MARKETING PROJECT

T.Y.B.C.B.I.

INTRODUCTION:
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments. It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves. Marketing is used to identify the customer, satisfy the customer, and keep the customer. With the customer as the focus of its activities, marketing management is one of the major components of business management. Marketing evolved to meet the stasis in developing new markets caused by mature and overcapacities in the last 2-3 centuries. The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions. It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors.

INSURANCE MARKETING:
The term Insurance Marketing refers to the marketing of Insurance services with the aim to create customer and generate profit through customer satisfaction. The Insurance Marketing focuses on the formulation of an ideal mix for Insurance business so that the Insurance organisation survives and thrives in the right perspective.

MARKETING --MIX FOR INSURANCE COMPANIES:

The marketing mix is the combination of marketing activities that an organisation engages in so as to best 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, its price, place, promotion, people, process & physical attraction.
Page 1

MARKETING PROJECT

T.Y.B.C.B.I.

PRODUCT:
There is no point in developing a product or a service, that no one wants to buy, yet many businesses decide what to offer first and then hope to find the market afterwards. In consist the successful company will find out what customers need or want and then develop the right product with the right level to quality to meet those needs now and in future. The detail of product mix is as follow. A product means what we produce. If we produce goods, it means tangible product and when we produce or generate services, it means intangible service product. A product is both what a seller has to sell and a buyer has to buy. Thus, an Insurance company sells services and therefore services are their product. Thus the product is also called a bundle of utilities consisting of various product features and accompanying services. The corporate objectives indicate that the insurance organisations are required to be careful, especially while launching a new policy. The policies should not only generate enough premium but it is also important that the policies cover persons working in the informal sector, serving as porter, working as manual labourers, or engaged in farm sector. It is the need of the hour that the insurance organisations make their service internationally competitive. The formulation of product strategy should assign due weightage to the rural segment emerging as a big profitable segment especially in the 21st century. The policies and schemes should have rural orientation so that backward and neglected regions of the country get priority attention and the regional imbalance is minimised.

The product mix consist of the following : Product development, product range, individual scheme, group scheme, pension scheme, risk covered, product services, housing schemes, mutual funds schemes, investment on securities, etc.

Page 2

MARKETING PROJECT

T.Y.B.C.B.I.

PRICE MIX:
A product is only worth that customer are prepared to pay for it. The price also needs to be competitive, but this does not necessarily mean the cheapest the small business may be able to compete with larger rivals by adding extra services or details that will offer customers better value for money. Your pricing may also provide a profit. It is the only element of the marketing mix that generates revenue everything else represents the cost. The detail of price mix is as follows. In the insurance business, the pricing decisions are concerned with the premium charged against the policies interest charged for defaulting the payment of premiums & credit facilities, commission charged for underwriting & consultancy services. The formulation of pricing strategies becomes significant with the viewpoint of influencing the target market or prospects. The process of rate of fixation in the insurance organizations is not so scientific & identifies the cases of moral hazard. It is easier to identify the physical hazard but the task of identifying the moral hazard is found difficult.

In the insurance business the pricing decisions are concerned with: i) The premium charged against the policies, ii) Interest charged for defaulting the payment of premium and credit facility, and iii) Commission charged for underwriting and consultancy activities. With a view of influencing the target market or prospects the formulation of pricing strategy becomes significant. In a developing country like India where the disposable income in the hands of prospects is low, the pricing decision also governs the transformation of potential policyholders into actual policyholders. The strategies may be high or low pricing keeping in view the level or standard of customers or the policy holders.
Page 3

MARKETING PROJECT

T.Y.B.C.B.I.

The pricing in insurance is in the form of premium rates. The three main factors used for determining the premium rates under a life insurance plan are mortality, expense and interest. The premium rates are revised if there are any significant changes in any of these factors.

MOR ALI Y (DEA

HS IN A PAR ICULAR AREA):

When deciding upon the pricing strategy the average rate of mortality is one of the main considerations. In a country like South Africa the threat to life is very important as it is played by host of diseases.

EXPENSES:
The cost of processing, commission to agents, reinsurance companies as well as registration are all incorporated into the cost of installments and premium sum and forms the integral part of the pricing strategy.

