Consumer Buying in Forex

EXECUTIVE SUMMARY
The study was conducted in Thomas Cook foreign exchange at M.G Road branch,
Trivandrum in order to understand the customer buying behaviour over foreign exchange
market. The study provides in-depth understanding of the awareness of the foreign travellers
who mostly prefer to exchange the respective countries currency and also to find out to whether
they use to travel with the currency, travellers cheque or borderless prepaid card as their
preferred mode of carrying currencies. The primary objective is to understand the consumer
buying behaviour of foreign exchange market.
Consumer behaviour is the study of how individuals spend their available resources on
consumption-related items. It includes the study of what they buy, why they buy it, when they
buy it, where they buy it, how often they buy it.
The topic of this study is consumers buying behaviour on foreign exchange market in
Trivandrum with reference to THOMAS COOK. A total sample of 100 consumers was chosen
for the data collection. The sampling method used is convenience sampling
The project started with the preliminary preparation by gaining knowledge about the
products and services offered by Thomas cook Under Forex. After the background study a
questionnaire was prepared to capture all the essential information required for the analysis.
This was followed by an extensive census survey conducted with a wide range of
existing as well as prospective customers. The Portfolio of customers included individuals,
corporates, travel agencies, financiers, retail. Based upon the response, opinion scores have
been calculated to evaluate the relative importance of the factors in buying decision making,
the study focuses on the importance which were assigned to different factors varies across the
service quality, preferring of the vendors to exchange the foreign currency. Through identifying
the prospective customers by their buying behaviour will helps the foreign exchange market to
tailor their marketing strategies and improve their service quality. This could satisfy both the
consumers and the marketers. The study also helps to understand the consumer behaviour, so
that they can improve their market stability and also reduce competition in the market, this
could help the company to develop
CHAPTER: 1
INTRODUCTION
1.1 CONSUMER BEHAVIOUR

Business environment today is turbulent as never before and the service industry as
promising as never before. In this era of intense competition where customer is the king,
success depends a lot on the efficiency of the managers in delivering what they have promised
and the responsibility lies on the organisations to develop such a culture where business ethics
are followed, value for the services is provided and quality services are offered to achieve
higher level of customer satisfaction. For achieving customer satisfaction understanding
dynamic consumer behaviour is essential. As true believers in the marketing concept marketer
should try their best to meet needs of consumers.
Service firms should follow a proactive approach i.e. begin the service and satisfaction
management process before they even come in contact with customers and also be reactive i.e.
look forward for customers to complain, welcome them and tell them what to do. This study is
an attempt to develop a thought on how to focus on enabling and keeping promises in service
firms because how promises are kept is a clear indication of how strong and for how long shall
the customer relationship be. The service sector dominates the Indian economy today,
contributing to more than half of our National Income. Since services are intangible in nature
and cannot be checked before the purchase is actually made therefore, it is very critical to
deliver what has been promised to the target customer. Consumer behaviour studies play an
important role in framing marketing and in deciding marketing strategies.
Consumers are often studied because certain discussions are significantly affected by
their behaviour or expected actions. For this reason such consumer behaviour is said to be an
applied discipline. Such applications can exist at two level of analysis. The micro perspective
involves understanding consumers for the purpose of helping a firm or organisation accomplish
its objectives. On the macro or societal perspective consumers collectively influence economic
and social conditions within an entire society.
MEANING OF CONSUMER BUYING BEHAVIOUR
The American Marketing Association (AMA) defines consumer behaviour as The
dynamic interaction of cognition, behaviour and environmental events by which human beings
conduct the exchange aspect of their lives.
Consumer behaviour is The study of individuals, groups, or organisations and the
processes they use to select, secure, use and dispose of products, services, experiences, or ideas
to satisfy needs and the impacts that these processes have on the consumer and society.
Behaviour occurs either for the individual, or in the context of a group (e.g., friends influence
what kinds of clothes a person wears) or an organisation (people on the job make decisions as
to which services the firm should use).
CONSUMPTION AND CUSTOMER
Consumption process is related to different types of individuals, purchaser, shopper or
customer and is generally used synonymously to indicate one who actively engaged in buying.
The consumption process involves three interrelated activities of decisions: determine personal
or groups wants, seek out and purchase products and employ products to derive benefits
Customer: The term customer is typically used to refer to one who regularly purchase from
a particular store or company. The consumer more generally refers to anyone engaging in
any of the activities (evaluating, acquiring, using or disposing of goods and services) used in
the definition of consumer behaviour. Therefore, a customer is defined in terms of specific
firm while consumer is not. Customers are value maximise within the bounds of search costs,
limited knowledge, mobility and income. The most commonly thought of consumer situation
is that of an individual making a purchase with little or no influence of others. A consumer or
buyer is one who determines personal wants, buys products and uses those products. The
traditional viewpoint defines consumers strictly in terms of economic goods and services or
one who consumes goods.
The customer is king philosophy has become one of those marketing fads and
fashions that have continued to trail the growth and expansion of the product economy. The
term consumer is often used to describe two different kinds of consuming entities personal
consumer and organisational consumer. Ultimate consumers are those individuals who
purchases for the purpose of individual or household consumption. Organisational consumers
are those who buy products and services in order to run their business. Buyer is the individual
who actually makes the purchase transaction whereas user is the person most directly involved
in the consumption or use of the purchased product.
A customer is also called client, buyer, shopper or purchaser, usually used to refer to a
current or potential buyer or user of the products of an individual or organisation, called the
supplier, seller, or vendor.5 This is typically through purchasing or renting goods or services.
However, in certain contexts, the term customer also includes by extension anyone who uses
or experiences the services of another. A customer may also be a viewer of the product or
service that is being sold despite deciding to not buy them. The word customer is derived from
custom, meaning habit; a customer is someone who frequented buy from a particular shop,
who made it a habit to purchase goods or services rather than elsewhere and with whom the
shopkeeper had to maintain a relationship to keep his or her custom, meaning expected
purchases in the future. The slogans the customer is king or the customer is god or the
customer is always right indicate the importance of customers to businesses - although the last
expression is sometimes used ironically.
CONSUMER BEHAVIOUR AND BUYER BEHAVIOUR

Consumer behaviour is seen to involve a complicated mental process as well as physical
activity (purchase decision). Consumer behaviour is a decision process and physical activity
individuals engage in when evaluating, acquiring, using or disposing of goods and services.
Consumer Behaviour reflects the totality of consumers decisions with respect to the
acquisition, consumption and disposition off goods, services, time and ideas by (human)
decision making units.6
Buyer Behaviour particularly is the study of decision making units as they can buy for
themselves or others. Thus, buying behaviour particularly involves collective response of
buyers for selecting, evaluating, and deciding and post purchase behaviour. Buyer behaviour
is the study of human response to services and the marketing of products and services. Buyer
behaviour researches continuously investigate a broad range of human responses including
human affective, cognitive and behavioural responses. The buying behaviour and purchase
decisions are need to be studied thoroughly in order to understand, predict and analyse critical
market variations of a particular product or service. The field of consumer behaviour is the
broad study of individuals, groups or organisations and the process they use to select secure
and dispose of products, services, experiences or ideas to satisfy needs and the impacts that
these processes have on the consumer and society.7 Consumer behaviour studies are based on
the buying behaviour of final consumers-individuals and households who buy goods and
services for themselves.8 The collective behaviour of consumers has a significant influence on
quality and level of standard of living. Buyer Behaviour is broadly defined by various scholars
and researchers as:
1. Its the behaviour displayed by the consumers during the acquisition, use and
disposition of products/services, time and ideas by decision making units.
2. It is the body of knowledge which studies various aspects of purchase and consumption
of products and services by individuals with various social and psychological variables
at play.
3. The process and activities people engage in when searching for, selecting, purchasing,
using, evaluating and disposing of products and services so as to satisfy their needs and
desires. The activities directly involved in obtaining, consuming and disposing of
products and services, including the decision processes that precede and follow these
actions.
FOREIGN EXCHANGE MARKET

The foreign exchange market (fx or forex) as we know it today originated in 1973.
However, money has been around in one form or another since the time of Pharaohs. The
Babylonians are credited with the first use of paper bills and receipts, but Middle Eastern
moneychangers were the first currency traders who exchanged coins from one culture to
another. During the middle ages, the need for another form of currency besides coins emerged
as the method of choice. These paper bills represented transferable third-party payments of
funds, making foreign currency exchange trading much easier for merchants and traders and
causing these regional economies to flourish.
From the infantile stages of forex during the middle Ages to WWI, the forex markets were
relatively stable and without much speculative activity. After WWI, the forex markets became
very volatile and speculative activity increased tenfold. Speculation in the forex market was
not looked on as favorable by most institutions and the public in general. The Great Depression
and the removal of the gold standard in 1931 created a serious lull in forex market activity.
From 1931 until 1973, the forex market went through a series of changes. These changes
greatly affected the global economies at the time and speculation in the forex markets during
these times was little, if any.
1. 1944 Bretton Woods Accord is established to help stabilize the global economy
after World War II
2. 1971 Smithsonian Agreement established to allow for greater fluctuation band for
currencies.
3. 1972 European Joint Float established as the European community tried to move
away from its dependency on the U.S. dollar.
4. 1973 Smithsonian Agreement and European Joint Float failed and signified the
official switch to a free-floating system.
5. 1978 The European Monetary System was introduced so other countries could try to
gain independence from the U.S. dollar.
6. 1978 Free-floating system officially mandated by the IMF.
7. 1993 European Monetary System fails making way for a world-wide free-floating
system
The foreign exchange market is the mechanism by which a person of firm transfers
purchasing power form one country to another, obtains or provides credit for international trade
transactions, and minimizes exposure to foreign exchange risk. It is an agreement between a
buyer and a seller that a given amount of one currency is to be delivered at a specified rate for
some other currency. A foreign exchange rate is the price of a foreign currency. A foreign
exchange quotation or quote is a statement of willingness to buy or sell at an announced rate.
The foreign exchange market consists of two tiers: the interbank or wholesale market, and the
client or retail market. Participants include banks and nonbank foreign exchange dealers,
individuals and firms conducting commercial and investment
transactions, speculators and
arbitragers, central banks and treasuries, and foreign exchange brokers. Transactions are
effectuated either on a spot basis or on a forward or swap basis. A spot transaction is for an
(almost) immediate value date while a forward transaction is for a value date somewhere in
the future. Quotations can be classified either as European and American terms or as direct and
indirect quotes. In the real world, quotations include a bid-ask spread. A bid is the exchange
rate in one currency at which a dealer will buy another currency. A task is the exchange rate
at which a dealer will sell the other currency. The spread is the difference between the bid
price and the ask price. This spread reflects the existence of commissions and transaction costs.
A cross rate is an exchange rate between two currencies, calculated from their common
relationship with a third currency.
Various participants of foreign Exchange Market:
Governments: Governments have requirements for foreign currency, such as paying
staff salaries and local bills for embassies abroad, or for arraigning a foreign currency credit
line, most often in dollars, for industrial or agricultural development in the third world, interest
on which, as well as the capital sum, must periodically be paid. Foreign exchange rates concern
governments because changes affect the value of product and financial instruments, which
affects the health of a nations markets and financial systems.
Banks: There are different types of banks, all of which engage in the foreign exchange market
to greater or lesser extent. Some work to signal desired movement in the market without
causing overt change, while some aggressively manage their reserves by making speculative
risks. The vast majority, however, use their knowledge and expertise is assessing market trends
for speculative gain for their clients
Brokering Houses: These exist primarily to bring buyer and seller together at a mutually
agreed price. The broker is not allowed to take a position and must act purely as a liaison.
Brokers receive a commission from both sides of the transaction, which varies according to
currency handled. The use of human brokers has decreased due mostly to the rise of the
interbank electronic brokerage systems
International Monetary Market: The International Monetary Market (IMM) in Chicago
trades currencies for relatively small contract amounts for only four specific maturities a year.
Originally designed for the small investor, the IMM has grown since the early 1970s, and the
major banks, who once dismissed the IMM, have found that it pays to keep in touch with its
developments, as it is often a market leader
Money Managers: These tend to be large New York commission houses that are often very
aggressive players in the foreign exchange market. While they act on behalf of their clients,
they also deal on their own account and are not limited to one time zone, but deal around the
world through their agents.6. Corporations: Corporations are the actual end-users of the foreign
exchange market. With the exception only of the central banks, corporate players are the ones
who affect supply and demand. Since the corporations come to the market to offset currency
exposure they permanently change the liquidity of the currencies being dealt with.
Retail Clients: This includes smaller companies, hedge funds, companies specializing in
investment services linked by foreign currency funds or equities, fixed income brokers, the
financing of aid programs by registered worldwide charities and private individuals. Retail
investors trade foreign exchange using highly leveraged margin accounts. The amount of their
trading in total volume and in individual trade amounts is dwarfed by the corporations indenter
bank markets.
Central Bank
External value of the domestic currency is controlled and assigned by central bank of
every county. Each country has a central or apex bank. For example In India Reserve Bank of
Indias the central Bank
Commercial Bank
Commercial banks are the one which has the most number of branches. With its wide
branch network the Commercial banks buy the foreign exchange and sell it to the importers.
These banks are the most active among the market players and also provide services like
converting currency from one to another.
Exchange Brokers
Services of brokers are used to some extent, Forex market has some practices and
tradition depending on this the residing in other countries are utilised. Local brokers can
conduct Forex transactions as per the rules and regulations of the Forex governing body of their
respective country.
Overseas Forex market
The Forex market operates all around the clock and the market day initiates with Tokyo
and followed by Bahrain Singapore, India, Frankfurt, Paris, London, New York, and
Sydney before things are back with Tokyo the next day
Speculators
In order to make profit on the account of favourable exchange rate, speculators buy
foreign currency if it is expected to appreciate and sell foreign currency if it is expected to
depreciate. They follow the practice of delaying covering exposures and not offering a cover
till the time cash flow is materialized.
Other financial institutions involved in the foreign exchange market include:
Stock brokers Commodity
Firms Insurance
Companies Charities
Private Institutions
Private Individuals
Players in Foreign Exchange Market
A key goal of exchange rate economics is to understand currency returns. Exchange
rates
Like asset prices more generally move in response to new information about their
fundamental value. Over the past decade microstructure research has revealed
That this price discovery process involves different categories of market
participants. Each participants distinct role is determined by (a) whether the agent
Is a liquidity maker or taker, and (b) the extent to which the agent is informed. The original FX
market participants were traders in goods and services. Currencies came into existence because
they solved the problem of the coincidence of wants with
Respect to goods. Most countries have their own currencies so international trade in
goods requires trade in currencies. The motives for currency exchange have expanded over the
centuries to include speculation, hedging, and arbitrage with the list of key players expanding
accordingly. Beyond importers and exporters, the major categories of market participants now
include asset managers, dealers, central banks, small individual (retail) traders, and most
recently high-frequency traders.
The Forex over the counter market is formed by different participants. With varying
needs and interests that trade directly with each other. These participants can be divided in two
groups: the interbank market and the retail market.
The Interbank Market
The interbank market designates Forex transactions that occur between central banks,
commercial banks and financial institutions.
Central Banks
National central banks (such as the US Fed, the ECB, R.B.I.)Play an important role in
the Forex market. As principal monetary authority, their role consists in achieving price
stability and economic growth. Their main purpose is to provide adequate trading conditions.
To do so, they regulate the entire money supply in the economy by setting interest rates and
reserve requirements. They also manage the country's foreign exchange reserves that they can
use in order to influence market conditions and exchange rates. Central banks intervene in
economic or financial imbalance in the foreign exchange market. Central banks are also
responsible for stabilizing the forex market. They do this by balancing the country's foreign
exchange reserves. In addition, they also have official target rates for the currencies that they
are handling. Because of this role, central banks are sometimes jokingly referred to as circus
performers because of the daily balancing act that they have to perform. Their intervention in
the foreign exchange market is not to earn profit from foreign currency trading.
Commercial Banks
Traditionally known as a savings and lending institution, banks are certainly one of the
major players in forex market. They are the natural players in foreign exchange as all other
participants must deal with them. Foreign exchange currency trading began as an added service
to deposits and loans offered by commercial banks. Banks are usually involved in both large
quantities of speculative trading and also daily commercial turnover. The really big and well-
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established banks trade in the billions of dollars in foreign currencies every day. Commercial
banks provide liquidity to the Forex market due to the trading volume they handle every day.
Some of this trading represents foreign currency conversions on behalf of customers' needs
while some is carried out by the banks' proprietary trading desk for speculative purpose. The
profitability of foreign exchange trading is a perfect characteristic for banks to be involved.
Financial Institutions
Financial institutions such as money managers, investment funds, pension funds and
brokerage companies trade foreign currencies as part of their obligations to seek the best
investment opportunities for their clients. For example, a manager of an international equity
portfolio will have to engage in currency trading in order to buy and sell foreign stocks.
The Retail Market
The retail market designates transactions made by smaller speculators and investors
.These transactions are executed through Forex brokers who act as a mediator between the
retail market and the interbank market. The participants of the retail market are investment
firms, hedge funds, corporations and individuals / retail forex brokers and speculators...
Investment Firms
Investment management firms commonly manage huge accounts on behalf of their
clients such as endowments and pension funds. Sometimes, these investments require the
exchange of foreign currencies so they have to facilitate these transactions through the use of
the foreign exchange market. These situations exist because there are basically no limitations
to the nationalities of customers that an investment firm can attract. Therefore, investment
managers with an international equity portfolio, needs to purchase and sell several pairs of
foreign currencies to pay for foreign securities purchases.
Hedge Funds
Hedge funds are private investment funds that speculate in various assets classes using
leverage. Macro Hedge Funds pursue trading opportunities in the Forex Market. They design
and execute trades after conducting a macroeconomic analysis that reviews the challenges
affecting country and its currency. Due to their large amounts of liquidity and their aggressive
strategies, they are a major contributor to the dynamics of Forex Market.
Corporations
They represent the companies that are engaged in import/export activities with foreign
counterparts. Their primary business requires them to purchase and sell foreign currencies in
exchange for goods, exposing them to currency risks. Through the Forex market, they convert
currencies and hedge themselves against future fluctuations. Initially, they were not interested
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in foreign exchange trading, but the trend of companies going international and tight
competition amongst them made them think twice
Individuals / Retail Forex Brokers
Individual traders or investors trade Forex on their own capital in order to profit from
speculation on future exchange rates
They mainly operate through Forex platforms that offer tight spreads, immediate
execution and highly leveraged margin accounts. These can be individuals or groups of
individuals. They handle a fraction of the total volume of the entire forex market, but do not
let that fool you. A single retail forex broker estimate retail volume of between 25 to 50 billion
dollars each day. Their volume is estimated to make up 2% of the total market volume.
Speculators
A person, who trades in currencies with a higher than average risk in return for higher
than average profit potential. These are the individuals or private investors who purchase and
sell foreign currencies and profit through fluctuations on their price. Speculators are a "hardy"
bunch simply because they are more adept at handling and maybe even sidestepping risks that
regular investors would prefer not to be involved with. Speculators take large risks, especially
with respect to anticipating future price movements, in the hope of making quick large gains.
Speculators are risk-taking investors with expertise in the market(s) in which they are trading
and will usually use highly leveraged investments such as futures and options
NON-BANKING COMPANIES
In recent years, the non-banking industry around the country has been undergoing a
rapid transformation. Non-banking company is regarded as a consumer-oriented services
industry and the companies have started realizing that their business increasingly depends on
the quality of the consumer service provided and overall satisfaction of the customer.. In
addition, the deepening of information technology has facilitated better tracking and fulfilment
of commitments, multiple delivery channels for customers, and faster resolution of issues.
Today, customers expect higher quality services from companies which, if fulfilled, could
result in significantly improved customer satisfaction, and potentially retention levels. The
non-banking industry, as is the case with other financial services industries, is facing a rapidly
changing market, new technologies, economic uncertainties, competition, and more demanding
customers; and the changing environment has presented an unprecedented set of challenges
.Unlike in the past, the companies in the non-banking sector, today are market driven and
market responsive. The top concern in the mind of every organizations head is increasing or at
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least maintaining the market share in every line of business against the competition. With the
entry of new players and multiple channels, customers have become less loyal to the companies
or organizations in this field. Bank is also treated as a major competitor of non-banking finance
industry. This makes it very important that the companies in this sector provide best possible
products and services to ensure customer satisfaction.
The foreign exchange trading in India is growing at a really good pace however it is
said that the forex market is still in the early phase in India. Nevertheless there are already
several big players in the Indian forex market. Companies like, Thomas Cook, UAE Exchange,
Western union, and Lulu Exchange etc. were in this industry. In this context it is important that
the company should provide its best to the customers to retain its position in the market and
make a good market share. . In this scenario the customer behaviour regard with the product
and services got importance. If the customer doesnt satisfied with what the company offered,
they will look into an alternative and move to the close substitute of the same product.
This project considers different aspects that used to identify the consumers buying
behaviour of those who uses the product & services of Thomas Cook, from that we can get an
idea about what all are the products and services offered by the organization and the behaviour
level of the customers using that product. Another important thing is to identify the percentage
or number of customers who is doing business with other organization. From that we can
ascertained that whether the customer is satisfied with the services offered by that organization.
A comparison between product and services of Thomas Cook and other competing
organization will help to identify the customer preferences. With the help of that result the
organization can frame or change their policies according to the needs. Customers have
different levels of buying behaviour as they have different attitudes and experiences as
perceived from the company. Customers satisfaction is affected by the importance placed by
the customers on each of the attitudes of the product and service in question. Consumers
behaviour measurement in buying the product allows an organization to understand the key
drivers that create satisfaction or dissatisfaction; and how does they really drive their behaviour
during buying their product and utilising service experience. If customers are satisfied with a
particular high quality service offering after its use, then they can be expected to engage in
repeat purchase and even try line extensions and thus market share can be improved.
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RATIONALE OF THE STUDY

