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Transcript of Phily Proj 1 Britannia BBM Project
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CHAPTER 1
INTRODUCTION
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THEORITICAL BACKGROUND OF THE STUDY
CONSUMER BEHAVOIUR
One official definition of consumer behavior is the study of individuals, groups, or
organizations and the processes they use to select, secure, use, and dispose of products,
services, experiences, or ideas to satisfy needs and the impacts that these processes have
on the consumer and society. It brings up some useful points:
Behavior occurs either for the individual, or in the context of a group (e.g., friends
influence what kinds of clothes a person wears) or an organization (people on the job
make decisions as to which products the firm should use).
Consumer behavior involves the use and disposal of products as well as the study of
how they are purchased. Products use is often of great interest to the marketer,
because this may influence how a product is best positioned or how we can encourageincreased consumption. Since many environmental problems result from product
disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or
garbage pilling up at landfills) this is also an area of interest.
Consumer behavior involves services and ideas as well as tangible products.
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The impact of consumer behavior on society is also of relevance. For example,
aggressive marketing of high fat foods, or aggressive marketing of easy credit, may
have serious repercussions for the national health and economy.
The most obvious application of consumer behavior is for making better marketing
campaigns. For example, by understanding that consumers are more receptive to food
advertising when they are hungry, we learn to schedule snack advertisements late in
the afternoon. By understanding that new products are usually initially adopted by a
few consumers and only spread later, and then only gradually, to the rest of the
population, we learn that
(1) companies that introduce new products must be well financed so that they can stayafloat until their products become a commercial success and
(2) it is important to please initial customers, since they will in turn influence may
subsequent customers brand choices.
Need to study consumer behavior:
The study of consumers helps firms and organizations improve their marketing
strategies by understanding issues such as how:
The psychology of how consumers think, feel, reason, and select between deferent
alternatives (e.g., brands, products)
The psychology of how the consumers is influenced by his or her environment
(e.g., culture, family, media)
The behavior of consumers while shopping or making other marketing decisions
Limitations in consumer knowledge or information processing abilities influence
decisions and marketing outcome
How consumer motivation and decision strategies differ between products that
differ in their level of importance or inerest that they entail for the consumer
How marketers can adapt and improve their marketing campaigns and marketing
strategies to more effectively reach the consumer.
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Understanding these issues helps us adapt our strategies by taking the consumer into
considerations.
According to section 2 on the Consumer Protection Act, 1986 consumer means any
person who -
i. Buys any goods for a consideration which has been paid or promised or partly
paid and partly promise or under any system of differed payment and includes any
user of such goods other than the person who buys such good for consideration
paid or promised or partly paid or partly promised or under any system of
deferred payment when such use is made with the approval of such person but
does not includes a person who obtains such goods for resale or for any purposeor
ii. Hires or avails of any services for a consideration which has been paid or
promised or partly paid and partly promised or under any system of deferred
payment and includes any beneficiary of such services other than the person who
hires or avails of the services for consideration paid or promised or partly paid
and partly promised or under any system of deferred payments when such
services are availed of with the approval of the first-mentioned person.
Note: THE CONSUMER PROTECTION ACT, 1986
An Act to provide for the better protection of the interests of consumers and for
that purpose to make provisions for the establishment of consumers councils and other
authorities for the settlement of consumers disputes and for matter connected therewith.
A MODEL OF CONSUMER BEHAVIOR
At one time, marketers could understand consumers through the daily experience
of selling to them. But the growth of companies and markets has removed many
marketing managers form direct contact with customers. Increasingly, managers have had
to rely on the 7 Os framework for consumer research to answer the following key
questions about market:
Who constitutes the market? Occupants
What does the market buy? Objects
Why does the market buy? Objectives
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Who participates in the buying? Organizations
How does the market buy? Operations
When does the market buy? Occasions
Where does the markets buy? Outlets
The starting point for understanding buyer behaviour is stimulus-response model shown
below. Marketing and environmental stimuli enter the buyers consciousness. The
buyers characteristics and decision process lead to certain purchase decisions. The
markers task is to understand what in the buyers consciousness between the arrival ofoutside stimuli and the buyers purchase decisions. They must answer two questions:
How do the buyers characteristics-cultural, social, personal, and psychological-
influence buying behavior?
How does the buyer make purchasing decisions?
Marketing
stimuli
Other
stimuli
Buyers
characteristics
Buyers
decision
making
process
Buyers
decision
Product
Price
Place
Promotion
Economical
Technological
Political
Cultural
Cultural
Social
Personal
Psychological
Problem
recognition
Information
search
Evaluation
Decision
Post
purchase
behavior
Product
choice
Brand
choice
Dealer
choice
Purchase
Timing
Purchase
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amount
BUYER BEHAVIOUR
Buyer behavior is the process by which consumers and organizational buyers
make purchase decisions. Buyer behavior is a broad term that applies both to ultimate
consumers and to organizational buyer. Consumers behavior refers to the buyer behavior
of ultimate consumers.
In order to understand human behavior in purchase/non purchase situations, consumer
behavior researchers borrow theories from other relevant social science disciplines such
as psychology and sociology.
The Interpersonal Determinants of Consumer Behavior
1. Cultural influences
Culture can be defined as values, beliefs, preferences, and tastes that are handed down
from one generation to the next. Although cultural values are show to change, they dochange over time. Basic core values are slow to change. Cultural differences are
important for the international marketer who is involved in understanding the potential of
target markets and constructing effective marketing programs.
A culture includes numerous subgroups with their own distinguishing modes of behavior
called subcultures. Subcultures are based upon such factors are race, nationality, age,
rural vs. urban, sex, religion, and geographical distribution among others.
2. Social influences
All interactions with and influences resulting from both formal and informal group
memberships other than the families are included. From the group, individuals receive
norms, status, and roles. Norms are values, attitudes, and behaviors that a group deems
appropriate for its members. Status is a persons relative position in a group. From
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groups, individuals acquire roles. Roles refer to what members of the group expect of the
individual.
The Asch phenomenon refers to a research project that demonstrates the impact groups
and group norms have on an individuals behavior. Reference groups are those whose
value structures and standards influence a person behavior. A person need not be an
actual member of a particular reference group in order to be influenced by it. Strong
influence by a group on a members purchase requires two conditions: The purchased
product must be one that others can see and identify. The purchased product must be
conspicuous, a brand or product not everybody owns. Social class membership can affect
both lifestyle and purchasing behavior, though to what extent, researcher has notdetermined.
3. Family influence
Because of the close, continuing interactions among family members, the family
often represents the strongest source of group influence. Like other groups, the family has
set of norms, roles, and status.
Four roles have been utilized in research on family decision-making:
Each partner makes Autonomic an equal number of decisions.
Husband dominates.
Wife dominates.
Syncratic both partners jointly make most decisions.
The role of young children in purchasing decision-making is also changing. Children
influence their parents and santa claus to buy certain toys, clothing and cereals, and so
forth. Teenagers, in May cases have become the household-purchasing agent in their
family unit.
4. Psychological influences
Needs and motives
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A need is a lack of something useful. It is an imbalance between the customers
actual and desired state. A need must be sufficiently aroused before it can serve as a
motive to buy something.
Motives are inner states that direct a person towards the goal of satisfied a felt need. The
individual moved to take action to reduce a state of tension and to return to a condition of
equilibrium.
