Indian urban and rural market: a comparative study on ... urban and rural market: a comparative...

International Trade & Academic Research Conference (ITARC ), 7 – 8th November, 2012, London.UK.

The Business & Management Review, Vol.3 Number 1, November 201286

Indian urban and rural market: a comparative study on place of purchasein selected consumer products

Sampath Kumar RavikanthiOsmania University, India

Key WordsConsumer behavior, Consumer product, durable and non-durable, rural marketing, retailer, shoppingmalls

AbstractIndia is on the threshold of significant industrial growth in the coming years. This is going to require a

great deal of orientation by manufacturers towards the consumers. At the same time, Indian industries have to moveaway from the small markets that they have concentrated on over the years due to capacity and other limitations, andlook to mass markets. The last century saw a lot of changes happening in the field of management as well as in othersocial sciences. Customers are the buyers of products and services. They also might be the final consumers of theproducts and services. Marketers need to identify these end users and frame marketing plans rather than consideringthe wholesalers and retailers who actually are the intermediaries in the process of purchasing. Although thesechannel members are important for a marketer; yet it is wise on their part not to dissipate their energies toward theseas the ultimate users decide the fate of the firm’s products and services. A simple non-probabilistic conveniencesampling method was used to understand the behaviour of consumers. The overall sample size for the study included400 respondents (200 urban consumers from Hyderabad and 200 rural consumers from rural Telangana region

This study reveals that majority of consumers are now-a-days a highly enlightened lot. The products shouldbe made available at various out lets for the consumers to purchase or procure. Hence, the marketing distributionsystems or marketing channels should be well-established. This helps the consumers to purchase items withminimum of efforts. The study of consumer behaviour towards place of purchase as a subject of study is important tothe marketers, students of marketing, policy makers, regulators and the consumers themselves.

In the light of the above revelation it is recommended that the marketers must make efforts to supply quality goods atreasonable prices and also maintain good relations with their retailers because the retailer is a major influencingperson at the point of purchase.

IntroductionIndia is on the threshold of significant industrial growth in the coming years. This is going to

require a great deal of orientation by manufacturers towards the consumers. At the same time, Indianindustries have to move away from the small markets that they have concentrated on over the years dueto capacity and other limitations, and look to mass markets. To do so they will have to become goodmarketing people and their organizations will have to become marketing oriented. Generally, as moreconsumer researchers have appreciated the complexity of customers’ behaviour towards the place ofpurchase, the more they have tended to look beyond formal economics for explanations of such activity.

The last century saw a lot of changes happening in the field of management as well as in othersocial sciences. The usage of new tools and techniques brought about revolutionary changes in theproduction of goods. Mass manufacturing has become a reality. FW Taylor’s “Principles of ScientificManagement” helped firms to increase their production levels. This in turn made the firms to reduce theprices of goods as they were mass-produced. Around that period Henry Ford used the assembly lineproduction systems to deliver more number of cars in a day. Added to this, were the increasingcontributions made by various scholars from different fields to the knowledge of management literature.These schools of thought helped in evolving new strategies and in initiating new measures. This was justthe beginning of a new era in management.



There are clear signs of a slowdown in rural consumption, even as aspirations for branded goodsaccelerate. Marketers are concerned, but determined to address the rush of downgrades by making theirproducts more affordable. The services rendered by rural retailer to the rural customers ranged fromextension of credit facilities to arrangements for use and guidance in respect of newer and sophisticatedproducts. The customers, however, did not feel satisfied with the services rendered to them by theretailers and made complaints regarding the poor quality of products, poor packaging, higher prices,adulteration, fewer varieties and non-availability of certain products at times. The village consumeraccording to retailers was gradually becoming discriminating regarding quality, price, brand name, etc.The loyalty of the rural customer towards the rural retailer was not of a binding nature. It mainly restedon the terms of credit and services mix which he received from his retailer and he did not hesitate to shoparound in search for more attractive bargains as and when the opportunity arose, i.e., when he couldafford to buy on cash”.

Customers are the buyers of products and services. They also might be the final consumers of theproducts and services. Marketers need to identify these end users and frame marketing plans rather thanconsidering the wholesalers and retailers who actually are the intermediaries in the process of purchasing.Although these channel members are important for a marketer; yet it is wise on their part not to dissipatetheir energies toward these as the ultimate users decide the fate of the firm’s products and services.Marketers, therefore, should consider the consumers and then develop their plans of action. Here lies theessence of marketing – the consumer is the king and all actions should start with this notion in mind.Consumer behaviour is the buzzword now. Firms who underestimate their consumers will have nochance to serve them. Competition is intensifying day-by-day and the firms have to evolve their strategiesbased on the behaviour of the consumer, on a continuous basis, to stay ahead and win the race. Consumerbehaviour as a discipline is quickly gaining new ground over the years. This has become even morerelevant in the present day world, marked up by rapid changes and explosion of information technology.It holds great interest for marketers, consumers and students of human behaviour.

Consumer behaviour is influenced by a variety of variables and it is important to understand thenature of these variables, and draw inferences out of these. Marketers use this knowledge to come outwith new products and services that satisfy their consumer’s needs and wants. So researching onconsumer behaviour is a very vital exercise and the results got, could be used by people for a variety ofpurposes. The rationale behind the study was to highlight the findings of consumer behaviour towardsplace of purchase on selected consumer products carried out in urban places of Hyderabad city and inrural areas of Telangana region in Andhra Pradesh. It is expected that this study will help the researchersto contribute and throw more light on this topic.

Scope of the StudyThe scope of the study was restricted to selected consumer products. The study covered four

consumer durable products and four consumer non-durable products as shown below:

I. Consumer Non-durables II. Consumer Durables1. Washing powder 1. Foot wear2. Soft drink 2. Fans3. Mosquito repellents 3. Watches4. Talcum powder 4. Refrigerators

The study has been carried out in Indian rural areas of Telangana region and urban areas of thecapital city of Andhra Pradesh i.e., Hyderabad., India

Sample sizeA simple non-probabilistic convenience sampling method was used to understand the behaviour

of consumers. The overall sample size for the study included 400 respondents (200 urban consumers fromHyderabad and 200 rural consumers from rural Telangana region). An attempt was made to make the



sample representative to the target market for products under study. In spite of the above limitations, thestudy throws some light on the understanding of consumer behaviour towards the place of purchase.Since the study was exploratory in nature, it is expected that this will pave the way for further research inthe area.

Period of the studyThe primary data for the study were collected between March 2012 and August 2012.

