International Referred Research Journal,September ,2011,ISSN-0975-3486, RNI: RAJBIL 2009/30097, VOL-II *ISSUE 24

Research Paper Commerce

P's of Marketing and Life Insurance

INDUSTRY -Elements of Benefit
September, 2011

* Desh Deepak Srivastava ** Dr. K. Singh

*-**Dept. of Commerce, B.B.D.P.G.College, Paruiya Asharam, Ambedkarnagar, Dr.R.M.L.

AvadhUni.Faizabad
AB STRACT
Many life insurance company was running before the nationalisation of life insurance corporation in 1956.It provides service to
give insurance in India through selling of insurance product to sale any type of product marketing of this is very crucial point .Then
there is use of the concept of 4P's of marketing mix is very compulsory .Because of insurance product is service product insurance
marketing needs additional 3P's of marketing mix-People,Process,Physical Distribution.To give specific touch in insurance marketing for growth of business .Now in present time of life insurance marketing where hard competition is stand need of one more
P-Physical evidence is too important to run in competitive marketI

It is not sufficient that you perform well but it is also

important that you let others know about the quality of
your positive contributions.LIFE INSURANCE
MARKETING:The term Life Insurance Marketing
refers to the marketing of Insurance services with the
aim to create customer and generate profit through
customer satisfaction. The LifeInsurance Marketing
focuses on the formulation of an ideal mix for Insurance business so that the Life Insurance organisation
survives and thrives in the right perspective.
MARKETING --MIX FOR LIFEINSURANCE
COMPANIES:
The marketing mix is the combination of
marketing activities that an organisation engages in
so asto best meet the needs of its targeted market. The
Insurance business deals in selling services
andtherefore due weight-age in the formation of marketing mix for the Insurance business is needed.The
marketing mix includes sub-mixes of the 7 P's of
marketing i.e. the product, its price, place,promotion,
people, process &physical distribution .One more Pphysical attraction or evidence is help in growth of
insurance business and maintain a signage touch to
every insurance company.so frist ,abovementioned 7
P's and also 8th P can be used for marketing of life
Insurance products, in the following manner:1PRODUCT: A product means what we produce. . A
product is both what a sellerhas to sell and a buyer has
to buy. Thus, an Insurance company sells services and
therefore services are their product. A service is a bundle
of features and benefits. However these benefits have
relevance to a specific target market. Hence while
developing a service package it is important that the
package of benefits in the service offer must have a
customer perspective. The first level is that of basic

INTRODUCTION:
Wherever there is uncertainty there is risk.
We do not have any control over uncertainties which
involves financial losses. The risks may be certain
events like death, pension, retirement or uncertain
events like theft, fire, accident, etc. Insurance is a financial service for collecting the savings of the public
and providing them with risk coverage. The main
function of Insurance is to provide protection against
the possible chances of generating losses. It eliminates
worries and miseries of losses by destruction of property and death. When insurance is about human life
aspects it is named as life insurance.
NOW INTRODUCTION TO LIFE INSURANCE:
Life insurance or life assurance is a contract
between the policy owner and the insurer, where the
insurer agrees to pay a designated beneficiary a sum of
money upon the occurrence of the insured individual's
or individuals' death or other event, such as terminal
illness or critical illness. In return, the policy owner
agrees to pay a stipulated amount at regular intervals
or in lump sums. There may be designs in some countries where bills and death expenses plus catering for
after funeral expenses should be included in Policy
Premium. In the United States, the predominant form
simply specifies a lump sum to be paid on the insured's
demise.Types of Life Insurance :1. Term insurance
policy 2. Whole life policy 3.Endowment policy4.
Money back policylic .It also provides capital to the
society as the funds accumulated are invested in productive heads. Life Insurance comes under the service
sector and while marketing this service, due care is to
be takenin quality product and customer satisfaction.
While marketing the services, it is also pertinent that
they think about the innovative promotional measures.

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International Referred Research Journal,September ,2011,ISSN-0975-3486, RNI: RAJBIL 2009/30097, VOL-II *ISSUE 24

