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INTRODUCTION
MARKET
It is the place where goods are bought and sold. Negotiation for such exchanges
happen face-to-face or through medium or through channel of communication market
DEFINITION
According to Philip kotler a market is an area for potential exchange.
According to American marketing association a market is an aggregate demand of
the potential buyers for product service.
MARKETING
Marketing is an important in daily life of human activity. It sets the economy strong
and stable now it is recognized as important function of management and termed as
marketing management. Marketing facilitates the movement of goods from the place of
production to the place of consumption. It is an important activity production of goods and
services has no meaning without marketing. Marketing is an complex activity, it involves
innumerable activities like buying, selling, transporting, warehousing, insurance, trading,
financing etc.
Marketing is all around as our existence our entire economic life a wide range of
marketing activities continuously affects our life style. The food we eat the clothes we wear,
the housing that shelter us the comfort luxuries and amenities we enjoy, all these are affected
each day by the marketing system, marketing is considered to be the soul of modern business
and society.
Thus considering these important reasons a study was undertaken with a view to
study marketing strategies of LIC policies.
Meaning
The word Marketing is derived from latin word Marchatus which means
merchandise ware traffic, trade or a place where goods are bought and sold.
Definitions
By the output of the sales the reward of the industry can be best judged in any
company.
Peter F. Drucker
Human activity directed at satisfying needs and wants through exchange process
absolutely modern marketing involves in those programs of satisfying needs and wants of
the people by over coming are competition from raival people or competing with them.
Philip Kotler
2. IMPORTANCE OF MARKETING
Distribution Channel
Distribution channel concerned with the activities involved in transferring the
products leading up to the final sale to the customer simply put it bridges the distance
between the producer end customer. In the case of life Insurance.
1. Marketing force comprising of gets and development officers forms the distribution
channel.
2. The agents canvas various products of the insurance to the clients and on completion
of the insurance contract they are paid concussion.
3. It is primary the agent who contracts the client and the does the presentation work in
regard to the setting of an insurance policy according to the needs of the client.
Types of Distribution Channels
Types or Classification of Distribution Channels are :
Manufacturers Consumers
Manufacturers Wholesalers Consumers
Manufacturers Wholesalers Retailers Consumers
Manufacturers Agents Wholesalers Retailers Consumers
We are using one of the distribution channels in the LIC are as under ;
LIC Development Officers Agents Customers
Function of an Agent
A life Insurance agent has the unique role of such a person who enjoys the trust of
two parties the prospects and insurer simultaneously in the same transaction.
Exception from an Agent
A life Insurance agent is expected to procure life insurance business in a manner
consistent with the interest of the policyholders and of the Insurance Company.
Keeping customer Happy
The factors that make customer happy are:
1. Recognition and respect: the customer feels recognition when his feelings and
requirements are understood and are not ignored.
2. It happens when the customer finds that the service provider is willing to help
him.
THEORETICAL BACKGROUND
PERCEPTION
Perception is the way in which the individual sees, organizes and interpret objects events and
person.
DEFINITION
According to Stephen P Robbins A process by which individuals organize and interpret
their sensory impressions in order to give meaning to their Environment.
According to Udai Pareek and Others Perception can be Defined as the process of
receiving, selecting, organizing, interpreting ,cheeking and reacting to sensory Stimuli of
data.
PERCEPTUAL PROCESS
Perceptual process that involves Receiving, Selecting Interpreting , cheeking and Reacting to
stimuli it is like an
Input Through output process the Stimuli or instinct can be considered as input i,e.
selection ,organization and interpretation as throughputs and the ultimate behavior or
response as output .
PROCESS IS:
1. RECEIVING STIMULI :
The perception process starts with reception of stimuli .Stimuli are things that Evoke activity
in living beings the Stimuli are received from various source through our sensory organs we
see , hear , smell , taste and touch things . In this way stimuli is physiological aspect of
perception process stimuli may be external use.
2. SELECTIVE STIMULI:
Individual in their everyday life are bombarded by various stimuli . they can not assimilate
all what they observed or receive from environment or a time . hence they select some
stimuli .
3. ORGANIZING STIMULI:
After selecting the stimuli they need to be Organized in some from to assign meanings to
them . This organizing bits of information into meaningful whole is called organization.
4. INTERPRETATTION:
The data collected and organized , remain meaningless to the perceiver till meanings are
assigned to them . assigning meanings to data is called interpretation .
b) EXTERNAL FACTORS:
1. SIZE:
The bigger the size of stimulus the higher is the probability that it is perceived . Size
always attracts the attention because it establishes dominance catch attention as compared to
few lines in the classified section.
