AS TUDY ON FACTORS THAT INFLUENCE CUSTOMERS IN CHOOSING ASNB UNIT by sj4oCq9a

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									      A STUDY ON FACTORS THAT INFLUENCE CUSTOMERS IN CHOOSING
                                     ASNB UNIT TRUST PRODUCTS


                                          CHAPTER 1

                                       INTRODUCTION




1.0    AN OVERVIEW


       First and foremost, the research topic that conducted by the researcher is “A Study on

       Factors that Influence Customers in Choosing ASNB Unit Trust Products”. The contents

       of this report consist of the introduction part, the literature review, research methodology,

       findings and interpretation of data, recommendation, conclusion and bibliography. Each

       of these chapters is explained in detail with the sub topics that discuss the essential

       procedures and steps in completing this study. On this chapter will discuss about the

       background of study, scope of study, problem statement, objectives and research

       question, hypothesis, limitation and significance involved and also discusses the

       definition of the main terms used in this research.




1.1    BACKGROUND OF THE STUDY


       In general, customers choose to have and to buy something that will fulfill their desired

       and needs is based on several factors. As long as it will satisfy their needs and wants,

       so they will decided to buy and having those things. Here, it mentions about a

       satisfaction of customers in choosing a desired products because, the satisfaction

       known as a person’s feeling of pleasure or disappointment resulting from comparing a

       product or service performance (or outcome) in relation to his or her expectations. If the

       performance falls short of expectations, the customer is dissatisfied. On the other hand,

       if the performance matches the expectations, the customer is satisfied. Meanwhile, if the


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 performance exceeds expectations, the customer is highly satisfied or delighted. So,

 there may have a several factors that will be an importance issues in choosing a unit

 trust products.


 A unit trust funds is one of the famous type of funds in Malaysia. On the other hand, it is

 a financial vehicle through which individuals may invest their money in a right way. The

 idea behind unit trust is the better investment through collective investing. This is to say

 that, we pooling the investments from many investors, individuals and institutions to do

 an investment. These funds will be managed actively by professional fund managers.

 These funds managers will invest in either equities, fixed income securities, or other

 assets that authorized under guidelines. There are two types of investment, either open-

 ended or close-ended investment. Here, unit trusts are open-ended investment.

 Therefore, the assets that have underlying value are always directly represented by the

 total number of units issued multiplied by the unit price less the transaction or any

 management fee incurred or other associated costs. Every fund has their specified

 investment objective, and that objective is to determine the management aims and

 limitations. (Wikipedia; unit trust, 2011)


 From the financial dictionary, a unit trust is defined as an investment product which

 enables small investors to pool their funds. Then, they may earn a greater return if each

 investor had acted individually. The investors will hold units that it may fluctuate depend

 on the performance of market of an underlying value of assets. There are three

 components of unit trusts: the trustee (custodian), the management company, and the

 unit holders (E. Carew, 1996-2011).


 Basically, this study is to determine the crucial factors which influence customer in

 choosing the ASNB unit trust products that will satisfy their needs and desired.

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 1.2   BACKGROUND OF THE COMPANY


       1.2.1   Permodalan Nasional Berhad


               Permodalan Nasional Berhad (PNB) or the National Equity Corporation

               was established on March 17, 1978 under the Companies Act 1965, with

               an authorized capital of RM200 million and a paid-up capital of RM100

               million, of RM1.00 a share. PNB is a wholly owned subsidiary of the

               Yayasan Pelaburan Bumiputera (YPB) or the Bumiputera Investment

               Foundation which was established by the government on January 9,

               1978. The YPB was incorporated with the objective to formulate

               strategies   to   promote    savings,   and     develop   investment     and

               entrepreneurship skills among the Bumiputras. The Chairman of the

               foundation is Y.A.B. Dato’ Seri Dr. Mahathir Mohamed. Under the late

               Chairman Y.A.Bhg. Tun Ismail Mohamed Ali (the PNB’s first Chairman)

               guidance, PNB rose from strength to strength to become the largest

               investment holding company managing the largest unit trust fund in the

               country. As one of the instruments of the New Economic Policy, PNB was

               very involved during the initial years in strategic corporate restructuring

               with the main objective to accelerate the Bumiputra corporate ownership

               in major Malaysian corporations (PNB Directory, 2000). In other meaning,

               it is to promote share ownership in the corporate sector among the

               Bumiputra,    and    develop    opportunities    for   suitable   Bumiputra

               professionals to participate in the creation and management of wealth.


               In addition to its direct participation in the development of the unit trust

               industry in Malaysia, PNB continues to emphasize on the importance of

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               creating and developing a pool of qualified Bumiputra professionals in the

               industry (PNB Directory, 2000). From my understanding based on a

               testimony given, even during the initial years, PNB is concerned over the

               role of Bumiputra professionals in companies where PNB owns a majority

               interest. And even until today PNB strives to ensure that suitable

               Bumiputra professionals are given the opportunity to participate in the

               management of the companies within the group. PNB is able to produce a

               professional management. It is because, within the PNB’s organizational

               set up, PNB continues to train and develop Bumiputra professionals to

               administer and manage its family of unit trusts, while continuous efforts

               are already in place to increase training and development in the

               international financial markets.


               One more thing, every year, PNB will make a program which is called as

               Minggu Amanah Saham Malaysia (MASM). The Minggu Saham Amanah

               Malaysia or Malaysian Unit Trust Week is an annual event organized by

               PNB.