It is very important that all the companies must retain a loyal base of customers. In
order to achieve this and better their market and profit positions, many organizations are
increasingly retains a loyal base of customers. In order to achieve this and better their market
and profit positions, the company should rearrange and targeting their strategies and policies
towards improving the overall satisfaction levels of their customers and building upon their
loyalty through improved service quality. The main concern of the study is to provide
information that would help the management to evaluate and re-design its current marketing
strategies in order to improve the good relation with the consumers and to attract them by
changing their mind to buy the product, which, in turn, can help them, retain their existing
customers and also attract new ones in todays competitive environment
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1.2 INDUSTRY PROFILE

Foreign Exchange Market in India:
Foreign Exchange Market in India works under the central government in India and
executes wide powers to control transactions in foreign exchange. The Foreign Exchange
Management Act, 1999 or FEMA regulates the whole foreign exchange market in India. Since
the onset of liberalization, foreign exchange markets in India have witnessed explosive growth
in trading capacity. The importance of the exchange rate of foreign exchange in India for the
Indian economy has also been far greater than ever before. While the Indian government has
clearly adopted a flexible exchange rate regime, in practice the rupee is one of most resourceful
trackers of the US dollar. The Indian foreign exchange market is made up of the buyers, sellers,
market mediators and the monetary authority of India. The main centre of foreign exchange in
India is Mumbai, the commercial capital of the country
Market Players:
Players in the Indian market include (a) Authorised Dealers, mostly banks who are
authorised to deal in foreign exchange, (b) foreign exchange brokers who act as intermediaries,
and (c) customers individuals, corporates, who need foreign exchange for their transactions.
Authorised Dealers have been divided into different categories. All scheduled commercial
banks, which include public sector banks, private sector banks and foreign banks operating in
India, belong to category I of ADs. All upgraded full-fledged money changers (FFMCs) and
select regional rural banks (RRBs) and co-operative banks belong to category II of ADs. Select
financial institutions such as EXIM Bank belong to category III of ADs. Currently, there are
86 (Category I) Ads operating in India out of which five are co-operative banks. All merchant
transactions in the foreign exchange market have to be necessarily undertaken directly through
Authorised dealers
Forex Market Types:
The forex market is an OTC (Over the Counter) market without any centralized
clearinghouse. It consists of two tiers.
The interbank or wholesale market,
Client or retail market.
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Wholesale Forex Market:

Major Forex trading in the wholesale forex markets is undertaken by banks popularly
known as interbank market. In this market, banks and non-bank financial institutions transact
with each other. They undertake trading on behalf of customers, but majority of trading is
undertaken for their own account by proprietary desks. Besides banks and non-bank financial
institutions, multinational corporations, hedge funds, pension and provident funds, insurance
companies, mutual funds etc. participate in the wholesale market.
Retail Market:
In the retail market, individuals (tourists, foreign students, patients traveling to other
countries for medical treatment) small companies, small exporters and importers operate.
Money transfer companies/remittance companies are also major players in the retail
market.
Retail traders buy/sell currency for their genuine business/personal requirements. For
Example, an exporter enters into forward contract to convert foreign currency to domestic
currency.
Fluctuations in Exchange Rate
A market-based exchange rate will change whenever the values of either of the two
component currencies change. A currency will tend to become more valuable whenever
demand for it is greater than the available supply. It will become less valuable whenever
demand is less than available less than available supply. This does not mean people no longer
want money; it just means they prefer holding their wealth in some other form, possibly another
currency
Increased demand for a currency can be due to either an increased transaction demand
for money or an increase speculative demand for money. The transaction demand is highly
correlated to a countrys level of business activity, gross domestic product (GDP), and
employment levels. The more people that are unemployed, the less the public as a whole will
spend on goods and services. Central banks typically have little difficulty adjusting the
available money supply to accommodate changes in the demand for money due to money
transactions.
Speculative demand is much harder for central bank to accommodate, which they
influence by adjusting interest rate. A speculator may by a currency is the return (that is the
interest rate) is high enough. In general, the higher a countrys interest rates, the greater will be
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the demand for that currency. It has been argued that such a speculation can undermine real
economic growth, in particular since large currency speculators my deliberately create
downward pressure on a currency buy shorting in order to force that central bank to buy their
own currency to keep it stable. For carrier companies shipping goods from one nation to
another, exchange rates can often impact the severely. Therefore, most carriers have a CAF
charge to account for these fluctuations.
Authorized Dealers:
As per section 2 of foreign Exchange Regulation act 1947, Authorized Dealer means a
person, for the time being authorized under section 3 to deal in Foreign Exchange. In other
words Authorized Dealer means a Bank, authorized by Central Bank to Deal in foreign
Exchange under the FER Act 1947. There are some persons or firms, authorized by Central
Bank to deal in Foreign Exchange with limited scope, are called Authorized Money Changers.
Functions of Authorized Dealers:
Authorized Dealer can handle all kinds of Foreign Exchange transaction as per FER Act
1947 under the instruction of Central Bank. Following are the main function of an Authorized
Dealer
Exchange of Foreign Currencies.
To make arrangement with Foreign Correspondent.
Buying and Selling foreign Currencies
Handling of Inward and Outward Remittance
Opening of L/C and Settlement of Payment
Investment in Foreign Trade
Opening & maintenance of Accounts with Foreign Banks under intimation of

Bangladesh Bank
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Foreign Exchange Management Act 1990 (FEMA)

The Foreign Exchange Management Act, 1999 (FEMA) is an Act of the Parliament of
India "to consolidate and amend the law relating to foreign exchange with the objective of
facilitating external trade and payments and for promoting the orderly development and
maintenance of foreign exchange market in India". It was passed in the winter session of
Parliament in 1999, replacing the Foreign Exchange Regulation Act (FERA). This act makes
offences related to foreign exchange civil offenses. It extends to the whole of India replacing
FERA, which had become incompatible with the pro-liberalization policies of the Government
of India. It enabled a new foreign exchange management regime consistent with the emerging
framework of the World Trade Organization (WTO). It also paved the way for the introduction
of the Prevention of Money Laundering Act, 2002 which came into effect from 1 July 2005.
Switch from FERA
FERA, in place since 1974, did not succeed in restricting activities such as the
expansion of (TNCs). The concessions made to FERA in 1991-1993 showed that FERA was
on the verge of becoming redundant. After the amendment of FERA in 1993, it was decided
that the act would become the FEMA. This was done in order to relax the controls on foreign
exchange in India, as a result of. FEMA served to make transactions for external trade and
easier transactions involving current account for external trade no longer required RBIs
permission. The deals in Foreign Exchange were to be managed instead of regulated. The
switch to FEMA shows the change on the part of the government in terms of for the capital.
The buying and selling of foreign currency and other debt instruments by businesses,
individuals and governments happens in the foreign exchange market. Apart from being very
competitive, this market is also the largest and most liquid market in the world as well as in
India. It constantly undergoes changes and innovations, which can either be beneficial to a
country or expose them to greater risks. The management of foreign exchange market becomes
necessary in order to mitigate and avoid the risks. Central banks would work towards an orderly
functioning of the transactions which can also develop their foreign exchange market. Foreign
Exchange Market Whether under FERA or FEMAs control, the need for the management of
foreign exchange is important. It is necessary to keep adequate amount of foreign exchange
from Import Substitution to Export Promotion.
Main Features of FEMA
18
Activities such as payments made to any person outside India or receipts from them,
along with the deals in foreign exchange and foreign security is restricted. It is FEMA
that gives the central government the power to impose the restrictions.
Without general or specific permission of the MA restricts the transactions involving

foreign exchange or foreign security and payments from outside the country to India
the transactions should be made only through an authorized person.
Deals in foreign exchange under the current account by an authorized person can be
restricted by the Central Government, based on public interest generally.
Although selling or drawing of foreign exchange is done through an authorized person,

the RBI is empowered by this Act to subject the capital account transactions to a number
of restrictions.
Residents of India will be permitted to carry out transactions in foreign exchange,

foreign security or to own or hold immovable property abroad if the currency, security
or property was owned or acquired when he/she was living outside India, or when it
was inherited by him/her from someone living outside India.
Restrictions are imposed on people living in India who carry out restrictions in foreign
exchange, foreign security or who own or hold immovable property abroad.
Exporters are needed to furnish there expert details to RBI. To ensure that the
transactions are carried out properly, RBI may ask the exporters to comply to its
necessary requirements.
Transactions which are prohibited

