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SAJMMR Volume 2, Issue 7 (July, 2012) ISSN 2249-877X

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Publ i shed by: South Asi an Academi c Research Journal s
SAJMMR:
S o u t h A s i a n J o u r n a l o f
M a r k e t i n g & M a n a g e m e n t
R e s e a r c h
A STUDY ON THE BENEFITS OF ADVERTISEMENTS ON THE
PROMOTION OF PRODUCTS A SPECIAL REFERENCE TO IDBI
FEDERAL LIFE INSURANCE COMPANY LTD

DR. S. SUJATHA*; SEEMA**

*Associate Professor,
VIT Business School,
VIT University, Vellore - 632014
Tamil Nadu, India.
**Assistant Professor,

VIT Business School ,
VIT University, Vellore - 632014
Tamil Nadu, India.

ABSTRACT

With the increase in the growth of players in Insurance sector (both public and
private) the insurance companies are finding it difficult to promote their products.
This paper tires to study the benefits of advertisement as a tool for promotion of
products by Insurance Company. The study is done with special attention to IDBI
Federal Life Insurance Company Ltd.

KEYWORDS: Advertisement, Promotion, Benefits, Insurance company, and
Products.
_____________________________________________________________________________

1. INTRODUCTION
Promotion is one of the four elements of marketing mix (product, price, promotion, and place). It
is the communication link between sellers and buyers for the purpose of influencing, informing,
or persuading a potential buyer's purchasing decision.
The following are two types of promotion:

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1. Above the line promotion: promotion in mass media (e.g. TV, radio, Newspapers,
internet, mobile phones) in which the advertiser pays an advertising agency to place the
advertisement
2. Below the line promotion: All other promotion. Much of this is intended to be subtle
enough for the consumer to be unaware that promotion is taking place.
3. E.g. sponsorship, testimonials, sales promotion, merchandising, direct mail, personal
selling, public relations, trade shows
The specification of five elements creates a promotional mix or promotional plan. These
elements are personal selling, advertising, sales promotion, direct marketing, and publicity. A
promotional mix specifies how much attention to pay to each of the five subcategories, and how
much money to budget for each. A promotional plan can have a wide range of objectives,
including: sales increases, new product acceptance, creation of brand equity, positioning,
competitive retaliations, or creation of a corporate image. Fundamentally, however there are
three basic objectives of promotion. These are:
1.To present information to consumers as well as others
2.To increase demand
3.To differentiate a product.
There are different ways to promote a product in different areas of media. Promoters use internet
advertisement, special events, endorsements, and newspapers to advertise their product. Many
times with the purchase of a product there is an incentive like discounts, free items, or a contest.
This is to increase the sales of a given product.
2. OBJECTIVES OF THE PROJECT
The various objectives in doing this study are as follows:
To find how effectively advertisements influence a person to buy the life insurance
products
The find whether insurance companys like IDBI federal needs brand ambassador to
reach the customer effectively
Identifying the role of advertisements for life insurance products
3. INDIAN INSURANCE MARKET
Insurance has had a very long history in India; life insurance was introduced in India with the
starting of Oriental life insurance Company in Kolkata in the year 1818. History of insurance can
be further divided in three areas a) pre-nationalization, b) nationalization and c) post
Nationalization. Life insurance was first nationalized in 1956, followed by general insurance in
SAJMMR Volume 2, Issue 7 (July, 2012) ISSN 2249-877X