       1.2.2   Amanah Saham Nasional Berhad (ASNB)

               Amanah Saham Nasional Berhad (ASNB) was established on May 22,

               1979, to manage the unit trust funds launched by PNB. Having been in

               the industry for more than 25 years, ASNB has confirms to maintain its

               position as a leading unit trust manager, controlling more than 40% of the

               total units in circulation. ASNB is a wholly-owned subsidiary company of

               Permodalan Nasional Berhad (PNB). ASNB is also the Management


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            Company of these types of products that is ASN, ASN 2, ASN 3, ASG

            Pendidikan, ASG-Kesihatan, ASG-Persaraan, ASB, ASW 2020, ASM and

            ASD (ASNB, 2010). From that, there are two types of prices manage by

            this company, which are fixed price and variable price. Fixed prices are

            ASB, ASD, ASW 2020, ASM and the latest one is AS 1 Malaysia. For the

            variable prices are ASN, ASN 2, ASN 3 Imbang, and ASG-Pendidikan,

            ASG-Kesihatan and ASG-Persaraan. The latest product offered by ASNB

            is Amanah Saham 1 Malaysia (AS1M). Last two years, ASNB have

            launched this product which was offered to all Malaysian by using a

            quotation system that are 30% offered to Chinese, 30% offered to

            Indians, and 40% offered to Malays. This fund is categorized as an equity

            and/or income fund. It has launched at August 5, 2009. The investment

            objective of this product is the fund seeks to provide regular and

            consistent income stream whilst preserving the Unit holders’ investment

            capital over a long term horizon through a diversified portfolio of

            investment. This fund has allocate the asset to achieve its objective by

            investing up to 90% of its VOF in equities, while maintaining at least 10%

            in other capital market instrument, inclusive of liquid assets. It is designed

            to preserve the capital of fund in the long-term period while at the same

            time to seek potential income from its investment (Master Prospectus,

            2010/2011).

            In addition, ASNB offered their products not only to bumiputra, but also to

            non-bumiputra. The highest percentage of bumiputra invest in this unit

            trust is they invest in ASB product compared to others. The requirement

            to invest in ASB is that investor must known as bumiputra, not allowed for


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            non-bumiputra. And minimum age required is 12 years old and above.

            This company is not a bank but the half operation of this company is

            similar to bank since, they can manage people money.

            Furthermore, since we know this company offered two types of prices that

            are fixed price and variable price. So, we also can determine whether

            investors are risk taker or risk adverse based on their selection of

            products. For those who prefer high return, they will select ASN product.

            We categorized this investor as a risk taker because they lead to faced

            with high risk due to high return. And for those who is seek for lower risk,

            they will select ASB product that is fixed products because only ASB

            product give bonus based on 10years invest in ASB.

            In fact, ASNB have their branches at every state in Malaysia. Nowadays,

            for every state, they only have one branch, but in future for every state,

            may have more than one branch. For every state, they will offer all

            products similar to other state. For instance, in ASNB Kuantan, this

            company has the entire products, so that investor have many choice to

            choose a products that they like to make an investment. Besides that, for

            every branch they will give better service to their customer. In term of staff

            at ASNB branch, they had trained to be very friendly and able to help the

            customer if any problem occurred. The staff also trained to be serious in

            doing a job in order to avoid any mistake and misunderstanding and to

            make sure that task going smoothly.

            Next, there are several strategies done by this company. The funds of this

            company will diversify its assets between equities and other securities

            depend on the economic situation, stock market conditions and interest


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              rate movements. The fund stresses on diversifying its equity portfolio

              through sectoral allocation in equities, fixed income securities and last

              one is in money market. The importance of this strategy is to preserve the

              value of the capital and to generate the competitive advantages in long

              term period (Signalpoint, 2006).

              Moreover, this company has their own agent in order to mobilize their

              fund. The agents of ASNB are Maybank Berhad, CIMB bank, RHB bank,

              and Pos Malaysia Berhad. As such, Maybank is an appointed authorised

              agent for (ASNB). Investors can perform transactions for the several

              ASNB’s unit trust funds at Maybank branches nationwide. That funds are;

              ASN, ASB, ASW 2020, ASN 2, ASM, ASD, ASN 3, and ASG (Dave,

              2008). RHB Bank is an authorised agent of Amanah Saham Nasional

              Berhad (ASNB). With the large network nationwide, investor can now

              easily perform ASNB Unit Trust transactions at RHB Bank. The funds

              available thera are; ASB, ASW 2020, ASM, ASD, AS1M, ASN, ASN 2,

              ASN 3 and ASG (RHB Group, 2011).



 1.3   SCOPE OF STUDY

       The scope of study in this research is to study on the factors that influence

       customers in choosing the ASNB unit trust products. It is focus more towards the

       customers who invest in unit trust funds only. This research will be conducted

       only at ASNB Kuantan branch.




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 1.4   PROBLEM STATEMENT

       As we rapidly approaching 21st century, many major changes have already taken

       place in our environment nowadays. As we realize, there are many financial

       institutions which apply investment in unit trust fund. So, one of the institutions

       that have an investment in unit trust is Amanah Saham Nasional Berhad. This

       company is also mobilizing the unit trust funds. It is also one of the premier

       investment organizations that committed to enhance the economic wealth of the

       Bumiputra community in particular and contribute towards the growth and

       prosperity of the nation for the benefit of Malaysians (ASNB, 2008). From many

       institutions that involved in unit trust fund, ASNB is give the lowest risk as

       compared to others unit trust fund. This is one way on how ASNB attract

       bumiputra and non-bumiputra to invest in their products. But, some of them do

       not believe this company is secure in term of their money and transaction of

       money. Instead, they do not want to take any risk if investing in this unit trust

       funds. Since, this company declares a high dividend plus with a bonus for ASB

       products, it able to make people outside believes to invest in this unit trust fund. It

       is because, the investor prefer for the high dividend or return. Besides that,

       ASNB offered its product with the affordable amount to the investor to buy its

       units compared to other unit trust fund that required a big amount of money to

       buy it.

       Other than that, the professional management may play its own role. It is

       because every organization should have a good management. If an organization

       able to perform better in their management, the level of competitions may be high

       to another company in the same level.




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       The diversification of risk may be an important element to that company. If that

       company put everything in one basket, they tend to give high risk at one time.

       So, the diversification of risk is needed to every company. It is because people

       do not like to bear a risk and it will lead to customer switch to the other unit trust

       fund.