The survey instrumentsThe study was mainly based on primary data and the instrument or method for collecting the

data was the questionnaire method. Questionnaire was prepared for collecting data from the Buyers.Rationale behind the study

Last decade has seen prominent interest in ‘India’ as technology improvement, policy focus andstrong demographic dividend underlying the economy of India, sought the attention of marketing. About68% of India’s population lives in rural areas. Rural population has grown by 12% in last decade. Ruralmarket has distinguished characteristics, accounts for 40% of Indian economy. Rural India has huge,heterogeneous and growing consumer market, which contributes more than 50% to India’s total consumermarket size. Rural India has witnessed significant development in last decade, with commitment offinancial resources and launch of a range of programmes by government towards physical and socialinfrastructure development. The report elaborates the status of rural India’s infrastructure, socialdevelopment, living conditions, economy and industry. 46% of the soft drinks sales happen in the ruralareas. Rural India accounts for 49% of motorcycle sales. Rural India accounts for 59% of Cigarettes sales.53% of FMCG sales happen at Rural India.

India, with about one Billion population and a vibrant economy has emerged as one of the largestmarkets in the world today. The liberalization initiatives, which began in the early 1990s, have altogetherchanged the competitive atmosphere. A large number of new products and a great proliferation of brandshave changed the decibel levels of marketing communication with every one trying to get a rupee of theconsumer’s wallet as well as a share of her mind. Consumer behaviour concentrates on understanding theattitudes, attributes, beliefs, values, norms of the consumers and it analysis the way the consumerconsciously or unconsciously follows any of these towards the place of purchase. Consumers do not makedecisions in vacuum. Their purchases are strongly influenced by cultural, social, personal andpsychological factors. The markets are customer-driven these days. To understand the customer is noeasy job as his behaviour is mostly unique and unpredictable. This has made the firms to step into theshoes of the consumer and understand him from his point of view in selection and purchase of productsand services at different places.

The urban- rural inequality in market, as well as customer characteristics bring a major differencein shopping behavior and consumption pattern of the two communities. In India, a sizeable number ofpersons migrate from rural to urban in search of job opportunities, work, education, marriage andpersonal reasons. From the marketing perspective, migration leads to new market opportunities. Themarket is a place where buyers and Sellers Exchange Things. In lay man terms "It is a place where buyersand sellers exchange goods/Service for some value in return such as Money”. So the Market is sameeverywhere. But, the difference is in the consumer behaviour. There will be different buyers in eachmarket. This is because of different factors which Influence them. So the same way there is a differencebetween Rural and Urban Market. The factors are so many to define. There is a difference in all themarketing Variables. That is where most of the companies approach with different Marketing Mix andStrategies to Rural Market. The strategies differ from the urban to rural market. The companies whichhave understood the phenomena of rural market have succeeded in the market. These companiesapproach shows that there is a difference between Rural and Urban Market. The Differences can beInfrastructure, Economy, Lifestyle, Socio- Cultural Background, Availability or reach, Habits,Competition, and Consumer Behaviour.



Limitations of the StudyThe study was carried out to understand the place of purchase of consumers towards selected

consumer products. The study was conducted in both rural and urban areas. However, in the case ofrural areas, only one region of Andhra Pradesh State was covered and hence this is a limitation of thestudy. Similarly in the urban areas the exercise was confined to only the capital of the state of the AndhraPradesh i.e., Hyderabad. The findings of the study are entirely dependent on the sample and hence cannotbe generalized.

In spite of the above limitations, the study throws some light on the understanding of place ofpurchase of consumers towards selected consumer products. Since the study was exploratory in nature, itis expected that this will pave the way for further research in the area.

Data Analysis and InterpretationPlace of Purchase (Washing Powder)

A query was posed to the consumers regarding their place of purchase of washing powder andtheir responses are recorded in the table 01. From the table 01 a majority of urban consumers and aminority of rural consumers (37% urban and 63% rural) prefer to make the purchase of washing powderat nearest Kirana shops. The urban consumer’s next preference at wholesale market 24%, rural consumerPreference at Street hawkers it is 19%. From the below table, it can be concluded that there is a differenceof opinion of consumers regarding their place of purchase of washing powder.

Table 01Sl.No.

Place of purchase of washing powder UrbanConsumers

% RURALConsumers

%

1. Nearest Kirana stores /Street vendors 74 37% 126 63%

2. Food retail outlets 28 14% 0 0%

3. Department Stores 14 7% 4 2%

4. Wholesale Market 48 24% 14 7%

5. Weekly Market 18 9% 12 6%

6. Street hawkers 12 6% 38 19%

7. Others 6 3% 6 3%

TOTAL 200 100% 200 100%

Chart 01

Place of Purchase (Soft Drinks):Consumer were asked to reveal the place of purchase of soft drink in both urban and rural areas

and the findings are placed in table 02.Table 02 reflects that 55% of urban and 91% of rural consumers buysoft drink at Nearest kirana stores and 22%, 8% of urban make their purchases at the Food retail outlets,Department Stores and 6% of rural consumers purchase from other sources. Overall, it can be concludedthat kirana shops are the most favoured spots for buying soft drinks both in urban and rural areas.



Table 02Sl.No.

Place of purchase of Soft DrinksUrban

Consumers%

RURALConsumers

%

1. Nearest kirana stores /Street vendors 110 55% 182 91%






7. Others 14 7% 12 6%

TOTAL 200 100% 200 100%

Chart 02

Place of Purchase (Mosquito Repellant)The consumers were asked to part with information concerning the place of purchase of mosquito

repellent and the particulars are noted down in table 03. Table 03 throws light on the purchase ofmosquito repellent by urban and rural consumers. Kirana Stores are preferred by 73% of urban consumerswhile in rural it is 72%, 12% urban consumers prefer Food Retail Outlets and in the case of rural, it is 14%of the consumers purchase from the Weekly market.

A view at the above table leads us to believe that Nearest Kirana stores , Food retail Outlets aremostly preferred by urban consumers and nearest Kirana shops are forwarded by the rural consumers inmaking their purchase of mosquito repellent.

Table 03

Sl.No.

Place of purchase of Mosquito RepellantUrban

Consumers%

RURALConsumers

%







7. Others 14 7% 6 3%

TOTAL 200 100% 200 100%



Chart 03

Place of Purchase (Talcum Powder)A query to know the place of purchase of talcum powder was put to consumers and their answers havebeen placed in table 04. From the table 04 shows 48% of urban consumers and 87% of rural consumersvisit Kirana stores to make purchase of talcum powder while the food retail outlets and weekly market arepreferred by 33% of urban consumers and 11% of rural consumers.

This indicates that the choices of consumers at urban and rural are different. When it comes tomaking purchase of talcum powder, urban consumers prefer Nearest Kirana stores and rural consumerprefer weekly market for purchase of talcum powder.