IN ERES :
The rate of interest is one of the major factors which determines people's willingness to invest in insurance. People would not be willing to put their funds to invest in insurance business if the interest rates provided by the banks or other financial instruments are much greater than the perceived returns from the insurance premiums.

Page 4

MARKETING PROJECT

T.Y.B.C.B.I.

PROMOTION:
Promotion is the way a company communicates what it does and what it can offer to customers. It includes activities such as branding, advertising, corporate identity, sales management gain attention , be appealing, tell a consistent message and above all else give the customer a reason to choose your product rather than someone elses. The detail of promotion mix is as follow.

The insurance services depend on effective promotional measures. In a country like India, the rate of illiteracy is very high and the rural economy has dominance in the national economy. It is essential to have both personal and impersonal promotion strategies. In promoting insurance business, the agents and the rural career agents play an important role. Due attention should be given in selecting the promotional tools for agents and rural career agents and even for the branch managers and front line staff. They also have to be given proper training in order to create impulse buying.

Advertising and Publicity, organization of conferences and seminars, incentive to policyholders are impersonal communication. Arranging Kirtans, exhibitions, participation in fairs and festivals, rural wall paintings and publicity drive through the mobile publicity van units would be effective increating the impulse buying and the rural prospects would be easily transformed into actual policyholders.

Page 5

MARKETING PROJECT

T.Y.B.C.B.I.

With the advent of private players in the insurance, companies resort to rampant promotion. Promotion mix for this sector is as follows:

ADVERTISEMENT:
Advertisement can be done through the telecast media, broadcast media and print media. Insurance companies have been making optimal use of all the three kinds. Use of World Wide Web, as media is almost negligible and will not be very frequent in the near future considering the fact that the majority of customer base of these companies is not yet exposed to the Internet. The telecast media has been the most effective of all in case of the insurance sector. Most of the companies have their separate advertising section to take care of this aspect. An important consideration while making the decision as to the selection of the media is budgetary constraint. Since the insurance companies work on a large scale, usually this constraint does not stand as an obstacle.

PUBLICITY:
It is a device to promote business without making any payment and therefore it could be also called as unpaid form of persuasive communication bearing a high rate of sensitivity. Developing rapport with the media is an important aspect of publicity. This makes it essential that the PR officers working in the insurance organisations maintain contacts with the media personnel, organise press conference, and offer small gifts and momento to them. These days LGD marketing is gaining popularity the world over. It also can be applicable here. At the apex and regional levels, the PROs bear the responsibility of projecting positive image of the organisation. Thus it is necessary to select suitable personnel for this. They should be in particular taught to deal with people, simple things like talking, greeting etc.

Page 6

MARKETING PROJECT

T.Y.B.C.B.I.

SALES PROMOTION:
Incentives to the end users for taking the policy play an important role in promoting the insurance business. Since the insurance business is also related to achieving of a particular target, it is pertinent that the policymakers assign due weightage to the same. The offering of small gifts during a particular period, the rebate, discount, bonus can increase business of organisation by leaps and bounds. Besides, there can be gifts for the insurance agents also.

PERSONAL SELLING:
Personal selling in case of the insurance organisations is quite important considering the existence of the insurance agents spread at all levels. Selection of these agents, their training is responsibility of the organisation. There is difference in urban and rural market. Rural customers might be uneducated / uninformed etc. compared to the urban customer. Hence the organisations will have to make selections of the rural and urban agents accordingly.

WORD OF MOUTH PROMOTING:

The word of- mouth communications result into wider publicity, which substantially sensitise the process of influencing the impulse of users/prospects of the insurance services. The satisfied group of customers, opinion leaders, the social reformists, the popular personalities act as word of mouth communicators. The advertisement slogans may be insensitive, the publicity measures may be ineffective but the positive feelings of friends and relations communicated cannot be ineffective. This makes it clear that the most important thing in the promotion of any business is the quality of services.

TELEMARKETING:
With the development of satellite communication facilities and with the expansion of the television network, we find telemarketing gaining popularity the world over. The insurance organisations in general need to promote telemarketing. The foreign insurance companies have been assigning due
Page 7

MARKETING PROJECT

T.Y.B.C.B.I.

weightage to this and in India this is beginning to gain importance with the advent of competition in this sector. The telemarketer is supposed to be well aware of the telephonic code so that the task of satisfying the customers/their queries will not consume much of time.