       Another important element is a liquidity of products or units. If a products or units

       are easily to convert into cash, investor will stick with those products. But, if the

       products very high and difficult to liquid, that is a problem.

       The important one is when take a look about the dividend or return. Nowadays,

       when talk about investment, people will think about money only. Of course, if

       make an investment people will go to the high dividend or return to them.

       According to this research, the major problem is to determine what the crucial

       factors that may influence people or investor to choose to buy units in ASNB unit

       trust products. From the observation, there are many unit trust funds in Malaysia

       that offered variety products. And the number of competitors is increase day by

       day. So, this company has to compete with each other in the same field. In order

       to compete with others, this company must have their own specialty and must

       benefit more than others to make sure investor choose these unit trust. The

       problem here is to study what that factors in order to satisfy investor’s needs and

       wants towards unit trust products.




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 1.5   OBJECTIVE OF THE RESEARCH

       The purposes of doing this research are:



       1.5.1   To identify whether the professional management is the factor that

               influence customers to choose ASNB unit trust products.



       1.5.2   To identify whether the diversification of risk is the factor that influence

               customers to choose ASNB unit trust products.



       1.5.3   To identify whether the liquidity is the factor that influence customers to

               choose ASNB unit trust products.



       1.5.4   To identify whether the dividend is the factor that influence customers to

               choose ASNB unit trust products.



       1.5.5   To identify the most important factors that influence customers to choose

               ASNB unit trust products.



       1.5.6   To give the recommendation to ASNB Kuantan in order to make

               innovation or improvement towards their service provided and their

               marketing efforts.




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 1.6   RESEARCH QUESTIONS

       Study of this research required several questions to be answer. From the study,

       there are a several questions has been developed in line with the problem

       statement that occurred during this study. Such of research questions are:



       1.6.1   Does the professional management implemented at ASNB influence

               customers to choose ASNB unit trust products.



       1.6.2   Does the diversification of risk available at ASNB influence customers to

               choose ASNB unit trust products.



       1.6.3   Does the liquidity of product at ASNB influence customers to choose

               ASNB unit trust products.



       1.6.4   Does the dividend given by ASNB influence customers to choose ASNB

               unit trust products.




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 1.7   RESEARCH HYPOTHESIS

       1.7.1   Theoretical framework

               A theoretical framework is a collection of interrelated concepts.

               Theoretical frameworks will guides this research, to determine what

               things going to measure, and what statistical relationships will look for (S.

               P. Borgatti, 1999).


        INDEDEPENDENT VARIABLES                                 DEPENDENT VARIABLES
                  (IV)                                                 (DV)




       PROFESSIONAL MANAGEMENT




         DIVERSIFICATION OF RISK
                                                                CUSTOMERS INFLUENCE
                                                                 CHOOSING ASNB UNIT
                                                                   TRUST PRODUCTS
                 LIQUIDITY




                 DIVIDEND



                 Figure 1.1     Schematic Diagrams for the Theoretical Framework

               This research is about the factors that influence customers in choosing

               ASNB unit trust products. So, the dependent variable is customers

               influence choosing ASNB unit trust products. Independent variables are

               professional management, diversification of risk, liquidity and dividend.




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       1.7.2   Hypothesis


               Hypothesis is an unproven proposition formulated for empirical testing

               (Rozieana, 2009). Hypothesis also brings a meaning as logically

               conjectured relationship between two or more variables. It is express in

               the form of testable statement. By testing the hypothesis and realize the

               conjectured relationship, it is expected that solution can be found to

               correct the problem encountered (Sekaran, U, 2006).



               Hypothesis 1

               H0:    There is no relationship between the professional management

                      implemented at ASNB with the customers’ influence of choosing

                      ASNB unit trust products.

               H1:    There is a relationship between the professional management

                      implemented at ASNB with the customers’ influence of choosing

                      ASNB unit trust products.



               Hypothesis 2

               H0:    There is no relationship between the diversification of risk at

                      ASNB with the customers’ influence of choosing ASNB unit trust

                      products.

               H1:    There is a relationship between the diversification of risk at ASNB

                      with the customers’ influence of choosing ASNB unit trust

                      products.




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            Hypothesis 3

            H0:   There is no relationship between the liquidity of products at ASNB

                  with the customers’ influence of choosing ASNB unit trust

                  products.

            H1:   There is a relationship between the liquidity of products at ASNB

                  with the customers’ influence of choosing ASNB unit trust

                  products.

            Hypothesis 4

            H0:   There is no relationship between the dividends given by ASNB

                  with the customers’ influence of choosing ASNB unit trust

                  products.

            H1:   There is a relationship between the dividends given by ASNB with

                  the customers’ influence of choosing ASNB unit trust products.




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 1.8   LIMITATION OF STUDY



       1.8.1   Availability of data and information

               Some information is hard to find out to complete the literature review. It is

               due to the limited resources. In order to do this study, it is quite hard to

               find the latest journal, annual reports, books and magazines. Some of

               data and information that available may be absolute and outdated.



       1.8.2   Difficult to get commitment from respondents

               The researcher faced the difficulty in getting            information from

               respondents. During the collection of data, some of them did not give full

               commitment in answering the questions given to them. They might not

               have enough time to spend on that questionnaire. Then, some

               respondents did not return back the questionnaire to the researcher.



       1.8.3   Limitation of time, cost and ability

               In dealing with a limited time with small budget, they have to cope with

               some unavailability. It is because time cannot be measure. So, the

               researcher need to find the right time in doing this research because to

               avoid from time constraints.




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 1.9   SIGNIFICANCE OF STUDY



       1.9.1   To the company

               By doing this research it may help this company to make some

               improvement to enhance their company performance. Then, it also could

               help them to identify the major problem during this research conducted.

               Once they able to detect that problem, they may find what the suitable

               strategy and take an action then.



       1.9.2   To the customers

               By doing this research it also can help customers in many term. First,

               customers can gain additional information about that company as well as

               the unit trust products. They also can gain more knowledge about what

               the important factor which make them to invest in this unit trust fund.

