235820934 By Adarsh Mishra Report on Marketing Mix Promotional Strategies at IDBI Federal Lfe Insurance Final Report PDF

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A Report on

“Marketing Mix and Promotional Strategies of IDBI Federal Life Insurance Co. Ltd.” (A summer training project report submitted in partial fulfilment of the requirement of Post-Graduation Diploma in Management)

2013-15 Under the guidance of:

Submitted By:

Corporate Guide:

Ms. Piyushi Verma (Manager Distribution) IDBI Federal Life Insurance

ADRASH MISHRA PGDM 2ND YEAR Roll No.-:22061

Faculty Guide:

Dr. Agna Fernandez (M.Com, FPM-XLRI, Associate Professor)

Siva Sivani Institute of Management

Siva Sivani Institute of Management - Secunderabad

ACKNOWLEDGMENT I would like to express my gratitude to Ms. Piyushi Verma, MANAGER DISTRIBUTION, for providing us an opportunity to work in IDBI Federal Life Insurance Co. Ltd. for entrusting me and providing me valuable inputs for my project “Marketing Mix and Promotional Strategies of IDBI Federal Life Insurance Co. Ltd.” I sincerely express my gratitude to Dr. Agna Fernandez, M.Com, FPMXLRI, Associate Professor (my faculty guide), for giving her valuable guidance, healthy support and suggestions to make the project a successful one. I would also like to express my gratitude to Ms. Piyushi Verma (my company guide) for providing their valuable feedback and intense support relentlessly throughout the project. I am really thankful to my parents and friends for helping me to study and giving feedback in all possible ways to make me feel comfortable during my project. There have been numerous influences, big and small that have helped me to work on my project successfully. Regardless of the source, I thank all those who may have contributed to this project.

ADRASH MISHRA 22-061 Siva Sivani Institute of ManagementSECUNDERABAD

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PREFACE Life insurance business is booming in India. The business of life insurance is related to the protection of the economic value of human life and this project is just offered to draw the attention of individuals, who are interested in life insurance business running by Insurance Regulatory Development Authority (IRDA). Insurance industry has Ombudsmen in 12 cities. Each Ombudsman is empowered to redress customer grievances in respect of insurance contracts on personal lines where the insured amount is less than Rs. 20 lakh, in accordance with the Ombudsman Scheme. Addresses can be obtained from the offices of LIC and other insurers. This project is like just an extract of my rigorous work in Life Insurance Companies, and I hope the beneficiaries’ decision regarding recruitment of advice; or, all information and data. This responsibility really in hence my effective communication and convincing power and such quality will help me in near future for having decision making.

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AUTHORISATION This is to certify that the project title: “Marketing Mix and Promotional Strategies of IDBI Federal Life Insurance Co. Ltd.” is

a bonafide work

completed by ADRASH MISHRA, Enrollment Number 22-061, in partial fulfillment of the requirements of the PGDM Program and submitted to SIVA SIVANI INSTITUTE OF MANAGEMENT- SECUNDERABAD. I declare that this project is a result of my own efforts and has not been copied from any source. References from which information has been taken have been given in the references section. This work has not been submitted earlier at any other university or institute for the award of the degree.

ADRASH MISHRA 22-061 SIVA SIVANI INSTITUTE OF MANAGEMENTSECUNDERABAD

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Table of Contents ON THE JOB TRAINING ............................................................................................................................ 1 Company Assigned activities:................................................................................................................... 1 Targets Assigned:...................................................................................................................................... 1 Accomplishments/Achievement of Objectives ......................................................................................... 1 Learnings: ................................................................................................................................................. 1 I.

CHAPTER ............................................................................................................................................ 2 INTRODUCTION .................................................................................................................................... 2 NEED OF THE STUDY ........................................................................................................................... 5 OBJECTIVES OF THE STUDY .............................................................................................................. 5 LIMITATIONS ......................................................................................................................................... 5 RESEARCH METHODOLOGY .............................................................................................................. 6 REVIEW OF THE LITERATURE........................................................................................................... 7

II.

CHAPTER .......................................................................................................................................... 10 INDUSTRY PROFILE ........................................................................................................................... 10 COMPETITOR ANALYSIS .................................................................................................................. 20 COMPANY PROFILE ........................................................................................................................... 24 SWOT ANALYSIS OF IDBI FEDERAL LIFE ..................................................................................... 30 CUSTOMERS......................................................................................................................................... 31

III.

CHAPTER ...................................................................................................................................... 32

THEORETICAL ASPECT RELATED TO TOPIC OF THE STUDY .................................................. 32

IV.

A.

Marketing Mix at IDBI Federal Life Insurance .......................................................................... 32

B.

