“A study of loan procedure of consumer durable products at

Capital First”
Capital First Limited

Industry Internship Project Report

Submitted in Partial Fulfillment

For the award of

Post Graduate Diploma in Management

Submitted By:
Krunal Trivedi
27 (B)
Batch: 2016-18

Under the guidance of

Prof. Anumeha Mathur Mr.Tapan Sharma

Asst. Professor Customer Relationship Manager

St. Kabir Institute of Professional Studies Capital First Ltd.

Submitted To

St. Kabir Institute of Professional Studies, Ahmedabad

June 2017

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 St. Kabir Institute of Professional Studies
(Approved by AICTE, Government of India)
Nr. SAL Hospital, Ahmedabad

CERTIFICATE
This is to certify that the project report titled “A study of loan procedure of consumer durable

products at Capital First” being submitted by “Krunal Trivedi” in partial fulfillment of the

requirement for the award of Post Graduate Diploma in Management, is a record of bonafide

work carried out by him/her under my guidance and supervision.

Date: 21th June, 2017

Place: Ahmedabad

Prof. Anumeha Mathur Dr. Gurpreet Singh Arora

Faculty Guide Dean,SKIPS

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 Declaration

I hereby declare that project Titled “A study of loan procedure of consumer durable products

at Capital First” is an original piece of research work carried out by me under the guidance

and supervision of Mr. Tapan Sharma and Prof. Anumeha Mathur. The information has been

collected from genuine & authentic sources. The work has been submitted in partial

fulfillment of the requirement of PGDM to our college.

Place: Ahmedabad

Krunal Trivedi

Date: 15 April to 1 June 2017

PGDM 2016-18

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 ACKNOWLEDGEMET

“Success in any task cannot be achieved without proper guidance and hard efforts.”

I am obliged to get an opportunity to work with Capital First limited, with immense pleasure.

I take this opportunity to thank all who have inspired me during the course of my project

without which successful completion of project would not been possible.

I am highly thankful to my college SKIPS (St.kabir institute of professional studies) from

where I got an opportunity to acquire the training at Capital First for one and half months

and also thankful to in charge Hon. Principal Dr. R.K.balyan and Dr. Gurpreet Singh Arora

(Dean) of college who provides me best support also allowing me to undertake this project

report.

I would like to express my sincere thanks to Mr.Ravi Jain (Senior Cluster Head) who

permitted me for training at Capital First and very greatful to Mr. Tapan Sharma (Training in

charge) of consumer relationship management for providing guidance, support and encourage

me during the internship program. I express a sense of gratitude to my faculty guide Prof.

Anumeha Mathur for her valuable guidance, advice and support at a right time in all matter

related to project from beginning.

At last I would thank all staff members and management trainees of Capital First who gave us

their important time and knowledge.

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 Executive summary

India is the second largest country with the highest population in the world. The population of

India is divided into 3 categories based on income. They are high income group, medium

income group and low income group. Majority of the India’s population lies between low

class and middle class. Thus, everyone cannot afford buying necessary goods on cash and so

they go for credit to fulfil their multiple needs and wants. Consumer Durable loan is a finance

option for purchase of household items like Washing Machines, Refrigerators, AC, Color TV,

LCD, Microwaves etc.This is very popular in India for electronic appliances, mobiles,

laptops and other gadgets. An EMI scheme means you can purchase the product and begin

using it immediately, but pay the price over an extended period of time in installments. There

are many companies providing such credit facilities to thecustomers on low interest rates

such as capital first, Bajaj Finserv, Tata capital, etc.

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 Table of Content

Sr.No Particulars Page.No.

.
1 Introduction 9

1.1 Introduction of the topic/study 10

1.2 Objectives of the study 12

1.3 Rationale of the study 13

2 Overview of Industry and Company  14

2.1 Introduction to Industry 15

2.2 Introduction to the company (analysis regarding 20

Company, Customers & Competitors)

2.3 Organization structure 28

2.4 Product/services range 29

2.5 SWOT analysis 30

2.6 Past performance of the company 32

3 Reviews of Literature/ Theoretical Background 34

3.1 Review of the existing literature from international/ 35

national journals, conferences, books, and reports which are

related to the project.

4 Core Topic of Study 45

4.1 Type of Study 46

4.2 Task Assigned 47

4.3 Process Studied 48

4.3.1 Process - In general 48

4.3.2 Process Studied at the Company 50

4.4 Problems under study 54

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 4.5 Theoretical Connect 55

4.6Detailed Description of work done 57

5 Learning&Observations 58
6 Bibliography 62

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 List of Figures

Sr.No. Particular Page no.

1 Figure-1 28
2 Figure-2 50
3 Figure-3 52

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CHAPTER 1: INTRODUCTION

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1.1 Introduction of the topic/study

“Competitive study and analysis of consumer durables- finance market”

India is the second largest country with the highest population in the world. The

population of India is divided into 3 categories based on income. They are high income

group, medium income group and low income group. Majority of the India’s population lies

between low class and middle class. Thus, everyone cannot afford buying necessary goods on

cash and so they go for credit to fulfil their multiple needs and wants. There are many

companies providing such credit facilities to the customers on low interest rates such as

capital first, Bajaj Finserv, Tata capital, etc.