1. Remittance out of lottery winnings.
2. Remittance of income from racing/riding etc. or any other hobby.
3. Remittance for purchase of lottery tickets banned /proscribed magazines, football pools,
sweepstakes, etc.
4. Payment of commission on exports made towards equity investment in Joint Ventures
/ Wholly Owned Subsidiaries abroad of Indian companies.
5. Remittance of dividend by any company to which the requirement of dividend
balancing is applicable.
19
6. Payment of commission on exports under Rupee State Credit Route, except commission
up to 10% of invoice value of exports of tea and tobacco.
7. Payment related to "Call Back Services" of telephones.
8. Remittance of interest income on funds held in Non-Resident Special Rupee (Account)
Scheme.
As per the conditions of license, Thomas cook are permitted to release foreign exchange
only for non traded related current account transactions specified in the license to Resident
Indian Citizens. The various purposes for which they can release or remit foreign exchange are
as under:1) Private visit
2) Business visit
3) Education
4) Medical treatment
5) Emigration
6) Employment
7) Film shooting
8) Remittance by tour operators/ Travel agents to its overseas agents/ Principals/ Hotels
9) Fee for participation in global conference and specialized training
10) Remittance for participation in international events / Competitions
11) Disbursement of crew wages
12) Remittance to overseas universities under education tie ups
13) Remittance towards fee for examinations held in India and abroad and additional score
sheets for GRE, TOEFL etc.
14) Skills or credential assessment fees for intending migrants
15) Visa fees
16) Processing fees for registration of documents by overseas governments
20
17) Registration / Subscription / membership fees to international organizations

1. Private visits :
Private visit are the visits where people are going to abroad for their private purposes.
For private visits, he can carry only USD 10000. The minimum amount that person can carry
as cash is only 3000 USD and rest as DD and TT. The beneficiary and the remitter will be the
individuals. The documents for the private visit are: - Passport, Address proof, Air ticket, Visa,
and application.
2. Business visits:
Business visits are the visits where people are going to abroad for their business purposes.
The minimum amount he can carry only USD 25000. The remitter will be the legal entities and
the beneficiary will be the individual sponsored by legal entities. The documents for the
business visits are: - KYC documents, Passport, Air ticket, ID & Address proof.
3. Overseas Education:
Students going abroad for education will need to make payments towards fee, hostel
charges, cost of study materials etc. from time to time. Since the amount involved will be very
large they will not be drawing the entire exchange in one go but in instalments or prefer
periodical remittances. Most of them will be availing bank finances or will depend upon their
parents and close relatives for finance and receiving funds from them time to time. By virtue
of their stay abroad time completion of their education, most of them will become NRIs and
not naturally be entitled for remittance from India. However, for the purpose of such
remittances, they have been treated as resident Indians. At the time of their first departure from
India they have to nominate somebody in India who will be remitting them funds from time to
time.
Eligibility: - USD 100000 per annum
Documents Required: A2 form duly filled and signed by the customer
Application form
FEMA undertaking duly filled and signed by the customer
21
Photocopy of the customer passport / student visa copy

Admission letter from the overseas college / university / institute
4. Medical Treatment Abroad :
Foreign exchange for medical treatment can be taken out of the country either in part or
in full at the time of leaving India. It US 100000 or the estimate given by the overseas doctor
or hospital whichever is higher.
Application form
Letter from an Indian doctor or hospital regarding the present illness or letter from the
overseas hospital or doctor giving an estimate of expenditure
Photocopy of the customer
5.
Emigration:
Person who is planning to immigrate to another country may require to send money abroad
for applying immigration visa and also there will be some customers who might be having visa
and will to take at the time of immigration. These types f transactions will come under the
above set category. In this type of transaction, suppose a family is immigrating each family
members can take one lakh US dollar equivalent amount.
Application form
22
Photocopy of the customer passport or immigration visa copy

6. Employment processing, Assessment fees for overseas job application
Customers may require sending money favouring some institutions for getting a job or
for applying to a particular job vacancy. Also after getting the employment at the time of
travelling he may require to take some amount to be submitted to the employer before joining.
Application form
Photocopy of the customer passport or Employment visa copy
Copy of letter detailing the fees structure
7. Film shooting:
Indian film producing companies or producers go abroad for shooting of certain scenes at
overseas location like Kal Ho Na Ho, sing is king etc. they take an entire team of actors or
actresses and the crew members who will be associated with film producing etc. most of them
will be travelling in a group and many a time it will be to different locations. Beside the daily
living expense for the entre team, they also hire hotels / overseas studios / shooting sites /
services of different ground staff abroad etc. the amount of exchange required will be
substantial both in currency notes or TCs as well as remittance to various overseas hotels or
agents etc. besides the allowances being provided by the company, each individual going
abroad will also carry something of his / her own for shopping.
For capturing this segment of the market, they need to approach film producers or their
companies thereof. Sometimes, it will be a recurring business or remittances. The amount of
forex that the company can release for such cases is not specified and will always be the actual
amount supported by invoices or bills etc.
Eligibility: - No specific limits
23

Application form giving details of the stars or crew who going being sent abroad
Detailed letter regarding the nature of expenses
8. Remittance by tour operators / travel agents to overseas agents / hotels :
Resident Indian who are going abroad are permitted to remit through an AD cost of Hotel
accommodation to overseas hotels. Such remittance should be out of the amount of exchange
drawn for travel abroad. Travel agents or tour operators in India are permitted to make
remittances on behalf of their travellers to overseas hotels / tour operators with whom they have
made tie up arrangements for providing various conveniences of travel such as Hotel
accommodation / tour arrangements etc.
Thee travel agent / tour operator are also permitted to open foreign currency accounts with
banks in India for deposit of forex collections towards overseas hotel accommodation / tour
arrangements and for eventual remittance thereof.
a) The travel agent / tour operators enters into an arrangement or tie up arrangement with the
overseas Hotel / tour operator for providing hotel booking / tour arrangements to the travellers
whom he may be sending abroad from time to time
b) They have to tie up separately with each overseas hotel / tour service provider
c) In case the travel agent / tour operator desires to make remittance through us, he has to
surrender the forex collected for forward remittance to the overseas party
Eligibility: - AS per the invoice
Documents required: -
A2 form duly filled and signed by the customer

Application form or Declaration on the letter head
24

Tie up letter with hotels / agents abroad such as agreement to fro mail etc.
Original invoice copy received from the agent / hotel / tour operator
9. Fee for participating in Global Conferences and Specialized Training
This particular category itself is self-explanatory like some companies will send their
executive to abroad for attending conferences or some hospitals may sending doctors to abroad
for conducting training or attending specialized trainings.
Eligibility: - As per the letter
Documents required: A2 form duly filled and signed by the customer
Application form
Photocopy of the customer passport
Photocopy of letter detailing the fees structure
10. Remittance for participation in International events or Competitions
Corporate or firms who are in exports participate in international trade exhibitions for
which purpose they provide training to their personal abroad to prepare their staff to participate
in certain international events / competitions as winning in such events or competitions will
add value to their organization etc.
Application on the letter head of the company / firm / institutions / organization giving
details of the events or competitions venue of such events etc.
25
Details of the persons who they want to depute abroad

Letter detailing the fees structure
Photocopy of customer passport
11. Disbursement of Crew wages
Overseas shipping crew members when they land in India are allowed to draw their salaries
/ wages from banks / AD II with whom the employer has a tie up arrangement for disbursement
of their wages. Their wages in the desire foreign exchanged are to be disbursed to each of them
preferably at the sea port or at our office; the wages is disbursed in FC and not in INR
Wage has to be distributed as per the statement and on personal identification and their
valid passport.
Eligibility: - Up to the amount received in the NOSTRO
Application form
Photocopy of the captain of the ship
List if crew with wages
12. Remittance under Educational Tie up arrangements with universities abroad
Universities in India have tied up with various universities for exchange of their faculty
members, organizing educational seminars etc. for e.g.: The Rajagiri college must have
definitely tied up with a large number of overseas universities of exchange of faculty members
, training of Indian faculty members in overseas universities etc.
There is no specific limit and the amount of remittance will be actually supported by
invoices / bills and a reasonable amount of advance remittance is also permitted.
Documents required: -
26
A2 form duly filled and signed by the customer

Application form
13. Remittance towards fees for examination held in India and Abroad and additional
score sheets for GRE, TOELF etc.
There are fees for enrolling international mostly post graduate professional course like MS,
MBA
Etc. The amount of remittance for such exam will be negligible and hence not munch
documentation is required. Those who to enroll for such examination will be required to send
the applications from along with a foreign currency demand draft.
Document required: A2 form duly filled and signed by the customer
Application form
FEMA undertaking duly filled and signed by the passport copy of the customer
14. Skills or Credential Assessment fees for intending Migrants
Before granting an immigration visa, most of the countries want the indenting migrant
to undergo certain skill/ credential test for, they want only people with some skill and who can
be productive in their respective countries. These are the fee payable by indenting migrant to
overseas consultancies / Embassies in India/ Abroad. The fees varies from consulate / embassy
and will be indicated in the respective countrys application form and needs to be paid by way
of a foreign currency demand draft favouring the consulate embassy.
Eligibility: - AS per the invoice
27
Application form
Photocopy of letter dealing the fees structure
15. Visa Fees
These are the fees payable to Embassies or consulates by those who intend to go abroad.
The fee is payable by means of a foreign currency demand draft drawn in favor of the embassy
/ consulate
Eligibility: - AS per the letter
Application form
16. Processing fees for registration of documents as required by the Portuguese or other
Government
Most of such remittance will be relating to registration of documents such as property
acquisition power of attorney etc. if someone is acquiring an immovable property he need to
register the same with the local authorities and such fee is permitted to be remitter through
Thomas Cook. Mostly such remittance are by individuals though there will be some corporate
or firms which also remit the funds. The amount will have to be remitted by way of a DD drawn
in favour of the overseas registering authority or Government. The remitter is required to
produce some document relating to the fee payable such as letter from the overseas government
or a internet downloaded documentary evidence etc.
Eligibility: - AS per the application letter
28
Application form
Photocopy of letter dealing the fees structure
16. Registration / Subscription / membership fees to international organizations
As per the conditions of AD II license, the company is permitted to release exchange
towards Registration / Subscription / membership fees to international organizations. The
subscription or membership fee could be both a onetime lump sum payments towards renewal
thereof and some evidence related to such remittances should also be kept on record. The
quantum of exchange for such remittances is not fixed nor the periodicity thereof. Such
remittances are also based on self-declaration basis but have to be the actual amount duly
supported by some documentary evidence such as a letter from the international organization /
brochure / leaflet or even internet downloaded information will do. All such remittance should
be in favour of an international organization and not in the name of an individual or a company.
Eligibility: - As per application mostly such remittances will be by corporate / firms and also
professionals like CAs, Architect etc.
Photocopy of letter dealing the fees structure.
29
1.3 COMPANY PROFILE

Thomas Cook (India) Ltd. is the largest integrated Travel and Travel related Financial
Services Company in the country offering a broad spectrum of services that include Foreign
Exchange, Corporate Travel, Leisure Travel, and Insurance. The Company launched its Indian
operations in 1881 and is celebrating its 127 years of world-class service in India. Thomas
Cook (India) operates in the following areas of business, namely: Leisure Travel, Corporate
Travel Management, MICE, Foreign Exchange, SWIFT Network, Travel Insurance, Credit
Cards, Pre-Paid Cards, Life Insurance and E-Business.
Post March 31st 2008, Thomas Cook (India) Limited (TCIL) is a part of Thomas Cook
Group plc UK (TCG). On March 7th 2008, TCG announced its decision to acquire TCIL from
Dubai Investment Group. Thomas Cook Group plc is one of the largest travel groups in the
world with a market capitalization of approximately US$6 Billion.
In June 2006, Thomas Cook (India) acquired LKP Forex Limited and Travel
Corporation (India) Pvt. Ltd. (TCI).
TCIL presently operates in over 61 cities across almost 166 locations in the country.
The company has overseas operations in Sri Lanka which is a branch of TCIL and Mauritius
which is a subsidiary of Thomas Cook (India). The Company employs over 2,500 resources
and is listed on both the Bombay Stock Exchange as well as the National Stock Exchange.
Thomas Cook (India), over the years has received several prestigious awards such as
the Golden Peacock Award for excellence in Corporate Governance and the Pacific Asia Travel
Association (PATA) Golden Award for Best Travel. Recently, the Company won the Best Tour
Operator at the CNBC Awaaz Travel Awards 2008 and was also accredited the P1 rating which
is the highest financial rating given by Crisil.
History of Thomas Cook
In 1841, young Thomas Cook arranged an 11-mile train journey for a motley group of
passengers from Leicester to Loughborough. And it marked the beginning of a chapter in
history. He went on to introduce a railway tour of Europe. But it wasn't until the early 1860s
30
that he began the travel firm, Thomas Cook & Son, which included tours of the USA. The
Company also started operations for military transport and postal services for England and
Egypt during the 1880s. The world got around and by the early 1900s, the who's who of the era
- kings, politicians, bishops and professors - patronised Thomas Cook's travel itinerary.
As the years passed by, the Company introduced the world to a whole new concept of
leisure and business travel. Driving innovation in the business, it connected continents and
presented the people an economic and state mode of travel across them.
In 1881, Thomas Cook started its India operations, with its first office being set up in
Kolkata. As it expanded its horizons across the subcontinent, the Company came to be known
as Thomas Cook Overseas Ltd. And on 21st October 1978, it was christened Thomas Cook
(India) Ltd, only to make its first public issue in February 1983. In the year 2000, the Group
commenced its operations in Mauritius and also acquired the Sri Lanka business from Thomas
Cook Overseas Ltd, UK.
Thomas Cook (India), over the years has received several prestigious awards such as
the Golden Peacock Award for excellence in Corporate Governance and the Pacific Asia Travel
Association (PATA) Golden Award for Best Travel. Recently, the Company also won the Best
MICE Operator Award and was also accredited the P1 rating which is the highest financial
rating given by Crisil.
Apart from this Thomas Cook has won the following awards:
Best Travel Agency Award 2004 given by TTG Asia - Part of Pacific Asia Travel
Association (PATA) for the 5th year in succession.
The Golden Peacock Award for Corporate Governance, for the second time in a row.
The Criteria for this award are transparency, excellence in conducting business, various
levels of management, social and environmental responsibility, ethical business
practice and Consistent creation of value for all the stakeholders.
The National Tourism Award for 2001-2002 & 2002-2003, winning the second rank in
category 1 for the company that achieved the highest foreign exchange earnings from
Ministry of Tourism.
31
National Tourism Award - Best MICE Operator 2006-07
National Tourism Award - 3rd prize Inbound Operator 2006-07
The Association of Business Communications of India (ABCI) where the company won
the first prize for its website - www.thomascook.co.in
Awarded "The Best Outbound & Inbound Tour Operator of the Year" award at the
Hospitality India Awards 2006 hosted by Hospitality India.
Recipient of the prestigious Government of India Ministry of Tourism award for