Table 04Sl.No.

Place of purchase of Talcum PowderUrban

Consumers%

RURALConsumers

%







7. Others 0 0% 0 0%

TOTAL 200 100% 200 100%

Chart 04

Place of Purchase (Foot Wear)The questionnaire given to the consumers requested them to answer the place of purchase of their

foot wear and the recorded observations are indicated in table 05. Table 05 shows that 61% of urbanconsumers and only 11% of rural consumers prefer going to company’s show room 22% of urbanconsumers are purchasing at shopping malls and 86% of rural consumers go for Retail Outlets forpurchasing foot wear.

Two things are very clear here. A majority of urban consumers shop at company’s show room forfoot wear, while in rural the majority goes to the retailer stocking more than one brand.



Table 05Sl.No.

Place of purchase of Foot Wear UrbanConsumers

% RURALConsumers

%

1. Company's Show room / Dealer 122 61% 22 11%

2. Shopping Malls 44 22% 0 0%

3. Online Shopping 6 3% 6 3%

4. Retail Outlets 28 14% 172 86%

5. Near By Towns 0 0% 0 0%

6. Others 0 0% 0 0%

TOTAL 200 100% 200 100%

Chart 05

Place of Purchase (Talcum Powder)A question was thrown to the consumers about their place of purchase of fans and the answers are

placed in table 06. Table 06 indicates that 47% of urban and 62% of rural consumers prefer buying from acompany’s show room. From the shopping Malls it is 27% in urban and nil in rural, preference for theretailer stocking more than one brand is very much seen among the rural consumers (18%), while in urbanit’s only 14%.

Show rooms are preferred by consumers in urban and retailers stocking more than one brand arefavored by rural consumers and this is the main point one can note from this table.

Table 06Sl.No.

Place of purchase ofFans

UrbanConsumers

% RURALConsumers

%





5. Near By Towns 0 0% 40 20%

6. Others 0 0% 0 0%

TOTAL 200 100% 200 100%

Chart 06



Place of Purchase (Watches)The consumers were requested to reveal the source of place of purchase of watches and the

disclosed information is highlighted in table 07. Table 07 throws light on the place of purchase of watchesby urban and rural consumers. A majority of urban consumers (51% of them) prefer to shop at thecompany’s show room for making the purchase and in case of rural it’s only 61%. A look at the belowtable given an idea of the preferences of urban and rural consumers in making watch purchases. A greatmajority in urban go for company show room while in rural it’s the retailer stocking more than one brand,so places of purchase are different.

Table 07Sl.No.

Place of purchase ofWatches

UrbanConsumers

% RURALConsumers

%





5. Near By Towns 0 0% 52 26%

6. Others 0 0% 0 0%

TOTAL 200 100% 200 100%

Chart 07

Place of Purchase (Refrigerator)A query on the place of purchase of refrigerator was posed to the consumers in both urban and

rural and the findings are listed in table 08. Table 08 reveals that 35 % of urban consumers and only 29%rural consumers prefer going to a company’s showroom. In case of an Retail Outlets, it is 24% of urbanand 36% of rural. The Online shopping 12% in urban and 22% are purchasing in rural areas nearbytowns.

From the above, it can be concluded that company’s show room are the preferred places ofpurchase in urban and exclusive dealer in case of rural consumers.

Table 08Sl.No.

Place of Purchase of RefrigeratorUrban

Consumers%

RURALConsumers

%





5. Near By Towns 0 0% 44 22%

6. Others 0 0% 26 13%

TOTAL 200 100% 200 100%



Chart 08

RecommendationsThis study reveals that majority of consumers are now-a-days a highly enlightened lot. The

products should be made available at various out lets for the consumers to purchase or procure. Hence,the marketing distribution systems or marketing channels should be well-established. This helps theconsumers to purchase items with minimum of efforts.

The major portion of Indian population resides in rural India. According to the Indian recentcensus report, there are 638,365 villages in India and about 74% of Indian population lives in thesevillages. The main occupation of the Indian rural population is agriculture and related occupations. Thescenario is changing, as the economic development in the urban area is much faster due toindustrialization such as IT, automobile, and the like. The rural-urban migration exists in India as therural population seeks to make use of the opportunities in the urban environment for job, work,education, marriage and personal reasons. As per the census report, 39 million people migrated in rural-urban patterns of which 54% were female. As a result of this migration the literacy rate among rural Indiais 65% (Source: Indian Census Report) Indian market is heterogeneous one. The urban market comprisesof urban consumers and migrants (people who have migrated from rural to urban). The rural customersare likely to differ in terms of their responsiveness towards marketing mix as well as retail shoppingbehavior.

Researchers addressing emerging market issues have often targeted urban consumers in thosecountries (Maheswaran, 2010). Little attention has been paid to rural consumers’ buying behavior (Home,2002). Rural consumers probably represent the more enduring cultural traditions of those emergingeconomies and may provide unexplored cultural perspectives on economic development (Maheswaranand Shavitt, 2011). An understanding of migrants’ behavior would enable the marketers to drawappropriate strategic marketing decisions to attract and retain migrated customers. India is fast emergingas one of the biggest consumer markets. And so, various MNCs that deal with consumer products areaiming to have a major share in India. Hence this type of study assumes prominence. A buyer's purchasedecisions are highly influenced by buyer's culture, social, personal, psychological factors.



CUSTOMERSC - Care for the customersU - Understand the customersS - Study the customersT - Trust the customersO - Oblige the customersM - Meet the customersE - Evaluate the customersR - Response the customersS - Sell and win the customers

THE EXISTING PROBLEMS IN INDIAN RURAL MARKETING ARE:a) Physical Distanceb) Language/Culturec) Accessibilityd) Money/Expensivee) Lack of Human Resourcef) Competitiong) Technologyh) Rules & Regulationi) Lack of Informationj) Size of the Marketk) Buying Powerl) Image

As the consumer behaviour involves understanding the acquisition, consumption, and disposition ofthe products and services those involved in analyzing it - be it the consumers, marketers, middlemen, orregulatory agencies should continuously make sincere and necessary efforts and take periodic measuresto strengthen the body of knowledge that already exists.

Customers are the buyers of products and services. They also might be the final consumers of theproducts and services.

Marketers need to identify these end users and their place of purchase to frame marketing plansrather than considering the wholesalers and retailers who actually are the intermediaries in the process ofpurchasing. Although these channel members are important for a marketer; yet it is wise on their part notto dissipate their energies toward these as the ultimate users decide the fate of the firm’s products andservices. Marketers, therefore, should consider the consumers and their place of purchase then developtheir plans of action. Here lies the essence of marketing - the consumer is the king and all actions shouldstart with this notion in mind.