TYPES OF CONSUMER BUYING BEHAVIOUR
Consumer always wants to create an assortment of products which satisfies their
needs and wants in the present and also in the future. To realize this aim, the consumer
has to make a lot of decisions. These purchasing decisions can be classified into three
main categories of decisions:
1. Routine response behavior
This behavior happens when the consumer regularly buys cheap products that needs
very little search and also very little decision effort. In this care the consumer prefers a
special brand but he also knows other brands of the same product class to have an
alternative to buy if there is something wrong with his favorite brand.
2. Limited Decision Making
This is the case if the consumer buys a product occasionally or if there is a new brand,
he doesnt know about, in a familiar product category. For this type of decision-making,
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the consumer needs a moderate amount of time for gathering information and
deliberation.
3. Extensive Decision-making
This is the most complex decision making behavior. It happens when a purchase
includes unfamiliar, expensive or infrequently bought products; for e.g. cars, house etc.
the buyer uses a lot of time evaluating alternative brands or choices and also for seeking
information.
A big contrast to the extensive decision making process that were mentioned earlier is the
behavior of the impulse buyers. These people do not plan conscious to buy; they have a
persistent urge to buy something immediately if they like it. But often these people get in
emotional conflicts; they often feel guilty because of their limited finances or some thing
else.
CONSUMER DECISION MAKINGConsumer decision-making process
NEED
RECOGNITION
INFORMATION
SEARCH
EVALUATION OF
ALTERNATIVES
PURCHASEPOST PURCHASE
BEHAVIOUR
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This decision process can be divided into five stages:
1) Problem Recognition
This occurs when the buyer notices that there is a difference between the desired state
and the actual conditions. The consumer gets aware that he has to change some thing to
get satisfied. For example, if somebody needs a care to get to work and one day the car
stops working. In this situation the person recognizes that there is a difference between
the desired state (a working car) and the actual condition (a broken car).
2) Information search
After recognizing the problem, the buyer searches for information about a new
product, which can solve his problem and also is able to satisfy his needs.
Here we distinguish two aspects to an information search:
In the internal search, buyer check first if they have any information about
the needed product in their memory. If they cannot get enough information for their
memory for a decision, they are looking for more information in an external search. In
the external search the buyer may focus on communication with friends or relatives, to
here about their experience with special brands. He also can obtain information from
public sources like manufacturers, sales persons, or product test organizations.
3) Evaluation of Alternatives
To evaluate the products of which the buyer got information is looking for criteria to
compare the products. These criteria are for example characteristics or features that the
buyer wants (or does not want). The buyer also think about how important each criterion
is; because some features may carry more weight than others. This evaluation of the
consumer can be influenced by the marketer by framing the alternatives-that means the
manner how the marketer describes the products and its features.
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4) Purchase
In this stage the consumer chooses the product or brand, which he wants to buy. This
selection is based on the result of the previous evaluation stage. There is also a set of
criterions, which must be taken into account:
One of the most important criterions is the product availability, which may influence
which brand is purchased. If the favorite brand is not available at the moment the
consumer may choose the brand that is ranked second. Other criterions that also could be
important for the consumer are for example the price, delivery, guarantees, maintenance
agreements, and installation and credit agreements.
5) Post purchase evaluation
After the purchase the buyer begins to check the product with actual performance
meet the expected level. In this stage many of criteria used in the evaluating alternatives
stage are used again. The result is either satisfaction or dissatisfaction.
THE POST PURCHASE EVALUATION PROCESS
Increased knowledge
before purchase
Leads to more realistic expectations of
the product.
Yields higher levels of satisfaction.
Cognitive dissonance
State of inner tension felt when
consumers are aware of a lack of
consistency between their values or
opinions and their behavior.
Consumers reduce
cognitive dissonance
by:
Finding new information that re-
enforces positive ideas about the
purchase.
Avoiding information that contradicts
their decision
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Revoking the original decision by
returning the products.
CHAPTER 2
RESEARCH DESIGN
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STATEMENT OF THE PROBLEM
The title of the present research is A study on consumer behavior towards the
insurance products with special to ICICI PRUDENTIAL
ICICI (Industrial Credit and Investment Corporation of India), which was one of thelargest developmental banks, has ventured into many areas of finance-in fact it has
become a universal banking brand. Prudential one of the worlds leading insurance
company has joined hand with ICICI to offer insurance products. Though private
insurance companies are in the infancy stage, the impact on the insurance market is
tangible. The marketing strategies of these private operators have forced LIC to change
its gears.
Insurance products are marketed with unique STP strategies. The market is more aware
and realistic about investment and returns from insurance products. Insurance business is
more transparent as compared to the past. In this background this study tries to analyze
the investors behavior towards insurance products in general and ICICI in particular.
OBJECTIVE OF THE STUDY
1. To understand the attitudes and perception of respondents towards insurance
products.
2. To understand the purchase behavior towards insurance products.
3. To study the respondents awareness towards ICICI PRUDENTIAL
4. To know people perception towards investments available in the market and their
risk perception.
5. To analyze the investment strategies of respondents.
6. To know the present consumer trend prevailing in the market.
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7. To offer suggestion based upon the findings.
SCOPE OF THE STUDY
It is necessary to understand what make people to buy insurance products; who influence
the buying decision and the market attitude towards insurance products.
In this perspective, the present study has concentrated to analyze the behavior exhibited
by the consumers of ICICI Prudential. It necessities to understand the attitudes of
consumers towards products and services offered by ICICI Prudential.
The study about consumers helps the company to improve their marketing strategies by
understanding the consumers. For example, by understanding that a number of different
messages compete for our potential customers attention, company learns that to be
effective, advertisement must usually be repeated extensively. Company also learn that
consumers will some times be persuaded more by logical arguments, but at other times
will be persuaded more by emotional or symbolic appeals. By understanding the
consumer the company will be able to make a more informed decision as to which
strategy to employ.
Limitations of the study
1. An underlying assumption for the entire project is that the details and the
feedback received from the population is true.
2. It was difficult to find respondents as they were busy in their schedule, and
collection of data was very difficult. Therefore, the study had to be carried out
based on the availability of respondents.
3. Some of the respondents were not ready to fill the questionnaires and some of
them were not ready to come out openly
4. Due to Time constraints, the research study cannot be applied for a long time.
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REVIEW OF LITERATURE
PURPOSE
For the present dissertation also information where collected from both primary
and secondary sources. Primary source constitute questionnaires and personal interviews.
Most of the theoretical information needed is collected from different textbooks,
magazines and web sites. Those constitute a significant information source for the present
study. As the present dissertation was titled as consumer behavior towards the insurance
products, literature reference were concentrated mostly on marketing and insurance
related journals and magazines.
Sources of information
Insurance information:
Monthly insurance magazines like Asia Insurance Post, Insurance
chronicle and other business magazines like Business World, Business India etc. have
also provided good insight and valuable information during literature search.
Insurance sector plays a very vital role in the process of economic development of any
country it act as a mobilizer of savings, as a financial intermediary, as promoter of
investment activity a stabilizer of financial market and as a risk manager. Insurance
services lead to efficient and products allocation of capital resources, facilitate growth of
trade and commerce, substitute for governments social security programs and assessed
individuals and firm in efficient management of risk.
[The Chartered Accountant Journal of the Institute of Chartered Accountants
of India June 2003 - Insurance Industry]
The Indian life insurance industry vibrant activity, since it opened to private
sector participation in 2001. The number of private life insurers now numbers to 12. This
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has led to a significant increase in life insurance in penetration, which stood at 2.7% of
the GDP during 2001 02. all private insurers witnessed impressive growth, with a
campaigned growth of 33%. ICICI Pru continues to lead the private insurers with a new
business market share 37%. Birla Sunlife has seen a rapid growth with close to 90% of its
premium income arising out of unit-linked plan. The union budget 2003 04 proved to
be disappointing for life insurance industry. It restricted the tax benefit currently offered.