Competitive study

Strategic technique used to evaluate outside competitors. The analysis seeks to identify

weaknesses and strengths that a company's competitors may have, and then use

that information to improve efforts within the company. Competitor

analysis in marketing and strategic management is an assessment of the strengths and

weaknesses of current and potential competitors. This analysis provides both an offensive and

defensive strategic context to identify opportunities and threats. Profiling coalesces all of the

relevant sources of competitor analysis into one framework in the support of efficient and

effective strategy formulation, implementation, monitoring and adjustment

Competitor analysis is an essential component of corporate strategy. It is argued that most

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firms do not conduct this type of analysis systematically enough. Instead, many enterprises

operate on what is called "informal impressions, conjectures, and intuition gained through the

tidbits of information about competitors every manager continually receives." As a result,

traditional environmental scanning places many firms at risk of dangerous competitive

blind spots due to a lack of robust competitor analysis.

Organizations must operate within a competitive industry environment. They do not exist in

vacuum. Analyzing organization’s competitors helps an organization to discover its

weaknesses, to identify opportunities for and threats to the organization from the industrial

environment. While formulating an organization’s strategy, managers must consider the

strategies of organization’s competitors. Competitor analysis is a driver of an organization’s

strategy and effects on how firms act or react in their sectors. The organization does a

competitor analysis to measure / assess its standing amongst the competitors.

Michael Porter in Porter’s Five Forces Model has assumed that the competitive

environment within an industry depends on five forces- Threat of new potential entrants,

Threat of substitute product/services, bargaining power of suppliers, bargaining power of

buyers, Rivalry among current competitors. These five forces should be used as a conceptual

background for identifying an organization’s competitive strengths and weaknesses and

threats and opportunities for the organization from competitive environment.

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1.2 Objective of the study

 To know the buying preference of the customers.

 To examine different schemes given by capital first to attract the customers.

 To examine the loan procedure and documentation at Capital First.

 To learn about key competitors and their marketing strategies.

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1.3 Rationale of the study

 Understanding the trends of consumer durable finance company.

 It helps to know the marketing strategy adopted by consumer durable finance

company.

 It helps to know the different buying behavior of different types of customers.

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CHAPTER 2 : OVERVIEW OF INDUSTRY AND COMPANY

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2.1 Introduction to industry

Consumer durables are a category of consumer products that do not have to be purchased

frequently because they are made to last for an extended period of time (typically more than

three years). They are also called durable goods or durables.

The consumer durables industry can be categorized into two segments:

 Consumer electronics (brown goods) – such as televisions, laptops, cameras,

computers, and audio systems.

 Consumer appliances (white goods) –washing machines, kitchen appliances,

microwave ovens, cleaning equipment, air conditioners, and fans.

About two-thirds of India’s consumer durables are currently sold in urban markets. The most

popular consumer electronics are color television sets. Electric fans and air conditioners are

popular due to India’s hot climate. Other top consumer durables include refrigerators and

washing machines.

The majority of consumer durables production occurs in Delhi and Uttarakhand in the north,

West Bengal in the east, Tamil Nadu in the south, and Maharashtra and Gujarat in the west.

Future Group

Future Group has business interests through its various subsidiaries in area of

consumer finance, capital, insurance, leisure and entertainment, brand development, retail

real estate development, retail media and logistics. Besides FCHL, the group owns other

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companies like Pantaloon Retail, Future Generali, Galaxy Entertainment, Home Solutions

Retail India, Future Brands, Future Logistic Solutions, Convergem Communication (India),

TalwalkarsPantaloon Fitness, Foot Mart Retail are among others.

Imports and Exports

India imports televisions, refrigerators, and air conditioners mainly from China and Southeast

Asia. India also imports from Japan, Indonesia, Malaysia, and Taiwan. Top component

imports include compressors, evaporator coils, condenser coils, air conditioning and

refrigerator chemicals (refrigerants), motors, LCD or LED panels, semiconductors, and

electronic components.

India’s consumer durables exports include refrigerators and refrigerating equipment

compressors, color TVs, air conditioner parts and compressors, and fully automatic washing

machines. The U.A.E. is a major export location. The majority of white goods are exported to

the South Asian Association for Regional Cooperation (SAARC) nations, countries which

border India.

