study focused on understanding the preference of exporters towards functional textile product, government scheme and strategies that could be adopted to reduce risks. Samples of 33 exporters were contacted in Tirupur. Exporters of higher in number have selected technical textile sector due to a passion towards entering new business venture. There has been significant difference in the opinion among the exporters towards various schemes taken for study that are proposed by the government. Textile manufacturers venturing into the area of technical textiles need to focus on the level of their in-house technologies, know-how and competence and make concerted efforts to modify them to the requisite level. Strategies to be adopted for promotion of technical textiles depends upon the exporters' objective, willingness to enter into novel field, technical know-how, investment capacity, market development, and government support, not merely on the experience of exporters. The study will help in framing the strategies for promoting technical textiles that offer a congenial environment, to achieve greater share in the global market in future.

INTRODUCTION The technical textiles are one of the fastest growing segments of the textile and

apparel industry worldwide. The very distinctive feature of technical textiles is that it can make value addition as high as 500 percent depending upon the application and end uses. At the same time, it is a diverse and dynamic one, having wide range of materials, processes, products and application.

With the growing demand of functional textiles and due to closing down of conventional textiles owing to high cost of raw materials, market fluctuations, to meet the global competition, to reach newer horizons of market, for new entrepreneurs who are enthusiastic to enter into innovative vicinity, use of textiles in various fields like medical, technical, agricultural and protective clothing etc., promotion of ecofriendly textile products, product diversification that focuses to

PRERANA March 2011

P. Suguna, Rameshwari Ramachandra and N. Krishnaveni28

widen the scope of technical textile market and rather than importing such functional textile material, a diversification of the textile industry by manufacturing these products in our country with available skilled labour and resources, are the reasons for selection of the opportunities open for technical textiles.

A Technical textile is a textile product manufactured for non-aesthetic purposes, where function is the primary criterion. It is a huge and growing sector and supports a vast array of other industries. Technical textiles include textiles for automotive applications, medical textiles (e.g., implants), geotextiles (reinforcement of embankments), agrotextiles (textiles for crop protection), and protective clothing (e.g., heat and radiation protection for fire fighter clothing, molten metal protection for welders, stab protection and bulletproof vests, and spacesuits).

Technical Textiles offers new ways, means and opportunities to the Indian textile industry to sustain the present growth and thrive in near future. It would offer not only an opportunity to augment growth, but also a new direction for advancement of the industry. The field of technical textiles had not received adequate importance in Indian context so far; however, it is a potential area where the textile industry can excel. Traditional textiles today are unable to cope with cost of production for various reasons like fast technological obsolescence, high cost of modernization, increasing cost of power etc. Present product mix of traditional textiles is not remunerative enough and therefore more and more ideas of value-addition to textile products are gaining momentum. Technical textiles, in this context, are just perfect.

With the growing dominance of technical textiles, Techtextil, Messe Frankfurt GmbH has classified technical textiles into twelve groups from the application point of view. Protech covers technical textiles catering to protection of personnel like fire retardant textiles, bullet-proof jackets, high altitude clothing, etc. Geo tech covers textile items used in geotechnical applications pertaining to soil, rock, earth, etc. These are used in roads, rail-tracks, slopes etc., for separation, filtration, and drainage. Packtech covers technical textile products used for protective coverings like sacks, twine, (FIBC), tea/coffee bags, etc. Cloth tech covers technical textiles used in garments, shoes, bags like interlinings, wadding and fibre-fills, shoe laces, components of bags, etc. Sport tech covers technical textiles used in sports industry to manufacture sports equipments, outfits like sport bags, artificial turf, sport nets, sail cloth, etc. Mobiltech covers technical textiles used in automobiles, aircrafts, shipbuilding like nylon tyre cord fabrics, seat covers, seat belts, cabin filters, tufted carpet, upholstery, etc. Buildtech covers technical textiles used in construction of buildings, house structures, dams, tunnels, etc., like reinforcement of walls, facades, hose wrap, concrete wraps, waterproof membranes, thermal and sound insulation, sewer and pipe linings, etc. Indu tech covers technical textiles used in industrial processes like filtration, clearing, seals like woven filters, air filters, dust filters, conveyor fabrics, industrial belts and hose, abrasive products, etc. Oekotech covers technical textiles used for environmental protection like environment control, municipal solid waste management, industrial hazardous waste management, etc. Meditech covers technical textiles used in hygiene and medical facilities like surgical dressing, bandages, surgical gowns, artificial implants, etc. Agrotech includes shade fabrics, mulch mat, crop cover, fish linings, animal husbandry, protective fencing etc. Hometech includes furniture, interior furnishings, rugs, floor coverings, jute carpet

PRERANA March 2011

P. Suguna, Rameshwari Ramachandra and N. Krishnaveni 29

packing, coffee filters etc. The exporters in Tirupur were primarily influenced by the widespread use of technical textile, as this sector is represented as a multi-disciplinary field with numerous end use applications.

India has enough of bleached cotton, polypropylene and polyester viscose yarn and resources. But high-tenacity polyester, specialty flame retardant, and ballistic protective materials like Kevlar, Nomex, and broad spectrum antimicrobials incorporated textile products are to be imported. They are mainly required for defence and medical applications. The government should consider their zero-duty import. Vigorous push needs to be given to the use of locally available coir and jute in a big way to produce environment-friendly products.

STATEMENT OF THE PROBLEMAt present, India is importing $5 billion worth of technical textile products such

as composite leather, sanitary napkins and diapers to meet the domestic demand, which has been growing at 8 per cent a year. This has led to the development of Rs.150-crore zone—that is planned to be established on 200 acres during the 11th Plan under the cluster development programme of the Textiles Committee. This will be a boon for the small and medium enterprises in the region to switch from conventional textiles to value-added technical textiles. Small and medium enterprises in the Tirupur region are set to flourish as technical textiles manufacturing zone that will come up near Tirupur sooner.

At this juncture this study aims at drawing an introspective view of the existing conventional textile exporters of Tirupur; on the reasons for choosing the technical textile sector, opportunities, contribution of government and the strategies to be adopted for sustainable development.

REVIEW OF LITERATURENonwovens are most widely used in diverse applications of technical textiles

due to their unique characteristics, performance and cost advantage. Behnam Pourdeyhimi (2009) presented in his lecture that nonwovens are not only replacing traditional textiles, but are also creating new markets for new value added products.

The application of hot-melt products for the production of functional technical textiles are necessary for developing of new solutions and systems for the required fields such as for the automotive industry, for interlinings, medical textiles, and other clothing applications and to meet the high demand on technical textiles for the protection of human, environment, and machinery, as well for special textiles for functional applications such as roofing systems, geotextiles, building textiles, and textiles for airplanes. Owing to recent advancements in medical procedures and textile engineering; single use materials used in the operating theatre have found a greater use. To meet the fashion requirements and comfort rather than covering body, latest technology and sophisticated machines are inevitable to enter into new areas like medical, protective, filtration, transmission, transportation, structural and many non conventional applications. To avoid the risk contamination by pesticides, protective clothing is useful to give some degree of protection for agricultural workers who are at a risk contamination by pesticides, insecticides and herbicides. The design, manufacture and applications of textile composites in space and

PRERANA March 2011

P. Suguna, Rameshwari Ramachandra and N. Krishnaveni30

aerospace have become one of the most predominant aspects in present day textiles. (Abreu et al., 2003; Andrea Glawe et al., 2003; Anita Desai 2005; Kumar et al., 2005; Ragavendra Pavan et al., 2009)

The Government of India has come up with several positive schemes to support the growth of the non woven and technical textile industry. Center for Excellence in Technical Textiles is likely to be set up in Surat very soon or which details are been worked out by the Government of Gujarat in collaboration with South Gujarat Chamber of Commerce and Industries. These units will manufacture medical textiles, geo textiles, parachute textiles, laminated fabrics; application in agriculture etc., similarly in an earlier scenario, the Pakistan government has removed the 5% customs duty on import of textile machinery in the annual budget of 2005-06, to overcome the troublesome situation of home textiles. The State Economic and Trade Commission of China have recently approved 115 textile technical renovation projects in three groups, estimated to cost 14.71 billion Yuan (US$1.8 billion), with 9.76 billion Yuan of bank loans (Asia pulse news 2000; Seshadri Ramkumar and Appachi Arunachalam, 2009; Chandan Chatterjee 2010).

The second international exhibition of machine tools and automation industry was conducted at Karachi Expo Centre in September 2006. The event had attracted more than 60 local and foreign companies, which encouraged foreign investors to invest in technical textile sector and other machine tools. Pakistani exporters were provided to avail the facility of testing their products in 19 internationally accredited labs within Pakistan. These labs have successfully participated in 35 international proficiency testing schemes for the quality of technical textile raw materials and products (Pakisthan Press International 2006; Zawdu Felleke, Trade Related Technical Assistance Programme of United Nations Industrial Development organization, 2008).

Changing pattern of Chinese textile market was identified with a growing focus on technical innovations and the significant relocation of manufacturing and service centres to Asia. To meet the growing International competiton, US companies followed the strategies to relocate some operations offshore (Owen and Phil, 2005; Ting Chi, et al., 2005).

LITERATURE GAPAs reviewed in the literature, choice of technical textiles, promotion schemes by

government is focused. Yet the strategies for promoting technical textiles has not been focused in Indian scenario, hence to fill the research gap the study area has been selected.

OBJECTIVES OF THE STUDYThe study is expected to draw conclusion about the opinion of the exporters to

enter into technical textiles to meet the domestic as well as international needs.lTo study the features that influences the lateral diversificationlTo analyze the exporters' choice of preference towards the technical textiles

sector lTo know the exporters' opinion towards the schemes of the governmentlTo study the strategies to be focused to promote the technical textiles

PRERANA March 2011

P. Suguna, Rameshwari Ramachandra and N. Krishnaveni 31

METHODOLOGYManufacturing Exporters of garment industry were chosen for the study.

Sampling unit may be a geographical one such as state, district, village etc., so in this research sampling unit is Tirupur Garment units. The study being descriptive in nature, 33 small and medium exporters of total population have been selected as sample respondents by using convenient sampling technique. Interview schedule has been used as instrument to conduct this research. A well structured close ended interview schedule with queries relating to: reasons to choose technical textile sector, application oriented areas of technical textiles, an outlook about the government schemes, strategies to be focused for long term development, has been framed to obtain primary data from the respondent's group. The secondary data for the review were sourced from news bulletin of various textile and research agencies, both official and unofficial newspapers. The study period extended for about twelve months from October 2009 to October 2010. In order to analyze the objectives of the study, several statistical methods and tests were used. Percentage analysis, Chi square test, ANOVA, Kendall's coefficient of concordance was used to test the relationship among the variables taken for study.

ANALYSIS This section presents the analysis of the data that was collected from the

respondents. The profile of the 33 surveyed respondents is depicted in this section of the research work.

There are more number of new entrants into the business (46%) with less than 5 years experience, as compared to those with 5-10 years experience (33%). However, considering the risk involved in the export business, respondents with more than 10 years of experience have constituted only to about 21%. 9% of the exporters invested their own money in the business. 24% of them have taken up the risk of borrowing money from external sources to run the business whereas 67% of the respondents have sourced their own and borrowed capital. 46% of the exporters contacted, have an annual turnover of less than Rs.10 crores, while those exceeding Rs.10 crores turnover target have been 11%. A very small proportion of 7 % have more than 20 crores annual turnover.

Table 1: Profile of the Tirupur Knitwear Industry

Particulars Respondents PercentageLess than 5 Years

15

46%5-10 years

11

33%Experience

Above 10 years

7

21%Own capital

3

9%

Borrowed capital

8

24%Sources of finance

Own and borrowed capital 22 67%Less than 10 16 48%10 to 20

8

24%Turn over (in Crores of Rupees)

Above 20

9

28%

Agro Tech

5

15%Medi Tech 18 55%Application areas

Home Tech 10 30%

PRERANA March 2011

32 P. Suguna, Rameshwari Ramachandra and N. Krishnaveni

15% of the respondent exporters had chosen Agro tech which includes technical textiles used in agriculture, horticulture (include floriculture), fisheries and forestry. 55% of them invested their capital in the Meditech which covers technical textiles used in hygiene and medical facilities. Home tech is manufactured by 30% of the exporters which includes technical textiles used in household activities like furniture components, mattress components, upholstery and interior furnishing, stuffed toys, etc.Reasons for preference of technical textiles: India is an emerging economy and their textile markets are bound to grow on globalization hence technical textiles can be indigenized. ?The value addition in technical textiles is slowly but steadily shifting from raw materials and intermediate products to downstream industries in which India has a strong base and only needs strategic augmentation. Downstream processes generate relatively more employment and are influenced by labour cost. The labour cost in India is competitive compared to developed countries. Indigenization of technical textiles will not only minimize import and achieve strategic self sufficiency in sensitive and emerging areas of applications like defense, aerospace, sustainable development, waste management etc. but also provide new avenues of value added exports. Growth in Asia is expected to be more than 6.5%, with the projected growth rate being merely 2.2% in the developed countries. Promoting technical textiles as a tool of value addition for survival and revival of Indian textile industry hold a high potential of success. The table 2 has quoted the reasons for the preference of technical textiles and the exporters' opinion about the basis for choosing the technical textiles rather than conventional in the recent times.