The budget proposes to restrict the tax rebate under Section 88 to 20% of the sum
assured.
[Asia Insurance Post May 2003 A firm leap by Richard Holloway,
managing consultant & Sumit Narayanan, Consultant of Watson Wyatt]
Life insurance is no longer being bought only as a savings tool but is increasing being sold
for protection. The competition in the insurance market is not in savings products such as
endowment and money back, but in the term insurance market. According to survey carried
out by FICCI, as many 88% of the respondents said that they insure for security while only
40% did not for saving.
% of market share in 2001-02
Company Name %
LIC 98%
ICICI PRUDENTIAL 0.8%
HDFC STANDARED LIFE 0.2%
OTHERS 1.0%
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Private players:
Company Name %
ICICI prudential 40%
Max New York 14%
Birla Sunlife 12%
HDFC Standard 12%
SBI life 6%
Allianze Bajaj 4%
Others 12%
[Business India Oct 28 Nov 10, 2002 precious life]
Marketing information
Businesses today face three major challenges and opportunities: globalization and
advance in technology and de-regulation. Marketing is typically seen as the task of
creating, promoting and delivering good and services to consumers and business. And
marketer are involved in marketing many type of entities: goods, service, information etc.
among these service marketing has an eminent role in this present century. Consumers
are in present days marketing. So it is important to a marketer to analyze and perceive the
consumer behavior.
In this perspective in order to get information about the above-related areas the
following books has given a valuable in-depth in-sight:
1. Marketing Management Philip Kotler (the millennium edition)
2. Service Marketing Valarie A. Zeithaml & Mary Jo Bitner
3. Consumer Behavior - Leon G. Shiftman & Loslie Lazar Kanok (6 th
edition)
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CONCLUSION
The different information or benefits derived from the in-depth study of the above
mentioned information sources are as follows:
History of the life insurance industry; it helped to know about where from
the life insurance company started their journey and how it has grown to the
present set-up. It was a surprising information about the contribution of
insurance industry to the growth of the country.
Existing regulations and legislations relating to the life insurance industry;
this gives me an insight into the rules and various restriction that IRDA has
passed and the effect of Union Budget 2003 04
Competition existing in the present insurance market; the private sector
also took participation in the insurance industry from 2001. It was clear from
the above-mentioned articles, still LIC is the market leader in the life insurance
industry with 98% market share.
All the marketing information sources has given a significant contribution
to the detailed theoretical perspective for the research i.e. about marketing in
general, about service marketing and about consumer behavior.
World wide web also worked as a highly important information source as
it provides updated information for the research relating to various areas.
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METHODOLOGY
Type of research
The study was conducted as an exploratory sampling survey method to collect primary
and secondary data.
Primary Source of Data
A well-structured questionnaire was personally administrated to the selected sample to
collect the primary data and personal interviews were conducted from insurance policy
holders of ICICI PRUDENTIAL.
Secondary Source of Data
Secondary data are those, which have already been collected by some other
persons for their purpose and published. Secondary data are usually in the shape of
finished products.
Two types of secondary data were collected for the preparation of the project work:
Internal Data was generated from companys brochures, manuals and annual reports.
External Data, on the other hand, was generated from magazines, research books and
internet (websites). Magazines devoted solely to insurance news, such as Asia Insurance
News, Insurance Chronicle-monthly insurance digest and other marketing magazines
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Sampling Techniques
A sample is a representative part of the population. In sampling technique,
information is collected only from a representative part of the universe and the
conclusions are drawn on that basis for the entire universe.
A random sampling technique was used to collect data from the respondents. A random
sample is a sample selected from a population in such a way that every member of the
population has a equal chance of being selected and the selection of any individual does
not influence the selection of any other. The selection is purely depends on chance. So
while conducting the survey, 90 respondents were selected at random.
Sample Size
Sample size denotes the number of elements selected for the study. For the
present study, 90 respondents were selected at random. All the 90 respondents were the
customers of one or another insurance company. Out of these 90 respondents 30 were
specifically ICICI Prudential customers.
Sample Description
The dissertation was focused on the consumer behaviour towards the insurance products
with special reference to ICICI Prudential. The respondents were personally contacted for
the purpose of the study.
Most of the respondents were in age group of 45-55; which was having a frequency of31, 23 respondents were in the age group of 35-45, 15 respondents were in the age group
of 25-35 and 21 respondents were more than 55 years.
According to gender wise, 78 were male respondents and only 12 were female
respondents.
Nearly half of the respondents were professionals and a big chunk of the rest was
business class. Retired officers and others like housewives were among the respondents.
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CHAPTER 3
COMPANY PROFILE
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ICICI PRUDENTIAL Life Insurance was established in2000 with a commitment
to expand and reshape the life insurance industry in India. The company was amongst the
first private sector insurance company to begin operations after receiving approval from
Insurance Regulatory Development Authority (IRDA), and in the time since, has taken
several steps towards realizing its goal.
THE COMPANY
ICICI PRUDENTIAL Life Insurance Company is a joint venture between ICICI,
a premier financial powerhouse and prudential plc; a leading international financial
services group headquarters in the United Kingdom. ICICI Prudential was amongst the
first private sector insurance company to begin operations in December 2000 after
receiving approval from Insurance Regulatory Development Authority (IRDA).
ICICI and Prudential come together in1993 to form prudential ICICI Asset Management
Company, which has today emerged as one of the leading mutual funds in India. The two
companies bring together two of the strongest financial service brands in Asia, known for
their professionalism, excellent quality of service and long term commitment to customers.
Riding on the success of this relationship, the two companies joined hands once more
in2000, to form ICICI PRUDENTIAL Life Insurance, with a commitment to provide
leading-edge life insurance solutions. ICICI Bank has 74% stake in the company, and
Prudential plc has 26%. COMPANY PROFILE
LIFE INSURANCE
Life insurance is a contract providing for a payment of a sum of money to the
person assured or failing him to the person entitled to receive the same on the happening
of certain event. Uncertainty of death is inherent in human life. It is this risk, which gives
rise to the necessity for some form of protection against the financial loss arising from
death. Insurance substitutes this uncertainty by certainty.
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The objective of insurance is normally to provide:
a. Family protection and
b. Provision for old age.
HISTORY AND PRESENT STATUS OF INSURANCE MARKET IN INDIA
The insurance sector in India has come a full circle from being an open
competitive market to nationalization and back to a liberalized market again. Tracing the
developments in the Indian insurance sector reviles the 360-degre turn witnessed over aperiod of almost two centuries.
A brief history of the insurance sector
The business of life insurance in India in its existing form started in India in the
1818 with the establishment of 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.
1928: The Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non insurance business.
1938: earlier legislation consolidated and amended to by the Insurance Act with
the objective of protecting the interest of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken over by
the central government and nationalized. LIC found by an Act of Parliament, viz. LIC
Act 1956, with a capital contribution of rupees Five Crore from the Government of India.
Insurance sector reforms
In 1993, Malhotra Committee, headed by former Finance Secretary and RBI
Governor R.N. Malhotra, was formed to evaluate the Indian insurance industry and
recommend its future direction. The Malhotra committee setup with the objective of
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complimenting the reforms initiated in the financial sector. The reforms where 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:
i. Structure
Government stake in the 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 company should be given greater freedom to operate.
ii. Competition
Private companies with a minimum paid up capital of Rs. 1bn should be
allowed to enter the industry.