2. REPETITION:
The Repetition principle states that a repeated external stimulus drawing than asingle
one.
3. MOVEMENT:
The principle of motion states that a moving object receives more attention than an
object which is standing still . Moving car among the parked car catch our attention.
4. LOCATION:
The best location of visual stimulus for attracting attention is directly in the front of
the eyes and center of the page.
CONSUMER BEHAVIOUR
Consumer is the king this is all the more accept for todays business environment
everywhere all other factors remaining more or less constant it is the value addition to the
customer that is making all the difference. Consumer is one who buys goods and services for
ultimate consumption. The aim of the consumer is to satisfy his needs through product or
services. Consumer may decide or may not decide to buy the product the marketers aim is to
attract the consumer to go for the products.
Behavior is a mirror in which everyone shows his or her image. Behavior is the
process of responding to stimuli. Consumer behavior is to do with the activities of
individuals in obtaining and using the goods and services, it compasses the decision making
process that precedes and determines purchases. Consumer behavior is all the psychological,
social and physical behavior of potential customers as they become aware of evaluate
purchase consume and tell others about the products or services
DEFINITIONS
According C.G. Walter consumer behavior is the process whereby individual decides
whether what, where, when and how and from when to purchase goods and services.
According to Philip kotler consumer behavior refers to the buying behaviors of the
final consumers, individuals and households who buy goods services for personal
consumption .all of these consumers combined to make up the consumer market.
According to F.Engel consumer behavior refers to the actions and decision process of
people who purchase goods and services for personal consumption.
CONSUMER PROFILE
Consumer profile is the biographical sketch of a person. To be very exact, consumer
profile stands for the details of a consumer as photographed from different angles of a
strategic camera of a marketer. It has economic, social, psychological and cultural
dimensions with specific reference to his consumption pattern. Consumer profile speaks of
his life style or quality of life or the standard of living. It is an individual file or a cases paper
as maintained by a doctor or a lawyer that helps the marker to understand the consumer from
nearest point or a close up photograph where details are clear that go a long way in preparing
marketing plans, programs and strategies and finally developing a matching marketing mix
as per his or her specifications.
LEARNING MODEL
All theories of buyer behavior have been basically based on a learning model namely,
stimulation-response or more popularly known as SRmodel.SR learning theory is very useful
to modern marketing and marketers. Learning is the centrifugal point in the entire study of
human behavior. Learning, as noted earlier, refers to a change in the behavior which occurs
as a result of practice. it is a change in the behavior that results from previous experience and
behavior in similar situations. What is important, learning is the product of reasoning.
Thinking, information processing and, of course, perception. Therefore behavior is deeply
affected by the learning experiences of the buyers.
SOCIOLOGICAL MODEL
According the sociological model, the individual buyer behavior is influenced by
society-by intimate groups as well as social classes. That is, his buying decisions are not
totally determined by the concept of utility. That is his buying decisions are governed by
social compulsions.
USE OF MODELS
Models are devised for a variety of reasons but the purposes for developing most
consumer models are
To assist in constructing a theory that guides research on consumer behavior
To facilitate learning what is presently known about consumer behavior. In both
cases the model serves to structure systematic and logical thinking about
consumers. This entails
o Identifying the relevant variables
o Indicating their characteristics
o Specifying their interrelationships, that is how they influence each other
Broadly considered therefore consumer behavior and human behavior would be rarely
synonymous fields of study since the human beings are involved a few decades back
consumer behavior received only very little emphasis in the basic marketing causes today it
has its own distinct area for scholarly investigation.
The main reason consumer behavior coming to the spotlight is the change that taken
places in the demand supply relationships; the modern consumer is better place. Then his
counterpart half a century ago. Now the consumer is free to choose from many options
making him the king in the modern market. Thus the business firms are now compelled to
design and sell products that confirm to the consumer desires.
The better meet the needs of specific growth of consumers, most marketers adopted a
policy of market segmentation which called for the division of their total potential markets
into smaller homogeneous segments for which they could design specific products and or
promotional campaigns.
As marketing researchers began to study the buying behavior of consumers. They soon
realized that despite a sometimes "me too approach to feed and fashions, many consumers
rebelled at used instead they preferred differentiated products that they felt reflected their
own special needs personalities and life styles.
They also used promotional techniques to vary the image of their products so that they
would be perceived as better fulfilling the specific needs of certain targets segments-a
process now known as positioning. Other reasons for the developing interest in consumer
behavior included the rate of new product development growth of the consumer movement
public included the rate or new product development growth of the consumer movement
public policy concerns environmental concerns and the growth of both non-profit marketing
and international marketing.