               Besides that, if customers detect what the problem in that company, so

               they may give some suggestion to that company to improve those

               problems.



       1.9.3   To the researcher

               By doing this research, it will help the research a lot. It is because the

               researcher is one who has conducted this research. So, the researcher

               knows a lot what the strength and weaknesses for an organization. From

               that, the researcher have gain more knowledge and additional information

               about the company which conducted. The importance is, the researcher

               has exposed to the new experience in doing the research.


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 1.10   DEFINITION OF TERMS


        1.10.1 Dividend

              Dividends mean the payments made by a corporation to its shareholder

              members. It is the portion of corporate profits paid out to stockholders.

              When a corporation earns a profit or surplus, that money can be put to

              two uses: it can either be re-invested in the business, or in other word

              called as retained earnings. It can be paid to the shareholders as a

              dividend. Many corporations retain a portion of their earnings and pay the

              remainder as a dividend (Wikipedia; Dividend, 2011).



        1.10.2 Customers

              A customer is someone who receives and uses the products or services

              of an individual or organization. The word “customer” is derives from

              "custom," meaning "habit"; a customer was someone who frequented a

              particular shop, who made it a habit to purchase goods there, and with

              whom the shopkeeper had to maintain a relationship to keep his or her

              "custom," meaning expected purchases in the future.



        1.10.3 PNB

              PNB is stand for Permodalan Nasional Berhad. PNB is the biggest fund

              management company in Malaysia. The main headquarters is located at

              Jalan Tun Razak, Kuala Lumpur near tabung Haji bulding. PNB is also a

              parent company for ASNB which operates a number of unit trust

              schemes. Besides that, it is a wholly owned subsidiary of Yayasan

              Pelaburan Bumiputra (YPB) (Wikipedia; PNB, 2011).

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       1.10.4 ASNB

            ASNB is stand for Amanah Saham Nasional Berhad. ASNB have a

            branch at all state included Sabah and Sarawak. It has either one or more

            than one branches at every state. ASNB is a wholly-owned subsidiary

            company of Permodalan Nasional Berhad (PNB).




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                                         CHAPTER 2

                                   LITERATURE REVIEW



2.0    AN OVERVIEW

       The literature review means, the process of reading, analyzing, evaluating and

       summarizing scholarly materials about a specific topic. The results of a literature review

       may be compiled in a report or they may serve as part of a research article, thesis, or

       grant proposal. When doing a research review, it systematically examines all sources

       and describes and justifies what we have done. This enables someone else to

       reproduce methods and to determine objectively whether to accept the results of the

       review. A well-structured literature review is characterized by a logical flow of ideas;

       current and relevant references with consistent, appropriate referencing style; proper

       use of terminology; and an unbiased and comprehensive view of the previous research

       on the topic. (Nordquist, R, 2011).



       2.1    Customer Behavior Influence the Choosing of ASNB Products

              Here, customer behavior or in other word, consumer behavior is the study of

              individuals, groups, or organizations, and the processes they use to select,

              secure, use and dispose of products, services, experiences, or ideas to satisfy

              needs and the impacts that these processes have on the consumer and society

              (Sinha, R, 2009). In order to support, there are several useful tips that brings up:

                 Behavior occurs either for the individual, or in the context of a group (e.g.,

                  friends’ influence what kinds of clothes a person wears) or an organization

                  (people on the job make decisions as to which products the firm should use).



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          Consumer behavior involves the use and disposal of products as well as the

           study of how they are purchased. Product use is often of great interest to the

           marketer, because this may influence how a product is best positioned or

           how we can encourage increased consumption. Since many environmental

           problems result from product disposal (e.g., motor oil being sent into sewage

           systems to save the recycling fee, or garbage piling up at landfills) this is also

           an area of interest.

          Consumer behavior involves services and ideas as well as tangible products

           (Perner, L, 1999-2010)


       Consumer behavior is also the study of when, why, how, and where people do or

       do not buy a product. It attempts to understand the buyer decision making

       process, both individually and in groups. It studies characteristics of individual

       consumers such as demographics and behavioral variables in an attempt to

       understand people's wants. Customer behavior study is based on consumer

       buying behavior, with the customer playing the three distinct roles of user, payer

       and buyer. A greater importance is also placed on consumer retention, customer

       relationship   management,     personalization,   customization    and    one-to-one

       marketing. Social functions can be categorized into social choice and welfare

       functions (Answer; 2011). Besides that, it also involves the psychological

       processes that consumers have go through in recognizing their needs, to find the

       ways to solve these needs, making decisions to buy (e.g., whether or not to

       purchase a product and, if so, which brand and where), interpret information,

       make plans, and to implement these plans (e.g., by engaging in comparison

       shopping or actually purchasing a product).



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       The importance one before choosing any products, people must make a

       decision, simplify as a decision making. Decision-making may vary according to

       customer experience with the service. Indeed, the typical effort has identified

       some process features, or motivations, but not how decisions were made. For

       example, Dean and Sharfman (1996) (Paul C, Nutt, 2011) classify a process by

       procedural features such as rationality (systematic collection and interpretation of

       information), political behavior (using power), and flexibility (adaptability).

       Hickson et al. (1986) (Paul C, Nutt, 2011) use process descriptors such as

       sporadic (with delays and negotiation), fluid (formalized process), or constricted

       (restricted to a very small number of senior executives). Fredrickson (1985),

       (Paul C, Nutt, 2011) has classified process by its comprehensiveness. Bell et al.

       (1998) (Paul C, Nutt, 2011) identifies rational, comprehensive, political action,

       and sub-unit involvement processes. Others treat process as coalition formation

       or social process control and focus on measuring decision maker attributes such

       as tolerance for ambiguity, uncertainty, or risk aversion (Poole and van de Ven,

       2004) (Paul C, Nutt, 2011). Although interesting, such research says little about

       how decisions are and should be made. Classifications, such as comprehensive,

       analytical, or political, fail to explain how a decision maker acts comprehensively,

       conducts analyses, or engages politically. They characterize the process not the

       actions that take place within it. Research is needed that treats decision making

       as an action-taking process that embraces activities such as intelligence

       gathering, formulation, search, and implementation, as well as evaluation and

       choice, and allows for emergent ideas and messy recycling among key ideas

       such as formulation and search to be observed (Paul C, Nutt, 2011).