Promotional Strategies at IDBI Federal Life Insurance .............................................................. 41

C.

Promotional Strategies Adopted By IDBI Federal...................................................................... 48 CHAPTER ...................................................................................................................................... 50

DATA ANALYSIS & INTERPRETATION .......................................................................................... 50 V.

CHAPTER .......................................................................................................................................... 67

REFERENCES ...........................................................................................................................................69 ANNEXURE............................................................................................................................................... 70

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ON THE JOB TRAINING Company Assigned activities: The company IDBI Federal Life Insurance is into selling insurance products. The job assigned by the company is to get trained and enter the market to sell the products. During the training process I was trained on three insurance products, Life Insurance, Child Insurance, and Income insurance. The target given by the company is to complete one sale of insurance product which is successfully completed.

Plan of action and Execution / Activities performed Targets Assigned: • Twenty thousand worth of business before 13th May The target was achieve before 13th of May, during the process I met customers and explained them about three different insurance products with complete details and explanation about the benefits epically tax benefits one of the customer was convinced and I was able to make a thirty thousand rupees •Second 20000 businesses before 24th May •Third 20000 business before 3rd June • Fourth 20000 business before 12th June Goals The Second, third and fourth targets were incomplete; I went across many customers during this period I met the customers who already have the insurance in LIC which is a government player, hence it was difficult to convince them and close the sale.

Accomplishments/Achievement of Objectives At the completion of my 45 days of Industrial Internship Program I was able to complete the sale of one insurance product of thirty thousand businesses for completion of my target.

Learnings:   

The major learning from my IIP is to understand the mood of the customer and how react according the situation. Able to understand the corporate culture and flow of communication with the higher order officials Learnt that going out into the market and explain the customer is difficult, but after few days in the market it was comfortable.

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I. CHAPTER INTRODUCTION The Indian insurance industry has undergone transformational changes since 2000 when the industry was liberalized. With a one-player market to 24 in 13 years, the industry has witnessed phases of rapid growth along with extent of growth moderation and intensifying competition. There have also been a number of product and operational innovations necessitated by consumer need and increased competition among the players. Changes in the regulatory environment also had a path-breaking impact on the development of the industry. While the insurance industry still struggles to move out of the shadows cast by the challenges posed by economic uncertainties of the last few years, the strong fundamentals of the industry augur well for a roadmap to be drawn for sustainable long-term growth. The decade 2001-10 was characterized by a period of high growth (compound annual growth rate of 31 percent in new business premium) and a flat growth (CAGR of around two percent in new business premium between 2010-12) There was exponential growth in the first decade of insurance industry liberalization. Backed by innovative products and aggressive expansion of distribution, the life insurance industry grew at jet speed. Regulatory changes were introduced during the past two years and life insurance companies adopted many new customer-centric practices in this period. Product-related changes, first in ULIPs (Unit Linked Insurance Plans) in September 2011 and now in traditional products, will have the biggest impact on the industry This project involves an understanding of the marketing mix and finding out the various promotional strategies presently implemented by IDBI Federal Life Insurance Co. Ltd. and to find out its effectiveness through a study on consumer behavior towards these strategies. Insurance industry is an industry which is said to be in its Golden period now. And IDBI Federal is a fast growing company in this industry. IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, India’s premier development and commercial bank, Federal Bank, one of India’s leading private sector banks and Ageas, a multinational insurance giant based out of Europe. In this venture, IDBI Bank owns 48% equity while Federal Bank and Ageas own 26%

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equity each. IDBI Federal endeavours to deliver products that provide value and convenience to the customer. Through a continuous process of innovation in product and service delivery IDBI intend to deliver world-class wealth management, protection and retirement solutions to Indian customers. Having started in March 2008, in just five months of inception it has become one of the fastest growing new insurance companies to garner Rs 100 Cr in premiums. The company offers its services through a vast nationwide network across the branches of IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners. This project aims in understanding the marketing mix which exists in the insurance industry. The marketing mix is the combination of marketing activities that an organization engages in so as to meet the needs of its targeted market. The Insurance business deals in selling services and therefore due weight age in the formation of marketing mix for the insurance business is needed. The marketing mix includes sub-mixes of the 7 P’s of marketing i.e. the product, price, place, promotion, people, process & physical attraction. This project also aims to help the company to achieve its objective by focusing on their promotional strategies and to understand its effectiveness by understanding the customer perception towards these strategies. There are insurance marketing strategies that can take any insurance agency from mediocre to success when utilized correctly. Breaking into a new business climate and finding customers is hard work, but when equipped with innovative ideas and proven techniques, financial markets sales personnel can become extremely successful. Getting an education and training is very important in every industry, sales is certainly no exception. Those selling insurance will want begin their careers with the very best tools of the trade and those with already established businesses that are in need of a motivational push will also gain great benefits by researching and learning new insurance marketing tips. Through this project we will be able to understand the promotional strategies implemented by the company and also make an attempt to find out its effectiveness and suggest better promotional strategies which would help in increasing the overall profitability of the company. Commercial advertisements also create huge impact upon the minds of the customers hence this project also focuses upon the role of advertising in this industry. Insurance industry is a service oriented industry where promotional strategies play a vital role because this is an industry which deals with intangible products. Hence it is very necessary that the company adopt the best marketing strategies which help to communicate the product to

