The concept of sky credit card - Essay Example

Introduction Aggressive marketing and easy availability of credit cards has resulted in credit cards being used to finance consumer purchases as a way of life. Research suggests that socialization as a consumer begins in infancy with children making their first purchase at the average age of eight years (Hayhoe et al., 2000). There has been a change in attitude towards credit card which implies that consumers are more willing to use credit to finance their consumption. The widespread us of credit cards reflects the consumer preference for using credit cards and technological advancements have made it possible for the creditors to offer revolving credit (Chien & Devaney, 2001). The credit card has allowed for convenience in purchasing but still one needs to go to the shops and cash machines to use the credit card. For the first time, Sky TV and Barclays have joined hands to introduce an interactive credit card known as Sky Credit Card which offers the convenience to make purchases right from the comfort of the living room through the television. The users will be able to place the SkyCard in the second slot of their set-top boxes and through the remote control they can manage their accounts and make purchases. Literature Review The attitude-behavior relationship in consumer finance differs from that in social settings. The consumers may have favorable attitudes towards borrowing but having low incomes poor credit history may impose constraints on the level of credit that they would like to enjoy. Research also suggests that those in the early phase of their careers have more favorable attitudes towards borrowing as they expect to have more future resources towards paying off their debts (Chien & Devaney). Hence it is essential to study the relationship of attitude and behavior in the context of an interactive credit card as the attitude here differs from the attitude towards a regular credit card. The SkyCard is just like any other credit card but has the advantage of being fully integrated with Sky’s interactive television services (Slocombe, 2005). The SkyCard members will earn point on every purchase which will work as an inducement to membership and to get people to use the card. It will also offer savings on Sky’s monthly entertainment. This card is expected to build on the value delivered to the customers through the rewards and loyalty programs and the savings in subscription. The consumer culture is also responsible for the wide usage of credit cards. It is powerful enough to shape the individuals and societies. The consumer culture has been defined as a culture in which the majority of consumers avidly desire, pursue, consume and display goods and services that are valued for non-utilitarian reasons like status, envy provocation and pleasure seeking (Roberts & Jones, 2001). The value that the Sky Credit card is expected to add is comfort, convenience and savings in television services. Hence it is more for non-utilitarian reasons, which makes this research of great significance. Credit cards are an expensive retail payment instrument extensively used by those who use it as a source of revolving credit and also those who routinely pay off their balances every month (Chakravorti & Emmons, 2003). The market share of credit cards has been increasing over the years and it is essential to understand the attitudes of the consumers, merchants and users. Research problem The existing literature does discuss the consumer culture, convenience shopping and the attitude of merchants and consumers. Nevertheless, since this is the first time that such a card has even been launched, it is essential to know the impact it makes on the people and the industry. There is no prior research data available on this issue. Sky Credit card works through the digital box system and hence the countries where it can be launched initially are the USA and the UK. There are seven million direct-to-home customers across the UK (Slocombe, 2005), which makes it essential to determine what share of market SkyCard can expect to exploit. It is also essential to understand the purchasing pattern the credit card usage pattern of different age groups. A comparative study between two countries namely, the USA and the UK would help to determine where the concentration should lie in the initial phase of introduction of this interactive credit card. Both the UK and the USA are huge markets for credit card users and it is essential to generate knowledge about this new interactive card which promises loyalty rewards and fringe benefits in addition to the comfort of making purchases through the remote control of the set-top box. At the same time, the study would also reveal whether people feel it is essential to visit the shop for purchases and what items can be purchased without having to physically visit the shop/merchants. Aims and objectives of the study The objective of the research then is as follows: To investigate the acceptance and satisfaction of concept of sky credit card in UK. 1. To study whether the concept of interactive credit card would be accepted in the USA. 2. To understand the attitudes & perception towards switching from existing credit card to interactive credit card. 3. To draw conclusion on potential future on interactive credit card in the UK and the USA. 4. To determine the age group that should be targeted for future marketing in each of the two countries. 5. The level of trust that the UK customers have in UK. Research Philosophy Research relies on facts and experience, data, concepts and constructs, hypotheses and conjectures, and principles and laws (Amaratunga, Baldry, Sarshar, & Newton, 2002). Research methodology is the procedural framework within which the research is conducted. While positivism (quantitative with hypothesis testing), interpretivism (qualitative with hypothesis generalizations) and realism are the different types of research philosophies, each has its own purposes and advantages. According to Taylor et al., (1995) quantitative data is numerical in form. Questionnaires and interviews are the usual research methods used under this paradigm. Some researchers claim that unless human behavior can be expressed in numerical terms, it cannot be accurately measured (cited by Jones, 2004). Qualitative data covers a range of material collected from previous research, literature review, case studies and unstructured interviews. Some researchers argue that the qualitative approach is better as it provides greater depth. Research approach Research philosophy highlights different schools of thought on the how to conduct research. Arguments should be evaluated in different ways because primarily arguments have different roles and purposes and people assess according to the purpose in their mind. At times arguments provide useful information depending on one’s knowledge of how the world works. In a different setting, one can take an abstract approach and ask what follows from a given set of information and then decide on the outcome. Arguments can be evaluated in two qualitatively different ways – in terms of their deductive correctness or in terms of inductive strength (Rips, 2001). Research strategies Amaratunga et al., suggest that research strategy should be chosen as a function of the research situation. Each strategy has its own approach to collect and interpret data and hence its strategy has its own advantages and disadvantages. Some