Subculture
Each culture contains different subcultures such as religions, nationalities, geographic
regions, racial groups etc. Marketers can use these groups by segmenting the market
into various small portions. For example marketers can design products according to
the needs of a particular geographic group.
Social Class
Every society possesses some form of social class which is important to the marketers
because the buying behavior of people in a given social class is similar. In this way
marketing activities could be tailored according to different social classes. Here we
should note that social class is not only determined by income but there are various
other factors as well such as: wealth, education, occupation etc.
Social Factors
A consumers behavior also is influenced by social factors, such as the (i) Groups (ii)
Family (iii) Roles and status
Reference Groups
Reference groups have potential in forming a person attitude or behavior. The impact
of reference groups varies across products and brands. For example if the product is visible
such as dress, shoes, car etc. then the influence of reference groups will be high. Reference
groups also include opinion leader (a person who influences other because of his special
skill, knowledge or other characteristics).
Family
Buyer behavior is strongly influenced by the member of a family. Therefore marketers are
trying to find the roles and influence of the husband, wife and children. If the buying decision
of a particular product is influenced by wife then the marketers will try to target the women
in their advertisement. Here we should note that buying roles change with change in
consumer lifestyles.
Personal Factors
Personal factors can also affect the consumer behavior. Some of the important
personal factors that influence the buying behavior are: lifestyle, economic situation,
occupation, age, personality and self-concept.
Age
Age and life-cycle have potential impact on the consumer buying behavior. It is
obvious that the consumers change the purchase of goods and services with the passage of
time. Family life-cycle consists of different stages such young singles, married couples,
unmarried couples etc which help marketers to develop appropriate products for each stage.
Occupation
The occupation of a person has significant impact on his buying behavior. For
example a marketing manager of an organization will try to purchase business suits, whereas
a low level worker in the same organization will purchase rugged work clothes.
Economic Situation
Consumer economic situation has great influence on his buying behavior. If the
income and savings of a customer is high then he will purchase more expensive products. On
the other hand, a person with low income and savings will purchase inexpensive products.
Lifestyle
Personality
Personality changes from person to person, time to time and place to place. Therefore
it can greatly influence the buying behavior of customers. Actually, Personality is not what
one wears; rather it is the totality of behavior of a man in different circumstances. It has
different characteristics such as: dominance, aggressiveness, self-confidence etc which can
be useful to determine the consumer behavior for particular product or service.
Psychological Factors
There are four important psychological factors affecting the consumer buying
behavior. These are: perception, motivation, learning, beliefs and attitudes.
Motivation
The level of motivation also affects the buying behavior of customers. Every person
has different needs such as physiological needs, biological needs, social needs etc. The nature
of the needs is that, some of them are most pressing while others are least pressing. Therefore
a need becomes a motive when it is more pressing to direct the person to seek satisfaction.
Perception
Selecting, organizing and interpreting information in a way to produce a meaningful
experience of the world is called perception. There are three different perceptual processes
which are selective attention, selective distortion and selective retention. In case of selective
attention, marketers try to attract the customer attention. Whereas, in case of selective
distortion, customers try to interpret the information in a way that will support what the
customers already believe. Similarly, in case of selective retention, marketers try to retain
information that supports their beliefs.
CUSTOMER SATISFACTION
Customer satisfaction is an abstract concept and the actual manifestation of the state
of satisfaction will vary from person to person and product/service to product/service. The
state of satisfaction depends on a number of both psychological and physical variables which
correlate with satisfaction behaviors such as return and recommend rate. The level of
satisfaction can also vary depending on other factors the customer, such as other products
against which the customer can compare the organization's products.
Work done by Parasuraman, Zeithaml and Berry (Leonard L) between 1985 and 1988
delivered SERVQUAL which provides the basis for the measurement of customer
satisfaction with a service by using the gap between the customer's expectation of
performance and their perceived experience of performance. This provides the researcher
with a satisfaction "gap" which is semi-quantitative in nature. Cronin and Taylor extended the
disconfirmation theory by combining the "gap" described by Parasuraman, Zenithal and
Berry as two different measures (perception and expectation) into a single measurement of
performance relative to expectation.
The usual measures of customer satisfaction involve a survey with a set of statements
using a Likert Technique or scale. The customer is asked to evaluate each statement in terms
of their perception and expectation of performance of the service being measured. Arguably,
consumers are less complex than some of these surveys tend to portend. They are basically in
two simple states satisfied or not satisfied. On or off, just like a switch. A business can
measure its customer satisfaction index by relating the aggregates of satisfied customers
versus dissatisfied customers.