Among the eight variables chosen most of the exporters have selected technical textile sector driven due to a passion towards entering new business venture (mean value 6.30). High rate of consumption has scored the next maximum mean (5.55). As the industry is best suited for small and medium sized industries it scored a mean value of 5.06. Changing nature of conventional textile industry has scored the next highest mean of 4.70. Rising price of cotton and availability of cheap and skilled labour has scored the next mean of 4.24 and 3.70 respectively. Opportunity to cater both domestic and export market is considered as the next important factor (mean value 3.58). The next highest mean value has been 2.88 for creation of additional employment opportunity.

Kendall's Coefficient has been applied to test the validity of factors influencing the technical textiles and analyse the opinion of the respondents with the null

Table 2: Reasons for preference of Technical Textiles

Reasons Total scores Mean RankPassion towards new business venture

208

6.30 1

High rate of consumption

183

5.55 2Suited for small and medium size industries

167

5.06 3

Changing nature of conventional textile industry 155 4.70 4Rising price of cotton 140 4.24 5Availability of cheap and skilled labours

122

3.70 6

Opportunity to cater both domestic and export market

118

3.58 7

Create additional employment opportunity 95 2.88 8

PRERANA March 2011

P. Suguna, Rameshwari Ramachandra and N. Krishnaveni 33

hypothesis as “Exporters' opinion on the influencing factors that leads to choice of technical textiles considerably have differed from one another”.

W value 0.0711 (which has been less than ±1) has shown a low level of concordance among the respondents, though the chi-square value has been highly significant at 1% level, rejecting the hypothesis. Thereby the exporters' opinion on the influencing factors that leads to choice of technical textiles has very low similarity with each other in assigning the ranks.

Contribution of government in promoting technical textiles: Government of India during its 11th five year plan i.e., April 2007-March 2012, has initiated positive schemes to support the growth of technical textile industry. National Mission for technical textiles was launched by Prime Minister Dr. Manmohan in the texsummit conference on September 2007 in New Delhi. The main aim of the mission is to expand the current technical textile industry to a size of around 12-15 billion dollars by 2012. The mission will be divided into 4 mini-missions which will focus on creating awareness, human resource development, capacity building of the non-woven and technical textile industry and related machinery industry, establishing centers for research excellence and support with testing and standardization. Exporters' opinion on the schemes of the government is showed in the table 3

To ascertain if there has been any difference in opinion among the exporters' towards the awareness about the schemes of government of India, a null hypothesis has been framed to apply ANOVA for within group's and between group's as; there has been no significant difference in opinion among the exporters towards the awareness about the schemes of the government towards the growth of technical textiles.

ANOVA table shows that there has been significant difference in the opinion among the exporters towards various schemes taken for study that are proposed by the government at 5% level. Strategies for promotion of Technical Textiles in Tirupur: Although various quarters of textile industry have started identifying the concept and composition of

Table 3: Opinion about the schemes

Schemes Excellent Good Fair Total points

TUF- 10 % subsidy for new machinery - 5% interest subsidy

19

10

4 81

Drop down of custom duty on imported technical textile machinery - from 10 % to 5%

22

8

3 85

R and D infrastructure -20 centers of excellence in research on non -woven and technical textiles in next five years

12 14 7 71

Setting up of Technology information and forecasting assessment council (Kumaraguru College of Technology- Coimbatore for South India)

10 15 6 66

ANOVA Test

Sum of squares df Mean square F Table value

Between groups

236.17

2 118.08

With in groups 150.06 9 16.67 Total 386.23 11

7.08 4.26

PRERANA March 2011

P. Suguna, Rameshwari Ramachandra and N. Krishnaveni34

technical textile and related products, still there are prevalent apprehensions to venture into this field. Strategies are required to be put in place as early as possible. This has been shown in the table 4.

Textile manufacturers venturing into the area of technical textiles need to focus on the level of their in-house technologies, know-how and competence and make concerted efforts to modify them to the requisite level. If it is inescapable to import technology in high-tech areas of technical textiles, it is essential that efforts should be aimed at acquiring the state-of-the-art technology as far as possible and to be prepared to invest, assimilate, innovate and improve the technology. Hence improvements in manufacturing facilities have scored the maximum opinion with a mean score of 1.67. Success of a new technical textile product will essentially depend on the user of the product. It will be necessary to have close interaction between textile technologists and technical personnel users, viz., engineers, doctors, etc. who will use such technical textiles. Product development and production of technical textiles will succeed only if simultaneous market development is also carried out to sustain demand (mean score 1.63). Research and development, consultancy, quality management, testing and evaluation hold the key to the success of capturing a substantial share of the competitive global market of technical textiles. According to exporters' substantial investment in R and D will be unavoidable. Strong world class testing facilities for accurate and relevant evaluation of technical textile must be made available in India to satisfy the stringent and critical requirements of performance related product parameters in the global market. Thus R and D and developing a Centre of Excellence has scored a next highest mean (1.60). ?Identifying the products with different application areas with a strong potential in the domestic market, and which will in the long run, help exports have gained a mean score of 1.58. ?Initially such items should be selected for which there exists know-how, production facilities, raw material etc. Such products may be on the lower end of technology but should have a big impact in terms of volume, value addition, etc. The existing production capacity / capability with incremental addition to the facilities may be focused. It will create a favorable psychological impact and climate for future investment in more demanding products. Focus on backward integration scores as the next important factor with a mean value of 1.55 as to reduce the supplier power and to minimize the cost. Exporters opined that SEZ benefits are to be extended to more number of areas to enjoy the tax exemption benefits and concessions which has a mean score of 1.51. Many of the specifications like directives, literature, books, etc. are very costly and most of the manufacturers will not be able to afford them. Also IT

Table 4: Strategies for promotion of Technical Textiles

StrategiesNeed Immediate

focus

Need to be

Focused

Total score

Mean

Improving manufacturing facilities

22

11

55 1.67

Market Development 21

12 54 1.63

R and D and Centre of Excellence 20 13 53 1.60Identifying the application areas 19 14 52 1.58Focus on backward integration

18

15

51 1.55

SEZ to be extended 17

16

50 1.51Literature, Standards and Information technology

17 16 50 1.51

PRERANA March 2011

35P. Suguna, Rameshwari Ramachandra and N. Krishnaveni

facilities to be created centrally for dissemination to the concerned users is the strategy to be focused (mean score 1.51).

To establish the authenticity of the relationship between the Experience and Strategies to be followed, a Chi square test was applied with the null hypothesis, that there has been no significant relationship between the Strategies and Experience of exporting companies. To find the relationship Table 5 was prepared.

The calculated value of Chi-square has been (0.4277) which has been less than the table value (21.026) and hence there has been no significant relationship between the Strategies to be adopted and Experience of the exporters. It depends upon the exporters' objective, willingness to enter into novel field, technical know-how, investment capacity, market development, and government support, not merely on the experience of exporters.

DISCUSSION The rationale of this research was to highlight the scope and strategies for the promotion of technical textiles in Indian Scenario. Respondents' opinion for choice of technical textiles and their perception towards government schemes were analyzed. The findings are as follows; Kendall's Coefficient has been applied to test the validity of factors influencing the technical textiles and the opinion of the respondents. The exporters' opinion on the influencing factors that leads to choice of technical textiles has very low similarity with each other in assigning the ranks.

The profile of respondent exporters reveals that 67% of the respondents have sourced their own and borrowed capital, from commercial banks to enter into the technical textiles. The State Economic and Trade Commission of China has recently approved 115 textile technical renovation projects in three groups, estimated to cost 14.71 billion Yuan (US$1.8 billion), with 9.76 billion Yuan of bank loans (Asia pulse news,2000). Such capital sources and loans from banks encourage more exporters to enter in to technical textiles. 15%, 55%, 30% of respondents have chosen Agro tech, Meditech, Home tech as their choice of the filed in technical textiles respectively. Various applications of technical textiles in different fields as functional textiles, meditech, protective clothing, Geotech etc., have been revealed in other countries also. (Abreu et al., 2003; Andrea Glawe et al., 2003; Anita Desai 2005; Kumar et al., 2005; Ragavendra Pavan et al., 2009).

Reasons for the preference of technical textiles and the exporters' opinion on their inclination for choosing the technical textiles rather than conventional textiles

Table 5: Strategies for promotion of Technical Textiles

Experience / Strategies Less than 5 years 10-20 years Above 20 yearsImproving manufacturing facilities

2

2

1 5Market Development

3

2

1 6

RandD and centre of excellence

3

3

1 7Identifying the application areas 3 1 1 5Focus on backward integration 2 1 1 4SEZ to be extended

1

1

1 3

Literature, Standards and Information technology

1

1

1 315

11

7 33

PRERANA March 2011

P. Suguna, Rameshwari Ramachandra and N. Krishnaveni36

were studied. Among the eight variables chosen most of the exporters have selected technical textile sector driven due to a passion towards entering new business venture. Similarly other reasons were ranked. Changing pattern of Chinese textile market was identified with a growing focus on technical innovations and the significant relocation of manufacturing and service centres to Asia. To meet the growing International competiton, US companies followed the strategies to relocate some operations offshore (Owen and Phil, 2005; Ting Chi, et al., 2005). Preference of choice for the diversification into technical textiles varies among the exporters.

It was observed from the ANOVA table that there has been significant difference in the opinion among the exporters towards various schemes taken for study that are proposed by the government at 5% level. The Government of India has come up with several positive schemes to support the growth of the non woven and technical textile industry. TUF subsidy, drop down of custom duty to 5% by the government have encouraged exporters. Similarly the Pakistan government has also removed the 5% customs duty on import of textile machinery of home textiles. The State Economic and Trade Commission of China have recently approved 115 textile technical renovation projects through bank loans. The study shows that 20 centers of excellence in research on non-woven and technical textiles are planned, and a technology information and forecasting assessment council has been formulated. A technical textiles Expo organized by Pakistan government at Karachi encouraged FDI and 19 internationally accredited labs were set up to test the quality of technical textile products.

In the present study a Chi-square analysis has shown that there is no significant relationship between the Strategies to be adopted for promotion of technical textiles and experience of the exporters. It depends upon the exporters' objective, willingness to enter into novel field, technical know-how, investment capacity, market development, and government support, not merely on the experience of exporters.

CONCLUSIONGovernment may provide subsidy and extended support facilities, to encourage

the technical textile manufacturers for increasing their export potential for various products and expanding the domestic markets. Awareness programmes are to be conducted for more number of exporters to enter into this field. R and D facilities for indigenous development of raw materials and diversification of products, Centre of Excellence for standard testing facilities are to be set up. End users may be educated about the functional properties which will enhance their life style. Empowerment of human resources is possible by creating skill-oriented employment opportunities. Lateral diversification opens up wider market potential in the global scale. To fulfill the social objectives of providing cheaper and efficient products like shelters, protective clothing etc. to the masses in the event of disasters like flood, drought, earthquake and the like, transparent and effective policy matters are to be formulated by the government to encourage the exporters who ventured into technical textiles and recognize such ventures as knowledge based industry. Thus a scheme of planning should be made to ensure the inputs and to offer a congenial environment, both regulatory and fiscal, to achieve greater share in the global technical textile market in future.

PRERANA March 2011

P. Suguna, Rameshwari Ramachandra and N. Krishnaveni 37

Abreu, M.J., Silva, M.E., Schacher, L. and Adolphe, D. (2003), New performance and quality requirements in the field of operating room garments (non-active medical devices). International Journal of Health Care Quality Assurance, 16 (5), 261

Adanur, A. and Sear,W. Handbook of Industrial Textiles, 495-521

Andrea Glawe, Regina Reuscher, Regina Koppe, and Thomas Kolbusch, (2003), Hot-Melt Application for Functional Compounds on Technical Textiles. Journal of Industrial Textiles, 33(2), 85-92

Anita A. Desai, (2005), Protective clothing for agricultural workers. Journal of the Textile Association, 66(2), 59-62

Arup Rakshit, Manisha Hira and Gango Padhyay U.L., (2007), Technical Textiles- what India needs to do now. Tax summit 2007, Retrieved from www.sasmira.org

Behnam Pourdeyhimi, (2009), Opportunities in nonwovens and their future value added products and processes. The Indian Textile Journal, 119.