Some top domestic companies in India and their products include:

 Blue Star – central air conditioners, room air conditioners, commercial refrigerators,

cold storages, and specialty cooling products such as process chillers and mortuary

chambers

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  Godrej Group – refrigerators, air conditioners, washing machines, DVD players,

microwave ovens, audio-visual products, and digital-imaging products

 Onida Electronics – televisions, washing machines, air conditioners, microwave

ovens, and mobile phones

 Videocon Industries Limited – televisions, DVD players, microwave ovens,

refrigerators, washing machines, air conditioners, and power backup

Top foreign companies active in India’s consumer durables sector include:

Whirlpool Corporation (U.S.) – home appliances such as refrigerators, washing

machines, microwave ovens, water purifiers, and power backup

LG Electronics (South Korea) – televisions, audio-visual solutions, computers, mobile

phones, refrigerators, washing machines, microwave ovens, air conditioners,

and vacuum cleaners

Samsung Group (South Korea) – mobile phones, digital cameras, camcorders,

refrigerators, air conditioners, washing machines, and computers

Daikin Industries, Ltd. (Japan) – air conditioners and cooling equipment

Sony Corporation (Japan) – televisions, projectors, DVD players, audio systems,

digital cameras, camcorders, and videogame products

Philips N.V. (Netherlands) – televisions, home theater systems, DVD players, audio

products, computers, and phones

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 India is expected to become the fifth largest consumer durables market in the world by

2025. The consumer electronics market is expected to increase to US$ 400 billion by

2020.

Consumer Durable Finance:

“Consumer durable finance means to provide the finance on the consumer durable product

like, washing machinist, TV etc. it is known as consumer durable finance”

The consumer durable finance provide the 0% interest on durable product to the consumer,

This gives customers another compelling reason to opt for 0% interest Consumer Durables

Finance for their durables purchases. Consumer durables finance schemes are generally

available at the dealer location (point of sale) or the showroom. The beneficiaries are not just

customers – lenders, manufacturers, and retailers too benefit. Manufacturers gain from the

resultant boost to sales and increased consumer preference towards high-margin products.

Financing schemes enable customers, especially those with lower income levels, to use future

income streams to buy consumer products upfront and pay in installments over a period.

The most popular finance scheme prevalent in the market currently is the 12/4 scheme, where

the financier collects the amount for the first four months as initial down payment from the

buyer and then disburses the full amount to the dealer. The financier then recovers the

balance amount in 8 monthly installments from the buyer. The interest and processing

charges are generally paid upfront by the manufacturer to the financier. Consumer durables

financing appears robust, continued support from manufacturers (who are effectively bearing

the interest costs currently) would be critical to sustain high growth.

Financial services are the economic services provided by the finance industry, which

encompasses a broad range of businesses that manage money, including credit unions, banks,

credit card companies.

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As of 2004, the financial services industry represented 20% of the market capitalization of

the S&P 500 in the United States. The U.S. finance industry comprised only 10% of total

non-farm business profits in 1947, but it grew to 50% by 2010. Over the same period, finance

industry income as a proportion of GDP rose from 2.5% to 7.5%, and the finance industry's

proportion of all corporate income rose from 10% to 20%.

Financial services perform best in low interest rate environments. A large portion of this

sector generates revenue from mortgages and loans, which gain value as interest rates drop.

Furthermore, when the business cycle is in an upswing, the financial sector benefits from

additional investments. Improved economic conditions usually lead to more capital projects

and increased personal investing. New projects require financing, which usually leads to a

larger number of loans.

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2.2 Introduction to the company

Capital First erstwhile Future Capital Holdings (incorporated in 2006) was listed on

stock exchange in 2008. Capital First (CAPF) was formed in 2012 as a result of a

Management Buyout of an existing NBFC, which was backed by Global Private Equity

Warburg Pincus US. Capital First is listed on NSE and BSE, and has a record of consistent

growth & profitability.

WarbugPincus holds majority stake in Capital First through Cloverdell Investment Ltd.

Warburg Pincus was founded in 1966 & has been a leading private equity investor in the

world since 1971.

Capital First has financed more than 4 million customers and built loan assets of Rs. 198.24

billion (USD 3.05 bn) as of 31 March, 2017

Within a short time, Capital First has built a large network and provides financing in 222

locations across the length and breadth of the country. The loan book of the company is of

high quality as compared to the industry, with Gross and Net NPA of 0.95% and 0.3%

respectively as of 31 March 2017 on 120 dpd NPA recognition basis. The company enjoys

the highest long term credit rating of AAA. Capital First is focused on building an institution

on strong pillars of ethics, values and high corporate governance.

Capital First is a provider of financial service across consumer and wholesale businesses,

with aspirations to grow into a significant financial conglomerate.

CAPF focuses on providing financial services to retail and Micro and Small Enterprises, and

the company is growing between 25-30% per year.

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Capital First Ltd. is a Systemically important NBFC with record of consistent growth &

profitability. Capital First has a comprehensive product suite to meet multiple financial needs

of customers including Consumer Lending, Corporate Lending.

Logo of Capital First:

Capital first provides

 Loan against property

Capital First’s Mortgage Loan allows you to borrow a substantial amount of money by

mortgaging your property as collateral. Be it self-occupied or leased; commercial or

residential, Capital First will give you finance against the property! You can avail loans of up

to Rs. 15 cr. for tenure of up to 15 years.

