A STUDY ON INVESTOR PERCEPTION TOWARDS MUTUAL FUNDS

WITH SPECIAL REFERENCE OF “ENRIRCH FINANCIAL SOLUTION

PVT LTD” IN MADURAI CITY

CHAPTER 1

1.1 INTRODUCTION
Investment can be defined as an item of value purchased for income or
capital appreciation. Investments are made to achieve a specific objective and
savings are made to meet an unforeseen event. There are various avenues of
investments in accordance with individual preferences. Investments are made in
different asset classes depending on an individual’s risk and return characteristics
Investment choices are physical assets and financial assets.
Gold and Real estates are examples of physical assets, which have a
physical form to them. There is a strong preference for these assets, as these assets
can be purchased with cash and held for a long term. The obvious disadvantages
with physical assets are the risks of loss and theft, lower levels of return; illiquid
secondary markets; and adhoc valuations and transactions. Financial assets are
securities, which are certificates embodying a financial contract between parties.
Bonds, Equity shares, Deposits and Insurance policies are some of the examples of
financial assets. In financial assets investors only hold the proof of their
investments in the form of a certificate or account. These products are usually
liquid, transferable and in most cases, stored electronically with high degree of
safety. But a minimum amount of cash is always kept in hand for transactions and
contingencies.
To face the contingencies and unexpected events the insurance came into
existence. Another avenue of investment is mutual funds. It is created when
investors put their money together. It is therefore a pool of the investor’s funds.
The most important characteristics of a mutual fund is that the contributors and the
beneficiaries of the fund are the same class of people, namely the investors. The
term mutual means that investors contribute to the pool, and also benefit from the
pool. There are no other claimants to the funds. The pool of funds held mutually by
investors is the mutual fund.
A mutual fund pools the money of people with similar investment goals.
The money in turn is invested in various securities depending on the objectives of
the mutual fund scheme, and the profits (or loss) are shared among investors in
proportion to their investments. Mutual fund schemes are usually open-ended
(perpetually open for investments and redemptions) or closed end (with a fixed
term). A mutual fund scheme issues units that are normally priced at Rs.10 during
the initial offer. Thus, the number of units you own as against the total number of
units issued by the mutual fund scheme determines your share in the profits or loss
of a scheme.
In the case of open-end schemes, units can be purchased from or sold
back to the fund at a Net Asset Value (NAV) based price on all business days. The
NAV is the actual value of a unit of the fund on a given day. Thus, when you
invest in a mutual fund scheme, you normally get an account statement mentioning
the number of units that have been allotted to you and the NAV based price at
which the units have been allotted. The account statement is similar to your bank
statement.
Mutual funds invest basically in three types of asset classes:
Stocks: Stocks represent ownership or equity in a company, popularly known as
shares.
Bonds: These represent debt from companies, financial institutions or Government
agencies.
Money market instruments: These include short-term debt instruments such as
treasury bills, certificate of deposits and inter-bank call money.
A mutual fund’s business is to invest the funds thus collected, according to the
wishes of the investors who created the pool. In many markets these wishes are
articulated as investment mandates.
Analysis of The perception towards these mutual funds is done here in
this project. Even what factors the investors look before investing can also be
observed.
1.2 THE HISTORY OF MUTUAL FUNDS
The mutual fund was born from a financial crisis that staggered
Europe in the early 1770s. The British East India Company had borrowed heavily
during the preceding boom years to support its ambitious colonial interests,
particularly in North America where unrest would culminate in revolution in a few
short years. As expenses increased and revenue from colonial adventures fell, the
East India Company sought a bailout in 1772 from the already-stressed British
treasury. It was the “original too big to fail corporation” and the repercussions
were felt across the continent and indeed around the world. At the same time, the
Dutch were facing their own challenges, expanding and exploring like the British
and taking “copy-cat risks” in a pattern that has drawn parallels to the banking
crisis of 2008.
1.2.1 THE FIRST MUTUAL FUND
Against this backdrop, a Dutch merchant, Adriaan van Ketwich, had
the foresight to pool money from a number of subscribers to form an investment
trust – the world’s first mutual fund – in 1774. The financial risk to the mainly
small investors was spread by diversifying across a number of European countries
and the American colonies, where investments were backed by income from
plantations, an early version of today’s mortgage-backed securities.
 Subscription to the closed-end fund, which Van Ketwich called
“Eendragt Maakt Magt” (“unity creates strength”), was available to the public until
all 2,000 units were purchased. After that, participation in the fund was available
only by buying shares from existing shareholders in the open market. The fund’s
prospectus required an annual accounting, which investors could view if they
requested. Two subsequent funds set up in the Netherlands increased the emphasis
on diversification to reduce risk, escalating their appeal to even smaller investors
with minimal capital.