Chandan Chatterje, (2010), Indian Technical Textile Industry: Will it have a swift take off?, Retrieved on December 28, 2010 from http://www.articlessnatch.com

China approves 115 textile technical renovation projects, (2000, February 16), Asia pulse news, Retrieved from http://www.highbeam.com/doc/1G1-59511829.html

Five percent duty on import of textile machinery may remove, (2006, June 2), Pakistan Press International, Retrieved on December 28, 2010 from http://www.highbeam.com/doc/1G1-146560652.html

Funds for textile revitalization program (INVESTMENT) (2009,October 1), Indonesian Commercial News letter, Retrieved on December 28, 2010 from http://www.highbeam.com/doc/1G1-215117149.html

Hatrtmutmut Rödel, Andrea Schenk, Claudia Herzberg, Sybille Krzywinski, (2001), Links between design, pattern development and fabric behaviours for clothes and technical textiles. International Journal of Clothing Science and Technology, 13(3/4), 217 – 227

Kumar, K. V., Krishnaraj, G. and Gopalakrishnan, P.P. (2005), An overview on Technical Textiles. Apparel Today, 14

Lam Po Tang, S. and Stylios, G.K. (2006), An overview of smart technologies for clothing design and engineering. International Journal of Clothing Science and Technology, 18(2), 108 – 128

Lieva Van Langenhove and Carla Hertleer (2004), Smart clothing: a new life. International Journal of Clothing Science and Technology, 16(1/2), 63 – 72

Machine Tools and Automation exhibition opens, (2006, September, 21) Pakistan Press International, Retrieved on December 28, 2010 from http://www.highbeam.com/doc/1G1-151723530.html

Owen, Phil (2005), Textile chemicals producers switch focus to technical applications. Technical Textiles International.

Ragavendra Pavan, Karthik Macharla and Hayavadana, J. (2009), Scope of technical textiles in space and aerospace. The Indian Textile Journal, 119(6), 71-76

Rajkumar, Ranganathan (2006), Textile Research Assessment Model for targeted sustained innovation. Journal of the Textile Association, July-August, 71-76

Rajmenon (2006), Technical Textiles in India - a sleeping volcano prepares to erupt. Technical Textiles International, 31

Seshadri Ramkumar and Appachi Arunachalam, (2009), India Rising: Opportunities in nonwovens and technical textiles. The Textile Magazine, 50(1), 86-96.

Seshadri Ramkumar, (2009), Opportunities in Technical textiles, www.fibre2fashion.com, Retrieved on November 20, 2009

Ting Chi, Peter Kilduff and Carl Dyer, (2005), An Assessment of US Comparative Advantage in Technical Textiles from a Trade Perspective. Journal of Industrial Textiles, 35(1), 17-37

References

PRERANA March 2011

38

Vishal Samartha, Lokesh and N. Ashwitha Karkera

ROLE STRESS AND JOB PERFORMANCE IN BANKS - A CRITICAL ANALYSIS

1 2 3Vishal Samartha , Lokesh and N. Ashwitha Karkera

1 Mrs. Vishal Samartha, Assistant Professor, MBA Department, Sahyadri College of Engineering and Management, Mangalore, Karnataka, India. E-mail: vishalsamartha@hotmail.com, Handset: 9886184413

2 Mr. Lokesh, Assistant Professor, MBA Department, Sahyadri College of Engineering and Management, Mangalore, Karnataka, India. E-mail: lokesh_kuttar@yahoo.com, Handset: 9964513508

3 Ms. N. Ashwitha Karkera, Lecturer, MBA Department, Sahyadri College of Engineering and Management, Mangalore, Karnataka, India. E-mail: ashwitha25n@gmail.com, Handset: 9964187160

ABSTRACTBanking sector has undergone tremendous changes in the recent past.

Liberalization, entry of foreign banks, technological developments and increased competition has made banks to strive hard for success. Banks are not thinking in terms of traditional services but value added benefits to the customers for competitive advantage. This has put pressure on the employees of banks to render better job performance in terms of results. Due to this, the employees face role overload, role ambiguity which are the symptoms of role stress. The study tests role stress and its impact on job performance by using (n=100) data of employees including managers, officers and clerks of banks in Mangalore. The data obtained through questionnaires were analyzed using statistical tools like Mean, Standard deviation and ANOVA. The analysis of variance revealed significant difference between Role Stress with Gender, Education levels, Designation, Income levels and Age groups of respondents.

INTRODUCTION With increasing complexity in our life style, the level of stress has been rising at a

phenomenal rate. Stress is often developed when an individual is assigned a major responsibility without proper authority and delegation of power. Interpersonal factors such as group cohesiveness, functional dependence, communication frequency, relative authority and organizational distance between the role sender and the focal persons are important topics in organizational behavior. According to (Anderson, 2002) work to family conflicts is also a predecessor which creates stress in employees of an organization. Kahn et al., (1964) in their study observed that job stress has been viewed as dysfunctional for organizations and their members although stress has been variously viewed as an environmental stimulus to an individual. Stress is an individual's reaction to an environmental force that affects an individual's performance.

The banking scenario has witnessed sweeping change due to liberalization, privatization, globalization and modernization. This created increasing demand for learning new skillset, adapt to modern technological developments, work pressure, time pressure and hectic jobs. Owing to this the employees in the banking sector are facing role stress, which has an influence on job performance.

PRERANA March 2011

39

PRERANA March 2011

Vishal Samartha, Lokesh and N. Ashwitha Karkera40

NEED FOR THE STUDY Mangalore has been the birthplace of banks such as Karnataka bank, Syndicate bank, Corporation bank, Canara bank and Vijaya bank. People in Mangalore have been in the banking profession since a long time. Over the last ten years the banking industry has gone through some sweeping changes. Transformation, Consolidation, Outsourcing are just some of the most prominent buzzwords that are used to describe major trends afflicting the banking industry. Banking has become more of a service industry and less of a processing industry, staff performance and morale has become more and more important. There was a day when the banks worked like kings ruling the kingdoms but the scenario has completely changed. Today the customer is the king and the banks have to go a step ahead to treat the customers with respect and render all the services to keep them happy. Banks are doing what they can to distinguish themselves from each other and one of the most effective, and least expensive ways of achieving distinction will be to serve customers with friendly, dedicated and well-motivated staff. In the whole process the bank employees are facing a lot of pressure to strike a balance which slowly is taking the face of stress. In this juncture, the present study is undertaken to address the various forms of role stress that a bank employee faces at his work place and its impact on job performance.

REVIEW OF LITERATUREThe literature on role stress and job performance indicates that stress is a

constituent of modern organizations and it would remain a constant phenomenon in the workplace. Sikora et al., (2004) suggest that daily demands in the workplace are a constant challenge to the assimilative and adaptive capabilities of employees. Thus, an employee, who is overtaxed and unable to cope with environmental demands, would develop stress reactions or exhaustion, which in turn, will adversely affect the employee's job performance. However, job performance refers to the duties and responsibilities that are executed as part of an individual's job assignments (Vigoda, 2000). Past studies have conceptualized job performance as comprising quality and quantity of tasks accomplished. Individuals suffering from emotional exhaustion may experience impaired coping ability that may lead to less motivation to achieve desirable quality and quantity of performance.

As originally conceptualized (Kahn et al., 1964), role ambiguity refers to the relative unpredictability of the outcome of an individual's behavior. However, the most popular measure of role ambiguity also includes the component of lack of input from the environment to guide behavior (Rizzo et al., 1970). Relative to the other stressors, role ambiguity is least likely to have a challenge component because there are fewer coping processes that could possibly counteract its negative effects (King and King, 1990). This argument is consistent with the argument of Kahn et al., (1964) that relative to other types of stressors, role ambiguity is more structurally determined. Therefore, when ambiguity is high, the individual faces the difficulty of pursuing job assignments because of an inability to modify them (Lazarus and Folkman, 1984). On the other hand, when role ambiguity is low (role clarity is high), employees' knowledge of what is expected of them (their job requirements) and how to achieve these expectations (processes and procedures) are high (Griffin et al., 2007; Murphy

PRERANA March 2011

Vishal Samartha, Lokesh and N. Ashwitha Karkera 41

and Jackson, 1999). This in turn facilitates a high level of job control, which is associated with higher job performance (Griffin et al., 2007). All previous meta-analytic reviews that covered role ambiguity supported the expectation of a relatively strong negative association between role ambiguity and performance (Fisher and Gitelson, 1983; Jackson and Schuler, 1985; Tubre and Collins, 2000).

METHODOLOGYThe validity of any research is basically dependent on the systematic method of

data collection and analysis. Primary data was used for the present study. The primary data was collected from 100 sample respondents (bank employees) from Mangalore City by convenience sampling method. For this purpose, structured questionnaire i.e. Organizational Role Stress scale (ORS) (Pareek, 1993) was employed to collect the primary data from the selected sample respondents. The statistical tools used for analyzing the data were Mean, Standard deviation and ANOVA.

OBJECTIVES The objectives of the study were

1. To identify and analyze the factors influencing role stress2. To find the association between various factors influencing role stress3. To understand the implications of role stress on job performance

ANALYSIS AND DISCUSSION The analysis of the data collected is presented in this section.

Table1: Frequency and percentage of demographic factors

Demographic factors

Variables Frequency Percentage (%)

Male 61 61Gender

Female 39 39

25-29 18.0 18.0

30-35 19.0 19.0

36-40

18.0

18.0

41-45

9.0

9.0

Age (years)

Above 46

36.0

36.0

SSLC

24

24.0PUC

6

6.0UG

33

33.0Qualification

PG

37

37.0Clerk

61

61.0Special Assistant

3

3.0

Officer 18 18.0Designation

Manager 18 18.0

Urban

76

76.0

PlaceRural

24

24.0

75000-150000

42

42.0150000-225000

15

15.0225000-300000

21

21.0Income (Rupees)

Above 300000

22

22.0Married

82

82.0Marital Status

Unmarried

18

18.0Less than 2 27 27.02-4 66 66.0Dependants4-6 7 7.0Less than 5 27 27.05-10 16 16.010-15 9 9.015-20 12 12.020-25 9 9.0

Service (years)

Above 25 27 27.0

PRERANA March 2011

Vishal Samartha, Lokesh and N. Ashwitha Karkera42

The above table gives frequency and percentage of demographics of the respondents. From the total sample size of 100, 61% were male and 39% were female respondents. In this study majority of the respondents belonged to age group of above 46 years, followed by 41-45, 36-40, 30-35 and 25-29 (36%, 9%, 18%, 19% and 18% respectively). Qualification wise majority of the respondents were 37% post graduates , 33% were undergraduates, 24% had completed SSLC and 6% only PUC. Of the respondents around 61% were clerks by designation, 18% each as officers and managers and 3% were special assistants. 76% of the respondents were from the banks in urban areas and 24% from the rural areas. Majority i.e. 42% of the respondents were in the income level of Rs.75000-150000, 22% above Rs.300000, 21% in the range of Rs.225000-300000 and 15% in the range of Rs.150000-225000. 82% of the respondents were married in comparison to 18% unmarried. 66% of the respondents have 2 to 4 dependants in their family in comparison to 27% less than 2 and a small percentage of 7% had more than 4 dependents. Majority i.e. 27% of the respondents had either less than 5 years or above 25 years of work experience, 16% had 5 to 10 years, 12% had 15 to 20 years, a small percentage of 9% with 10 to 15 years and 20 to 25 years of experience respectively.