At Capital First we finance the following types of properties

 Self occupied residences

 Self occupied commercial property

 Leased Commercial property

 Leased Residential property

 Lease Rental Discounting against residential and commercial properties

 Loans uptoRs. 15 crores

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  Avail of tenures upto 15years

Special Services: To meet the needs of all our customers we bring you a complete

suite of programs that are tailor made to your requirements, you can avail a loan under any of

the following programs:

Normal Income Program: You can avail loan basis your financial statements.

Debt Consolidator: If you have multiple loans running and want to consolidate all the

payments into one single EMI. There is also a flexibility of availing additional loan under this

program.

Other programs

Repayment track record

Document Custodial Facility: Capital First understands the importance of

safeguarding your property documents and has entered into a strategic partnership with one

of the leading storage facilities in India for storing your valuable property documents. You

can be assured about your document residing safely with state of the art storage facility plus

world class security systems and fire resistant storage room

 Two wheeler loan

Capital First offers Two-Wheeler Loans, now you can own your own bike or

a scooter without any hassle. Speedy processing, affordable EMIs and low down

payment ensure that you are riding your two-wheeler in no time!

 Key Features and Benifits

 Affordable EMI

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  Low down Payment

 Speedy processing

 Business loan

Every small and medium sized enterprise needs access to working capital.

The business installment loan not only helps you meet your working capital needs,

but also helps fulfill your aspirations of expanding your business.

The Capital First Business Installment Loan offers you some great advantages

like:

 Speedy loan processing

 Loans upto 75 lakh*

 Repay with easy equated monthly installments

 Simple documentation

 Door-to-door Service

 Topping up the existing loan

 Excellent customer service

Business installment loan can be availed by engaging the small enterprise segment

across the following industries:

 Retail & Wholesale trade

 Manufacturing

 Service

Who should apply for this loans?

 Self employed individuals / professionals

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  Sole proprietorship firms

 Partnership firms

 Private limited companies and closely held limited companies

 Doctors

 Used car loan

Owning a car will now be a reality with Capital First’s quick & easy finance

for Used Cars. Our offerings are available at all Capital First Used Cars branches in

major cities

 Key Features and Benifits:

 100% LTV in the Used Car Elite Program

 Minimal documentation

 Competitive interest rates

 Easy repayment options

 Eligibility&Key Features

 Minimum Age of applicant to be 21 years

 Total Experience of > 2 yrs ( 1 year for applicants working in Big

Corporates)

 Income eligibility – As per Form 16 / ITR / Bank Statement

 Durable loan

 The small luxuries of life bring us great happiness – like a new LCD TV for the

family, a computer for your child, or even an air conditioner for the bedroom. You

can now enjoy these small luxuries with Capital First’s  Durable Loans. We allow

you to pay in easy EMIs, with the added benefits of a low down payment and 0%

interest.

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  Key Features and Benifits:

 0% Interest and low down payments 

 Easy repayment options

 Minimal documentation

 Instant Approvals

 No security deposit

 Eligibility & Key Features

 You must be above 21 years of age

 Insurance

 Along with HDFC life, Capital First brings you General Insurance, which covers

everything from health and medical emergencies, to protecting you from misfortunes

like theft and baggage loss while you are travelling. You can insure your car, your

home, and even yourself in case of accidents

 Capital First always strives to help you live each day to its fullest, without worrying

about the future. Tied up with HDFC life, Capital First brings you a  Life

Insurance scheme, which ensures that your loved ones will be taken care of in the

event of a tragedy. Apart from letting you breathe easily, life insurance also acts as a

tax-saving scheme.

Capital first provides loan on consumer durables in easy EMIs with the added benefits of a

low down payment and 0% interest.

Consumer Durable Loans – Overview

Capital First provides financing for consumer electronic goods like LED, LCD TVs, Washing

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Machine, Laptops, Furniture through easy EMIs to salaried and self employed customers.

The small luxuries of life bring us great happiness – like a new LCD TV for the family, a

computer for your child, or even an air conditioner for the bedroom. You can now enjoy these

small luxuries with Capital First’s Durable Loans. We allow you to pay in easy EMIs, with the

added benefits of a low down payment and 0% interest. Making your family happy has never

been this easy!

From a distribution point of view, this is a highly fragmented market. Since inception in

FY10, Capital First has tied up with all leading Consumer Durable manufacturers and has

grown the business with the help of extensive reach, robust credit processes, quick

turnaround and efficient customer services.

The Average Ticket Size is Rs. 32,000. The average Loan to Value ratio is ~70%. The Door

to Door tenure for the loan is around 8 months.

The Company evaluates the application by using Automated Credit Scoring engine,

repayment track record from Credit Bureaus, automated fraud scoring, dedupe mechanisms,

and real time identity authentications.

 Features and Benefits

 0% Interest and low down payments *

 Easy repayment options

 Minimal documentation

 Instant Approvals

 No security deposit

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  Eligibility

 You must be above 21 years of age

 Documentation

 Identity and residence proof

 Income proof

The competitors of Capital First are Bajaj Finserv, Tata Capital, HDFC,SBI, etc.