No company should dealing both the 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.
Only one State Level Life Insurance Company should be allowed to operated
in each state
iii. Regulatory body
The Insurance Act should be changed.
An insurance regulatory body should be setup.
ICICI Bank
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ICICI Bank (NYSE:IBN) is Indias second largest bank with an asset base of Rs.
106812 Corer. ICICI bank provides a broad spectrum of financial services to individuals
and companies. This includes mortgages, car and personal loans, credit and debit cards
and corporate and agricultural finance. The bank services a growing customer base of
more than 7 mn customer accounts and five mn bondholders accounts through a multi-
channel access network. This includes about 450 branches and extension counters, 1675
ATMs, call centers and Internet banking. ICICI bank posted a net profit of Rs 1206 Crore
for the year ended March 31,2003. ICICI bank is the only Indian company to be rated
above the country rating by the international rating agency Moodys and only the only
Indian company to be awarded an investment grade international credit rating. The bankenjoys the highest AAA (or equivalent) rating from all Indian leading rating agencies.
PRUDENTIAL PLC
Established in 1848, Prudential plc is a leading international financial services
company in UK with around US $ 250 bn funds under management, and more than 16
mn customers worldwide. Prudential has brought to market an integrated range offinancial services products that now includes life assurance, pensions, mutual funds,
banking, investment management and general insurance. In Asia prudential is UKs
largest life insurance company with a vast network of 22 life and mutual fund operations
in 12 countries- china, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Philippines,
Singapore, Taiwan, Thailand and Vietnam. Since 1923, prudential has championed
customer centric products and services, supported by over 60000 staff and agents across
the region.
DISTRIBUTION
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ICICI PRUDENTIAL has one of the largest distribution networks amongst
private life insurance in India, having commenced operations in 28 cities and towns in
India. These are: Ahmedabad, Bangalore, Chandigarh, Chennai, Coimbatore, Gurgaon,
Hyderbad, Indore, Jaipur, Jalandhar, Kanpur, Cochin, Kolkotta, Kottaym, Lucknow,
Ludhiana, Madurai, Mangalore, Meerut, Mumbai, Nagpore, Nasic, Noida, New Delhi,
Pune, Thane, Vadodara and Vashi.
The company has a largest number of banc assurance tie-ups, having agreement with
ICICI Bank, Citi Bank, Allahabad Bank, Federal Bank, South Indian Bank, Bank of
India, Lord Krishna Bank, and Punjab&Maharashra Co-operative Bank, as well as some
corporate agents. It has also tied-up with organizations like Dahn for distribution ofSalaam Zindagi, a policy for the socially and economically under privilege sections of
society.
SERVICE
ICICI PRUDENTIAL has recruited and trained over 18000 insurance agents to
interface with and advice customers, and has the highest number amongst private life
insurers on the renowned Million Dollar Round Table (MDRT). Further, it leverages its
state-of-the-art IT infrastructure to provide superior quality of service to customers.
MILESTONES
ICICI PRUDENTIAL life insurance has crossed Rs 500 Crore premium income
mark on March 31, 2003 having issued nearly 350000 policies for a sum assured of
Rs.8700 Crore since its inception.
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The last fiscal had seen significant growth for ICICI PRUDENTIAL across all segments,
with 246827 policies issued in the period April 2002-March 2003, and Rs. 348 Crore
premium from new business in the same period, a 200 per cent growth over the previous
fiscal (April 2001-March 2002).
The company had also met all its rural and social sector obligations, said a press release.
The growth been driven by pensions and unit linked products. It has garnered 23% of
pensions premium amongst all players for the period April 2002-February 2003 and 34%
in Feb alone. Today the company has established itself the number one private life
insurer in the country.
OUR VISION
To make ICICI PRUDENTIAL the dominant pensions player build 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
value -- Integrity, Customer first, Boundary less, Ownership and Passion. Each of the
values describes what the company stands for 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 significant role in redefining and reshaping the sector. Give the quality of our
parentage and commitment of our team; there are no limits to our growth.
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PRODUCTS
Insurance Solutions for Individuals
ICICI PRUDENTIAL life insurance offers a range of innovative, customer centric
products that meet the needs of customer at every life stage. Its 13 products can be
enhanced with up to four riders, to create a customized solution for each policyholder.
Savings Solutions
ICICI PRUDENTIAL Save n Protect is a traditional endowment savings plan than offers
life protection along with adequate returns.
ICICI PRUDENTIAL CashBak is an anticipated endowment policy ideal for meeting
milestone expenses like a childs marriage, expenses for a childs higher education or
purchase of an asset.
Protection Solutions
ICICI PRUDENTIAL Life Guard is a protection plan, which offers life covers at
very low cost. It is available in three options level term assurance, level assurance with
return of premium and single premium.
Child Solutions
ICICI PRUDENTIAL Smart Kid provides guaranteed educational benefits to a
child along with life insurance cover for the parent who purchases the policy. The policy
is designed to provide money at important milestones in childs life.
Market linked Solutions
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ICICI PRUDENTIAL LifeLink is a single premium Market Linked Insurance
Plan, which combines life insurance cover with the opportunity to stay, invested in the
stock market.
ICICI PRUDENTIAL LifeTimeoffers customers the flexibility and control to customize
the policy to meet the changing needs at different life stages. It offers three investment
options Growth Plan, Income Plan and Balanced Plan.
Retirement Solutions
ICICI PRUDENTIAL ForeverLife is retirement product targeted at individuals in their
thirties.
ICICI PRUDENTIAL LifeTime Pension is a regular premium market linked pensionplan.
ICICI PRUDENTIAL LifeLink Pension is a single premium market linked pension plan.
Single Premium Solutions
ICICI PRUDENTIAL AssureInvestis a single premium savings product with life
cover for terms of 5, 7or 10 years.ICICI PRUDENTIAL ReAssure is a retirement product for senior citizens who are on the
verge of retirement or have just retired.
ICICI PRUDENTIAL also launched salaam zindagi, a social sector group insurance
policy targeted at the economically under privileged sections of the society.
Group Insurance Solutions
ICICI PRUDENTIAL also offers Group Insurance Solutions for companies
seeking to enhance benefits to their employees.
ICICI PRUDENTIAL Group Gratuity Plan: ICIC Prus Group Gratuity Plan helps
employers fund their statutory gratuity obligation in a scientific manner. The plan can
also be customized to structure schemes that can provide benefits beyond the statutory
obligations.
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ICICI PRUDENTIAL Group Superannuation Plan: ICICI Pru offers a flexible
defined contribution superannuation scheme to provide a retirement kitty for each
member of the group. Employees have the option of choosing from various annuity
options or opting for a partial commutation of the annuity at the time of retirement.
ICICI PRUDENTIAL Group Term Plan: ICICI Prus flexible group term solution
helps to provide affordable cover to members of a group. The cover could be uniform or
based designation or rank or a multiple of salary. The benefit the policy is paid to the
beneficiary nominated by the member on his/her death.
Flexible Rider Options
ICICI PRUDENTIAL life offers for flexible riders, which can be added to the basic
policy at a marginal cost, depending on the specific needs of the customer.
1. Accident & disability benefit: If death occurs as the result of an accident during
the term of the policy the beneficiary receives an additional amount equal to the
sum assured under the policy. If the death occurs while traveling in an authorizedmass transport vehicle, the beneficiary will be entitled to twice the sum assured
as additional benefit.