DISTINGUISH BETWEEN RURAL AND URBAN CONSUMER

India is the second largest consumer market in the world. With over 1 billion potential customers, it comesas no surprise why consumer goods companies see India as fertile ground for expansion and growth. TheNational Council for Applied Economic Research (NCAER) published a study on consumer behaviourand purchasing power in India. The NCAER classified Indian consumers by their propensity to consume.At the lower end of the scale (the destitute and aspirants) are consumers who are in the market formanufactured essential consumables and basic durables. At the top end of the scale (the Very Rich) is arelatively small but rapidly growing segment for branded international products ranging fromautomobiles and electronics to cosmetics and garments, often at international prices. The middle segment(majority of the consumers and the climbers) is highly differentiated, and price sensitive, requiring atargeted approach to product design and pricing. Over the years, the bottom layer is expected to narrowfurther while the top level is expected to expand.

The biggest mistake a FMCG company can make while entering the rural India is to treat it as anextension to the existing urban market. But there is a vast difference in the lifestyles of the rural and urbanconsumers. The rural Indian consumer is economically, socially, and psycho graphically different from hisurban counterpart. The kind of choices that an urban customer takes for place of purchase granted isdifferent from the choices available to the rural counterparts. The difference in consumer behaviourtowards place of purchase in essence stems from the way of thinking with the fairly simple thoughtprocess of the rural consumer in contrast to a much more complex urban counterpart. An important toolto reach out to the rural audience is through effective communication. A rural consumer is brand loyaland understands symbols better.

The rural Indian population is large and its growth rate is also high. Over 70% India’s one billionplus population lives in around 627,000 villages in rural areas. This simply shows the great potentialityrural India has to bring the much needed volumes and help the MNC companies to bank upon thevolume driven growth. India is now seeing a dramatic shift towards prosperity in rural households. Todrive home the potential of rural India just consider some of these impressive facts about the rural sector.



As per the National Council for Applied Economic Research (NCAER) study, there are as many ‘middleincome and above’ households in the rural areas as there are in the urban areas. There are almost twice asmany ‘lower middle income’ households in rural areas as in the urban areas.

The study of consumer behaviour towards place of purchase as a subject of study is important tothe marketers, students of marketing, policy makers, regulators and the consumers themselves. Thisstudy reveals that majority of consumers are now-a-days a highly enlightened lot. The products shouldbe made available at various out lets for the consumers to purchase or procure. Hence, the marketingdistribution systems or marketing channels should be well-established. This helps the consumers topurchase items with minimum of efforts.

The study emphatically reveals that the consumers towards place of purchase uniformly both inurban and rural desire to have quality products at reasonable prices and they trust more on the advice ofretailer.

In the light of the above revelation it is recommended that the marketers must make efforts tosupply quality goods at reasonable prices and also maintain good relations with their retailers because theretailer is a major influencing person at the point of purchase.

ReferencesJ. William Stanton, Michael J.etzel, Brue J Walker “Fundamentals of Marketing “ MC GrawHill International

Edition, Tenth Edition, Page 176-177.Evan Berman, “Marketing” Macmillan Publishing Company New York, Fourth Edition,Leon G.Schiffman, Lesite Lazar Kanuk “Consumer Behaviour” Prentice Hall of India, New Delhi, Sixth

Edition,V. Shekhar. “Marketing Information System (A Study of select Public enterprises) Thesis, Department of

Business Management, Osmania University.Mohammed Amanatallah “Principles of Modern Marketing” First Edition 1998 by Kalyani Publishers,Evan Berman, “Marketing” Marlmithan Publishing Company, New York IV Edition,Peter D. Bennette(1995), “Dictionary of Marketing Terms”, 2nd ed, American marketing Association.Peter Drucker (1973), “Management: Tasks, Responsibilities, Practices, Harper and Row,Bordan Neil H.(1982), The Concept of Marketing Mix”, Journal of Advertising Research, .Jha, Mithleshwar(1999), “Rural Marketing: Some Conceptual Issues”, Rural Scan, Vol.I, Issue2,Dawar, N. & Chattopadhyay, A. (2002). “Rethinking marketing programs for emerging markets” Long Range

Planning,” 35, 457.Economic Times (ET Intelligence Group Report Nov. 2010).Prahalad, C.K., & Lieberthal, K. (2003). “The end of corporate imperialism.” Harvard Business Review, 81, 109-

117.Bullis, D. (1997). “Selling to India’s consumer market.” Westport, CT: Quorum Books.



Technology readiness and EFTPoS usage in Zimbabwe

Richard ShambareTshwane University of Technology, South Africa

Key WordsAdoption, banking, eBanking, EFTPoS, technology readiness, Zimbabwe

AbstractThe Zimbabwean retail banking sector presents numerous lessons as well as challenges for the marketing ofelectronic banking services. Within the last decade, the Zimbabwean banking sector together with the economyexperienced a near collapse in 2004, rebounded in 2009 with the formation of the coalition government and onceagain took another dip in 2012, when three retail banks were placed under curatorship. Notwithstanding thisvolatility, industry literature reports an increase in adoption rates of electronic banking channels. It is against thisbackground that the purpose of this paper seeks to establish the relationship between technology readiness personalitytraits and the adoption of electronic funds transfer at point of sale (EFTPoS) within the context of ‘volatile’developing economies such as Zimbabwe. Results broadly confirm the efficacy of these personality traitsin predictingthe adoption of technology-basedbanking services. This study provides new insights in that it suggests thattechnology readiness assumptions, regardless of prevailing economic conditions, will generally hold and remain goodindicators foradoption even in uncertain and volatile situations similar to those observed in Zimbabwe.

IntroductionDespite the fact thatfinancial services sector depends on market certainty, economic stability and

fidelity, Zimbabwean banks, nonetheless, continue to thrive amid a hostile and uncertain environment. Ofnote, industry literature is abounding with reports of increased uptake of banking technologies such asautomated teller machines (ATMs), cell phone banking (CPB), and electronic funds transfer at point ofsale (EFTPoS) (Reserve Bank of Zimbabwe, 2011a). In an ‘unstable’ environment such asZimbabwe(Richardson, 2005), it would be reasonable to assume that consumers would generally shyaway from formal banking, as the risk profile of such a sector would usually be intolerably high. Despitethis, patronage of the formal banking services in Zimbabwe including the adoption of technology-basedbanking services (Dube, Chitura & Runyowa, 2009).This apparent contradictiontherefore requires furtherinvestigation. Firstly, are mainstream theories such as the technology readiness (TR) framework useful inexplaining conditions in these difficult situations? Secondly, do consumers in volatile economies reactdifferently when selecting and using banking services?Naturally, the Zimbabwean retail banking sectorpresents itself as an opportune case study for understanding the latter phenomena. More importantly, itpresents numerous lessons as well as challenges for the marketing of electronic banking services such asEFTPoS especially given that within the last decade, the banking sectorwas at the brink of collapse.