Van Ketwich’s fund survived until 1824 but the vehicle he created is
still a hallmark of personal investing more than two centuries later with an
estimated $27.86 trillion US in global assets in July 2013. In Canada alone, mutual
funds represent $1.43 trillion. The early mutual funds spread were of the closed-
end variety, issuing a fixed number of shares. They spread from the Netherlands to
England and France before heading to the U.S. in the 1890s.
The first modern-day mutual fund, Massachusetts Investors Trust, was
created on March 21, 1924. It was the first mutual fund with an open-end
capitalization, allowing for the continuous issue and redemption of shares by the
investment company. After just one year, the fund grew to $392,000 in assets from
$50,000. The fund went public in 1928 and eventually became known as MFS
Investment Management.
1.2.2 THE MUTUAL FUND INDUSTRY IN INDIA:
The mutual fund industry in India started in 1963 with the formation
of Unit Trust of India (UTI) at the initiative of the Reserve Bank of India (RBI)
and the Government of India. The objective then was to attract small investors and
introduce them to market investments. Since then, the history of mutual funds in
India can be broadly divided into six distinct phases.
Phase I (1964-87): Growth Of UTI:
In 1963, UTI was established by an Act of Parliament. As it was the only entity
offering mutual funds in India, it had a monopoly. Operationally, UTI was set up
by the Reserve Bank of India (RBI), but was later delinked from the RBI. The first
scheme, and for long one of the largest launched by UTI, was Unit Scheme 1964.
Later in the 1970s and 80s, UTI started innovating and offering different schemes
to suit the needs of different classes of investors. Unit Linked Insurance Plan
(ULIP) was launched in 1971. The first Indian offshore fund, India Fund was
launched in August 1986. In absolute terms, the investible funds corpus of UTI
was about Rs 600 crores in 1984. By 1987-88, the assets under management
(AUM) of UTI had grown 10 times to Rs 6,700 crores.
Phase II (1987-93): Entry of Public Sector Funds:
The year 1987 marked the entry of other public sector mutual funds. With the
opening up of the economy, many public sector banks and institutions were
allowed to establish mutual funds. The State Bank of India established the first
non-UTI Mutual Fund, SBI Mutual Fund in November 1987. This was followed by
Canbank Mutual Fund,LIC Mutual Fund, Indian Bank Mutual Fund, Bank of India
Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. From 1987-88 to 1992-93,
the AUM increased from Rs 6,700 cr to Rs 47,004 cr, nearly seven times. During
this period, investors showed a marked interest in mutual funds, allocating a larger
part of their savings to investments in the funds.
Phase III (1993-96): Emergence of Private Funds:
A new era in the mutual fund industry began in 1993 with the permission granted
for the entry of private sector funds. This gave the Indian investors a broader
choice of 'fund families' and increasing competition to the existing public sector
funds. Quite significantly foreign fund management companies were also allowed
to operate mutual funds, most of them coming into India through their joint
ventures with Indian promoters.
The private funds have brought in with them latest product innovations, investment
management techniques and investor-servicing technologies. During the year
1993-94, five private sector fund houses launched their schemes followed by six
others in 1994-95.
Phase IV (1996-99): Growth And SEBI Regulation:
Since 1996, the mutual fund industry scaled newer heights in terms of mobilization
of funds and number of players. Deregulation and liberalization of the Indian
economy had introduced competition and provided impetus to the growth of the
industry. A comprehensive set of regulations for all mutual funds operating in
India was introduced with SEBI (Mutual Fund) Regulations, 1996. These
regulations set uniform standards for all funds. Erstwhile UTI voluntarily adopted
SEBI guidelines for its new schemes. Similarly, the budget of the Union
government in 1999 took a big step in exempting all mutual fund dividends from
income tax in the hands of the investors. During this phase, both SEBI and
Association of Mutual Funds of India (AMFI) launched Investor Awareness
Programme aimed at educating the investors about investing through MFs.
Phase V (1999-2004): Emergence of a Large and Uniform Industry:
The year 1999 marked the beginning of a new phase in the history of the mutual
fund industry in India, a phase of significant growth in terms of both amount
mobilized from investors and assets under management. In February 2003, the UTI
Act was repealed. UTI no longer has a special legal status as a trust established by
an act of Parliament. Instead it has adopted the same structure as any other fund in
India - a trust and an AMC.
UTI Mutual Fund is the present name of the erstwhile Unit Trust of India (UTI).
While UTI functioned under a separate law of the Indian Parliament earlier, UTI
Mutual Fund is now under the SEBI's (Mutual Funds) Regulations, 1996 like all
other mutual funds in India.
The emergence of a uniform industry with the same structure, operations and
regulations make it easier for distributors and investors to deal with any fund
house. Between 1999 and 2005 the size of the industry has doubled in terms of
AUM which have gone from above Rs 68,000 crores to over Rs 1,50,000 crores.
Phase VI (From 2004 Onwards): Consolidation and Growth:
The industry has lately witnessed a spate of mergers and acquisitions, most recent
ones being the acquisition of schemes of Allianz Mutual Fund by Birla Sun Life,
PNB Mutual Fund by Principal, among others. At the same time, more
international players continue to enter India including Fidelity, one of the largest
funds in the world.

