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Life Insurance Corporation of India

Staying Ahead in the Game Page 1

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NORTH SOUTH UNIVERSITY

Case Study on Life Insurance Corporation of India

Staying Ahead in the Game

Brand Management (MKT465)

Section: ??

FACULTY MEMBER: Zarjina Tarana Khalil (Ztk)

Submitted By:

Safwan Dawood Shams 093-0670-530

Sohidul Hoque 093-0385-030

Submission Date: 31st

August, 2013

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Abstract

The case deals with the strategy reformation of LIC to compete with new entrants in thefield of insurance in India.

Till year 2000, LIC was the only company providing insurance services to Indiancustomer. After year 2000 many new companies enters into the field of insurance such

as ICICIPrudential and Max New York etc.

To compete with the new players LIC totally reformed its strategy to maintain its marketleader position in insurance sector of Indian economy

Coverage of Area

In Its new strategy to compete the new entrants, LIC focused majorly on following areas:

Training and development of sales force Technological Edge Business Process Re-engineering Promotional Strategy

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01.What have been key successes factors that have helped LIC tide over competition?

Training and development of sales force

Sales force locates prospects, develop them into customers, and grow the business. Sales

personal serve as the companys personal link to the customer hence training and development

of sales force become an important aspect. Various methods adopted by LIC in this regards are:

Program they recruit many more agents to increase their network. Agents were given professional training mandatory under regulatory & Development

and authority rules

A tie up was done with IIM to impart IT skills to the sales force Laptops were sold to development officers at concession price.

Technological Edge

Technology plays a vital role in business. Over the years businesses have become dependent on

technology so much so that if we were to take away that technology virtually all business

operations around the globe would come to a grinding halt. This case LIC has used various

technologies to improve the effectiveness of business. They are:

LIC used WAN (wide Area Network) to interconnect its branches which facilitate the

customers to pay their premium at any branch.

LIC used IVRS (Interactive Voice Responsive System) that enables the customer to get their

query resolved in real time and obtain information on their policy.

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02.How did life insurance company manage to gain foothold in rural India

In the case, LIC has reengineered their service processes to clear the outstanding claims. They

improved their services in such a manner that it takes less time to process the customer

request. In this way they were able to send a message to customer that LIC delivers its services

on its promise.

Through its high level of accessibility and availability, LIC have been able to increase proximity

with the target group, irrespective of their location and status. Private insurance companies

focused more on affluent class while LIC targeted more poor and remotest customers. LIC not

only hired agents in rural areas but also set up satellite offices to cater customers. They cameup with different schemes that able to gain peoples attention and created awareness among

people specially children. Moreover premiums have been structured keeping in mind the

uncertainty of income of those people. To accomplish this LIC tied up with self-help groups and

NGOs.

03.What role has LICs promotion strategy played in brand building?

Promotional Strategy

Objective of promotion and advertisement is creating brand identity and brand equity. A Brand

is defined as a name, term, sign, symbol or design or a combination of them, intended to

identify the goods or services of one seller or group of sellers and to differentiate them from

those of competitors.

In the case LIC has taken help of advertising agencies to promote the Brand LIC. They used creative slogans which affects the customers mindset and able to attract

their attention.

Those slogans helped LIC to make the customer emotionally attached to servicesprovided by them.

They spend huge amount of money in advertising and sales promotions to build theirbrand equity and identity.

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To avoid the interference in communication to customer, they reduced the number ofad agencies and worked with limited number of those agencies so that the message

reached to customer, doesnt lose the main objective.

Conclusion:

Growth of Indian Economy is not a consumption driven but it is an investment driven growth,

and opens a wide variety of Investment Avenue. Competition means to compete, fight with

other business in the insurance industry to get maximum market share or profits, income, sales

etc. The entry of private sector insurance companies into the Indian insurance sector triggered

off a series of changes in the industry. Even with the stiff competition in the market place, it is

evident from the study that the public sector giant LIC dominates the Indian insurance

industry.LIC is competing with 16 other companies in the insurance sector and has successfully

managed not only to beat the competition but also has taken advantage of the competition to

increase its market share and premium income. Thus, LIC has taken the competition positively

as a means to innovate, develop and re-engineer itself to the market. In this project, an attempt

is made to determine the present competition in the Insurance and effective strategies to

overcome the competition.

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