Research objectivesAgainst this background, the purpose of this paper seeks to establish the extent to which

traditional theories that have been tried and tested in relatively stable economies would fare in explainingthe adoption of electronic banking services within the context of ‘volatile’ developing economies such asZimbabwe. To achieve this, technology readiness as proposed by Parasuraman (2000) was utilised as atheoretical basis for this study to establish the relationship between personality traits and adoption ofelectronic banking services. Subsequently, the following hypotheses were developed:

H1: Zimbabwean data will yield the same four technology readiness dimensions as initially established byParasuraman (2000).H2: Zimbabwean customers who currently have access to hi-tech products and services are more technologicallyready than those customers who currently have no accessto technology-based products and services.H3: Zimbabwean customers who have a higher desirability towards using EFTPoS banking services are moretechnologically ready than those who use it less frequently.



To remainder of the paper is structured as follows. The literature review is presented next. Following on,the methodology applied to test the above-mentioned hypotheses is described. Thereafter, results anddiscussions are presented.

Literature reviewIn financial services, technology “embraces the systems that underpin the delivery of services, the

information systems, and the digital revolution driving fundamental changes in marketing and marketingcommunications” (Farquhar and Meidan, 2010:14). With technology therefore, the whole concept of abank takes on a new dimension, in that the modern bank can be represented by a telephone in acustomer’s home, a plastic magnetic stripe card (credit or debit cards), ATMs, or the Internet (Jayamaha,2008; Prendergast & Marr, 1994). The amalgamation and convergence of the various information andcommunication technologies (ICTs) facilitate the extension of banking services beyond the conventionalphysical branch building. Consequently, ICTs allow for banking activities to be conducted from literallyanywhere and anytime(Kumar & Gupta, 2008). It is for that reason that Farquhar and Meidan(2010)further explain that the banking culture has forever changed in that ICTs have placed remote banking intothe mainstream culture.

While these findings are generally true in developed economies, the trend is also observed inmany developing countries such as Nigeria, Kenya, and South Africa(Berndt, Saunders & Petzer, 2010;Chen & Li, 2010). Of particular interest, however, is that the electronic banking culture is fast catching upin countries such as Zimbabwe, which have become to be known as economically unstable and volatile(Dube et al.,, 2009; Richardson, 2005). A cursory review of the literature shows that there are very fewstudies that consider adoption of banking innovations in such economies, and even less that apply thetechnology readiness framework. The main focus of embarking on this study therefore would be to assessthe applicability of Parasuraman’s (2000) TR framework in an economy that can be considered to beunstable and highly volatile(Mlambo & Raftopoulos, 2010; Robertson, 2011), an area that has not receivedmuch attention until recently.

The state of retail banking in ZimbabweAs a direct result of the poor economic performance, the banking sector in 2004/ 2005 was in

much distress. Financial institutions grappled to stay afloat as they battled hyperinflation andunprecedented levels of customer attrition. The banking sector rebounded in 2009 with the formation ofthe coalition government between the country’s three major political parties. Also in 2009, thecountrysuspended use of the Zimbabwe dollar and adopted the American Dollar as the official currencyto help ease further economic meltdown and instability, which had seen inflation to rise to way above 60,000 per cent(Mlambo & Raftopoulos, 2010). In 2012, the sector suffered yet another setback when at leastthree retail banks were placed under curatorship and another’s licence being revoked by the country’scentral bank (Reserve Bank of Zimbabwe, 2012).

Undeniably, the events of the past decade affect customers’ trust and confidence in the financialservices sector(Farquhar & Meidan, 2010). It would not be unreasonable to assume that risk-averseconsumers would rather not associate themselves with such unpredictability. Notwithstanding this,industry literature reports that the numbers of banking customers and among them, the use of electronicbanking channels is increasing rapidly (Reserve Bank of Zimbabwe, 2011a; Reserve Bank of Zimbabwe,2011b). While the increase in banking customers in laudable, it is equally astounding given the negativeratings of the economy. Very little explanation to the phenomenon exists owing to the lack of scientificresearch into the area, which also undermines the availability ofreliable and verifiable statistics on theextent of the retail banking sector (Dube et al.,, 2009). What is known, however, is that owing to highunemployment levels, the number of unbanked individuals is still intolerably high(Reserve Bank ofZimbabwe, 2011b). For that reason, the Reserve Bank of Zimbabwe regards extending the reach offinancial services by means of remote banking channels to the unbanked communities a high priority(Reserve Bank of Zimbabwe, 2011a).Therefore, understanding the diffusion of banking technologies inZimbabwe transcends beyond just understanding the bounds of theoretical applications, but also



mightprovide valuable insights into extending the reach of banking services to a critical mass ofZimbabwean consumers.

Electronic banking in ZimbabweCommercial banks in Zimbabwe provide a wide array of banking products and services including

EFTPoS, which commonly is referred to as the Easy Pay System (Ho & Ng, 1994). EFTPoS refers a meansof payment by which customers transfer funds, online, from their bank accounts directly to retailers’ bankaccounts (Moutinho & Meidan, 1989). Using an electronic funds transfer (EFT) terminal installed at the pointof sale (PoS), a customer swipes a credit, debit, or ATM card and enters a personal identification number(PIN) to authorise the transfer of funds.

However, ever since the country adopted a multicurrency regime, including the American dollaras its de facto currency in February 2009 (Reserve Bank of Zimbabwe, 2011b:36), acquiring smalldenominations of these currencies has been a challenge. Consequently, retailers struggle to providechange for transactions, especially the non-even bills. In such an instance, according to (Moyo, 2010), acustomer has two options: (a) buy additional items so as to round off the transaction or (b) accept a ‘creditnote’ from the retailer to use at a later stage. Consequently, a single trip to the grocery store can easilybecome stressful and complicated. The situation effectively forces consumers to buy unnecessary items(e.g., candles or sweets) and to carry two forms of money in the form of bank notes and credit notes.However, since the latter form of money can only be redeemed at the issuing retailer, consumers’ sense ofchoice becomes severely compromised. Thus, to avoid these problems,authors such as Moyo (2010)articulate that consumer bodies including the Consumer Council of Zimbabwe (CCZ) increasingly areencouraging the use of EFTPoS, ascoping strategies to manage the situation. So instead of “surgicallyslicing” ham or buying “unnecessary products” , consumers simply resort to swiping exact amountsusing debit or credit cards(Robertson, 2011). Consequently, EFTPoS is steadily becoming popular amongZimbabwean consumers (Reserve Bank of Zimbabwe, 2011a).