even suggest a mixed or balanced approach. At the same time, there are certain overlapping parameters which make the strategy selection a difficult task. The strategy selection should depend upon the behavioral elements, the degree of focus on past events and the conditions or setting. As far as this research is concerned, both the qualitative method (interpretive or inductive) and the quantitative (positivist or deductive) method of research will be used. Literature review would be used as the qualitative method as a lot of literature is available, with diverse opinions on the use of credit card in general. The deductive method would not bring to light the deeper, underlying meanings and explanations of the data collected. It would enable to understand the totality of the situation and multiple methods can be used to establish different views of the phenomena. Studies would be conducted over a period of time, which would give a realistic view of the change process of over time. This makes it powerful for studying any process. This method has been established to be best strategy for discovery, exploring a new idea or developing hypothesis. Data collection and analysis method Quantitative investigations look for “distinguishing characteristics, elemental properties and empirical boundaries’ and tend to measure “how much” or “how often” (Nau, 1995 cited by Amaratunga et al.,). In quantitative analysis data is collected through mail questionnaires, interviews and published statistics (Gable, 1994). The most widely used data collection method is interviews as it is a highly flexible method, can be used almost anywhere and has the potential to produce data of great depth. The research topic has to be seen from the perspective of the interviewee. Interviews can be taken at social clubs where people from all age groups would be available. A questionnaire is a powerful evaluation tool. It is essential to understand the capabilities of the questionnaire and how they can help the research. A questionnaire would help to collect qualitative information from the consumers about their opinion and expectations. Questionnaires are an inexpensive way to collect data and very often it is the only method to collect information for analysis (Fao, n.d.). In the administration of questionnaire, the researchers control is limite (Gatech, n.d.). Hence the validity of the results is more reliant on the respondents. Participant observation would have to be categorized under different sections: a. Those that have been using SkyCard in the UK. b. Those that intend using it in the near future. c. Those that have considered using but decided not to use it along with the reasons for not using it. d. Those that have heard of it in the USA. e. Those that have heard and intend to use it. f. Those that have heard in USA but do not intend to use it. g. Those that have heard and do not have much of information about it. Qualitative data has a strong potential for revealing complexity. It denotes ‘lived experience’ and is rich and holistic. Qualitative data is very helpful in supplementing or explaining quantitative data from a setting (Amaratunga et al.,). Additional help will be obtained from secondary data through literature review. A literature review provides the meaningful context of the project within the universe of already existing research (Obenzinger, 2005). It sets the basis for discussion or analysis or contemplation of implication and the necessity for further research. Literature review distinguishes what has been done from what is to be done. Previous perspectives can be synthesized and a new one gained. In this case, most literature would be published news in journals or other papers as it is a relatively new phenomenon. Analysis and interpretation is the major part of the research process. Analytic techniques such as rearranging the arrays, placing the evidence in a matrix of categories, creating flowcharts or data displays, using means, variances and cross tabulations to examine the relationships between variables would facilitate analysis (Tellis, 1997). Pattern matching is another major mode of analysis. Here the empirical pattern can be compared with the predicted one. When the patterns coincide the internal validity is enhanced. Time series analysis is another technique in experimental and quasi-experimental analysis. In case of a single variable this is simpler than pattern matching but multiple changes in a variable make the starting and ending points unclear. The analysis should rely on all the relevant evidence. Prior expert knowledge would help to get the right analysis. Limitations and Expected outcomes This research is expected to indicate the customer preferences and the way they base their decisions. It would provide a solution to the marketing strategy to be adopted in both the countries. However, there is no unique research method and each method has its own strengths and weaknesses. Problems could arise during data collection and there also exists the risk to manipulate independent variables. During data analysis through pattern matching there remains a risk of interpretive discretion. Qualitative research is the method of asking simple questions and getting complex answers. This is where prior expertise and knowledge would help in interpreting data. Research timetable August 2007 Collection of literature, discussion with mentors, subscribing to journals and periodicals, working out the framework for research. . September 2007 Sending out questionnaires to both USA and UK, interviews in UK October 2007 Collecting the questionnaires in USA and holding research through interviews in USA. November 2007 Collecting and compiling data, analysis and interpretation of data. December 2007 Writing the dissertation, and submission. References: Amaratunga, D., Baldry, D., Sarshar, M., & Newton, R., (2002), Quantitative and Qualitative Research in the built environment: application of mixed research approach, Work Study, Vol. 15 No. 1 2002, pp. 17-31 Chakravorti, S., Emmons, W. R., (2003), Who Pays for Credit Cards? The Journal of Consumer Affairs, Vol. 37, No. 2, 2003 Chien, Y., & Devaney, S. A., (2001), The Effects of Credit Attitude and Socioeconomic Factors on Credit Card and Installment Debt, The Journal of Consumer Affairs, Vol. 35, No. I , 200 I Fao (n.d.), Marketing Research and Information Systems, Chapter 4, 01 August 2007 Gable, G. G., (1994) Integrating case study and survey research methods: an example in information systems. European Journal of Information Systems 3(2):pp. 112-126. Gatech (n.d.), Questionnaire Design, 01 August 2007 Hayhoe, C. L., Leach, L. J., Turner, P. R., Bruin, M. J., & Lawrence, F. C., (2000), Differences in Spending Habits and Credit Use of College Students, The Journal of Consumer Affairs, Vol. 34, No. I , 2000 Jones, C., (2004), Quantitative and Qualitative Research: Conflicting Paradigms or Perfect Partners? 01 August 2007 Obenzinger, H., (2005), What can a literature review do for me? 02 July 2007 Rips, L. J., (2001), Two Kinds of Reasoning, American Psychological Society, Vol. 12 No . 2 pp. 129-134 Roberts, J. A., & Jones, E., (2001), Money Attitudes, Credit Card Use, and Compulsive Buying among American College Students, The Journal of Consumer Affairs, Vol. 35, No. 21, 2001 Slocombe, M., (2005), SkyCard: Interactive Credit Card from Sky, 01 August 2007 Tellis, W., (1997), Application of a Case Study Methodology, 01 August 2007 Read More