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1973.General insurance corporation of India was set as controlling body, all this was initiated
against the economic reforms of 1991.This was followed by many such acts and amendments
including insurance regulatory development Act (IRDA) passes in 1999.Private players were
encouraged in the insurance sector and they effectively started operations from 2001.
4. INSURANCE MARKET- PRESENT
Insurance sector was opened for private players with the starting of the 20
th
century. After
economic reforms in 1991, economy was liberalized. Since then there has a rampant and
dynamic growth in the field of insurance. Most of private players have entered this sector with
joint collaborations across the globe. There are now 29 insurance companies operating in the
Indian market 14 private life insurers, nine private non-life insurers and six public sector
companies.
The insurance sector has intensified and companies are formulating survival strategies due to
immense competition in a de-tariff scenario. There is pressure from both within the country and
outside on the Government to increase the foreign direct investment (FDI) limit from the current
26% to 49%, which would help this sector to expand.
5. TYPES OF INSURANCE
1. Life Insurance - Insurance guaranteeing a specific sum of money to a designated
beneficiary upon the death of the insured, or to the insured if he or she lives beyond a
certain age.
2. Health Insurance - Insurance against expenses incurred through illness of the insured.
3. Liability Insurance - This insures property such as automobiles, property and
professional/business mishaps.
6. CHALLENGES FACED BY INSURANCE INDUSTRY
THREAT OF NEW ENTRANTS: The insurance industry has been budding with new
entrants every other day. Therefore the companies should carve out niche areas such that
the threat of new entrants might not be a hindrance. There is also a chance that the big
players might squeeze the small new entrants.
POWER OF SUPPLIERS: Those who are supplying the capital are not that big a threat.
For instance, if someone as a very talented insurance underwriter is presently working for
a small insurance company, there exists a chance that any big player willing to enter the
insurance industry might entice that person off.
POWER OF BUYERS: No individual is a big threat to the insurance industry and big
corporate houses have a lot more negotiating capability with the insurance companies.
Big corporate clients like airlines and pharmaceutical companies pay millions of dollars
every year in premiums.
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AVAILABILITY OF SUBSTITUTES: There exist a lot of substitutes in the insurance
industry. Majorly, the large insurance companies provide similar kinds of services be it
auto, home, commercial, health or life insurance.
7. COMPANY PROFILE
IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, Indias premier
development and commercial bank, Federal Bank, one of Indias leading private sector banks
and Ageas, a multinational insurance giant based out of Europe. In this venture, IDBI Bank owns
48% equity while Federal Bank and Ageas own 26% equity each. IDBI Federal endeavors to
deliver products that provide value and convenience to the customer. Having started in March
2008, in just five months of inception we became one of the fastest growing new insurance
companies to garner Rs 100 Cr in premiums. The company offers its services through a vast
nationwide network across the branches of IDBI Bank and Federal Bank in addition to a sizeable
network of advisors and partners. As on January 31st 2011, the company has issued over lakh
2.68 lakh policies with over Rs 14, 230 Cr in Sum Assured.
8.PROMOTIONAL STRATEGIES ADOPTED IN IDBI FEDERAL
Following are the main ways in which IDBI Federal life Insurance company ltd promotes its
products/services and creates awareness in the market.
8A.NEWSPAPER: IDBI Federal has attained notice through many articles and advertisements
published in various national and regional newspapers in India like the Economic Times, Times
of India, The Hindu , Samachar Jagat, Vir Arjun, Meghalaya Guardian etc. IDBI Federal spends
around Rs 1040 per sq.cm for promotional activities through newspapers. They position the ads
and articles in such a way that it catches the eye of the reader as soon as they start reading the
newspaper (See appendix for the articles).
8B.HOARDINGS: IDBI Federal has also tried making their potential customer aware of their
products and policies through billboards and hoardings by positioning them in strategic
locations. As of now, the total number of hoardings which are put up in Hyderabad region counts
to a good 17 number. The total expenses spent by the company for this promotional activity is Rs
4 lakh.
8C. PAMPHLETS: Pamphlets are distributed across India at least 5 times in a month without
any cost. Its done to create maximum awareness about the products/services.
8D. MAGAZINES: There is no specific magazine in which advertisement is given. Its given in
magazines depending upon their sales and reputed magazines like Outlook, Money etc. The
advertisement is given every month at least once in any magazine.
8E. TELEVISION: Mainly, the advertisement is shown on cricket channels, Star channels. The
main promotions were done during FEB & MARCH to:
Highlight the tax benefits
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To combat competition as all the insurance companies would advertise during this time at
a great frequency. Also the company will soon start displaying their advertisements on
Satellite TV like SUN network, etc.
8F. DISTRIBUTORS: A strong network of distributors and parent advisors also helps a lot in
promoting products/services of IDBI Federal by word of mouth. A Viral campaign is also run
on the Internet by wherein flash videos of working of products are explained in a very humorous
manner.
8G. LOCAL EVENTS: The overall costs associated with such events totals to Rs. 2,00,000 per
annum such events are mainly conducted in Apartments, Schools, etc. Building an engagement
process around the solution being offered gives an additional boost to this cause. Spelling Bee
was a specially created spelling contest created to connect with children. The engagement started
with the spelling contest for kids and gave their IRMs a natural opening for a discussion with
parents about financial planning for their childrens future needs like education. This is a sort of
channel marketing which IDBI Federal had adopted to create awareness as well as to educate the
future generation about the company and the importance of saving.
Also IDBI Federal involved them in developing their business by joining hands with SAMHITA,
a community development organization based out of Bhopal which works towards bringing
financial literacy to the underprivileged population in Madhya Pradesh. They believe that such
financial literacy among the under banked population will help bring a holistic change in the way
people perceive and understand financial products and their utility at various stages in their life.
This will ultimately help bring them closer to financial inclusion
9. RESEARCH METHODOLOGY
The type of research is Descriptive research. It relies on both Primary data and Secondary data.
The primary data is collected using the questionnaire which is specifically gathered for current
study. It tends to be Quantitative in nature that is to say in the form of numbers that can be
quantified and summarized. Thus, descriptive research is useful in research conclusions and
decision making.
9A. POPULATION AND SAMPLE
The research population comprised of Government employees, Self-employed, Private
employees, retired people, home-makers, College students. The Sample Size was restricted to
150 above the age group of 20 which comprised of mainly people from Chennai. The type of
sampling used for the research is Simple random sampling where the population has an equal
chance of being selected
10. DATA COLLECTION TOOLS
The questions are designed in the easily understandable way in the topic Study of Promotional
Strategies for Life Insurance Products With Reference To IDBI Federal.
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11. DATA ANALYSIS TOOLS
Data collection is done through questionnaire. The SPSS software is used to analyze the data.
Different types of graphs & Charts have been used to illustrate the findings diagrammatically.
They are,
Bar graphs
Pie Chart
Line Chart
Area chart
These charts and graphs help to illustrate the output in the diagrammatic way. Thus, the data is
interpreted with the help of graphs and charts and the findings have been arrived.
12. DATA ANALYSIS
In the questionnaire i have considered three important factors to find the importance of
promotional strategies. They are,
Psychological factors
Sources that influence the people to purchase the insurance product
Features influencing the people to purchase an insurance product
Thus, these factors help in finding how effectively they influence a person in purchasing a
insurance product.
12A. MEDIA

