marketing mix of idbi federal life insurance company
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marketing mix of idbi federal life insurance companyTRANSCRIPT
A PROJECT REPORT
ON
“MARKETING MIX OF IDBI FEDRAL LIFE INSURANCE COMPANY”
SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF
THE DEGREE OF MASTER IN BUSINESS ADMINISTRATION
UNDER THE GUIDANCE OF:
Ms. Sonam Goel
Assistant Professor, RDIAS
SUBMITTED BY:
Anuj
Enrollment No.03115901713
BBA, Semester Vth
Batch 2013 - 2016
RUKMINI DEVI INSTITUTE OF ADVANCED STUDIES
An ISO 9001:2008 Certified Institute
(Approved by AICTE, HRD Ministry, Govt. of India)
Affiliated to GuruGobindSinghIndraprasthaUniversity, Delhi
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2A & 2B, Madhuban Chowk, Outer Ring Road, Phase-1, Delhi-110085
Table of Contents
Page no.
Student declaration 4
Certificate of the guide 5
Acknowledgment 6
Chapter I
Introduction 10
Chapter II
Company Profile 18
Chapter III
Research Methodology 38
Purpose of the study 39
Method of data collection 40
Limitations 40
Chapter IV
Data Analysis and Interpretation 41
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Chapter V
Findings & Conclusions 51
Chapter VI
Suggestion/ Recommendation 53
Bibliography 55
Annexure 56
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STUDENT DECLARATION
I the undersigned solemnly declare that the report of the project work entitled “Financial Services
Offered by “IDBI FEDERAL“, is based my own work carried out during the course of my study under
the supervision of MR. SACHIN GARG
I assert that the statements made and conclusions drawn are an outcome of the project work. I
further declare that to the best of my knowledge and belief that the project report does not contain any
part of any work which has been submitted for the award of any other degree in this University or any
other University.
Name of the Student: ANUJ
Enrollment No.: 03115901713
Class & Section: BBA Vth (M)
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CERTIFICATE OF GUIDE
This is to certify that the project titled “MARKETING MIX OF IDBI FEDRAL LIFE INSURANCE
COMPANY” is an academic work done by “ANUJ” submitted in the partial fulfillment of the
requirement for the award of the degree of “Bachelors in Business Administration” from “Rukmini Devi
Institute of Advanced Studies, New Delhi.” under my guidance and direction.
To the best of my knowledge and belief the data and information presented by him / her in the project
has not been submitted earlier elsewhere.
Name of the Faculty: Ms. Sonam Goel
Assistant Professor
RDIAS
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ACKNOWLEDGMENT
I am greatly obliged to Mr. Manas das, branch head IDBI federal life insurance for his valuable guidance
and unwavering support during our internship period to complete our project. I am truly grateful to him for
the timely completion of my project.
I would also take this opportunity to express my gratitude to Mr. Sachin Garg for his guidance provided in
this field in which he is an expert.
I would also take this opportunity to thank my faculty guide MS.SONAM GOEL of RUKMINI DEVI
INSTITUTE OF ADVANCED STUDIES without her encouragement as well as monitoring this project
would not have been possible.
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ABSTRACT
The insurance industry of India consists of 51 insurance companies of which 24 are in life insurance
business and 27 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole
public sector company. Apart from that, among the non-life insurers there are six public sector insurers. In
addition to these, there is sole national re-insurer, namely, General Insurance Corporation of India. Other
stakeholders in Indian Insurance market include Agents (Individual and Corporate), Brokers, Surveyors and
Third Party Administrators servicing Health Insurance claims.Out of 27 non-life insurance companies, 4
private sector insurers are registered to underwrite policies exclusively in Health, Personal Accident and
Travel insurance segments. They are Star Health and Allied Insurance Company Ltd, Apollo Munich Health
Insurance Company Ltd, Max Bupa Health Insurance Company Ltd and Religare Health Insurance
Company Ltd. There are two more specialized insurers belonging to public sector, namely, Export Credit
Guarantee Corporation of India for Credit Insurance and Agriculture Insurance Company Ltd for Crop
Insurance penetration of India.
MARKET SHARE
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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% equity each. Having started in March 2008, in just five months of inception, IDBI Federal
became one of the fastest growing new insurance companies by garnering Rs.100 Cr in premiums. Through
a continuous process of innovation in product and service delivery IDBI Federal aims to deliver world-class
wealth management, protection and retirement solutions that provide value and convenience to the Indian
customer.
Objectives of the Internship:
1. Analysis of Customer Perception of the insurance industry.
2. To suggest marketing methodologies to increase business of IDBI-Federal Life Insurance.
3. To get hands on experience of doing sales for the company.
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EXECUTIVE SUMMARY
The insurance sector in India is still in its nascent stages. But the Indians are an extremely risk averse race.
Thus due to this only the government entities have a good presence and brand recognition in India and the
others have a difficult time carving a space out for themselves in the market.
Since the industry is at its early ages even now hence it’s constantly changing and evolving. This makes it
mandatory for the new players to toe the line and at the same time constantly keep on evolving itself to meet
the needs of the consumers.
In this sector the visibility of the brand matters the most and is of utmost importance. Since, insurance is the
backup plan for more risky propositions like shares and stocks. Hence the customers who want to go for
these propositions too are extremely risk averse. Hence there has to be products specifically for this
segment. And then expand furthermore into other segments while keeping their base customers with them.