Ten factors according to Organizational Role Stress scale (ORS) (Pareek, 1993) are:

Factor 1- Self role distance (SRD): It denotes the conflict between the self concept and the expectations from the role. Roles which call for behavior which is not in accordance with the value system of the person result in Self role distance. Factor 2: Role stagnation (RS ) : As a person occupies a role over a period of time, he grows into that role and behavior patterns become habitual. When he has to assume a new role he is unable to change as he has outgrown in that role.Factor 3: Inter role distance (IRD): Due to the simultaneous occupation of multiple roles, it is likely to face conflicts between them. An employee could face conflicts between his or her role as an executive and role of a father or a mother.Factor 4: Role ambiguity (RA): This results when a person is not clear about the expectations that other people have from him. This can happen when an employee has taken a new job without sufficient orientation to that role.Factor 5: Role expectation conflict (REC): This is due to the conflicting expectations of different role senders for ex: boss, colleagues, clients etc.Factor 6: Role overload (RO): When more and more work is demanded out of an employee stress increases because of role overload. It occurs when a person is unable to face the demands of that role.Factor 7: Role erosion (RE): When an employee feels that some of his duties are taken away from him or that he is underemployed, the stress which results is Role erosion.Factor 8: Role inadequacy (RI): It is experienced when an employee is not supplied with enough resources for ex: manpower, facilities and finance.Factor 9: Personal inadequacy (PI): This occurs when an employee feels that he lacks the expertise or skills necessary for efficient role performance. Factor 10: Role isolation (RIN): An employee may feel that some roles are close to him and others are at a relatively greater distance. If linkages are strong feelings of role isolation will be low and vice versa.

l

l

l

l

l

l

l

l

l

l

PRERANA March 2011

Vishal Samartha, Lokesh and N. Ashwitha Karkera 43

Pareek (1993) has further classified the ten factors into 2 main classifications-1. Role Space Conflict (RSC1) - Refers to conflict between the self, a person's role

and the other role occupied by him. Self role distance (SRD), Inter role distance (IRD), Role stagnation (RS) are included in the Role space conflict.

2. Role Set Conflict (RSC2) - Denotes the incompatibilities amongst the varying expectations from the role holder. Role ambiguity (RA), Role expectation conflict (REC), Role overload (RO), Role erosion (RE), Role inadequacy (RI), Personal inadequacy (PI), Role isolation (RI) constitute role set conflict.

Table 2: Descriptive statistics and results of ANOVA for demographic variables

with reference to Role space conflict –RSC1 and Role set conflict –RSC2Demographic Variable RSC1 RSC2

Mean 2.26 2.25MaleSD 0.677 0.658Mean 2.80 2.70FemaleSD 0.482 0.373Mean 2.47 2.43TotalSD 0.660 0.603F VALUE 18.329 15.107

Gender

ANOVA ResultsP VALUE 0.000 0.000Mean 2.60 2.8525-29SD 0.293 0.143Mean 2.49 2.5130-35SD 0.337 0.612Mean 2.57 2.7536-40SD 0.828 0.551Mean 2.07 2.0841-45SD 0.757 0.606Mean 2.45 2.10Above 46SD 0.785 0.663Mean 2.47 2.43TotalSD 0.660 0.603F VALUE 1.129 9.309

Age (years)

ANOVA ResultsP VALUE 0.348 0.000Mean 2.60 2.85SSLCSD 0.293 0.143Mean 2.65 2.36PUCSD 0.337 0.612Mean

2.57 2.51UG

SD

0.828 0.551Mean

2.07 2.08PG

SD

0.757 0.606Mean

2.47 2.43Total

SD

0.660 0.603F VALUE

4.446 6.838

Qualification

ANOVA results

P VALUE

0.006 0.000Mean

2.50 2.43Urban

SD

0.735 0.645Mean

2.40 2.44

Rural

SD

0.410 0.513Mean

2.47 2.43Total

SD

0.660 0.603F VALUE

0.365 0.032

Place

ANOVA results

P VALUE

0.695 0.969Mean

2.66 2.67Clerk

SD

0.523 0.423Mean

1.93 2.09Special Assistant

SD

0.000 0.000Mean

2.65 2.36Officer

SD

0.337 0.612Mean

1.74 1.74Manager

SD

0.822 0.619Mean

2.47 2.43Total

SD

0.660 0.603F VALUE

14.181 16.841

Designation

ANOVA results

P VALUE

0.000 0.000

Demographic Variable

RSC1 RSC2Mean

2.63 2.6675000-150000

SD

0.431 0.272Mean

2.58 2.50

150000-225000

SD

0.360 0.541Mean

2.47 2.58225000-300000

SD

0.827 0.659Mean

2.11 1.79Above 300000

SD

0.757 0.606Mean

2.47 2.43Total

SD

0.660 0.603F VALUE

3.379 15.130

Income (Rs. )

ANOVA results

P VALUE

0.021 0.000Mean

2.50 2.72Less than 5

SD

0.478 0.384Mean

2.47 2.475-10

SD

0.799 0.552Mean

2.60 2.3610-15

SD

0.254 0.252Mean

3.03 2.7715-20

SD

0.455 0.076Mean

2.07 2.0120-25

SD

0.757 0.613Mean

2.28 1.96Above 25

SD

0.728 0.663Mean

2.47 2.43Total

SD

0.660 0.603F VALUE 3.287 10.152

Service (Years)

ANOVA resultsP VALUE 0.009 0.000Mean 2.43 2.31MarriedSD 0.706 0.597Mean 2.60 2.95UnmarriedSD 0.355 0.199Mean 2.47 2.43TotalSD 0.660 0.603F VALUE 1.179 10.980

Marital Status

ANOVA resultsP VALUE 0.312 0.000Mean 2.46 2.63Less than 2SD 0.334 0.448Mean 2.47 2.362- 4SD 0.695 0.616Mean 2.53 2.304- 6SD 1.213 .867Mean 2.47 2.43TotalSD 0.660 0.603F VALUE 0.035 2.273

Dependants

ANOVA resultsP VALUE 0.966 0.108

PRERANA March 2011

44 Vishal Samartha, Lokesh and N. Ashwitha Karkera

l

l

Analysis of variance revealed that there is significant difference between male and female towards Role space conflict (RSC1) (F=18.329; P=.000), and Role set conflict (RSC2) (F=15.107; P=.000). The above table reveals the results of ANOVA with no significant difference between age groups towards Role space conflict (RSC1) and significant difference between age groups towards Role set conflict (RSC2) factor. The Role space conflict (RSC1) had 'F' value of 1.129 and P value of .348 and Role set conflict (RSC2) with 'F' value of 9.309 and P value .000 respectively.

PRERANA March 2011

45Vishal Samartha, Lokesh and N. Ashwitha Karkera

l

l

l

l

l

l

l

Analysis of variance revealed significant difference between different education level and Role space conflict –RSC1 with F value of 4.446 and P value of .006 and Role set conflict –RSC2 factor with F value of 6.838 and P value of .000. The ANOVA table states that there is no significant difference between place of work and Role space conflict –RSC1 and Role set conflict –RSC2. The mean scores of all the factors were found to be statistically same.From above table it is evident that there is significant difference found on conducting ANOVA between different levels of designation and Role space conflict –RSC1 with F value of 14.181 and P value of .000 and Role set conflict –RSC2 with F value of 16.841and P value of .000 respectively.From the above table it is clear that analysis of variance revealed significant difference between different income levels and Role space conflict –RSC1 with F value of 3.379 and P value of .021 and Role set conflict –RSC2 with F value of 15.130 and P value of .000.Analysis of variance revealed that there is significant difference between the different age groups and Role space conflict (RSC1) (F=3.287; P=.009), and Role set conflict (RSC2) (F=10.152; P=.000). The above table reveals the results of ANOVA with no significant difference between marital status towards Role space conflict (RSC1) and significant difference between marital statuses towards Role set conflict (RSC2) factors. The factors like Role space conflict (RSC1) had 'F' value of 1.179 and P value of .312 with Role set conflict (RSC2) 'F' value of 10.980 and P value .000 respectively. The ANOVA table states that there is no significant difference between dependents and factors Role space conflict –RSC1 and the number Role set conflict –RSC2. The mean scores of all the factors were found to be statistically same.

RESEARCH IMPLICATIONS AND CONCLUSIONSThis research was undertaken to know the factors influencing role stress and its

impact on job performance in banks. Based on convenience sampling method, primary data (structured questionnaire) was collected from 100 respondents (bank employees) of Mangalore city. Through the structured questionnaire of (Pareek, 1993) Organizational Role Stress scale (ORS) was employed to collect the primary data from the selected sample respondents. The basic objective of the research was to identify and find the association between factors influencing role stress and its implications on job performance. Descriptive study of demographic factors revealed that major of the respondents was male. 36% of respondents were above 46 years of age followed by 41-45, 36-40, 30-35 and 25-29 (36%, 9%, 18%, 19% and 18%) respectively. 76% of the respondents were from the banks in urban areas. Qualification wise majority of the respondents were 37% post graduates and 33% were undergraduates. Of the respondents around 61% were clerks by designation, 18% each as officers and managers. Majority of the respondents have 2 to 4 dependants in their family. Majority of the respondents had either less than 5 years or above 25 years of work experience. Majority i.e. 42% of the respondents were in the income level of Rs. 75000-150000.

PRERANA March 2011

Vishal Samartha, Lokesh and N. Ashwitha Karkera46

•Analysis of variance revealed that there is significant difference between male and female towards Role space conflict (RSC1) (F=18.329; P=.000), and Role set conflict (RSC2) (F=15.107; P=.000).This shows the mean responses of male respondents are comparatively lesser than that of the mean responses of the female respondents. This implies female respondents are more prone to role set conflict and role space conflict.

•Analysis of variance revealed significant difference between different educational level and Role space conflict –RSC1 with F value of 4.446 and P value of .006 and Role set conflict RSC2 factor with F value of 6.838 and P value of .000. Post graduate employees are experiencing less stress in comparison with employees of lower qualification.

•There is significant difference found on conducting ANOVA between different levels of designation and Role space conflict RSC1 with F value of 14.181 and P value of .000 and Role set conflict RSC2 with F value of 16.841and P value of .000 respectively. The mean scores of managers and special assistants are low in comparison to other designations.

•The analysis of variance revealed significant difference between different income levels and Role space conflict RSC1 with F value of 3.379 and P value of .021 and Role set conflict RSC2 with F value of 15.130 and P value of .000. Employees with salary above 300,000 experience lower role stress but it is higher in case of Role space conflict in comparison with Role set conflict.

ReferencesAnderson, E.S., Coffey, S.B., and Byerly, T.R. (2002), Formal Organizational Initiatives and Informal Workplace Practices: Links to Work-Family Conflict and Job-Related Outcomes. Journal of Management 28,787

Chandraiah, Agrawal S.C., Marimuthu P., and Manoharan, N. (2003) Occupational Stress and Job Satisfaction Among Managers. Indian Journal of Occupational and Environmental Medicine 7(2)

Fisher, C.D., and Gitelson, R. (1983), A meta-analysis of the correlates of role conflict and ambiguity. Journal of Applied Psychology, 68, 320–333.

Griffin M.A., Neal A. and Parker S.K. (2007), The new model of work role performance: Positive behavior uncertain and interdependent contexts. Academy of Management Journal, 50, 327–347.

Kahn R.L., Wolfe D.M., Quinn R.P., Snoek J.D. and Rosenthal R.A. (1964), Organizational stress: Studies in role conflict and role ambiguity. New York: Wiley.

King L.A. and King D.W. (1990), Role conflict and role ambiguity: A critical assessment of construct validity. Psychological Bulletin, 107, 48–64

Lazarus R.S., Folkman S. (1984), Stressor, appraisal, and coping. New York: Springer

Pareek, U. (1993), Making organizational roles effective: New Delhi: Tata McGraw Hill

Rizzo J.R., House R.J. and Lirtzman S.I. (1970), Role conflict and role ambiguity in complex organizations. Administrative Science Quarterly, 15, 150–163

Sikora, P. B., Beaty, E. D., and Forward, J. (2004), Updating theory on organizational stress: The asynchronous multiple overlapping change (AMOC) model of workplace stress. Human Resources Development Review, 3(1), 3-35

Vansell, M., Brief, A.P. and Schuler, R.S. (1981). Role conflict and Role ambiguity: Integration of the literature and directions for future research. Journal of Human relations, 34(1), 43-66

Vigoda, E. (2000), Internal politics in public administration systems: An empirical examination of its relationship with job congruence, organizational citizenship behavior, and in-role performance. Public Personnel Management, 29(2), 185-210.

S. Mani and A. Sridharan

SUBHIKSHA – THE RETAIL PHENOMENON THAT

FLATTERED TO DECEIVE1 2Dr. S. Mani and A. Sridharan

The Indian Retail Industry today is going through exciting times. Be it Reliance Retail, More, Pantaloon, in spite of economic recession or two notwithstanding, the Indian retail industry has been growing at a fast clip. The current size of the overall retail market in India is estimated to be about USD 400 billion (Rs 18,00,000 crores), and the industry has been clocking healthy two digit growth rates over the last many years. Currently, the Indian Retail Market is the fifth largest in the world, and is one of the fastest growing among the emerging markets category.