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2.3 Organization Structure

R
V
W
(
P H
O
T
E
E
C
O
)E
I
A
S
E
L )

Figure-1

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2.4 Services range

 MSME Loan

 CFL provides long term loans to MSMEs after proper evaluation of cash flows.

 Backed by collateral of residential or commercial property.

 Monthly amortizing products with no moratorium.

 CFL also provides unsecured short tenure working capital loans to the MSMEs.

 Two wheeler loans

 CFL provides financing to salaried segment as well as self employed individuals like small

traders, shop keepers for purchase of new two-wheelers

 Consumer durable loans

 CFL provides financing to salaried and selfemployed customers for purchasing of

LCD/LED panels, Laptops, Air-conditioners and other such white good products. They are

also availed by small entrepreneurs for official purposes.

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2.5 SWOT Analysis

This SWOT Analysis of Capital First Ltd provides a strategic SWOT analysis of the

company's businesses and operations. This free SWOT analysis shows strengths, weaknesses,

opportunities and threats. This SWOT analysis of Capital First Ltd can provide a competitive

advantage.

Strengths
-high growth rate

-skilled workforce

-domestic market

-monetary assistance provided

-experienced business units

 
Weaknesses
-productivity

-future profitability

-future debt rating

-competitive market
 
Opportunities
-income level is at a constant increase

-growing economy

-growing demand

-growth rates and profitability

-new products and services

-new markets

-global markets
 
Threats
-rising cost of raw materials

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-growing competition and lower profitability
 
Financial and Strategic SWOT Analysis provides a comprehensive insight into the

company’s history, corporate strategy, business and financial structure, management and

operations.

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2.6 Past Performance of the Capital First

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33
CHAPTER: 3 REVIEWS OF LITERATURE / THEORETICAL
BACKGROUND

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3.1 Review of the existing literature from international/ national journals,

conferences, books, and reports which are related to the project.

A New Product Growth for Model Consumer Durables- Frank M bass

Published online January 1, 1969

A growth model for the timing of initial purchase of new products is developed and tested

empirically against data for eleven consumer durables. The basic assumption of the model is

that the timing of a consumer's initial purchase is related to the number of previous buyers. A

behavioural rationale for the model is offered in terms of innovative and imitative behaviour.

The model yields good predictions of the sales peak and the timing of the peak when applied

to historical data. A long-range forecast is developed for the sales of colour television sets.

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Will It Ever Fly? Modeling the Takeoff of Really New Consumer Durables – Peter N

Golder, Published online August 1, 1997

A consistent pattern observed for really new household consumer durables is a takeoff or

dramatic increase in sales early in their history. The takeoff tends to appear as an elbow-

shaped discontinuity in the sales curve showing an average sales increase of over 400%. In

contrast, most marketing textbooks as well as diffusion models generally depict the growth of

new consumer durables as a smooth sales curve.

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Price and brand name as indicators of quality dimensions for consumer durables-
Merrie Brucks, June 2000

Delivering quality products requires an understanding of the critical dimensions and cues that

consumers use to judge quality. To that end, this article addresses two fundamental research

issues. Using a qualitative study, the authors first develop a generalizable typology of quality

dimensions for durable goods that includes ease of use, versatility, durability, serviceability,

performance, and prestige. Second, the authors conduct a process-tracing laboratory

experiment to examine how key marketing variables—price, brand name, and product

attributes—affect consumers’ judgment processes and inferences about how products

perform on the six quality dimensions. Results of the experiment indicate that consumers use

price and brand name differently to judge the quality dimensions, searching for price and

brand name much more frequently when evaluating prestige than when evaluating any other

quality dimension. Results suggest that managers must determine the relevant quality

dimensions for a product category and the cues that are salient for judging those dimensions.

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CONSUMPTION AND SAVING OVER THE LIFE CYCLE: HOW IMPORTANT
ARE CONSUMER DURABLES?- Jesus Fernandez, November ,2011

In this paper we investigate whether a standard life-cycle model in which households

purchase nondurable consumption and consumer durables and face idiosyncratic income and

mortality risk as well as endogenous borrowing constraints can account for two key patterns

of consumption and asset holdings over the life cycle. First, consumption expenditures on

both durable and nondurable goods are hump-shaped. Second, young households keep very

few liquid assets and hold most of their wealth in consumer durables. In our model durables

play a dual role: they both provide consumption services and act as collateral for loans. A

plausibly parameterized version of the model predicts that the interaction of consumer

durables and endogenous borrowing constraints induces durables accumulation early in life

and higher consumption of nondurables and accumulation of financial assets later in the life

cycle, of an order of magnitude consistent with observed data.

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The Dynamic Pricing of Next Generation Consumer Durables – Barry L Bayus, August

1, 1997

Learning curve effects, aspects of consumer demand models (e.g., reservation price

distributions), and competitive activity are reasons

which have been offered to explain why prices of new durables decline over time. This paper

presents an alternative rationale based on the buying behaviour for products with overlapping

replacement cycles (i.e., next generation products). A model for consumer sales of a new

durable is developed by incorporating the replacement behaviour of a previous generation

product. Pricing strategies for two product generations are investigated analytically and with

numerical methods. Results indicate that durable replacement behaviour leads to a wider set

optimal pricing strategies than previously obtained. Several empirical illustrations of industry

pricing practices for successive product generations are also shown to be consistent with the

theoretical results. Finally, various areas for future research are outlined.