Keeping in mind the same these paper was done to study the marketing mix of IDBI Federal life insurance
solely depending on the current marketing approaches and the expectation of the Indian consumers in the
insurance sector.
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CHAPTER -1
INTRODUCTION
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INTRODUCTION
This industry thrives mostly on the desire of the individual to reduce the uncertainties of the future. This
uncertainty can vary regarding various issues starting from their life to commodities to their child’s future as
well as their present income. In the current fiscal year the growth of BFSI i.e. the banking financial and
insurance sector hovering around 9% and the Gross Domestic Product growth of the country at being around
4.7 % in the fiscal year 2013-2014 the industry is facing a hard time as the lower growth means lower
disposable income in the hands of the consumers. The increase in the inflation index also hasn’t helped the
industry at any level. If anything it has made the returns look less and less lucrative.
HISTORY OF INSURANCE
The history of Insurance in India is deep-rooted. Since the earliest times insurance has been
carried out in some form or the other. Insurance in India has developed overtime and has taken ideas from
other countries- England in particular.
The history of insurance is divided into three phases as follows:-
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PHASE I – Pre Liberalization
PHASE II – Liberalization
PHASE III – Post Liberalization
Phase I – Pre- Liberalization
1818- 1829 First Insurance company in 1818 the Oriental Life insurance company in Kolkata
(then Calcutta) was the first company to start a life insurance business in India.
However, the company failed in 1834. In 1829 the Madras Equitable had begun
transacting Life insurance business in Madras Presidency.
1870 Following the enactment of the British Insurance act 1870, The last three decades of
the nineteenth century saw the creation of the Bombay Mutual, Oriental and Empire
of India in the Bombay Residency.
1912 The Indian Life Assurance Companies Act 1912 was the first statutory measure to
regulate Life Business.
1928 The Indian Insurance Companies act 1928 gave the Government the power to
collect statically information above both life and non-life business transacted in
Indian by Indian and foreigner insurers, including provident insurance
societies.
1938 To protect the interest of the insuring public, the earlier legislation was consolidated
and amended by the Insurance Act 1938 which gave the Government effective
control over the activities of insurers.
1950s In the 1950s, competition in the insurance business was very high and there were
allegations of unfair trade practices. The government of India therefore decided to
nationalize insurance business.
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1957 Formation of the General insurance Council (GI Council): the GI council
represents the collective interests of the non-life insurance companies in India. The
council speaks out on issues of common interest, participates in discussions related
to policy formation, and acts as an advocate for high standards of customer service
in the insurance industry.
1972 The General Insurance Business (Nationalization) Act 1972 was passed. The
General insurance Corporation of India was formed in pursurance of Section
9(1) of GIBNA. It was incorporated on 22 November 1972 under the companies Act
1956 as a private company limited by shares.
PHASE II- Liberalization
__________________________________________________________________________The start of
reform
The international payment crisis of the 1990s forced the Government to re-think its industrial policies and
regulations.
1993 Malhotra Committee: In 1993 the government set up a committee under
chairmanship of RN Malhotra, the former Governor of RBI, To make
recommendation for the reform of the insurance sector.
1999 Formation of IRDA: following the recommendations of the Malhotra committee
report, The Insurance regulatory and Development Authority was constituted as an
autonomous body in 1999 to regulate and develop the insurance industry. The IRDA
was incorporated as a statutory body in April 2000.
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PHASE III – Post Liberalization
Recommendations of Malhotra Committee, the insurance sector were opened to private companies. Foreign
companies were also allowed to participate in Indian Insurance market through joint ventures with Indian
Companies. Under current regulations for the foreign partner cannot hold more than 26% stake in the joint
venture.
The key objective of the IRDA includes the promotion of competition with a view to increasing customer
satisfaction through more consumer choice and lower premiums, while ensuring the financial security of
insurance market. The IRDA has the power to make regulations under section 114A of insurance Act 1938.
Since 2000 it has introduced various regulations ranging from the registration of companies for carrying on
insurance business to the protection of policy holder’s interest.
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INSURANCE- COMPANIES IN INDIA
1. Life Insurance Corporation of India
2. ICICI Prudential.
3. SBI Life Insurance company Limited
4. Reliance Life Insurance company Ltd.
5. Max new York Life Insurance
6. HDFC Standard Life
7. Tata AIG Life Insurance
8. Bajaj Allianz Life Insurance
9. Birla Sun life
10. MetLife India Life Insurance
11. ING Vyasa Life insurance
12. Kotak Life Insurance
13. Aviva Life Insurance
14. Bharti AXA life insurance
15. IDBI federal Life Insurance
LIST OF GENERAL INSURERS IN INDIA
1. Bajaj Allianz
2. ICICI Lombard
3. IFFCO Tokio
4. National Insurance Company
5. The New India Assurance Company
6. Oriental Insurance
7. Reliance General Insurance
8. Royal Sundaram Alliance
9. TATA AIG
10. United India Insurance
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11. Cholamandalam
12. HDFC ERGO
13. Export Credit Guarantee
14. Agriculture Insurance Co
15. Star Health and allied Insurance
16. Apollo Munich health insurance
17. Future General
18. Universal Sompo
19. Shriram general
LIC has around 70% share in the premium being filed while all the others put together has a share of 30 %.