"Excellence in Conference Tourism"
Best Travel Agency - India for the year 2008 by TTG Asia - Part of Pacific Asia Travel
Association (PATA)
Best Tour Operator by CNBC Awaaz in 2008
Best Outbound Tour Operator in the 4th Hospitality India & Explore the world Annual
International Awards - 2008
32
CHAPTER: 2
REVIEW OF
LITERATURE
33
INRODUCTION
Consumer is the king and it is the consumer determines what a business is therefore a sound
marketing program start with a careful analysis of the habits, attitudes, motives and need of
consumers. In particular a marketer should find answer to the following questions:
What are the products they buy?
Why they buy them?
How they buy them?
When they buy them?
Where they them?
How often they buy them?
In order to solve these questions a marketer should possess sound knowledge as well as
better understanding about the consumer buying behaviour. Consumer behaviour is affected by
many uncontrollable factors. Just think, what influences us before we buy a product or service?
Our friends. Our upbringing, our culture, the media, a role model or influences from certain
groups?
Culture is one of the factor that influences behaviour. Simply culture is defined as our
attitudes and beliefs. But how are these attitudes and beliefs developed? As an individual
growing up, a child is influenced by their parents, brothers, sisters and other family members
who may teach them what is wrong or right. They learn about their religion and culture, which
helps them develop those opinions, and attitudes and beliefs (AIO). These factors will influence
their purchase behaviour however other factors like group of friends, or people they look up to
may influence their choices of purchasing a particular product or service. Reference groups are
particular groups of people some people may look up towards to that have an impact on
consumer behaviour. So they can be simply a band like Spice Girls or your immediate family
members. Opinion leaders are those people that you look up to because your respect their views
and judgements and these views may influence consumer decisions. So it may be a friend who
works with the IT trade who may influence your decision in what computer to buy. The
economic environment also has an impact on consumer behaviour; do consumers have a secure
job and regular income to spend on goods? Marketing and advertising obviously influence
consumers trying to evoke them to purchase a particular product or service.
34
Peoples social factor will also impact their behaviour. What is the role within their society?
Are they Actors, Doctors, Office workers and mothers and fathers also? Clearly being parents
affects your big habits depending on the age of the children, the type of job may mean you
need to purchase all clothes, the income which is earned has an impact. The lifestyle of
someone who earns RS 10000 would clearly be different by someone who earns RS 25000.
Also characters have an impact on the preference on the buying decision. Whether the person
is extrovert (outgoing and spends on entertainment) Introvert (keeps to themselves and
purchases via online or mail order again has an impact on the mode of the purchases made.
35
CONSUMER BUYING BEHAVIOUR

Mr. Amit Mukherjee (2007). In his book Discussed various factors affecting
consumer behaviour for buying such as demographic and social influences (family and
household), group influence, impact of advertising and internal influences (learning,
perception, attitude etc.). The book elucidated the topics such as types of consumer decisions,
purchase involvement and product involvement. The book also emphasized on information
search process and various ways for providing relevant information to the consumers are
recommended in this study. The book also emphasized on individual judgment and proposed
that the ability of an individual to distinguish between similar stimuli is called sensory
discrimination which could involve many variables related to individual preferences.
Mr. Schiffman Lenon G., & Kanuk Leslie Lazar (2006). In his book The authors
suggested consumer behaviour as individual differs as from group. The family decision for a
purchase decision is entirely different from individual decision making. The authors discussed
various variables that affect consumer purchase decision. The book focused on family life cycle
and various needs of consumer during different life stages. The family decision making process
as a group decision making is elaborated and it is recommended to segment the market
according to family need hierarchy
Loudon David L. & Bitta Albert J. Della., (2004). The authors proposed that
consumer behaviour studies play an important role in deciding marketing segments and
marketing strategies. The authors recommended that consumer is often studied because certain
discussions are significantly affected by their behaviour or expected actions. For this reason
such consumer behaviour is said to be an applied discipline. Such applications can exist at two
levels of analysis. Market segmentation, consumer decision making and buying behaviour is
considered as core marketing activities in designing effective marketing strategies
Schiffman Lenon G., & Kanuk Leslie Lazar (2006). The book highlights dynamic
business environment is turbulent as never before and the service industry as promising as
never before. In this era of intense competition companies understand the customer is the king
in the market and success depends a lot on the efficiency of the managers in delivering the
promised product or services. The responsibility lies on the organisations to develop a culture,
ethics, responsibility, value and quality services should be offered to achieve higher level of
customer satisfaction. Dynamic consumer behaviour is required to analyse various factors
affecting consumer purchase decision directly or indirectly.
36
Bitta and Della (2008). The authors proposed that consumer behaviour studies play
an important role in deciding marketing segments and marketing strategies. The authors
recommended that consumer is often studied because certain discussions are significantly
affected by their behaviour or expected actions. For this reason such consumer behaviour is
said to be an applied discipline. Such applications can exist at two levels of analysis. Market
segmentation, consumer decision making and buying behaviour is considered as core
marketing activities in designing effective marketing strategies.
The micro perspective involves understanding consumers for the purpose of helping a firm or
organisation to accomplish its objectives. On the other hand macro or societal perspective
consumers collectively influence economic and social conditions within an entire society. The
authors discussed factors affecting consumer behaviour at micro and macro level for making a
purchase decision
Batra, S, K & Kazmi (2008). The book has described consumer decision making
process, buyers black box and importance of consumer behaviour studies for marketers in
order to understand what satisfy the ultimate consumer. The book described vital characteristics
of Indian consumer and competitive advantages in Indian context for the marketers. The
consumer decision process, buying roles and consumer black box are discussed in detail. The
various steps evolving consumer decision making are linked with the life stages. Young buyers,
women and children considered as uprising consumers groups as a part of competitive market
situations
Consumer buying behaviour is considered to be an inseparable part of marketing and
Kotler and Keller (2011) state that consumer buying behaviour is the study of the ways of
buying and disposing of goods, services, ideas or experiences by the individuals, groups, and
organisations in order to satisfy their needs and wants.
Buying behaviour has been defined as a process, which through inputs and their use
thought process and actions leads to satisfaction of needs and wants (Enis, 1974, p.228).
Consumer buying behaviour has numerous factors as part of it which are believed to have some
level of effect on the purchasing decisions of the customers.
Alternatively, consumer buying behaviour refers to buying behaviour of consumers,
both the individuals and households, who buy goods and services for personal consumption
(Kumar, 2010, p.218). From marketers point of view issues specific aspects of the product that
need to be studied include the reasons behind the consumers making purchases, specific factors
37
influencing the patterns of consumer purchases, analysis of changing factors within the society
and others.
According to Blackwell et al (2006) consumer buying behaviour is itself is a complex,
dynamic issue which cannot be defined easily and commonly. Therefore, the concept of
consumer buying behaviour gas been defined in different ways by different researchers.
The definition formed by Solomon et al (1995) describes consumer buying behaviour
as a process of choosing, purchasing, using and disposing of products or services by the
individuals and groups in order to satisfy their needs and wants. Similar definition of consumer
buying behaviour is offered by Schiffman and Kanuk (2000) in which they describe it as
behaviour that consumers express when they select and purchase the products or services using
their available resources in order to satisfy their needs and desires.
Consumer buying behaviour is defined by Stallworth (2008) as a set of activities which
involves the purchase and use of goods and services which resulted from the customers
emotional and mental needs and behavioural responses. It is further stated by Gabbot and Hogg
(1998) that process may contain different activities and stages.
Although the definition given above are various, they all lead to common view that
consumer buying behaviour is a process of selecting, purchasing and disposing of goods and
services according to the needs and wants of the consumers. However, there is a general
consensus among the researchers and academics that this process is subject to continual change
over time as the purchase characteristics of the customers change due to their physical and
psychological needs.
In the meantime, Kotler and Keller (2011) highlight the importance of understanding
consumer buying behaviour and the ways how the customers choose their products and services
can be extremely important for manufacturers as well as service providers as this provides them
with competitive advantage over its competitors in several aspect. For example, they may use
the knowledge obtained through studying the consumer buying behaviour to set their strategies
towards offering the right products and services to the right audience of customers reflecting
their needs and wants effectively.
Another valuable argument is provided by Egen (2007) on the importance of
understanding the consumer behaviour. According to the author, better awareness of consumer
buying behaviour is a positive contribution to the countrys economic state. The author further
38
argues that the quality of goods and services are exceptionally good in countries where buying
behaviour of consumers is well understood. This in turn increased the competitiveness of the
product and services in international market increasing the export potential of the country.
Meanwhile, high quality of domestic products and services leads to sophisticated domestic
consumers base (Blackwell et al, 2006).
In addition to efforts of better understanding the consumers buying behaviour,
companies also engage in advertising and promotion activities to influence the consumers
purchasing decision. However, when engaging in such types of activities, they need to consider
other external factors such as the overall economic conditions of the country, politics,
technology and ethnic culture all of which are beyond the control of both the company and the
consumer Lancester et al (2002)
To sum up all the arguments stated above, it is clear that better understanding the
consumer buying behaviour through studying and identifying their needs leads to huge long
term benefits to the businesses. However, as stated by Kotler et al (2005) it is essential to
mention that despite the great efforts to learn and understand the buying behaviour of the
consumers, it is very difficult to identify the exact reasons why the consumers purchase and
prefers one product or services over another one. This is because consumers sometimes make
purchasing decisions based on their emotional beliefs which they even themselves are not well
aware.
The consumer buying behaviour is defined as a process in which the individuals search,
purchase, use and finally dispose of the goods and services in accordance to their needs, wants
and satisfaction. In other words, the consumer buying behaviour studies the actions and
decisions of the people that motivate them in involve in buying and using the products, services
that a company offers. [John A Howard, 1989]1
The American Marketing Association (AMA) defines consumer behaviour as The
dynamic interaction of cognition, behaviour & environmental events by which human beings
conduct the exchange aspects of their lives.
Consumer buying behaviour is the behaviour displayed by the consumer during the
acquisition, consumption and disposition of products, services, time and ideas by decision
making units. [Thomson India Edition, 6th Edition, 2006]2
39
CONSUMER DECISION MAKING PROCESS

The consumer decision making is the complex process with involves all the stages of
the problems recognition to post purchase activities. All the consumers have their own needs
in their daily life and this needs make them make different decisions. These decisions can be
complex depending on the consumers opinion about a particular product evolving, comparing,
selecting and purchasing among the different types of product. Therefore, understanding and
realising the core issue of the process of consumer decision making and utilise the theories in
practice is becoming a common view point by many companies and people.
There is a common consensus among many researchers and academics that consumer
purchasing theory involves a number of different stages. Depending on the different factors
and findings, numerous researchers and academics develop their own theories and models over
the past years. However, according to Tyagi and Kumar (2004), although these theories vary
slightly from each other, they all lead to almost the same theory about these theories vary
slightly from each other, they all lead to almost the same theory about the consumer purchasing
the theory which states that it involves the stages of search and purchase of product or service
and the process of evaluation the product or services in the post-purchase product.
Five Stage Model initially proposed by Cox et al (1983) is considered to be one of the
most common models of consumer decision making and it involves five various stages. These
stages are: recognition of need or problem, information search, comparing the alternatives,
purchase and post-purchase evaluation. This simple model clearly illustrates and explains how
the consumers make a purchasing decision.
Furthermore, Blackwell et al (2006) highlights the argument why this model is more precise
and clear compared to the other similar models is that because this models core focus is on the
motivational factors which helps the user to understand the reasons behind the purchasing
decision easier.
1. Problem/Need recognition
Recognition of need or a problem is the first stage of the model. According to Bruner
(1993) recognition of a problem arises in the situation where an individual realises the
difference between the actual state of affairs and desired state of affairs. Neal and Quester
(2006) further state that recognition of a problem or need depend on different situations
and circumstances such as personal or professional and this recognition results in creation
40
of a purchasing idea. For instance, consumer may recognise the need to buy a laptop when
there a need to carry it use it in different places which is convenient compared to a desktop
computer
According to Tyagi (2004) need recognition at various levels often occurs during the
process of encountering with the product ate the various circumstances. In other words,
Tyagi (2004) convincingly argues that an individual might not be aware of the need for a
specific product until he or she encounters with the product as a result of engaging in
Window-shopping, media advertisements, or in a range of other circumstances.
The human need has no limit therefore, the problem recognition is a repetitive in nature.
According to Maslow theory, human being is always dissatisfied, when an individuals one
need is satisfied another one will come out and this trends continues repetitively.
2. Information Search
The next stage of the model is information search. Once the need is recognised, the
consumer is likely to search more product-related information before directly making a
purchase decision. However, different individuals are involved in search process differently
depending on their knowledge about the product, their previous experience or purchase or
on some external information such as feedback from others.
Search of information process itself can be divided into two parts as stated by Oliver
(2011): the internal search and external search. In internal search, the consumers compare
the alternatives from their own experiences and memories depending on their own past
experiences and knowledge. For example, searching for fast food can be an example for
internal search because customers often use their knowledge and tastes to choose the right
product they need rather than asking someone for an advice. On the other hand, external
search ends to be for biggest purchases such as home appliances or gadgets. For instance,
consumers who wish to buy new furniture or a mobile phone tend to ask friends opinion
and advices or search in the magazines and media before making a purchasing decision.
Winer (2009) argues that with the enhancing role of internet in professional and
personal lives of people, increasing numbers of individuals are turning to various resources
in internet when searching for information about the product categories or specific brands.
The author specifically highlights the role of online user reviews and forums in terms of
41
their significant impact upon information search stage of consumer decision making
process among internet users.
Colleagues, peers, friends, and family members are highlighted as another important
source of information by Kahle and Close (2006). Moreover, according to Kahle and Close
(2006) the nature of influence of peers, friends and family members upon information
search and consumer decision making process in general depends upon a range of factors
such as the nature of relationships, the level of personal influence, the extent of opinion
leadership associated with specific inviduals etc.,
3. Evaluation and alternatives
After gathering enough information at the first stage the consumer gets into comparing
and evaluating that information in order to make the right choice. In this stage the consumer
analyses all the information obtained through the search and considers various alternative
products and services compares them according to the needs and wants. Moreover, another
various aspects of the product such as size, quality, brand and price are considered at this
stage. Therefore, this stage is considered to be the most important stage during the whole
consumer decision making process.
Furthermore, according to Ha et al (2010), the process of evaluation of alternatives can
sometimes be difficult, time consuming and full of pressure for a consumer. This is because
it is quite hard to find an ideal product or service that satisfies the need of the customer as
there are numerous factors that hinder the consumer purchasing decision making process.
For instance, when it comes to the online hotel reservation or furniture purchasing
evaluation process, it can be quite complex. Several factors and aspects needs to be
considered before making a purchasing decision. Factors such as age, culture, taste and
budget have all the impact on the evaluation process by the consumer. For example, when
purchasing a furniture, the young people consider the factors such as convenience and price
whereas the old people are likely to consider the quality and design.
Moreover, celebrity endorsement is seen as another factor with great potential impact
on evaluation of alternatives of celebrity endorsements with perceived impact on evaluation
of alternative stages of consumer decision making process. Cant et al (2010) explain the
effectiveness of celebrity endorsements with perceived greatness people associate with
their idols and the willingness and desire to become like their idols.
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4. Purchase Decision
Once the information search and evaluation process is over, the consumer makes the
purchasing decision and this stage is considered to be the most important stage throughout
the whole process. In this stage, the consumer makes decision to make a final purchase as
he or she has already reviewed all the alternatives and came to final decision point.
Purchased further can be classified into three different types: planned purchase, partially
purchase and impulse purchase (Kacen, 2002).
Kacens view is further supported by Hoyer and Macinnis (2008) stating that there are
a number of factors that can affect the purchasing process. For example, the desired product
may not be available at the stock. In the case the purchase process is delayed and consumer
may consider buying the product through online stores rather than visiting traditional
physical stores.
According to Wiedmann et al. (2007) department store sales assistants play an integral
role in terms of impacting consumer purchase decision in a positive way from a business
point of view. At the same time Wiedmann et al. (2007) warn that this impact must not be
done in a pushy manner, in which case it can prove to be counter-productive.
5. Post- Purchase Evaluation
The final stage in the consumer decision making process is post-purchase evaluation
stage. Many companies tend to ignore this stage as this takes place after the transaction has
been done. However, this stage can be the most important one as it directly affects the
future decision making processes by the consumer for the same product. Therefore, this
stage reflects the consumers experience of purchasing a product or services. This view is
further supported by Ofir (2005) mentioning that the consumer decision making process is
a repetitive action and a good experience is vital in reducing the uncertainty when the
decision to purchase the same product or service is considered the next time.
The opinion of peers, friends and family regarding the purchases made is specified as
one of the most important factors affecting the outcome of post-purchase evaluation by
Perrey and Spillecke (2011). This point is further expanded by Trehan and Trehan (2011),
according to whom peer opinions regarding product evaluations tend to impact customer
level of satisfaction regardless of their level of objectivity.
43
Brink and Berndt (2009) also highlights the importance of the post-purchase evaluation
stage. According to the authors, the consumer may either get satisfaction or dissatisfaction
depending on the evaluation of the purchase and comparison of their own expectations. The
outcome of the experience of the customer and it this experience is believed to have a direct
impact on the next decision of the consumer to purchase the same product from the same
seller.
Simply, if the consumer is satisfies with the purchase it is likely that the purchase may
be repeated while if they have a negative experience from the purchase it is likely that the
consumer may make the decision to buy the same product from the same seller or even may
not buy the product at all.
TYPES OF CONSUMER PURCHASE BEHAVIOUR
Consumers are faced with purchase decisions nearly every day. But not all decisions are
treated the same. Some decisions are more complex than others and thus require more effort
by the consumer. Other decision are fairly routine and require little effort. In general,
consumers face four types of purchase decisions: [3]
a) Minor New Purchase - these purchase represent something new to a consumer but in
the consumers mind is not a very important purchase in terms of need, money or other
reasons (e.g., status within a group).
b) Minor Re-Purchase - these are the most routine of all purchases and often the
consumers returns to purchase the same product without giving much thought to other
product options (i.e., consumer is brand loyalty).
c) Major New Purchase - these purchase are the most difficult of all purchases because
the product being purchased is important to the consumer but the consumer has little
or no previous experience making these decisions. The consumers lack of confidence
in making this type of decision often (but not always) requires the consumer to engage
in an extensive decision making process.
d) Major Re-Purchase - these purchase decisions are also important to the consumer but
the consumer feels confident in making these decisions since they have previous
experience purchasing the product.
44
For marketers it is important to understand how consumers treat the purchase decisions
they face. If the company is targeting consumers who feel a purchase decision is difficult (i.e.,
Major New Purchase), their marketing strategy may vary greatly from a company targeting
customers who view the purchase decision as routine. In fact, the same company may face both
situation at the same time; for some the product is new, while other customers see the purchase
as routine. The implication of the buying behaviour for marketers is that different buying
situations require different marketing efforts.
DIFFERENT TYPES OF BUYING BEHAVIOUR
There are four typical types of buying behaviour based on the type of products that intends
to be purchased.
1. Complex buying behaviour
2. Habitual buying behaviour
3. Variety seeking buying behaviour
4. Dissonance reducing buying behaviour
Complex buying behaviour is where the individual purchases a high value of brand and
Seeks a lot of information before the purchase is made. Habitual buying behaviour is where
the individual buys a product out of habit e.g. a daily newspaper, sugar or salt. Variety seeking
buying behaviour is where the individuals like to shop around and experiment with different
products. So an individual may shop around for different breakfast cereals because he/she
wants variety in the morning! [Consumer behaviour, Roger. D. Blackwell] 7. Dissonance
reducing buying behaviour is when buyer is highly involved with the purchase of the products,
because the purchase is expensive or infrequent. There is little difference between existing
brands an example would be buying a diamond ring, there is perceived little difference between
existing diamond brand manufacturers.
Consumer purchases are strongly influenced by four major factors.
01. Cultural Factor
02. Social Factor
03. Personal Factor
04. Psychological Factor
45
01. Cultural Factor