Technology readiness and consumer adoption of EFTPoSDeveloped by Parasuraman (2000), technology readiness (TR) models consumers’ personality

traits and beliefs associated with technology usage. More specifically, it measures consumers’ “propensityto embrace and use new technologies” (Parasuraman & Colby, 2001:27).TR is not a measure ofcompetence of using a particular technology, it is an amalgamation of attitudes that determine consumers’disposition to interact with technology in general(Aldas-Manzano, Lassala-Navarre, Ruiz-Mafe & Sanz-Blas, 2009). Many authors including Yi, Tung and Wu (2003), Walczuch et al. (2007), Berger (2009) andlater Chen and Li (2010) have found correlations between TR, TAM and TPB. In fact, Berger (2009)proposes that TR is an extension and addition to Davis’s TAM in that its four constituent dimensions(optimism, innovativeness, discomfort and insecurity) that essentially measure attitudes.

When faced with a decision whether to adopt or reject a new technology-related product, theliterature acknowledges that potential adopters deal with a complex set of emotions, some of which act aspsychological barriers and others as enablers to adoption (Berger, 2009). Parasuraman and Colby (2001)illustrate that consumers harbour both favourable and unfavourable beliefs about a technology, with thedominant feeling determining adoption or rejection decisions. Accordingly, the technology readinessindex (TRI) is a metric measuring consumer attitudes towards these psychological push and pull factors(Parasuraman & Colby, 2001). The 36-item TRI scale identifies four dimensions of TR which are ultimatelyresponsible for adoption. These dimensions are explored next.

OptimismOptimism refers to the beliefs that technology will provide increased control, flexibility and

efficiency within adopters’ lives or work. This point of view therefore acknowledges that technologyenhances effectiveness and efficiency; a position proposed in numerous conceptual frames including TPB(Ajzen, 1991) and TAM (Davis, 1989). Optimism ties in very closely with the notions of relative advantage(Meuter, Bitner, Ostrom & Brown, 2005), perceived behavioural control (Ajzen, 1991), user-convenience



(Maenpaa, 2006) and perceived ease of use (Berger, 2009).In their research, Parasuraman and Colby (2001)and later Tsikriktsis (2004) found that younger consumers tend to be more optimistic than the elderly.

InnovativenessIn the context of technology in general and TR in particular, to be innovative is the tendency to be

a technology pioneer and thought leader within the community. Innovativeness measures people’s beliefsof being at the forefront of technology adoption (Walczuch et al.,, 2007). Parasuraman and Colby (2001)explain that a vast majority of innovative individuals work in ICT-related disciplines, in which thedevelopment and use of new technologies integrate well with their life and work. By and large, this trendcorroborates earlier findings about innovators and early adopters (Robertson, 1967; Rogers, 1995). For themost part, innovative individuals tend to be highly motivated and skilled in using technologies (Shivers-Blackwell & Charles, 2006).

DiscomfortWhile optimism is the trust that technology improves life and work by making it easier and more

efficient, discomfort is the direct opposite. It is a general distrust of technology and the fear that it furthercomplicates life (Tsikriktsis, 2004). To a certain extent, feelings of discomfort are comparable to those ofperceived complexity or the lack of relative advantage associated with the technology. To this effect,consumers presenting high levels of discomfort fail to see the benefits of using technology in their presentcircumstances. Parasuraman and Colby (2001:61) articulate that these consumers do not hate technologiesper se, but need reassurance that technology can perform as expected. Ideally, they should receiverelatively more support, if they are to adopt and use technology.

InsecurityLike discomfort, insecurity inhibits adoption of technologies. The major difference between

discomfort and insecurity is that while the former is the distrust of technology in general, the latter istransaction specific. That is to say, consumers may be less willing to engage in certain transactions usingtechnology. By definition, insecurity is in many regards similar to the notion of perceived risk (Brown,Cajee, Davies & Stroebel, 2003; Ho & Ng, 1994).

Collectively, the four TRI dimensions as explained in the foregoing section define individuals’technology readiness. Research demonstrates that behaviours associated with adoption of technologiescorrelate highly with TR (Berndt et al.,, 2010).Undoubtedly, one of the clear advantages of the TRI is therealisation that consumers possess a complicated mix of beliefs and emotions about technology.

Research methodologyA survey method was used to collect primary data from students at a Zimbabwean university in

Harare. Three undergraduate students were trained as research assistants and helped with administeringthe instrument. The research assistants were positioned at strategic places within the university campus –close to dining halls, restaurants, libraries, and sports arenas – points where the density of students tendsto be high between November2011 and January 2012. Non-probabilistic sampling techniques wereutilised; research assistants solicited volunteers to participate in the study by completing the self-administered questionnaires (Malholtra, 2010). SPSS 19 was used for data analysis (Field, 2009).

SampleThe entire sample comprised of a homogenous group of university students, and hence non-

probabilistic sampling was deemed appropriate (Calder, Phillips & Tybout, 1981). In total 780questionnaires were distributed. Of the543 questionnaires returned, only 275respondents reported usingEFTPoS and thus considered the sample for this research and used for analysis. Table 1 illustrates theparticipants’ demographic characteristics.



Table 1: Demographic Profile

Demographic Characteristics PercentageGender Male 66

Female 34

Age 20 years or below 26

21 – 30 years 70

31 years + 4

Education level 1st year 32

2nd year 36

3rd year 19

4th year 13

EFTPoS Awareness < 5 years 35

5 – 10 years 42

>10 years 23

Consistent with a student sample, respondents’ ages ranged from 18 to 30 years, with a mean age of 21.20years and a standard deviation of 1.83 years.

Results and DiscussionTechnological readiness

To assess respondents’ level of technology readiness, the 36-item scale developed by Parasuraman(2000) was utilised. Respondents used a 5-point likert scale (1 = strongly disagree; 5 = strongly agree) torate the extent to which their agreed with each of the 36 questions. Descriptive analysis was performed onthe responses of the 36-item TRI scale. Table 2 indicates that the TRI statement: “I like the idea of bankingusing this product because I would not be limited to the regular bank hours” was most significant, with a meanof 3.96. This provides further support for customers’ need for convenience (Maenpaa, 2006). On the otherhand, issues relating to technical support of banking products were observed to be most inhibitive when itcomes to adoption, as shown by the lowest mean of 2.50 to the question (Table 2): “When I get technicalsupport from my bank about this product, I sometimes feel as if I am being taken advantage of by someone whoknows more than I do.”

