52409607 Comparative Study Of Services Provided By Lic Icici Prudential Life Insurance

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Submitted To: . Submitted By: - RIMT-Maharaja Aggrasen Engineering College Mandi Gobindgarh ACKNOWLEDGEMENT 1 The success of this final report is the outcome of Guidance and valuable suggestions provided by all the concerned without whom the report could not fide on the right back. I would like to express my sincere gratitude to Lect. Mrs. Paramjeet kaur, MBA Dept.,RIMT-MAEC for giving me an opportunity to do this project work. I also express my sense of deep gratitude towards PUNJAB TECHNICAL UNIVERSITY JALANDHAR for introducing a programme which enables us to learn more. Finally, I will be failing in my duty, if I do not thank my parents, friends and well wishers for their enthusiastic support and who have directly or indirectly helped in some way or the other in making this final report a success. Preface 2 Table of Content 1. Main Text 1.1 Executive Summary ……………………………………………5 1.2 Introduction • • 3 Introduction ...…………………………………………….6 Objectives.………………………………………………...8 • Limitations..………………………………………………10 2. Finding & Results • • • • • • • Industry profile..…………………………………………….11 Company profile.…………………………………………...14 Company products………………………………………….18 SWOT Analysis..….………………………………………..21 Research methodology...……………………………………22 Advantage of life insurance..……………………………….27 Conclusion………………………………………………….30 3. Appendices …………………………………………….……..31 4. Bibliography..…………………………………………………34 Executive Summary Management Thesis is a part of the MBA Program. The objective of a Management Thesis is to train the student in designing and implementing a research project in respect of a business problem. A Management Thesis is the culmination of 4 training provided to the student on practical applicability of the theoretical concepts learned by them. In this study we look at the options of experiential learning and embedding to the skills and how the organization get the accreditation from its training course and develop the employee exactly and smartly using applying different models like 360o feedback, training by telephone, group training, mind mapping, perceptual awareness etc. Training is essential to order to understand how to implement the core principle of coaching and learning. Most of the people attracted up to the profession or precisely the once who are likely to make good trainers. People with integrity like helping other and enjoy making different others. Experiential learning and embedding skills is an action oriented behavioral situation. The purpose of the action situation is to have participants generate their own data about each of the key concepts to be studied. To get the best from experiential learning and embedding skills method, the trainer must be a good observer of behavior. When the groups start to examine its experiences and reflect upon them, he is in a position to assist with this process. His responsibilities in focusing learning, and making it clearer for each participant, are extremely important. INTRODUCATION Insurance is an upcoming sector, in India the year 2000 was a landmark year for life insurance industry, in this year the life insurance industry was liberalized after more than fifty years. 5 Insurance sector was once a monopoly, with LIC as the only company, a public sector enterprise. But nowadays the market opened up and there are many private players competing in the market. There are fifteen private life insurance companies has entered the industry. After the entry of these private players, the market share of LIC has been considerably reduced. In the last five years the private players is able to expand the market (growing at 30% per annum) and also has improved their market share to 18%. For the past five years private players have launched many innovations in the industry in terms of products, market channels and advertisement of products, agent training and customer services etc. The various life insurers entered India:1. HDFC Standard Life Insurance Company Ltd. 2. Max New York Life Insurance Co. Ltd. 3. ICICI Prudential Life Insurance Company Ltd. 4. Kotak Mahindra Old Mutual Life Insurance Limited. 5. Birla Sun Life Insurance Company Ltd. 6. Tata AIG Life Insurance Company Ltd. 7. SBI Life Insurance Company Limited. 8. ING Vysya Life Insurance Company Private Limited. 9. Met life India Insurance Company Ltd. 10. Royal Sundaram Life Insurance Company Limited. 11. Aviva Life Insurance Co. India Pvt. Ltd. 12. Sahara India Insurance Company Ltd. 13. Shriram Life Insurance Company 6 14. Life Insurance Corporation of India. 15. Reliance Life Insurance Company Limited. 16. Bharti AXA Life Insurance Company Limited. Through this project I want to study about the life insurance industry and also doing the comparative analysis between two insurance players in this industry. They are,  ICICI Prudential Life Insurance  Life insurance corporation of India OBJECTIVES The entry of foreign MNC’s and the conductive business environment fostered by the government, it is no wonder that the re-entry of private insurance has marked a second coming for the sector. In just five years, the sector has undergone a makeover, offering more choice, better services, quicker settlement, tighter regulation and greater 7 awareness ‘s the environment become more and more competitive and services and products become alike, creating a differentiation is becoming extremely tough. Thus, this project objectives is as follows .  To know where Reliance life insurance Company limited & life insurance Corporation of India companies stands in the market.  Find out the strength and the weakness of their plans.  And making comparative analysis between the products of Reliance life insurance Company limited with Life insurance Corporation of India. Scope of the study:  This study can be conducted by comparing the performances & products of three private & government insurance players in insurance industry.  The number of respondents to be surveyed can be improved.  The study can be conducted in Bangalore city only. 8  This study can be conducted to analyze the market stand of Reliance life insurance Company limited and Life insurance Corporation of India insurance companies. LIMITATIONS Thought the present study aims to achieve the above mentioned objectives in full earnest and accuracy, it may be hampered due to certain limitations, some of the limitations of this study may be summarized as follows,  This study is limited to two private insurance companies only. (Reliance life insurance company limited & Life insurance corporation of India) 9  This study is limited to Bangalore city only.  And getting accurate responses from the respondents due to their inherent problems. They may be refusing to co-operate.  Respondents may have to be contacted repeatedly or alternate respondent may have to be identified.  For want of time is restricted. Finding & Results INDUSTRY PROFILE “Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed amount of money on the happening of a certain event.” Insurance is a protection against financial loss arising on the happening of an unexpected event. The primary purpose of Life Insurance is the protection of the family. Insurance in it's various forms protects against such misfortunes by having the losses of the unfortunate few paid by the contribution of the many who are exposed to the same risk. This is the essence of insurance- the sharing of losses and substitution of 10 certainty for uncertainty. Insurance companies collect premiums to provide for this protection. A loss is paid out of the premiums collected from the insuring public and the insurance companies act as trustees of the amount collected. In is a system by which the losses suffered by a few are spread over many, exposed to similar risks. In the western world, life insurance evolved mainly from the maritime industry. Started by private financiers who used to gamble on the lives of seafarers by offering five times the money deposited with them in case of certain contingencies? In its present form, life insurance has its origin in England and made its debit in India in the year 1818.Initially, Indians were not considered on par with Europeans as far as their insurability was concerned. There were also many other failures. It was in the early part of the 20th century that some kind of legislation was made to regulate the industry. From then on life insurance made great strides in the country. At the time of independence and thereafter, there were more than 200 companies operating in India and not all of them on sound ethical principles. Many factors combined together to prompt the then government to nationalize the life insurance industry in 1956 to form the Life Insurance Corporation of India. The years from 1956 to 1999 saw the life insurance corporation of India emerge as a giant financial institution and the lone organization purveying life insurance, if we ignore the minimal presence of postal life insurance. The institution succeeded in penetrating in many areas and segments of the population and in garnering public money for public welfare. 11 It was in the 1990’s that the winds of change started sweeping over India and brought in their wake many changes in the economy. Liberalization ensured competition in many fields and there was a clamor that the insurance industry too is opened up to Private Indian and foreign players to provide the customer with a choice. The Malhotra committee, appointed in 1993 was given the mandate to study the industry and to suggest the changes that were necessary to make it modern and in tune with people’s aspirations. The report submitted by the committee was the precursor of the IRDA Bill. By the passing of the IRDA Bill, the Insurance sector has been opened up for the private companies to carry on insurance business. Now the life insurance industry in India is rapidly evolving and growing. It has witnessed a big growth as many Indian and foreign were entered in to the Indian insurance sector. The life insurance industry in India has become fiercely competitive with the entry of several new players including major multinational insurers after the deregulation of the sector. It has opened up a range of untapped opportunities for new entrants into the industry, as the potential market for buyers is high since the emerging market in India has a low insurance penetration and high growth rates. 12 COMPANY PROFILE ICICI Prudential Life Insurance Overview ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of India's foremost financial services companies-and Prudential plc - a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. We began our operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Today, our nation-wide team comprises of over 2100 branches (inclusive of 1,116 micro-offices), over 290,000 advisors; and 18 bancassurance partners. 13 ICICI Prudential is the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As we grow our distribution, product range and customer base, we continue to tirelessly uphold our commitment to deliver world-class financial solutions to customers all over India. Our vision: To be the dominant Life, Health and Pensions player built on trust by world-class people and service. This we hope to achieve by: • • • • • Understanding the needs of customers and offering them superior products and service Leveraging technology to service customers quickly, efficiently and conveniently Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders Providing an enabling environment to foster growth and learning for our employees And above all, building transparency in all our dealings The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the values describe what the company stands for, the qualities of our people and the way we work. We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth. Our values : Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundaryless, Ownership, and Passion. These values shine forth in all we do, and have become the keystones of our success. 14 Mangement Profile: Board of Director The ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both from India and abroad. Mr. K.V. Kamath, Chairman Ms. Chanda Kochhar, Director Mr. Barry Stowe, Director Mr. Adrian O’Connor, Director Prof. Marti G. Subrahmanyam, Director Mr. Mahesh Prasad Modi, Director Ms. Rama Bijapurkar, Director Mr. Keki Dadiseth, Director Ms. Shikha Sharma, Managing Director Mr. N.S. Kannan, Executive Director Mr. Bhargav Dasgupta, Executive Director Management Team The ICICI Prudential Life Insurance Company Limited Management team comprises reputed people from the finance industry both from India and abroad. Ms. Shikha Sharma, Managing Director & CEO Mr. N. S. Kannan, Executive Director Mr. Bhargav Dasgupta, Executive Director Ms. Anita Pai, Executive Vice President – Customer Service & Technology Dr. Avijit Chatterjee, Appointed Actuary Mr. Puneet Nanda, Executive Vice President & Chief Investment Officer 15 Life insurance Corporation of India LIC of India is one of India’s leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking to stock broking to mutual funds to life insurance to investment banking, the group caters to the financials needs of individuals and corporate. The LIC has a net of over Rs. 1,800 crore and employs over 7,500 employees in its various businesses. With a presence in 82cities in India and it services a customer base of over 20,00,000. Date of Establishment 1 Sep. 1956 Address 1st Floor,West Wing, Mumbai Do-Iv, Yogakshema, Jeevan Bima Marg, Mumbai - 400 021, India Branches 8 Zonal Offices and 101 Divisional Offices Management Team T.S. Vijayan - Chairman D.K. Mehrotra - MD, LIC Thomas Mathew T - MD, LIC 16 A K Dasgupta - MD, LIC Arun Ramanathan - Secretary, Financial Services, Dept. of Financial Services, Ministry of Finance, Govt of India Sindhushree Khullar - Addl. Secretary, Dept of Economic Affairs, Ministry of Finance Yogesh Lohiya - Chairman cum MD, GIC of India T.C. Venkat Subramanian - Chairman & MD, Export Import Bank of India. Overview The largest life insurance company in India, Life Insurance Corporation is fully owned by the government. It provides individual life insurance, group insurance and pension plans. Its subsidiaries include Life Insurance Corporation of India International, LIC Nepal, LIC Lanka, LIC Housing Finance and LICHFL Care Homes. It has over 12 million policy holders and over 9 lakh agents. It has underwritten more than 120 million policies. LIC saw computers in 1964. Today the company is on the Internet and is utilizing Information Technology in servicing its clients. It has bagged various award including Loyalty Awards 2008 in Insurance Sector, NDTV Profit Business Leadership Award – 2007, CNBC Awaaz Consumer Awards 2007 and Outlook Money NDTV Profit Awards 2007. LIC provides a rewarding career as sales agents. It offers world class training, freedom to work and unmatched financial strength. COMPANY PRODUCT Product Details of ICICI Prudential Life Insurance Products:• • • • • • • • • 17 Life Time Gold Premium Life Gold Life Stage Pension Life Time Super Pension Hospital Care Life Link Super Premier Life Pension ICICI Pru______ + MediAssure Invest Shield Life Product of Life Insurance Corporation of India Children's Policy Komal Jeevan - Plan No. 159 Children Deferred - Plan no.41 Jeevan Kishore - Plan no.102 Jeevan Chhaya - Plan no.103 Marriage Endowment/Educational Annuity - Plan No. 90 Jeevan Anurag - Plan no.168 Endowment Policy Endowment with Profits - Plan no.14 Limited Payment Endowment with Profits - Plan no.48 Jeevan Mitra - Plan no.88 New JanaRaksha Policy - Plan no.91 Jeevan Anand Plan no. 149 Jeevan Mitra Triple Cover - Plan no.133 Group Insurance Policy 18 Janashree Bima Yojana Group Insurance Scheme in lieu of EDLI Group (Term) Insurance Scheme Group Savings Linked Insurance Scheme Group Superannuation Scheme Group Mortgage Redemption Assurance Scheme Shiksha Sahayog Yojana Joint Life Policy Jeevan Saathi - Plan no.89 Money Back Policy Money Back with Profit - Plan no.75 New Money Back - Plan no.93 Jeevan Surabhi 15 yrs - Plan no.106 Jeevan Surabhi 20 yrs - Plan no.107 Jeevan Surabhi 25 yrs - Plan no.108 Jeevan Bharati Plan No 160 Jeevan Samriddhi Plan No 154, 155, 156 157 Bima Bachat- Plan no.175 Pension Plans or Annuities New Jeevan Dhara - Plan no.148 New Jeevan Suraksha Plan no. 147 Jeevan Akshay II Plan no. 163 Jeevan Nidhi Plan no. 169 Jeevan Akshay V Plan no. 183 Special Plans Term Assurance - Plan no.43 Mortgage Redemption - Plan no.52 Jeevan Aadhar - Plan no.114 Market Plus - Plan No 181 Jeevan Vishwas Plan No. 136 Jeevan Saral Plan No. 165 Jeevan Pramukh Plan No. 167 19 Bima Nivesh 2005 Plan No 171 Money Plus-Plan No 180 Term Policy Convertible Term Assurance - Plan no.58 New Bima Kiran Term Assurance Anmol Jeevan I Plan No- 164 Amulya Jeevan-Plan No-177 Whole Life Policy Whole Life with Profits - Plan no.2 Limited Payment Whole Life with Profits - Plan no.5 Single Premium Whole Life - Plan no.8 Jeevan Tarang- Plan no.178 PENSION PLAN PRODUCTS OF LIC INDIA & ITS FEATURES • LIC of India retirement income plan • LIC of India retirement income plan (unit linked) What is the LIC of India retirement income plan? The LIC of India retirement Income plan is a saving plan designed to meet your post – retirement needs. It is a plan that gives you “jeene ki azaadi “. It gives you the choice to remain independent even after retirement. The LIC of India retirement income plan is a participating plan. The plan comes in two forms: One with cover and one without cover Who can avail of the LIC of India retirement income plan?” How old do you have to be to avail of this plan?” Minimum age -18 years Maximum age – 60 years 20 For what term can choose to pay the premiums? 