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The Impact of Brand Awareness on Consumer Purchase Intention: The Mediating

Effect of Perceived Quality and Brand Loyalty

Dr. Hsin Kuang Chi, Nanhua University, Taiwan Dr. Huery Ren Yeh, Shih Chien

University, Kaohsiung, Taiwan Ya Ting Yang, Graduate Student, Nanhua University,

Taiwan

The purposes of the study are to explore the effects among brand awareness, perceived

quality, brand loyalty and customer purchase intention and mediating effects of perceived

quality and brand loyalty on brand awareness and purchase intention. The samples are

collected from cellular phone users living in Chiyi, and the research adopts regression

analysis and mediating test to examine the hypotheses. The results are: (a) the relations

among the brand awareness, perceived quality and brand loyalty for purchase intention are

significant and positive effect, (b) perceived quality has a positive effect on brand loyalty, (c)

perceived quality will meditate the effects between brand awareness and purchase intention,

and (d) brand loyalty will mediate the effects between brand awareness and purchase

intention. The study suggests that cellular phone manufacturers ought to build a brand and

promote its brand awareness through sales promotion, advertising, and other marketing

activities. When brand awareness is high, its brand loyalty will also increase. Consumers will

evaluate perceived quality of a product from their purchase experience. As a result, brand

loyalty and brand preference will increase and also purchase intention.

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Consumer Behaviour On Consumer Durables With Reference To Bijapur District

MR. PARAMANAND DASAR*, DR. S.G. HUNDEKAR** & MR. MALLIKARJUN

MARADI*** *Research Student, Research and PG Dept. of Commerce, Karnatak

University, Dharwad, Karnataka. **Professor Research and PG Dept. of Commerce,

Karnatak University, Dharwad, Karnataka. ***Teaching Assistant, PG Centre Rani

Channamma University, Bijapur, Karnataka.

The Indian consumer durables industry has witnessed a considerable change over the last few

years. Changing lifestyle and higher disposable income coupled with boom in the real estate

and housing industry and a surge in advertising have been instrumental in bringing about a

sea change in the consumer behaviour pattern. Consumer durables involve any type of

product purchased by consumers that is manufactured for long-term use. As opposed to many

goods that are intended for consumption in short term, consumer durables are intended to

endure regular usage for several years or longer before their replacement is required. Just

about every household contains at least a few items that may be considered to be of consumer

durable nature. With India being the second fastest growing economy having a huge

consumer class, consumer durables have emerged as one of the fastest growing industries in

India.

41
The Importance Of Brand Awareness In Consumers’ Buying Decision And Perceived

Risk Assessment

Lecturer PhD Ovidiu I. MOISESCU Babeş-Bolyai University of Cluj-Napoca

Brand awareness is the first andprerequisite dimension of the entirebrand knowledge system

in consumers’minds, reflecting their ability to identify the brand under different conditions:

thelikelihood that a brand name will cometo mind and the ease with which it doesso (Keller,

1993).Brand awareness can be depictedinto brand recognition (consumers’ability to confirm

prior exposure to thebrand when given the brand as cue)

and brand recall (consumers’ ability toretrieve the brand when given theproduct category, the

needs fulfilled bythe category, or some other cues). Brand awareness is essential in buying

decision-making as it isimportant that consumers recall thebrand inthe context of a given

specificproduct category, awareness increasingthe probability that the brand will be amember

of the consideration set.Awareness also affects decisions aboutbrands in the consideration set,

even inthe absence of any brand associations

in consumers’ minds. In lowinvolvement decision settings, aminimum level of brand

awareness maybe sufficient for the choice to be final.Awareness can also influence

consumer decision making by affectingbrand associations that form the brandimage (Keller,

1998).

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A Study of Impact of Promotional Measures on Consumer Buying Behaviour towards

Durable Goods---With Reference to Lucknow City

The Indian Economy is in transition from Government Control to free market economy, from

protection to competition, from isolation to globalization, from obsolescence to innovation.

The main purpose of business is to create customer and its needs are the foundation on which

the whole business activity revolves. The needs, desires and aspirations of customer have

changed significantly in the past few years. Today, the consumer has become a KING and

he/she and his/her behaviour have acquired the major attention. Consumer Behaviour is an

indispensable condition upon which all market planning and strategy must be predicted.

Knowing his customers is a marketer’s most important responsibility and with rising income,

multiple income households, the consumer durable goods industry is on fast track.

Advertising media is transforming the tastes and aspirations of the people of the country and

with the expansion in communication, infrastructural facilities and rising awareness of brands

has led to the increase in the demand for durable goods.