While the present scenario is exciting, the future seems to be still brighter. It is expected that retail will contribute about 23% of the overall GDP within the next three years, and the market size estimates vary between USD 750 billion (Rs 35,00,000 crores) to a mind boggling USD 1.25 trillion (Rs 55,00,000 crores), depending upon which analyst you want to believe.

Like many other industries in India, the Indian retail sector is also dominated by the unorganized sector. Almost every road that you take in any Indian city or town, you will find a “general store” or a modest “kirana shop” after every hundred steps or so! Retail is a big employer in India – though the estimated numbers vary from 3 million (30 lakhs) to somewhat unbelievable 60 million ( 6 crores) retailers! This makes it the biggest in the world, if the sheer number of retailers is taken into account.

THE RISEThe year 1997 saw the birth of first wonder kid of Indian retail industry –

Subhiksha. It was unheard of an organized retail outlet, as Indians were and are always fond of friendly neighbourhood grocery shops. The founder, R Subrahmaniyam is an alumnus of IIT-M and IIM-A, the best pedigree one could ever desire in India and who had the long term vision of taking groceries and vegetables nearer to the common man. One shop started in 1997 grew into 1,600 shops by June, 2008, to become the largest retail chain store in India.

This phenomenal growth saw the revenue of the chain increased by nearly 700% during this period (Rs. 3.3 bn in FY06 to Rs. 23.05 bn in FY08). The growth of Subhiksha even attracted Azim Premji; a renowned Indian entrepreneur, to acquire 10% stake of the chain for Rs. 2.3 bn.

THE STUMBLEThe trouble started trickling in by August 2008 when unconfirmed reports

started dribbling in about the retailer not paying salaries to its staff and defaulting on rent. Towards the end of the year, most of its suppliers backed out from supplying to Subhiksha, owing to nonpayment of their previous dues. The subsequent events lead

PRERANA March 2011

47

1 Dr. S. Mani, Dean, Department of Management Science, Sree Saraswathi Thyagaraja College,

Pollachi.2 Mr. A. Sridharan, Professor, Department of Management Science, Sree Saraswathi Thyagaraja

College, Pollachi.

PRERANA March 2011

S. Mani and A. Sridharan48

to a shameful low that the retailer had to ask its employees to take inventory from the store instead of salary!!! The battle for survival, however, did not last long and the cash starved retailer was forced to bid adieu to India retail sector by early 2009. The ignominy of the retailer aggravated with the revelation from the EPFO that the retailer had failed to remit the provident fund deductions to the PF trust from June 2008.

WHAT THEY DID RIGHTSubhiksha pioneered the concept of no-frills, deep discount stores in India.

When other retailers were providing good, enviable ambience with air-conditioned showrooms, Subhiksha dared to think differently. They strongly believed that customers visit retail stores not for shopping experience, but to make routine, lower costs purchases.

Even before Dr.C K Prahalad creator of BOP, Subhiksha decided to tap the bottom of pyramid customers by offering products lower than market prices. This was done primarily through cutting such frills as air-conditioned showrooms. They also ensured that customers realize the savings when they shop at Subhiksha, as their printed bills showed the savings on each purchase made by the customers.

Mr. Subramanian clearly understood that what India needs is not 'one stop shopping destinations', but small sized stores nearer to the customers. He decided to limit his store's sizes to around 1500 sq.ft. Subhiksha integrated their supply chain by sourcing their products directly from the manufacturers, thus eliminating the commission to intermediaries. They also used to pay for the sourcing in cash in order to avail cash discounts. Subhiksha was also against the touch and feel factor as a marketing experience and the deliveries were made by shop assistants over the counter. This ensured that vegetables and fruits remained fresh and there were lesser number of shop lifting at Subhiksha.

WHAT WENT WRONG•Rapid expansion without consolidation and focus: Between 1997 and 2008,

Subhiksha did not pause and ponder over its growth and how to plan exponential growth and capital required for such a growth. When they moved from 1 store to 160 stores in 2006, they could have, in hindsight, paused to take a hard look at their expansion strategies and financial requirements. Instead, they put their operations in top gear to reach 1,600 stores in 2008.

•Correct Format and Wrong Strategy or Correct Strategy and Wrong Format: While the model of small stores than big retail outlets definitely helped Subhiksha to expand rapidly, they got into problem through formation of too many stores within a radius of 1 – 2 kilometers.

•Business Conglomerate in short span of time?: Subhiksha's meteoric rise can be traced to the “Syndrome of Satyam Computers”, where you ignore business basics and land in mess. While Satyam wanted to join the big league players in IT Industry – TCS, Wipro, Infosys, Subhiksha wanted to get into the big league of Big Bazaar, Pantaloons, etc.

PRERANA March 2011

S. Mani and A. Sridharan 49

•Economic Meltdown: Unfortunately for Suhiksha, the period of their consolidation between 2005 – 2008 also was the period of economic earthquake, when the biggest employers in India, IT Industry, started having shakeups due to economic mess/huge unemployment in US / Europe. This led to pruning down of consumer purchases and lesser off take of essentials by Indian customers.

•Sale of commodities with wafer thin margins: Subhiksha focused primarily on food and grocery, on which the net margin is as low as 1% - 2%. To sustain with FMCG, the retailer need to introduce in house brands/private labels, on which the margin can be anywhere between 15-20%. However, Subhiksha continued with selling the branded Food and Grocery items at this razor thin margin, without bothering much to introduce private labels. Subhiksha had private labels only in a handful of categories where national brands were absent. Surviving with this narrow margin is sustainable only if the retailer can generate high volume sales continuously. Would it be an inappropriate mention that almost all the retailers across the world, from Wal-Mart to India's own Future Group and Reliance Retail are focusing on private labels to drive up their profit margins?

•Poor Financial Structure: Their debit equity ratio of 1:031 was far from desirable, which led to total debt of around Rs.8 billion against their equity base of Rs,320 million (Face value), when they closed down their shops.

•Poor inventory management: Subhiksha had a bad history of credit defaults and this led to supply breakages. This led to situations where sometimes the store had very high inventory and at others, the stocks were out. This led to great dissatisfaction for both customers and creditors/suppliers.

CONCLUSIONa. Entrepreneurs need to focus on consolidation, rather than spread their wafer thin

finances on too many activities b. Bottom-line numbers are more important than top-line numbersc. A clear, focus on strategies on store expansion, products being offered to

customers, long term debit management and effective and efficient supply chain operations.

References

Gibson G. Vadamani (2007) 'Retail Management'. India: Jaico Publishing House

http://economictimes.indiatimes.com

http://ibnlive.in.com

http://www.business-standard.com

http://www.indiaretailbiz.com

http://www.moneycontrol.com

Levy, M., Weitz A Burton and Pandi Ajay (2008) 'Retailing Management' India:Tata McGraw-Hill

Publishing Company Limited

Pradhan, Swapna (2009) 'Retailing Management Text and Cases' India: Tata McGraw-Hill Publishing

Company Limited

PRERANA March 2011

50

PRERANA March 2011

51Sangeetha Natarajan and S. Poornima

RURAL PARADIGM SHIFT: EXPLORING BRANDING STRATEGIES FOR RURAL INSURANCE INDUSTRY

1 2Sangeetha Natarajan and Dr. S. Poornima

1 Mrs. Sangeetha Natarajan, HOD and Assistant Professor in Hospital Administration, Tiruppur Kumaran College for Women, Tirupur, Tamilnadu. E-mail: sangeethanatarajan.tup@gmail.com, Handset: 98431 99989

2 Dr. S. Poornima, Associate Professor, Department of Business Management, PSGR Krishnammal College for Women, Coimbatore. E-mail: sripournima@gmail.com

ABSTRACTToday with the paradigmatic shift in the development strategy, the Rural

Insurance sector which remained relatively untouched by the reforms also become the part of it and is not exempted. In this way IRDA has initiated steps in order to ensure the transition. Through regulation it compels that after five years of operation every year private and public life insurance companies has to achieve a certain proportion of their business in rural sector. That is duly 15 % of the business in rural sector after 5 years for private and 18% for LIC. Hence with the compulsion for the insurers with IRDA legislations on one side along with low penetration in vast untapped rural market on the other urges the insurance industry to think on revamping existing marketing strategies. Thus choosing a competitive strategy becomes a must for all insurers with respect to rural insurance.

The present study is an attempt to introspect the level of expectations from customers of rural India with respect to insurance and thereby to compare the actual performance of insurers with the expectations of the customers for which both quantitative and qualitative analysis was carried out. Quantitative analysis was carried out using already published information and statistics. Qualitative analysis was carried out through schedules covering both service providers and service users including agents, employees, officers and general public in the rural Coimbatore district. The collected data was duly analyzed with help of averages, percentages, standard deviation and Chi-square Analysis. The analysis revealed what actually is lacking and where the gap arises between the two extremes of insurer's perception and customer's expectations, based on which suggestions and conclusions were drawn.

RURAL INDIA –THE PARADIGM SHIFTThe Indian census of 2001 shows that the rural India comprises 72 % of the

population might be old. But it accounts to 12.2% of the world is new. In addition the statistics shows that every one person in eight on earth lives in rural India. This forms the very core for all the companies to tap this market.

Today, rural India is far from dry land and irrigated agriculture. The high tech and low tech agriculture, new age farming practices, greenhouse cultivation, fertilizer irrigation and hydro phonics resulted in paradigm shift in the economics of farming. All these sharply increased the disposable income of the rural folk along with hike in purchasing power. The proportion of very rich has increased five fold. The growing

PRERANA March 2011

52

incomes have modified demand patterns and buyer behavior. In addition, the need for a product or service is adequately backed up with the capacity, ability and willingness to pay. This theory would be duly supplemented with some research facts and findings already available. The overview of the Indian Rural consumers is given below•46% of Soft drink

•49% of Motorcycles

•59% of cigarettes

•18 million TV sets

•26% of Microwave ovens

•17% of ACs

•15% of Washing machines

•12% of Refrigerators

•50% of 2 million BSNL Mobile connections

•53 % of FMCG Products

•59% of consumer durables are sold in Rural India

•Nearly 42000 Supermarkets in Rural India

•In 2002-03 LIC sold 50% of its policies in Rural India

•Of 20 million have signed up for rediffmail about 60% are from small towns

•Electricity consumption increased from 17.6% in 1980 -81 to 20.2% in 19992000

•Telecom sector: subscriber rate 71% is growing at a much faster rate

•Rs. 1.76 trillion Bharat Nirman Rural Infrastructure program (05- 09) forimproving electricity, Roads, Housing and Irrigation

•Rs. 300 Billion wage payment under NREGA -38 million HHS in 330 districtsalready paid

•More than 60% of India's income comes from Rural & small TownsThe above information paves way for the future projection of Rural India. In

spite of these rapid advancements in rural consumer market, service sector in rural India remains largely untouched and unexploited. These markets need to be found and even created especially for products like Insurance.

INDIAN RURAL INSURANCE – A SCENARIO The Insurance scenario in Rural India, in terms of its coverage is quiet

unsatisfactory. The insurable population in India is about 250 million out of which LIC and postal Life insurance agencies in India covered 89.36 populations as on 31.3.1998. LIC claims that over 51% of its new policies are sold in rural India and ensured half of the LIC's agents are from rural India with above half of its branches are in mofussil areas. This is relevant from the following figure.

The statistics with regard to health insurance is even dismal and low. As per GIC's own estimates the number of health insurance policy holders amount to 2 million. All this shows that the penetration is as low as 0.83% among eligible and

Sangeetha Natarajan and S. Poornima

PRERANA March 2011

53

prospective policy owners who belong to insurable population and notably the penetration is pit fully low and inadequate.

In furtherance IRDA regulation compels that after five years of operation every private and public sector life insurance companies has to achieve a certain proportion of their business in rural sector. That is duly 15% of the business in rural sector after 5 years for private and 18% for LIC. It further brings out the definition of rural sector as follows:

1) a population of not more than 50002) a density of population of not more than 400 per square km. an3) At least 75 % of the male main working population is engaged in

agriculture.Hence with the compulsion for the insurers with IRDA legislations on one side

along with low penetration in vast untapped rural market on the other urges the insurance industry to think on revamping existing marketing strategies and identified BRANDING the need of the hour.

BRANDING - THE NEED OF THE HOUR “Brand is not a process, but a promise”. This should be the key word for all

insurance companies in the context of branding. Branding correlates with image building in an organization, its products or services rendered. When one thinks of life insurance, the immediate flash that appears would be the logo of Life Insurance Corporation of India (LIC) “The two hands gently circling the lamp”, assuring trust and security in the minds of public. For the last five consecutive years, LIC has been the most trusted service brand in insurance industry. But the private players and General insurance companies have to travel a long path to reach LIC's destination. For today's marketing scenario Brand Management is the order of the day and hour.