1.3 ADVANTAGES OF MUTUAL FUNDS

There are many reasons why investors choose to invest in mutual funds with such
frequency. Let's break down the details of a few.
Advanced Portfolio Management
When you buy a mutual fund, you pay a management fee as part of your expense
ratio, which is used to hire a professional portfolio manager who buys and sells
stocks, bonds, etc. This is a relatively small price to pay for getting professional
help in the management of an investment portfolio.
Dividend Reinvestment
As dividends and other interest income sources are declared for the fund, it can be
used to purchase additional shares in the mutual fund, therefore helping your
investment grow.
Risk Reduction (Safety)
Reduced portfolio risk is achieved through the use of diversification, as most
mutual funds will invest in anywhere from 50 to 200 different securities—
depending on the focus. Numerous stock index mutual funds own 1,000 or more
individual stock positions.
Convenience and Fair Pricing
Mutual funds are easy to buy and easy to understand. They typically have low
minimum investments (some around $2,500) and they are traded only once per day
at the closing net asset value (NAV). This eliminates price fluctuation throughout
the day and various arbitrage opportunities that day traders practice.

1.3.1 DISADVANTAGES OF MUTUAL FUNDS

However, there are also disadvantages to being an investor in mutual funds. Here's
a more detailed look at some of those concerns.
High Expense Ratios and Sales Charges
If you're not paying attention to mutual fund expense ratios and sales charges, they
can get out of hand. Be very cautious when investing in funds with expense ratios
higher than 1.20%, as they are considered to be on the higher cost end. Be wary
of 12b-1 advertising fees and sales charges in general. There are several good fund
companies out there that have no sales charges. Fees reduce overall investment
returns.
Management Abuses
Churning, turnover, and window dressing may happen if your manager is abusing
his or her authority. This includes unnecessary trading, excessive replacement, and
selling the losers prior to quarter-end to fix the books.
Tax Inefficiency
Like it or not, investors do not have a choice when it comes to capital
gains payouts in mutual funds. Due to the turnover, redemptions, gains, and losses
in security holdings throughout the year, investors typically receive distributions
from the fund that are an uncontrollable tax event.
Poor Trade Execution
If you place your mutual fund trade anytime before the cut-off time for same-day
NAV, you'll receive the same closing price NAV for your buy or sell on the mutual
fund. For investors looking for faster execution times, maybe because of short
investment horizons, day trading, or timing the market, mutual funds provide a
weak execution strategy.

1.4 ABOUT COMPANY

Enrich Financial Group was started in 2008 as a unit and became a
success with its customer-centric approach, transparent business practices and with
hardcore professionalism. It was incorporated in the year 2013, with the backup of
a strong marketing and technical team. We established a strong presence in South
India and acquired a name of TRUST through Commodity Broking Business.

We always believe in learning the latest from the market, adapting and then
evolving innovative trader centric game changing plans. We have brought many
new changes in the trading process with the help of integrated and innovative use
of technology enabling clients to trade offline & online and strategic tie-ups with
technology partners to facilitate smooth trading.