Cultural factor divided into three sub factors.
(i)
Culture
(ii)
Sub Culture
(iii)
Social Class
Culture:
Set of basic values, perceptions, wants and behaviours learned by a member of society
from family and other important institutions. Culture is the most basic cause of a persons wants
and behaviour. Every group or society has a culture, and cultural influences on buying
behaviour may vary greatly from country to country. [8]
Sub Culture:A group of people with shared value systems based on common life experiences and
situations.
Each culture contains smaller sub cultures a group of people with shared value systems
based on common life experiences and situations. Sub culture includes nationalities, religions,
racial group and geographic regions. Many sub culture make up important market segments
and marketers often design products.
Social Class:Almost every society has some form of social structure, social classes are societys
relatively permanent and ordered divisions whose members share similar values, interest and
behaviour.
02. Social Factors:
A consumers behaviour also is influenced by social factors, such as (i) Groups (ii)
Family (iii) Roles and status
Groups:Two or more people, who interact to accomplish individual as well as mutual goals, a
persons behaviour is influenced by many small groups. Groups that have a direct influence
and to which a person belongs are called membership groups.
46
Some are primary groups includes family, friends, neighbours and co-workers. Some
are secondary groups, which are more formal and have less regular interaction. This includes
the organisations like religious groups, professional association and trade unions.
Family:Family members can strongly influence buyer behaviour. The family is the most
important consumer buying organisation society and it has been researched extensively.
Marketers are interested in the roles, and influence of the husband, wife and children on the
purchase of different products and services.
Roles and Status:A person belongs to many groups, family, clubs and organisations. The persons position
is each group can be defined in terms of both role and status.
For example, M & X plays the role of the father, in his family he plays the role of the
husband, in his company, he plays the role of the manager, etc., A Role consists of the activities
people are expected to perform according to the persons around them.
03. Personal Factors
It includes,
a. Age and lifecycle stage
b. Occupation
c. Economic situations
d. Life Style
e. Personality and Self concept
Age and Life Cycle Stage:A person changes the goods and services he/she buy over their influences. Tastes in
food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage
of the family life cycle.
Occupation:A persons occupation affects the goods and services bought. Blue collar workers tend
to buy more rugged work clothes, whereas white-collar workers buy more business suits. A co.
can even specialize in making products needed by a given occupational group. Thus, computer
47
software companies will design different products for brand managers, accountants, engineers,
lawyers, and doctors.
Economic Situation:A persons economic situation will affect product choice.
Life Style:Life style is a persons pattern of the living understanding these forces involves,
measuring consumers major AIO dimensions. Such as activities like (work, hobbies, shopping,
support etc.) interest (Food, fashion, family recreation) and opinions (about themselves,
Business, Products)
Personality and Self-concept:Each persons direct personality influences his or her buying behaviour. Personality
refers to the unique psychological characteristics that lead to relatively constant and lasting
responses to ones own environment.
04. Psychological Factors:Psychological Factors includes the following factors,
a) Motivation
b) Perception
c) Learning
d) Beliefs and attitudes
a) Motivation:Motive (drive) a need that sufficiently pressing to direct the person to seek satisfaction
of the need.
b) Perception:The process by which people select, organize, and interpret information to form a
meaningful picture of the world.
c) Learning:Change in an individuals behaviour arising as a result of an experience.
d) Beliefs and attitudes:Belief is a descriptive thought that a person holds about something. Attitude, a persons
consistently favourable or unfavourable evaluations, feelings, tendencies towards an
object or idea.
48
There are multiple of psychological factors that influence the buying behaviour of
consumers. An individual consumers purchasing decisions are often that influenced by
the perceptions of his needs, wants and status in life. Some consumer behaviours are
caused by subconscious behaviours, while others are influenced by conscious decisions
made by the consumer in order to achieve certain goals or fit a specific segment of
lifestyle choices.
An individuals consumer may purchase an item that the believe will further their own
goals or will satisfy a need they have. For example, a shopper may stop at the mall food because
they are hungry, and may select a salad to eat because they believe it will help them achieve
weight loss or a healthier lifestyle. [Morrison D G 1979]9
A persons personality will affect their behaviour as consumer as well. Individuals have
likes and dislikes that are solely their own. For example, two forty-year-old women might be
shopping in the same department store and see a pink blouse on sale. The first women might
decide to buy the blouse because pink is her favourite colour, while the second women might
decide not to buy the blouse because she doesnt like pink. [Carlyn, Marcia, 1977]10
Consumer behaviour is often influenced by individuals of products or items. If two
quits are of sale in the same store, one mass produced in China and other marked as hand-made
in America, the hand-made quilt is likely to have a higher price and perceived as more valuable
and desirable by consumers, even though both quilts would keep the consumer warm equally
well. Attitudes and knowledge, whether justified or implied, heavily influence individual
consumers perceptions about products.
Certain consumer behaviours, especially the popularity of designer items and the desire
to purchase them, are fuelled by social class. Certain items are perceived to belong to members
of certain classes. Consumers are likely to purchase items they view as a part of their social
standing, or that they believe will evaluate them to a higher social standing.
Consumers may drive to certain behaviours by the culture to which they belong. Some
items may be viewed as normal in one culture, yet strange in another. Ethnic background and
geographical locations play a large part in culture and establishing culturally acceptable and
acceptable consumer behaviour. [Kacen J 2002] 11
Abraham Maslow hierarchy of needs theory sets out to explain what motivated
individuals in life to achieve. He set out his answer in a form of a hierarchy. He suggests
49
individuals aim to meet basic psychological needs of hunger and thirst. When this has been met
they then move up to the next stage of hierarchy, safety needs, where the priority lay with the
job security and the knowing that an income will be available to them regularly. Social needs
come in the next level of the hierarchy, the need to belong or be loved is a natural human desire
and people do strive for this belonging. Esteem need is the need for status and recognition
within society, status sometime drives people, the need to have a good job title and be
recognised or the need to wear branded clothes as a symbol of status. [12]. Self-actualization
is the realization that an individual has reached their potential in life. The point of selfactualization is down to the individual, when you know you have reached your point of selffulfilment.
But how does this concept help an organisation trying to market a product or service?
Well as we have established earlier within this website, marketing is about meeting needs and
providing benefits, Maslows concept suggests that needs change as we go along our path of
striving for self-actualization. Supermarket firms develop value brands to meet the
psychological needs of hunger and thirst. Harrods develops product and services fir those who
want met their esteem needs. So Maslows concept is useful for marketers as it can help them
understand and develop consumer needs and wants.
Many factors play into the buying behaviour of the consumer. Successful marketers
take into consideration the beliefs and culture of the buyer, as well as the family situation and
even the psychological outlook of the purchaser.
CONSUMER BUYING BEHAVIOUR IN FINANCIAL SERVICES
Over the last decade there has been a growing interest in the field of services marketing
and in the financial services sector in particular. Much of the literature to date has been
concerned either with the extent to which services marketing requires a separate approach from
the marketing of physical goods or with identifying specific marketing strategies to deal with
the problems posed by the unique characteristics of services. In effect, most of the current
studies of services marketing approach the problem from the perspective of the seller. By
contrast, the issue of consumer behaviour has been relatively under researched. Although a
number of empirical studies have been undertaken, there has been little progress in developing
a conceptual framework through which consumer buying behaviour for services may be
understood.
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Since relatively little has been published on buyer behaviour for services, it is necessary
to turn to more general buyer behaviour literature to gain insights into possible techniques and
approaches that might be applied in future conceptual and empirical research in this field. This
article aims to examine the current status of buyer behaviour literature, so that some of this
work can be synthesized with the generic literature on services marketing, as well as specific
literature on financial services, in order to consider the nature of buying behaviour for personal
and corporate financial services. The second section reviews briefly the recent development of
services marketing and describes the distinguishing characteristics of services in general and
financial services in particular. The next section reviews and appraises the main comprehensive
models of consumer and organizational buying behaviour, and considers their applicability to
financial services. In the fourth section the importance of understanding both sides of the buyerseller interaction process for financial services transactions is examined, along with the
implications this has for relationship marketing. Finally, conclusions are drawn from this
overview of consumer buying behaviour in the financial services and recommendations are
made for further research
CHARACTERISTICS OF SERVICES AND THEIR IMPLICATIONS FOR BUYER
BEHAVIOUR.
The academic literature on services marketing has developed from a number of sources
(e.g. Bateson, 1977; Eiglier and Langeard, 1977; Gummesson, 1979; Lovelock, 1981;
Shostack, 1977) and was described by Zeithaml et al. (1985) as being based on three
assumptions: first, that factors existed which distinguished services from goods; second, that
these factors posed special problems for service marketers not faced by goods marketers; and
third, that services marketing required services marketing solutions. Services are typically
distinguished from goods on the grounds of intangibility, inseparability, heterogeneity and
perishability, and while goods and services are not polar extremes, these characteristics tend to
dominate in services and create problems for services marketing. Although less explicitly
recognized in the literature, the characteristics of services, including financial services, will
also have an important impact on buyer behaviour. Thus any attempt to understand the purchase
decision-making process must recognize the ways in which buyer behaviour can be affected
by these characteristics. Intangibility is the main distinguishing feature, since services are
processes or experiences rather than physical objects and therefore cannot be possessed
(Bowen and Schneider, 1988; Lovelock, 1981; Shostack, 1977). Furthermore intangibility can
be double-edged in the sense that services are not only impalpable but also difficult for
consumers to grasp mentally (Bateson, 1977). Consequently at the pre-purchase stage services
51
are more difficult for consumers to evaluate than goods, since any evaluation will be low in
search qualities, which are tangible attributes and can be considered in advance. Conversely,
services are high in experience qualities, which refer to attributes which can only be assessed
after purchase or during consumption. Furthermore, many professional or specialist services
will also be high in credence qualities, which are attributes which cannot even be assessed after
purchase and consumption (Zeithaml, 1981). Thus for many consumers, for example, any
evaluation of financial advice given or product recommendations made must be based on trust
in the financial adviser. As a consequence of intangibility, the ways in which services are
evaluated, particularly at the pre-purchase stage, are likely to differ from goods, and this area
needs further consideration in understanding buyer behaviour for services.
The second factor distinguishing services from goods is inseparability. The fact that
services are processes or experiences means that essentially they must be produced and
consumed simultaneously. This leads to a third distinctive feature, namely perishability:
services cannot be stored for some future time period, hence the need for short distribution
channels so that they can be produced on demand (Bateson, 1977). The inseparability of
production and consumption in services make production and marketing interactive processes
(Gronroos, 1978). The front-line service employees play an important "boundary spanning
role" in the production of services, as do the consumers themselves in their capacity as "partial
employees" (Bowen and Schneider, 1988). Therefore in understanding buyer behaviour it will
be important to consider the interaction between buyer and supplier. Since services depend on
input from both service employees and consumers for their production, the quality of the
service output very much depends on the nature of the personal interactions of these parties.
This makes the potential for variability in the service performance high, which leads to the final
distinctive characteristic of services, namely heterogeneity.
In addition to these distinguishing features of services there are two more which are
present in financial services, namely fiduciary responsibility and two-way information flows
between buyer and seller. Fiduciary responsibility refers to the implicit responsibility of
financial services organizations for the management of their customers' funds and the nature of
the financial advice supplied to their customers. In financial services transactions a set of
promises is essentially being exchanged between the buyer and the seller. From the buyer's
point of view much depends on what exactly is being promised and the likelihood of such
promises being delivered (Lewis and Chiplin, 1986). In the case of long-term savings plans,
for example, it is often difficult for consumers to evaluate these promises that are given in the
absence of full information. Decisions on whether to purchase such services are more likely to
52
be based on experience and credence qualities as there are fewer search qualities (Zeithaml,
1981). Before any financial resources change hands consumers must have confidence and trust
not only in the financial institution concerned but also in its personnel. Apart from relying more
on information from personal sources, consumers are likely to consider factors such as the size,
longevity and image of the financial services organization as indicators of whether any
promises made are sound and likely to be fulfilled. The establishment of trust can also bring
about a degree of inertia in buyer-seller relationships. Since an irreversible amount of time and
effort is required by an individual in order to acquire the necessary experience and information
on which to assess an institution's reliability, it is usually the case that once satisfied, a
consumer is more likely to remain with that institution than incur the costs of searching for and
vetting alternative suppliers.
As far as two-way information flows are concerned, what is unique about financial
services, is that rather than being concerned with one-off purchases, they involve a series of
regular two-way transactions between buyer and seller usually over an extended period of time.
As a by-product of the normal operation of these transactions a great deal of up-to-date private
and confidential customer information is captured, which can subsequently be used to maintain
and develop relationships with existing customers as well as attracting new ones.
CONSUMER BUYING BEHAVIOUR IN FINANCIAL SERVICES
As the previous section shows there is a wealth of conceptual material concerned with
how buyers make decisions. This is supported by a large volume of empirical work, most of
which was developed in the context of studying the purchases of physical goods rather than
services. By contrast in the services marketing and financial services marketing literature the
conceptual and empirical work is not as well developed. The reasons for this may be threefold: first, this may be due to a problem with the conceptual models themselves in that they do
not lend themselves to empirical testing (see Tuck, 1976; Foxall, 1991); second, it is not clear
whether these models are necessarily the most appropriate conceptual frameworks to use in
any case; and third, there has been a lack of appropriate measures of salient dimensions for
testing concepts in services marketing situations (Teas et al., 1988). There is little, if any,
theoretical work on how consumers buy services. Although Zeithaml (1981) examined how
consumer evaluation processes differed between goods and services, this was not done in the
context of a general model.
The application of some organizational buying behaviour models to the purchasing of
international financial services was attempted by Turnbull (1982a), who concluded that no
single model adequately explained all the complexities of these purchases. Nevertheless he
53
pointed out that certain aspects of these theories seemed to lend themselves well in this respect.
First, the application of the interaction model by the IMP group seemed to be particularly
appropriate. Although this model is concerned with the sale and purchase of industrial goods,
it may have been the case that it was considered to be appropriate to the sale and purchase of
corporate financial services on the grounds that the latter also involved organizational buying
behaviour, rather than because of any adaptability the model might have for services of any
kind. Addressing the importance and nature of relationships between companies and banks, the
interaction model examines factors which influence search and decision processes, in particular
the "atmosphere" in which these relationships are conducted. Second, consideration was given
to the application of the stages of the purchase process put forward by Robinson et al. (1967)
and Brand (1972), which led to the conclusion that the financial purchasing process largely
followed these sequences. Finally, it was observed that the organizational factors in the
Webster and Wind (1972) model also seemed to be appropriate. The buying centre concept
from this model was also applied in another study (Turnbull, 1982c) which identified a low
number of people directly involved in the decision-making process. In this same study the
importance of developing and maintaining company-bank relationships was considered, and it
was recognized that (although already widely accepted in US banks) customer contact bank
employees played a key role in establishing relationships with new clients. The importance of
company-bank relationships was stressed even further by Turnbull and Gibbs (1987) in their
discussion of the concept of "financially responsive relationship management" and the
interactive process this entails, as well as the substantial benefits to be gained for both parties
concerned. Based on more recent research it was claimed that the commercial banks which
would succeed over the next ten years would be those which developed systems of financial
responsiveness and whose customer contact officers and senior management had a better
understanding of corporate customer buying behaviour (Turnbull and Gibbs, 1989).
Although the long-term success of any service depended on the buyer-seller
relationship, Yorke (1990) pointed out that most of the literature that had appeared on the
relationship definition of marketing had looked at this from the perspective of the seller and
not the individual or corporate buyer. He explicitly advocated the adaptation of the interaction
model as being appropriate for the purchase of services, particularly corporate rather than
personal services; and stressed the important implications it has for professional supplier firms.
Acknowledging the wide recognition of the importance of establishing long-term working
relationships in services marketing, Teas et al. (1988) concluded from their empirical research
that commercial customers had favourable attitudes to long-term bank relationships where the
54
bank behaved as follows: they were responsive to these customers' requests, initiated
interaction with their customers, were knowledgeable about their customers' business and
business needs, and developed close informal working relationships with their customers.
FUTURE DIRECTIONS
Although, as the previous section has indicated, there is a growing body of empirical
literature, there is still some progress to be made in the development of a conceptual framework
which deals with issues of buyer behaviour in services. While a range of general buyer
behaviour frameworks exists, there are advantages in the formulation of theories at a lower
level of abstraction to deal with more specific services issues (Blois, 1974). In this context, it
would appear that while the application of the IMP framework to corporate financial services
is particularly interesting, there are potentially useful insights to be gained from the more
general application of this approach to financial services. The main reason for this is that the
IMP model is the only buying behaviour model which explicitly covers relationships and
interactions. It addresses the interactive process which takes place between the buyer and the
seller in an exchange situation, and bases this not just on a single transaction but a series of
transactions over time which enables a relationship to be formed between the two parties. In
services marketing where there is a complex interface between the buyer and the seller, it is
clear that the traditional marketing mix approach does not fully cover the relationships that
exist between consumers and service providers and the task of managing the total
customer/firm personnel interaction process (Booms and Nyquist, 1981; Gronroos, 1990).
Although Foxall (1991) criticized consumer behaviour models for implying high consumer
involvement and then indicated the recent development of alternative low involvement
theories, it is the case that as far as consumers of services are concerned they are indeed actively
involved in shaping up a service offering due to the inseparability of production and
consumption. Since the importance of buyer-seller relationships was only recognized relatively
recently, there has been very little coverage of this topic in the literature either on buying selling
or behaviour. An important contribution was made to the latter by Watson (1986), who offered
two conceptual frameworks: one model examining the steps involved in building a relationship;
another model describing the communication tasks required at each stage of the process of
relationship building. More recently it is interesting to note that Donaldson (1990) describes
the interaction approach to selling as one of five approaches to the sales function and its
management, and devotes a whole chapter to examining buyer-seller interaction. Buyer-seller
interactions have a great impact on the future buying behaviour of customers and on word-ofmouth communications about the services concerned. Consequently much importance needs to
55
be given to the "boundary-spanning role" performed by front-line service employees, and the
need to ensure direct control of the environment in which these personnel work in order to set
and maintain satisfactory standards of service quality (see Bowen and Schneider, 1988). The
relationships that are formed between buyers and sellers need to be built on mutual trust and
commitment if they are to be developed and maintained in the long term. For services generally
they can be broad or narrow in scope and continuous or discrete in nature. Having examined
the potential usefulness of the interaction model for services in general, consideration is now
given as to whether the same can be said for financial services in particular. By their very nature
financial services tend not to be one-off purchases but ones which are required on a recurring
basis (Turnbull and Gibbs, 1987) with the result that there is a clear need for financial services.
Suppliers to establish initial relationships with their prospects while at the same time
maintaining and developing long-term relationships with existing customers. Furthermore
financial services are based on customer trust and confidence not only in the organization
supplying these services but also particularly in the customer contact employees themselves.
Turnbull and Gibbs (1982c) in their study emphasized the importance of the interaction
between the salesperson and the client, and that the salesperson, because of the nature of
banking services (i.e. intangibility, complexity, uncertainty and great importance to buying
organization), was often perceived as the item of purchase itself. Financial services
organizations operate in a high contact business where the nature of buyer-seller interactions
and the establishment of long-term relationships based on confidence and trust have real
implications for successful retention of customers and recruitment of prospects. A recent
survey of senior financial services marketers revealed that, after pricing policy, they perceived
the interface with customers as the second most important area of marketing activity as well as
the area of second highest potential for improving company performance (Easingwood and
Arnott, 1991). These findings were supported by Stephenson and Kiely (1991) who
recommended that in the selling of banking services, the emphasis should shift from the
promotion of an institutional image to concentration on the crucial boundary-spanning role
played by customer contact personnel, since they not only sell and perform these services but
are also equated by customers with the service.
56
22
EMOTIONAL
DRIVERS
THAT
INFLUENCES
CONSUMER
BUYING
BEHAVIOUR
According to Eric Leuenberger [2009]20, people want to gain, Health, Self-confidence,

