Magazine article Journal of Services Research

Consumer Perception towards the Purchase of Credit Cards

Magazine article Journal of Services Research

Consumer Perception towards the Purchase of Credit Cards

Article excerpt


Services marketing differ from goods marketing due to well established service characteristics; viz., intangibility, perishability, inseparability of production and consumption, heterogeneity and lack of ownership. Further, this difference is due to resulting extended marketing-mix of 7Ps (Booms and Bitner, 1981). The present study is focused on the fundamental 'P'; i.e., service product which is critical to manage for keeping one's business in market.

The service product is essentially a bundle of activities, consisting of a core service plus a cluster of supplementary services. The core elements respond to the customer's need for a basic benefit; for example, airlines offer transportation. Supplementary services are those that add value to the core service.

Within the purview of given parameters, the study is carried out in the area of financial services marketing, a branch of services marketing, with special reference to credit card services. Thus, the objective is to study the consumer perception towards service product features in pre-purchase evaluation and position of supplementary service elements on different product levels with respect to credit cards.

A credit card is a financial instrument which is considered as a convenient way of making payments for one's day-to-day purchases. Credit card is a product which gained importance and popularity as plastic money or safe money. The credit card system is one whereby the card holder can make purchases on credit upto an amount agreed by him / her with the credit card company by presenting the card in lieu of cash. The core benefit of credit cards' system is built around the revolving credit concept; i.e., credit facility obtained can be extended in form of several easy installments. This revolving credit appears to be an attractive feature of credit cards because consumer can enjoy and avail credit without any extra charge if he makes entire payment on time. Analyzing the credit card as a product reveals that it does not provide just the facility of revolving credit but it enables the consumer to have additional benefits - called as supplementary services - like free accident insurance coverage for self, as well as for spouse.

The credit card culture in India was formally introduced almost 25 years ago. The credit card business is probably the most lucrative banking business in India today. The industry is demonstrating vigorous growth rates of 25 to 30 percent per annum, and offers unparalleled profit potential and margins (IBEF, 2005). This may result in one of the most exciting card markets in the world now and in the next decade.


As intangibility is the main distinguishing feature of services when compared to goods, services are low in search qualities (tangible attributes which can be considered prior to purchase) and are, therefore, more difficult to evaluate pre-purchase. Conversely services are high in experience qualities, which refer to attributes which can only be assessed after purchase or during consumption. Furthermore, many professional or specialist services will also be high in credence qualities, which are attributes which cannot or are very difficult to be assessed after purchase and consumption (Zeithaml 1981).

The service as a product is essentially described as a package or bundle of different services, tangibles and intangibles, which all together form the total product. The package is divided into two main categories:

1) The main service, which is called as "core service" (Gronroos 1978, Norman 1984) or as "substantive service".

2) "Auxiliary services" or "Extras" which are often referred to as "peripherals" or "peripheral services" (Norman 1984). These are sometimes also referred as "facilitator services" (Maister & Lovelock 1982) and also known as supplementary services (Lovelock 1991).

The core service is the basic value provided by the service product. …

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