FIGURE 1 MEDIA
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Out of 150 samples collected for the survey 94 people(62.7%) have chosen TV as the most used
media followed by Newspaper(37 people, 24.7%) and Internet(19 people 12.7%). Out of 150
people not even one preferred Radio. This shows that Television is the best media to promote the
products. This will help the company to reach end users easily.
12B. BRAND

FIGURE 2 BRAND
Out of 150 samples collected 84 people (56%) have said that brand is most important, 65 have
said that brand is important (43.3%) and one person said brand is least important. This shows
brand is most important for the people.

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12C. PRODUCT AWARENESS

FIGURE 3. PRODUCT AWARENESS
Among the 150 samples collected 85 said that product awareness is most important followed by
Important 57 people, Moderate 7 people and not important 1 person.
12D. LOW PREMIUM AND RETURNS

FIGURE 4 LOW PREMIUMS & RETURNS
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Out of 150 samples collected 82 have said low premium and returns are most important, 56 have
said its important and 12 have said it is moderate.
12E. SECURITY

FIGURE 5 SECURITY
Among the 150 samples collected 120 said security is most important, 23 said its important, 5
said its moderate and 2 of them said it is not important.
12F. ADVERTISEMENTS

FIGURE 6 ADVERTISEMENT
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Out of 150 people 6 have said it is most important, 12 have said it is important, 46 have said
moderate, 46 of them said it is not important and 40 chose least important.
12G. TAX BENEFIT

FIGURE 7 TAX BENEFIT
Out of 150 samples collected 100 of them said tax benefit is most important, 38 said its
important, 9 of them said it is moderate, 2 of them said not important and 1 person said it is least
important.
12H. DEATH BENEFIT

FIGURE 8 DEATH BENEFIT
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Among 150 samples 47 said it is most important, 86 said it is important, 15 chose moderate and
2 of them said it is not important.
12I. LIFE INSURANCE ADVERTISEMENT

FIGURE 9 LIFE INSURANCE ADVERTISEMENT
Among the 150 samples collected 145 of them answered that they have seen the life insurance
advertisement and 5 of them said they have not.
12J. PSYCHOLOGICAL FACTORS
PRICE

FIGURE10 PRICE
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Out of 150 people 87 said that price is more affecting, 56 of them said that it is affecting, 5 of
them said it is moderate and 2 of them said it is not affecting.
12K. CELEBRITY ENDORSEMENTS