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       Hence, all the factors contribute to the decisions consumers make when deciding

       on what to buy, therefore consumer's decisions depend upon so many factors

       which must be taken into consideration by firms when undertaking market

       research in order to increase their sales volumes to attain higher profits (Kelly. C,

       2010).




 2.2   Professional Management


       Unit trusts are important savings and investment vehicles in New Zealand. Many

       fiduciaries recommend unit trusts to their clients because this trusts offer

       professional management, liquidity, and diversification to them. On order to

       manage their total portfolios effectively, investors need to know what they have

       bought when they invest in a unit trust. They need disclosure from the funds’

       managers to allow them to optimize their holdings, certainly in terms of asset

       allocation, if not specific securities (R. Fowler, R. Grievas, J. C. Singleton, 2010).

       A unit trust combines the capital of many investors to employ experienced

       management in purchasing securities of many companies. The management of a

       unit trust provides diversification of investments and supervision which few

       investors could individually afford. Investment management is a full time job

       requiring specialized knowledge and training. It involves the study of a variety of

       factors.

       Some of the factors which have to be examined are:

       a. Comparisons of all industries in the economy

       b. Relative studies of companies within a promising industry

       c. Personal contact with management of promising corporations

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       d. Evaluating the effect of international events, both monetary and political

       e. Determining the results of government policies on each industry

       Professional management is also interested in studying less obvious factors such

       as wage rates, which might affect the economy or the profitability of certain

       companies or corporations. It requires careful study of individual companies

       within the industry to determine which of the many companies offer the best

       prospects for the investors. It requires comparing this company with the best

       companies in other promising industries. Since all this factors are constantly

       changing, re-evaluation and study have to be continuous (Jesselau, 2011).

       In addition, with the benefit of full time professionals, unit trust fund holders are

       able to leave the investment decision-making to fund managers trained for the

       purpose. The fund managers have the expertise, resources and market

       information for conducting in-depth research before investing.


       The importance is, potential investors have to decide themselves whether they

       have sufficient expertise to manage an investment. From a management point of

       view, it is advisable to evaluate investments continuously and to decide whether

       they should be replacing with other or another investment. The obligatory

       investment term will determine when an investment can be altered (Swart, N,

       2002).


       According to Izabela Kowalik from Poland who mentions about the professional

       of management said that; the reason is that professional and/or charismatic

       leaders who put emphasis on marketing orientation, they not afraid introducing

       an innovations, and stimulate the development of marketing orientation.

       Therefore it is worth to test the hypothesis with respect to the Polish local

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       government units. Result from the hypothesis is, the managers’ professionalism

       has a positive effect on the level of marketing orientation. One of the

       professionalism indicators tested in the study will be the total time spent working

       in public admin (Kowalik, I, 2011).


       From my understanding, I gave an example in order to understand more.

       Regarding to those several researchers, during one of the recent recessions, an

       organization which have too many employees, making a product necessary for

       that construction industry, came upon a bad times. This corporation has decided

       to close most of its facilities making products for construction industry just except

       for particular facility. However, products demanding made in this facility was

       falling and that corporation required it to reduce costs until remain to 20 percent.

       From that, most organizations would have to begun to lay people down to

       accomplish this feat, but not for this organization. After creating a team to study

       the problem which called as a labor management team, employees has decided,

       voted after decided, so there would be no layoffs. Instead all employees include

       management, would be paid for four days of work, thereby saving the required 20

       percent, while still working the normal five days a week. Besides that, sales also

       continued falling. In order to stay in business, the corporation required another 20

       percent costs reduction. So, employee-management team required to study

       again and try to recommend all employees to sacrifice rather than lay off any

       employees to reach the goal. Unfortunately, the demand for the product has

       declined even further and at this time, the reduction of workforce became a

       necessary one. This action may be done after complete transparency by

       explaining everything to the entire workforce so there would be a collective

       understanding of the seriousness of that situation. The employee-management

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       team developed a downsizing plan and that plan was accepted as fair as

       equitable. Hence, this is an example to show how professional the management

       of this company. Their leadership knows well how to manage their management

       to make sure this corporation can operate well in future (J.P. Cangemi, H.

       Lazarus, T. McQuade, J. Fitzgerald, J Corner, R. Miller, W. Murphree, 2011).


       Additionally, this unit trust funds are known as ethical funds. According to the

       C.J.Cowton, (2004), Ethical investment can be described, in broad terms, as a

       set of approaches which include social or ethical goals. It also can be described

       as constraints in addition to more conventional financial criteria in decisions over

       whether to acquire, hold or dispose of a particular asset, particularly publicly

       traded shares. In contrast with mainstream or “economic” (Frankel, 1984)

       investing, risk and return are not the sole dimensions of interest (Anand and

       Cowton, 1993), though they are still likely to be important. It is the nature of the

       source, and not just the size and risk, of the financial return that is of concern in

       ethical investment (C.J.Cowton, 2004). Hence, this fund is not involved in

       investment that categorized as unethical. There is no investment in liquor,

       gambling, tobacco and any unethical activities.


       Fortunately, once investor choose these unit trusts products, they do not have to

       worried anymore, since investment made by this unit trusts is well manage by the

       expertise. It is because, ASNB is one of the well known companies, and they

       have a huge of investment strategies that strategic and systematic. This

       company is able to manage funds effectively and efficiently.


       PNB is one of Malaysia's leading asset managers. We have the expertise to

       manage an array of portfolios to meet the expectations of investors and their

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       investment requirements. At all times, we ensure that the best interests of our

       investors are protected (PNB, 2011).




 2.3   Diversification of risk


       Diversification means spreading one's investments among many securities. It is

       an important method of reducing risk. It decreases the danger of damaging

       losses, which can occur through having all of one's eggs in one basket.

