A Project Report On A study on Consumer Buying Behavior of insurance policies (With reference to LIC of India)

SUBMITTED TO

UNIVERSITY OF PUNE FOR PARTIAL FULFILLMENT OF 2 YEAR FULL TIME COURSE MASTER OF MARKETING MANAGEMENT (MMM)

BY

Dinesh Kumar
MMM (2011-2013)

UNDER THE GUIDANCE OF

Prof. A.Ramakumar

SINHGAD INSTITUTE OF MANAGEMENT, Vadgaon, Pune (2011 2013)

DECLARATION

I, the undersigned, hereby declare that the Project Report entitled A study on Consumer Buying Behavior of insurance policies with reference to LIC of India written and submitted by me to university of Pune. In the partial fulfillment of the requirements for the awards of degree of Master of Marketing Management (MMM) under the guidance of Prof. Mr. A. Ramakumar. This is my original work and the conclusions drawn there in are based on the material collected by myself.

Place: Pune

Date:

Dinesh Kumar

ACKNOWLEDGEMENT

Co-operation and building up of moral are the essence of success. These are two factors that go a long way in achieving it. It is a Herculean task, which lacks these two determinants of success. Summer training was an exposure to corporate environment. It was an opportunity and great pleasure for me to be in such an environment and having interaction with concerned people. I am highly obliged to Mr. Sudhir Singh (Development officer, LIC Minthouse, Nadesar, Varanasi branch) who provided me the opportunity for doing my summer training at LIC, and would like to thank him for their guidance and help which had made it possible for me to complete my project work successfully. Finally, I would like to thank Dr.Subhash Awale (Director), and Prof. A.Ramakumar, my project guide at the Sinhgad Institute Of Management, for their enlightening and meticulous guidance for the consummation and evaluating of this project. I also wish to pay my sincere regards to all my respected teachers who helped me build a concrete platform before sending me for training so that I can land out firmly in all respects.

Thanks and regards, Dinesh Kumar

TABLE OF CONTENTS

S.NO.
1. 2.
Executive Summary Chapter 1 1.1 1.2 1.3 1.4

TITLE

PAGE NO.
56 7 11

Introduction Objectives Significance of the study Scope of the Study 12 17

3.

Chapter 2 Conceptual Background

4.

Chapter 3 Organizational Profile

18 31

5.

Chapter 4 Research Methodology

32 35

6.

Chapter 5 Data Analysis And Interpretation

36 50

7.

Chapter 6 1.1 1.2 1.3 1.4 Findings Suggestions Recommendations Conclusion

51 56

8. 9.

Bibliography Annexure

57 58 62

Executive Summary
Someone has greatly said that practical knowledge is far better thanc lassroom teaching. During this project I fully realized this and come to know about the present real world of Insurance sector. It includes all the activities involved in providing insurance products to the final customers. I am pleased to know about the consumers wants and competitors activities in the real world of Insurance. The subject of my study is to analyze the present insurance sector and products offered by LIC by applying various tools like cold calling and through direct interaction with customers. I have also done research on the growth of private life insurance companies in the last five years. The report contains first of all brief introduction about the company. Then it contains the current status of private insurance companies and foreign insurance companies in India. I also put forward recommendations of the consumers and conclusionsthat will help LIC to provide consumer satisfactory servic es in the insurance sector. Every human being has the tendency to save to protect him from risk or events of future. Insurance is one from of savings where in people try to assure themselves against risks or uncertainties of future. In this research we are going to study about the insurance current view of consumers and the factors that on which consumers are going to buy the insurance. The objectives of this study is to know the source is awareness of LIC

and its insurance policies and To know the views of customers

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abound insurance policies and on the investment options and to know the customer preference of various insurance companies and to know the level of influence that a policies as on the minds of policies holders, to analyze the various aspects of LIC and do a complete SWOT analysis of the organization.
Consumer behavior is affected by a host of variables, ranging from personal motivations, need, attitudes and vales, personality characteristics, socio-economic and cultural background, age, sex, professional status influence of various kinds exerted by family, friends, colleagues and society as a whole. Psychological factors such as individual customer needs and motivations, perceptions, attitudes the learning process and personality characteristics are the similarities which operate across different people and influence their behavior. Amongst the social influence affecting behavior, we can classify the influence of family, friends, leaders and the social class to which the consumer belongs. Finally during the project I observe that every LIC is launching more attractive plans for every kind of consumers in endowment, whole life, and also in unit linked insurance plan.

CHAPTER - 1
1.1 Introduction:
Insurance is a social device where uncertain risks of individuals may be combined in a group and thus made more certain - small periodic contributions by the individuals provide a found out of which those who suffer losses may be reimbursed. In addition to being a means to protect oneself, the insurance Industry is an efficient conduit for the saving of people to be channelled towards economic growth. In India, the Insurance Industry7 is more than150 years old. Today, it is monopolized by two PSU's in their respective fields of life and General Insurance. However, with the successful passage IRDA Bill through both houses of parliament in December 1999 the sector has been opened up to private players. This will provided much. Needed impetus to the Industry and will improve the quality of service and products and will also increase employment opportunities. There are still some issues their need to be sorted out, particularly with regard to the status of intermediaries as envisaged by the Insurance Regulatory Authority. With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. Its a business growing at the rate of 15-20 %annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 %to the countrys GDP. Gross premium collection is nearly 2 %of GDP and funds available with LIC for investments are 8 %of GDP. Yet, nearly 80 %of Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This itself is an indicator that growth potential for the insurance sector is immense. A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and at the same time strengthens the risk taking ability. It is estimated that over the next ten years India would require investments of the
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order of one trillion US dollar. The Insurance sector, to some extent, can enable investments in infrastructure development economic growth of the country. The growing number of wealthier as well as aging Indian middleclass is set to offer a strong business potential for the countrys untapped life insurance market. Insurance is a federal subject in India. There are two legislations that govern the sector-The InsuranceA c t - 1 9 3 8 a n d t h e I R D A A c t - 1 9 9 9 . 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 reveals the 360 degree turn witnessed over a period of almost two centuries. As the twentieth century has come to a close and we have move into the third millennium, we can see many developments and changes taking place around us with all the industries and firms within each2industry trying to keep pace with the changes and diverse needs of the people. Though for decade together, marketers have regarded customer as the king and evolved all activities to satisfy him or her, giving this concept a momentum it is necessary to understand the Perception and Expectations of the customer in respect various aspects & attributes so as to design a successful and an acceptable product or service. This can largely be attributed to the prevailing market situation. Not only has competition become intense but over and above with the market being flooded with many me-too products, the challenge before the marketer is to understand the diversity of consumer expectations and offer goods/services accordingly. Today the company image is built and made known by its customers. Thus the success of the firm will be determined by how effective it has been in meeting the diverse consumer needs and wants by treating each customer as unique and offering products and services to suit his or her needs. Therefore today all the firms are engaged in a process of creating a lifetime value and relationship with their customers, a step towards developing knowledge regarding its customers needs is the utmost important. The current study is an attempt to measure the various parameters as perceived by the customers and to help the company in serving its customers in a much better and efficient manner.