Time Improved appearance, Comfort, Leisure and Increased enjoyment. People want to save
Time Discomfort, Risks, Money, Worry, Embarrassment and Doubts. And they want to be
Efficient, Up-to date, First in thing, Proud of their possessions and Influential over others.
Not only these much they also want to express their personalities, appreciate beauty and
improve themselves generally. These are the 22 emotional factors according to Eric
Leuenberger, which influence people in their buying behaviour. So the focus of marketer
should on these factors. Those are who are successfully satisfy the needs and wants of customer
will survive in the market others will perish. Important thing is that a these factors are
emotionally bond with customers so marketer must have to give immense efforts to bring out
goods and services capable for satisfying emotional needs and wants of the customer.
57
Black box model

ENVIRONMENTAL
BUYERS BLACK BOX
FACTORS
BUYERS
Decision Process
RESPONSE
Attitudes
Problem recognition
Product Choice
Technological
Motivation
Information Search
Brand Choice
Place
Political
Perceptions
Alternative evaluation
Dealer Choice
Promotion
Cultural
Personality
Purchase Decision
Purchase timing
Demographic
Lifestyle
Post-purchase
Purchase Amount
Knowledge
Behaviour
Marketing
Environmental
Buyers
Stimuli
Stimuli
Characteristics
Product
Economical
Price
58
CHAPTER: 3
RESEARCH
METHODOLOGY
59
RESEARCH METHODOLOGY
Research aims at discovering the truth. A research may be defined as careful critical
inquiry or examinations in seeking facts or principles, design investigation in order to ascertain
something. The research process consists of a number of selected steps, which are essentially
interdependent.
3.1RESEARCH DESIGN:
A research design is considered as the framework or plan for a study that guides as well
as helps the data collection and analysis of data. The research design may be descriptive and
experimental for the present day.
3.2OBJECTIVES OF THE STUDY
Primary Objective:
Consumer buying behaviour of foreign exchange market in Trivandrum with reference

to Thomas Cook
Secondary Objective:
To study consumers attitude towards foreign currency & its effects on their buying
behaviour
To know the various forces that drives the consumer towards the foreign currency
To know the most effective media for promoting the product.
To understand the various criteria for exchanging the foreign currencies
To identify the relationship between services of existing foreign exchange provider with
familiarity, categories who uses foreign exchange services, transferring the foreign
currencies through services providers.
3.3METHODOLOGY OF THE STUDY

This study used the descriptive type of research. Descriptive method of research is to
gather information about the present existing condition. The purpose of employing this method
is to describe the nature of the situation. Descriptive approach is also quick and more practical
financially. Moreover this method will allow for a flexible approach, thus when important new
issues and questions arise during of the study, a further investigation may be allowed.
60
Primary Data
Primary data is collected from consumers with the help of questionnaire and through
formal interviews
Secondary Data
Data which is obtained from the published or unpublished are known as secondary data
and is collected from the source like company reports, research reports, online portals,
magazines, etc...
3.4TARGET POPULATION
Population refers to the entire group of people, event, or things of interest that the
researcher wishes to investigate
3.5AREA OF THE STUDY:
Since the project was the study of consumers buying behaviour on foreign
exchange market in Trivandrum with reference to THOMAS COOK, target population
of the study was the individuals, retail, students who use foreign exchange services in
Trivandrum.
3.6DURATION OF THE STUDY
Duration of the study was from 4 May to 4 July (60 days)
3.7NATURE OF THE STUDY:
The study is conducted through the understanding of consumer buying behaviour on
foreign exchange market in Trivandrum; this would help to identify the potential customers
preference to foreign exchange and factors that affect buying decision. The basic idea of the
study is to identify the consumers behaviour towards foreign currency exchange. The needs
has to be recognised and the necessary steps has to be taken to make the changes. The purpose
of consumer behaviour is not only for retaining the customers but also attracting new customers
and increasing the sales. It also create and maintains the brand awareness.
3.8DATA COLLECTION TOOLS
Tools of the data collection are the methods used for collecting the information required
for the study. Each method is having its own advantages and disadvantages. Tools for
collecting the data are selected according to the research process, or the behaviour of the study,
61
in this study tool used for collecting the information were Questionnaires and Personal
interview.
3.10 SAMPLING TECHNIQUE
For the data collection of this project convenience sampling method is used. As its name
implies, it refers to the collection of information from the population who were conveniently
available to provide it.
3.11 SAMPLE SIZE
A sample is asset of population. It comprises of some member selected from the
population. Sampling is the process of selecting a sufficient number of elements from the
population.
In this project, survey was administered among 100 foreign exchange users from
different part of Trivandrum i.e., total sample size is one hundred foreign exchange users in
Trivandrum. It was selected based on convenient sampling and data was collected by using
Questionnaire.
3.12 SCOPE OF THE STUDY
The main study is to understand the foreign exchange market and its impact on
consumer buying behaviour in Trivandrum. The study was confined to Kerala state only. The
study were conducted among foreign currency exchange users from different part of
Trivandrum. The survey was conducted among 100 foreign currency users. Study was for the
period of 60 days from 4 May to 4 July
3.13 TOOLS USED FOR ANALYSIS
The analysis of data was done using Percentage Analysis, The relation between the
variables are found using Chi-Square test and represented graphically with the help of the SPSS
software
(Statistical Package for The Social Science) ver.21
62
TOOLS USED
Chi-Square test
This is used to test the statistical significance of the observed association in across
tabulation. It assists us in determining whether a systematic association exists between two
variables.
Frequency analysis
A frequency distribution is obtained for each variable in the data. This analysis
produces a table of frequency counts, percentage, and cumulative percentage for all values
associated with that variable. It indicates the extent of out-of range, missing, or extreme
values.
3.14 LIMITATIONS OF THE STUDY
The major limitations of the study were the following
The study has limited to the person who are especially NRIs and the students who
travel abroad for their higher studies
The study has some limitations because it can be used only on the persons who are
using foreign exchange
Geographical coverage, as only few places in Trivandrum has been selected for data
collection, it is not sure whether the findings will apply to the whole district.
Due to limited time allotted to this project, few prospective customer segments were
not covered, though their views might have added more value to the project.
63
CHAPTER: 4
DATA ANALYSIS AND
INTERPRETATION
64
Demographical analysis of sample