2. Level Term Cover: This rider provides the option to increase the risk cover. The
may be increased for an additional amount upto a maximum of the existing basics
sum assured on your policy.
3. Critical Illness Benefit: protects the insured against the financial loss in the
event of 9 specified critical illnesses. Benefits are payable to the insured for
medical expenses prior to death.
4. Major Surgical Assistance Benefit: provides financial support in the event of
medical emergencies, ensuring that benefits are payable to the life assured for
medical expenses incurred for surgical procedures. Cover is offered against 43
different surgical procedures.
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AWARENESS
According to Saugata Gupta Chief Marketing of ICIC Pru ICICI Pru lifes
communication strategies have been very success full in building the brand and driving
awareness of the company and the category. ORG-Margs Brand track survey undertaken
last year indicate that though awareness of LIC stands at 100%, ICICI Pru life stands not
far behind in second place at 70%. Further the awareness scores for ICICI Pru life double
between February 2001 and September 2001.
ORG Marg research also showed that the communication not only created saliency and
awareness, but also succeeded in influencing the buying decision. ICICI Pru life emerged
far ahead of other private players as far as share of wallet went, with 52% of the
respondents saying that they intended to buy policy from ICICI Pru life.
ADVERTISING EFFECTIVENESS
ICICI PrudentialAgency: Lowe
The making of Indias no: 1 Private life insurer
ICICI Pru is a case study in the role of marketing in reshaping an industry. It
highlights how an industry where sell and push were oft used words and consumer
was nothing more than a file number, has changed to one where consumer preference
and consumer pull rule the roost. Heres a look at how ICICI Pru changed the rules of
the games and emerged a leader in the process.
Background
When the insurance sector was liberalized in 2000, the private players contend
with a few issues. Ratio of premium to GDP was low;1.3% of GDP was invested in
insurance. Insurance penetration was at an abysmal 22% of insurable population. Besides
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the above the private players were faced with attitudinal barriers, perception of insurance
has a tax saving tool and lack of a consumer centric approach in service and product
offerings.
The marketing challenges facing ICICI Pru:
The challenge therefore was to change established category drivers (death
payment and tax saving) and to get the consumer to evaluated insurance on a more
emotional plat form (protection) rather than a mere rational decision (tax savings).
The campaign Objectives:
a. Reposition the category in the consumers mind. Influence the consumer to view
it as a protection instrument and not a tax saving product alone.
b. In the process, create differentiation for the ICICI Pru brand as a provider of
social security and family protection.c. Achieve leadership status in saliency, image and product parameters.
d. Build credibility and trust.
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. To this effect the core
brand insight highlighted was As head of the family, it is my responsibility to take care
of my loved ones and protect them from the uncertainties of life, summed up in the
advertising idea: we cover you at every step in life.
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Media Strategy
In a market likely to be cluttered, we used multiple touch points to reach the
consumer. The role for each medium was envisaged. The TV medium was used to
enhance the emotional link with the brand. Strategic use of 15 sec. edits facilitated high
frequency levels. In print, the cost per response rather than the cost per thousand as
responses were measured in form of call ins. Radio FM, Cinema, Internet were used to
create a media multiplier effect
The results of communication efforts
Being no: one 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 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 e-mails: there were 70000 calls at the call
center and 6582 e-mails in the year 2001.
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CHAPTER 4
DATA ANALAYSIS AND
INTERPRETATION
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TABLE NO: 1
Table showing the monthly income of the respondents
PARTICULARS FREQUENCY PERCENTAGE
Less than 10000 11 12%
10000-20000 22 24%
20000-30000 24 27%
30000-40000 18 20%More than 40000 15 17%
Total 90 100%
Interpretation:
From the above table it can be inferred that the maximum respondents fall between
income of 20000 30000 i.e., 27% o and 24% of the respondents have a monthly
income of 10000 20000 and the respondents who have less income level are upto 12%.
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GRAPH 4.1
Graph showing the monthly income of the respondents
0
5
10
15
20
25
1112
24
18
15
Monthlyincomeoftherespondents
lessthan10000
10000 20000
20000 30000
30000 40000
morethan
40000
Inference
The above graph shows the monthly income level of the respondents.
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TABLE NO: 2
Table showing the monthly savings of respondents
PARTICULARS FREQUENCY PRECENTAGE
Lessthan2000 15 17%
2000-4000 22 24%
4000-6000 21 23%
6000-8000 19 21%
More than 8000 13 15%
TOTAL 90 100%
Interpretation:
From the above table it can be inferred that therespondents fall between
savings of 2000 4000 i.e., of 24% and 23% of the respondents have a monthly savings
of 4000 6000 and the respondents who have less income level are upto 15%.
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Graph 4.2
Table showing the monthly savings of respondents
0
5
10
15
20
25
15
2221
19
13
monthly savings of the respondents
less than 2000 2000 - 4000
4000 - 6000 6000 - 8000
more than 8000
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TABLE NO: 3
Table showing the purpose of savings of the respondents
PARTICULARS FREQUENCY PRECENTAGE
Medical expenses 21 23%
To buy durables 06 07%
To buy jewelers 05 06%
To buy house or site 25 27%
Education 31 34%
Others 02 03%
TOTAL 90 100%
From the above table it can be inferred that:
23% of the 90 respondents make savings for the purpose of medical expenses,07%
of the respondents make savings for the purpose to buy durables,06% of the respondents
make savings for the purpose to buy jeweler, 27% of the respondents make savings for
the purpose to buy house or site,34% of the respondents make savings for the purpose of
education, 03% of the respondents make savings for some other purpose like marriage,
entrepreneurship etc.
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Graph 4.3
Graph showing the purpose of savings of the respondents
21
6 5
25
31
2
0
5
10
15
20
25
30
35
Purpose of savings
medical expences to buy durables to buy jewellers
to buy house or site education others
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TABLE NO: 4
Table showing the investment preference of the respondents
PARTICULARS FREQUENCY PRECENTAGE
Bank deposit 22 24%
Insurance 18 20%
Shares 13 14%
Debentures 09 10%
Real estate 12 13%
Gold 04 05%
Mutual funds 07 08%Chit funds 05 06%
Others 00 00%
TOTAL 90 100%
From the above table it can be inferred that:
24% of the 90 respondents preferred to make investments in bank deposits,20% of the
respondents preferred to make investments in insurance,14% of the respondents
preferred to make investments in shares,10% of the respondents preferred to make
investments in debentures,13% of the respondents preferred to make investments in
real estate,05% of the respondents preferred to make investments in gold,08% of the
respondents preferred to make investments in mutual funds,06% of the respondents
preferred to make investments in chit funds
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Graph 4.4
Graph showing the investment preference of the respondents
0
5
10
15
20
25 22
18
13
9
12
4
75
Investment preferences
bank deposit insurance shares
debenture real estate goldmutual funds chit funds
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TABLE NO: 5
Table showing the respondents who are actively planning their
investments taking care of tax implications
PARTICULARS FREQUENCY PRECENTAGE
Yes 72 80%
No 18 20%
TOTAL 90 100%
From the above table it can be inferred that:
80% of the 90 respondents actively plan their investments taking care of tax
implications, 20%of the respondents does not plan their investments taking care of
tax implications.