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This tremendous competitiveness of the industry has given rise to high differentiation of the products and
services. Innovation is the new buzzword. Companies are trying to innovate across the product life cycle to
retain that edge.
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CHAPTER-2
COMPANY PROFILE
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Sponsors of IDBI Federal Life Insurance Co Ltd
IDBI Bank Ltd. is a Universal Bank with its operations driven by a Cutting edge core Banking IT platform.
The Bank offers personalized banking and financial solutions to its clients in the retail and corporate
banking arena through its large network of Branches and ATMs, spread across length and breadth of India.
They have also set up an overseas branch at Dubai and have plans to open representative offices in various
other partsof Globe.
IDBI Bank is the youngest, new generation, public sector universal bank that rides on a cutting edge core
banking Information technology platform. This enables the Bank to offer personalized banking and financial
solutions to its clients.
The Bank had an aggregate balance sheet size of Rs. 3, 22,769 crore and total business of Rs 4, 23,423 crore
as on March 31, 2013. IDBI Bank's operations during the financial year ended March 31, 2013 resulted in a
net profit of Rs. 1882 crore continues to be, since its inception, India's premier industrial development bank.
It came into being as on July 01, 1964 to support India's industrial backbone. Today, it is amongst India's
foremost Commercial banks, with a wide range of innovative products and services, serving retail and
corporate customers in all corners of the country from 1201 branches and 2156 ATMs.
The Bank offers its customers an extensive range of diversified services including project finance, term
lending, working capital facilities, lease finance, venture capital, loan syndication, corporate advisory
services and legal and technical advisory services to its corporate clients as well as mortgages and personal
loans to its retail clients. As part of its development activities, IDBI Bank has been instrumental in
sponsoring the development of key institutions involved in India's financial sector - National Stock
Exchange of India Limited (NSE) and National Securities Depository Ltd, SHCIL (Stock Holding
Corporation of India Ltd), CARE (Credit Analysis and ResearchLtd).
Federal Bank is one of India's leading private sector banks, with a dominant presence in the state of Kerala.
The history of Federal bank dates back to the pre-independence era. Though initially it was known as the
Travancore Federal Bank, it gradually transformed into a fully-fledged bank under the able leadership of its
founder, Mr. KP Hormis. It has a strong network of over 1,142 branches and 1,312 ATMs spread across
India. The bank provides over four million retail customers with a wide variety of financial products.
Federal Bank is one of the first large Indian banks to have an entirely automated and interconnected branch
network. In addition to interconnected branches and ATMs, the Bank has a wide range of services like
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Internet Banking, Mobile Banking, Tele Banking, and Any Where Banking, debit cards, online bill payment
and call centre facilities to offer round the clock banking convenience to its customers.
The Bank has been a pioneer in providing innovative technological solutions to its customers and the Bank
has won several awards and recommendations.
Ageas is an international insurance group with a heritage spanning more than 180 years. Ranked among the
top 20 insurance companies in Europe, Ageas has chosen to concentrate its business activities in Europe and
Asia, which together make up the largest share of the global insurance market. These are grouped around
four segments: Belgium, United Kingdom, Continental Europe and Asia and served through a combination
of wholly owned subsidiaries and partnerships with strong financial institutions and key distributors around
the world. Ageas operates successful partnerships in Belgium, UK, Luxembourg, Italy, Portugal, Turkey,
China, Malaysia, India and Thailand and has subsidiaries in France, Hong Kong and UK.
Ageas is the market leader in Belgium for individual life and employee benefits, as well as a leading non-life
player through AG Insurance. In the UK, Ageas has a strong presence as the fourth largest player in private
car insurance and the over 50's market. Ageas employs more than 13,000 people and has annual inflows of
more than EUR 21 billion.
MARKETING MIX FOR IDBI FEDERAL BANK
Before embarking on the journey of understanding the marketing mix of IDBI bank it is imperative for us to
understand what a marketing mix is. It consists of the 4 Ps and STP. The 4Ps are the product, price, place
and promotion. The important fact to notice is that their importance is in their chronological order in a
decreasing way. The most important thing is the product.
The product is the most important of the 4Ps. The product has to be very good to capture the market share.
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Next important factor is the price. The pricing has always been a very important factor as far as economists
are concerned. There is that famous demand curve and the estimation that tells us the quantity that will be
sold depending on what the price that is being charged. But marketing is an extension of the branch of
economics. It states that it is not only price which decides the sales but the value that a customer perceives
that he will get from the product. In the mind of the customer it has to be more than the price he has paid for
the product.
Then the most important component of our marketing strategy is the place. The place has to be appropriate.
The famous example that has been quoted so frequently is that there is no point in trying to sell summer
wear in Alaska or Greenland or to an Eskimo to be more precise with. Thus it is very important for us to
understand the people or place where we are trying to sell our product.
Promotion is the last but certainly not the least most important factor.
Promotional event and campaigning helps us in reaching out to our target customer and convey our value
proposition. This is the way companies communicate with their target customer and hence is extremely
important for their sale purpose.