WORLD WIDE WEB:

In banking as well as insurance, more and more importance is being given to online contact facilities whereby complaints/comments could be sent through an email. Email is fastest written mode of communication and since it has been recognized legally, its use to clear doubts has been in full swing.

PROCESS:
The process of giving a service and the behavior of those who deliver are crucial to customer satisfaction. Issues such as waiting times, the information given to the customer and the helpfulness of staff are all vital to keep customers happy. The process should be customer friendly in insurance industry. The speed and accuracy of payment is of great importance. The processing method should be easy and convenient to the customers. Installment schemes should be streamlined to cater to the ever growing demands of the customers. IT & Data Warehousing will smoothen the process flow. IT will help in servicing large no. of customers efficiently and bring down overheads. Technology can either complement or supplement the channels of distribution cost effectively. It can also help to improve customer service levels. The use of data warehousing management and mining will help to find out the profitability and potential of various customers product segments.

Page 8

MARKETING PROJECT

T.Y.B.C.B.I.

PLACE:
The place where customers buy a product and the means of distributing your product to that place, must be appropriate and convenient for the customer. The product must be available in the right place, at the right time, and in the right quantity while keeping storage, inventory and distribution costs to an acceptable level. The detail pf price mix is as follows. This component of the marketing mix is related to two important facets -i) Managing the insurance personnel, and ii) Locating a branch. The management of agents and insurance personnel is found significant with the viewpoint of maintaining the norms for offering the services. This is also to process the services to the end user in such a way that a gap between the services- promised and services -- offered is bridged over. In a majority of the service generating organizations, such a gap is found existent which has been instrumental in making worse the image problem. The transformation of potential policyholders to the actual policyholders is a difficult task that depends upon the professional excellence of the personnel. The agents and the rural career agents acting as a link, lack professionalism. The front-line staff and the branch managers also are found not assigning due weight-age to the degeneration process. The insurance personnel if not managed properly would make all efforts insensitive. Even if the policy makers make provision for the quality upgrading the promised services hardly reach to the end users. It is also essential that they have rural orientation and are well aware of the lifestyles of the prospects or users. They are required to be given adequate incentives to show their excellence. While recruiting agents, the branch managers need to prefer local persons and provide them training and conduct seminars. In addition to the agents, the front-line staff also needs an intensive training programme to focus mainly on behavioral management. Another important dimension to the Place Mix is related to the location of the insurance branches While locating branches, the branch manager needs to consider a number of factors, such as smooth accessibility, availability of infrastructural facilities and the management of branch offices and premises.
Page 9

MARKETING PROJECT

T.Y.B.C.B.I.

PEOPLE:
Anyone who comes into contact with your customer will make an impression and that can have a profound effect positive or negative on customer satisfaction . the reputation of your brands rests in your people hands. They must therefore, be appropriate trained well motivated and have the right attitude. People are most important component of marketing mix for the insurance industry. Sophistication in the process of technological advances makes the ways for the personnel in such a way that an organization succeeds in making possible a productive utilization of technologies used or likely to be used. Professional qualification requirements change as technological develops & evolves. The use of computers microcomputers, fax machines, sophisticated telephonic service, e-mailing, intra-net service have been found throwing a big impact on the perception of quality of service. This makes it essential that the insurance organizations also think in favour of developing personnel in line with the development and use of information technologies. The front-line-staff as well as the branch managers are required to be given the training facilities so that they in position to make possible an effective use of the technologies. The insurance organizations bear the responsibility of developing the credentials of their employees. In this context, it is also significant that they think about the behavioral profile of insurance personnel. It is pertinent that the employees are well aware of the behavioral management. They know & understand the changing level of expectations of users & make sincere efforts to fulfill the same. In this context, it is also significant that the senior executive while recruiting, training & developing the insurance personnel make it sure that employees serving the organization have a high behavioral profile in which empathy has been given due place. The psychological attributes become significant with the viewpoint of influencing the prospects or retaining the users. It is in this context that the insurance companies need a rational plan for the development of insurance personnel.

Page 10

MARKETING PROJECT

T.Y.B.C.B.I.

