Marketing Influence on Retail Investors’ Behaviour in Equity and Mutual Fund Markets

Abstract

The past few years have witnessed the financial marketing practice rapidly changing as the involvement of the retail investors in the equity and mutual funds marketplaces has increased. Marketing has transformed to be more than the conventional promotional instruments and more to the digital, data-driven, and trust-oriented approaches that play a significant role in the perception of risk by the investors, the analysis of investment opportunities, and the financial decisions by the investors. This paper will discuss how the marketing variables affect the behaviour of retail investors in the equity and mutual fund markets with particular emphasis on marketing communication, brand image and trust, and exposure to digital marketing. The adopted research design was quantitative, and primary data were obtained based on the interaction with 400 retail investors by using a structured questionnaire. To test the proposed hypotheses, descriptive statistics, correlation analysis, multiple regression analysis, and independent sample t-tests were used. The results indicate that marketing communication plays a major positive role in investment behaviour, brand image and trust play a big role in influencing investors preferences especially with regard to mutual fund investments. Risk perception by the investors was also observed to be greatly influenced by digital marketing and social media exposure. Also, the findings show that there is a great distinction in the degree of marketing impact between mutual fund and equity investors. The paper concludes that marketing is central in the development of modern retail investment behaviour and there should be transparency and responsibility in marketing activities in order to enable informed and sustainable investment decisions.