SEGMENTATION, TARGETING AND POSITIONING
In segmentation we decide which part of the population we want to have as our target customer and whom
we want to serve. This depends on generally four parameters, namely: Psychographic, demographic,
geographical and behavioral characteristics. All these characteristics generally the classification of the
population on the basis of their income, age, gender, attitudes, preferences, and the place where they are
reside. This in short decides the target segment of our customers.
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PRODUCTS THAT WERE INTRODUCED TO INTERNS
IDBI Federal Childsurance is a non-linked participating endowment plan that ensures child’s future
financial needs are fulfilled. It is designed to give customer guaranteed annual payouts and aid the important
milestones in their child’s life.
HOW DOES THIS PLAN WORK
1. Customer needs to decide the amount of guaranteed annual payouts he would need which will depend on
plans for his child’s future.
2. Basis the amount of payouts, he would then choose the Maturity Sum Assured (MSA).
3. Next, he would choose when and for how long he would need the payouts – the difference between
child’s current age and the age at which the guaranteed annual payouts should end, will be the policy
term. This can help plan his child’s future better.
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The tagline for this product is that your kid might look cute while being angry now but he won’t look so
when he’s 18.It makes us think regarding the way we plan our future. The best example is that in today’s
date a marriage might cost you around 5 lakh but after 18 years the same marriage is going to cost 33 lakh
Indian rupees. So, people have to keep in mind the inflation and cannot plan keeping the present value of
things in mind. This product takes care of the above fact and hence the future planning efforts are unaffected
by unforeseen and unfortunate events.
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IDBI Federal Wealthsurance Suvidha Growth Insurance Plan is a simple unit linked plan that helps
customer take their first step towards wealth creation and that too, with ease. What’s more, the life cover
with this plan provides financial protection for loved ones.
Wealthsurance Plans guarantees following:
Financial protection against uncertainty
Partial withdrawals for emergency fund requirements
Guaranteed loyalty additions to boost your wealth
Flexible to switch funds and investment options
Option to choose how long you want to stay invested
Get 2 Tax benefits of 80 C and 10(10 D).
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IDBI Federal Incomesurance™ Guaranteed Money Back Insurance Plan is a non-linked non-participating
money back plan which gives customer guaranteed* returns on investment, so that they stop worrying about
the future. With Incomesurance, customer can guarantee a secure future for their family even when they are
not around.
HOW DOES THIS PLAN WORK
Incomesurance is a simple plan with guaranteed benefits. On payment of premiums for 5 years customer
will receive guaranteed annual payouts at the end of every year for the next 5 years. At the time of
purchasing the policy, he will know exactly how much he will receive as guaranteed annual payouts. The
guaranteed annual payouts that will be received will depend on two factors - the amount of annual premium
that he will pay and age.
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IDBI Federal Lifesurance savings insurance plan is a fixed term non-linked participating plan that provides
twin benefits of long-term savings and life cover.
With Lifesurance Savings, small savings will help customer realize the big dreams that he hasfor himself
and his family. This plan also offers the benefit of life cover that will provide financial security to family in
his absence.
BENEFITS OF THIS PLAN
Financial protection against uncertainty
Lump sum payout at maturity
Guaranteed additions to safeguard as per your need
Flexible to choose options as per your need
Bonuses to boost your savings
Get 2 Tax benefit of 80C and 10(10D)
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PRICING AND CALCULATING THE PREMIUM
Pricing refers to the calculation of premium that will be charged on the insurance policy.
The pricing of the insurance policy is an important decision for the insurance company and it will have a
number of prime objectives in mind in this respect.
In addition to being corned about charging premiums that are sufficient to meet claims, expenses and
produce profits at the desired level, the company will also be keen to ensure that premiums are competitive
so that it does not lose business to other insurance companies in the mortality tables.
PRICING ELEMENTS
Mortality rates:
As mentioned already that insurers use mortality tables to help calculate the premium. These tables also
contain mortality rates, which in simple words can be defined as the probability that a certain individual will
die before their next birthday.
Loading:
All companies incur expenses in going about their business and insurance companies are no different. The
premium is the key source of income for an insurance company and so the premium needs to convert the
cost of meeting these expenses. The addition of these expenses to the premium is called loading.
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Income from investment of premium:
The premium that is collected by insurance companies for traditional plans are invested as mandated in
Insurance Act 1938. The profits they earn from theirinvestment can help to cover the insurance company’s
expenses and so can be taken into account while considering the price.
Benefits promised:
The pricing will depend upon the benefits promised by the company. The larger the benefits offered by the
insurance company, the higher the premium will need to be cover the cost of providing that benefit.
With profit-policyholders pay a slightly higher premium for the benefit of sharing in the bonuses and are
generally rewarded well by bonus declaration.
Premium Plan Being Taken:
The policyholder can pay the premium in a number of ways:
Single premium plan In this plan policy holder pays a single lump sum payment at the
inception of the policy. The premium amount should be sufficient to
meet the administrative and other expenses during the entire term of
the policy.
Level Premium Plan In this type of plan policyholder pays the same amount of premium for
the entire duration of the policy. When pricing this sort of policy the
insurance company will need to allow the time value of money i.e. it
should be sufficient to meet future claims.
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Flexible Premium Plan Insurance companies also allow the policyholder to choose a flexible
premium payment plan, where the policyholder can pay the premium
amount at their convenience. They can choose whether they wish the
premium to remain the same over the term or to change the amount of
premium paid based on affordability.