1.2 Objectives:
1) To know the source is awareness of LIC and its insurance policies. 2) To know the views of customers abound insurance policies and on the investment options. 3) To know the customer preference of various insurance companies. 4) To know the level of influence that a policies as on the minds of policies holders. 5) To analyze the various aspects of LIC and do a complete SWOT analysis of the organization.

1.3 Significance of the study:

High quality products with quality support services both in terms of international standards and competitiveness have entered into our country. Customer satisfaction has emerged as the key differentiator and defining attribute. The study is very much significant because it brings out the differences in various parameters like awareness; service quality, problems faced and rationale behind investment between the products of LIC and private sector companies and these are the main attributes which build up the customer perception and loyalty towards a company. The study is significant also because it will help LIC to create a positive impact on its customers by working on its lacking qualities.

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1.4 Scope of the study:

The result of this research would help the

company to have a better understanding about the consumers perception towards life insurance.
The help the company by creating awareness about

the consumer of different ages and income levels.

The study enables the company to focus the

consumers preferences and expectations on the product which they offer.

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CHAPTER - 2
Conceptual Background:
Consumer Buying Behaviors

Buying Behavior is the decision processes and acts of people involved in buying and using products. What influences consumers to purchase products or services? The consumer buying process is a complex matter as many internal and external factors have an impact on the buying decisions of consumers. Consumers do not spend much time thinking about the purchase of low value products which are bought on impulse. Manufacturers of such products will need to implement strategies that encourage consumers to buy on impulse from them instead of their competitors. When consumers purchase high value products or non impulse products, they often go through a set process. This process is discussed below. On the next page there is a discussion of what influences consumer buying behavior and the different types of buying behavior.

Problem or Need Recognition

How do you decide which particular product or service to purchase? It could be that your Blu-Ray DVD player stops working and you now have to look for a new one; otherwise you will not be able to play your Blu-Ray films So you have a problem or a new need. This is the first step in the consumer buying process.

Information search
So we have a problem, our Blu-Ray player no longer works and we need to buy a new one. What is the solution? Yes go out and purchase a new one, but which
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brand? Shall we buy the same brand as the one that blew up? Or stay clear of that just in case the new player experiences the same problems as the old one? Consumers often go on an information search to help them choose their product. Sources of information include family, friends, and retail staff and in this digital age the internet. The internet contains information about products (specifications), product reviews and online product forums. Information search may involve a visit to a retail store to view products that the consumer is interested in purchasing. In our example the consumer is on an information search to solve an immediate problem; they intend to make a purchase at the end of the process. Consumers also acquire and store information for future purchases. Firms will take such consumers into account when designing their marketing strategies, in the hope that when such a consumer is ready to buy they will use the "stored" information about their product into account and buy their products. Evaluation of different purchase options So what Blu-Ray DVD player do we purchase? Will it be a Sony, Toshiba or Samsung player? Consumers often create a point system in their minds where products are scored based on how many of their features appeal to them. So for one customer, brand may be more important than price and for another customer product appearance may be important. In the case of a DVD player consumers may be reviewing sound and picture quality. An evaluation system is particularly useful when there is a large number of an option. Marketing strategies will try and influence this stage of the process by highlighting product features that they think will appeal to consumers. Appealing product features will be emphasized on product packaging, promotional materials and the manufacturer's websites. Purchase decision After the evaluation process consumers will select the product they would like to purchase. Once product may be a clear winner or the consumer may have to reprioritize their criteria to help them select a product. The job of the seller is to ensure that the purchase process is simple and effective. Even at this stage the purchaser could change their mind and select a competitor product or cancel the purchase altogether. A long queue, impolite sales staff or complicated sales process can all dissuade consumers from buying. Even if a consumer buys on this occasion a negative buying experience could stop them
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buying in the future. Therefore sellers need to make the buying process as simple and enjoyable as possible to safeguard this and future purchases. Post Purchase Behaviour Ever have doubts about the product after you purchased it? Research shows that this feeling is common post purchase behavior. Manufacturers of products clearly want purchasers to feel proud of their purchase, so that they will purchase from them again and recommend them to family and friends. It is therefore just as important for manufacturer's promotions to reassure purchasers, as it is for them to attract new customers. Promotions should make purchasers feel that they have bought their product from a strong and reputable organization with "good" products.