1.5 NEED FOR STUDY

This study is to know the investor perception about the mutual funds and
how investors are investing their funds in the different investments like equity
market, fixed deposit, insurance etc, secondly to know how the investors being
aware in Mutual Fund investment.
 The study towards mutual fund as per the sample size and method which is
applied to the study and found that the investors are not choosing or feeling
confident in investing in mutual fund because they think that mutual fund is risky
than other investment options.
The awareness level of mutual fund among the investors are very low
because of only having the partial knowledge about the mutual fund which prevent
them to Invest in mutual fund to avoid risk bearing factor and fear of losing
money. They used to know about the perception of common investor about mutual
funds of PSU and private entities in different cities.
The awareness level of mutual fund among the investors is very low because of
only having the little knowledge about the mutual fund which prevents them to
invest in mutual funds.
1.5.1 PURPOSE OF STUDY
1. This research paper shows that investor perception plays an important role while
investing mutual funds.
2. This research help to analyzed the main parameters of mutual funds namely
liquidity market share and rate of return
3. This study is more concern to the find out the mutual funds
4. Should analyze the risk factors and performance and position of investment
plans.
1.5.2 INVESTORS PERCEPTION
Investor’s perception refers to the choosing, purchasing and
consumption of goods and services for the satisfaction of their wants. There are
different processes involved in the investor perception. Basically the investor
attempts to find what kind of investments he/she would like to consume, after that
investors selects only those investments that promise greater utility. After selecting
the investment, the investor makes an estimate of the available money which
he/she can spend. Lastly, the investor analyzes the prevailing prices of investment
and takes the decision about the investment he/she should consume.