CALCULATING PREMIUM
The process of calculating the premium is as follows:
Calculate the risk premium
Based on risk premium, calculate the level premium
Deduct the expected interest on investments to calculate the net premium
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Add the loadings
Arrive at the gross premium to be charged
Calculate the risk premium:
The life insurance premiums collected by the insurance company are kept in a single pool, known as the
common fund or life fund. All the future claims on the company are settled using this common fund.
Therefore, the insurance company has to make sure that there is enough in the common fund to meet those
claims.
Determining the correct amount for the common fund is a difficult task, as no one can accurately predict the
future. However, as we have seen, using the statistics on death ratesfrom previous years, insurance
companies can now estimate fairly accurately the probability of anindividual dyingbefore their next
birthday. This probability – known as the mortality rate – is used to calculate the risk premium.
The risk premium is calculated using the mortality rates in the mortality table of the respective insurance
company. The formula is:
Risk Premium = Mortality Rate * Sum assured
The risk premium is the premium that has to be charged just to meet the claims of those who die during the
year.
Based on risk premium, calculate the level premium
With many life insurance policies the insurance company charges the same amount of premium for the
entire policy term: it cannot be changed. Therefore, the premium set will need to take into consideration the
future expenses and claims that the insurance company will have to pay. It will also need to take into
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account the effects of inflation, which means that the value of money decreases over time, so the premium
the policyholder pays now will not hold the same value in later years. This means that the cost of inflation
will be borne by the insurance company in the later years of the policy. Consequently, the premium will
need to be set at a higher level than would appear to be appropriate initially. The higher premium collected
in the early years is put into a reserve by the insurance company to meet the cost of future claims and
expenses.
Calculate the net premium
The premium that is collected by the insurance companies for traditional plans is invested in securities as
mandated in the Insurance Act 1938. The insurance companies earn interest as income from their
investments. This interest earned is also considered for the premium calculation. The actuaries make an
estimate of the amount of interest that the investments are expected to earn. Based on the estimate of these
interest earnings the premium charge can be reduced.
Premium – Interest Earnings = Net Premium
There are some important points to remember when thinking about how the premium is adjusted for the
interest earned on its investment:
• The premium is invested, until it is required to pay claims;
• For level premiums, the reserve funds are also invested; and
• The interest expected to be earned also depends upon the term of the policy.
Add loadings
A further adjustment is made to the net premium in order to calculate the gross premium (the actual
premium that is paid by the policyholder). This adjustment is to take account of the expenses and profit of
the insurance company. This process is known as loading.
The following items are added in loading:
• Administrative expenses, such as the cost of running the building, employees’ salaries, etc.
• Medical expenses incurred for medical underwriting;
• Processing fee;
• Expenses involved in the renewal of the policy;
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• claim settlement expenses;
• Profit margin; and
• Bonus loading for with-profit policies
Arrive at gross premium to be charged
The type of policy – whether it is a single premium plan, a level premium plan, flexible premium plan or an
annually renewable plan – will affect the gross premium to be charged. For instance, when calculating the
premium for a single premium plan the insurance company will need to determine how many policyholders
are likely to take up the plan and how many death claims it will expect to have to pay during the policy term.
Similarly, whether the premium is to be paid annually, semi-annually, and quarterly or monthly will also
need to be taken into account. Most insurance company’s first calculate the premium for annual payment,
and then make a further adjustment for monthly payment. Insurance companies generally collect a
‘frequency loading’ if the premium is not being paid annually.
PROMOTIOAL ACTIVITIES OF IDBI FEDERAL
Promotion is one of the four elements of marketing mix (product, price, promotion, and place). It is the
communication link between sellers and buyers for the purpose of influencing, informing, or persuading a
potential buyer's purchasing decision.
The following are two types of promotion:
1. Above the line promotion: Promotion in mass media (e.g. TV, radio, Newspapers, internet, mobile
phones) in which the advertiser pays an advertising agency to place the advertisements.
2. Below the Line Promotion: Much of this is intended to be subtle enough for the consumer to be
unaware that promotion is taking place.
3. E.g., Sponsorship, testimonials, sales promotion, merchandising, direct mail, personal selling, PR,
trade shows
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The specification of five elements creates a promotional mix or promotional plan. These elements are
personal selling, advertising, sales promotion, direct marketing and publicity. A promotional mix specifies
how much attention to pay to each of the five subcategories, and how much money to budget for each. A
promotional plan can have a wide range of objectives, including: sales increases, new product acceptance,
creation of brand equity positioning, competitive retaliations, or creation of a corporate image
fundamentally, however there are three basic objectives of promotion.
These are:
1. To present information to consumers as well as others
2. To increase demand
3. To differentiate a product.
Here we have to find out:
how effectively advertisements influence a person to buy the life insurance products
The find whether IDBI federal needs brand ambassador to reach the customer effectively
Identifying the role of advertisements for life insurance products
Following are the main ways in which IDBI Federal life Insurance company ltd promotes its
products/services and creates awareness in the market.