FACTORS INFLUENCING THE BEHAVIOUR OF BUYERS Introduction Consumer behavior is affected by many uncontrollable factors. Just think, what influences you before you buy a product or service? Your friends, your upbringing, your culture, the media, a role model or influences from certain groups? Status and Culture Culture is one factor that influences behavior. Simply culture is defined as our attitudes and beliefs. But how are these attitudes and beliefs developed? As an individual growing up, a child is influenced by their parents, brothers, sister and other family member who may teach them what is wrong or right. They learn about their religion and culture, which helps them develop these opinions, attitudes and beliefs (AIO) . These factors will influence their purchase behavior however other factors like groups of friends, or people they look up to may influence their choices of purchasing a particular product or service. Reference groups are particular groups of people some people may look up towards to that have an impact on consumer behavior. So they can be a singer like the Lady Gaga or your immediate family members. Opinion leaders are those people that you look up to because your respect their views and judgments and these views may influence consumer decisions. So it maybe a
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friend who works with the IT trade who may influence your decision on what computer to buy. The economical environment also has an impact on consumer behavior; do consumers have a secure job and a regular income to spend on goods? Marketing and advertising obviously influence consumers in trying to evoke them to purchase a particular product or service. People's social status will also impact their behavior. What is their role within society? Are they Actors? Doctors? Office worker? and mothers and fathers also? Clearly being parents affects your buying habits depending on the age of the children, the type of job may mean you need to purchase formal clothes; the income which is earned has an impact. The lifestyle of someone who earns 250000 would clearly be different from someone who earns 25000. Also characters have an influence on buying decision. Whether the person is extrovert (out going and spends on entertainment) or introvert (keeps to themselves and purchases via online or mail order) again has an impact on the types of purchases made. Maslows Hierarchy of Needs Abraham Maslow hierarchy of needs theory sets out to explain what motivated individuals in life to achieve. He set out his answer in a form of a hierarchy. He suggests individuals aim to meet basic psychological needs of hunger and thirst. When this has been met they then move up to the next stage of the hierarchy, safety needs, where the priority is with job security and knowing that you have a regular income. Social needs come in the next level of the hierarchy, the need to belong or be loved is a natural human desire and people strive for this belonging. Esteem need is the need for status and recognition within society, status sometimes drives people, the need to have a good job title and be recognized or the need to wear branded clothes as a symbol of status. Self-actualization the realization that an individual has reached their potential in Life. The point of self-actualization is down to the individual, when do you know you have reached your point of self-fulfillment? But how does this concept help an organization trying to market a product or service? Well as we have established earlier within this website, marketing is about meeting needs and providing benefits, Maslows concept suggests that needs
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change as we go along our path of striving for self-actualization. Supermarket firms develop value brands to meet the psychological needs of hunger and thirst. Harrods develops products and services for those who want have met their esteem needs. So Maslows concept is useful for marketers as it can help them understand consumer needs and wants. Consumer buying behavior is influenced by the major three factors: 1. Social Factors 2. Psychological Factors 3. Personal Factors. 1- Social Factors Social factors refer to forces that other people exert and which affect consumers purchase behavior. These social factors can include culture and subculture, roles and family, social class and reference groups. Example: By taking into consideration Reference group, these can influence affect the consumer buying behavior. Reference group refers to a group with whom anin dividual identifies herself/ himself and the extent to which that person assumesmany values, attitudes or behavior of group members. Reference groups can be family, school or college, work group, club membership, citizenship etc. Reference groups serve as one of the primary agents of consumer socialization and learning and can be influential enough to induce not only sociallyacceptable consumer behavior but also socially unacceptable and even personal destructive behavior. For example, if fresher student joins a college university, he/she will meet different people and form a group, in that group there can be behavior patterns of values, for example style of clothing, handsets which most of group member prefer or even destructive behavior such as excessive consumption of alcohol, use of harmful and addictive drugs etc. So, according to how an individual references him / her self to that particular reference group, this will influence and change his/her buying behavior.

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2- Psychological Factors These are internal to an individual and generate forces within that Influence her/ his purchase behavior. The major forces include motives, perception, learning, attitude and personality. Example: Attitude is an enduring organization of motivational, emotional, perceptualand cognitive processes with respect to some aspect of our environ ment.Consumer form attitude towards a brand on the basis of their beliefs about the brand. For example, consumers of Sony products might have the belief that the products offered by Sony are durable; this will influence those customers to buy Sony products due to this attitude towards the brand. 3- Personal Factors These include those aspects that are unique to a person and influence purchase behavior. These factors include demographic factors, lifestyle, and sit uationalfactors. Example: Lifestyle is an indicator of how people live and express themselves on the basis of their activities, interests, and opinions. Lifestyle dimension provide a broader view of people about how they spend their time the importance of thing sin their surroundings and their beliefs on broad issues associated with life and living and themselves. This is influenced by demographic factors and personality. E.g. A CEO or Manager is likely to buy more formal clothes, ties and shoes or PDAs and less informal clothes like jeans as compared to a Mechanic or Civil engineer. So according to their lifestyle and profession, the buying behavior of people differs from one another.

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Chapter - 3
Organizational Profile LIC:
Life Insurance Corporation of India Life Insurance Corporation of India (LIC) ( ) is the largest state-owned life insurance company in India, and also the country's largest investor. It is fully owned by the Government of India. It also funds close to 24.6% of the Indian Government's expenses. It has assets estimated of 9.31 trillion (US$206.68 billion). It was founded in 1956 with the merger of more than 200 insurance companies and provident societies. Headquartered in Mumbai, financial and commercial capital of India, the Life Insurance Corporation of India currently has 8 zonal Offices and 101 divisional offices located in different parts of India, at least 2048 branches located in different cities and towns of India along with satellite Offices attached to about some 50 Branches, and has a network of around 1.2 million agents for soliciting life insurance business from the public. The Oriental Life Insurance Company, the first corporate entity in India offering life insurance coverage, was established in Calcutta in 1818 by Bipin Bernard Das gupta and others. Europeans in India were its primary target market, and it charged Indians heftier premiums. The Bombay Mutual Life Assurance Society, formed in 1870, was the first native insurance provider. Other insurance companies established in the pre-independence era included