Branding aids the insurance companies separating their brand with the competitors in a unique way, motivating the customers, enhances value and makes them special among prospects and channels, shelters them from low price competition, contributes to share holders value, provides resilience in times of negative press and enables to launch new products quickly and cost effectively.

Such a brand for rural insurance has to be handled with the same concern as the artisans show in their work as it can break or make the product and its service. All the

Sangeetha Natarajan and S. Poornima

Source: IRDA Annual report -2001-06

PRERANA March 2011

54

activities that are taken under this shade of a brand would add to or subtract the value of the concern. With all these base working in mind an effort was taken to conduct a study on exploring branding strategies for rural insurance industry in India.

REVIEW OF LITERATURE Although previous researches on rural insurance are not directly related to

exploration of branding strategies, yet a number of academics have conducted research in the related field. As early as 1989, Patki in his article “Rural Marketing”, discussed the selling of life insurance in rural areas. But the intensity developed with the passing of IRDA legislation after which many academics started probing in this field of research.

Ramanathan (2002) in his article examined the recent successes and failures of the corporate world in the rural market and also discussed the opportunities available for life insurance companies in the Indian rural markets and the strategies to be adopted. Naren (2002) in his article examined the different types of delivery systems and its cost effectives. Reddy (2004) in his article reviewed the innovative techniques in agriculture and rural insurance. Tapen Sinha (2005) in his article overviewed the Indian insurance market, compared its growth, penetration, density and other insurance variables and finally summarized the pitfalls and potentials in the rural insurance in India. Machiraju and Sandhyarani (2005) in their article analyzed the critical factors of access and credibility in Rural post office, Health Insurance Penetration in Rural areas was analyzed by MD India Health care services (TPA) Private Ltd in 2005. Samuel et al., (2007), in their article examined how the basic insurance knowledge can change the habit and attitude of rural society and rural customers interest towards insurance policy. Chitra et al., (2007) in their article explored the customer satisfaction on the services provided by LIC in Namakkal branch in Tamilnadu. Balakrishnan and Balasubramaniam (2007), in their article examined the concept of social security and its link with physical, financial and emotional factors with regard to insurance sectors. Daven and Shanmugasundaram (2007) studied the present trends in Insurance industry in India. Mythili (2007) in her article studied the innovative products and improved service of insurance market. Karthikeyan (2007) in his article examined the trends and developments in insurance industry and its circle from privatization to monopoly and then back to privatization. Venkata Ramana Rao (2007) tried to explore the unique approaches and possibilities for innovation to raise risk awareness and education of insurance in rural India, in his article, Gupta (2008), in his article examined the low penetration and poor density even after privatization of insurance sector. Ragul Mirchandani (2008) in his article duly analyzed the evolving new marketing mix for selling FMCG products to Rural Indians and Anand Prakash (2008), in his article studied the problems in spreading insurance in rural markets and tried identifying the strategies for its development.

To sum up there is no comprehensive study on analyzing the gap between expectation and perception of the customers and service providers with regard to rural insurance Branding strategies; therefore there is an imperative need for an in-depth study in this area.

Sangeetha Natarajan and S. Poornima

PRERANA March 2011

55

OBJECTIVES OF THE STUDY The present study is broadly divided into two main categories. Primarily to study

the Macro level market study which aims at studying the Indian Rural Insurance sector, its issues, challenges and opportunities and the micro level study that aims at developing rural branding strategies for insurers in India. The secondary objectives were •To find out the key reasons behind attractiveness of Indian Rural market

•To explore the opportunity areas in the market

•To identify the key issues to be addressed

•To explore the status of rural insurance in India and the growth avenues for rural insurance and its branding strategies

•To identify the challenges faced by insurance industries in rural branding sector

METHODOLOGY Keeping in view the objectives of the study at macro and micro level of insurance

sector a detailed analysis has to be carried out both quantitatively using already published information and statistics and qualitatively, with the help of primary data collection. The latter was duly collected by schedules covering both the service providers and service users. This includes agents, employees' officers and the general public in the rural Coimbatore district. The exploration of facts and figures on a wider scale is through in-depth interviews mostly non directive in design and style. The respondents were let to talk freely in a wide ranging manner about their branding experience and their choices concerning factors, which are quantified with the use of scaling techniques. There by the study is Descriptive in nature. Through Convenience Sampling, the Survey results are computed on the basis of responses in which 300 service providers and 500 service users were found to be valid on the basis of consistency of responses and therefore taken fit for analysis. The collected data was duly analyzed with the help of Averages, Percentages, Standard Deviation and Chi-square Analysis.

ANALYSIS AND FINDINGS Analysis of the Issues in Rural Branding for Service Providers and Service Users: By throwing light to the first objective of analyzing the issues of service providers and service users the following table 1 depicts the results by way of percentages, point analysis using Likert scaling technique and thereby assessing the corresponding favorableness. Table 1 clearly indicates the factors that are analyzed, their frequencies, their percentages and the points arrived using Likert's scaling technique. Out of which majority of the factors have gained favorableness from the responses assessed as their calculated values are more than the normal mean which is 3, except to, Adequate distribution mechanism (3.15), Nature of products – Tailor made (3.0), Training to office personnel (3.0). Hence these factors were identified to be neither favorable nor Unfavorable. Specifically factors like, Range of products (2.975), Rate of productivity – quantity of sales (2.58), Efficiency of sales management (2.31), Agent turnover rate ( 2.72) were identified to be Unfavorable.

Sangeetha Natarajan and S. Poornima

PRERANA March 2011

56

Particulars SA A N DA SDA Likert’sPoints

Favorability

Access to customers 157(53)

68(22)

75(25)

0(-)

0(-)

4.275 F

Rural customers knowledge 150(50)

75 (25)

30 (10)

45 (15)

0(-)

4.1 F

Understanding attitudes, values, opinions, preferences

180(60)

82(27)

38(13)

0(-)

0(-)

4.475 F

Understanding the rural buyers behaviors

165(55)

68(23)

22(7)

15(5)

30(10)

4.075 F

134

(45)

98

(32)

38

(13)

30

(10)

0

(-)

4.125

F

120

(40)

90

(30)

75

(25)

15

(5)

0

(-)

4.05

F

Demand for the right service

- Willingness

- purchasing power

- intention 75

(25)

135

(45)

53

(18)

22

(7)

15

(5)

3.775

F

Difference in perception

105

(35)

75

(25)

38

(13)

14

(5)

68

(22)

3.45

-

Maintaining relationship

128

(43)

89

(30)

60

(20)

23

(7)

0

(-)

4.075

F

Range of products 68

(23)

75

(25)

22

(7)

53

(18)

82

(27)

2.975

UF

Adequate distribution mechanism

68

(23) 98

(32) 22

(7) 38

(13) 74

(25) 3.15

UF

Procuring reliable, standard documents

180 (60)

82 (27)

38 (13)

0 (-)

0 (-)

4.475 F

60

(20)

83

(27)

30

(10)

60

(20)

67

(23)

3.0

-Nature of products

-Tailor-made policies

- region specific

75

(25)

90

(30)

45 (15)

45

(15)

45

(15)

3.335

-

Different market structure

90

(30)

135

(45)

23 (7)

23

(7)

29 (10)

3.775

F

Value expectancy from products, services

180

(60)

82

(27)

38

(13)

0

(-)

0

(-)

4.475

F

Training to office personnel

60

(20)83

(27)30

(10)60

(20)67

(23)3.0

-

113 (37)

45(15)

38(13)

30(10)

75(25)

3.3-

Rate of productivity-Quality of sales

- Quantity of sales 60(20)

62(21)

22(7)

53(18)

103(34)

2.58 UF

Efficiency of sales management 58(19)

45(15)

38(13)

30(10)

129(43)

2.31 UF

Agent turnover rate 60(20)

60(20)

22(7)

53(18)

105(35)

2.72 UF

(Note: Numbers in the top represents the frequency; numbers in the brackets represents the percentages. F represents favorable and UF represents unfavorable) For assessing the gap between the expectation of the service users and the perception of the service providers, it is essential to identify the factors corresponding to the issues of service Users and hence was identified from the analysis that Supply of right product (57 %), Premium payment procedure (53%), Procedural aspects (renewal) (52%), Claim settlement (53 %) and physical presence (58%) were identified to be Unfavorable and again factors like Accessing service providers (51%), updation of knowledge of company (50%) were neither favorable nor Unfavorable (Table 2).

Table 1: Table showing Factors for studying the Issues of Service providers

Sangeetha Natarajan and S. Poornima

PRERANA March 2011

57Sangeetha Natarajan and S. Poornima

Table 2: Factors for studying the Issues of Service Users

Favorable UnfavorableFactorsFrequency % Frequency %

Accessing service providers 255 51 - 245 49 -

Assessing company standards 320 64 F 180 36 UFAwareness of the variety (motor, accident, cattle, tractor, property, health, crop, agriculture)

285

57

F

215

43 UF

340

68

F

160

32 UF

250

50

F

250

50 -380

76

F

120

24 UF

420

84

F

80

16 UF

Updation of knowledge

- services

- companies

- brand

- strategies

- Bylaws 410 82 F 90 18 UF

Assistance in policy purchase

340

68

F

160

32 UFBehavior of agents 310

62

F

190

38 UF

Personalized service

285

57

-

215

43 UFSupply of right product

215

43

UF

285

57 -Premium payment procedure

235

47

-

53 -Complex products 320

64

F

265

180

36 UF

280

56

-

220 44 UF310 62 190 38 UF

240 48 UF 260 52 -

Procedural aspects- processing- subscription- renewal- claim settlement 235 47 UF 265 53 -

Physical presence 210 42 UF 290 58 -

(Note: F represents favorable and UF represents unfavorable)Analysis of the Opportunities of Rural Branding for Service Providers and Service users: In order to identify the existing opportunities in the rural insurance market, analysis was made covering both the ends, service providers and service users, in which factors like liberalized legislations (3.3), diversified marketing strategies (3.335), product demand (3.0), rural house hold contribution to total income (3.335), savings rate to income (3.3), Query handling (3.0), distribution strategy- cooperative societies (3.0), product features placement (3.45), were identified to be in the mid of the line of favorableness and complaint handling (2.31), Premium collection (2.72), distribution strategy –through NGO's ( 2.31) and regional rural bank (2.72), Connectivity through IT (2.27) moves to the negative end of favorableness and hence need insight (table 3).

Particulars SA A N DA SDA Likert’sPoints

Favorability

Wide population 18060)

82(27)

38(13)

0(-)

0(-)

4.475 F

Rate of savings to income 15753)

68(22)

75(25)

0(-)

0(-)

4.275 F

Rising middle class 13445)

98(32)

3813)

30(10)

0(-)

4.125 F

Large untapped market 12040)

90(30)

75(25)

15(5)

0(-)

4.05 F

liberalized legislations 11337)

45(15)

3813)

30(10)

75(25)

3.3 -

Diversified marketing strategies 75(25)

90(30)

4515)

45(15)

45(15)

3.335 -

disposable income of rural folk

90

(30)

135

(45)

23

(7)

23

(7)

29 (10)

3.775 -

Table 3: Table showing the Factors for studying the opportunities of Service providers

Particulars SA A N DA SDA Likert’sPoints

Favorability

product Demand 60(0)

83

(27)

30

(10)

60

(20)

67

(23)

3.0 -

Rural household contribution to total income

75

(5) 90

(0) 45

(15) 45

(15) 45

(15) 3.335 -

Rural access 75 25)

135 (45)

53 18)

22 (7)

15 (5)

3.775 F

Savings rate to income 113

45)

45

(15)

38

13)

30

(10)

75

(25)

3.3 -

Complaint handling 58

(19)

45

(15)

38

13)

30

(10)

129 (43)

2.3 UF

Premium collection 60

(20)

60

(20)

22

(7)

53

(18)

105

(35)

2.72 UF

Query handling 60

(20)

83

(27)

30

10)

60 (0)

67

(23)

3.0 -

Business retention 105

(35)

75

(25)

38

13)

14

(5)

68

(22)

3.45 -

Supporting channels 134

(45)

98

(32)

38

(13)

30

(0)

0

(-)

4.125 F

75

25)

135

(45)

53

(18)

22

(7)

15

(5)

3.775F

60

(20)

83

(27)

30

10)

60

(20)

67

(23)

3.0 -

58

(19)

45

(15)

38

(13)

30

(10)

129

(43)

2.31 UF

60

(20)60

(20)22

(7)53

(18)105

(35)2.72 UF

12040)

90(30)

0(-)

0(-)

0(-)

4.475 F

Distribution and delivery strategy

-District cooperative bank

- Cooperative societies

- NGO’S

- Regional Rural bank

- Commercial Bank

- SHG’S 75(25)

135(45)

53(18)

22(7)

15(5)

3.775 F

Extensive agent network 180(60)

82 (27)

38(13)

0(-)

0(-)

4.475 F

Connectivity through IT 35(12)

35(12)

46(15)

110(36)

74(25)

2.27 UF

Cross selling options 210(70)

90(30)

0(-)

0(-)

0(-)

4.7 F

Product features, placement 105(35)

75(25)

38(13)

14(5)

68(22)

3.45 -

PRERANA March 2011

58 Sangeetha Natarajan and S. Poornima

(Note: numbers in the top represents the frequency; numbers in the brackets represents the percentages. F indicates the favorableness, - represents the neutral, UF – indicates Unfavorableness)

Probing into the opportunities for service users; flexibility in payment of premium (58%), trust and reliability (52%), easy reach (49%) fall in between the line of favorableness and factors like Relationship building and management (39%), operational discipline (35%), product innovation (27%), convenience (38%), safety of funds (45%) were negative end of the opportunity factors and hence lacking performance and need improvement (table 4).