PHYSICAL DISTRIBUTION:
The service cant be experience before it is delivered. This means that choosing to use service can be perceived as a risky business because you are buying something intangible. This uncertainty can be reduced by helping potential customer to see what they are buying. Case studies and testimonials can provide evidence that an organisation keeps its promises. Distribution is a key determinant of success for all insurance companies. Today the nationalised insurers have a large reach and presence in India. New entrants cannot duplicate such a network. Is very expensive and time consuming . If the insurers are willing to take advantage of indias large population and reach a profitable mass customers then new distribution avenues and alliances will be necessary. This is also true for nationalized corporations which have to find fresh avenues to reach new and exiting customers. The financial services industries have successfully used remote distribution channels such as telephone or internet so as to reach more customers, avoid intermediaries, bring down overheads and increase profitability. A good example is UK insurer direct line. It relied on telephone sales and low pricing. Today it is the largest motor insurance operator. In India also, banks hope to maximize expensive exiting networks by selling a range of products. It is anticipated that could fact.

Page 11

MARKETING PROJECT

T.Y.B.C.B.I.

MARKETING MIX OF BAJAJ ALLIANZ

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Finserv Limited (recently demerged from Bajaj Auto Limited) and Allianz SE. Both enjoy a reputation of expertise, stability and strength. Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration on 2nd May, 2001 to conduct General Insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Finserv Limited holds 74% and the remaining 26% is held by Allianz, SE. As on 31st March 2009, Bajaj Allianz General Insurance maintained its premier position in the industry by achieving growth as well as profitability. The company garnered a premium income of Rs. 2866 crore, achieving a growth of 11 % over the last year. Bajaj Allianz has made a profit before tax of Rs. 149.8 crore and has become the only private insurer to cross the Rs.100 crore mark in profit before tax in the last three years. The profit after tax was Rs.95 corers, which is also the highest by any private insurer. Bajaj Allianz today has a countrywide network connected through the latest technology for quick communication and response in over 200 towns spread across the length and breadth of the country. From Surat to Siliguri and Jammu to Thiruvananthapuram, all the offices are interconnected with the Head Office at Pune.

Page 12

MARKETING PROJECT

T.Y.B.C.B.I.

PRICE:
The price structure is based on the type of policies. The price variation has to be kept due to intense competition among private players. Pricing element is very important for Bajaj Allianz as they want to increase market share. The price of Bajaj Allianz policies are made as per keeping the customer in mind.

PLACE:
3rd Floor, 349 Business Point, Western Express Highway Road, Andheri (E). The locations of every corporate offices of Bajaj Allianz is magnificent. They locate themselves in a very professional manner. This indicates their corporate approach towards their work. Work culture is also conducive to such environment.

PROMOTION:
Promotion technique used by them are as follows:      Huge advertisements on Television and radios. Tele-marketing Promotion in front of corporate offices Internet Marketing Hoardings and brochures

PEOPLE:
People are the main assets of financial organization because of service factor attached to it. Here in this case of insurance business, talented and experienced personnel are required. Bajaj Allianz recruits highly intellectual persons with good market knowledge. They also provide training to brief them up
Page 13

MARKETING PROJECT

T.Y.B.C.B.I.

about Bajaj Allianz to its new staff members. This is the reason they are No.1 position in General Insurance among private players. They create an emotional commitment and strong two-way relationship between the employees and the Company. To have clear performance expectations and a clear return from the Company (working environment, development, reward, career opportunities etc), which helps employees to make a connection between their contribution and the progress made by the Company. To inspire and empower people to achieve their best and reward them competitively for their contribution and provide attractive career opportunities. To build a learning culture which fosters personal development and professional mobility and upholds values of professionalism, innovation, pragmatism, team spirit, integrity. To respect and value individuals, their diversity and support them in their need to balance professional and personal lives.

PROCESS:
The prestigious awards itself speaks the smooth functioning of the insurance activities. They have the highest claims paying ability and a fundamentally strong position. They want to be the first choice for insurers in the country. So, they understand the insurance needs of the customers and translate it into affordable products that deliver value for money.

PHYSICAL EVIDENCE:
Physical evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues. There are many examples of physical evidence, including some of the following: a) Business cards b) Internet / Websites etc.

Page 14