Bharat Insurance Company (1896) United India (1906) National Indian (1906) National Insurance (1906) Co-operative Assurance (1906) Hindustan Co-operatives (1907) Indian Mercantile General Assurance Swadeshi Life (later Bombay Life)
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The first 150 years were marked mostly by turbulent economic conditions. It witnessed, India's First War of Independence, adverse effects of the World War I and World War II on the economy of India, and in between them the period of worldwide economic crises triggered by the Great depression. The first half of the 20th century also saw a heightened struggle for India's independence. The aggregate effect of these events led to a high rate of bankruptcies and liquidation of life insurance companies in India. This had adversely affected the faith of the general public in the utility of obtaining life cover. The Life Insurance Act and the Provident Fund Act were passed in 1912, providing the first regulatory mechanisms in the Life Insurance industry. The Indian Insurance Companies Act of 1928 authorized the government to obtain statistical information from companies operating in both life and non-life insurance areas. The subsequent Insurance Act of 1938 brought stricter state control over an industry that had seen several financially unsound ventures fail. A bill was also introduced in the Legislative Assembly in 1944 to nationalize the insurance industry. Life Insurance Corporation of India, which commanded a monopoly of soliciting and selling life insurance in India, created huge surpluses, and contributed around 7 % of India's GDP in 2006. The Corporation, which started its business with around 300 offices, 5.6 million policies and a corpus of INR 459 million (US$ 92 million as per the 1959 exchange rate of roughly Rs. 5 for a US $ , has grown to 25000 servicing around 180 million policies and a corpus of over 8 trillion (US$177.6 billion). The recent Economic Times Brand Equity Survey rated LIC as the No. 1 Service Brand of the Country. The slogan of LIC is "Zindagi ke saath bhi,Zindagi ke baad bhi"in hindi. In English it means "with life also, after life also. Life Insurance Corporation(LIC) plans to invest R45,000 crore of its total investment kitty of R2.15 lakh crore in the stock markets this year. LIC has already invested R5000 crore since April. LIC currently has just under a 70% share of the life insurance premium market with private sector players together accounting for the rest. During 2011-12, LIC plans to adopt a changed marketing strategy and is targeting 4.26 crore policies to garner R54,000 crore worth of fresh premium. Last year the corporation had sold 3.70 crore policies and had mobilized R44,000 crore worth of premium and R42, 000 crore through renewal premiums. According to a BCG report, the insurance industry
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is expected to reach $350-400 billion by 2020,with India being among the top three life insurance markets in the world and among the top 15 nonlife insurance markets. The report states that the total penetration of insurance (premium as percentage of GDP) has increased from 2.3% in 2001 to 5.2%in 2011. In addition there has been a vast increase in the coverage of insurance. The number of life policies in force has increased nearly 12fold over the past decade and health insurance, nearly 25fold, with the progress aided by the dramatic shift in the availability of products. The report estimates the total insurance premium at approximately R17 lakh crores to R22 lakh crore in 2020 with life insurance premium being between R15 lakh crore and R20 lakh crore. This sudden spurt of advertisements and awareness programs was visible on all the media channels. Print, electronic and outdoor advertisements of the new private insurers flooded could be seen everywhere. This prompted many comparisons of such behavior of insurance companies with the advertising frenzy of the dotcoms in India not too long ago with similar full-page advertisements, huge hoardings and costly electronic media advertisements. According to reports, in the first quarter of the year 2010, insurance companies spent 70%of what was spent in the whole of 2009, on advertising and publicity. Across the world, insurance, as a category was one of the largest spenders on advertising. In India too substantial expenditure was being incurred due to advertising. COMPANY LIC Allianz Bajaj Om Kodak Mahindra ICICI Prudential Source: ICMR. EXPENDITURE 1000 200 150 146

However, during the first year reported a growth of over 250%, private insurers managed to garner only about 0.5% market share, in spite of spending hefty amounts on advertising and promotion. According to reports, LICs Business increased mainly because of the increased public awareness about
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insurance, which was brought about by the heavy advertisement campaigns of private players of the entry of new players, while LIC.

LIC of India, International A joint venture offshore company promoted by LIC commenced its operation in july1989. The primary objective is to the US-dollar denominated policies which cater to the insurance needs of nonresident in Indians. It provides insurance services to policyholders who residing in Gulf. The LIC International operates in all Gulf Cooperation Council (GCC) countries. LIC Nepal A joint venture company formed in September 2001 with the Vishal Group of Industries with a capital base of Rs.250mn. It is one of the largest capitalized insurance companies of Nepal. It has joint share between LIC of India (55%) Vishal Group (25%) and has a public participation to the extent o 20%. Life Insurance Corporation Lanka Limited (LICL) A joint venture company formed in 2003 with the Bartley Group of Companies, it is one of the oldest and reliable institutions in Sri Lanka. The combined strengths of these two formidable companies has enabled LICL to emerge as the premier provider of Life Insurance in Sri Lanka. The Indian-based blue-chip also has offices in UK, Mauritius, Fiji, and in all Middle East countries. LIC Housing Finance Incorporated on June 19, 1989; its main objective is to provide long term finance for construction or purchase of houses or apartments. The company provides long terms finance to individuals for
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purchase, construction, repair and renovation of new \existing flats\houses. It also provides finance on existing property for business, personal needs and gives loans to professionals for purchase or construction of clinics\nursing homes\diagnostic canters\office space and also for purchase of equipments. It has set up are preventative office in Dubai and Kuwait to cater to the non-resident Indians in countries covering Bahrain, Dubai, Kuwait, Qatar and Saudi Arabia. It has client group of over 9, 40, 000prudent house owners who enjoy the companys financial assistance. LIC Housing Finance Limited Care Homes It is a Wholly-owned subsidiary of LIC Housing Finance. It builds and operates Assisted Community Living Centre for senior citizens. It operates a network of approximately 6 regional offices, 13 back offices, and 127marketing offices. Vision To emerge as a Trans nationally competitive financial conglomerate of significance to societies and be the pride of India. Mission Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns and by rendering resources for economic development. Objective of LIC Spread life insurance widely in particular to the rural areas and socially and economically backward classes. This is done with a
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view to reach all the insurable persons in the country and provide them adequate financial cover against death at a reasonable cost. To maximize mobilization of peoples savings by making insurance linked savings adequatelyattr active. Bearing in mind, the primary obligation to its policyholders, whose money it holds in trust, the investible funds to be deployed to the best advantage of the investors as well as the national priorities and the obligations of attractive returns. To conduct business with utmost economy and keeping gin mind that the money belongs to the policy holders. It acts as a trustee of the insured public in its individual and collective capacities. To meet the various life insurance need of the community that would arise in the changing social and economic environment. It ensures that all people working in the corporation are involved to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy. Promote amongst all agents and employees of the corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of corporate objective.