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Graph 4.5
Graph showing the respondents who are actively planning their
investments taking care of tax implications
80%
20%
Respondents who plan their investmentstaking care of tax implications
yes no
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TABLE NO: 6
\Table showing the respondents level of information regarding
insurance productsPARTICULARS FREQUENCY PRECENTAGE
Good 30 33%
Moderate 54 60%
Poor 06 07%
TOTAL 90 100%
From the above table it can be inferred that:
33% of the 90 respondents have a good level of knowledge and information regarding
insurance products of the respondents have an average level of knowledge and
information regarding insurance products, 07% have a poor knowledge and
information regarding insurance products, 60%
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Graph 4.6
Graph showing the respondents level of information regarding
insurance products
good33%
moderate60%
poor7%
Level of information on insurance products
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TABLE NO: 7
Table showing the companies preferred for taking life insurance policies
by the respondents
PARTICULARS FREQUENCY PRECENTAGE
LIC 40 45%ICICI 30 33%
ING-VYSYA 07 08%
Birla Sunlife 10 11%
Others 03 03%
TOTAL 90 100%
From the above table it can be inferred that:
45% of the 90 respondents are the holders of life insurance policies of LIC , 33% of
the respondents are the holders of life insurance policies of ICICI, 08% of the
respondents are the holders of life insurance policies of ING VYSYA, 11% of the
respondents are the holders of life insurance policies of Birla sunlife, 3% of the
respondents hold the life insurance policies of other companies, which include Max
New York, Metlife etc.
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Graph 4.7
Graph showing the companies preferred for taking life insurance
policies by the respondents
45%
33%
8% 11%
3%
Companies preferred for life
insurance policies
LIC ICICI ING - VYSYA Birla sunlife others
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TABLE NO: 8
Table showing the policies preferred by the respondent
PARTICULARS FREQUENCY PRECENTAGE
Annuity 35 39%
Money back 16 18%
Endowment 28 31%
Term 11 12%
TOTAL 90 100%
From the above table it can be inferred that:
39% of the respondents prefer annuity policy, 18% of the respondents prefer money
back, 31% of the respondents prefer endowment, 12% of the respondents prefer term
polices
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Graph 4.8
Graph showing the policies preferred by the respondent
05
10
15
20
2530
35
annuity money back endowment term
35
16
28
11
Policy preferences
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TABLE NO: 9
Table showing how much insurance premium is paid monthly by the
respondents
PARTICULARS FREQUENCY PRECENTAGE
Less than 1000 16 18%
1000 2000 22 24%
2000 3000 40 44%3000 4000 08 09%
More than 4000 04 05%
TOTAL 90 100%
From the above table it can be inferred that:
18% of the 90 respondents used to pay a monthly premium of less than 1000, 24% of
the respondents pay a monthly premium of 1000 2000 , 44% of the respondents pay
a monthly premium of 2000 3000 , 09% of the respondents pay a monthly premium
of 3000 4000 , 05% of the respondents pay a monthly premium of more than 4000
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Graph 4.9
Graph showing how much insurance premium is paid monthly by the
respondents
0
5
10
15
20
25
30
35
40
16
22
40
8
4noofrespondents
Approximate monthly insurancepremium
less than 1000 1000 - 2000
2000 - 3000 3000 - 4000
more than 4000
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TABLE NO: 10
Table showing the purpose for which the respondents have taken the
policy
PARTICULARS FREQUENCY PRECENTAGE
Tax purpose 39 43%
Future security 23 26%
Childrens education 20 22%
Marriage 00 00%Others 08 09%
TOTAL 90 100%
From the above table it can be inferred that:
43% of the 90 respondents have taken the policy for the purpose of tax saving, 26%
of the respondents have taken the policy for the purpose of future security, 22% of the
respondents have taken the policy for the purpose of childrens education, 09% of the
respondents have taken the policy for some other purpose like accidents, natural
calamities etc.
None of the respondents have opted life insurance policies for marriage purpose
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Graph 4.10
Graph showing the purpose for which the respondents have taken the
policy
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0
5
10
15
20
25
30
35
4039
23
20
0
8noofrespond
ents
Purpose of the policy taken
tax purpose future security children's education marriage others
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TABLE NO: 11
Table showing the person who pays premium for the respondent
PARTICULARS FREQUENCY PRECENTAGE
Self60 66%
Employer 15 17%Spouse 12 13%
Others 03 04%
TOTAL 90 100%
From the above table it can be inferred that:
66% of the 90 respondents premium is paid by themselves, 17% of the respondents
premium is paid by their employees, 13% of the respondents premium is paid by
their spouse, 04% of the respondents premium is paid by persons other than the
above three .
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Graph 4.11
Graph showing the person the person who pays premium for the
respondent
60
15
123
Person who pays premium
self employer spouse others
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TABLE NO: 12
Table showing whose life is insured as per the policy taken by the
respondents
PARTICULARS FREQUENCY PRECENTAGE
Self 41 46%
Spouse 28 31%
Children 11 12%
Parents 10 11%
TOTAL 90 100%
From the above table it can be inferred that:
46% of the 90 respondents have insured their life itself as per the policy taken, 31%
of the respondents have insured their spouse life as per the policy taken, 12% of the
respondents have insured their childrens life as per the policy taken, 11% of the
respondents have insured their parents life as per the policy taken.
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Graph 4.12
Graph showing whose life is insured as per the policy taken by the
respondents
0
5
1015
20
25
30
35
40
45
1
41
28
11 10
Person whose life insured
self spouse children parents
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TABLE NO: 13
Table showing the level of information of the respondents regarding the
products of ICICI PRUDENTIAL
From the above table it can be inferred that:
56% of the 90 respondents have a good level of information regarding the products of
ICICI PRUDENTIAL, 30% of the respondents have an average level of information
regarding the products of ICICI PRUDENTIAL, 14% of the respondents have only a
poor information regarding the products of ICICI PRUDENTIAL.
PARTICULARS FREQUENCY PRECENTAGE
Good 50 56%
Moderate 27 30%
Poor 13 14%
TOTAL 90 100%
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Graph 4.13
Graph showing the level of information of the respondents regarding
the products of ICICI PRUDENTIAL
Level of information about products of
ICICI PRUDENTIAL
good moderate poor
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TABLE NO: 14
Table showing ICICI PRUDENTIAL advisors who have contacted the
respondents
PARTICULARS FREQUENCY PRECENTAGE
Yes 39 43%
No 51 57%
TOTAL 90 100%
From the above table it can be inferred that:
43% of the 90 respondents have contacted by the advisors of ICICI PRUDENTIAL,
57% of the respondents have not contacted by the advisors of ICICI PRUDENTIAL.
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Graph 4.14
Graph showing ICICI PRUDENTIAL advisors who have contacted the
respondents
0
10
20
30
40
50
60 39
51
ICICI PRUDENTIAL advisors who have contactedthe respndents
Yes
no
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TABLE NO: 15
Table showing the policies preferred by the respondents owning ICICI
PRUDENTIAL life insurance policy
PARTICULARS FREQUENCY PRECENTAGE
Annuity 12 40%Money back 05 17%
Endowment 09 30%
Term 04 13%
TOTAL 30 100%
From the above table it can be inferred that:
40% of 30 respondents who are owing icici prudential life insurance policy prefer
annuity policy, 17% of 05 the respondents of prefer money back policy, 30% of 9 ofthe respondents prefer endowment policy, 13% of the respondents term policy
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Graph 4.15
Graph showing the policies preferred ICICI PRUDENTIALS
customers
0
2
4
6
8
10
12
annuity money back endowment term
12
5
9
4
noof
respondents
Policies prefered by ICICI
PRUDENTIAL'S customers
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TABLE NO: 16
Table showing the rating of the service offered by ICICI PRUDENTIAL
PARTICULARS FREQUENCY PRECENTAGE
Good 18 60%
Average 12 40%
Poor 00 00%
TOTAL 30 100%
From the above table it can be inferred that:
60% of the 30 respondents have an opinion that service offered by ICICI
PRUDENTIAL is good, 40% of the respondents have rated its service as average.