1.AGE
Percent
Frequency
Valid
15-25
25-35
35-45
Above 45
Total
18
30
34
18
18.0
30.0
34.0
18.0
Valid
Percent
18.0
30.0
34.0
18.0
100
100.0
100.0
45above
18%
Cumulative
Percent
18.0
48.0
82.0
100.0
15-25
18%
25-35
30%
35-45
34%
15-25
25-35
35-45
45above
INFERENCE
From the diagram it came to know that 34% of the respondents in the age group of 35-45 are
dealing with foreign exchange and are exchanging currencies according to the country
respectively. And 30 % of the respondents in the age of 25-35 are dealing with the foreign
exchange and availing forex services. 18% of the respondent in the age group of 15-25 are of
students which are using forex services.
65
2.GENDER
Frequency
Valid
Percent
Valid Percent
Cumulative
Percent
Male
62
62.0
62.0
62.0
Female
38
38.0
38.0
100.0
100
100.0
100.0
Total
Female
38%
Male
62%
Male
Female
INFERENCE
The above diagram it says about almost 62% are Male respondent and 38% of them are Female
respondent
66
3.OCCUPATION
Frequency
Percent
Student
Self-Employed
Valid
Salaried
Professional
Housewife
Retired
Total
Housewife
6%
22
16
22.0
16.0
Valid
Percent
22.0
16.0
24
24
6
8
100
24.0
24.0
6.0
8.0
100.0
24.0
24.0
6.0
8.0
100.0
Retired
8%
Cumulative
Percent
22.0
38.0
62.0
86.0
92.0
100.0
Students
22%
Professional
24%
Self-Employed
16%
Students
Self-Employed
Salaried
24%
Salaried
Professional
Housewife
Retired
INFERENCE
From the above diagram it came to know that almost 24% of the respondent are Professionals
& Salaried persons who are using Foreign Exchange services. 22% of the respondents are NRI
Students who are using Foreign exchange services for higher studies. 16% of them are SelfEmployed and 8% are Retired persons and 6% are Housewife who are using Foreign Exchange
services from Banks and other Authorized Dealers.
67
Analysis of variables
4. HAVE YOU EVER USED FOREIGN EXCHANGE SERVICES?
Frequency
Valid
Percent
Valid Percent
Cumulative
Percent
Yes
66
66.0
66.0
66.0
No
34
34.0
34.0
100.0
100
100.0
100.0
Total
No
34%
Yes
66%
Yes
No
INFERENCE
From the survey it came to know that 66% of the respondents are availing foreign exchange
services and 34% of the respondents are not availing foreign exchange services.
68
5.HOW OFTEN DO YOU TRANSFER MONEY/EXCHANGE FOREIGN

CURRENCY
Frequency
Percent
Valid Percent
Cumulative
Percent
Never
23
23.0
23.0
23.0
Monthly
26
26.0
26.0
49.0
Quarterly
18
18.0
18.0
67.0
Valid
13
13.0
13.0
80.0
Half-yearly
Annually
Total
20
100
20.0
100.0
Annually
20%
20.0
100.0
100.0
Never
23%
Half Yearly
13%
Monthly
26%
Quarterly
18%
Never
Monthly
Quarterly
Half Yearly
Annually
INFERENCE
It came to know that 26% of the respondent do transfer or exchange foreign currency on a
monthly basis. And 23% of them never uses the foreign currencies. 20% of respondents
annually uses to transfer or exchange the foreign currency.
69
6. HOW FAMILIAR ARE YOU WITH FOREX?

Frequency
Percent
Valid
Percent
10
10.0
10.0
Extremely Familiar
Very Familiar
Valid
Moderately Familiar
Slightly Familiar
Not at all Familiar
Total
Cumulative
Percent
10.0
24
32
24.0
32.0
24.0
32.0
34.0
66.0
18
16
18.0
16.0
18.0
16.0
84.0
100.0
100
100.0
100.0
Extremely Familiar
10%
Not at all Familiar

16%
Very Familiar
24%
Slightly Familiar
18%
Extremely Familiar
Very Familiar
Slightly Familiar
Not at all Familiar
Moderately Familiar
32%
Moderately Familiar
INFERENCE
From the above diagram it came to know that 10% of the respondent are extremely familiar
with the foreign exchange and they are using it frequently. 24%of them are very familiar with
the foreign exchange these respondents are using the foreign exchange on the time of their
need. 32% of the respondent are familiar with the foreign exchange and they are using the
service on the occasional basis. And 18% of the respondents are slightly familiar with the
foreign exchange these group use the forex service very rarely. And 18 % of the respondents
are not at all familiar with foreign exchange.
70
7.IN THE FOLLOWING, KINDLY TICK THE APPROPRIATE ONE

Frequency
Percent
Valid
Cumulative
Percent
Percent
Individuals
52
52.0
52.0
52.0
16
16.0
16.0
68.0
Corporates
20
20.0
20.0
88.0
Financiers
8.0
8.0
96.0
Retail
4.0
4.0
100.0
Total
100
100.0
100.0
Travel agencies
Valid
Financiers
8%
Retail
4%
Travel Agencies
20%
Individuals
52%
Corporates
16%
Individuals
Corporates
Travel Agencies
Financiers
Retail
INFERENCE
From the diagram above it came to know that 52% of the respondents are individuals who are
using foreign exchange for exchanging the currencies according to the respective countries.
20% of them are Travel agencies who are using the foreign currencies for their business
purpose. 16% of the respondents are corporate who are using foreign exchange for their
business purpose. 8% of them are financiers who are availing services from the authorised
dealer for the inward remittance. 4% of the respondents are retail outlets who are using foreign
exchange only on the occasional time.
71
8. TYPICALLY HOW DO YOU TRANSFER MONEY/EXCHANGE FOREIGN

CURRENCY?
Frequency
24
24.0
Valid
Percent
24.0
18
18.0
18.0
42.0
Both
58
58.0
58.0
100.0
Total
100
100.0
100.0
Bank
Authorised Dealers
Percent
Cumulative
Percent
24.0
Valid
Others
0%
Bank
24%
Both
58%
Authorized Dealers
18%
Bank
Authorized Dealers
Both
Others
INFERENCE
From the above diagram it came to know that 58% of the respondent prefer Authorised dealers
and Banks to transfer or exchange the foreign exchange. 24% of the respondent prefer bank to
transfer or exchange the foreign currency. 18% of the respondent prefer authorised dealer as
their preferred mode of exchanging or transferring foreign currency.
72
9.IF BANK, PLEASE TICK THE APPROPRIATE ONE

Frequency
Percent
Valid
Cumulative
Percent
Percent
ICICI
20
20.0
24.4
24.4
16
16.0
19.5
43.9
Federal Bank
Valid
Missing
Total
HDFC
SBT
IOB
Others
Total
System
20
18
4
4
82
18
100
Missing
18%
20.0
18.0
4.0
4.0
82.0
18.0
100.0
24.4
22.0
4.9
4.9
100.0
68.3
90.2
95.1
100.0
ICICI
20%
Others
4%
IOB
4%
Federal Bank
16%
SBT
18%
ICICI
Federal Bank
HDFC
HDFC
20%
SBT
IOB
Others
Blanks
INFERENCE
From the above diagram it came to know that 20% of the respondent each prefer HDFC banks
and ICICI banks to exchange the foreign currency. And 16% prefer Federal Bank to exchange
the foreign currency. 18% of them prefer SBT bank to exchange foreign currency. 4% prefer
IOB to exchange the foreign currency.
73
10.IF AUTHORISED DEALERS, TICK THE APPROPRIATE ONE

Frequency
Percent
Valid Percent
Cumulative
Percent
Thomas Cook
34
34.0
44.7
44.7
24
24.0
31.6
76.3
UAE Exchange
Valid
Missing
Total
4.0
5.3
81.6
12
12.0
15.8
97.4
Others
2.0
2.6
100.0
Total
System
76
24
100
76.0
24.0
100.0
100.0
Paul Merchant
Tata Forex
Tata Forex
16%
Others
3%
Paul Merchant
5%
Thomas Cook
45%
UAE xchange
31%
Thomas Cook
UAE xchange
Paul Merchant
Tata Forex
Centrum
Others
INFERENCE
From the above diagram it is clear that 45% of the respondent are dealing with the Thomas
Cook and 31% of them are dealing with the UAE Xchange. And 16% of the respondents are
dealing with the Tata Forex. Merely 5% of the respondent are dealing with the Paul Merchant.
74
11. DO YOU PREFER THE FOREX AGENTS TO DO OTHER RELATED

SERVICES TO?
Frequency
Percent
Valid Percent
Cumulative
Percent
Valid
Agree
76
76.0
76.0
76.0
Disagree
24
24.0
24.0
100.0
100
100.0
100.0
Total
Disagree
24%
Agree
76%
Agree
Disagree
INFERENCE
From the above diagram it came to know that 76% of respondents are agreed to prefer other
related services other than foreign exchange. And 24% of the respondents are disagreed to
prefer other related services other than foreign exchange by finance sector or travel related
financial service sectors.
75
12. IF YES, WHAT KIND OF SERVICES OTHER THAN FOREX, ARE YOU
EXPECTING FROM AN AGENCY?
Frequency
Percent
Valid Percent
Cumulative
Percent
Holidays
34
34.0
42.5
42.5
Remittance
22
22.0
27.5
70.0
18
18.0
22.5
92.5
Air Ticketing
Valid
Visa & Passport
Missing
Total
6
80
20
100
Total
System
6.0
80.0
20.0
100.0
7.5
100.0
100.0
Visa & Passport

8%
Air Ticketing
23%
Holidays
42%
Remittance
27%
Holidays
Remittance
Air Ticketing
Visa & Passport
INFERENCE
From the above diagram it came to know that other than forex 42% of the respondents know
about the holiday services which are provided by the Thomas Cook. And 27% of the
respondents know about the Inward and Outward remittance services which are provided by
the Thomas Cook. 23% of them are aware about the Air Ticketing services from the Thomas
Cook. And merely 8% of them are aware about the visa & Passport services.
76
13. WHICH IS YOUR MOST PREFERRED FORM OF FOREIGN CURRENCY

ABROAD?
Frequency
Percent
Valid Percent
Cumulative
Percent
Currency
72
72.0
72.0
72.0
Travellers Cheque
14
14.0
14.0
86.0
Forex prepaid Card
14
14.0
14.0
100.0
100
100.0
100.0
Valid
Total
Forex Prepaid Card

14%
Travellers Cheque
14%
Currency
72%
Currency
Travellers Cheque
Forex Prepaid Card
INFERENCE
From the above diagram it came to know that 72% of the respondents are preferring currencies
as their preferred mode of carrying by the foreign currency according to the respective
countries. And 14% of the respondents each are preferring Travellers cheque and the forex
prepaid card as their preferred form of carrying foreign currency to abroad according to the
respective countries.
77
14. HOW YOUR RATE THE SERVICE GIVEN BY YOUR EXISTING FOREIGN
EXCHANGE PROVIDER?
Frequency
Percent
Valid Percent
Cumulative
Percent
Highly Satisfied
28
28.0
28.0
28.0
44
44.0
44.0
72.0
Satisfied
Valid
Somewhat Satisfied
8.0
8.0
80.0
Not at all Satisfied
20
20.0
20.0
100.0
100
100.0
100.0
Total
Not at all satisfied

20%
Highly Satisfied
28%
Somewhat Satisfied
8%
Satisfied
44%
Highly Satisfied
Satisfied
Somewhat Satisfied
INFERENCE
From the above diagram it shows that 44% of the respondents are satisfied of the services
provided by the Thomas Cook. And 28% of them are highly satisfied by the services provided
from Thomas Cook. 20% of them are not at all satisfied by the services from the Thomas Cook.
And merely 8% of the respondents are somewhat satisfied by the services from the Thomas
Cook.
78
14.a) IF NOT, WHAT ARE THE REASONS

Frequency Percent Valid Percent
High Charge
Valid
Delay in Transactions
Accessibility
Total
Missing System
Total
3
7
3.0
7.0
15.0
35.0
10
20
80
100
10.0
20.0
80.0
100.0
50.0
100.0
Cumulative
Percent
15.0
50.0
100.0
High Charge
15%
Accessability
50%
Delay in Transaction
35%
High Charge
Delay in Transaction
Accessability
INFERENCE
The responses received from the respondents are 35% are mentioned about the reason due to
delay in transaction. And 50% of them are not interested only due to the accessibility of the
Thomas Cook outlet. And 15% of them are not interested due to High service charge which are
incurred by the Thomas Cook.
79
15. IF BETTER OFFERS ARE OFFERED WOULD YOU THINK OF AVAILING

SERVICES FROM OTHERS PROVIDERS?
Frequency
Percent
Valid Percent
Cumulative
Percent
Agree
54
54.0
54.0
54.0
46
46.0
46.0
100.0
Disagree
Valid
100
Total
100.0
100.0
Disagree
46%
Agree
54%
Agree
Disagree
INFERENCE
From the above diagram it came to know that 54% of the respondents agrees to deal with the
Thomas Cook if they offers better offer than any authorised dealers. And 46% of them are not
shown interest to deal with the Thomas Cook even if they are offering better offers.
80
17.ARE YOU AWARE OF THE BRAND THOMAS COOK

Frequency
Valid
Percent
Valid Percent
Cumulative
Percent
Yes
80
80.0
80.0
80.0
No
20
20.0
20.0
100.0
100
100.0
100.0
Total
No
20%
Yes
80%
Yes
No
INFERENCE
From the above diagram it came to know that 80% of the respondents know the brand name
Thomas Cook. And 20% of them doesnt have any idea about the Thomas Cook.
81
17. a) IF YES/NO WOULD YOU LIKE TO AVAIL SERVICES FROM THOMAS

COOK?
Frequency
Percent
Valid Percent
Cumulative
Percent
Valid
Sure
40
40.0
40.0
40.0
Not Sure
60
60.0
60.0
100.0
100
100.0
100.0
Total
Sure
40%
Not Sure
60%
Sure
Not Sure
INFERENCE
From the above diagram it came to know that 40% of the respondents are interested to avail
services from the Thomas Cook. And 60% are neither refused nor shows the interest to avail
services from Thomas Cook.
82
18. PLEASE TICK THE APPROPRIATE ATTRIBUTE ABOUT THE THOMAS

COOK WHEN YOU HEAR?
Frequency
Percent
Valid Percent
Cumulative
Percent
Valid
Foreign exchange
40
40.0
40.0
40.0
Holidays
44
44.0
44.0
84.0
Visa & Passport
16
16.0
16.0
100.0
100
100.0
100.0
Total
Visa & Passport