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Products and Services LIC has eight zonal offices and 105 divisional offices located in different parts of India. It compromises of 2,048 branches and employs over 10, 02, 149 agents for soliciting life insurance business from public. LIC has extended its activities in 12 countries from outside India, primarily to cater to the insurance needs of nonresident Indians.LIC aims at strengthening it relationship with its vast customer base by providing value-added service such as credit cards and offering premium payment facility to the policyholders. It is the largest insurance player in India and its objective is to channelize its funds for the benefit of the community at large. It enjoys a near monopoly power in the solicitation and sale of life insurance policies in India. The corporation has major business houses as clients, under the group business of India. It has more than1, 18,000 corporate clients covering more than 3, 15,00,000 members. Apart from the corporate group insurance business the pension& group schemes is responsible for Aam Aadmi Bima Yojna,a social security schemes for the rural landless households under the aegis of the Government of India.LIC has been investing a major portion of its funds in socially-oriented sectors with a view to reach every insurable person in the country and provide adequate financial cover against death at a reasonable cost. Another goal is to mobilize peoples savings adequately attractive. LIC has recently tied up with Policybazaar.com an insurance portal that enables the consumers to get detailed information on the policy. It is one of the leading online non-life and life insurance aggregator to sell its policy Jeevan Aastha on the internet.

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LIC Product profile Insurance plans of LIC As individuals it is inherent to differ. Each individual's insurance needs and requirements are different from that of the others. LIC's Insurance Plans are policies that talk to you individually and give you the most suitable options that can fit your requirement.

Bima account Plus Plan Bima account 1 Bima Account 2 Children Plan Jeevan Anurag Plan, Jeevan kishore ,Jeevan Chaya, Komal jeevan, Child future plan, child carrier plan. Plan for handicapped Jeevan adhar Jeevan viswas Special money back plan for women Jeevan Bharti

Plan for individual Jeevan shree Jeevan paramukh Whole life plan Whole life policy, whole life policy limited payment, whole life policy single premium, jeevan anand . jeevan tarang.

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Term assurance policy Two year temporary assurance policy, the convertible assurance policy, anmol jeevan 1, amulya jeevan 1 Joint life plan Jeevan sathi

Logos or slogan design. The message should reinforce the benefit of the product and should also help the company in developing the positioning strategy of the product. Companies with effective message strategies include:

LIC "Zindagi ke saath bhi,Zindagi ke baad bhi"

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ICICI PRUDENTIAL Jeetye Raho

HDFC STANDERD LIFE Sar Utha Ke Jiyo

RELIANCE LIFE INSURANCE

Media strategy refers to how the organization is going to deliver their message. What Aspects of the promotional mix will the company use to deliver their message strategy? Where will they promote? Clearly the company must take into account the readership and general behavior of their target audience before they select their media strategy. What newspapers does their target
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market read? What TV programmers do they watch? Effective targeting of their media campaign could save the company on valuable financial resources. Advertisement is a form of communication used to persuade an audience (viewers, readers or listeners) to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common. Advertising messages are usually paid for by sponsors and viewed via various media; including traditional media such as newspapers, magazines, television, radio, outdoor or direct mail; or new media such as websites and text messages. Commercial advertisers often seek to generate increased consumption of their products or services through "branding," which involves the repetition of an image or product name in an effort to associate certain qualities with the brand in the minds of consumers. Non-commercial advertisers who spend money to advertise items other than a consumer product or service include political parties, interest groups, religious organizations and governmental agencies. Nonprofit organizations may rely on free modes of persuasion, such as a public service announcement. Advertising effectiveness means different things to the groups responsible for its different effects. To the writer or artist, effective advertising is that which communicates the desired message. To the media buyer, effective advertising is that which reaches prospective buyers a sufficient number of times. To the advertising or marketing manager, effective advertising is that which, together with other marketing forces, sells his brand or product. To the general manager, effective advertising produces a return on his firms expenditure.In fact, effective advertising must achieve all four goals, delivering messages to the right audience, thereby creating sales at a profit. Most advertisers have begun only recently to Set goals in all four areas and measure progress toward them. Some advertisers have set Communications and audience goals, and measured copy and media effects, but few advertisers have set dollar goals and measured sales and profit effects. The result is that advertising has rarely been a part of corporate planning. Thirty years ago, management was asking the same questions they ask today: Is my advertising working and what impact does it have on my sales? Can it be measured? Can our advertising and promotion be made accountable in the same manner as which one evaluates all of the other investments by our company? The answer to all three questions is
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yes. In fact, the techniques to deliver this degree of accountability and control have been around for more than 50 years and are industry standards. There are methods to test every aspect of marketing promotion, sales support and media mix, and analytical tools to establish a direct relationship to sales for complete Accountability. The key to this is applying a full advertising research curriculum. This requires involvement of both sales and marketing management advertising/promotions supplier coordinating their efforts with the researcher. It is a partnership. This may explain why so many from both the client and agency sides remain of the opinion that it cant be done. The fact is that a full curriculum can be implemented, is already integral to nearly every brand leader, and you can do it as well. It just takes a little planning and cooperation. Lets start from where it all began.