NEWSPAPER:
IDBI Federal has attained notice through many articles and advertisements published in various national
and regional newspapers in India like the Economic Times, Times of India, The Hindu , Samachar Jagat, Vir
Arjun, Meghalaya Guardian etc. IDBI Federal spends around Rs 1040 per sq.cm for promotional activities
through newspapers. They position the ads and articles in such a way that it catches the eye of the reader as
soon as they start reading the newspaper.
HOARDINGS:
IDBI Federal has also tried making their potential customer aware of their products and policies through
billboards and hoardings by positioning them in strategic locations. As of now, the total number of
hoardings which are put up in Hyderabad region counts to a good 17 number. The total expenses spent by
the company for this promotional activity is Rs 4 Lakh.
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PAMPHLETS:
Pamphlets are distributed across India at least 5 times in a month without any cost. It’s done to create
maximum awareness about the products/services.
MAGAZINES:
There is no specific magazine in which advertisement is given. It’s given in magazines depending upon their
sales and reputed magazines like Outlook, Money etc. The advertisement is given every month at least once
in any magazine.
TELEVISION:
Mainly, the advertisement is shown on cricket channels, Star channels. The main promotions were done
during FEB & MARCH to:
1. Highlight the tax benefit
2. To combat competition as all the insurance companies would advertise during this time at a great
frequency. Also the company will soon start displaying their advertisements on Satellite TV like
SUN network, etc.
DISTRIBUTORS:
A strong network of distributors and parent advisors also helps a lot in promoting products/services of IDBI
Federal by word of mouth. A Viral campaign is also run on the Internet by wherein flash videos of working
of products are explained in a very humorous manner.
LOCAL EVENTS:
The overall costs associated with such events totals to Rs. 2, 00,000 per annum such events are mainly
conducted in Apartments, Schools, etc. Building an engagement process around the solution being offered
gives an additional boost to this cause. Spelling Bee was a specially created spelling contest created to
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connect with children. The engagement started with the spelling contest for kids and gave natural opening
for a discussion with parents about financial planning for their children’s future needs like education. This is
a sort of channel marketing which IDBI Federal had adopted to create awareness as well as to educate the
future generation about the company and the importance of saving.
Also IDBI Federal involved them in developing their business by joining hands with SAMHITA, a
community development organization based out of Bhopal which works towards bringing financial literacy
to the underprivileged population in Madhya Pradesh. They believe that such financial literacy among the
under banked population will help bring a holistic change in the way people perceive and understand
financial products and their utility at various stages in their life.
This will ultimately help bring them closer to financial inclusion.
CLIENT NEEDS
As we have established, it is the responsibility of the insurance agent to determine the legitimate needs of
their clients, priorities them and then to recommend suitable insurance or savings products. The process
involves the following steps:
Identifying needs Quantifying needs Prioritizing needs
1. Identifying needs: An insurance agent needs to collect and analyse the following information:
• Details of the client in terms of their financial assets and liabilities;
• Marital status;
• Future financial goals of the client for themselves and their children;
• Number and age of dependants;
• Employment status, i.e. their existing grade and scope of promotion within their company;
• Income – which includes salary, business income and income from other sources and investments (if any);
• Details of health status and heredity medical conditions; and
• Existing protection, savings and retirement provision (if any).
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2. Quantifying needs: in the financial planning process an insurance agent needs to quantify each of the
needs in monetary-terms and then calculate suitable amounts that an individual needs to save and invest for
the future.
3. Prioritizing needs: the amount available for investment is the client’s income less their living and other
expenses, i.e. the monthly surplus available. The client’s needs must be prioritized, as their investment
capacity may be limited and the total amount to be spent may be more than the surplus funds available.
The insurance agent should suggest the best product mix, where limited funds can be allocated to full fill the
maximum needs of the client. Prioritizing these needs helps the client to determine which investment(s) can
be deferred, and so the needs which are given highest priority in the ranking are the ones for which
investment should be made first.
Client needs: real and perceived
It is important to understand that there are differences between real and perceived needs. Real needs are the
actual needs of a client which should take priority over others, whereas perceived needs are imagined or
thought to be important by the client (for example wanting to buy an expensive car when there is adequate
public transport and the client has insufficient savings or income to buy one).
Real needs are determined by the use of financial planning techniques and analysis. Perceived needs can be
understood by analyzing an individual’s thoughts and desires. Let’s have a look at some of the problems
faced by agents in advising clients about real and perceived needs:
• Different financial needs occur at different stages of the lifecycle of an individual. However, when the time
comes for financial planning, an investor might shy away from actually making investments. A young man
might aspire to have Rs. 10, 00,000 ten years from now, but for this he needs to sacrifice some of his leisure
activities and save and invest regularly.
• The second problem is that clients often fail to understand the importance of saving for the future and do
not appreciate the benefits that this will bring. They will want to give priority to their present needs as
opposed to their future intangible needs.
• Individuals may not understand their real needs and may fail to priorities them sensibly. There can be cases
where an individual might choose to invest in child plans first, whereas their priority need would be to
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provide financial protection for their family in the event of their premature death, illness or disability.
The job of an insurance agent is to help clients in identifying real needs:
Identification of real needs Insurance agents should help their clients in understanding their real
needs. This can be done by educating them about the concept and
importance of insurance.
Identification of current and
future needs
Insurance agents should help their clients in understanding their
current and future needs.
Quantification and
prioritization of needs
Once the needs are identified, they must be quantified in terms of
monetary value and prioritized.