service package which includes core service, facilitating services and supporting services. The 2nd level is
that of an augmented service offering where accessibility interaction and customer participation is given
equal importance in delivering the service product
.the third level is that of the market communication of
the service offering as in its absence the augmentation
service package doesn't have any relevance to the
customer.In India, the Life Insurance Corporation of
India (LIC) and 22 the Private players( icicipru life
insurance,bajajAllianz,met life, birla,etc. are offering
life insurance services to the users. Apart from offering life insurance policies, they also offer underwriting and consulting services.When a person or an
organisation buys an lifeInsurance policy from the
insurance company, he not only buys a policy, but
along with it the assistance and advice of the agent, the
prestige of the insurance company and the facilities of
claims and compensation.It is natural that the users
expect a reasonable return for their investment and the
Life insurancecompanies want to maximize their
profitability. Hence, while deciding the product portfolio or theproduct-mix, the services or the schemes
should be motivational. The Group Insurance scheme
isrequired to be promoted, the Crop Insurance is required to be expanded and the new schemes andpolicies
for the villagers or the rural population are to be included.
2. PRICING: A particular product or service is acceptable to the customer at a particularprice and if the
price ids increased it is likely that the same product or
service might become less acceptable to the customer.
Service pricing follows the principles and practices of
pricing of goods and therefore they are either cost
based or market based.Following aspects should be
taken into consideration while pricing services:1.
Demand fluctuations should be successfully handled
2. Service prices should be based on costs so as to take
into account the tangible clues 3. Service pricing should
be such as to provide value addition and quality indication 4. The pricing strategy should cope up with the
degree of competition.But the life insurance business
the pricing decisions are concerned with:
i) The premium charged against the
policies,ii) Interest charged for defaulting the payment of premium and credit facility, andiii) Commission charged for underwriting and consultancy
activities.With a view of influencing the target market
or prospects the formulation of pricing strategy becomes significant. In a developing country like India
where the disposable income in the hands of prospects
is low, the pricing decision also governs the transformation of potential policyholders into actual
policyholders.The strategies may be high or low pric-

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ing keeping in view the level or standard of customers

or the policyholders.1-The pricing in life insurance is
in the form of premium rates. The three main factors
used fordetermining the premium rates under a life
insurance plan aremortality,,expense ,interest.The
premium rates are revised if there are any significant
changes in any of these factors.o Mortality (deaths in
a particular area):When deciding upon the pricing
strategy the average rate of mortality is one of the
main. In a country like South Africa the threat to life
is very important as it is played byhost of diseases but
in india it is less then South Africa.o Expenses:
The cost of processing, commission to agents,
reinsurance companies as well as registration are
allincorporated into the cost of instalments and premium sum and forms the integral part of thepricing
strategy.o Interest:The rate of interest is one of the
major factors which determines people's willingness
to invest in Life Insurance. People would not be willing to put their funds to invest in Life Insurance business if theinterest rates provided by the banks or other
financial instruments are much greater than the perceived returns from the insurance premiums.Pricing
objectives:The pricing of services is greatly influenced
by the basic service characteristics. However in setting
price objectives several factors in relation to the overall marketing strategy of the corporation should be
consideredPlanned market position for the service
product: Gitlow suggested that price not only influences the market position but also affect the customers
perceptual positioning. It is therefore important to keep
market or customer position . Product life cycle: the
stage of life cycle of the life insurance product is of
utmost importance. Also you have to consider the elasticity of demand i.e. whether the demand is sensitive
to the change in price or notCompetition: competition should be studied both from the point of interbrand
and also from the viewpoint of the brand that provides
the same need satisfaction. For e.g. LIC is facing competition from other private players but also from
therailways faster trains on the same routes during
convenient timings .Strategic role of pricing: Lastly
it is important to understand the strategic role of pricing in your overall marketing strategy.
3. PLACE: This component of the marketing mix is
related to two important facets - (a)Managing the Life
Insurance personnel, and (b) Locating a branch
office.The management of agents and insurance personnel is found significant with the viewpoint
ofmaintaining the norms for offering the services. This
is also to process the services to the end userin such a
way that a gap between the services- promised and
services -- offered is bridged over. In amajority of the
service generating organizations, such a gap is found

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International Referred Research Journal,September ,2011,ISSN-0975-3486, RNI: RAJBIL 2009/30097, VOL-II *ISSUE 24