       Diversification is difficult and expensive for a small investor because the cost of

       purchasing numbers of shares in many companies at the same time is

       disproportionately high. Unit trusts with their resources are able to make widely

       diversified investments available to even the smallest investor. Diversification

       involves the ownership of many different securities. All the securities owned by

       an individual investor or unit trust fund are referred to as an investment portfolio

       (JesseLau, 2011).


       As remarked by Micheal R. Powers, the modern risk finance on the fact is

       primarily based upon only two tools that are diversification and hedging. These

       two tools are the most obvious ways to reduce the total risk of a random portfolio

       as measured by its standard deviation. It is possible to create more complicated

       methods by defining risk to incorporate such distributional properties as

       skewness (M. R. Powers, 2010).


       Previous studies of the Malaysian unit trusts performance have yielded

       conflicting results. Chua (1985) finds that unit trust funds in Malaysia perform

       better than the market during his study period, 1974-1984. He concludes that the


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       performance of unit trusts is fairly consistent and fund managers have diversified

       and performed risk control reasonably well. In addition, Chua finds that

       government sponsored funds perform better than private funds. This may be due

       to certain investment ‘‘privileges’’ accessible to only government-sponsored

       funds (Fauziah Md Taib, Mansor Isa, 2007).


       Since in ASNB unit trust, there are consists many products or securities. So,

       people can diversified their investment by buying different securities to reduce

       risk. It is because, the diversification is able in minimizing the risk factors.


       According to the ASNB’s master prospectus 2010/ 2011, it has mentions about

       the risk factors. The risk factors are any investment carries with it an element of

       risk. Therefore, prior to making an investment, prospective investors should

       consider the following risk factors in addition to the other information set out in

       this prospectus. The general risks occurred to investors if investing in these unit

       trust funds is:


       1.      Fund Management Risk


               The selection of securities which make up the assets of the funds is a

               subjective process. Securities selected by the investment manager may

               perform better or worse than the overall stock market, or as compared to

               portfolio selected by their competitors. The risk is managed by having a

               professional and experienced fund manager who is responsible to make

               fully informed decisions regarding investment.




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       2.     Operational Risk


              Here, the risk of loss to you arising from inadequacies in, or failure of, our

              internal procedure and controls for monitoring and quantifying the risks

              and contractual obligations associated with investments in a fund.

              Although the occurrences of such events are very unlikely, the manager

              seeks to mitigate the risk through the establishment of systematic

              operational procedures and stringent internal controls.




 2.4   Liquidity


       A simple meaning of liquidity is it enables us to liquidate all or part of the units on

       any Business Day. An investor can sell his units, wholly or partially, at the

       following trading day's unit buying price. Units have a high liquidity, that is, they

       can be readily converted into cash.


       It has to be remembered, however, that unit trust’s units will be redeemed at the

       prevailing buying price on the following day after receipt of the repurchase form.

       The unit price may be higher or lower than the price at which the investor started

       the plan. Unit trusts should be regarded as a long term, rather than short term

       investment (JesseLau, 2011).


       From Personal financial Management book, it mentions that, liquidity is

       particularly important to certain investors that their investment can be converted

       to cash fairly easily and at short notice. Even with short- term securities will be

       chosen. If the investor urgently needs his or her cash (investment), it must be

       available.

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       The results of Ong (2000) completely contradict those of Taib et al. (2000). Ong

       studies the performance of 53 unit trusts (37 private and 16 government-

       sponsored) before and during the 1997-98 financial crisis. He finds that

       Malaysian unit trusts were able to out-perform the market before and during

       financial crisis. In fact, the performance of unit trust during the crisis is ‘‘better’’

       than before crisis. It is also, consistent with previous studies. He finds that

       government-sponsored funds perform better than private funds before the crisis.

       But the situation reverses during the crisis. He also finds that fund size has no

       influence on performance (Fauziah Md Taib, Mansor Isa, 2007). Based on this

       statement, it is to shown, even though market has a crisis, this unit trusts will not

       be affected. And they still able to perform better even during market crisis. And,

       investors do not worry about their money. They can withdraw their money as they

       wish, since money in unit trust is very liquid.




 2.5   Dividend


       Dividends are one way in which companies "share the wealth". By running the

       business the dividends can be generated. They are usually a cash payment,

       often drawn from earnings, paid to the investors in a company. Dividend means a

       distribution of a portion of a company's earnings, decided by the board of

       directors, to a class of its shareholders. Normally, the dividend is most often

       quoted in terms of the dollar amount each share receives, called it as dividends

       per share. It can also be quoted in terms of a percent of the current market price,

       referred to as dividend yield (Investopedia, 2010).



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       The various monthly data pertaining to the unit trust performance cover from

       January 1990 to December 2001, the data is collected from The Star and The

       Edge Malaysia newspapers. Information regard the dividend is obtained either

       from annual reports or from collected directly from the fund managers. One-

       month Kuala Lumpur Inter-bank Offer Rate (KLIBOR) is used as a proxy for risk

       free, while monthly return of Kuala Lumpur Composite Index (KLCI) is taken to

       serve as a benchmark for the market portfolio. Dividend yield is omitted from the

       calculation of market return, as it will not have significant influence on beta value

       (Sharpe and Cooper, 1972) (Fauziah Md Taib, Mansor Isa, 2007).


       Based on the unit trust policy, they will declare a dividend to the shareholders for

       every year. For ASNB unit trust, dividend will be declared to shareholders every

       year based on minimum balanced of amount in their account. As according to the

       statement from Fikriyah Abdullah, Taufiq Hassan, Shamsher Mohamad, (2007),

       monthly returns adjusted for dividends and bonuses distributed to unit holders

       are computed for the 10-year period starting from January 1992 through

       December 2001 as example.