Financial planning review Clients should meet with their agents regularly to review whether their
financial planning needs have changed over time. If so, then new
investments should be made to suit the changed circumstances.
BENEFITS OF THE PROJECT TO THE COMPANY
Half of the work is simply done by knowing what the problem is at hand and by knowing the weakness. By
keeping them in mind the operations and the marketing efforts can be streamlined by customizing them
according the needs of target customer.
It is a well known fact that one size doesn’t fit all. Before approaching a customer it is always a good idea to
know the needs of the customer before approaching them. This project tries to point out the shortcomings
and modifications in their marketing approach.
Problems Formulation
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To increase the brand awareness about the company. To do the need analysis of the customer
To design the marketing mix in such a that the education of the common public happens regarding the
financial instrument ,Increase the financial education ,Increase transparency and increase the trust quotient.
The increase in this awareness might lead to increase in customer base. The economies of scale can be
achieved by tapping into the base of wary customers.
Therefore, the objectives of the company as of now should be
1. More differentiation of the product
2. To identify target segments more appropriately
3. To have customized strategies for every segment
So the major challenges right now in front of IDBI are what the general attitude towards various segments is
and how to increase the brand awareness of IDBI.
CHAPTER-3
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RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
Data approaches : Questionnaire.
Sample size : 100
Sample procedure : Convenience sampling.
Research Design : Descriptive.
Research design: Research design is simply the framework or plan for a study, Used guide in collecting
and analysing data.
For the study: for conducting that research I selected the Descriptive research design.
Descriptive research design: Descriptive research is also called Statistical Research. The main goal of
this type of research is to describe the data and characteristics about what is being studied. The idea behind
this type of research is to study frequencies, averages, and other statistical calculations. Although this
research is highly accurate, it does not gather the causes behind a situation. Descriptive research is mainly
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done when a researcher wants to gain a better understanding of a topic. That is, analysis of the past as
opposed to the future.
Descriptive research is the exploration of the existing certain phenomena. The details of the facts won’t be
known. The existing phenomena’s facts are not known to the persons.
Data Requirement Analysis:
The data required is about the investment pattern of the respondents, the income level under which they fall,
the respondent‘s current status of having any insurance policy, their awareness level if IDBI Federal and
their likeness to invest in IDBI Federal.
Data Collection :
The data is collected through primary and secondary research. The data is collected through primary
research by doing field Survey in Delhi/NCR region and secondary research through text books, websites,
previous studies etc. The scope of research is restricted to Delhi/NCR region and the research approach
descriptive method.
DATA SOURCE
Primary Data- Interviews, Group Discussions, and Structured questionnaires is been used to collect
Primary information on customers and marketers.
Secondary Data – Is collected from Business Magazines, Manual of advertisements, Websites, Official
Publication, Industry market report, Local and International Newspapers, Articles, Journals, Brochures and
Books.
Questionnaire Design Formulation
The objective behind every question is known the preferences and psychic of very customer. To evaluate the
attitude of consumers whether they believe that the information provided to them of various products
through internet is sufficient and accurate. To analyze whether they are finding new and improved modern
ways to shop through internet is time saving or difficult over traditional ways of shopping.
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Sample Design
Sample unit
Extent - The samples for the survey will be collected from New Delhi
Sampling Frame -
Sampling Technique - Random Sampling procedure is used.
Sample Size - The size of the sample will be about 50 comprising respondents of different socio-
economic profile (Age/ Gender/ Occupation/ Income Level/ Rural or Urban/ Education Level).
LIMITATIONS OF THE RESAERCH
The sample size though carried out amongst various age-groups has been limited to around 65.
The data collected is limited to the year 2014-15.
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CHAPTER- 4
DATA ANALYSIS& INTERPRETATION
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DATA ANALYSIS& INTERPRETATION
Q-1 Which of the following long-term savings you are aware of?
a) Life Insurance
b) Mutual Funds
c) Fixed Deposits
d) Securities
e) Post Office Savings
Long term saving %age share
Life Insurance 28
Mutual Fund 12
Fixed Deposit 35
Securities 10
Post Savings 15
28%
15%
12%
35%
10%
Long term savingsLife insurance post office mutual funds fixed deposits securities
CONCLUSION
As we can see maximum sample is interested in saving in fixed deposits with 35% share of sample.
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Q-2 Do you have investment/ insurance plan on your name? (Yes/No)__________
Investment plan %age share
Yes 48
No 52
48%52%
investment plans yes No
CONCLUSION
As 52% of sample has not invested in life insurance plans.
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Q-3 If the answer to the above question is ‘Yes’, please mention the details of the insurance policy
Term: _____ Maturity year: ____ Premium: _____ Insurance coverage amount: _____________
TERM PREMIUM INSURANCE
COVERAGE
%AGE SHARE
0-5 yr 10000-20000 p.a. 1 lakh 40
5-10 yr 20000-40000 p.a. 4 lakh 18
10-15 yr 40000-60000 p.a. 9 lakh 22
15-20 yr 60000-80000 p.a. 16 lakh 8
Above 20- yr Above 1 lakh p.a. Above 16 lakh 12
40%
18%
22%
8%
12%
Term 0-5 yr 5-10 yr 10-15 yr 15-20yr Above 20 yr
CONCLUSION
As we can see maximum people invest for period of 0-5 years.