Table 4: Table showing the Factors for studying the opportunities of Service Users

Favorable UnfavorableFactorFrequency % Frequency %

Creation of awareness

340

68

F

160

32 UF

Security of incomes

375

75

F

125

25 UFCombination of products , services

260

52

F

240

48 UFFlexibility in payment of premiums

210

42

UF

290

58 F

Bulk returns

360

72

F

140

28 UF

Favorable UnfavorableFactorFrequency % Frequency %

Trust & reliability 240 48 UF 260 52 -Easy reach

255

51

-

245

49 -

Relationship building and management 195 39 UF 305 61 FAwareness programs 275 55 F 225 65 F

Operational discipline

173 35

UF

327

45 UF

Product innovation

134

27

UF

366

73 F

Convenience

193

38

UF

307

62 F

Safety of funds

223

45

UF

277

55 F

Expert Advice 295 59 F 205 41 UF

Government regulations 395 79 F 105 21 UF

PRERANA March 2011

59Sangeetha Natarajan and S. Poornima

Analysis of the challenges of Rural Branding for Service Providers and Service users: Challenges, the danger alarm, if not duly considered would drown the entire operation into the pit. Hence an in-depth analysis was made assessing the factors threatening the service providers and service users in which, physical presence (3.15), security belief (3.0), selling risky products (3.335), gaining new customers (3.335), wide dissection of area (3.15), plugging the segment with right (3.335), Highly dispersed market (3.3), mass communication – promotional problems (3.44),Product customization (3.0) were neither Favorable nor Unfavorable. Further extending productlines (2.31), redefining traditional products (2.72), training manpower (2.58), cultural gap between rural and urban (2.31), lack of trustworthy research (2.72), regional cultural security (2.975) were identified to be strongly unfavorable (table 5).

Table 5: Factors for studying the challenges of Service providers

Factors SA A N DA SDA Likert’sPoints

Favorability

Creation of awareness 180(60)

82(27)

38(13)

0(-)

0(-)

4.475 F

Social consideration 60(20)

60(20)

22(7)

53(18)

105(35)

2.72 UF

Regulatory framework 192(64)

82 (27)

26(9)

0(-)

0(-)

4.56 F

Cultural, social dynamics 105(35)

75(25)

38(13)

14(5)

68(22)

3.45 -

Physical presence 68(23)

98(22)

22(7)

38(13)

74(25)

3.15 -

Government obligations 189(63)

60(20)

43(14)

8(3)

0(-)

4.43 F

Unpredictable market structure 75(25)

135(45)

53(18)

22(7)

15(5)

3.775 F

Quality service 60(20)

83(27)

30(10)

60(20)

67(23)

3.0 -

Security belief 60(20)

83(27)

30(10)

60(20)

67(23)

3.0 -

Trust building 210(70)

90(30)

0(-)

0(-)

0(-)

4.7 F

Extending product lines 58(19)

45(15)

38(13)

30(10)

129(43)

2.31 UF

Reinvention of brands 120(40)

90( 30)

75(25)

15(5)

0(-)

4.05 F

Maintaining relationship with users 75(25)

135(45)

53(18)

22(7)

15(5)

3.775 F

Appropriate channel of distribution 180(60)

82(27)

38(13)

0(-)

0(-)

4.475 F

Highly dispersed markets 113(37)

45(15)

38(13)

30(10)

75(25)

3.3 -

Cultural gap between rural and urban 58(19)

45(15)

38(13)

30(10)

129( 43)

2.31 UF

Lack of thrust worthy research 60(20)

60(20)

22(7)

53(18)

105(35)

2.72 UF

Mass communication ,promotional problems

93

(31)

67

(22)

38

(13)

28(9)

74(25)

3.44 -

High market development expenditures

138

(46)

95

(31)

35

(12)

32(11)

0(-)

4.13 F

Regional cultural sensitivity

68

(23)

75

(25)

22

(7)

53(18)

82(27)

2.975 UF

Procuring right documents

189

(63)

60

(20)

43

(14)

8

(3)0(-)

4.43 F

Product customization

60

(20) 83

(27) 30

(10) 60

(20)67

(23)3.0 -

Factors SA A N DA SDA Likert’sPoints

Favorability

Meeting customer expectations 180(60)

82(27)

38(13)

0(-)

0(-)

4.475 F

Selling risky products

75

(25)

90

(30)

45

(15)

45(15)

45(15)

3.335 -

Market positioning 134(45)

98(32)

38(13)

30(10)

0(-)

4.125 F

Remaining competitive 138(46)

95(31)

35(12)

32(12)

0(-)

4.13 F

Gaining new customers 75(25)

90(30)

45(15)

45(15)

45(15)

3.335 -

Building brand equity 189(63)

60(20)

43(14)

8(3)

0(-)

4.43 F

Redefining traditional products 60(20)

60(20)

22(7)

53(18)

105(35)

2.72 UF

Achieving credibility 112(37)

78(26)

60(20)

24(8)

26(9)

3.75 F

Wide dissection of area 68(23)

98(32)

22(7)

38(13)

74(25)

3.15 -

Low literacy rate 210(70)

90(30)

0(-)

0(-)

0(-)

4.7 F

Poor infrastructure

173

(58)

60

(20)

40

(13)

10( 3)

17(6)

4.21 F

Brand personification

164

(55)

62

( 21)

50

(17)

24(7)

0(-)

4.22 F

Training manpower

60

(20)

62

(21)

22

(7)

53(18)

103( 34)

2.58 UF

Lack of infrastructure

128

(43)

89

(30)

60

(20)

23(7)

0(-)

4.075 F

Plugging the segments with right products

75

(25)

(46)

90

(30)

(31)

45

(15)

(12)

45(15)

(11)

45(15)

(-)

3.335 -

Value for money pricing

138

95

35

32 0 4.13 F

PRERANA March 2011

60

(Note: numbers in the top represents the frequency ,numbers in the brackets represents the percentages, F indicates the Favorableness, - represents the neutral, UF – indicates Unfavorableness) While assessing the challenges for service users, factors like developing trust (42 %) and Relationship Management (53%) only fall under neither Favorable nor Unfavorable category and hence need consideration. All the other factors are highly Favorable (table 6)

Independent factor analysis: To get crystal clear picture about which respondents duly fall under the categorization of favorableness and unfavorableness, independent

Sangeetha Natarajan and S. Poornima

Particulars Favorable Unfavorable Total Particulars Favorable Unfavorable Total

Male

233

38

271

Male

115

335 450

Female 22

7

29

Female 10 40 50

Total

255

45

300

Gender of service users

Total

120

380 500

Gender of service providers

TV : 3.841, Df: 1, CV:0.349 TV: 7.815 ,Df:1, CV:0.1481

PRERANA March 2011

61Sangeetha Natarajan and S. Poornima

factors like age, gender, nature of company, persons taken policy or not etc., was analyzed using Chi Square analyses and was found that the service providers between 25-35 and 45-55 years of age, mostly male, working in Nationalized Insurance companies have favorable attitude with respect to service users, those between the age group of 25-35 and 35-45, mostly male respondents, who have taken policy in Nationalized Insurance companies alone have a favorable opinion (table 7, 8, 9).

Table 6: Table showing the Factors for studying the Challenges for Service UsersFavorable UnfavorableFactors

Frequency % Frequency %

Developing trust 213 42 UF 287 58 FSafety of invested funds 430 86 F 70 14 UFAffordability 410

82

F

90 18 UFPost purchase services 216

43

UF

284 57 F

Lack of knowledge- product

- company

- brand

335

367

417

67

73

83

F

F

F

16513383

332717

UFUFUF

Bad experiences of others

316

63

F

184 37 UF

Lack of personification

350

70

F

150 30 UF

Relationship management

267

53

F

233 47 UFLimited rate of literacy

420

84

F

80 16 UF

Understandability of product 366 73 F 134 27 UFHard procedures, too many mandatory papers 382 76 F 118 24 UF

Perception regarding claim settlement procedures 373 75 F 127 25 UF

Table 7: Table showing the Association between Age and FavorablenessParticulars Favorabl

eUnfavorable Total Particulars Favorable Unfavorable Total

25-35

75

15

90

Age of service users

25-35

175

30 205

35-45 45 7 52 35-45 110 60 17045-55 75 8 83 45-55 85 20 105Above 55

60

15

75

Above 55

10

10 20

Total 255 45 300 Total 380 120 500

Age of service providers (years)

TV : 7815, Df: 3, CV: 0.526 TV: 3.841,Df: 3, CV: 0.1707

Table 8: Table showing the Association between Gender and Favorableness

Favorable Unfavorable Particulars Favorable Unfavorable Total Particulars

taken Not taken

taken Not

taken

Total

Public 170

30

200

Public

300

75

30 10 415

Private 27 73 100

Service

users

Private 30 5 45 5 85

Total 197 103 300 Total 330 80 75 15 500

Service providers

TV : 3.841 , Df: 1,CV:99.49 TV:7.815 ,Df: 3 , CV:101.16

Table 9: Table showing the Association between Nature of company and Favorableness

PRERANA March 2011

62

SUGGESTIONS AND CONCLUSION Having analyzed the two extremes of service provider's perception and service

user's expectations, it's time to pin point what actually is lacking and where the gap arises. Hence some critical improvements could be made by way of branding strategies. Branding refers to the image building exercises. Today's marketing scenario makes branding the order of the day and this could be processed by the following aspects:

ØThe first aspect that needs to be developed so urgently is an efficient delivery system. Manage the channel issues that exist between the new model and the already existing network. Integrated marketing effort with local institutions and SHGs can be used to penetrate.

ØA smaller bundle of innovative products in synchronization with rural needs and perception. Emphasizing more on service brands and not just the product is very important this is because one should not only concentrate on sales but also what after sales that will create the true value for the product.

ØCreation of awareness of insurance products and the financial risk and opportunities. Make them informed with the choices – providing them the facts, data, knowledge to understand their risk exposure as well as insurance terms and concepts, through provision of training and guidance. Mass awareness campaigns can be organized in rural gatherings like temple festivals, melas, road shows etc.

ØHelp them where to go for help and enquiries. This could be done with the stakeholders of insurance companies, IRDA, intermediaries, NGO's, Governmental and Autonomous bodies, insurance educational institutions. Regional rural banks offer a wide reach to customers.

ØEducating the rural market about insurance market through talk shows and interview sessions on radio as All India Radio was distributing low-cost radio in each household of the village. Regular press meets can be conducted at office of District Public relations Officer (DPRO) to present the detailed aspects of the benefits that are being provided under various insurance schemes.

ØCreating Public relations to strengthen the service brand image of the product is essential. Some ceremonies can be held at village level along with government programmes so as to show the companies commitment to the members of the community and thereby ensuring the availability and accessibility of the service providers and to enjoy the proximity of the customers.

ØDirect marketing with rural agent team handling activities like Door-to Door sampling, marketing and product promotion can be exercised. Agent is a person who has to be local and trustworthy .Word of mouth is the primary reason for the success and thereby physical presence could be ensured. He acts as a brand ambassador for rural market and has to concentrate on after sales service, collection of premium etc.

ØRural marketing research throwing insight into rural consumer behavior, their values beliefs and opinion is a must. This can be done by gathering information, analyzing them and linking the findings in promoting the product.