       Furthermore, dividend is the importance factor why people choose to invest in

       ASNB unit trust. It is because only this fund able to give high dividend every year

       even though recession period. It is because, this fund have the own reserve not

       as similar to the reserve in bank. It will beneficial to all investors in this unit trust

       fund. As evidence, I will compile with a historical table (table 2.1) to show the

       performance of this fund. I took ASB performance as an example. One more

       thing because of only ASB have a bonus which will distributed to all unit trust

       holders. According to the Faiz Zaki, (2011), he mentions that ASB is probably the


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       best “safe investment” around, but it is not the best. It does not yield the best

       dividend but it’s among the highest capital guaranteed investment, of course

       there are other better yielded investment vehicles but they come at a risk.


               YEAR         DIVIDEND        BONUS          TOTAL

                1993          9.00%          4.50%         13.50%

                1994          9.00%          4.50%         13.50%

                1995         10.00%          3.00%         13..50%

                1996         10.25%          3.00%         13.25%

                1997         10.25%          1.25%         11.50%

                1998          8.00%          2.50%         10.50%

                1999         10.50%          1.50%         12.00%

                2000          9.75%          2.00%         11.75%

                2001          7.00%          3.00%         10.00%

                2002          7.00%          2.00%          9.00%

                2003          7.25%          2.00%          9.25%

                2004          7.25%          2.00%          9.25%

                2005          7.25%          2.00%          9.25%

                2006          7.30%          1.25%          8.55%

                2007          8.00%          1.00%          9.00%

                2008          7.00%          1.75%          8.75%

                2009          7.30%          1.25%          8.55%

                2010          7.50%          1.25%          8.75%




        Table 2.1 Dividend and Bonus History, Since 1993 until 2010




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                                        CHAPTER 3

                              RESEARCH METHODOLOGY




3.0    AN OVERVIEW


       On this chapter, will be covered a research design, data collection method, the

       population and sample size. In the research design, it consists of two, which are type of

       study and the nature of study. For the type of study, the researcher has select the

       descriptive research that is seeks to determine the answer to who, what, when, where

       and how questions is. For the nature of study, the researcher has selected the cross-

       sectional study.


       The researcher has defined their target population, sampling frame, sampling units and

       subject. The researcher also selects a simple random sampling to assure that each

       element in the population has an equal chance of being included in the sample. The data

       for this study has obtained from primary and secondary sources. And the method used

       for this study is quantitative method by distribute questionnaire to the respondents. The

       researcher has conducted this research at ASNB Kuantan.




3.1    RESEARCH DESIGN

       According to Rozieana, 2009, research design is a master plan specifying the methods

       and procedures for collecting and analyzing the needed information. The importance of

       research design includes a plan selecting sources and types of information used to

       answer the problem statement. It is also include a framework for specifying the

       relationships among variables.

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       3.1.1   Types of study (Descriptive research)

               The type of study used is a descriptive study. Descriptive research design is a

               scientific method which involves describing and observing the behavior of a

               subject without influencing it in any way (M. Shuttleworth, 2008). Its objectives

               are to describe the characteristics of a population or phenomenon. Then, to

               estimates the proportion of a population despite of discovery of associations

               among different variables. The accuracy is very important in descriptive research.

               It is based on some previous understanding of the nature of the research

               problem.



       3.1.2   Nature of study (cross-sectional design)

               From this research, the researcher have implemented a single cross-sectional

               design which involves the collection of information from any given sample of

               population elements, and only one sample of respondents is drawn from the

               target of population and information is obtained from sample one. This study is

               also conducted for only short period of time. It bring a meaning of once the

               researcher has finished all procedures, there is no further research will be

               conducted due to restricted of time.



3.2    DATA COLLECTION METHODS

       Data can be collected in different settings that are actual environment condition (field)

       and stages or manipulated condition (lab). Data also can be gathered through primary

       sources or secondary sources such as journal, articles, master prospectus, reference

       books, and internet. Primary sources means a data collected for the firsthand to

       subsequent analysis to find solutions to the problem researched. Secondary sources


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 means data that have already been gathered by researchers, data published in

 statistical and other journals, and information available from any published or

 unpublished source available either within or outside the organization (Sekaran, 2006).

 Data can also be collected in three basic methods which are interview session means a

 purposeful discussion between two or more people. Second is, questionnaires means

 formulated written set of questions to which respondents record their answer. And third

 is observation means observe the individuals behavior and events with or without

 videotaping or audio recording.



 3.2.1   Primary data

         Primary data is defined as data originated by the researcher from specific

         purpose of addressing the research problem. This is a final stage of the process

         of collection.

         For this study, data has collect at ASNB Kuantan by the researcher. The

         methods used in order to collect the data are:



         3.2.1.1 Questionnaire

                 This questionnaire will be given to the respondents to answer particular

                 questions. This questionnaire will be given personally administered. But, it

                 also can be administered electronically that is sent through mail. These

                 questions focus more on independent variables that influence directly the

                 dependent variable.




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               3.2.1.2 Interview

                      The interview session can be face-to-face interview, telephone interview

                      and computer-assisted interview. For this study, it is a face-to-face

                      interview. The interview has done between the researcher and the staffs

                      at ASNB Kuantan. Some data also gathered from employee of this

                      company.



3.3    POPULATION AND SAMPLE SIZE



       3.3.1   Population


               A population or universe is any complete group of people, companies, hospitals,

               stores, college students or the like to share some set of characteristics

               (Rozieana, 2009). For this study, a target of population is customers whose come

               to ASNB Kuantan.


       3.3.2   Sample Size


               Sample size means the actual number of objects or subjects which choose as a

               single sample to represent the population characteristics (Sekaran, U, 2006). For

               this study, the sample size has chosen 40 respondents. It is because this number

               is appropriate size of the best research. According to the Sekaran, Uma (2006)…

               too large a sample size, over 500 could also become a problem....Sample size

               large than 30 and less than 500 are appropriate.




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3.4    INSTRUMENTS USED FOR RESEARCH

       The structured questionnaire is used in gathering data to complete this study. For this

       study, the question is divided into five different sections that are section A, B, C, D and

       E. Each section has a different variable. As such section A is used for demographic

       factors. It is consists of multiple choice questions. While for the section B, C, D, and E,

       the questions has constructed by the researcher based on the variables and uses a

       Likert scale rating.