LEVELS OF CUSTOMER SATISFACTION
By Brian Tracy If sales are the engine that drives your business, then customer
satisfaction is the fuel. Your ability to satisfy your customers is the critical determinant of
your success in driving sales and growing your business. There are four levels of customer
satisfaction, all based on the degree to which you meet customer expectations. The higher the
level you achieve, the more you will build customer loyalty and the greater will be your
success.
Customer expectations
The minimum requirement to simply stay in businessto surviveis to meet the
expectations of your customers. At this level, your customers have no complaints. They are
satisfied for the moment. But they are not loyal. If a competitor demonstrates that it can and
will do more than merely meet their expectations, your customer will very quickly become
ex-customers. Moreover, if you fail to meet their expectations, perhaps only one time, they
will leave and find someone else who will. It can be instructive to observe your local
merchantstrue entrepreneurs.
Customer value
It is defined as the difference between what a customer gets from a product, and what
he or she has to give in order to get it. It helps people and companies unlock their inner
creative power and achieve amazing results. Relative performance identifies how the product
or service gives customer value relative to what competitors offer. In order to generate more
thought about customer value, and to reach out to a customer base, a business might promote
a customer value proposition. The customer value proposition is basically a promise of
benefits from a vendor to customers.
Purpose of Studying Consumer Value
Using information about consumer value and the way consumers perceive a business
and its products, marketers can try to increase sales and encourage repeat business. Further,
consumer value may be of use for business managers in determining the market structure.
With more detailed knowledge of the characteristics of the market, businesses can work to
expand product-market boundaries or manipulate prices to increase profits
Economic models
These models are largely quantitative and are based on the assumptions of rationality
and near perfect knowledge. The consumer is seen to maximize their utility. See consumer
theory. Game theory can also be used in some circumstances.
Psychological model
These models concentrate on psychological and cognitive processes such as
motivation and need recognition. They are qualitative rather than quantitative and build on
sociological factors like cultural influences and family influences.
What was horrible about our outsourcing relationship in the beginning is that our
expectations were unclear. Thats a horrible formula for success. The person stating this
assessment described a troubled but remediated and turned-around relationship that
Outsourcing Center studied in its annual Outsourcing Excellence and Sourcing Awards
program.
Like the relationship just described, industry analysts and consulting advisors called
in to remediate relationships on the brink of failure often find the root cause of both parties
frustration lies in the buyers unclear expectations of the service providers performance.
Unfortunately, this is not an uncommon situation at the beginning of relationships.
Regrettably its also not uncommon for this to occur later in a relationship that is
successful until the point when the buyers vision for its business or for the outsourcing
relationship changes due to new needs. When organizations alter their business vision or
needs, change management comes into play; and expectation-setting is a top priority in
change management. In outsourcing, the more clearly a buyer sets expectations, the greater
chance there is for achieving the desired outcome.
Outsourcing Center spoke with more than 60 clients in the nominated relationships in
its 2010 awards program to identify their lessons learned and best practices in
communicating their expectations to their service providers. Twenty responded with
information about their best practices in setting expectations around their future vision and
changing needs so that their own internal teams as well as the providers team embrace
change and new ideas.
CUSTOMER AWARENESS
The process of development along with the expanding globalization and liberalization
process has increased the number of consumer related issues. Consumer protection has
earned an important place in the political, economic and social agendas of many nations. In
India, the Government has taken many steps including legislative, to protect consumers.
It is, therefore, our bounden duty to play our part jointly and effectively in
disseminating various schemes to the common consumers of the country. In this regard, the
role of the voluntary consumer organizations, consumer activists, non-governmental
organizations, educational institutions and media cannot be ignored.
The Right to Safety - to be protected against the marketing of goods which are
hazardous to health or life.
The Right to be heard - to be assured that consumer interests will receive full and
sympathetic consideration in the formulation of Government policy, and fair and
expeditious treatment in its administrative tribunals.
Responsibilities
Consumer responsibility can be divided into three phases. Initially, the consumer was
supposed to be concerned only with value for money, information and production of
consumer goods.
In the second phase, the aware consumer challenged the large corporations and their
Marketing strategies and advocated consumer cause.
In the third and the current phase, the consumer is expected to be aware of the
Environmental implications of each product on the market shelf and be aware of his/her
Duties and responsibilities as a consumer and as a citizen. Currently, the crucial area of
concern is the question of consumer priority. In other Words, this means what the consumer
should look for: Whether to purchase cheaper and More easily available products or to look
out for fair trade practices, environmental costs.
And public health. The ethical and ecological facts of consumer behavior have helped
to evolve the Concept of consumer responsibility. A responsible consumer is a person who
exercises his/her discretion with the full Awareness of the implication of his/her right to
choice, and is accountable or answerable to other consumers and to the environment for
his/her purchase decisions.