5 years – 30 years At what intervals can you pay premiums?” • Quarterly • Half yearly • Annually What are the advantages of this plan?” • You can choose to retire at any age between 45 years and 65 years. • On retirement: • Annuity option: • Early retirement benefits: Other products are: • Money plus • Auto plus • Child plan • Health plan Strengths: a. b. c. d. e. f. Dedicated Employees. Well Efficient Management. Technology. Diversification of funds. Strong and popular brand name. Adaptability to changes. SWOT ANALYSIS Weakness: a. Lack of good services. b. Lack of awareness about insurance among people. 21 c. Less coverage in Rural Areas. Opportunities: a. Fast growing economy. b. Increasing per –capita income in India. c. Saving behavior. d. High growth of ULIP industry. Threats: a. Arrival of new entrants in the insurance industry. b. Cut throat competition within the industry Observations RESEARCH METHODOLOGY TYPE OF RESEARCH The research includes different options. They are: Exploratory research: It is usually a small-scale study undertaken to define the exact nature of a problem and to gain a better understanding of the environment within which the 22 problem has occurred. It is the initial research, before more conclusive research is under taken. Descriptive research: It is to provide an accurate picture of some aspects of market environment. Descriptive research is used when the objective is to provide a systematic description that is as factual and accurate as possible. It provides the number of time something occurs, or frequency, lends itself to satisfied calculations such as determining average number of occurrences. Casual research: If the objective is too determined which variable might be causing a certain behavior that is whether there is a cause and effect relationship between variable, casual research must be undertaken. In order to determine causality, it is important to hold the variable that is assumed to cause the change in the other variable constant and than measure the changes in the variable. This type of research is very complex and the researcher can never be completely certain that there are no other factors influencing the casual relationship, especially when dealing with people’s attitudes and motivation. This research is about understanding the market stand and also find the strength & weakness of the products of three insurance companies by making comparing analysis of the products of the companies, mainly descriptive research methodology are 23 adopted. Descriptive research was adopted since it provides accurate picture about some aspect of market environment such as which brand is performing well and what the company can do to improve its market share. SAMPLING PROCEDURE How should the respondents be chosen? To obtain a representative sample and nonprobability sample can be drawn, they are Judgment sample: The researcher selects population numbers who are good prospects for accurate information. For collection of research data judgment-sampling technique is used where all of them are employees of the three insurance companies as they are good prospect for accurate information. ACTUAL COLLECTION OF DATA Data sources: The sources of data include either secondary data or primary data and even some times the combination of both. The present study is more concentration on both primary and secondary data. Primary data: 24 Primary data is collected through face-to face interaction with employees of the insurance companies, by meeting them in personal. Secondary data: The secondary data used for their study are inclusive of the data collected from the internet, catalogues and brochures and magazines. METHODOLOGY The study will conduct on the bases of survey through questionnaires given to respondents. Sampling Design Population: Ludhiana Sample Size: Population of 100 Sample Technique: Convenience Sampling Statistical Tools: Correlation. 25 ADVANTAGES OF LIFE INSURANCE Protection against risk of untimely death Life insurance is a product, which offers protection against the risk of death the full sum assured is made available under a life assurance policy, whereas under other savings schemes, the total accumulated savings alone will be available. Protection during old age Life insurance can also be used as a means of saving for one’s future. There are a number of life insurance policies, which in addition to life cover also provide the means of investing one’s income. The sum as per the policy will be received only after a period of time. This amount thus provides for the old age. Forced savings Payment of life insurance premiums is compulsory and becomes a habit. Savings in other scheme can be easily withdrawn and may be used for less worthy 26 purpose. Termination of a life insurance policy by the policyholder usually results in substantial loss in benefits under the policy to the policyholder. One is thus encouraged to save and keep one’s policy alive. Educational requirements and charity The object of insurance may be to serve as a security to educational funds in respect of loans advanced for educational purpose or to provide donations to charitable institutions like hospital and school. Nomination and assignment The life insured can name the person or persons to whom the policy money would be payable in the event of his death .the proceeds of a life insurance policy can be protected against the claims of the creditors of the life insured by effecting a valid assignment of the policy. The beneficiaries are fully protected from creditors expect to the extent of any interest in the policy retained by the insured. Marketability and suitability for borrowing After 3 years, if the policyholder finds that he is unable to continue payment of premiums he can surrender a policy for a cash sum. A life insurance policy is accepted as a security for a commercial loan. Loans from the insurance company A policy holder can take a loan from his insurance company against the 27 Security of his life insurance policy provided the terms of the terms of his policy allow such a loan. This loan can be taken usually after a period of 3 years from commencement of the policy and is a percentage of its surrender value. Investment options The unit link products gives comprehensive insurance solutions that cater to an individual’s dual need of earning potentially high returns as well as stay for life. Thus there is an option to invest money in the products that combine the best of insurance and investment. In a volatile market conditions it is possible to secure both as one can hedge the investment with saver investment vehicles that provide a diversified portfolio. Tax benefits The Indian income tax act provides tax concessions to the policyholder both on payment of premium and on the maturity amount. Under sec 88 the tax benefits on premium paid by an individual for life insurance policies on his own life\on the life of spouse \children minor or major, including married daughters. Protection to wife and children Under sec 6 of the married women’s property act if a married man takes a policy of life insurance on his own life and expenses on the face of it to be for the benefit of his wife or of his wife and children or any of them, then it shall be deemed to be a trust for the benefit of his wife and children or any of them, According to the interest so expressed and shall not so long as any object of trust remains be subject to the control of the husband or to his creditors or form part of his estate. An insurance policy taken by a married man in the above manner is ideal way to protect the interest of his wife and children, even after his untimely death. 28 CONCLUSION The financial markets have continued to witness unprecedented liberalization, growth and reforms over the last decade prompted by regulatory compulsions and a rapid integration between domestic and global markets. And as a result, one has seen substantial growth in the number of financial firms (insurance companies, mutual funds, brokerages, banks etc.) and in the number and variety of financial products and services offered by them. As the need of the people is changing so is changing the investment habits of the people and this has brought in a spate of new products and schemes where people can invest. The concept of insurance as an investment option has arrived where people first identify the varying needs of money then converts the needs into specific amount of money and time required to achieve the objective of investments plans. The objective of insurance as an investment is to ensure that investments are driven by pre determined and well thought out investment plan and that the investments are suitable and adequate to meet these plans. But for this the planner must understand the universe of investments options. He/she must be well informed on the risk and return attributes of these options. In addition to the above, companies should also innovate to come up with better products that would suit the Indian population and should also try to market and sell their products through new channels of distribution that can be effective in selling their products to the masses. People should identify their needs and then decide on the type of policy they want to invest in. insurance is a good investment option for those people who do not know where to invest and who do not want to the risk of capital erosion. But, people who are financially savvy can opt for term insurance and invest the rest in other options that may give them higher returns. 29 APPENDICES QUESTIONNAIRE I,Kunj bihari paliwal, student of ICFAI National Collage, pursuing my MBA, carrying out a project work in partial fulfillment of my live project. I am undertaking a project “A comparative study on the offerings of Insurance products between Reliance Life Insurance Company Ltd Vs Life Insurance Corporation of India” In view of this, I hereby request you to give your feed back on the questionnaire given below. Please note that your response will be kept confidential. Please mark the appropriate answer NAME --------------------------------------------------------------------------------AGE ----------- Nationality ----------------------- Income -----------------------Contact number --------------------------------, -------------------------------------------Address--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------1. Occupation a) Businessman [ ] c) Students [ ] b) Professional d) House wife [ ] [ ] 2. Do u have Insurance? If yes of which company? a)Yes b) No …………………………………………………… 3. Have u heard about Reliance Life Insurance? a)Yes b) No 4. Are you aware about the various plans offered by Insurance Company? a)Yes b) No 30 5. According to you, Insurance policies are for? a) Child [ ] b) Adults [ ] c) Couple [ ] d) Old people [ ] 6. Is there any age, gender, or other limitation in getting insurance? a)Yes b) No 7. At what age should a person think about taking an insurance policy? ……. 8. Have you or any of your family members got the benefit out of Insurance? a)Yes b) No 9. Do you know about Unit Linked Insurance Plans (ULIP)? a) Yes b) No 10. How did you come to know about ULIP? □ Friends/Close circle □ Advertisements □ Periodicals/Books/Internet □ Investors □ Agents 11. In which Reliance Life’s scheme did you invest? □ life invest □ life maker investment □ life maker premium □ life maker gold If any other please specify……………………………. 12. Why did you prefer above-mentioned Reliance Life policy? □ High returns □Security □wide acceptance □ Less risk □ Flexible □ Tax benefit If any other please specify……………………………. 13. How long have you been investing in the above Reliance Life policy? □ Less than 1 year □ 1 year-2 years □ 2 year-3years □ 3 years and more 14. How do you rate the quality of service provided by Reliance Life? □ Good □ Very good □ Average □ Bad □ can’t say 31 15. Did you try out any other Company’s policy? □ Yes □ No If any other please specify……………………………. 16. How do you rate Reliance Life by our other company insurance Policy? □ Good □ Very good □ Average □ Bad □ can’t say Thank you Date: Signature Bibliography BOOKS:  Life and Health Insurance –Kenneth Black and Harold D.  Fundamental of Risk and Insurance- Emmet J Vaughan and John Willy WEBSITES  www.licindia .com  www.irdaindia.org  www.iciciprulife.com Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd 32 Name Rajni Kant Student ID No. PGPMI/N/01/039 Course Post Graduate Program in Management and Insurance Project Title Advertisement Effectiveness (With Reference to Life Insurance) Project Guide Prof. Gaurav Ashesh Sub Topic Analysis and Evaluation of ICICI Prudential Media Strategy International School of Business and Media Noida Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd Certificate of Participation This is to certify that Mr. Rajni Kant (PGPMI/N/01/039), who is a part of FIRST BATCH of PGPMI Program, conducted by ICICI PRUDENTIAL Life Insurance Co. Ltd. in ISB&M Noida (A Division of ISB&M Training Pvt. Ltd.), had successfully done the project on “Advertisement Effectiveness Study (With reference to Life Insurance)” for IGNITE – 5 (ON-LINE PROJECT) with the best of his effort. (Guide Sign) (PGPMI Team Member Sign) (Director Sign) Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page i Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. ACKNOWLEDGEMENT First of all I would like to thank the Management of ICICI Prudential Life Insurance Co. Ltd. for giving me the opportunity to do SURVEY PROJECT under IGNITE SERIES. In my whole endeavor to complete this project, I own immense gratitude to my project guide Prof. Gaurav Ashesh for extending his guidance and co-operation though this project. I express my sincere thanks to all the Faculty Members of ISB&M Noida for there valuable cooperation and giving me valuable information in preparing the project. I am highly indebted to Prof. Hari Shrivastava for his continuous support and encouragement. I would also like to thank Prof. Vikas Sharma for extending his guidance and support 33 though this project. Last but not least, I express my sincere gratitude to all the respondents who helped me in the project. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page ii Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. DECLARATION The information provided in this report is accurate and true as per my knowledge & understanding. Prof. Gaurav Ashesh, Faculty, ISB&M Noida, was my Project Guide during ONLINE PROJECT COMPETITION conducted by PGPMI TEAM of ICICI Prudential Life Insurance Co. Pvt. Ltd. under the title head of IGNITE SERIES. This IGNITE-V Online Project report represents “Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd.” Under the title head of “Advertisement Effectiveness with reference to Life Insurance” The pages count in this project does not include Front Page, Table of content, and Annexure, The Preface, Declaration, Executive Summary, and References, do not constitute part of the page limit. The page count in the main text excluding the aforementioned points is 46 pages. Report style has been adopted for presentation as per guideline and attempt has been made to maintain the different parts and tasks as distinctive as possible but yet linking key elements together to avoid repetition and to communicate the significance. (Signature of the Projectee) Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page iii Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. PREFACE In this project we review the tools and techniques used to measure Advertising Effectiveness. Effectiveness is the measure of the gap between results and objectives. Lower the gap, higher the effectiveness. Thus it is an evaluation of the advertising process. The advertising evaluation process is frequently called accountability. Management wants the advertising managers to identify exactly what results were 34 obtained for the advertising investment and to provide evidence of the return on investment. After all, advertising uses the scarce resources that could be invested in a number of ways. Therefore, the question that management poses is, “Is advertising the best way to use those funds?" And it is the job of the advertising campaign planner to be able to answer that question. To do so usually requires some form of advertising evaluation. Evaluation of advertising campaign effectiveness is a form of research though it is somewhat different from other forms. Most advertising research is used to predict what might occur in the market place. Effectiveness research, on the other hand is used to determine exactly what did happen. Although this information might be used as a basis for future actions, its basic purpose is to measure what occurred as a result of the advertising campaign and, therefore, what return was received on the investment made. In short, the reasons to evaluate the advertising campaign are as follows: 1. To determine if the objectives set for the advertising campaign were met. This off course presupposes that measurable objectives were set in the first place. And that these objectives are in line with the overall marketing objectives and strategies. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page iv Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. The first success of any effectiveness research would be that it forces managers to think clearly and put down on paper, for themselves and others, what they expect the advertising to do. 2. To quantify the return on the campaign investment. By knowing what was achieved, management can relate that information to opportunity cost of money and determine cost effectiveness of the advertising campaign. Off course this is an ideal situation. Measurements of advertising results are seldom precise enough to make this quantification possible. 3. To use the results of effectiveness research to make changes, additions, or completely alter course for future campaigns. No advertising campaign is ever totally successful. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page v Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. A. EXECUTIVE SUMMERY A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organization promotional strategy can 35 consist of: ��� Advertising: Is any non-personal paid form of communication using any form of mass media. ��� Public relations: Involves developing positive relationships with the organization media public. The art of good public relations is not only to obtain favorable publicity within the media, but it is also involves being able to handle successfully negative attention. ��� Sales promotion: Commonly used to obtain an increase in sales short term. Could involve using money off coupons or special offers. ��� Personal selling: Selling a product service one to one. By personalizing advertising, response rates increase thus increasing the chance of improving sales. ��� Direct Mail: Is the sending of publicity material to a named person within an organization Message & Media Strategy An effective communication campaign should comprise of a well thought out message strategy. What message are you trying to put across to your target audience? How will you deliver that message? Will it be through the appropriate use of branding? Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page vi Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Logos or slogan design? The message should reinforce the benefit of the product and should also help the company in developing the positioning strategy of the product. Companies with effective message strategies include: ICICI PRUDENTIAL: Jeetye Raho Om Kotak: ‘Jeene ki azaadi’ Nike: Just do it. Media strategy refers to how the organization is going to deliver their message. What aspects of the promotional mix will the company use to deliver their message strategy? Where will they promote? Clearly the company must take into account the readership and general behavior of their target audience before they select their media strategy. What newspapers does their target market read? What TV programmers do they watch? Effective targeting of their media campaign could save the company on valuable financial resources. A.1. Research Objectives A) Primary Objective ��� To understand & measure the impact of advertising in the market. 36 ��� To measure the effectiveness of advertisement / promotional activities for a particular product class and corporate advertising. ��� To understand and measure the affect of advertising in brand-building, brand re-call and finally the choice of a plan while buying it. B) Secondary objective ��� To know the promotional strategies of ICICI prudential. ��� To know how they face their competitor’s strategies. ��� To know how they survive in the cutthroat competition. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page vii Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. A.2. Structure of the Project This report consists of parts covering relevant areas to the topic under discussion. ��� The first part introduces the reader to the report and also outlines the structure and topics of discussion. ��� The second part describes in brief that what the concept behind giving advertisement is., and what is the scope to this project. ��� The third part identifies in which way we moved. Which methodology we adopt to conduct this project. ��� The fourth seeks new scope in untouched market and how advertisement affects in brand building. ��� The fifth part deals with facts and findings which give us knowledge about the current market trend. ��� The sixth part extends into the generic strategies adopted by ICICI Prudential to touch not only consumer share of mind but also consumer share of heart. ��� The fifth part introduces with greater analysis what is happening in current market scenario and how ICICI Prudential survives in this cutthroat market competition. ��� The sixth part talks about the Insurance Industry and discuss the growth story of Leading Private Insurance Company which is ICICI Prudential Life Insurance Company Limited. ��� The final part sets the final context linking all the key frameworks and analysis with the author’s own conclusions and future directions and expresses the author’s limitation to this report. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page viii Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 37 1. Table of Contents Particulars Pages Acknowledgement ii Declaration iii Preface iv-v A Executive Summary vi-viii A.1 Research Objective vii A.2 Project Structure viii 1 Introduction 1-3 1.1 Problem Area 2 1.2 Scope 3 2 Background 4-5 3 RESEARCH METHODOLOGY 6-8 4 Literature Review 9-12 Media Exposure in Rural Market 9 Corporate Advertising 10-11 Affect of advertising in Brand Building 12 5 Analysis 13-28 Data and Interpretation 13-15 FACTS AND FINDINGS 16-26 Limitation of the Project 27 Conclusion 27-28 6 RECOMMENDATIONS 29-30 7 Media Strategies of the Company 31-34 8 Current Market Scenario 35-39 9 Industry profile 40-43 10 ICICI Prudential Life Insurance Co. Ltd. 44-46 References 47 Bibliography Annexure Questionnaire Respondent Database Result Analysis Sheet IMPACT: Marketing on Society Vs Society on Marketing RAJNI KANT Page ix Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 1. INTRODUCTION "Advertisements are sometimes spoken of as the nervous system of the business world ... 38 As our nervous system is constructed to give us all the possible sensations from objects, so the advertisement which is comparable to the nervous system must awaken in the reader as many different kinds of images as the object itself can excite" “Advertising effectiveness means different things to the groups responsible for its different effects. To the writer or artist, effective advertising is that which communicates the desired message. To the media buyer, effective advertising is that which reaches prospective buyers a sufficient number of times. To the advertising or marketing manager, effective advertising is that which, together with other marketing forces, sells his brand or product. To the general manager, effective advertising produces a return on his firm’s expenditure.” “In fact, effective advertising must achieve all four goals, delivering messages to the right audience, thereby creating sales at a profit. Most advertisers have begun only recently to set goals in all four areas and measure progress toward them. Some advertisers have set communications and audience goals, and measured copy and media effects, but few advertisers have set dollar goals and measured sales and profit effects. The result is that advertising has rarely been a part of corporate planning. Thirty years ago, management was asking the same questions they ask today: Is my advertising working and what impact does it have on my sales? Can it be measured? Can our advertising and promotion be made accountable in the same manner as which one evaluates all of the other investments by our company? The answer to all three questions is yes. In fact, the techniques to deliver this degree of accountability and control have been around for more than 50 years and are industry standards. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 1 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. There are methods to test every aspect of marketing promotion, sales support and media mix, and analytical tools to establish a direct relationship to sales for complete accountability. The key to this is applying a full advertising research curriculum. This requires involvement of both sales and marketing management and the advertising/promotions supplier coordinating their efforts with the researcher. It is a partnership. This may explain why so many from both the client and agency sides remain 39 of the opinion that it can’t be done. The fact is that a full curriculum can be implemented, is already integral to nearly every brand leader, and you can do it as well. It just takes a little planning and co-operation. Let’s start from where it all began. 1.1. Problem Areas A majority of Indian customers being very conservative and averse to risk, trust was an extremely important factor in the insurance business. Since LIC was a government owned body, there was an element of security embedded in its services and products. This proved to be the biggest hurdle for the new insurance companies as Indian customers were reportedly rather skeptical about them. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 2 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 1.2. Scope to The Study A big boom has been witnessed in Insurance Industry in recent times. A large number of new players have entered the market and are vying to gain market share in this rapidly improving market. The study deals advertisement given by Insurance Companies. The study then goes on to evaluate and analyze the findings of these advertisements so as to present a clear picture of media strategy the Insurance players. The Company The result of the survey will help the company to know about the effectiveness of various life insurance advertisements and how much advertisement is helpful in buying decision. The results will also help the company to trace the loop holes and then take the corrective measures to rectify them. The Industry This is a limited study which takes into consideration the responses of 50 people. This data can be exported to take decision for promotional strategy across the industry. The significance for the industry lies in studying these trends that emerge from the study. It is a rapidly changing and evolving sector. People are only beginning to wake up to its vast possibilities. A study like this can attempt to guide the future of the industry based on 40 current trends. The Researcher To facilitate and provide all the useful information of the study, the company, the insurance industry and also provide marketing ways, methods of ICICI Prudential Life Insurance Co. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 3 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 2. BACKGROUND According to industry observers, one of the main reasons for the low insurance penetration in India was the ineffective distribution and marketing strategies adopted by LIC. The company reportedly never had any strategic marketing game plan, and due to its monopolistic nature the need for serious marketing efforts was never felt. The advertising initiatives were limited to some print and electronic media advertisements that typically talked about LIC’s products being great tax saving tool for salaried individuals who came under the income-tax bracket. Despite all this, LIC was synonymous with insurance in India and it had established an enviable brand image for itself, especially in the rural areas and small towns. However, with the entry of new players, the insurance market changed almost overnight. Analysts commented that the private insurers seemed all set to make the industry marketing-driven, wherein technical and service excellence would be the key factors of success. The private companies, in a bid to make their presence felt and their brand noticed, initiated a series of aggressive marketing and promotion initiatives, something that buyers of insurance were not accustomed to. In July 2002, India’s state owned insurer, Life Insurance Corporation of India (LIC) announced aggressive marketing plans with a budget of around Rs 1 billion. The aim of this unusual decision was to woo customers across the country through a multimedia campaign including advertisements on the radio and the press media, the outdoor media and the television. However, this did not come as a major surprise to industry observers who said that LIC did not have too many options. With the insurance bill being passed in 2000, the Indian insurance sector saw a host of 41 private players enter the market with multinationals as their partners. These new players resorted to aggressive marketing and advertisement strategies – something the market had never seen earlier. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 4 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. This sudden spurt of advertisements and awareness programs was visible on all the media channels. Print, electronic and outdoor advertisements of the new private insurers flooded could be seen everywhere. This prompted many comparisons of such behavior of insurance companies with the advertising frenzy of the dotcoms in India not too long ago – with similar full-page advertisements, huge hoardings and costly electronic media advertisements. According to reports, in the first quarter of the year 2002, insurance companies spent 70% of what was spent in the whole of 2001, on advertising and publicity. Across the world, insurance, as a category was one of the largest spenders on advertising. In India too substantial expenditure was being incurred due to advertising. COMPANY EXPENDITURE LIC 1000 Allianz Bajaj 200 Om Kotak Mahindra 150 ICICI Prudential 146 Source: ICMR. However, during the first year of the entry of new players, while LIC reported a growth of over 250%, private insurers managed to garner only about 0.5% market share, in spite of spending hefty amounts on advertising and promotion. According to reports, LIC’s business increased mainly because of the increased public awareness about insurance, which was brought about by the heavy advertisement campaigns of private players. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 5 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 42 3. RESEARCH METHODOLOGY Research methodology is a strategy that guides a research in providing answers to research questions and for this, research survey is being done. “Accuracy of the study depends on the systematic application of the method”. The researcher has to decide the method to be used that helps him to get a desired direction in a systematic way. This study in the following manner. A) Methodology Adopted Questionnaire Design The questions were designed in an easily understandable way with the help of Prof. Gaurav Ashesh (Faculty Guide) and Prof. Hari Sadhu. That the respondents may not have any difficulty in answering them. The questionnaire also contained a comments section. This section was included so as to get opinion of the people regarding the ICICI Prudential Life Insurance. Random Sampling Sampling can be defined as a part of population. Thus random sampling may be defined as the selection of a portion from the whole population in which each elements of the population has an equal chance of being selected. A more please definition is that each element in the population has a non-zero and known probability of selection a randomly drawn sample is an unbiased sample. In this research survey 50 people were surveyed at random to get the relevant information. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 6 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Sample Size: The sampling techniques used in this project are probability sampling techniques and the methods used in cluster sampling. Sampling Unit: The respondents who were asked to fill out questionnaires are the sampling units. These comprise of employees of MNCs, Govt. Employees, and Self Employed etc. Sample size: The sample size was restricted to only 50 between age group of 25-40, which comprised of mainly peoples from different regions of India. Sampling Area: The area of the research was Delhi Metro Railway Quarters, New Delhi, India. B) Data Collection Structured Questionnaire 43 In this collection data, structured questionnaire is used as a tool by asking a set of standardized questions to know the effect of Life Insurance Advertisement and behavior of the people for the ICICI Prudential Life Insurance. Interview The next step involved in collecting information requires discussion with people. Thus valuable information was gathered informal friendly talks with the people. Secondary Data Collection Various websites were consulted to collect literature relevant to the topic. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 7 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Interpretation Interpretation refers to the task of drawing inference from the colleted facts after an analytical study, in fact it is a search for broader meaning of research findings it is through interpretation that the researcher can well understand the abstract principle that respondents beneath his findings. The simple statistical tools will used to analyze the data collection, Bar Graphs and pie chart have been used to illustrate the findings diagrammatically. The scores for advertisement were compiled on spontaneous recall, aided recall and likeability. The top ads are selected on the basis of their score. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 8 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 4. Literature Review 4.1Media Exposure in Rural Market The rural middle-class constitutes a potential market lying to be tapped by any industry. There are 16.4 million urban middle-class households and 15.6 million rural middle class households in the country, but the latter had a better purchasing power because they do not incur any expenditure on rent, transport and school fees, compared to their urban counterparts, who spend a sizable portion of their income on these items. 44 The estimated annual business from rural markets was Rs 1,23,000 crore, comprising Rs 65,000 crore of FMCG, Rs 5,000 crore of durables, Rs 45,000 crore of agricultural inputs including tractors and Rs 8,000 crore of two-wheelers and four-wheelers. 29% of the rural people own cars, 27%t own colour televisions, 24% own refrigerators and 10% own washing machines, which points to the untapped potential in the rural areas. Another revealing aspect of the market is that 55% of the LIC policies, 50% of the BSNL mobile connections, 53% of the FMCG products, 59% of durables, 60%of Rediffmail sign-ups and 50% of online shopping on Rediffmail are accounted for by the rural sector. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 9 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. TV impact: The dressing style of the rural people has also changed due to the impact of the TV. Studies revealed that TV advertisements are not understood by the rural people who think "they are for the rich". "Being sensitive and relevant to the requirement of the region should be of utmost importance in the choice of products, packaging, pricing, promotions, markets and communication," Key Summary The Indian rural market with its vast size and demand base offers a huge opportunity any industry cannot afford to ignore. With 128 million households, the rural population is nearly three times the urban. We therefore have to look at the rural market very seriously for future expansion. 4.2. CORORATE ADVERTISING How a company does announced a name change especially when the old name was well known? How does the company explain itself to constituents who may have known the 45 company quite well in an earlier incarnation but may be struggling to figure out what the new organization stands for? How can the company create a new image while retaining the strengths of the old one? And what role might corporate advertising play in all this? Corporate advertising can tell a story about a company as a whole, large organizations may need to use corporate ads to simplify their image in the minds of key constituents and to show what unifies the company, despite the geographical spread and variety of its businesses. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 10 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. We can very well understand the concept of corporate advertising by taking the example of ICICI Prudential communication. When Company first began operations, the task was to present the visiting card of the company to the public at large and build credibility and stature and to give the consumer the confidence that ''here is a company that can be trusted to invest funds with.'' This required a corporate campaign - to establish the brand, build awareness and give the brand a larger-than-life image. The advertising idea, which was encapsulated in symbols of protection from the initial print campaign, culminated in the corporate film where sindhoor was used as an endearing and lasting symbol of protection. Once the corporate image and brand identity were established, and as the company expanded and its product range grew, the next phase of communication was to give the consumer a rational and tangible reason to buy - first of all insurance and secondly from ICICI Prudential Life. This was tackled through product-specific advertising, such as for ICICI Pru Smart Kid, retirement solutions or LifeTime. Key Summery ��� Create a good citizen image through consistent & dedicated effort. ��� Convey the organizations commitment to the concerned publics as well as to the masses & eliminate prejudices, if any held by opinion leaders in particular & by the public in general. 46 ��� Boost both employee management relation & employee morale enabling all members of the internal public to discover a new vitality. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 11 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 4.3. Affect of advertising in Brand Building Brand building through corporate advertising, defined generally as advertising that benefits a company’s image by emphasizing its own resources, skills and/or character. Many astute business people now recognize corporate brands as fundamental business assets, and have begun reaching out to customers, prospects, and the financial community by advertising those brands. Brand building advertising is synonymous with product advertising and is commonly seen in traditional mass media, including TV, radio, magazine, and newspaper. Brand building advertisements tend to be product/service- (or retailer-) oriented with the purpose to establish a positive image and creating demand for a product or service that leads to eventual purchase. The communication route is typically one-to-many and is designed to reach a mass audience by using a tactic of at capturing the attention of users. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 12 * Analysis of only selected question is discussed in this project which shows huge information of the market. Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 5. Analysis It includes the summary of advertisement scenario of insurance industry in the soaring mass market available in India based on the survey conducted. 5.1 Data and Interpretation In the market it can easily be realized that the Television audience had a huge impact of these ads. Although the most popular medium of entertainment or information gathering has emerged as the arena of media war. But yes the old players news paper and radio are still on their high trying to dominate in the market. Internet being in its youth phase is rapidly reaching in the elite class. 47 Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 13 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Apart from entertainment channels like Zee T.V , Sony etc where family soaps are having the highest TRPs contribute mainly for in FMCG sector. Though they show a bit of Insurance Ads too. In the emerging economy of INDIA News and business channels have risen serprizingly and contributing in the promotion of insurance sector. (Ranks are in ascending order) LIC being the gaint of Life Insurance in INDIA has grabed the top slot in terms of advertisement also. Other private players like ICICI Prudential, HDFC Std. Life, Brila Sun life and Reliance Life Insurance are trailing behind LIC. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 14 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Life Insurance is considered to be sold by push strategy only, and we are witnessing alternative financial Instruments available in the market giving tough competition. The first thing before buying an Insurance Product in the competetetive market comes in the mind, is the BRAND. It really plays a tremendous role for a product to be bought. It seems clearly in the servey. The message which is conveyed through these advertisements are however acceptable by the mass market. People agree that the ads are understandable to them. But the relevance is still in the black hole as these advertisements are treated as like entertainment clips. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 15 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 5.2 Facts & Findings TAM Media Research, a joint venture between Nielsen Media Research (NMR)/ AC Nielsen 48 and Kantar Media Research (KMR)/IMRB gives fruitful knowledge to understand media and advertising trend. In July 2002, TAM took operational control of ADEX service-the pioneer in Media monitoring in India. TAM inherited a well-oiled monitoring system with a trend work force. ADEX India represents a cutting edges strategy tool which helps us to keep an eye on advertising and media trend. Facts and figures of advertising trend of year 2007-08 and role of Life Insurance advertising in advertising business as per the survey conducted by AdEx India (A division of TAM Media Research) is mentioned below. Snapshot on TV Advertising in 2007 1) Volumes growth in TV advertising. TV ad volumes saw a tremendous growth of 126 per cent during 2007 compared to 2004. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 16 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 2) Sartorial division in TV advertising. Top 10 sectors constituted 58 per cent share of TV advertising during 2007. With 14 per cent share F&B had the largest share of TV advertising, followed by Personal Care/Personal Hygiene and Services with 9 per cent and 6 per cent share, respectively. 3) Channel wise distribution of advertisement in TV. General Entertainment Channel led with 1/3rd share, followed by News and Music Channel with 23 per cent and 15 per cent shares, respectively, during 2007. Key Findings: ��� 31 per cent growth in TV ad volumes during 2007 compared to 2006. ��� Food & Beverages sector leads in TV advertising during 2007. ��� HUL maintained its first rank in the top 10 advertisers list on TV across both the years 2006 and 2007. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 17 49 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Snapshot on Life Insurance advertising on TV in 2007 1) Share of Life Insurance (Life Insurance versus Other Insurance). The overall TV advertising was shared by Life Insurance and Other Insurance in the ratio of 80:20 during 2007. 2) Volume Growth in Life Insurance sector. Television advertising of Life Insurance grew by 258 per cent in 2007 as compared to 2004. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 18 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 3) Private versus Public Insurers on TV during 2007. Private Insurers lead with 78 per cent share of overall advertising of Life Insurance sector on TV during 2007. 4) Rank shift of top Life Insurers in 2007 during 2006. LIC and HDFC Standard Life Insurance Co. Ltd switched their ranks in 2007 compared to 2006. Compared to 2006, Bharti AXA Life Insurance Co and ING Vysya Life Insurance moved up maximum places to be in the top 10 list of 2007. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 19 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 5) Top 10 Life Insurance brands on TV. HDFC Standard Life Children Plan lead with 8 per cent share followed ICICI Prudential Life Insurance and Bharti AXA Life Insurance with 7 per cent and 6 per cent share, respectively, during 2007. Top 10 brands were a mix of five brands of Life Insurance, and three of the brands belonged to the Pension 50 Plan. 6) New brands launched on TV in 2007. Birla Sun Life Children's Dream was number one Life Insurance brand to be launched on TV in 2007. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 20 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 7) Genre usage for Life Insurance advertising. Maximum Life Insurance advertising was done on Regional GEC followed by Hindi News. Among the News genres viz. Hindi, English and Regional News channels took second third and fourth slots respectively during 2007. Highlights ��� Life Insurance' players had an 80% share of overall TV advertising of 'Insurance' sector in 2007. ��� 'Life Insurance' advertising grew by 72% during 2007 compared to 2006. ��� ‘Life Insurance’ advertising max. during Q1 across 2006 and 2007. ��� 'LIC' took the top slot among the players of 'Life Insurance' on TV in 2007. ��� ‘Birla SunlifeChildrensDream’was the top brand in the new brands list on TV. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 21 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Snapshot on Life Insurance advertising in print in 2007 1) Share of Life Insurance (Life Insurance vs. Other Insurance) 'Life Insurance' and 'Other Insurance' contributed to Insurance advertising in the ratio of 76:24 in Print. 2) Volume Growth in Life Insurance sector Life Insurance’ advertising in Print witnessed a dip of 14% during 2007 over 2004. 3) Share of Private and Public Insurers in Print during 2007 51 Private Insurers took 55% advertising share of ‘Life Insurance’ advertising in Print during 2007. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 22 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 4) Rank shift of top Life Insurers in 2007 Tata AIG Life Insurance and Max New York Life Insurance moved up maximum places to be in the top 10 list of 2007 compared to 2006. 