Sangeetha Natarajan and S. Poornima

PRERANA March 2011

63Sangeetha Natarajan and S. Poornima

Now it is the need of the hour for the rural insurance through branding strategies to inculcate new ideas and new thinking approach to dominate the Insurance world of tomorrow. It undergoes cultural shock since both Service providers and service users have to understand and adopt themselves to handle new way responsibilities. To conclude the largely untouched Indian rural sector holds great opportunities for both life and Non life insurers. To grab these opportunities insurance companies has to be strong enough in their marketing strategies especially branding.

References

Dhruv Tanwar (2008), Rural Marketing: the bottom – of the Pyramid Game, May 2008

Dhunna, Mukesh and Rajan A. Kumar, (2002), Liberalisation of Insurance sector: Social Implications. Indian Management Studies Journal, 6, 109 -117

Graham Morris, and Krishnamurthy, R. (2005), The emergence of alternative distribution in India. Asia Pacific Insurance Review, December 2005

Gupta, P. K. (2005), Insurance and Risk Management. Himalaya Publishing House

Holloway Richard and Rajgopalan Krishnamurthy (2006), Insuring Rural India. Insurance Chronicle, December 2006

Kishore, R.B. (2006), Life Insurance and Affluent Segments of Market. Insurance Chronicle, ICFAI University, October 2006

Krishnan, T.N. (1996), Hospitalisation Insurance: A proposal, Economic and Political. Weekly, April 13, 1996

Mathur, S.B. ( 2003), 25 Years of Life Insurance. Business World, 23, 23-26

Oomen A. Nihan (2004), Community approach for viable Rural Insurance. The Hindu online edition, July 2004

Prahlad, C.K. and Stuart, .L. Hart (2002), The Fortune at the bottom of the Pyramid. Strategy and Business, 26

Ramkrishnan (2002), New perspectives on Rural Marketing. Jaico publication house, Mumbai.

Ravichandran, K. (2007), Recent Trends in insurance sector in India. Abhijeet Publication, Delhi

Surjan, A, (2004), Rural Insurance Market in India. Insurance Chronicle, ICFAI University press, July 2004

Tripathy, Nalini Prava and Pal Prabir (2005), Indian Insurance Industry – The Paradigm Shift. Insurance – Theory and Practice, New Delhi, 29

PRERANA March 2011

64

PRERANA March 2011

65

CXO Interview

The Executive Editor of PRERANA (PRN) interviewed Mr. R Varadaraj (RVJ), Director and Chief Operating Officer, Rajshree Sugars and Chemicals Ltd, Coimbatore on March 16, 2011.

PRN: What are the best practices adopted in your company?

RVJ: “Equal opportunity to all”, this is one of the fundamental things we believe in. These things become very subjective and cannot be written as a policy. This should come innately within the senior managers and they should act as mentors, which comes only when the organization and its' people realize this. Managers need not have a feeling of insecurity that if 'I teach him he may get into my job and I may get displaced.' On the contrary, what we tell people is that 'if you want to be promoted find somebody to takeover your place or else if you're so good at doing your job you can remain there'. This is one of the practices that we are proud of. Our deliverables to the farmers are maintained with care. Asymmetry of power between the company and its' suppliers should be treated well especially when you're dealing with asymmetrical peers. These are all transcending best practices. So treat every stakeholder in your business with equal respect; banker, government, farmer, driver, security and workmen.

PRN: What best practices would you recommend to other companies….?

RVJ: I believe that every organization has some reason for doing what it is doing. The only thing I would advice every company is when they started a new company they started it with a philosophy. Every religion begins on a philosophy; a philosophy which an individual has taught for over generations becomes a tradition and over another few generations it becomes a ritual. In due course of time we forget the philosophy behind it. We simply do it because this was how everybody was doing it. Now in order to avoid this, the philosophy should be understood and it should be translated. We should utilize the advancement in technology, for example the technology young people bring in when they join a company, but imbibe the philosophy that we have in the company. The philosophy has to be alive and the company should not lose its identity. There is no simple solution or a formula to this but when you are able to do it that distinguishes you as a leader.

PRN: Could you highlight the innovative practices adopted by your company that helped you gain a competitive edge in the current scenario?

RVJ: The foremost factor is a deep philosophy of respecting all stakeholders especially at times of difficulty. Dissemination of information is another factor. It is very important that your team understands where we are. Our goal, the mission, vision and the business plan has to be well understood by people which means the business plan has to be created by the people themselves. That was one of the things which we also innovated among the Indian firms, although western businesses had done it earlier. Innovation also comes in when we utilize our resources to the best and quickly alter the method we use to utilize the resources. For example, sugarcane is our raw material; at times when it is a factor of climate or certain government policies

PRERANA March 2011

66

farmers may not grow cane. Now we do not have raw material, what do you do with our facility? We cannot let it stay idle. So we import raw sugar from countries having surplus and process it. We need to be constantly more imaginative than innovative.

PRN: What talent management measures has your company adopted to retain the talented employees?

RVJ: Skilled workers need to feel as a part of your team. They need to feel that they are respected as individuals and their skills are respected; else they feel very insulted. Money is secondary. They should not feel that you think of them only when there is a problem. Retaining people at technical, personnel and office level varies with their expectations and aspirations. Unskilled workers actually impart no talent. They are people whom you need but can be replaced without a great loss. They need to be respected and that cannot be told. So it is a constant effort. We have training schemes for them, welfare measures for their families and children, schools which are run as a part of the institution, a good cafeteria and so on. You make them feel they are getting some additional benefits because of continuing in one place.

Security should not be intrusive rather it should be obvious, visible as a deterrent and subtle. Technically skilled people who are not well educated have a problem in managing finances and personal finances. They do not have anybody to ask and the bank manager may also not give him much attention, so our HR team advice these people on these issues by having certain programs for them which are handled by our accounting people who come and explain to them the tax exemptions and monthly savings for the future education of children. These are all small things which need a little extra effort from our HR and accountant staff.

Something which is very weak currently in many organizations is conducting sports. In earlier days companies used to take great pride in having sports teams but that is lacking in many organizations in these days.

Serving a meal is a basic need. The difference lies in how the meal is served. If served with dignity and hygiene, it shows that a lot of effort is put in by the officers. A lot of empathy is required because when they believe that they are being cared for, they feel part of the team and feel that they should remain there. Say for example if you have facilities in the workers rest shed and the rest shed is dirty and not maintained properly, the reactions will be the same. If we maintain it well and if it is a place which they are proud of they won't spit and ensure that it is maintained clean. We need to make sure they have facilities like cool water. I always believe that first it's the workmen and last should be the officers who need these facilities. Never take care of yourself first, take care of your men first. This has to be made visible to them rather than be told to them. The day you command the respect of your men, you have achieved your target. If you have to demand that respect, you are in trouble. These are the HR practices in action. People should be happy coming to work.

PRN: What are the new ventures that you are planning for the next 2-3 years?

RVJ: We are upgrading many of our systems. We are setting up a new distillery to make use of the molasses which we are producing through our activities. We have a distillery in our first unit in Andipatti, but we do not have distilleries in other units.

PRERANA March 2011

67

The new distillery will be able to pick up the molasses thereby adding value to our own product. Secondly we are also revamping our power plants in Unit I and in our Andhra plant.

PRN: What steps the organization has taken to address environmental issues?

RVJ: The Sugar Industry and the Alcohol Industry come under the red category as far as the Ministry of Environment is concerned. The sugar industry does not dirty the water. We do not have any toxic waste in the system. It's entirely organic load which means nobody can die, but the water is discolored. So people have a feeling that it is polluted. Hence the sugar factories have a system of cleaning the wastewater. We would like to conserve water. Environmental management is not only just treating waste but also reducing it, as we say reduce, reuse, and recycle. So first create a system that uses less quantity of water from the environment as water is the greatest thing that we pollute at all times. Second thing is we try to recycle much of whatever we are using and for this we have systems through which we clean up some of the water and reuse it. Third thing is we try to find better methods of handling wastes. We are trying to reduce the quantum of water which is used for every ton of sugarcane processed. In the distillery side for every liter of alcohol produced, in the old batch fermentation plants, it produces 14 liters of wastes and in some of the modern plants we have brought it down to about 5-6 liters and there is no toxicity, but the BOD levels are high. Hence our first initiative was to be pioneers in creating organic manure by anaerobic digestion. This organic manure is branded and certified. This organic manure goes back to the soil which is called sustainable agriculture. We are taking it from the soil and returning it back to the soil. So nothing is getting wasted in the system. In the current new distillery we have an even better technology where we would be concentrating on the wastewater. Water is injected into a boiler that becomes steam, steam drives turbines, and turbines will generate electricity. Hence the energy is utilized. The waste from the sugarcane goes as fuel to the bigger boilers. Hence I would say that Sugar industry is a classic example of how environment is managed for sustainable agriculture.

PRN: According to you, what qualities are to be nurtured in the present youth and students of management in particular?

RVJ: We are limiting the opportunities to them because of the way we are programming the curriculum. I believe that students should be allowed to widen their scope and horizon and they should read more. But it is essential that we educate ourselves also and especially one of the things that I would sincerely like students to understand is the history of industrial growth in our country from independence till now. There are many books that will help them to do that. We say knowledge is power and it is required at all levels. Students need to understand their role in the global stage and the big picture. There has to be some focused reading in geopolitics which should also become a part of their curriculum. Students should first study the immediate environment, then the regional environment, then the global environment and how the environments are interlinked and what are the pressures they are likely to meet. Students will get lot of information from newspapers and hence one hour could be allotted daily to discuss on the current news in the class.

PRN: Thank you for your time Mr Varadaraj

PRERANA March 2011

68

Issue Dated Deadline for Submission

Issue No. 1 - March December 31

Issue No. 2 - September June 30

Guidelines to Authors

1. All articles are subject to peer review.

2. The manuscripts should be between 2000 – 3000 words (including figures and tables), typed using MS Word in 1.5 line spacing, Times New Roman, 12-point size, on A4 size papers with 1” (2.54 cm) margin on all sides.

3. All references in the manuscript should be placed at the end and arranged alphabetically. The referencing style suggested by the Amer ican Psycho logy Assoc ia t ion may be fo l lowed (www.apastyle.apa.org).

4. The cover page should contain (a) the title of the paper (b) author's name (c) designation and official address (d) address for communication (e) phone numbers and (f) e-mail address.

5. Author(s) should include a brief profile of themselves in about 50 words.

6. A non-mathematical abstract of about 150 words should be submitted along with the manuscript.

7. Two hard copies of the manuscript along with a soft copy in CD should be sent by courier/post addressed to “The Editor, PRERANA, GRG School of Management Studies, Peelamedu, Coimbatore – 641 004, Tamilnadu” and a soft copy to prerana@grgsms.com.

8. Authors(s) should send a declaration stating that the manuscript is not published, copyrighted, accepted or under review elsewhere. Please note that copyright of all accepted articles will be with PRERANA.

9 Each author will receive a complementary copy of the journal.

Deadlines for submission of Manuscripts

About GRGSMS

GRG School of Management Studies (GRGSMS) is a part of the GRG Group

of Educational Institutions in Coimbatore founded by GRG Trust. It is one of

the few Institutions in India dedicated and committed exclusively to the

development of women business leaders and entrepreneurs. The GRG Trust

was founded in 1956 by the late Shri GR Govindarajulu and his wife, Smt G

Chandrakanthi who were industrialists, philanthropists, educationists, and

great visionaries.

GRGSMS, established in 1993, is an autonomous institution, approved by the

All India Council for Technical Education (AICTE), affiliated to the

Bharathiar University, and accredited by the National Accreditation and

Assessment Council (NAAC) with ‘A’ rating. GRGSMS is ranked `A+' by

Business India in its B-School survey published in October 2010.

The flagship programme offered by GRGSMS is the holistic, full-time, two-

year MBA programme. Other programmes offered include a full-time, one-

year PG Diploma in Business Administration.

GRGSMS is presently located within the premises of PSGR Krishnammal

College for Women. The environment-friendly landscape and architecture

provides conducive atmosphere for learning and development. State-of-the-

art infrastructure encompasses well-equipped classrooms, technology-based

teaching aids, latest hardware and software tools, an interactive multimedia

studio, a comprehensive digital studio, conference halls and seminar rooms.

The core members of the faculty at GRGSMS are qualified and experienced,

bringing a judicious mix of knowledge and skills. In addition, expertise of a

team of visiting faculty is drawn regularly to augment the learning

experience.

Executive Editor - PRERANA

Peelamedu, Coimbatore 641 004, Tamilnadu, IndiaPhone: +91 422 257 2222 / 429 5959 URL: www.grgsms.com

Email to: prerana@grgsms.com

GRG School of Management Studies