CHAPTER 2
2.1 LITERATURE REVIEW
The study was all about the investor who were diversifying their risk and what the
perception towards the investment on mutual fund is. The published relating to the
above topic is reviewed. The relevant literature is reviewed on the basis of
Newspaper, journals and some papers on Conference.
Devakumar.V.K (1987) reveals that earlier to 1985, there were very few investors
and they were knowledgeable. During the 1985 boom, thousands of new investors
invaded the market. The new investors suffered heavy losses compared to the
professionals. A good number of new investors have walked out of the stock
market to safer areas like UTI Units, NSC, etc. There is a mild shift of investment
preferences to mutual funds also.
Sikidar and Singh (1996), carried out a survey with an objective to understand the
behavioral aspects of the investors of the North Eastern Region towards Equity and
MF’s Investment Portfolio.
Shunmugham (2000) conducted a survey of 201 individual investors to study the
information sourcing by investors, their perceptions of various investment strategy
dimensions and the factors motivating share investment decisions and reports that
among the various factors, psychological and sociological factors dominated the
economic factors in share investment decisions.
Ms.T.R.Rajeshwari and V.E.Ramamoorthy under took a study on “Mutual’s
know them investors in the year 2001 with the main aim of measuring the level of
awareness among the retail investors about the concept and functioning of mutual
funds in Mumbai, Bangalore and Hyderabad. The study reveal that more and more
small investors with a great appetite for wealth are entering in to the industry,
expecting a dramatic change in their personal wealth and therefore it is essential to
educate them on the risks involved in mutual funds investment.
Desigan G, Lalaiselvi S and Anusuya L (2006) conducted a study on women
investors’ perception towards investment and found that women investors
generally hesitate in investing in mutual funds due to lack of their knowledge and
awareness regarding investment protection, procedure of making investment,
valuation of investment and redressal of grievances regarding their investment
related problems.
Dr. Neha Parashar (2009) presented a paper on factors affecting perception
towards mutual funds. For this purpose she collected the data from 300
respondents from different states and showed in the study that perception towards
mutual fund is differ from one state to another.
Singh and Jha (2009) conducted a study on awareness and acceptability of mutual
fund and found that consumers basically prefer mutual fund due to return potential,
liquidity and safety and they were not fully aware about the systematic investment
plan.
Parihar B B S, Sharma R and Parihar D.S (2009) also studied that respondent’s
age, gender and income are significantly associated with their attitude.
Sanjay Das (2011) presented a report on small investor’s perception on mutual
funds in Assam: An empirical analysis. For the purpose, he collected the data from
250 respondents belonged to five different commercial towns. This study analyze
that different demographic variables like investor’s age, gender, marital status,
occupation, income etc. has impact on the selection of investment. In the end this
study describes that majority number of small investors has positive approach
towards mutual investment.
K.Lakshman Rao (2011) surveyed in their paper that majority of investing
respondents were found to be in the age group of 31-50 years. People belonging to
the age group of more than 60 years and less than 20 years were found to be less
aware of different investment schemes and so their investments are comparatively
much less.
SimranSaini and BimalAnjum (2011) had analyses the mutual fund investments
in relation to investor’s behavior that attract them to invest in mutual funds.
Investor’s opinion and perception has been studied relating to various issues like
type of mutual fund scheme, main objective behind investing in mutual fund
scheme, level of satisfaction, role of financial advisors and brokers, sources of
information, deficiencies in the services provided by the mutual fund managers,
challenges before the mutual fund industry etc.
Binod Kumar Singh (2012) had studied the impact of various demographic
factors on investor’s attitude towards mutual fund for measuring and analyzing
various factors responsible for investment in mutual funds.
R. Vasudevan & Peermohaideen (2012) the study aimed to understand and
analyze investor’s perception of such risk and expectation associated with specific
mutual fund. The research also revealed that investors perceive risk as under
performance as risk and return in mutual fund investment are medium and not so
satisfactory.
D. Rajasekar (2013) the study was conducted with a sample size of 150
respondent by using the statistical tools like percentage analysis, chi square,
weighted average, with an objective to know about the investor’s perception on
their profile, income, savings pattern, investment patterns and their personality
criteria. The study was concluded by taking into consideration various parameters
involved in investors decision making keeping in mind investors perception
towards mutual fund investment.
Gaurav Agrawal, Dr. Mini Jain (2013) presented a paper on investor’s
preference towards mutual fund in comparison to other investment avenues. For
the purpose, they collected data from 300 investors within the Matura city. This
study showed the various kinds of investments are available in the market. It is
analyzed that preference of investors towards different avenues of investment are
dependent on return, tax planning, growth etc. in end it conclude that real estate is
mostly preferred by investors of Mathura.
In this respect V Rathnamani (2013) concluded in her research that many
investors prefer to invest in mutual fund in order to gain high gain at low level of
risk, safety and liquidity.
Sukhwinder Kaur, Dr. G. S. Batra, Dr. Bimal Anjum (2013) presented a paper
on investor’s perception towards selection of mutual funds rather than stock
market. For the purpose of study, they collected the data from 200 investors and
this study showed that investor prefers mutual fund rather than stock market.
Because mutual fund investment can be changed according to their requirement
where as investment in stock market is complex and risky.
Preeti Khitoliya (2014) examined through her research that majority of the
respondents in the age of 35-44 wish to invest in mutual fund having moderate risk
which ensures wealth maximization followed by balanced fund and income funds.
Similar results have been seen in the age group of 25-34. But a reverse trend were
seen in the age group of 45 above where majority is risk averse as they wish to
invest in mutual fund schemes which guarantees safety of principal amount
followed by balanced fund and growth fund.
Prof. Gauri Prabhu, Dr. N. H. Vechalekar (2014) conducted a study on
perception of Indian investors toward investment in mutual funds with special
reference to MIP (Monthly income plan) funds. For the purpose of study they
collected data from individual mutual fund investors. The study revealed that
awareness, age, income level of investors, return etc. has impact on the selection of
mutual funds. Investors are also aware about MIPs funds and here they invest only
on the basis of consistent return.
Subramanya PR (2015) the research has been studied on socio economic factors
like age, gender, education income and savings of investor’s perception towards
mutual fund is not encouraging but the age of investor’s and saving habit of the
respondent is closely correlated.
Mukesh. H.V. (2015) had studied investor’s perception on mutual fund for return,
tax benefit and capital appreciation, but most of the investors lack awareness about
mutual funds and their various schemes like, SIP (Systematic Investment Plan).
Hence, it becomes necessary to create awareness among the investors through
conducting seminars, workshops on financial market and published data like
newspaper, magazines and journals.
Priyanka Sharma, Payal Agrawal (2015) conducted a study on investor’s
perception towards mutual fund as an investment option. For the purpose of study,
they collected the data from 50 educated investors. This study revealed that various
factors has impact on the buying decision of investor for mutual fund investment
and it also showed that income, awareness etc. has also considered by investors
while making buying decision.
Rama Krishna Mishra (2015) presented a study on perceptions of investors
towards mutual funds: an analytical study in Odisha. For the purpose, hr collected
data from 136 respondents. This study revealed that return and future of mutual
fund has impact on the buying behavior of small and large investors.
Ms. M. Kalaiselvi, (2016) conducted a study on investor’s perception towards
mutual fund investment (with special reference to Pollachi Town). For this purpose
they collected data from 250 respondents and this study showed that investors
decisions effected by various schemes and their satisfactory level.
Priti Mane (2016) conducted a study on investor’s perception towards mutual
funds in the city of Aurangabad. For the purpose of study, she collected the data
from only 30 investors. On the basis of data collected, she concluded that
awareness level and non-awareness has impact on the buyer’s decision. It also
showed that investor see mutual funds as risky investment and avoids investing in
and preferring fixed deposits.