CORORATE ADVERTISING How a company does announced a name change especially when the old name was well known? How does the company explain itself to constituents who may have known the company quite well in an earlier incarnation but may be struggling to figure out what the new organization stands for? How can the company create a new image while retaining the strengths of the old one? And what role might corporate advertising play in all this? Corporate advertising can tell a story about a company as a whole, large organizations may need to use corporate ads to simplify their image in the minds of key constituents and to show what unifies the company, despite the geographical spread and variety of its businesses. We can very well understand the concept of corporate advertising by taking the example of Life insurance corporation communication. When Company first began operations, the task was to present the visiting card of the company to the public at large and build credibility and stature and to give the consumer the confidence that ''here is a company that can be trusted to invest funds with. This required a corporate campaign - to establish the brand, build awareness and give the brand a larger-than-life image.

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Affect of advertising in Brand Building Brand building through corporate advertising, defined generally as advertising that benefits a companys image by emphasizing its own resources, skills and/or character. Many astute business people now recognize corporate brands as fundamental business assets, and have begun reaching out to customers, prospects, and the financial community by advertising those brands. Brand building advertising is synonymous with product advertising and is commonly seen in traditional mass media, including TV, radio, magazine, and newspaper. Brand building advertisements tend to be product/service- (or retailer-) oriented with the purpose to establish a positive image and creating demand for a product or service that leads to eventual purchase. The communication route is typically one-to-many and is designed to reach a mass audience by using a tactic of at capturing the attention of users.

Advertisements by Life Insurance Corporation of India-

Vintage advertisements by LIC

Full train advertisements by LIC India

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Chapter - 4
Research Methodology:
Research methodology is a strategy that guides a research in providing answers to research questions and for this, research survey is being done. Accuracy of the study depends on the systematic application of the method. The researcher has to decide the method to be used that helps him to get a desired Methodology AdoptedQuestionnaire Design The questions were designed in an easily understandable way with the help of D.O Mr. Sudhir Singh So that the respondents may not have any difficulty in answering them. The questionnaire also contained a comments section. This section was included so as to get opinion of the people regarding the Life Insurance Corporation of Indias life insurance policy. Convenience Sampling Convenience sampling is a non-probability sampling technique where subjects are selected because of their convenient accessibility and proximity to the researcher. Sampling UnitThe respondents who were asked to fill out questionnaires are the sampling units. These comprise of employees of Government, business man and professionals.

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Sample sizeThe sample size was restricted to only 150 people between different age group of which comprised of mainly peoples from Varanasi District of UP. Sampling AreaThe area of the research was Varanasi ( UP)

Data Collection Structured Questionnaire - In this collection data, structured questionnaire is used as a tool by asking a set of standardized questions to know the effect of Life Insurance and behavior of the people for the Life Insurance Corporation of Indias life insurance Interview The next step involved in collecting information requires discussion with people. Thus valuable information was gathered informal friendly talks with the people. Secondary Data Collection Various websites were consulted to collect literature relevant to the topic.

Interpretation Interpretation refers to the task of drawing inference from the collected facts after an analytical study, in fact it is a search for broader meaning of research
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findings it is through interpretation that the researcher can well understand the abstract principle that Respondents beneath his findings. The simple statistical tools will used to analyze the data collection; Bar Graphs and pie chart have been used to illustrate the findings Diagrammatically. The scores for advertisement were compiled on spontaneous recall, Aided recall and likeability. The top policies are selected on the basis of their score.

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Limitations of the Study:

The research is confined to a certain parts of Varanasi due to time constraints and does not necessarily shows a pattern applicable to all of Country . Some respondents were reluctant to divulge ( to give personal) information which can affect the validity of all responses. In a rapidly changing industry, analysis on one day or in one segment can Change very quickly. The environmental changes are vital to be considered in Order to assimilate the findings

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Chapter 5
Data Analysis and Interpretation:
It includes the summary of advertisement scenario of insurance industry in the soaring Mass market available in India based on the survey conducted. Q-1 which media you mostly use for information?

14 Televison Newspaer Internet 20 60 Radio

Media Television Newspaper Internet Radio

Percentage 60 20 14 6

Response 90 30 21 9 150 TOTAL

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In the market it can easily be realized that the Television audience had a huge impact of these ads. Although the most popular medium of entertainment or information gathering Has emerged as the arena of media war. But yes the old players news paper and radio are Still on their high trying to dominate in the market. Internet being in its youth phase is rapidly reaching in the elite class.

Q2.Where you saw Life insurance ad?

2 28 Internet Television Newspaper Friend/Family

40

30

Media Channels Internet Television Newspaper Friends/Family

percentage 2 40 30 28

Responses 3 60 45 42 150 Total

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If we look at interpretation we will find that maximum no of people found advertisements on televisions, if we look at data which says that 60 out of 150 respondents watch ads on this medium of entertainments, in case of newspaper its is second medium for ads of life insurance policy, which is 45 out of 150 respondents says that they watch ads on newspaper. For internet its comes to 3 out of 150 respondents. Last oral communication also play a very important role on today marketing scenario heres data says that 42 out of 150 respondents comes to know about products through family/ friends.

Q3. How often do you share interesting policies with your family or friends?

16

40

very often often

20

sometimes rarely

24

Sharing of Ads Very often Often Sometimes Rarely

Percentage 40 24 20 16

Responses 60 36 30 24 150 Total

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From this data I conclude that people are very rarely showing any interest in sharing of interesting Advertisement. Today people think that interesting advertisement are not broad casted very well due to paucity of time.

Q4. Have you seen any Life Insurance Policy details?

10

20

Yes No cant say

70

RESPONDENT Yes No Cant say

Percentage 70 20 10

Responses 105 30 15 150 Total

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Today every people like to watch advertisement on television. From this data I found that 105 respondents out of 150 people have viewed and 30 respondents out 150 says that didnt watch any advertisement and 15 respondents out of 150 say that never watch advertisement.

Q5. Have you taken any LIC policy?