FIGURE 11 CELEBRITY ENDORSEMENTS
Out of 150 samples collected 2 of them said its most affecting, 8 of them said its affecting 17
said its moderate 26 said its not affecting and 97 said it is least affecting.
12L. BENEFIT

FIGURE 2 BENEFIT
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Among 150 samples collected 132 said benefit is most affecting factor, 13 said it is affecting, 3
said it is moderate, 2 said it is not affecting and 1 said it is least affecting.
12M.TV COMMERCIAL


FIGURE 13 TV COMMERCIAL
Out of 150 samples collected 105 said Message is most important followed by creativity (44
people) and celebrity endorsements (1 person).
12N. SOURCES INFLUENCING PURCHASE OF INSURANCE POLICY
ADVERTISEMENT

FIGURE 14 ADVERTISEMENTS INFLUENCE
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Among 150 persons 30 have said it is most influential, 49 have said influential, 54 of them said
moderate, 13 of them answered Not influential and 4 of them said least influential.
12O. PROMOTIONS(SCHEMES, DISCOUNTS)

FIGURE 15 PROMOTIONS
Out of 150 samples collected 62 said most influential, 72 said influential, 11 of them answered
moderate, 4 of them said not influential, and 1 person answered least influential.
12P. WORD OF MOUTH

FIGURE 16WORD OF MOUTH
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Among 150 samples 111 said it is most influential, 25 said it is influential, 7 said it is moderately
influential, 4 said its not influential and 3 said it is least influential.
12Q. INTERNET

FIGURE 17 INTERNETS INFLUENCE
82 of them answered that internet is least influential while buying an insurance policy followed
by not influential (19 people), moderate (19 people) influential (14 people), most influential (16
people).
12R. BRAND AMBASSADOR

FIGURE 18 BRAND AMBASSADOR
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Out of 150 samples collected 36 of them answered yes and 114 of them answered no, which
shows that brand ambassadors are not important to endorse insurance products.
12S. ADVERTISEMENTS ROLE

FIGURE 19 ADVERTISEMENTS ROLE
72 of them agreed that advertisements play major role for insurance products.74 of them were
moderate and 4 of them disagree the statement.
12T. PRODUCTS POPULARITY

FIGURE 20 PRODUCTS POPULARITY
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Among the 150 samples collected 132 of them answered that they will look for products
popularity while buying an insurance policy and 18 of them answered no.
13. FINDINGS
After analysis it is found that,
Television for entertainment and gaining information. So it is the best media for
promotion.
People dont give more importance for the advertisements while compared to brand, tax
benefit, death benefit, security and low premium.
It is found that people are least bothered about the celebrity endorsements.
The message and creativity is important for insurance product.
The promotional efforts and word of mouth is most influencing while compared to
internet.
Advertisements play a major role in influencing a person to buy an insurance policy.
Insurance companies dont need a brand ambassador to endorse the product.
After the analysis it is found that advertisements help the insurance companies to reach the
end users easily. But still the advertisements must be more clear and creative because there is
heavy competition in the market.
The companys must use other promotion strategies like conducting more events and
experience, publicity etc. that would help in reaching the end users effectively.
14. CONCLUSION
Insurance sector was opened for private players with the starting of the 20
th
century, after
economic reforms in 1991, economy was liberalized. Since then there has a rampant and
dynamic growth in the field of insurance. The insurance sector has intensified and companies are
formulating survival strategies due to immense competition in a de-tariff scenario. This study
was focussed on the role and impact of advertisement in the promotional strategies of various
products adopted by Insurance sectors. The study reveals the advertisements are the major
strategy that helps the insurance companies to promote their products.
REFERENCES
BOOKS
1. George Belch & Michael Belch(2006),6
th
edition, Advertising & Promotion, Tata
McGraw Hill
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2. Philip Kotler, Keller, Koshy, Jha, 13
th
edition, Marketing Management, Pearson
Education
3. Donald R Cooper / Pamela S. Schinder, 9
th
edition, Business research methods, McGraw
Hill
4. Ramaswamy and Namakumari,4
th
edition, Marketing Management, Macmillan
Publication
5. Wells, Burnett, Morairty, 6
th
Edition, Advertising Principles & Practices, Pearson
Education
WEB REFERENCES
1. Annual Report IRDA
2. www.idbifederal.com
3. www.emeraldinsight.com
4. www.scribd.com
5. www.wikipedia.org
6. www.irda.com

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