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Graph 4.16
Graph showing service ratings of ICICI PRUDENTIAL
0
5
10
15
20
1
18
12
0noofres
pondents
Service ratings of ICICI PRUDENTIAL
good average poor
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TABLE NO: 17(a)
Table showing whether the respondents are satisfied with the service of
the company
PARTICULARS FREQUENCY PRECENTAGE
Yes 25 83%
No 05 17%TOTAL 30 100%
From the above table it can be inferred that:
83% of the 30 respondents are satisfied with the service of ICICI PRUDENTIAL,
17% of the respondents are not satisfied with its service.
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Graph 4.17
Graph showing level of satisfaction on service of ICICI PRUDENTIAL
83%
17%
Level of satifaction on service of ICICIPRUDENTIAL
yes no
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TABLE NO: 17(b)
Table showing whether the respondents are satisfied with the service ofICICI PRUDENTIAL advisors
PARTICULARS FREQUENCY PRECENTAGE
Yes 17 57%
No 13 43%
TOTAL 30 100%
From the above table it can be inferred that:
57% of the 30 respondents are satisfied with the service provided by ICICI
PRUDENTIAL advisors, 43% of 30 respondents are not satisfied with advisors
service.
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Level of satisfaction on the service of advisors
57%
43%
yes no
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TABLE NO: 18
Table showing how frequently respondents like to pay their premium
PARTICULARS FREQUENCY PRECENTAGE
Monthly 13 43%Quarterly 08 27%
Half yearly 04 13%
Yearly 03 10%
One time single
premium02 07%
TOTAL 30 100%
From the above table it can be inferred that:
43% of the 30 respondents like to pay their premium monthly , 27% of the
respondents like to pay their premium quarterly, 13% of the respondents like to pay
their premium half yearly, 10% of the respondents like to pay their premium yearly,
07% of the respondents like to pay their premium as one time single premium.
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Graph 4.18
Graph showing frequency of payment
Frequency of payment of premium
27%
10%7%
43%13%
monthly
quarterlyhalf yearlyyearlyone time single premium
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TABLE NO: 19
Table showing whether the ICICI PRUDENTIAL policyholders are
receiving premium notice in advance
PARTICULARS FREQUENCY PRECENTAGE
Yes 25 83%
No 05 17%
TOTAL 30 100%
From the above table it can be inferred that:
83% of the 30 respondents have agreed that they are receiving premium notice in
advance, 17% of the respondents have not agreed that they are receiving premium
notice in advance .
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Graph 4.19
Graph showing policy holders who receives premium notice in
advance
0
5
10
15
20
25
yes no
25
5
ICICI PRUDENTIAL policy holders who recievespremium notice in advance
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TABLE NO: 20
Table showing the respondents opinion regarding whether the ICICI
PRUDENTIAL website www.iciciprulife.com is informative and
suggestive
PARTICULARS FREQUENCY PRECENTAGE
Yes 11 37%
No 19 63%
TOTAL 30 100%
From the above table it can be inferred that:
37% of the 30 respondents has an opinion that ICICI PRUDENTIAL website is
informative and suggestive, 63% of the respondents has an opinion that ICICI
PRUDENTIAL website is not informative and suggestive.
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Graph 4.20
Graph showing comments on ICICI PRUDENTIAL web site
37%
63%
Comments on ICICI PRUDENTIAL web site
yes no
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TABLE NO: 21
Table showing the number of respondents who are interested to hold
more policies other than one they are using now
PARTICULARS FREQUENCY PRECENTAGEYes 21 70%
No 09 30%
TOTAL 30 100%
From the above table it can be inferred that:
70% of the 30 respondents are interested to hold more policies, 30% of the
respondents are not interested to hold more than one policy.
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GRAPH 4.21
Graph showing respondents willingness to hold more policies
0
5
10
15
20
25
yes no
21
9
Respondents' willingness to hold more policies
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CHAPTER 5
SUMMARY OF FINDINGS AND
CONCLUSION
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FINDINGS
1. LIC is the clear market leader across all age groups and income levels. May be ICICI
PRUDENTIAL can excuse it self that people in the age of more than 55 years
category could not take its policies because ICIC PRUDENTIAL was not around
when these people made their life insurance choices. But what is disturbing is that the
young age group (25 35) also prefers the government run LIC.
2. Majority of the respondents i.e. 22 respondents have a monthly savings around 2000
4000, 21 respondents said that they have monthly savings around 4000 6000 and
only a few respondents have monthly savings of less than 2000, around 6000 - 8000
and more than 8000.
3. It is inferred from the study that, 31 respondents make the savings for the purpose of
education, 21 respondents make the savings for the purpose of medical expenses, 25
respondents make the savings to buy house or site and few respondents make savings
to buy durable, to buy jewelers and some other purpose also.
4. From the study it is found that majority of the respondents i.e. 22 respondents preferbank deposits for investment purpose, 18 prefer insurance, 13 prefer shares and 12
prefer real estate. So there is a more scope insurance sector as people feel it is secured
and profitable mode investment and this trend can capitalized upon by ICICI
PRUDENTIAL.
5. Most of the respondents give enough care to tax implication while planning their
investments, only a few i.e. 18 respondents does give any importance for tax
implication while planning their investments.
6. In an absurd contrast to the information and awareness of life insurance among the
younger earning generation respondents seems careless to take up insurance. ICICI
PRUDENTIAL can take up the initiative to create awareness of its insurance policies
right from the college level by conducting workshops there.
7. Birla Sunlife is ICICI PRUDENTIALs main competitor for the higher income group
and competitors include Max New York, HDFC Standard Life, and SBI Life etc.
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8. Most of the respondents prefer annuity policies; followed by endowment policies. 16
respondents like to invest in money back policies and only 11 respondents prefer
term.
9. Potential for ICICI PRUDENTIAL exists in the category of respondents aged 25
45 years old earning less than 10000 per month. As awareness of life insurance is
gaining ground here and tomorrow respondents from here will be growing upwardly
mobile and will invest larger amounts in life insurance.
10.Contrary to popular belief life insurance is not being bought for future security (even
though buying an insurance policy automatically implies future security) but for tax
exemption purpose under Sec. 88 of the Income Tax Act, 1961. This is quite risky forinsurance companies because if this tax exemption is withdrawn by the government
later then with this prevailing attitude towards insurance, not many people will be
attractive towards life insurance. Hence ICICI PRUDENTIAL must educate the
public towards the core benefit of life insurance through innovative promotional
campaigns.
11.Life policies have not at all been bought for marriage purpose.
12.From the study, it is clear that majority of the respondents has taken the policy for
themselves and 28 respondents have taken the policy for their spouse. The study also
shows that very less number of respondents have taken the policy for their children
and parents.
13.Most of the respondents are well informed about the products of ICICI
PRUDENTIAL, 27 respondents have an average knowledge and 13 respondents have
only a poor knowledge about it.
14.The ICICI PRUDENTIAL network of advisors should be increased and their
targeting tactics should be strengthened as out of 90 people surveyed only 39 were
contacted by ICICI PRUDENTIAL advisors previously.
One respondent said he would have taken ICICI PRUDENTIALs policy had not
Birla Sunlife approached him earlier. This shows adage the early bird catches the
worm is very true here.
15.Among 30 ICICI policyholders majority prefers annuity policies, 9 respondents prefer
to take endowment policies and a few give preference to money back and term.