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the customer. With the help of questionnaires and interviews, this project also aims to understand the perception of the customer regarding the promotional strategies especially the commercial ads and thereby bringing the company more closely to the customers’ heart. Thus this project aims to study the promotional strategy the importance of these tools in creating increased sales and customer base for the company.

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NEED OF THE STUDY  To understand the seven P’s (Product, Place, Price, Promotion, People, Process, Physical evidence) of IDBI Federal Life Insurance Co. Ltd. And the promotional strategies they are using to promote the insurance products  Understanding roles and functions of Marketing manager and factors affecting decisions of marketing manager.

OBJECTIVES OF THE STUDY  To analyze Marketing Mix and Promotional Strategies of IDBI Federal Life Insurance Co Ltd.  To find how effectively advertisements influence a person to buy the life insurance products

LIMITATIONS  Time Duration of the project was 6 weeks. Within this short time, completion of the project was a challenge. Customers were unwilling to part with information required for the study.

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RESEARCH METHODOLOGY  Primary data  Secondary data Primary data: Data required for the study was collected through questionnaires. The sample size was 101 and the sampling unit was office going people who have either joined recently or who have been working for quite a few years. Questionnaires were mailed to respondents and few were handed over to them personally. Both open ended and close ended questions are used in the design of the questionnaire so as to know the opinion of customers relating to insurance and awareness about the brand IDBI federal and how they respond to the marketing stimuli adopted by the company. The type of questionnaire used in this project is structured. The questions are listed in a prearranged order and respondents are informed about the purpose of collecting information. The type of sampling was convenient sampling. Secondary data: Gathering data from internet and television, published articles, books, research reports and other sources.

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REVIEW OF THE LITERATURE Literature no. 1 A study by Garg & Verma(2010) 1, The insurance firms should focus on the concept of MM and implement the concept. They should quantify the level of expenditure for their mix ingredients, study elasticity of the mix ingredients, carry out careful analysis in order to identify the most effective and economic mix, analyze their competitors’ mix while implementing MM, review the whole mix in detail so that each segment gets its own assemblage of mix components, and review their MM on a regular basis. The marketing departments of the insurance firms should call other functional departments while developing MM and provide details of their thinking on the subject.

Literature no. 2 In the study by Abdalelah S. Saaty(2011)2, attempts to find out the factors important in developing a suitable marketing strategy for insurance companies. It investigates the reasons for buying insurance by the current users of insurance, reasons for not buying insurance by nonusers of insurance and the issues and problems faced by Saudi Insurance industry. The results of the study show that the social and regulatory factors played crucial role in the consumer’s decision in purchasing insurance. However it was also found that the public at large is unaware about the benefits of insurance, and various types of insurance products. The insurance companies shall focus of promotional marketing strategies. The marketer’s primary focus should be on promotional activities.

1

Garg ,M.C.& Verma A.2010. An empirical analysis of the marketing mix in the Life Insurance Industry In India.The IUP journal of management research .Vol.9.pp07-20. 2 Abdalelah S. Saaty A 2011. Factors Critical in Marketing Strategies of Insurance Companies in Saudi Arabia. The International Journal of Marketing Studies. Vol.3.pp104-122.

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Literature no. 3 A study by D’Andrea & Schleicher(2006)3. Attempts to understand the role of promotions among other key drivers at determining consumer’s overall store price image (OSPI) of grocery stores in Latin America, identifying its relative importance. Pricing is a relevant issue to customers as well as for retailers. However, this research shows that price promotions and its advertisement may blur the consumer’s possibilities of identifying which retailer runs the best prices and minimizes their overall purchasing cost. At the same time, it makes harder to the retailer to find which factors are more effective in forming the overall store price image (OSPI). Further understanding of how OSPI is built seems necessary in order to help retailers make the right decisions that will not confuse consumers. However, a review of the literature shows that most of the studies have concentrated at the product level, or have considered isolated variables. Our research was then set for understanding the relative importance of the different factors that form the OSP I, and consider the differences towards price promotions across consumer segments and markets. Literature no. 4 A study by Pulidindi Venugopal(2010)4. Attempts to understand the attitude of insured on ...