       3.4.1   Multiple choice questions

               The multiple choices question where the questions are single coded and the

               respondent is permitted to thick to only one answer. Normally this question is

               prepared to answer in a small box. The respondents are advisable to select the

               best possible answer from that choice.



               For example:

                       Gender/ Jantina

                       a) Male

                       b) Female



                       Monthly Income/ Pendapatan bulanan

                       a) Below RM500

                       b) RM501 until RM1500

                       c) RM1501 until RM2500

                       d) RM2501 and above




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       3.4.2   Likert Scale

               The likert scale is one of the famous attitudes rating scale used by the

               researchers in their questionnaire. The likert scale is designed to examine how

               strongly subjects agree or disagree with statement on a 5-points scale. There are

               five different scale used to differentiate the degree of agreement and

               disagreement. The scales are ranging 1 to 5 from strongly disagree to strongly

               agree, respectively.



               Likert Scale:



Strongly disagree/         Agree/          Average/            Disagree/       Strongly agree/

Sangat tidak setuju        Setuju        Pertengahan       Tidak setuju        Sangat bersetuju

       1                       2                3                  4                  5




               For example:

               Please circle the best answer.

               Promotion and Advertisement/                1        2      3     4        5

               Promosi dan pengiklanan yang berkesan




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3.5    PROCEDURES FOR THE DATA PROCESSING

       Next is the procedure of data processing. This procedure started after the data collection

       is collected from the respondents. Data collected from the customers are from the

       distribution of questionnaires. After that, the research can proceed with analyzing the

       data. And that data will be keyed in and will analyze using SPSS program.



3.6    DATA ANALYSIS AND INTERPRETATION

       The next step after obtaining data from questionnaire is, the data need to be edited and

       keyed in to be analyzed. The SPSS is used in order to analyze data. This SPSS

       program is widely use by the researcher in doing the research. The benefit why the

       research used this program because it can help in summarizing all the data and also to

       determine the significant of the variables input for this study. Besides that, it helps in

       determine whether there are significant in differences between groups of study and

       examine the relationships among variables results.



       3.6.1   Frequency Distribution Analysis

               A frequency distribution shows a frequency count and characteristics for the

               distinct values in a column. When running a column analysis job, a frequency

               distribution is generated for each column that has analyzed. This frequency

               distribution also can use to learn about the content of the data and make a

               decisions about the data structured (IBM, 2007).

               In addition, a frequency distribution is a mathematical distribution where the

               researcher is tries to obtain and count the number of responses with different

               values of variables and expressed them in the percentage term. When the data

               have been collected, the researcher will used SPSS to analyze data.


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 3.6.2   Reliability Analysis

         According to the Rozieana, (2009), reliability is the degree to which measures

         are free from error and therefore yield consistent results in repeated uses. From

         Sekaran, Uma, (2006), the reliability of a measure indicates the extent to which it

         is error free and hence ensures consistent measurement across time and across

         the various items in the instrument. On the other words, the reliability test

         measure is established for testing the stability and consistency with which the

         instrument measures the concept and helps to assess the “goodness” of a

         measure. In general, reliability less than 0.600 are considered to be poor, a

         range around 0.700 is acceptable and Coefficient Alpha over 0.800 is considered

         good. The closer the reliability or Coefficient Alpha is to 1, the higher the internal

         consistency reliability.



 3.6.3   Testing of Hypothesis

         It is used to determine whether that hypothesis should be rejecting or accept. H0

         is represented as null hypothesis while H1 or HA represented as alternate

         hypothesis.



         3.6.3.1 Pearson Correlation Matrix

                 The Pearson correlation matrix is obtained for the five interval-scaled

                 variables. The function of this matrix is to measure the closeness of the

                 relationship between two or more variables. This testing is used to test

                 whether to accept or reject the hypotheses.

                 The measure of goodness between the variable should fall within the

                 range of 1 to -1. If the r = 1 there is a perfect direct linear relationship


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             between two variables. Otherwise if r = -1, there is a negative relationship

             between two variables.

             In addition, the researcher used the correlation to know the relationship

             between the dependent and independent variables. The correlation were

             used to determine whether the relationship weak or strong with the

             negative or positive association.



       3.6.3.2 Chi-Square

             Chi-Square will be used in this research to test the hypotheses. The

             calculated value from Pearson Chi-Square will be compared with the

             critical value from the table of chi-square distribution based on the Degree

             of Freedom (df) obtained from the calculated value.




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                                         REFERENCES




ASNB. (2008). About us. Retrieved February 1, 2011, from ASNB website:
http://www.asnb.com.my/english/about.htm

Answer. (2011). Consumer Behaviour. Retrieved January 27, 2011, from Answer.com website:
http://www.answers.com/topic/consumer-behaviour

Borgatti, S. P. (1999). Elements of Research. Retrieved February 1, 2011, from
http://www.analytictech.com/mb313/elements.htm

Carew, E. (1996-2011). Financial Dictionary. Retrieved February 1, 2011, from ANZ website:
http://www.anz.com/edna/dictionary.asp?action=content&content=unit_trust

Cowton, C. J. (2004). Managing Financial Performance at an Ethical Investment Fund.
Accounting, Auditiing & Accountability Journal , 1-27.

Dave. (2008). Amanah Saham Bumiputera. Retrieved February 2, 2011, from Blogspot:
http://amanahsahambumiputera.blogspot.com/2008/11/amanah-saham-nasional-berhad-unit-
trust.html

F. Abdullah, T. H. (2007). Investigation of Performance of Malaysian Islamic Unit Trust funds.
Managerial Finance , 1-12.

F. Md. Taib, M. I. (2007). Malaysian Unit Trust Aggregate Performance. Managerial Finance , 1-
20.

Group, R. (2011). RHB. Retrieved February 1, 2011, from
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