5) Top 10 Life Insurance brands in Print 6 out of top 10 brands of Life Insurance print advertising were of LIC during 2007. 3 of the top 5 brands were of LIC during 2007. 6) New brands launched in Print in 2007 Interestingly, among the top 10 list of new brands, 8 were related to ULIP except for LIC’s Aam Admi Bima Yojana and LIC’s Jeevan Amrut. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 23 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 7) Preference of Genre for advertising of Life Insurance Maximum Life Insurance advertising was done on business/Finance/Economic magazines, followed by news/current affairs and general interest. But the condition is reversed in case of newspapers. Here 91 percent of the Life Insurance advertisement is found on General Interest page. Highlights: ��� In the Insurance sector, ‘Life Insurance’ contributed 76% of advertising in Print during 2007. ��� ‘Life Insurance’ advertising dropped by 25% in Print during 2007 compared to 2006. ��� High advertising in ‘Life Insurance’ sector during the first quarter of both the years 2006 and 2007. 52 ��� Private Insurers took 55% share of overall advertising of 'Life Insurance' in Print. ��� LIC and Bajaj Allianz Life Insurance maintained their respective 1st and 2nd ranks in 2006 and 2007. ��� Baja Allianz Life Insurance and LIC were the top 2 brands of ‘Life Insurance’ in Print during 2007. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 24 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Findings As per the survey conducted it is found that our result also supports the facts mentioned above. Majority of public use television for entertainment or information gathering, followed by newspaper and internet. Radio is seems to be out dated in urban areas. But after revolution in mobile technology and satellite radio it again starts growing. This survey question shows that how much brand awareness is important. Majority of the public goes behind brand name. That’s why corporate advertising plays a vital role in growing stage. It is also found that Insurance companies like to give their ads in News/Business channel. It may be because of Insurance is related to finance and Insurance is mainly taken as a tax saving instruments. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 25 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Liking an advertisement does not mean that public 53 would like to buy that product. During survey a collection of various insurance companies ad shown to the respondent. They liked it very much. Some of them are get emotional because it touches their heart. But when it is asked that how many of them now would like to purchase insurance policies then instead of raising hands deep salience come as a answer. It shows that Liking an advertisement does not the guarantee of sell. Only few of them actually buy after seeing ad especially in case of Insurance. As we know LIC is a big player in an Insurance Industry and it is everyone’s first choice. But private players also start chasing LIC. The craze of LIC is mainly because of Public sector. If we talk about private players then ICICI PRUDENTIAL is the first choice of the public followed by HDFC Std. Life and Reliance Life Insurance. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 26 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 5.3 Limitation of the Project ��� The research is confined to a certain parts of Delhi due to time constraints and does not necessarily shows a pattern applicable to all of Country. ��� Some respondents were reluctant to divulge personal information which can affect the validity of all responses. ��� In a rapidly changing industry, analysis on one day or in one segment can change very quickly. The environmental changes are vital to be considered in order to assimilate the findings 5.4 CONCULSION There has been a tectonic shift in advertising the insurance companies. Till 2 or 3 years back a typical Ad will showcase a small happy family enjoying their life. Then one unfortunate Day the head of the family dies in an accident and the rest of the family is drawn to rags. The ad ends up saying Insurance can help them against such calamities. 54 People bought the idea and started buying insurance. But there was a basic flaw in the ad. It tells the consumers about the advantages of “having Insurance” but nothing about “buying insurance from a perticular insurance firm”. So whoever casting such ad was helping the industry as a whole but not their specific firm. If we see the recent ads they are talking about how “SBI Life” can help smoothen your oldage life or how “ICICI Prudential” can help you in receiving pentions etc. This sounds more logical. Each ad speaks about how their firms offers can help you instead of telling how insurance as a whole can help you. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 27 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. In concluding part of this project it shows that advertisement is very much important for any business. A huge amount is paid by companies against advertisement. There are many ways available to give advertisement on which this amount is paid this are TV, Newspaper, Radio, Internet etc. The amount spent on advertisement over four year across the world is shown I table. At the initial phase of a company it is important that they give emphasis on corporate advertising because it helps in brand recall. At the later stage company can go for product class advertisements. Well it is also found that during session that endorsement of celebrities is helpful in ad recall. But giving advertisement in any type of media is not the only medium; there are many other ways also like social service, by way of educating people. Especially for Insurance companies if they want to capture rural market then they have to approach in different way. In my opinion rural market can only been captured if we reaches to there heart. And this can be happen only if we solve there basic problem. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 28 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 55 6. Recommendation about promotional strategies The suggestions have been classified into two categories. ��� Action oriented suggestions ��� People oriented suggestions ACTION ORIENTED SUGGESTIONS An intense AIDA model needs to be adopted the AIDA model (Awareness, Internet, Desire, and Action). Customers are aware of majority of products of ICICI PRUDENTIAL Life Insurance Co. Ltd. To create the awareness regarding Product 1. Print & Electronic Media Advertisement should be done (As we can see intense ad campaign of HDFC Standard Life and Bajaj Allianz.) 2. After the initial promotional campaign the relative advantage of ICICI PRUDENTIAL Life Insurance Co. Ltd. Over its competitor should be highlighted. 3. Hoardings at prime areas should be used. PEOPLE ORIENTED SUGGESTIONS 1. Creating offers like lucky draws for the users of Internet. 2. Giving free gifts for the customer. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 29 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 6.1 Special Recommendation The insurance sector has largely stuck to images of happy families, carefree couples and cute babies. We have to use a different route to break the clutter, and humor and endorsement of celebrities is some of the routes available to us." ICICI Prudential should come in front for development of rural sector, by way of establishing a school, by digging a well in villages. May be it seems like a fool’s suggestion but it is one of the way to gain trust in rural sector. We can also use to advertise us by using the way of “HALLA BOL”. If we adopt this technique then I am sure that this will be most creative and cheaper advertisement all over the world. And by this way ICICI Prudential can again list their name in top advertiser. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 30 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 56 7. Media strategy of ICICI Prudential Life Insurance Co. Ltd. It was time when the marketing team was thinking about an advertising campaign, almost everyone, including the company's board, pooh-poohed the idea. At that time people thought Company is wasting money. But ICICI discarded this “fear" typically used for hawking insurance, choosing instead a "happy" platform to convey a more positive message. Even today after it has rolled out so many campaigns, ICICI remains among the top advertisers: ad spends, as a percentage of new business premium, range between 0.5 per cent and 0.75 per cent. Lowe (Lintas) has been the creative advertising agency for ICICI Prudential Life since the beginning. The TA: Representing an ideal mix of medium to high net worth individuals: The consumers most disposed towards buying life insurance. Middle-aged professionals, primarily male, salaried and self employed, age group: 28 - 45 years, household income: Rs.20, 000 and above. Creative Strategy: The essence of the creative strategy: To get the consumer to re look at Insurance as a means to lead a worry free life and not as a necessary evil. When ICICI Prudential Life Insurance first began operations, the task was to present the visiting card of the company to the public at large and build credibility and stature and to give the consumer the confidence that 'here was a company that could be trusted to invest funds with'. This required a corporate campaign, which started with advertising to establish the brand, build awareness and give the brand a larger than life image. To this effect the core brand insight highlighted was "As head of the family it's my responsibility to take care of my loved ones and protect them from the uncertainties of life", summed up in the advertising idea: Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 31 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. ‘We cover you at every step in life (Suraksha… Zindagi ke har kadam par). ICICI Pru was positioned as an enabler of protection relevant to the needs of the life stage that you are in. 57 Over the last few months, ICICI Prudential has been advertising in outdoor, TV and press. The company launched a corporate television campaign – Saat Phere – which took the emotions and thoughts of initial Sindoor corporate film a few steps further. The film highlights the strength of promises that a husband makes to his wife, through the depiction of everyday situations, and then goes on to emphasize that ICICI Prudential will stand by the husband to help him fulfill all these promises. The TV campaign has also been extended to outdoor. The company has also undertaken press and internet campaigns to inform customers about benefits of some of its products, particularly retirement solutions, through the Chintamani campaign. Once the corporate image and brand identity were established, and as the company expanded and its product range grew, the next phase of communication was to give the consumer a rational and tangible reason to buy - first of all insurance and secondly from ICICI Prudential Life. This was tackled through product-specific advertising, such as for ICICI Pru Smart Kid, retirement solutions or Lifetime. The Creative execution: TVC: Building image and creating a differential in the most creative and compelling manner. The creative execution heightened the emotional connect with the ICICI Pru brand - Indian; satisfaction of knowing that one’s loved ones are protected. Symbolic representation of the protector of the family through situations showcasing various life stages and creating endearing imagery of protection and familial bonding. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 32 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Press: Gave the consumer a rational and tangible reason to buy insurance first and secondly from ICICI Prudential. The product specific advertising focussed on changing the prevalent perception about insurance and breaking a few myths: non- affordability, insurance not being good investment option and the myth that insurance was good only for tax saving. After the hugely successful Chintamani (retirement) and Saat Phere (corporate) campaigns, ICICI Prudential Life Insurance also introduced some innovations in the category, such as: 58 having a tax planner by the name of Chintamani on radio, who would answer consumer’s queries about the role of insurance in financial planning. Other Communications: Other programs included direct mail, PR of communications campaign in press & TV, website marketing; and database generation through Bancassurance channels. Other initiatives included tie-up with the Dabbawalla Organisation in Mumbai for a direct marketing exercise, to talk to the customer through a non-cluttered route, and thereby have a higher impact. The direct mailer was about ICICI Prudential’s retirement solutions and the tax benefits that one can avail of buy investing in any of these. About 100,000 direct mailers were attached to the ‘dabbas’, in areas such as Churchgate, Bandra and Andheri where there are mostly office-goers. ICICI Prudential Life Insurance has also announced a strategic distribution tie-up with Hariyali Kisaan Bazaar, the rural business arm of DCM Shriram Consolidated Ltd (DSCL). As a partner, Hariyali Kisaan Bazaar can now distribute ICICI Prudential's protection, wealth creation, retirement solutions and health insurance products to customers across the its growing number of rural business hubs in the country. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 33 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. In addition to advertising, the company has also initiated several activities to raise consumer awareness about life insurance and ICICI Prudential. “It includes seminars ICICI Prudential regularly holds consumer awareness meets on ‘the need for retirement planning’ in different cities such as Pune, Aurangabad, Coimbatore, Nagpur, Bangalore and Mangalore. These are very well attended and have contributed significantly towards increasing awareness about the category and the company. Apart from this, company also entered into alliances with telecom companies, as well as companies like BPCL and Dominos. The results of communication efforts: Being no: 1 in awareness and saliency. Awareness: ICICI Pru showed a significant jump in awareness between Feb and Sept 2001. Image: Highest score among all Insurance players 59 including LIC, on image parameters like safety, modernity, service, good returns etc. Intention to invest: Next only to LIC as per research (All Source: Research by ORG Marg). No. of calls and emails: There were 70,000 calls at the call center and 6582 emails in the year 2001. Today, ICICI Prudential are fairly high on awareness, among target segment. Company have a 86% brand recall today.A research survey shows that among the investing public. About 11% of the investing public knew Prudential ICICI top of mind. It is a fair indicator of the share that the brand enjoys in the market. On spontaneous level ICICI prudential are at 30%. ICICI Prudential Life was awarded the INDY’s Award for Excellence in Mass Communication in the category of Most Creative AdvertisementTelevision. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 34 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Insurance Advertisement Trend LIC Vs Private Players According to a survey conducted by a leading marketing research firm, ORG Marg, brand awareness of private insurers in India was increasing in the early 21st century. The difference in the level of awareness of these new players as compared to the hitherto monopoly of LIC was decreasing fast because of the aggressive advertising measures adopted by private insurers. The new companies focused their campaigns primarily on building an image of trustworthiness and reliability for themselves. Secondly, their advertisements focused on insurance as an investment option and not a mere tax saving tool – another first for the Indian market. Most of these advertisements carried messages like the family’s happiness, human bonding, etc., with underlying emphasis on the security that insurance could provide. Also, instead of projecting the idea, that an insurance policy actually starts working only after the death of the insured, the new campaigns projected that insurance protects people throughout their lives. Various Insurance Ads 60 In one of its TV commercials, ICICI Prudential showed a series of scenes depicting the childhood, marriage and old age of an individual. The purpose of using these visuals was to translate the company’s message ‘I will protect’ into real-life incidents. In order to project its commitment towards consumers to ‘protect at every stage of life,’ the company brought in the concept of sindoor, which symbolizes protection. Sindoor was shown throughout the commercial as a mark of auspiciousness and protection, and at the end, it became the red line below the ICICI Prudential logo. Max New York also resorted to depicting positive emotions such as trust and protection in its print advertisements. The company released two print advertisements. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 35 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. While one of them carried an image of the revered deity Goddess Durga, the other projected three teenagers standing together, with their faces painted green, white and saffron – like the Indian national flag. Reportedly, Max New York wanted to convey the message that ‘insurance is your partner for your life.’ In addition to such TV commercials, the private insurance companies were trying to make their presence felt by organizing blood donation camps, contests and sponsoring various events social events through their agents. ING Vysya tied up with leading US-based Columbia Picture’s Indian arm to carry out promotional activities using the blockbuster English movie ‘Spiderman.’ In the metros, ING Vysya distributed free movie tickets to its customers. The latter also organized the Green Mumbai Drive and several blood donation camps in association with the Red Cross, besides sponsoring the action replay of the India-West Indies cricket match series in May 2002 and also in November 2002. Om Kotak and Birla Sun Life took to sponsoring events in a major way, to attract prospective customers. Om Kotak initially highlighted in its advertisements the credibility and trustworthiness of individual partners (Old Mutual & Kotak Mahindra) through its generic campaigns. The TV commercials featured men and women ‘meeting’ themselves 61 in the future – happy, healthy and secure, thanks to insurance. Allianz Bajaj went a step ahead. Apart from bringing out TV commercials and putting up hoarding and billboards, it entered into a two-month long contract with Shoppers Stop. According to the contract, every Shoppers Stop outlet had an Allianz Bajaj kiosk that provided information about policies in order to attract customers. Allianz Bajaj’s entire communication package included print advertisements, outdoor media campaigns and direct marketing methods. All its print advertisements carried a visual of human hands, which symbolized partnership and care to stress on the concept of care. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 36 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Similarly, Tata AIG entered into an agreement with Westside to set up information kiosks in all its outlets in order to attract people’s attention. Also, Tata AIG was one of the first insurance companies to adopt the celebrity endorsement strategy. Tata AIG chose the Hindi movie star, Naseeruddin Shah, as its brand ambassador for endorsing its personal accidental death insurance policy. In addition to all the above, private players in the insurance sector charted out various innovative marketing plans to establish their products. For instance, ICICI Prudential launched the ‘TruLife Club’ for its high-value policyholders as part of its marketing strategy. Through TruLife Club, the company offered a wide range of health-related products, health and fitness equipment and membership in gyms, health resorts and clinics in India. Policyholders with a sum assured of Rs 0.5 million or more were included into this club. Punch Lines Another interesting development was regarding the punch lines used by private insurance players that invariably tried to associate positive emotions with insurance products. While ING Vysya said ‘Adding life to insurance,’ ICICI Prudential said, ‘We cover you. At every step in life.’ Similarly, HDFC Standard advertisements projected a happy man asserting; ‘Now I can continue enjoying a comfortable lifestyle even after I retire.’ Om Kotak highlighted its campaigns with ‘Jeene ki azaadi’ (Freedom to live)’ and Allianz Bajaj stated 62 ‘Allianz Bajaj, Life insured by care.’ LIC came out with a corporate advertisement on TV with the punch line, ‘Zindagi Tumhari Roshan Rahe’ (May your life be glorious). LIC Vs ICICI Prudential With private players paying much attention to advertising and promotional activities, LIC, too, was forced to make efforts to increase its visibility and enhance its brand image. The company commenced intense, systematic and well-focused public relations and publicity activities both at the corporate and operational levels. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 37 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. LIC upped its ad spend to tackle competition and succeeded in forging way ahead. LIC has advertised in satellite channels as well as terrestrial channels. LIC has to reach out to nonresident India policy holders as well as its other corporate customers who are based abroad.ICICI Prudential has advertised on several channels from the Star TV bouquet, Zee Network and Sony. The company have spent about Rs 50 million on TV advertising last year. With the geographical expansion, TV became a viable medium and the corporate campaign for ICICI Pru Life was run on TV, because the medium lends itself well to an emotional type of films that strike a chord with the audience. Product advertising, which needs to impart information, was largely done through print and outdoor channels, as these are appropriate for rational type of messages, ICICI Prudential Life Insurance campaign was short-listed as one of the 12 most effective campaigns for the year 2001 in the EFFIE awards. According to an ORG MARG study, the ICICI Prudential brand name and advertising had the highest recall amongst all private players, and was only marginally behind LIC. ICICI Prudential Life was awarded the INDY’s Award for Excellence in Mass Communication in the category of Most Creative Advertisement-Television. (The scores for advertisement were compiled on spontaneous recall, aided recall and likeability. The top ads are selected on the basis of their score.) 63 Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 38 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. It’s all about Money, Honey In recent times, the consumer has been bombarded with an unprecedented barrage of brand advertisement campaigns from insurance companies. Turn on the radio, TV, or open a newspaper or internet portal – the glut of insurance advertisements is there to see. The insurance industry is estimated to have spent over Rs 900 crore in 2007, up from Rs 200 crore in 2002 on brand building. Of the media investments absorbed in 2007, around 53 per cent went to TV, and the remaining to the print media. Life insurers alone accounted for over 70 per cent. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 39 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 9. Industry profile The business of life insurance in India in its existing from started in India in the year 1818 with the establishment of the Oriental Life Insurance company in Calcutta. Some of the important milestones in the life insurance business in India are: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1912: The Indian Life Assurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance business. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The general insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 64 in Calcutta by the British. Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. Set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 40 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India assurance Company Ltd., the Oriental Insurance Company Ltd. And the United India Insurance Company Ltd. GIC incorporated as a company. Insurance sector reforms in 1993, Malhotra Committee, headed by former Finance secretary and RBI Governor R.N. Malhotra, were formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra Committee was set up with the objective of completing the reforms initiated in the financial sector. The reforms were aimed at “ creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms…” In 1994, the committee submitted the report and some of the key recommendations included: 1. Structure Government stake in insurance companies to be brought down to 50%. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freedom to operate. 2. Competition 65 Private Companies with a minimum paid up capital of Rs. 1bn should be allowed to enter the industry. No Company should deal in both Life and General Insurance through a single entity. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Postal Life Insurance should be allowed to operate in the rural market. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 41 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. Only one state Level Life Insurance Company should be allowed to operate in each state. Regulatory Body The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance (Currently a part from the Finance Ministry) should be made independent. 3. Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time). Customer Service LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans. Computerized of operations and updating of technology to be carried out in the insurance industry. The Insurance Regulatory and Development Authority Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. Attracted by the huge untapped potential, many private players entered the market after the Insurance bill was passed in late 2000. A majority of these were collaborations between an Indian company and a leading MNC insurance/financial services company. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 42 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. COMPANY INDIAN PARTNER FOREIGN INSURER AREA 66 Birla Sun Life Aditya Birla Group Sun Life, Canada Life Om Kotak Kotak Mahindra Finance Old Mutual, South Africa Life HDFC-Standard Life HDFC Standard Life, UK Life Royal Sundaram Sundaram Finance Royal Sun, UK Life and Non-Life ICICI-Prudential ICICI Prudential, UK Life Max New York Life Max India New York Life, USA Life Tata-AIG Tata Group AIG, USA Life and Non-Life ING Vysya Vysya Bank ING Insurance, Netherlands Life Aviva Dabur CGU Life, UK Life MetLife India Jammu & Kashmir Bank MetLife, USA Life Bajaj Allianz Bajaj Auto Allianz Life & Non-Life AMP Sanmar Sanmar Group AMP, Australia Life SBI Life Insurance SBI Cardiff, France Life Source: www.knowledgedigest.com Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 43 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. 10. ICICI Prudential Growth Story ICICI Prudential, a joint venture between ICICI Bank and Prudential UK, has been around ever since the private sector was allowed to sell life insurance policies. ICICI Prudential began their operations in 12th December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Since then the tribe of life insurers has grown from 12 to 16, but ICICI still leads the private sector pack. With a portfolio of over 6.5 million policies, India's biggest private sector life insurer has not merely held on to its share but grown it; at the end of January 2008, the firm commanded 29 per cent of the share owned by private sector players. Quite some way below was Bajaj Allianz with 21 per cent, while State Bank of India came in third with 10 per cent. 67 ICICI Prudential's premium income grew at about 100 per cent between March 2003 and March 2007. Interestingly enough, the insurer started out with the traditional endowment products and was not the first to introduce the more popular Unit Linked Insurance Policy (Ulip): the credit for that goes to Birla Sunlife. However, in the first full year of operations itself, it started offering Ulip policies and was selling more policies than anyone else. Today, Birla Sunlife doesn't find a place in the top five and players such as HDFC Standard Life, which were late to cotton on to Ulips, may be regretting it. It wasn't just that ICICI Prudential rolled out Ulips quickly; the company also made sure the products were priced competitively. Compared with the competition, ICICI's upfront charges have always been lower. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 44 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. With charges across the industry now converging at around 20 per cent of first year premiums, ICICI has come up with a zero-load product. Another scheme that has been introduced automatically balances the debt and equity components of the portfolio every quarter. Apart from this, ICICI Prudential has been quick off the block with retirement solutions and the first to come up with health products. If ICICI Prudential has managed to sign on 6.5 million policy holders, it is because the company has built up a strong agent network, which brings in 60 per cent of the total premium. Today the insurer has nearly 250,000 agents working for it, even though it doesn't hand out the best commissions in the industry. Bajaj Allianz's network is about 275,000- strong, while the public sector Life Insurance Corporation boasts over a million agents. ICICI Prudential does not care about their commission at the lower end compared with peers they compensate them by ensuring that customer do better volumes. The insurer is also rolling out offices at a furious pace; by the end of March 2008, ICICI Prudential will have around 1,500 offices from around 1,100 currently, of which nearly 900 68 will have come up in 2007-08. Bajaj Allianz, too, has around 1,000 offices as of now. ICICI Prudential targeting of 3,500 branches in five years. The industry believes ICICI Prudential has a big advantage in that it can leverage the customer base of its parent ICICI Bank. Bajaj Allianz, for instance, didn't have that advantage. Banc assurance today fetches about 27 per cent of ICICI's premium; apart from ICICI Bank, the insurer sells through Bank of India, Federal Bank, South Indian Bank and some co-operative and rural banks. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 45 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd. While ICICI Prudential has done well to stay at the top, the next seven years will certainly be more difficult than the last seven. Competition is getting keener - in the past couple of years, Bajaj Allianz is believed to have written more policies than Prudential. SBI Life has a stronger distribution now that it has signed on many more agents and newcomers like Reliance (which took over AMP Sanmar) are growing at a fast pace. But the strong growth in the industry has surprised everyone. Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 46 Study of Promotional Strategy of ICICI Prudential Life Insurance Co. Ltd ADDITIONAL READINGS & REFERENCES: 1. Ahluwalia Harjeet, IRDA to remind insurance companies over ad norms, Financial Express, February 5, 2001. 2. Jagannathan Venkatachari, Private Players ‘Insure’ LIC’s Business, domain-b, July 10, 2001. 3. Jagannathan Venkatachari, Its war out there, or is it?, domain-b, October 18, 2001. 4. Srinivasan Lalitha, Putting a premium on marketing differentiation, Financial Express, November 21, 2001. 69 5. Shashidar Ajita, When ads get emotional, Catalyst – Business Line, January 17, 2002. 6. Vishwanath Rukmani, Menon. G. Shyam, Insure, be secure in the tinsel town motto, Business Line, February 1, 2002. 7. Magazine Mukta, Max New York Life: Focusing on Internal Brand-Building, Financial Express, April 4, 2002. 8. Joseph Jaiboy, Life insurance with seasoning, Catalyst – Business Line, April 25, 2002. 9. Mohandas Poornima, Private Insurance Companies turn on the heat, Business Line, June 9, 2002. 