00 20

Yes No

80

Feedbacks YES No

Percentage 80 20

Respondents 120 30 150 total

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Through this interpretation I found that 120 respondents have yes life insurance and 30 respondents are not life insurance.

Q6. Have you got any life insurance policy (other than LIC?)

life insurance Policies

30 NO Yes 70

Response No Yes

percentage 70 30

Respondent 105 35 Total 150

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From this analysis I found that through advertising 105 responded no out of 150 have purchased the life insurance policy and 35 responded yes out of 150 says that they didnt get any life insurance policies.

Q7. How many life insurance policy you have got?

No of life inurance policies

6 9 42 4 One Two Three 18 Four Five Six 22

No of Life insurance policies One Two Three Four Five Six

Percentage 42 22 18 9 6 4

Respondent 63 33 27 12 9 6 Total 150

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By this interpretation I came to know that no of life insurance policies varies, if we look at interpretation we found that 63 respondents out of 150 have one policy, 33 out of 150 have two, 27 out of 150 have three policy, 12 out of 150 have four policy, 9 out of 150 have 5 policy, and 6 out 150 have only 6 policy of life insurance.

Q8. If you are the customer of Life Insurance Corporation where you find the advertisement

14

42 24

Telivisions Templates Newspaper Radio

20

Channels Television Brochure Newspaper Radio

Percentage 42 20 24 14

Responses 63 30 36 21 Total 150

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By this interpretation I found that 63 respondent out of 150 says that they find advertising of life insurance on television, 30 out of 150 says that they found advertising on brochure, 36 out of 150 they see advertising on newspaper, and 21 out of 150 says that they hear the life insurance advertising on radio.

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Q9.On which type of policy you believe to spend ?

16

market linked 46 20 Child plans Secured pension

18

Channels Market Linked Child Plan Secured Pension

Percentage 16 20 18 46

Responses 24 30 27 69 Total 150

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Q10. Do you feel taking insurance policy is compulsory in this era

8 12 42 Stongly agree somewhat agree niether 14 strongly disagree somewhat dis agree

24

Opinions Strongly agreed Somewhat agree Neither Strongly disagree Somewhat dis agree

Percentage 42 24 14 12 8

Respondent 63 36 21 18 12 Total 150

Life Insurance is considered to be sold by push strategy only, and we are witnessing Alternative financial Instruments available in the market giving tough competition. The first thing before buying an Insurance Product in the competitive market comes in the mind is the BRAND. It really plays a tremendous role for a product to be bought. It seems clearly in the survey.
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Q11. Which company policy you prefer mostly?

20 HDFC LIC ICICI 60 14 Reliance lic

Company HDFC ICICI RELIANCE LIFE CORP LIFE insurance corp. of India

Rank 4 2 3 1

Percentage 6 20 14 60

Responses 9 30 21 90 150

LIC being the giant of Life Insurance in INDIA has grabbed the bottom slot in terms of Advertisement also. Other private players like ICICI Prudential, HDFC Std. and Reliance Life Insurance are leading player if we compared to LIC.

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Q12. Can you recall the content of the policy?

40 YES No 60

Respondent Yes No

Percentage 40 60

Responses 60 90 Total 150

As we know that if we show a good advertisements it will create a good impact on viewer and also help in creating a brand images in mind of customer and that customer will purchase a product of that companies whose advertisement have shown some impact on viewers. If we look at interpretation we will found that 60 out of 150 respondent are able to recall ads but this is quiet low if we compared to No of respondent who says NO.
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Q13. Do you think this policy has influence you to?

Buy Insurance 24 44 Recommend insurance policy suggest insurance policy would like to inform Cant say

22

Respondent Buy insurance policy Recommend insurance policy Suggest insurance policy Would like to inform Cant say

Percentage 44 22 24 8 2

Responses 66 33 36 12 3 Total 150

By this interpretation we will find that advertisement influence somewhat to buy a products as in case of insurance policy. If we look into data I came to know that 66 out 150 will buy insurance policy, 33 out of 150 recommends insurance policy, 36 out of 150 will suggest in insurance policy, 12 out of 150 they like to inform about products and only 3 out of 150 say that ads didnt influence.
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Q14. Which of the Insurance Policy would you like to buy?

20

life plan health plan 14 58 Child plan Retirement plan

Plans Life plan Health plan Child plan Retirement plan

Percentage 58 8 14 20

Responses 87 12 21 30 150 Total

By this interpretation I came t o know that maximum no people are showing lot of interest in buying life insurance policy this can be said if we look into above data we will found that 87 out of 150 respondents like to buy life insurance policy, for health plan it is 12 out of 150 respondents and for child plan its come to be 21 out of 150 policy, and for retirements plans its come to be 30 out of 150 respondents.
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Chapter - 6
6.1 Finding:
In the market it can easily be realized that the Television audience had a huge impact of These ads although the most popular medium of entertainment or information gathering Has emerged as the arena of media war But yes the old players news paper and radio are Still on their high trying to dominate in the market Internet being in its youth phase is Rapidly reaching in the elite class We will find that maximum no of people found advertisements on televisions. The people are very rarely showing any interest in sharing of interesting Advertisement. Today people think that interesting advertisement are not broad casted very well due to paucity of time. Today every people like to watch advertisement on television because of some creativity in advertisements and celebrity endorsement also plays a very important role in today scenario. By seeing advertisements some people show there interest in purchasing life insurance advertisements and some people won t purchase any insurance. Today most of people are rarely interested in buying life insurance products the main reason is needs varies among person to person and one more thing comes to play a very important role in today market that there is lot of insurance companies in Indian market The maximum no of people find advertising of life insurance on television, some people says that they found advertising on brochure;
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some says they saw advertising on newspaper and some says that they hear the life insurance advertising on radio. Apart from entertainment channels like star T.V, Sony etc where family soaps are having the highest TRPs contribute mainly for in FMCG sector. Though they show a bit of Insurance Ads too. In the emerging economy of INDIA News and business channels have risen surprisingly and contributing in the promotion of insurance sector. Life Insurance is considered to be sold by push strategy only, and we are witnessing Alternative financial Instruments available in the market giving tough competition. The first thing before buying an Insurance Product in the competitive market comes in the mind is the BRAND. It really plays a tremendous role for a product to be bought. It seems clearly in the survey. LIC being the giant of Life Insurance in INDIA has grabbed the bottom slot in terms of Advertisement also. Other private players like ICICI Prudential, HDFC Std. and Reliance Life Insurance are leading player as compared to LIC. As we know that if we show a good advertisements it will create a good impact on viewer and also help in creating a brand images in mind of customer and that customer will purchase a product of that companies whose advertisement have shown some impact on viewers.. We will find that advertisement influence somewhat to buy a products as in case of insurance policy. By this interpretation I came t o know that maximum no people are showing lot of interest in buying life insurance policy.