CHAPTER 3
3.1 OBJECTIVES
 To Analyze the Perception of investors towards mutual funds.
 To know the preference of investor toward specific instrument.
 To study the level of awareness of mutual funds.
 To study the factors considered by the investors and those which ultimately
influence him while investing.
 To determine the type of mutual fund investor prefers the most.

3.2 RESEARCH METHODOLOGY

Research methodology is the path through which researchers need to
conduct their research. It shows the path through which these researchers formulate
their problem and objective and present their result from the data obtained during
the study period. This research design and methodology chapter also shows how
the research outcome at the end will be obtained in line with meeting the objective
of the study. This chapter hence discusses the research methods that were used
during the research process.
It includes the research methodology of the study from the research
strategy to the result dissemination. For emphasis, in this chapter, the author
outlines the research strategy, research design, research methodology, the study
area, data sources such as primary data sources and secondary data, population
consideration and sample size determination such as questionnaires sample size
determination and workplace site exposure measurement sample determination,
data collection methods like primary data collection methods including workplace
site observation data collection and data collection through desk review, data
collection through questionnaires, data obtained from experts opinion, workplace
site exposure measurement, data collection tools pretest, secondary data collection
methods, methods of data analysis used such as quantitative data analysis and
qualitative data analysis, data analysis software, the reliability and validity analysis
of the quantitative data, reliability of data, reliability analysis, validity, data quality
management, inclusion criteria, ethical consideration and dissemination of result
and its utilization approaches. In order to satisfy the objectives of the study, a
qualitative and quantitative research method is apprehended in general. The study
used these mixed strategies because the data were obtained from all aspects of the
data source during the study time. Therefore, the purpose of this methodology is to
satisfy the research plan and target devised by the researcher.

3.3 RESEARCH DESIGN

Research design is the framework of research methods and techniques
chosen by a researcher. The design allows researchers to hone in on research
methods that are suitable for the subject matter and set up their studies up for
success.
Research Design of the present quantitative study is descriptive in
nature, based on the primary data collected among the Mutual funds Investors with
special reference of Enrich Financial Solution Pvt Ltd in Maduai. The study is
designed to examine and measure the Investor perception towards Mutual Funds in
Madurai. A research design is the arrangement of conditions for collection and
analysis of data in a manner that aims to combine relevance to the research purpose
with economy in procedure.
3.3.1 DESCRIPTIVE RESEARCH
Descriptive research can be explained as a statement of affairs as they
are at present with the researcher having no control over variable. Moreover,
“descriptive studies may be characterized as simply the attempt to determine,
describe or identify what is, while analytical research attempts to establish why it
is that way or how it came to be.
Descriptive research is “aimed at casting light on current issues or
problems through a process of data collection that enables them to describe the
situation more completely than was possible without employing this method.
In its essence, descriptive studies are used to describe various aspects of the
phenomenon. In its popular format, descriptive research is used to describe
characteristics and/or behavior of sample population.
An important characteristic of descriptive research relates to the fact that while
descriptive research can employ a number of variables, only one variable is
required to conduct a descriptive study. Three main purposes of descriptive studies
can be explained as describing, explaining and validating research findings.
Descriptive studies are closely associated with observational studies, but they are
not limited with observation data collection method. Case studies and surveys can
also be specified as popular data collection methods used with descriptive studies.