Table 2: TRI descriptive analysisTRI Statement Mean SD

Other people come to me for advice on technological innovations. 2.98 1.262

It seems my friends are learning more about these banking products than I am. 2.79 1.263

In general, I am among the first in my circle of friends to acquire new banking technologieswhen they first appear.

3.20 1.229

I can usually figure out new banking products and services without help from others. 3.38 1.293

I keep up with the latest technological developments in banking technologies. 3.28 1.253

I enjoy the challenge of figuring out new banking products and services. 3.49 1.307

I have fewer problems than other people in using banking technologies. 3.69 1.118

I do not consider it safe giving out my credit card number or other banking details over acomputer.

3.50 1.396

I do not consider it safe to do any kind of banking using this product. 2.42 1.243

I worry that financial information transmitted using this product will be seen by other people. 2.82 1.325

I do not feel confident doing business with a place that can only be reached online. 3.05 1.367

Any business transaction I do electronically should be confirmed later with something inwriting.

3.87 1.190

Whenever something gets automated, I need to carefully check that the machine or computer isnot making mistakes.

3.75 1.222



The human touch is very important when banking. 3.27 1.330

When I call a business, I prefer to talk to a person rather than a machine. 3.73 1.371

If I provide information to a machine or over the Internet, I can never be sure it really gets tothe right place.

3.23 1.377

Technical support lines (and Call Centres) are not helpful because they don’t explain things inthe language I understand.

2.61 1.323

Sometimes, I think this product was not designed for use by ordinary people. 2.70 1.381

The manuals and instructions for this service are not written in plain language. 2.65 1.290

When I get technical support from my bank about this product, I sometimes feel as if I am beingtaken advantage of by someone who knows more than I do.

2.50 1.239

If I use this product, I prefer to use the basic model (or version) over one with a lot of extrafeatures.

2.93 1.272

It is embarrassing when I have trouble with this service while people are watching. 3.20 1.371

There should be caution in replacing important people-tasks with technology because thistechnology can breakdown or get disconnected.

3.50 1.203

This product like many new technologies has health or safety risks that are not discovered untilafter people have used them.

3.05 1.241

This technology makes it too easy for governments and companies to spy on people. 3.25 1.318

This product always seems to fail at the worst possible time. 3.03 1.256

This product gives me more control over my finances. 3.74 1.142

This product much more convenient because it uses the newest technologies. 3.89 1.045

I like the idea of banking using this product because I would not be limited to the regular bankhours.

3.96 1.125

I prefer to use this product because it is the most advanced banking technology available. 3.81 1.105

I like this product because it allows me to tailor my finances to fit my own needs. 3.68 1.124

This product makes me more efficient in my job and life. 3.75 1.134

I find this product to be mentally stimulating. 3.56 1.169

This product gives me more freedom of mobility. 3.82 1.149

Learning about this product can be as rewarding as the technology itself. 3.82 1.117

I feel confident that this product will perform the functions I command it to do. 3.77 1.093

As previously mentioned, the TRI metric can essentially be broken down into four distinct factors.Of these, innovativeness and optimism are considered to be enablers of adoption. Since, discomfort andinsecurity are recognised as those factors that inhibit adoption, they are reverse-scored. In calculating theoverall TRI score, the item mean scores of TRI items (Table 2) are computed into averages. These averagesare based on the different items constituting the TR dimensions. The results of the four dimensions as wellas those for the overall score are depicted in Table 3. The overall TRI score is 3.1926. This score shows thatZimbabwean consumers have a moderate to high technological readiness index (Parasuraman, 2000).

Table 3: TRI descriptive analysis

Dimension Mean Standard Deviation

Innovativeness 3.3358 .7604

Optimism 3.7794 .7477

Insecurity 3.4018 .8003

Discomfort 2.9430 .7336

Overall TRI 3.1926 .4411

Hypothesis 1Having established a moderate to high level of TR among the respondents (Table 3), it was

instructive to conduct further analysis in order to test hypotheses. Hypothesis 1 sought to establishwhether Zimbabwean (i.e., from a developing country) data would yield a similar structure of TRcomparable to the evidence found in past works (e.g., Berndt et al.,, 2010; Chen & Li, 2010; Parasuraman,



2000; Parasuraman & Colby, 2001; Tsikriktsis, 2004). Factor analysis using the principal componentsanalysis (PCA) utilising Oblimin rotation was used to test this hypothesis(Field, 2009).

Table 4: TR Factor analysis summary

Factor (Dimension) % Variation Cumulative % Cronbach’s alpha

1. Optimism 13.998 13.998 .862

2. Discomfort 11.865 25.864 .753

3. Insecurity 6.292 32.156 .736

4. Innovativeness 5.544 37.699 .668

As indicated in Table 4, a four-factor structure, accounting for approximately 38 per cent ofvariance, emerged. All the four TR dimensions loaded uniquely as single factors onto each of the fourresultant factors, with no cross-loadings. The measure of internal consistency of these factors was assessedby means of Cronbach’s alpha. Table 4 illustrates that the Cronbach’s alphas ranged from .668 to .862, wellabove the minimum .6 threshold, and thus indicating good measures of reliability for thedimensions(Ozer & Gunluk, 2010).

Optimism loaded onto Factor 1 followed by Discomfort, Insecurity, and lastly Innovativeness(Table 4). Since optimism refers to the beliefs that technology provides the potential adopter withincreased control, flexibility and efficiency, in this context, this suggests that using EFTPoS hasconsiderable relative advantage of traditional forms of banking. Clearly, this consistent with past researchfindings that observed that the convenience associated with services such as EFTPoS is an importantdeterminant of adoption (Ho & Ng, 1994; Kumar & Gupta, 2008; Maenpaa, 2006). Having said that,discomfort (an adoption inhibitor) was observed as Factor 2 or the second-most important factor related toEFTPoS usage. This is consistent with the TR theory, which presupposes a combination of both favourableand unfavourable believes about technology to influence its adoption (Parasuraman & Colby, 2001). Inthis instance, optimism appears more dominant and thus has greater effect than the inhibiting variables.Overall, these results, therefore, provide evidence that the four TR dimensions, as postulated byParasuraman (2000), are indeed applicable and useful in predicting adoption behaviour even withindeveloping nations’ contexts. Thereby providing support for studies undertaken in other developingnations such as Berndt et al. (2010).More importantly, the findings indicate that TR assumptionsalso applyin economies characterised by market uncertainty and volatility such as Zimbabwe.