10. www.insuremagic.com 11. www.indiainfoline.com 12. www.bimaonline.com 13. www.expressindia.com 14. www.responsiveservice.com 15. www.agencyfaqs.com 16. www.knowledgedigest.com 17. Insurance Case Studies – ICMR 18. www. indiantelevision.com 19. The Hindu Business Line 20. Market Research in Insurance Advertisement Effectiveness Study (With reference to Life Insurance)-IGNITE-V March-2008 RAJNI KANT Page 47 (http://FreeOnlineSurveys.com/rendersurvey.asp?sid=nxwoh5j1nwm22gv411585) Hello Sir/Madam, I, RAJNI KANT, here to conduct a research on the T.V audience with respect to advertisement put up by LIFE INSURANCE COMPANIES. The purpose of this study is to understand, capture, assesses and evaluate the effectiveness of the advertisement. We would appreciate if you could spend about 15 Min. and communicate your feelings, expression, comments and impact on you with respect to the content of the advertisement. Please give your honest opinion and be understood that this information collected will be purely confidential and not 70 to be shared with any other entity in term of commercialization. PERSONAL PROFILE Name Age Occupation email-id Postal Address Contact No. Q1. Which media you use for information/entertainment? TV Radio Newspaper Internet Q2. How often do you share interesting advertising with your family or friends? Never Rarely Sometimes Often Very often Q3. Have you seen any Life Insurance Product Ad? Yes No Q4. On Which channel you watch mostly? Zee T.V Sony Star News Channel Q5. If yes can you recall the content of the Ad? Yes No Q6. Based on the features advertised, in that ad…... Rank the following Strongly Agree Somewhat Agree Neither Somewhat Disagree Strongly Disagree The ad message is understandable. 71 The advertisement is believeable The ad's message is relevant to me. The benefits described in the ad are believeable to me. After viewing this ad, I would consider purchasing the product. This ad is much better than other ads for products in this product category. Q7. Which company ad you find mostly? LIC India HDFC Std. Life Insurance Co. Ltd. Birla Sun Life Insurance Co. Ltd. ICICI Prudential Life Insurance Co. Ltd. Reliance Life Insurance Co. Ltd. Q8. Do you think this ad has influence you to………………. Buy the insurance policy Recommend the Insurance Policy Suggest the insurance Policy would like to inform Q9.Can you recall if your family members ever tried to influence you to buy/secure a life insure Policy from the insurance company of her interest? Yes No Q10. Which of the Insurance Policy would you like to buy? Life Plan Health Plan Child Plan Retirement Plan Q11. Other than T.V Where you saw Life insurance ad? Internet Newspaper Holdings Friends/Family Radio Q12. Please rank the following Life Insurance Company as per your liking HDFC Standard Life Insurance ICICI Prudential Life Insurance Reliance Life Insurance Tata AIG Insurance Solutions 72 Bajaj Allianz The survey questionnaire was filled by the employee of Delhi Metro Railway, by online procedure. They are from various places of India working in DMRC,used to stay in officer’s flat. The entire respondents are from South region of Delhi only. Sr.No. Name of the Customer Contact no. Postal Address 1 Mr. Daljeet Singh 9810598120 E-1, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 2 Mr. C.P. Singh 9810848159 E-2, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 3 Mr. Vikash Rawat 9910484389 E-3, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 4 Mr. Sunil Kataria 9971598608 E-4, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 5 Mr. V. C. Gandhi 9971598574 E-5, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 6 Mr. A. S. Rao 9891173666 E-6, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 7 Mr. Gautam Kumar 9971598589 E-7, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 8 Mr. N. P. Singh 9810598148 E-8, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 9 Mr. Hari Ram 9891025582 73 E-9, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 10 Mr. R.C.Kulshrestha 9871130998 H-1, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 11 Mr. Pramod Kumar 9810738914 H-2, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 12 Mr. Sanjeev Sharma 9212045886 H-3, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 13 Mr. Sudhir Mittal 9212038937 H-4, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 14 Mr. M.C. Gupta 9810160154 H-5, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 15 Mr. Alok Ranjan 9810998363 H-6, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India H-7, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , 16 Mr. Santosh Kumar 9313083576 New Delhi-110017, India 17 Mr. Ramakant singh 9810520066 H-8, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India H-9, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , 18 Mr. Arvind Kumar Tiwari 9810996743 New Delhi-110017, India 19 Mr. Chandan Bhatia 9212503676 H-10, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , 74 New Delhi-110017, India 20 Mr. Pankaj Saxena 9871374626 H-11, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 21 Mr. Saral Dwivedi 9910376097 H-12, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 22 Mr. Dharmendra Kumar 9910478524 H-13, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 23 Mr. Shiv Singh 9818250486 H-14, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 24 Mr. Kumar Keshav 9810854812 H-15, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 25 Mr. Pradeep Kharab 9910484377 H-16, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 26 Mr. Atul Gadgil 9818313973 H-17, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 27 Mr. Yashpal Mehta 9810848117 H-18, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 28 Mr. V.P. Srivastava 9971598614 H-19, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 29 Mr. Mukesh Thakur 9971598615 H-20, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , 75 New Delhi-110017, India 30 Mr. R.D. Gupta 9810079015 D-1, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India D-2, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , 31 Mr. Rajesh Kumar 9810803733 New Delhi-110017, India 32 Mr. S.K. Mittal 9871370955 D-3, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 33 Mrs. Kavita Verma 9971598602 D-4, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 34 Mr. V.C. Koshy 9212045898 D-5, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 35 Mr. Sulekh Jain 9891755653 D-6, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 36 Mr.Raj Kumar 9810045933 D-7, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 37 Mr. Ram Chandra 9868234788 D-8, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 38 Mr. T. N Mohan 9810598111 D-9, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 39 Mrs. Rita Kumar 9212503143 D-10, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 76 40 Mr. Arvind Bhatnagar 9971396200 D-11, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 41 Mrs. KumKum 9212701808 D-12, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 42 Mr. A. K. Gupta 9971396156 D-13, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 43 Mr. Puneet Garg 9891173666 D-14, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 44 mr. Om Tiwari 9911959557 D-15, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 45 Mr. O.h. Pandey 9818122922 D-16, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 46 Mr. S. K. Kappor 9810893392 D-17, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 47 Mr. Vineet Chaudhary 9871952378 D-18, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 48 Mr. Bhuneshwar Shah 9810998384 D-19, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 49 Mrs. Jyoti Ranjan 9818799684 D-20, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India 77 50 Mrs. Laliy Malhotra 9810708120 D-21, Metro Enclave, DMRC Officer's Colony, 41 Press Enclave Road, Sector 7, PushVihar , New Delhi-110017, India Results for: Advertisment Effectiveness Servey 1) Q1. Which media you mostly use for information/entertainment? Percentage Responses TeleVision 42.0 21 Newspaper 36.0 18 Internet 14.0 7 Radio 8.0 4 Total responses: 50 2) Q2. How often do you share interesting advertising with your family or friends? Percentage Responses Never 8.0 4 Rarely 28.0 14 Sometimes 52.0 26 Often 8.0 4 Very often 4.0 2 Total responses: 50 3) Q3. Have you saw any Life Insurance Product Ad? Percentage Responses Yes 96.0% 48 No 4.0% 2 Total responses: 50 4) Q4. On Which channel you saw Insurance ad mostly? Percentage Responses Zee T.V 14.0 7 Sony 26.0 13 Star 4.0 2 News Channel 56.0 28 Total responses: 50 5) Q5. Which company ad you find mostly? Rank Them.... View Results Page 1 of 4 http://freeonlinesurveys.com/viewresults.asp?surveyid=414824&print=1 3/29/2008 Average Score Responses Life Insurance Corporation of India 1.22 / 5 50 HDFC Std. Life Insurance Co. Ltd. 2.84 / 5 50 Birla Sun Life Insurance Co. Ltd. 3.96 / 5 50 78 ICICI Pru. Life Insurance Co. Ltd. 2.16 / 5 50 Reliance Life Insurance Co. Ltd. 4.82 / 5 50 4.82 / 5 6) Q6. Can you recall the content of the Ad of any life insurance company? Percentage Responses Yes 94.0% 47 No 6.0% 3 Total responses: 50 7) Q7.Based on the features advertised in that ad... 1 Strongly Agree 2 Somewhat Agree 3 Neither 4 Somewhat Disagree 5 Strongly Disagree Responses Average Score The ad message is understandable. 15 (30.00%) 31 (62.00%) 1 (2.00%) 2 (4.00%) 1 (2.00%) 50 1.86 / 5 (37.20%) The advertisement is believeable. 1 (2.00%) 21 (42.00%) 26 79 (52.00%) 1 (2.00%) 1 (2.00%) 50 2.60 / 5 (52.00%) The ad's message is relevant to me. 3 (6.00%) 12 (24.00%) 26 (52.00%) 8 (16.00%) 1 (2.00%) 50 2.84 / 5 (56.80%) The benefits described in the ad are believeable to me. 2 (4.00%) 23 (46.00%) 12 (24.00%) 12 (24.00%) 1 (2.00%) 50 2.74 / 5 (54.80%) After viewing this ad, I would consider purchasing the product. 3 (6.00%) 14 (28.00%) 19 (38.00%) 9 (18.00%) 5 (10.00%) 50 2.98 / 5 (59.60%) This ad is much better than other ads for products in this product category. 80 1 (2.00%) 19 (38.00%) 13 (26.00%) 13 (26.00%) 4 (8.00%) 50 3.00 / 5 (60.00%) 2.67 / 5 (53.40%) 8) Q8. Do you think this ad has influence you to………………. Percentage Responses Buy the insurance policy 10.0 5 View Results Page 2 of 4 http://freeonlinesurveys.com/viewresults.asp?surveyid=414824&print=1 3/29/2008 Recommend the Insurance Policy 40.0 20 Suggest the insurance Policy 42.0 21 would like to inform 8.0 4 Total responses: 50 9) Q9. Before buying a product do you pay attention to the Brand Name? Percentage Responses Yes 80.0% 40 No 20.0% 10 Total responses: 50 10) Q10. Which of the Insurance Policy would you like to buy? Average Score Responses Life Plan 1.66 / 4 50 Health Plan 2.36 / 4 50 Child Plan 2.28 / 4 50 Retirement Plan 3.70 / 4 50 3.70 / 4 11) Q11. Other than T.V Where you saw Life insurance ad? Average Score Responses Internet 2.14 / 5 50 Newspaper 1.36 / 5 50 Holdings 2.78 / 5 50 81 Friends/Family 4.10 / 5 50 Radio 4.62 / 5 50 4.62 / 5 12) Q12. Please rank the following Life Insurance Company as per your liking. Average Score Responses HDFC Standard Life Insurance 1.96 / 5 50 ICICI Prudential Life Insurance 1.14 / 5 50 Reliance Life Insurance 3.30 / 5 50 View Results Page 3 of 4 http://freeonlinesurveys.com/viewresults.asp?surveyid=414824&print=1 3/29/2008 Tata AIG Insurance 3.90 / 5 50 Bajaj Allianz 4.70 / 5 50 4.70 / 5 13) Please Mention Your Detail here........... View Results Page 4 of 4 http://freeonlinesurveys.com/viewresults.asp?surveyid=414824&print=1 3/29/2008 ADVERTISMENT CODE BY IRDA Every Insurer or Intermediary or Insurance Agent Shall – 1. Have a compliance officer, whose name and official position in the organization shall be communicated to the Authority, and he shall be responsible to oversee the advertising program; 2. Establish and maintain a system of control over the content, form, and method of dissemination of all advertisements concerning its policies. 3. Maintain an advertising register at its corporate office which must include: ��� A specimen of every advertisement disseminated, or issued or a record of any broadcast or telecast, etc.; ��� A notation attached to each advertisement indicating the manner, extent of distribution and form number of any policy advertised. ��� Maintain a specimen of all advertisements for a minimum period of three years. ��� File a copy of each advertisement with the Authority as soon as it is first issued, together with information: an identifying number for the advertisement; ��� The form number(s) of the policy(ies) advertised and when the product/s were approved by the Authority; ��� A description of the advertisement and how it is used. ��� The method or media used for dissemination of the advertisement. ��� File a certificate of compliance with their annual statement stating that, to the best of its knowledge, advertisements disseminated by the insurer or by its 82 intermediaries during the preceding year have complied with the provisions of these regulations and the advertisement code as stated in regulation 12. ��� The advertisement register shall be subject to inspection and review by the Authority for content, context, prominence and position of required disclosures, omissions of required information, etc. Changes In Advertisement Any change in an advertisement would be considered a new advertisement. 1. All the provisions of regulation 3 shall apply to an advertisement referred to in sub regulation (i). 2. The Authority shall be informed at the time of filing the advertisement the extent of change the original advertisement Insurance company advertisements. 3. Every insurance company shall be required to prominently disclose in the advertisement and that part of the advertisement that is required to be returned to the company or insurance intermediary or insurance agent by a prospect or an insured the full particulars of the insurance company, and not merely any trade name or monogram or logo. 4. Where benefits are more than briefly described, the form number of the policy and the type of coverage shall be disclosed fully. Source: www.bimaonline.com *Executive, Corporate Strategy Group, Satyam Computer Services Ltd. **Correspondence Address: G-6, Aditya Apartments, Durga Nagar Colony, Punjugutta,Hyderabad-500082. E-mail: [email protected] IMPACT: Marketing on Society Vs Society on Marketing Gaurav Wadekar*,** Introduction Marketing has long been used by firms to position their products or services in the minds of the customers. But marketing has remained one tool that not only uses the traits of the society to tailor their products but has also become a major contributor to society, in terms of molding its mind set and bringing a sense of sensibility. Of course, it cannot be ignored that inappropriate Marketing has also led to undesirable impact on society. Also, there is increasing competition for the hearts and minds of the different markets being appealed to. When marketing tries to influence how and what people buy, Social Marketing tries to influence how they think, feel and act. 83 This paper, titled “Impact: Marketing on Society Vs Society on Marketing”, shall attempt to shed light on this correlation between Marketing and Society. The correlation between marketing and society Does this thesis hold true and if it does, is there any method by which it can be proved? To begin answering this question, let’s consider a few definitions. Marketing is defined in various ways by different people. The most suitable to the present context is “all the activities involved in moving products and services from the source to the end user, including advertising, sales, packaging, promotion and printingi”. The most critical entity implied by this definition is ‘end user’. The definition of society suitable to this context is “Society is made up of people, groups, networks, institutions, organizations and systems. These aspects of society may include local, national and international patterns of relationships. People belong to informal and formal groups, and within and between these groups there are patterns of interactionsii.” The most critical entity implied by this definition is ‘people’. Correlation is a synonym for association or relationship between variables. In this case, Marketing and Society are two variables, while ‘end user’ and ‘people’ are the correlating factors. In order to devise a method to prove this correlation, we shall consider a set of parameters, examples and case studies in the later sections of the paper. Question 1: Why is it necessary to evaluate the impact of society on marketing? For any firm to form its marketing strategy, it is necessary to discover unfulfilled customer needs and bring market products that satisfy those needs. The process of doing so can be modeled in a sequence of steps: situation analysis to identify opportunities, strategy formulation for a value proposition, tactical decision making, plan implementation and result monitoring (refer Fig 1) The first stage in this process is very critical as a thorough analysis of situation in which the firm 84 finds itself, serves as the basis for identifying opportunities to satisfy unfulfilled customer needs. In addition to identifying the customer needs, the firm must understand its capabilities and forces of the environment in which it is operating. Situation analysis Marketing strategy Marketing mix decision Implementation and control Fig 1: Forming a Marketing Strategy Part VI – Consumer Markets & Marketing International Marketing Conference on Marketing & Society, 8-10 April, 2007, IIMK 564 Thus, the situation analysis is an analysis of the external environment and the internal forces of the firm itself. The external environment can be described in terms of macroenvironmental factors that broadly affect many firms and micro-environmental factors, closely related to the specific situation of the firm. Figure 2 suggests some frameworks for Situation Analysis. Question 2: Why is it necessary to evaluate the impact of marketing on society? There are two reasons why it becomes necessary to evaluate the impact of marketing on society: One, to get feedback/results of the marketing strategy that was implemented and second, to assess the contribution to society. The first reason is directly related to Return on Investment (RoI) as well as Assessment and Realignment towards target achievement. For example, by monitoring the results of marketing strategy the firm can adjust its marketing mix if it finds that the market has changed its attributes. Secondly, organizations make profit by using the human resources as the backbone. Employees spend a life time in companies to make them profitable. It becomes the company’s liability to give back to the society. This means that all the activities the organization takes, including the marketing strategy should consider the impact on society. 