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The Competitive Implications Of Consumer Evaluation Of Brand Image, Product

Attributes, And Perceived Quality In Competitive Two-Wheeler Markets Of India

Chandrasekaran Kathiravanaa*, Natarajan Panchanathamaa and Sivasundara

Anushanb

A durable good or a hard good is a good which does not quickly wear out, or more

specifically, it yields services or utility over time rather than being completely used up when

used once. Durable goods are typically characterized by long interpurchase times that is the

time between two successive purchases. Most goods are therefore durable goods to a certain

degree. Perfectly durable goods never wear out.Generally they have a lifespan of more than 3

years. Goods that aren't consumed or quickly disposed of, and can be used for several years

are called durable goods.

44
CHAPTER 4: CORE TOPIC OF STUDY

45
4.1 Type of study

The type of study: Descriptive study

A descriptive study is one in which information is collected without changing

the environment. Sometimes these are referred to as “correlation” or

“observational”studies.

Secondary data involves the summary, collation and/or synthesis of

existing research rather than primary research, in which data are collected from, for

example, research subjects or experiments.

As it studies the comparison and analysis of two different consumer durable finance

companies Capital First and Bajaj Finserv. The data obtained is secondary as the

information is collected from websites of the companies and other websites. In this

report the two companies are compared on the basis of their different loan procedures,

documentation, target customers, marketing and promotion schemes.

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 4.2 Task Assigned

During the 45 days of internship, there were different task assigned by

the company. They are as follows:

 Pitching customers and explaining them about EMI and how they can get benefits by

purchasing products on EMI.

 Convincing customers to purchase electronic products on EMI instead of purchasing them in

cash and explaining them about company policy and services.

 Convert the existing customer of BajajFinserve in to Capital first.

 Ask customers about their locality, Occupation, Age and then Checking documents of

customers.

 Log in, in system to check eligibility of customers for loan.

 Filling the manual forms for passing the loan.

 Filling the application forms for storing the details of the customers.

 Explaining the customers about the importance of EBC card and convince them to buy our

EBC card.

 Filling the ECS forms after finish the whole process of loan.

 Be with customer while they sign the agreement to tell them where to sign.

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4.3 Process Studied

4.3.1 Process - In general:

Eligibility for bank finance

A person must be salaried or should have his own business. There are some criteria fixed by

different companies for a person to be eligible to get the loan.

Security

Repayment is generally by installment. Repayment period is fixed according to the repaying

capacity of customer. These loans are given mainly on the personal security of one or more

individuals or group of persons. Security of gold and silver ornaments and consumer durables

are also accepted. Loans for consumption up to Rs.500 are disbursed on the basis of demand

promissory note or simple loan agreement. Loans up to Rs.1,000 per family is sanctioned if

they offer the security of gold and silver ornaments.

Lending Procedure

Application in prescribed form should be sent by the applicant mentioning all the essential

particulars. The loan amount will be disbursed if the banker is satisfied with all the essential

formalities. The applicant should apply for this loan through his employer, if he is a salaried

employee.

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Rate of Interest charged

The minimum rate of interest charged is 12.5% per annum. To make consumption credit

cheaper for weaker section it has been exempted from the purview of minimum lending rate

9%.

Repayment

Repayment is done in the form of installments by the borrower within the period decided by

the company.

49
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4.3.2 Process studied at the Company

 Loan Criteria

 Surrogate programs


Figure-2

We provide Consumer Durable Loans to all customers irrespective whether

their credit background is available in the bureau (CIBIL) or not.

In case, customer credit information is not available on the bureau, any one of

the following surrogate programs is applicable.

Single Document Based :

Original Electricity Bill ( Validity Period – 90 days)

Post paid Landline Bill (Bill Amount >Rs. 500)

Copy of RC Book ( Model should be > 1000 cc)

Surrogate Programs – Debit Card

The schemes applicable to the program should have a minimum of 1 advance

EMIs.

50
 The customer must mandatorily swipe the card at the Point of Sale and generate

a transaction slip.

 The entire down-payment according to the scheme has to be paid through the

card.

 Funding up to 50 K net disbursement and up to 90% irrespective of type of

card

Programs Type – Credit Card

 Credit Card surrogate is one of the most successful surrogates in our product

bouquet, with 99% approval rates overall.

 Customer has to make a payment with his credit card for an amount of Re. 1 or

he can pay the entire down payment amount.

 The charge slip for the same has to be attached with the disbursal documents.

51
Process

Figure-3

52
Application form for consumer durables

53
4.4 Problems under Study

 It was difficult to convert the existing customers of Bajaj Finserve into Capital First.

 The company doesn’t finance to the person living in the negative areas (where the

defaulters are likely to be more) .

 The company also doesn’t finance if customer live on rent and they have less than 3

months of rent agreement.

 As there were two companies which financed the product in Vijay Sales, competition

was very much there because there are Bajaj Finserve Interns also pitch customer

while we do.

 Sometimes both the companies have same schemes but the negative point is capital

first has processing fees Rs.111 is compulsory and Bajaj finserve doesn’t have

processing fees they have zero Down payment schemes.