existent which has beeninstrumental in making worse

the image problem.The transformation of potential
policyholders to the actual policyholders is a difficult
task that depends upon the professional excellence of
the personnel. The agents and the rural career agents
acting as a link, lack professionalism. The front-line
staff and the branch managers also are found not assigning due weight-age to the degeneration process.
The insurance personnel if not managed properly would
make all efforts insensitive. Even if the policy makers
make provision for the quality upgrading the promised services hardly reach to the end users. It is also
essential that they have rural orientation and are well
aware of the lifestyles of the prospects or users. They
are required to be given adequate incentives to show
their excellenceWhile recruiting agents, the branch
managers need to prefer local persons and provide
them training and conduct seminars. In addition to the
agents, the front-line staff also needs an intensive training programme to focus mainly on behavioural management. given proper attention.
Therefore place is important but other than
place what is more important is wide distribution of
policies through banks directly. It is known as
Bancassurance. It is a term used to describe the partnership or relationship between a bank and an insurance company whereby the insurance company uses
the bank sales channel in order to sell insurance products. By selling insurance policies bank earns a revenue stream apart from interest. It is called as feebased income. This income is purely risk free for the
bank since the bank simply plays the role of an intermediary for sourcing business to the insurance
company.So, ICICI Bank uses bancassurance to distribute policies to its customers. ICICI Prudential Life
has one of the largest distribution networks amongst
private life insurers in India.
It has a strong presence across India with
1,960 branches (including 1,096 micro-offices) and
an advisor base of over 230,000 (as on December 31,
2009).ICICI Prudential has 6 bancassurance partners
having tie-ups with ICICI Bank, Jalgaon Peoples Coop Bank, Ratanagiri District Central Co-op Bank,
BalliaKshetriya Co-operative Bank ,Renuka Nagrik
Sahakari Bank, Bhandara Urban Co-operative
Bank.Mostly all private life insurance companies are
using bancassurance model. Other than this all ICICI
Prudential Life Insurance offices are at significant
locations. Now LIC also use banccassurance through
their bank agent and Fses -central Bank, Uco ,Indian
Overseas Bank,Lucknow Khetriya Grameen
Bank,Dena Bank Etc.
4. Promotion: The Life Insurance services depend on

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effective promotional measures. In a country like India, the rate of illiteracy is very high and the rural
economy has dominance in the national economy. It is
essential to have both personal and impersonal promotion strategies. In promoting insurance business,
the agents and the rural career agents and banks play
an important role. Due attention should be given in
selecting the promotional tools for banks,agents and
rural career agents and even for the branch managers
and front line staff. They also have to be given proper
training in order to create impulse buying.
IMPERSONAL COMMUNICATIONAdvertising and Publicity, organisation of
conferences and seminars,incentive to policyholders
are. Arranging Kirtans, exhibitions, participation in
fairs and festivals, rural wall paintings and publicity
drive through the mobile publicity van units would be
effective in creating the impulse buying and the rural
prospects would be easily transformed into actual
policyholders.Here is a life insurance promotion
through ICICI PRU husband to help him fulfil 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.
"After the hugely successful Chintamani (retirement)
and SaatPhere (corporate) campaigns, ICICI Prudential Life Insurance also introduced some innovations
in the category, such as: 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.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, it also entered into alliances with telecom
companies.Now above these 4 P's when inter related
with 3 P's of marketing mix.then it help to service
marketing- life insurance marketing let's see these5.
PEOPLE:Understanding the customer better allows
to design appropriate products. Being a service industry which involves a high level of people interaction,
it is very important to use this resource efficientlyin
order to satisfy customers. An essential ingredient to
any service provision is the use of appropriate staff and
people. Recruiting the right staff and training them

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International Referred Research Journal,September ,2011,ISSN-0975-3486, RNI: RAJBIL 2009/30097, VOL-II *ISSUE 24

appropriately
in the deliveryand
of their
is essenof alliance betweeninsurers
banksservice
will emerge,
tial if the organisation
wants to obtain apoint
form of
of view
compopularly
known as bancassurance.My
petitive
that in liadvantage.
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mix one P ismake
addedjudgments
because itand
is a
delivertoperceptions
service
based
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play a roleoftothe
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insurance
ees
should
havewith
the service
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till toStaff
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matured
ate
skills,
aptitude, and service
knowllikeinterpersonal
providing policy
status,knowledge
of other
seredge to
thewhere
service
are paying
vices
to provide
customer
he that
is.Inconsumers
service industry
role
for..
To look
on this we
see care
ICICI
Prudential
hasallgood
ofphysical
evidence
is like
taker
that have
number oftotalented
people
in their
The
response
save cared
person
and organization
he keeps him. neat
people
strategy
of ICICI
is "To
build a comand clean.
A example
-If Prudential
you walk into
a restaurant
mittedexpectations
team with aare
culture
of innovation,
learning and
your
of a clean,
friendly environment.
growth.
The Human
Resource
ICICI
PruEvery insurance
customer
wantFunction
to knowatabout
their
dential drives
the people
the business.
With
policies
it is possible
onlystrategy
throughofphycial
evidence
its initial
focus
on operational
excellence
to deliver
that
policies
status
is provide by
the companies
time to
benefits
and services
to staff members,
now
time through
agent . Through
the figureHR
andisdescripcommitted
to building
capability
through state
of the
tion
we know
use of term
in life insurance
marketing.
art processes.
A Evidence
robust performance
management
sysPhysical
-Where is the
service being
tem, compensation
andisathe
segmented
delivered?
Physicalsystem
Evidence
element training
of the
architecture
enableallows
it to deliver
value to again
the organizaservice mix which
the consumer
to make
tion. The company
provides an If
enabling
environment
judgments
on the organisation.
you walk
into a resto
fosteryour
growth
and learning
foratheir
employees.Every
taurant
expectations
are of
clean,
friendly enmember of the ICICI Prudential team is committed to
5 core values:* Integrity* Customer First *
Boundaryless* Ownership * PassionThese values shine
forth in all we do, and have become the keystones of
our success.
6. PROCESS: The process should be customer friendly
in Life insurance industry. The speed and accuracy of
payment is of great importance. The processing method
should be easy and convenient to the customers. Instalment schemes should be streamlined to cater to the
ever growing demands of the customers. IT & Data
Warehousing will smoothen the process flow. IT will
help in servicing large no. of customers efficiently and
bring down overheads. ( the product describes the features provided by the insurer like maturity bonus, claims
allowed etc. These features vary from product to product), sum assured (the amount for which the client is
covered), term (number of years for which the client is
to be covered) and premium amount (instalment
amount to be paid by the client to the insurer). The
agent who brings this proposal is termed as a base/
servicing agent for the proposal.The proposal will go
through various stages of approval &risk evaluation
by the "Central Processing Centre" of the ICICI Prudential. Upon final approval, a legal agreement, termed
as policy, between the insurer and the client is prepared whereby the insurer covers the client for the sum
assured. The client is also entitled for some additional
benefits, if any, depending on the features of the product taken in the policy. The base agent gets a commission for the policyThe client pays a premium at
regular intervals. These subsequent premiums are
termed as renewal premiums. The base agent gets a