85 A closer look As the co-relation between marketing and society is established, here is a set of parameters, examples and case studies that support the point that marketing and society has a complimentary nature. The following table will showcase different parameters and examples to strengthen the fact that the marketing and society impact each other. Fig 2: Frameworks that can be used for Situation Analysis • 5C Analysis – company, customers, competitors, collaborators, climate • PEST Analysis – for macro-environmental political, economic, societal, and technological factors. • SWOT analysis – strengths, weaknesses, opportunities, and threats – for the internal and external situation. PEST analysis can be viewed as equivalent to the “climate” factor of the 5C framework. The climate factor in the 5 C framework considers the following factors: • Political and regulatory environment – governmental policies and regulations that affect the market • Economic environment – business cycle, inflation rate, interest rates, and other macroeconomic issues • Social/Cultural environment – society’s trends and fashions • Technological environment – new knowledge that makes possible new ways of satisfying needs; the impact of technology on the demand for existing products. In PEST analysis, S factor includes: • Demographics • Class structure • Education • Culture (gender roles, etc.) • Entrepreneurial spirit • Attitudes (health, environmental consciousness, etc.) • Leisure interests Sr. No. Type of segmentation Parameter Sub parameters Impact of marketing on society Impact of society on marketing 86 1 Demographic segmentation Age Thumbs up advertisement which said “grow up to Thumbs Up”, urged children to prefer it to get into the grown up segment, when the Ad intended to urge the grown ups to prefer Thumbs Up ICICI Debit cards for children, especially caters to the children age group, keeping in view the growng number of parents maintaing a fixed monthly account for their kids Family size and life cycle Children and early adulthood TV, video games, etc are leading to reduced interest of children in physical games, book reading etc, hampering growth. Job site promotions increased frequent job changes, leading to a change in concept of staying with the same company for long “Definitely male” slogan of Pulsar which created an increase in buying among men of this age group, who prefer a Macho feeling Pre-Family Adults married without children Easily available housing loans leading to buying of houses in early stages of life “Ready to Eat food” have targeted majorly the working couples who do not find the time to cook food Family - One or more children Easy availability of education loans have made it common for families to send their kids abroad for 87 higher studies. Tourism industry promotions have led to increase in domestic as well as international customers, leading to improvement in work life balance Insurance companies have targeted families that need to plan for their children’s future Late - Adults whose children have left home Chit funds which created a hype and attracted people to invest their savings to make easy money, had a drastic fall leading to many facing losses HDFC Life insurance ad “na sar jhuka hai kabhi aur na jukhega kabhi” targets the aged segment that demands monetary independence in their old age Social class/income Premium segment Due to the emergence of a number of products symbolizing status, a large number of people from the premium segment prefer only branded accessories, apparels etc., due to emerging branded security service providers, this segment has become more security conscious The luxury cars like Rolls Royce and Mercedes are targeted at the prestige and status of the premium segment Middle segment Air Deccan’s low cost airlines made traveling by air more convenient and affordable, and hence more common Small Cars like Alto, Wagon-R, etc have been targeted at the middle class people who cannot afford a luxury car but would need a small sized car for the entire 88 family Lower segment, Reliance cell phone technology, which made mobile phones available at very low prices, has made the “Nirma” washing powder was targeted at the lower segment. Over time they have product accessible to the common man ; Wal-Mart’s news of entry into India has created a furore among shopkeepers as its wholesale prices shall eliminate them from the market come up with many such products in this segment which generates more revenue than any other segment 2 Geodemographic segmentation Rural areas eChapaul of ITC helped farmers in a big way who were otherwise on verge of suicide Cheaper PCs are being introduced, which are aimed at people from rural areas who would otherwise not be able to afford a PC Urban areas Easily available housing loans leading to scarcity of space in big cities Interior Designers utilize structures and plans that require minimal space and area, thereby targeting the urban areas where there is dearth of living space 3 Benefit segmentation and behavioral segmentation Benefit segmentation Due to availability of standardized packaged drinking water, the level of personal satisfaction of people regarding hygiene has increased Fair and Handsome, surrogate advertisement (Wills, McDowell’s, etc.) Behavioral 89 segmentation Frequent users Extensive promotion of Colgate has made it a synonym to toothpaste Fairness soaps, have targeted the frequent users of soap who would otherwise not use a fairness cream Occasional Users Brufen – advertised for frequent use, but had negative impact on health Points on credit cards urge occasional users to increase usage ad hence increase purchases Non users Due to the entry of hair softeners in the retail market, which are affordable and easily available, it has been observed that women who were earlier not users of any such products have become regular users. Only because products like Fair and Handsome, Hair gel, people who were not using, also started using them The advertisements that spread awareness on usage of condoms to prevent AIDS, have been targeted on the Non-Users who find it hesitating even to buy these products 4 Psychographics segmentation 'young aspiring' Rang de Basanti, adv. of WWE created lot of negative impact on youth leading to deaths, fair and lovely adv is indirectly promoting that fair women are attractive Institutes providing coaching to budding student appearing for entrance exams, have used career consulting as a means of differentiating themselves ‘young fogey’ Extensive distribution of Hollywood movies have changed the outlook/mindset of this segment with respect to their thinking, living, etc. Job sites have attempted to move this 90 segment, who needs a change of job and hence lifestyle Part VI – Consumer Markets & Marketing International Marketing Conference on Marketing & Society, 8-10 April, 2007, IIMK 567 The examples mentioned above describe two phenomena. One is when marketing and society has a visible and substantial impact on each other. The other is when marketing or society unintentionally impacts each other. Whether visible and substantial or unintentional, the truth is there is a cyclical impact on the product to market process. From the time the product is launched and introduced to the market, till the product remains there, the impact of the product on marketing and society can be seen in a cyclical fashion as shown in Fig 3. Two case studies found below highlight the two phenomena as mentioned. The first case study “EMRI: Impact of marketing on society” discusses how EMRI as a method of social marketing visibly impact society. This case study proves that there is a direct relationship that governs marketing and society. Then the second case study, “Globalization: Impact of society on marketing” discusses how globalization has unintentionally affected marketing in a big way. EMRI: Impact of marketing on society EMRI is a home grown success story offering a glimmer of hope in the emergency management scenario in India, currently in the state of Andhra Pradesh. Envisaging a comprehensive coverage of Medical, Police and Fire emergences through Public-Private Partnership, the Government of Andhra Pradesh recognized Emergency Management and Research Institute (EMRI), a not-forprofit institute as the nodal agency to provide comprehensive emergency management services, by an MOU signed on April 2, 2005. Just as in other parts of the world, a centralized emergency management system is helping save 91 lives on a day to day basis, in AP, the number 108 is used as the centralized helpline for Medical, Police and Fire emergencies. The Government of India allotted this three-digit number – 108which is accessible from both fixed and mobile phones and is toll free across the state for all emergencies. B.Ramalinga Raju, Founder and Chairman of Satyam Computer Services Ltd, and his brothers have provided the initial funding for setting up EMRI. The Governing body of EMRI has provided thought leadership. Here the intention of EMRI was not to market Satyam but indirectly, as EMRI is associated closely with Satyam, it is helping Satyam in gaining mind share of the society. Neither did Satyam intend to start EMRI as a tool for marketing, but it is unintentionally symbolizing social marketing here. This is increasing the brand recall of Satyam within the regions of operations. Moreover, EMRI has plans to increase its operations and to be recognized as the pioneer in emergency services in India. Also, considering the fact that in just 365 days of operation, 108 has helped save over 7,661 lives and responded to over 4.37 million calls, shows the amount of impact it has created in the society. Marketing Society Fig3: Impact of Product/Service Part VI – Consumer Markets & Marketing International Marketing Conference on Marketing & Society, 8-10 April, 2007, IIMK 568 By setting up such an organization, Satyam has done lot of internal marketing as it provides opportunities to its associates to work for social cause and hence motivates them. Satyam’s AICS framework mentions society as one of the pillars in the organization’s success. This shows that how marketing, internal as well as external has a visible and substantial impact on society. The point to be noted here, at the cost of repetition is that the intention was not to 92 market the organization, but indirectly it has done that, and which has a created a huge wave in society. Globalization: Impact of society on marketing Globalization usually refers to the declining significance of national borders, brought about by increased trade, the spread of information technology, cross-border financial flows, and cultural transfers. Several forces have contributed to this phenomenon. • Reduction in trade barriers • Technology transfers, rapid spread of computers, internet • Accelerated economic integration through private cross-border financial flows • Cultural transfers that have given consumers "global tastes" These forces have led to a tremendous increase in the demand for better goods and services, and hence the companies have an opportunity to expand in other countries. To ensure global success, a marketing strategy that could cater to different markets, culture, societies is compulsory. Though globalization is affecting society, diversity continues to exist. Considering these diversities, it is necessary that organizations customize the marketing strategy according to each target country. There are many such examples where productization or customization was inevitable to cater to a particular country for certain companies. • Diet Coke is named Light Coke in Japan--dieting was not well regarded • Red circle trademark was unpopular in Asia due to its resemblance of Japanese flag • Packaging of products is more important in some countries than in U.S. • Advertisement featuring man and dog failed in Africa--dogs were not seem as man’s best friend • Cologne ad featuring a man “attacked” by women failed in Africa • Food demonstration did well in Chinese stores but not in Korean ones--older women were insulted by being “taught” by younger representatives • MacDonald’s customized its products to cater to the Indian market All the above examples show that there is an unintentional impact of society, culture on marketing. As it can be seen from these examples that how organizations had to tweak their 93 marketing mix to ensure successful launch and life cycle of their products or services to cater to a particular segment of society. Conclusion As shown in figure 4, we can consider a product or service being placed on the line and its impact on marketing or society can be defined by its closeness to either of the points. Moreover, the marketing and society impact each other in a cyclical fashion. When a product is launched in the market, its effect on society is monitored and depending on the intensity of this effect the marketing mix is revisited. Marketing Society Fig 4 Part VI – Consumer Markets & Marketing International Marketing Conference on Marketing & Society, 8-10 April, 2007, IIMK 569 While it is always intended that the marketing strategy should cause an effect on the society, it is necessary to ensure that this effect is always on the positive side considering the larger picture. It is very important to consider that anything that forms a part of the marketing mix of a particular product or service is going to cause an upswing or downswing in the way society thinks and acts. Keeping this in mind and bearing the fact that after all the society has to be considered before devising the marketing strategy, an organization should appreciate the cyclical behavior of marketing and society. With this, it can be concluded that as much as marketing impacts society, society also has an important role to play in marketing strategies and that both are complimentary in nature. References http://www.web-source.net/internet_marketing/22734.html http://www.eventuring.org/ http://www.netmba.com/marketing/process/ http://en.wikipedia.org/wiki/Corporate_social_responsibility i www.garyeverhart.com/glossary_of_advertising_terms.htm ii members.ozemail.com.au/~mghslib/subjects/society%20culture/Glossary.htm 94