16%
Travel Insurance
0%
Foreign Exchange
40%
Holidays
44%
Foreign Exchange
Holidays
Visa & Passport
Travel Insurance
INFERENCE
It came to know that while hearing about the Thomas Cook 44% of the respondents know about
the Holiday services which are provided by Thomas Cook. 40% of the respondents know about
the foreign exchange services which are provided by the Thomas Cook. 16% of them are
familiar with the visa & passport services which are provided by the Thomas Cook. And none
of the respondents have the idea about the Travel Insurance.
83
19.DO YOU KNOW ABOUT THE BORDERLESS PREPAID CARD PROVIDED

BY THOMAS COOK
Frequency
Valid
Yes
34
34.0
34.0
Cumulative
Percent
34.0
No
66
66.0
66.0
100.0
100
100.0
100.0
Total
Percent
Valid Percent
Yes
34%
No
66%
Yes
No
INFERENCE
From the above diagram it came to know that 66% of the respondents are not familiar with the
Borderless prepaid card provided by the Thomas Cook. And 34% of the respondents are
familiar with the prepaid card and they are using it while they travel to abroad.
84
20. Analysis of hypothesis framed

a) Services of existing forex provider v/s transferring of foreign currency
Hypothesis is,
H01: There is no relationship between services of existing forex provider and transferring of
foreign currencies.
H11: There is relationship between services of existing forex provider and transferring of
foreign currencies.
Crosstab
Count
How often do you transfer
money/exchange foreign currency
Highly
Satisfied
Satisfied
How your rate the service
given by your existing foreign Somewhat
exchange provider?
Satisfied
Not at all
Satisfied
Total
Total
Never Mont Quart Half- Annu

hly
erly yearly ally
2
16
8
2
0
28
5
4
10
0
8
0
9
0
12
4
44
8
12
20
23
26
18
13
20
100
Chi-Square Tests
Value
df
Asymp. Sig. (2sided)

.000
.000
.686
Pearson Chi-Square
56.050a
12
Likelihood Ratio
64.694
12
Linear-by-Linear Association
.164
1
N of Valid Cases
100
a. 10 cells (50.0%) have expected count less than 5. The minimum expected count is 1.04.
Results:
Here degree of freedom is 12 and the P value is .000 which is smaller than the significance
level of .05. Therefore null hypothesis is accepted. This means, at .05 level of significance
levels there is no relationship between services of existing forex provider and transferring of
foreign currency
85
b) Services of existing forex provider v/s familiarity with the forex

H02: There is no relationship between services of existing forex provider and familiarity with
the forex
H12: There is a relationship between services of existing forex provider and familiarity with
the forex
Crosstab
Count
Highly
Satisfied
Satisfied
given by your existing
Somewhat
foreign exchange provider? Satisfied
Not at all
Satisfied
Total
How Familiar are you with forex?

Total
Extreme Very Moderat Slightly Not at
ly
Familia
ely
Familiar
all
Familiar
r
Familiar
Familiar
8
8
8
0
4
28
2
0
16
0
20
2
4
6
2
0
44
8
10
20
10
24
32
18
16
100
Chi-Square Tests
Value
df

.000
.000
.000
Pearson Chi-Square
75.460a
12
Likelihood Ratio
77.600
12
35.798
1
N of Valid Cases
100
a. 12 cells (60.0%) have expected count less than 5. The minimum expected count is .80.
RESULTS:
Here degree of freedom is 12 and the P value is .000 which is smaller than the significance level
of .05. Therefore null hypothesis is accepted. This means, at .05 level of significance levels there
is no relationship between services of existing forex provider v/s familiarity with the forex
86
c) Services of existing forex provider v/s Portfolio of customers

H03: There is no relationship between services of existing forex provider and portfolio of
customers
H13: There is a relationship between services of existing forex provider and portfolio of
customers.
Crosstab
Count
In the following, kindly tick the
appropriate one
Highly
Satisfied
given by your existing
foreign exchange provider?
Total
Satisfied
Somewhat
Satisfied
Not at all
Satisfied
Total
Indivi Corpor Travel Financ Retai

duals
ates agencies iers
l
14
2
10
2
0
28
16
12
10
44
18
20
52
16
20
100
Chi-Square Tests
Value
df

.000
.000
.020
Pearson Chi-Square
38.822a
12
Likelihood Ratio
41.706
12
5.390
1
N of Valid Cases
100
a. 14 cells (70.0%) have expected count less than 5. The minimum expected count is .32.
Results:
Here degree of freedom is 12 and the P value is .000 which is less than the significance level
of .05. Therefore null hypothesis is accepted. This means, at .05 level of significance there is
no relationship between services of existing forex provider and portfolio of customers
87
CHAPTER: 5
FINDINGS, SUGGESTION
AND CONCLUSION
88
5.1FINDINGS
Based on the study 24% respondents are professionals who are using foreign exchange
services to exchange the respective countries currencies. 22% are students who are
using the service for their abroad studies. And 16% are self-employed persons who are
using the forex services for their business purpose. From this point we can say that the
consumer are using the service of these travel related financial services company. So
customer behaviour is looking for the better service providers.
From the study most of the respondents are availing the foreign exchange services
(66%). And 34% of them are not availing their foreign exchange services.
Based on the study 26% of them are transferring the money or exchanging foreign
currencies on the monthly basis. Secondly they are using the services according to their
needs. And the persons who are using the services of the company only on the annual
basis (20%). And 23% are not at all using the services because their needs are quite less
comparing with the others.
From the study some of them are familiar among the foreign exchange due to their
needs to exchange the currency for the respective countries. 32% are moderately
familiar about the foreign exchange and their regular services. 24% of them are very
familiar about it. From this point it came to know that customers should know about
the services, product and the quality of the forex dealers then they can do business with
them.
Services of existing forex provider with respect to transferring of foreign currency
From the analysis of
how do you transfer foreign currency, out of 100%
respondents 58% are preferring both authorized dealers and the bank to exchange
the foreign currency. 24% are preferring bank as to exchange and 18% are
preferring the authorised dealers to exchange the foreign currency. This is
preference in Trivandrum to exchange the foreign currency. Majority of the
customers preferring bank due to the perception of them about the surety given by
the bank authorities than the dealers.
This study shows there is no relationship between services of existing forex
provider and the transferring of foreign currency while exchanging the currency.
89
Customers selecting the bank to exchange the foreign currency

Based on this study the 20% of each respondents prefer ICICI and HDFC to transfer
their foreign currency and 18% of them are preferring SBT as their preferred mode of
exchanging the currency.
Customers selecting authorised dealers to exchange the foreign currency.
From the study says that 45% of the customers preferring Thomas Cook as their
authorised dealers to transfer the foreign currency. 31% of the customers preferring
UAE Exchange as their authorised dealers to transfer the foreign currency.
Various services other than foreign exchange that the customers expect from the forex
provider.
The 34% of the respondent prefer Holidays other than forex services
Second highest factor for customer behaviour is the inward and the other remittances
(22%)
Air ticketing is the other preferred form of services by the customers (18%)
From the question 20% of the customer are not responded to the question because they
are not preferring bank for exchanging the currencies.
Analysis of services with familiarity with the forex
From the analysis question how familiar are you with the forex, out of 100%
respondents 32% of them are moderately familiar about the forex and 24% are slightly
familiar, only 10% of the consumers are extremely familiar about the forex and their
buying decision will be strong comparing with other customers.
This study shows there is no relationship between services of existing forex provider
and familiarity with the forex.
Analysis of services with portfolio of customers
From the analysis question choosing the appropriate one, out of 100% respondents 52%
of them are individuals who deals with the forex for their regular purposes. 20% of the
respondents are from the travel agencies who do business of travel related financial
services. 16% of them are corporates who deals with the foreign exchange services.
This study shows there is no relationship between services of existing forex provider
and portfolio of customers.
90
5.2 SUGGESTIONS
Thomas Cook can give much more focus to their promotional activities
Customer complaints and suggestions can be handled properly
Thomas Cook is charging bit more service charge than that of its competitors,
service charge is the one of the factor influences the buying decision, they can give
some more added advantage to the customers.
Company should keep regular relation with the existing customer and to the
prospective customers.
High service charge is the factor that discourages the customers to deal with Thomas
Cook, so take adequate measures to reduce the service charge without making
compromises.
Companies advertisement activities are not much effective so company must take
immediate step to improve the persuasiveness if the advertisement.
Majority of the Prospects where making transactions through banks. The Prospects
Consider banks to be more secure and Trustworthy. Thomas cook should promote
their Security features and focus on gaining the Trust of their Customers
Currency Notes are the most preferred Forex Products among the Customers.
However with Forex Prepaid Cards and Travellers Cheques, Thomas cook can look
at longer term of business with the customers. Thomas cook should promote on the
benefits offered by the Borderless Prepaid cards and create awareness among the
customers
The Number of students who travel abroad for education has increased significantly
in the recent years and they form a Prime Segment of Effective Prospects for foreign
Exchange. The students not only buy Foreign exchange during departure but also
use the Money Transfer Services to receive money from their family members and
to pay college fees using foreign currency demand drafts. Thus by targeting this
segment Thomas Cook Could foresee longer term of Business with these
Customers.
91
5.3 CONCLUSION
The major findings of this project indicates about the buying behaviour of the customers
in foreign exchange market. Consumer buying behaviour is the important factor to forecast
sales of any particular area. So Thomas Cook should keep close eye on the market situation.
Even though Thomas cook is top in the travel and travel related Service Company their
customer are moving on to another same related service sector due to the high service charge
incurred by the company. So company should find some measures in order to overcome this
and the services provided to the customers also should be fast enough.
As Forex Is a Low margin Business, Thomas cook are not promoting it in Media. Hence
we had to come up with few of Low cost marketing strategies to Attract larger group of
Prospective customers
Thomas Cook is a widely known as a worldwide travel Agent, however the Forex
division of Thomas cook is not very popular among the prospects. Though Thomas cook is still
the leading Forex Authorised Dealer in India, there are several small time agents entering into
the field and in order to be competitive and improving their Customer base, Thomas cook
should also focus more on Promoting Forex Business in India.
92
APPENDIX
93
Questionnaire
1) Name :- _______________________________________
2) Age :- 15-25
25-35
3) Gender :- Male
Female
4) Occupation :- Students
Professional
35-45
45 above
Self-Employed
Housewife
Salaried
Retired
5) Have you ever used foreign exchange services?

Yes
No
6) How often do you transfer money/exchange foreign currency?

Never
Monthly
Quarterly
Half Yearly
Annually
7) How familiar are you with forex?

Extremely familiar
Very Familiar
Moderately Familiar
Slightly Familiar
Not at all Familiar
8) In the following, kindly tick the most appropriate category you belong to?
Individuals
Corporates
Travel agencies
Financiers
Retail
9) Typically how do you transfer money/exchange foreign currency?
Bank
Authorised Dealers
Both
Others
10) If Bank, Please tick the appropriate one

ICICI
Federal
HDFC
SBT
IOB
Others
11) If authorised dealers, tick the appropriate one

Thomas Cook
UAE Exchange
Centrum
Others
Paul Merchant
Tata Forex
12) Do you prefer the forex agents to do other related services to?
Agree
Disagree
13) If yes, what kind of services other than forex, are you expecting from an agency?
Holidays
Remittance
Air Ticketing
Visa & Passport
14) Which is your most preferred form of carrying foreign currency abroad?
Currency
Travellers Cheque
Forex prepaid card
15) How you rate the service given by your existing foreign exchange provider?
Highly Satisfied
Satisfied
Somewhat satisfied
94
16) If Not, What are the reasons?

Miscommunication
High Charge
Accessibility
Others
Delay in Transactions
17) If better offers are offered would you think of availing services from other providers?
Agree
Disagree
18) Are you aware of the brand Thomas Cook?

Yes
No
19) If yes/No, would you like to avail services from Thomas Cook?
Sure
Not Sure
20) Please tick the most appropriate attribute about Thomas Cook when you hear
Foreign exchange
Holidays
Visa &passport
Travel
Insurance
21) Do you know about the Borderless Prepaid Card provided by Thomas Cook?
Yes
No
95
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96
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WEBSITE
1. http://www.en.wikipedia/wiki/consumerbehaviour
2. http://www.thomascook.cm
3. http://www.thomascookindia.com
4. http://www.proquest.com
100

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EXECUTIVE SUMMARY

1.1 CONSUMER BEHAVIOUR

CONSUMER BEHAVIOUR AND BUYER BEHAVIOUR

FOREIGN EXCHANGE MARKET

transactions, speculators and

RATIONALE OF THE STUDY

1.2 INDUSTRY PROFILE

The interbank or wholesale market,

Client or retail market.

Wholesale Forex Market:

Exchange of Foreign Currencies.

To make arrangement with Foreign Correspondent.

Buying and Selling foreign Currencies

Handling of Inward and Outward Remittance

Opening of L/C and Settlement of Payment

Investment in Foreign Trade

Opening & maintenance of Accounts with Foreign Banks under intimation of

Foreign Exchange Management Act 1990 (FEMA)

Without general or specific permission of the MA restricts the transactions involving

Although selling or drawing of foreign exchange is done through an authorized person,

Residents of India will be permitted to carry out transactions in foreign exchange,

Transactions which are prohibited

17) Registration / Subscription / membership fees to international organizations

Photocopy of the customer passport / student visa copy

Photocopy of the customer passport or immigration visa copy

Documents Required: A2 form duly filled and signed by the customer

A2 form duly filled and signed by the customer

FEMA undertaking duly filled and signed by the customer

Details of the persons who they want to depute abroad

A2 form duly filled and signed by the customer

1.3 COMPANY PROFILE

National Tourism Award - Best MICE Operator 2006-07

National Tourism Award - 3rd prize Inbound Operator 2006-07

Recipient of the prestigious Government of India Ministry of Tourism award for

Best Tour Operator by CNBC Awaaz in 2008

CONSUMER BUYING BEHAVIOUR

CONSUMER DECISION MAKING PROCESS

01. Cultural Factor

According to Eric Leuenberger [2009]20, people want to gain, Health, Self-confidence,

Black box model

BUYERS BLACK BOX

Consumer buying behaviour of foreign exchange market in Trivandrum with reference

To know the most effective media for promoting the product.

To understand the various criteria for exchanging the foreign currencies

3.3METHODOLOGY OF THE STUDY

Demographical analysis of sample

5.HOW OFTEN DO YOU TRANSFER MONEY/EXCHANGE FOREIGN

6. HOW FAMILIAR ARE YOU WITH FOREX?

Not at all Familiar

Not at all Familiar

7.IN THE FOLLOWING, KINDLY TICK THE APPROPRIATE ONE

8. TYPICALLY HOW DO YOU TRANSFER MONEY/EXCHANGE FOREIGN

9.IF BANK, PLEASE TICK THE APPROPRIATE ONE

10.IF AUTHORISED DEALERS, TICK THE APPROPRIATE ONE

11. DO YOU PREFER THE FOREX AGENTS TO DO OTHER RELATED

Visa & Passport

Visa & Passport

13. WHICH IS YOUR MOST PREFERRED FORM OF FOREIGN CURRENCY

Forex prepaid Card

Forex Prepaid Card

Forex Prepaid Card

Not at all Satisfied

Not at all satisfied

Not at all satisfied