vironment. On
commission
onan
theaircraft
renewal
if premium
you travelalso.The
first class you
client mayenough
expect
come back
roomwith
to besome
able alterations
to lay down!
to the
Likepolicy
this
viz.Life
in
increase/decrease
Insurance marketing
in sumPhysical
assured,evidence
increase/decrease
is an
of the term
essential
ingredient
of policyofetc.
theThe
service
insurer
mix,will
consumers
make thewill
relevant
make
perceptions
changes tobased
the policy
on their
andsight
willofissue
the service
endorsements stating
provision
which
thewill
alterations
have animpact
made and
ontheir
the effect on
the policy During
organisations
perceptual
the term
plan of the policy,
service.includes
the client
can submit
facility
design,
claims.
equipment
The insurer
signage,
makes
employee
paymentdress,
against
the claim after
tangibles,
reports
verification.
and statements.
Depending
Signage
on personifies
the type of
claim
the
insurance
the policy
company.
is eitherItterminated
gives a identity
or is kept
by which
in force.At
the end
users
recognize
of the term
the of
company.
the policy,
A signage
the client
depicts
gets the
the sum
assured as part
company's
philosophy
of the maturity
and policy.
benefit under life insurance policies. In addition to this the client will get the
CONCLUSION:
maturity
From
bonus
above
anddiscussion
any other benefits
that in marketing
dependingofon
the product
life
insurance
feature.
7P's have a important role to make busi7. PHYSICAL
ness
of insurance
DISTRIBUTION:
without these or lose any one all
marketing
Distribution
strategiesis isa key
insufficient
determinant
to make
of success
insurance
for all insurance
sales.but
if insurance
companies.
industryToday,
consider
the to
nationalized
8th one insurers have
physical
evidence
a large
it make
reachmore
and presence
sale because
in India.
of signage
Building a which
advantage
distribution
customer
network
wantisthis
very
time,customer
expensive and
time consuming.
behaviour
is to gain
If the
more
insurers
facility
are willing to take
.advantage of India's large population and reach a profitable mass of customers, then new distribution avenues and alliances will be necessary.Initially life insurance was looked upon as a complex product with a
high advice and service component. Buyers prefer a
face-to-face interaction and they place a high premium
on brand names and reliability. As the awareness increases, the product becomes simpler and they become
off-the-shelf commodity products. Today, various intermediaries, not necessarily life insurance companies,
are selling insurance.

For example.The financial services industries

have successfully used remote distribution channels
such as telephone or internet so as . Finance companies
and banks can emerge as an attractive distribution
channel forinsurance in India. In India also, banks
REFERENCE
hope to maximize expensive existing networks by sell* Life Insurance-b.p. Agarwal, Sahitya Bhawan ,Agra.* Element
Chandra
ingOfa Insurance-bal
range of products.
It is Srivastava,Sahitya
anticipated that rather
Bhawan Agra.* Goggle Website. * www.licofindia.co.in* Maggines
-business
Today *arrangements,
News Papers *a loose network
than formal
ownership
Www.thelermarketing.net * Www.iciciprulife.com/
R
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