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6.2 Suggestions:

A. All agents must be adequately qualified or at least experienced in marketing. B. The commission of the ULIP plan should be increased for the single premium plans; due to this agents can get more interest to sale the ULIP plans. C. Better trained agent can transform the information about plan is a better way. D. More benefit plans should in lower premium and make it possible to buy for lower level income peoples too. E. Provide the video explainer clips to the rural and urban area to make it more attractive in different language and in the advertisements. Because it work as more impressive and easier to sale for lower qualified agents and too customers also.

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6.3 Recommendation:
Recommendation about promotional strategies To create the awareness regarding Product 1. Print & Electronic Media Advertisement can be done (As we can see intense ad Campaign of HDFC Standard Life and Bajaj Allianz) 2. After the initial promotional campaign the relative advantage of life Insurance Corporation of India Over its competitor can be highlighted. 3. Hoardings at prime areas can be used. Special recommendation The insurance sector has largely stuck to images of happy families, carefree couples and children. We have to use a different route to break the clutter, and humor and endorsement of celebrities is some of the routes available to us." Life insurance Corporation of India should come in front for development of rural sector, by way of establishing a school, by digging a well in villages. May be it seems like a fools suggestion but it is one of the way to gain trust in rural sector. We can also use to advertise us by using the way of HALLA BOL. If we adopt this technique then I am sure that this will be most creative and cheaper advertisement all over the world. And by this way Life insurance Corporation of India can again list their name in top advertiser.

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6.4 Conclusion:
1. There has been a tectonic shift in the insurance companies. Till 2 or 3 years back a typical Ad will showcase a small happy family enjoying their life. Then one unfortunate Day the head of the family dies in an accident and the rest of the family is drawn to rags. The policy ends up saying Insurance can help them against such calamities. People bought the idea and started buying insurance. But there was a basic flaw in the policy. It tells the consumers about the advantages of having Insurance but nothing about buying insurance from a particular insurance firm. 2. If we see the recent policy they are talking about how SBI Life can help smoothen your old age life or how ICICI Prudential can help you in receiving pensions etc. This sounds more logical. Each policy speaks about how their firms offers can help you instead of telling how insurance as a whole can help you. 3. In concluding part of this project it shows that LIC of India get the preference as being oldest and widest company in this field. A huge attention is given by other companies in coming with same type of policies. At the initial phase of a company it is important that they give emphasis on corporate because it helps in brand recall. At the later stage company can go for product class advertisements. Well it is also found that during session that endorsement of celebrities is helpful in ad recall. But giving advertisement in any type of media is not the only medium; there are many other ways also like social service, by way of educating people. Especially for Insurance companies if they want to capture rural market then they have to approach in different way. In my opinion rural market can only been captured if we reaches to their heart. And this can be happen only if we solve their basic problem.

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56

Bibliography
Internet 1. www.insuremagic.com 2. www.indiainfoline.com 3. www.bimaonline.com 4. www.expressindia.com 5. www.responsiveservice.com 6. www.agencyfaqs.com 7. www.knowledgedigest.com 8. Insurance Case Studies ICMR 9. Www. indiantelevision.com 10. The Hindu Business Line 11. Market Research in Insurance

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Annexure
Questionnaire
Personnel information Name Age _______________ ________________ Mobile no _______________ Email id ________________ Address _________________

Gender ________________ Occupation _____________ _________________________ Annual income ______________

__________________________

Q1. Which media you mostly use for information? 1) TV 2) Radio 3) Newspaper 4) Internet

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Q2. Where you saw Life insurance ad? 1) Internet 2) Newspaper 3) Holdings 4) Friends/Family

Q3. How often do you share interesting policies with your family or friends? 1) Never 2) Rarely 3) Sometimes 4) Often 5) Very often

Q4. Have you seen any Life Insurance Policy details ? 1) Yes 2) No Q-5 Have you taken any LIC policy ? 1) Yes 2) NO
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Q-6 How many life insurance policies you have (other then LIC) ` 1) Yes 2) No Q7- How many life insurance policy you have got? 1) One 2) Three 5) Five 2) Two 3) Four 6) Six

Q8- If you are the customer of Life Insurance Corporation where you find the advertisement. 1) Televisions 2) Templates 3) News Paper 4) Radio

Q9. On which type of policy you believe to spend. 1) Market Linked 2) Child plan 3) Secured plan 4) Pension
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Q10. Do you feel taking insurance policy is compulsory in this era? 1) Strong Agree 2) Somewhat Agree 3) Neither 4) Strong Disagree 5) Somewhat Disagree

Q11. Which company policy you prefer mostly? 1234HDFC LIC ICICI RELIANCE

Q12. Can you recall the content of the policy? 1) Yes 2) No

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Q13. Do you think this policy has influence you to? 1) Buy insurance policy 2) Recommend insurance policy 3) Suggest insurance policy 4) Would like to inform 5) Cant say Q.14 Which of the Insurance Policy would you like to buy? 1) Life plan 2) Health plan 3) Child plan 4) Retirement plan

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