3.4 SOURCES OF DATA

For the study purpose both primary and secondary data are used. The
primary data collected from sales men of the companies, customers and dealers
dealing in the products of the company. The secondary data collected from records
of the company, retailers and dealers. The data of past sales also have been
collected. The primary and secondary data have been collected to cover every
aspect of the study. The primary data are related to behavior and response of
employees, dealers and customers. The secondary data shows the sales of the
company product wise. These data used in combination as per need of the study.
These data having different merits and demerits and have serves our purpose of the
research study. These are explained below:
3.4.1 PRIMARY DATA
Primary data are information collected by a researcher specifically for a
research assignment. In other words, primary data are information that a company
must gather because no one has compiled and published the information in a forum
accessible to the public. Companies generally take the time and allocate the
resources required to gather 8 primary data only when a question, issue or problem
presents itself that is sufficiently important or unique that it warrants the
expenditure necessary to gather the primary data. Primary data are original in
nature and directly related to the issue or problem and current data. Primary data
are the data which the researcher collects through various methods like interviews,
surveys, questionnaires etc.
3.4.2 SECONDARY DATA
Secondary data are the data collected by a party not related to the research
study but collected these data for some other purpose and at different time in the
past. If the researcher uses these data then these become secondary data for the
current users. These may be available in written, typed or in electronic forms. A
variety of secondary information sources is available to the researcher gathering
data on an industry, potential product applications and the market place. Secondary
data is also used to gain initial insight into the research problem. Secondary data is
classified in terms of its source – either internal or external. Internal, or in-house
data, is secondary information acquired within the organization where research is
being carried out. External secondary data is obtained from outside sources. There
are various advantages and disadvantages of using secondary data.

3.5 DATA COLLECTION METHOD

In this research the methods used for data collection is questionnaires.
Surveys or
Questionnaires are instruments used for collecting data in survey research. They
usually include a set of standardized questions that explore a specific topic and
collect information about demographics opinions, Awareness, preference.
3.5.1 QUESTIONNAIRE
A questionnaire is a research instrument consisting of a series of questions
for the purpose of gathering information from respondents. Questionnaires can be
thought of as a kind of written interview. They can be carried out face to face, by
telephone, computer or post.
Questionnaires provide a relatively cheap, quick and efficient way of obtaining
large amounts of information from a large sample of people.
Data can be collected relatively quickly because the researcher would not need to
be present when the questionnaires were completed. This is useful for large
populations when interviews would be impractical.
Close ended questionnaire: Closed-ended questions can be answered
with “Yes” or “No,” or they have a limited set of possible answers (such as: A, B,
C, or All of the above. Closed-ended questions are often good for surveys, because
you get higher response rates when users don’t have to type so much. Also,
answers to closed-ended questions can easily be analyzed statistically, which is
what you usually want to do with survey data.
 Multiple choice questions: Want to know what aspects of your
product the respondent’s likes best? List them and let your respondents rank the
items themselves by asking a ranking question. This allows survey respondents to
compare different items to each other by placing them in order of how they score
(or rank) at a specific aspect, such as design, cost, functionality, importance. Often
with the most important or preferred item ranked first or on top of the list.
Likert Scale questions: Various kinds of rating scales have been
developed to measure attitudes directly (i.e. the person knows their attitude is
being studied). The most widely used is the Likert scale (1932).In its final form,
the Likert scale is a five (or seven) point scale which is used to allow the individual
to express how much they agree or disagree with a particular statement.
3.6 SAMPLING TECHNIQUE
Sampling helps a lot in research. It is one of the most important
factors which determine the accuracy of your research/survey result. If anything
goes wrong with your sample then it will be directly reflected in the final result.
There are lot of techniques which help us to gather sample depending upon the
need and situation. This blog post tries to explain some of those techniques.
3.6.1 NON-PROBABILITY SAMPLING
Non-probability sampling is used in this research. It does not rely on
randomization. This technique is more reliant on the researcher’s ability to select
elements for a sample. Outcome of sampling might be biased and makes difficult
for all the elements of population to be part of the sample equally. This type of
sampling is also known as non-random sampling.
SNOWBALL SAMPLING
This technique is used in the situations where the population is
completely unknown and rare.
Therefore we will take the help from the first element which we select for the
population and ask him to recommend other elements who will fit the description
of the sample needed.
So this referral technique goes on, increasing the size of population like a
snowball.
CONVINIENCE SAMPLING
Here the samples are selected based on the availability. This method is
used when the availability of sample is rare and also costly. So based on the
convenience samples are selected.
3.7 SAMPLE SIZE
In this project I have done a survey with a questionnaire with a sample
size of 100 individuals who are Mutual Fund Investors. The questionnaire includes
the economic status of the individuals, age group, marital status, investments made
etc.