 It was also difficult to convert the customer who already had the Bajaj’s EMI card.

 Capital First gives the extended warranty like Bajaj but Customers are not aware as

much as of Bajaj

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4.5 Theoretical Connect

Product :

Capital First : Loan on Consumer durables, Two-wheeler, loan against property , used car

loans, business loans insurance and EBC card.

Bajaj Finserv : Personal loan, home loan, business loan, doctor loan, loan against shares,

durable finance, lifestyle finance, extended warranty, EMI card, two and three wheeler

finance, gold loan, loan against fixed deposit and 5 more.

Price :

Capital First : Easy Buy card – Rs.399/-, Processing Fees – Rs.111/-, Other Fees depends

upon the brand of the product

Bajaj Finserv : Easy Monthly Installment Card – Rs.350/-, Co-brand card

Place :

Capital First : Vijay sales, reliance and sales India at different locations in India

Head office at Mumbai.

Bajaj Finserv : Vijay sales, reliance, croma and sales India at different locations in India

Head office at Pune.

Promotion :

Capital First : Video displayed in television at different stores, mobile app

Bajaj Finserv : banners at different stores, lucky draw schemes at festival times, promotional

offers of Rs. 1/-

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Process :

Capital First :Cibil score, documentation, online approval

Baja Finserv : Cibil score, documentation, online approval

People :

Capital First : around 2500 employees

Baja Finserv : around 4500 employees

Physical evidence :

Capital First: Company provides shirts and t-shirts, id cards, laptop and scheme paid.

Company also has its own website and online approval app

Baja Finserv : Company provides shirts and t-shirts, badges and scheme paid. Company also

has its own website and online approval app.

56
4.6 Detailed Description of work done

During the first week of internship program, training was given regarding how to pitch

customers, learning about the different schemes available on the product and finding the

leads. The company gave us the general idea about how the loans are passed on durables.

How to calculate EMI amount and the down payment was also taught.

In the second week, studied about the different KYC (know your customer) documents

required. During that week, started pitching the customers to buy the durables on finance

instead of cash. Also, explained the customers about the importance of the EBC card.

In the third week, training was given on how to login in a case of the customers, how to

check their limit available in the EBC card and how to find out the customers information if

he has purchased the loan before but does not have the EBC card.

In the last days of the internship program, started pitching the customers, giving them

schemes, explained the documentation, filling the manual forms and Login In the case.

During the internship program, I studied the whole process of financing on the consumer

durable products.

57
CHAPTER 5: LEARNINGS AND OBSERVATIONS

58
Learnings

 I learn how to pitch the customers and how to make aware them about loan on

consumer durable products on 0% interest rate.

 How to bring the customers who already have the EMI card of BAJAJ Finserve.

 How to give the demo of any product while sales executive is not present.

 How to make healthy relationships with sales person and colleague to make work

easy.

 How to get surrogates approved of the customers.

 How to check the documents of customers which are necessary to take the loan.

 Filling the ECS form after complete the process of loan.

 After 1 week of my internship I learn that it’s easy to convenience the young married

couple who wants to take 2 or 3 products at a one time by loan from us.

 After completing 20-25 days I started to do LOG-IN of customers for loan.

 As I learn if any cheque will bounce there some charges which will be taken by

customers and there are also some other charges which are mentioned in the

agreement of loan procedure.

 If any customer is already existing customer of capital first and he/she wants to take a

loan second time than customer can give only his/her mobile number to us and we can

check their credit limit, CIBIL score and do further process of loan.

 Sometimes we can’t give loan to those customers who has negative CIBIL score and

their loan will be rejected.

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Observations

 EMI is a good option because people who cannot afford to buy on cash can buy

multiple things at a single time.

 Different players in the consumer durable finance industry like Bajaj Finserve.

 Customers do not have to go anywhere to pay the EMI amount, the amount is

deducted directly from their respective bank account by ECS.

 If customer wants to give all the cheques of no. of their EMI than also they can give at

a time.

 Customers are attracted when they aware about the zero percent interest rate on the

loan by us.

 It becomes easy to pass the loan if the person has the EBC card with him as the

documents are not required of the person holding the EBC card, only ID card is

required every time.

 There are multiple schemes available on different products the customers get to

choose among the options available for down payment.

 It is required to keep good relations with the executives or the colleagues as they

would make the job easy.

 The different documents needed to finance a loan like, ID card, Address proof, Light

bill, Rent agreement of 3 months old, Passbook, Passport, etc.

 People are attracted because of 0% interest rate, less documentation and quick

approval.

 The low income group goes for loan and the high income group for cash but we tried

to convert them to take loan from cash payment.

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 The company has 0 down payment scheme but they have other charge is 111/- that is

compulsory which Bajaj Finserve has not.

 As the people are not much aware about the company, promotional activities should

be undertaken.

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 Bibliography

 www.capitalfirst.com

 www.bajajfinserv.com

 www.investinganswers.com

 http://journals.cambridge.org

 http://pubsonline.informs.org

 http://www.businessdictionary.com

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