Hypothesis 2TR further postulates that technologically ready individuals tend to accept and adopt technology-

related products more than those who are less technologically ready (Parasuraman, 2000). Accordingly,Hypothesis 2 sought to investigate whether customers who currently have access to hi-tech products andservices are more technologically ready than individuals who currently have no access to technology-based products and services. Ownership of three technologies or hi-tech products (i.e., cell phones,personal computers, and the Internet) was used to test this hypothesis. The sample was divided into twosegments – those who owned and used the high-tech product and another group that did not use theproduct. Two-sample independent T-tests were applied to compare the differences in the means betweenthe groups.

Table 5: TR Factor analysis summary

Technology usedTechnology

Yes Not p-value

Cell phones 3.2181 2.9778 -2.670 .008

PersonalComputer

3.2408 3.0860 -2.662 .008

Internet 3.2710 3.1142 -2.961 .003



Table 5 illustrates that indeed technology readiness and usage of technology-related products arerelated. There was a significant difference in means between the two groups (those using and those notusing the product) for cell phones, personal computers, and the Internet. In all the cases, the TR score forthe adopters was significantly higher (p< .05) than that of the non-adopting group (Table 5). These results

provide further support for the efficacy of technology readiness in predicting technology acceptance andusage. The implication of these findings is that individuals who use other technology products are morelikely to be users of EFTPoS. This also is in line with results presented in Table 4, which indicate theimportance of optimism in adopting EFTPoS in that general perceptions about technology being beneficialare important for technology usage. Consequently, the data supports Hypothesis 2.

Hypothesis 3Further analysis on the notion of technology readiness and usage of technology was conducted. In

this instance, it was importance to determine whether the rate of EFTPoS usage (or desirability) wascorrelated with the level of technology readiness. Desirability was operationalised by the frequency withwhich the banking channel was used. Respondents indicated the rate of usage for banking channelsanchored at 1 and 6, with 1 being less than once a month and 6 indicating usage of more than three times aweek. Scores of up to 3 were considered less desirable and those greater than 3 were classified as showingtendencies of high desirability for EFTPoS. A two-sample t-test indicated a significantly higher TRI meanscore for consumers with high desirability (t = -3.377; p< .001);therefore providing support for Hypothesis

3. This clearly is further confirmation that higher levels of technology readiness influencesincreased usageof banking technologies such as EFTPoS. One-tail correlation analysis between TRI and EFTPoS alsosupport the latter findings (Table 6).

Also shown in Table 6 are the correlation coefficients of the various banking channels and TRI andalso when correlated among themselves. Therein, TRI was observed to record significant correlationsbetween ATM desirability (p< .05) and EFTPoS desirability (p< .01). Given that ATMs and EFTPoS areclosely related products in that both channels require plastic magnetic swipe cards or chip cards totransact, these results are not surprising. These two products (ATMs and EFTPoS) were also observed tobe highly correlated (r = .498; p< .001).

Table 6: Correlations (1-tail) of TRI and desirability of banking channel

1 2 3 4 5 6 7

1. TRI 1

2. IB .058 1

3. Branch -.026 .089 1

4. ATM .120* .238** .397** 15. EFTPoS .252** .252** .267** .498** 1

6. TB .089 .676** .128* .229** .262** 1

7. CPB .074 .763** .115* .276** .237** .662** 1

*p< .05; **p< .01

However, what was interesting is the fact that the remaining four banking channels were notcorrelated with TRI, but were among themselves correlated. To illustrate cell phone banking usage washighly correlated with telephone banking (r = .662; p< .001) and with Internet banking (IB) (r = .763; p<

.001). Albeit requiring further investigation, the foregoing appears to suggest a unique pattern withrespect to the different banking products used. Another interesting finding relates to TRI and EFTPoS.Although it is a non-significant correlation, TRI and the physical branch usage seem to have a negativerelationship, indicating that individuals with lower levels of TRI tend to use physical bank branches. Thisfinding, albeit it being non-significant summarises the technology readiness concept, in that it shows thatindividuals with low TR scores do not favour using technological innovations, and the converse beingalso true.



ConclusionThe objective of this paper was to establish the extent to which the technological readiness theory

is applicable in the financial services sector of a developing economic context characterised by marketuncertainty and volatility. This area of study was seen as being one that has not been addressed fully inthe existing literature as most of the studies reporting of technology readiness especially in the retailbanking sector provide insights into developed economies predominantly the United States(Parasuraman, 2000; Parasuraman & Colby, 2001)and Europe(Berger, 2009; Tsikriktsis, 2004). Of thosereporting on the developing world for instance Berndt et al. (2010) and Chen and Li (2010), none havefocused solely on a volatile and unstable economies. Special attention on a volatile economy such asZimbabwe was important for two reasons. Firstly, it is not uncommon for consumer behaviour especiallyrelated to money and banking in in volatile economies to be fundamentally different from that observedin stable economies. Secondly, researchers sought to establish whether the assumptions of technologyreadiness do indeed apply in these extreme cases.

Generally, the results conform to previous studies, wherein the four TR dimensions hypothesisedby Parasuraman (2000) and later by Parasuraman and Colby (2001) were observed to be associated withadoption behaviour. The latter was also demonstrated in studies such as that undertaken by Berndt andcolleagues as well and by Chen and Lin, which specifically reported on developing nations’ context. Theimplication of this is that technology readiness is indeed an important predictor of technology usage. Ofparticular importance is the fact that regardless of the market dynamics at play within the economy,consumers’ level technology readiness remains an important indicator of technology usage even in thecontext of banking technologies.

Another important finding observed in this current study was the fact that increased usage oftechnologies is strongly correlated with technology readiness. In other words, the more technologicalready consumers are the more likely they will use a technology more frequently and regularly. Inaddition, high levels of technological readiness indicate that consumers are more likely to use a differentmix of technologies. This therefore implies that bank marketers should not consider the various bankingchannels as separate products. Rather, these should ideally be sold as a package or bundle of products tocustomers. This brings to mind the idea of cross-selling products, as evidence suggests that these productsare hardly used in isolation, for instance, ATMs are almost always used together with EFTPoS andInternet banking together with cell phone banking.

Overall, the implications for financial institutions operating in difficult economic environmentsare that they should place more attention on understanding consumers’ needs and bank patronagemotives together with their technology readiness, which can best be estimated by consumers’ usagepatterns of other hi-tech products (Parasuraman & Colby, 2001). As with any study, this study was notfree from limitations. Focusing only on technology readiness as an indicator or predictor of EFTPoS usagecan be viewed as a limitation. The sample composition, constituting only students is yet again anotherlimitation. Future research could combine a more diverse sample over and above students. Also differentconceptual frames in addition to technology readiness could be utilised to model adoption.

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