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16.Majority of ICICI policyholders rates its service as good.
17.It is found that majority of the ICICI PRUDENTIAL policyholders are satisfied with
the service of both the company and advisors.
18.13 policy holders of ICICI PRUDENTIAL are likes to pay their premium monthly, 8
likes to pay quarterly, few likes to pay half-yearly and only 2 likes to pay as one time
single premium.
19.Majority of the customers of ICICI PRUDENTIAL has agreed that they are receiving
premium notice advance. 5 customers have said that they are not receiving the
premium notice frequently, which also a quite good number out of total 30
respondents. So the company should not ignore it.20.Only 37% of the respondents have logged into iciciprulife.com. The company
should understand that if adequate publicity is given to its website through print,
television, radio, mobile and even through Internet, people would browse through it.
This is important because among all the above media, Internet offered the advantage
of presenting the data in the greatest detail anywhere, any time with constrains of
time and space and the least expense. If matter is presented well the information
seeker can take positive decision.
21.With improving economic conditions people can afford to take up more policies,
which is slowly, but surely coming. Thus ICICI PRUDENTIAL can tap into the 25%
market held by LIC. It also point out that ICICI PRUDENTIAL has 85% of market
potential as many of the existing policy holders are grossly under insured and they
can take additional insurance policies as they progress in their career.
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CONCLUSION
Since the opening up of the insurance sector in 1994, 20 private insurers are in the
fray each one trying to garner more market share than the other. Among all the players
ICICI Prudential with the advantage of being the earliest to operate in the liberalized
insurance market has cornered 3,50,000 policies as on March 31, 2003.
Yet the survey has exposed how far behind LIC is ICICI Prudential. ICICI
Prudential must also be alert what with Birla Sunlife and ING-VYSYA breathing down
its neck.
I am sure the company will find my findings relevant and I sincerely hope it uses
my suggestions enlisted, which I hope will take them miles ahead of competition.
In short, I would like to say that the very act of the concerned management at
ICICI Prudential in giving me the job of critically examining consumer behavior towards
financial products of the company is a step in their continual mission of making all round
improvements as a means of progress.
I am sure the company has a very bright future to look forward to and will be a trailblazerin its own right.
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CHAPTER 6
RECOMMENDATIONS AND
SUGGESTIONS
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SUGGESTIONS
1. Affordable schemes must be launched for the 20 30 year olds drawing less than
5000 rupees per month. This category will rise in the future and ICICI Prudential
must concentrate on catching them young so that the company can generate more
income from the longer service lives of the younger potential policyholders. ICICI
Prudential must not limit itself to serve only the affluent, as it will be ignoring a large
chunk of aspirational Indians. It would be wise for the company to target young
people in the above category and grow along with them as they and the nation
prospers.
2. Many respondents in the 20 40 year old category are saving to buy a house / site.
ICICI Prudential can capitalize on this yearning by offering house loans with low
interest if customers take up its insurance policies.
3. Many respondents in their answer as to why they did not take ICICI Prudential
policies said that ICICI Prudential being a private insurer its reliability and long term
existence is a big question mark. This myth must be broken through an Ad-campaign
through radio, television, print internet that tells that ICICI is nothing but the
Industrial Credit and Investment Corporation of India which was set up as a
public limited company on January 5, 1955 by the government. Hence it has existed
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for 48 years close to half a century and has gone from strength to strength, so why not
even in the future? It can exist for an even longer time with its tremendous reserves
and valuable experience in the financial sector. Even the advisors must sell this fact
of the company to the discerning public.
4. Website Changes:
a) ICICI Prudential must advertise more about its website in the mass
media so people can gain first hand knowledge about its products at
their convenience in a more detailed manner.b) The website is good but instead of having a glossary as a separate
entity, link words which are difficult to understand for a first timer
(even if it is as simple as premium) must be marked up (underlined)
in the text, which upon clicking must open out to a window giving
details.
c) A page must be devoted on why life insurance must be taken plus real
life stories of how people without insurance protection suffered when
tragedies struck them. In contrast happy stories of those who were
smart must be given.
d) Links to other sites extolling the virtues of life insurance must be
given.
e) A page devoted to ICICIs beginning as a developmental bank started
in 1955 must be included in the website to assure potential customers
that this is one company that will stick around for a long time to
come.
f) Exciting contests can be launched for those who visit the website.
g) ICICI Prudential has tied up with Citibank, Allahabad Bank, Federal
Bank, Lord Krishna Bank, Bank of India hence it must advertise in
these websites also. It can also advertise in other financial sections of
websites like rediff.com and indiainfoline.com. Youth sites like
mtvindia.com can also be targeted.
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h) It should highlight in bold letters (not just a mention) that ICICI
Prudential is working for underprivileged sections of the society
(e.g. Dhan).
5. According to Abraham Maslows hierarchy of needs the 2nd step to self actualization
is the fulfillment of the safety needs. Though people feel the need for security a large
number live in an ivory tower oblivious to the uncertainties life could throw up in the
distant future. They procrastinate to take decisions regarding this aspect. It is this
dormant aspect that ICICI Prudential should awaken in people and bring about a
restlessness and unfulfilled feeling regarding their and their familys security. Thenext choice then would be insurance. This could be brought about by an innovative
campaign slogan saying, The decision is now.
6. ICICI Prudential must not target people only when they start earning but much before
that. To gain the early bird advantage they must organize sessions in schools and
colleges giving explanations on life insurance in general and ICICI Prudential in
particular. This will make the younger generation more responsible making them go
in for insurance in a big way at the earliest thus making ICICI Prudential the ultimate
beneficiary to enjoy the income from customers from the very beginning of their
service lives. It can also bring about a stronger brand commitment in this manner.
7. ICICI Prudential should consciously try to change the mindset of people from
investing in life insurance for the sake of tax exemption to that of worry exemption.
India will move into that mode in the future in its journey to being a developed
country as is exemplified by the fact that in developed countries insurance policies
are bought while in developing countries it is sold.
8. Nuclear families and increased life expectancy are two factors that have left the
elderly to fend for themselves. Hence pension is a necessity now than a luxury earlier.
Only 6% of the insurable populations are covered by some pension scheme hence
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ICICI Prudential should tap this existing market and bring about awareness and
innovative schemes.
9. Majority of the respondents in all age and income groups of this survey prefer to save
in banks over insurance citing the reason that banks give better returns. ICICI
Prudential should explode this myth among consumers with the following fact:
The consumers believe that investment in life insurance is not desirable as the
yield on the premia is very low. It is correct that yield on most of the insurance
products is in the range of 7 per cent to 8 per cent only. However, this traditional
concept of investment totally ignores the invisible yield on the death-risk
coverage. For example, a policyholder aged 30 years for an endowment assurance
of 25 years will pay a yearly premium of Rs 4,000 only for a sum assured of Rs 1
lakh. In case he dies after two years, his wife will get Rs 1 lakh in settlement of
death claims against Rs 8,000 premia paid for this policy. However, if the same
consumer makes investment in the recurring deposit of a bank of Rs 4,000 per
year, his wife gets only Rs 8000 plus interest after two years. Hence the insurance
claim amount is much higher than the bank deposits. This applies to other savingsas well. Hence investment in insurance has an edge over other savings in the
event of the death of the consumers.
10. Leverage information technology to service large numbers of customers efficiently
and bring down overheads. Technology can complement or supplement distribution
channels cost-effectively. It can also help improve customer service levels
considerably.
11. Use data warehousing, management and mining to gauge the profitability and
potential of variou