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Q-4 From which source did you come to know about life insurance?
a) Newspapers &magazines
b) Radio
c) Internet
d) Tele-marketing
Others, specify_______________________
Sources %age Share
Newspaper &Magazines 12
Radio 28
Internet 44
Tele-Marketing 14
Others, specify 2
12%
29%
45%
12%
2%
sourceRadio Tele-marketing Internet Newspapers Others
CONCLUSION
As maximum sample get awareness about the life insurance product through internet with 45%.
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Q-5 In which company you would like to purchase investment plan?
a) Government owned company public ltd.
b) Private company
c) Foreign company
Company’s %age share
Government owned co. 60
Private co. 22
Foreign co. 18
60%22%
18%
companygovt.co. private co. foreign co.
CONCLUSION
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As per sample, 60% sample want to purchase insurance in government ownedpublic co.
Q-6 Provide the reason behind choosing particular investment company?
a) Safety
b) Brand Name
c) Good Track
d) Good Return
25%
25%17%
33%
Reasons for investment Safety Brand name Good track Good return
CONCLUSION
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Reasons for Investment %age Share
Safety 25
Brand Name 25
Good Track 17
Good Return 33
As per sample most people want good return with safety and brand name are also important aspect while
reasons for investment.
Q-7 How important would it be you to make a right choice of brand?
a) Not at all
b)
Equally important
c) very important
27%
45%
28%
choice of brand not important equally important very important
CONCLUSION
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Choice of making brand %age share
Not at all Important 27
Equally Important 45
Very Important 28
As maximum sample feel right brand plays equal importance in selecting lifeinsurance.
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Q-8 Are you aware with the new unit link plane in the market?
a) Yes
b) No
Ulip plan % age share
Yes 69
No 31
69%
31%
ULIP PLANyes no
CONCLUSION
As per sample 69% people know about the unit linked insurance plans
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Q-9 How do you made your purchase decision for life insurance product?
a) Consult other people to help choose best alternative available
b) Try to buy the same brand that my friends/colleagues have bought
c) Base my decision on the brand value of the company & product
Purchase decision influencing factors %age share
Consult others to choose better 33
Try to buy the same brand that friends have
bought
45
Base my decision on brand value 22
33%
45%
22%
Factors influencing purchase decisionconsult others try to buy same brand base on brand value
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CHAPTER-5
FINDINGS & CONCLUSION
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CONCLUSION
The right service model, a low cost platform, partnership with an Indian PSB, focus on brand building, trust
and good governance along with customized products for the ever expanding client base in India will help
them in carving out their own space.
Getting associated with Insurance industry which is fastest growing insurance company in India.
Learning all the important points which affect the pricing and selling of company’s product.
The high level of customer interaction and understanding the different behavior associated with the client.
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CHAPTER- 6
RECOMMENDATIONS
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RECOMMENDATIONS
It should target the target the rural rich populace first and should try and customized service with accordance
to the needs of the poor.
Especially women should be their next target as the penetration in this segment is pretty low.
It should use banc assurance to its fullest use those banks which have a good rural penetration to serve or
sell its products.
If it can tie up with SBI then there would be more credibility to its products as people tend to have more
trust in the rural segment.
Extremely high class agents should be recruited as at the end of the day they are the brand
ambassadors for the organization.
Benchmarking the products against LIC and ICICI are going to bring in the best results.
Companies abroad have started big data in a big way to carry out analysis of which portions to approach in a
geographical location and how much to charge for premiums.
To create a pull approach rather than a push approach.
To make smokers and other people aware of the fact that even if they have an earlier ailment that does not
prevent them from having a health insurance.
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BIBLIOGRAPHY
http://www.idbifederal.com/Pages/home.aspx
http://www.idbi.com/index.asp
http://en.wikipedia.org/wiki/IDBI_Federal_Life_Insurance
http://www.ageas.com/
http://www.idbifederal.com/Products/Pages/default.aspx
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ANNEXURE
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QUESTIONNAIREQ-1 Which of the following long-term savings you are aware of?
a) Life Insurance
b) Mutual Funds
c) Fixed Deposits
d) Securities
e) Post Office Savings
Q-2 Do you have investment/ insurance plan on your name? (Yes/No)__________
Q-3 If the answer to the above question is ‘Yes’, please mention the details of the insurance policy
Term: _____ Maturity year: ____ Premium: _____ Insurance coverage amount: _____________
Q-4 From which source did you come to know about life insurance?
a) Newspapers &magazines
b) Radio
c) Internet
d) Tele-marketing
Others, specify_______________________
Q-5 In which company you would like to purchase investment plan?
a) Government owned company public ltd.
b) Private company
c) Foreign company
Q-6 Provide the reason behind choosing particular investment company?
a) Safety
b) Brand Name
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c) Good Track
d) Good Return
Q-7 How important would it be you to make a right choice of brand?
a) Not at all
b) Equally important
c) very important
Q-8 Are you aware with the new unit link plane in the market?
a) Yes
b) No
Q-9 How do you made your purchase decision for life insurance product?
a) Consult other people to help choose best alternative available
b) Try to buy the same brand that my friends/colleagues have bought
c) Base my decision on the brand value of the company & product
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