LO1 Understand the concept and process of

marketing

1.1) Explain the various elements of the

marketing process
According to Philip Khotler Marketing is a social and managerial process
by which individuals and organization obtain what they need and want
through creating and exchanging value with others.
Marketing process is takes place by following by many elements, so it is
important for all the organisation to understand these elements of the
marketing for the successful completion of their company objective.
Needs are basic human requirement it include air, food, water, clothing,
and shelters. The marketing product of the company should minimum
meet the customer core needs. When a product does not meeting the
customers needs they cannot survive in the market.
When the needs are directed to specific object then it is known as want.
Wants are shaped according society where they are living. So the
marketers should analyse society before developing product to specific
area.
The want for the food for the Indian citizen and American are different. So
in order to satisfy the want the company have made a good idea about
the customers in the market. Demands are wants for specific products are
backed up by an ability to pay.
Through measuring the demand the company not only to how many
people want their product, but also how many are willing and able to buy
it. In now a days marketers do not create needs and the marketers get
people to buy things they dont want. As a result the needs are always pre
exist in the market. So marketers should try meet the needs of the
customers by providing the proper product.

1.2) Evaluate the benefits and cost of a

marketing orientation for a selected
organization
In the modern world most of the companies are following consistently the
holistic marketing concept. By analysing the marketing concept of LIC i
can found that they are following the holistic marketing concept. Here i

am trying to evaluate the benefits and cost of LIC by following this

marketing concept. Basically the holistic marketing concept is based on
the development , design and implementation of marketing programs
,processes and activities that recognise their breadth and
interdependences.
Holistic marketing teaches everything matter in the marketing. The life
insurance business marketing are highly impacting through following
these concept. In the past years they are following the old marketing
concept, but these marketing concept does not include the overall
marketing idea that is why most of the successful organisation are now
following the holistic market concept.
The life insurance company have got many benefits through following this
concept basically the company start a complete strategy to develop a
marketing programme .In the past year the company think that marketing
is only based on the promotion but it is a fault thought of the company.
This holistic marketing concept is start with developing the plan of the
product and ends with the attaining the feedback from the buyers.
Because of this company trying study about the product and other
marketing in this concept. The company try to invest a lot of money in
the field of research and development of the product. This made the
company to understand correct need and expectation of the customers in
the market. The company try to analyse the competitor for making the
product more diffrentions with the competitor. From this we can
understand that holistic marketing give many benefits to the life insurance
business.

LO2 Be able to use the concepts of segmentation,

targeting and positioning
2.1 ) Show macro and micro environmental factors which
influence marketing decision
Macro and micro environmental factors are affecting the working of an
organisation. To analyse the macro environmental factors here i am using
the tool called as PESTLE. PESTEL stands for Political, Economic, Social,
Technological, Environmental and Legal. It is very important for the
marketers to analyse how PESTLE factors are changing now and how they
are likely to change in the future, drawing out implications for the
organisation.
Economic

In kerala around 60% of revenue is coming from the gulf countries, when the
some of the gulf countries introduced a rule known as Nithakath there a lot of
malayalees lost their job through this law. It is highly affected the LIC some of
customers paused the payment of insurance and some of them are quit the LIC.

Technological
Through using the information technology most of insurance company are
promoting their policy to the customer. In order to success with them LIC
is now highly concentrating in the modern technique in the IT. The
company is now introduced the e-payment for the conviniance of the
customer and they are providing the proper information about the
payment through e-mail and text message in the handset.
Social
In our area most of the peoples are taking insurance policy only
by pushing the insurance agents through many strategy. Most of the
people are now also unwilling to buy insurance due to lack of awareness
about this service. But in the several countries the peoples are compell to
take the insurance.
LEGAL

Life insurance of India is control by the IRDA Insurance Regulatory

development Authority. In now a days they are keeping on change their
policies related to insurance. The changing policies are makes LIC difficult
for the companies to maintain their functioning.
POLITICAL
In now days the regulation board of insurance are lifting many entry
restrictions for private players as a result it will allowing foreign players to
enter the insurance market. The service tax on the services provided by
the insurers has been increased significantly over past few years by
the government.
PORTERS FIVE FORCE
Porters fives forces model is an excellent model to use to analyse a
particular environment of an industry. The five forces are the threat of
entry into an industry; the threat of substitutes to the industrys products
or services; the power of buyers of the industrys products or services; the
power of suppliers into the industry; and the extent of rivalry between
competitors in the industry.
Threat of new entrants
In now a days Life insurance industry entry barriers is moderate by the
regulatory board of insurance. The most of the peoples are buying their
product mostly based on consider the brand , in insurance sector LIC

brand is penetrated to the mind of the people rather than the other
company.
So it is difficulty to the competor to build a brand name in this sector.
The peoples are accepting the new brand is also very low in the market.
Power of buyer
Insurance market is highly segmented with different policies and services,
so the buyer power is changing according to the different policies. In the
industry the customers cannot quit the industry suddently because each
customers are signed their policies with a specific premium of amount to
the company. Those who is paying these they can quit from this and join
with other organisation.
competitive rivalry
There is tight competion is happening in the insurance industry in our area
.
There are mainly thirteen private organizations and one public
organization are working together to lead the market share. Most of the
Insurance companies has providing identical policies and services in the
market.

2.2 ) propose segmentation criteria to be used for

products in different markets
According to Philip Khotler Market segmentation is dividing a market into
smaller segments with distinct needs, characteristics, or behaviour that
might require separate marketing strategies or mixes.
People are taking the insurance for several reasons, so the people needs
to take the insurance policy according to satisfy their needs. When the
people have to need to take the insurance policy for protecting their
product in accident or other disaster. By analysing the need of the people
LIC build a new segment for protection policy schemes in their
organisation.
LIC is segmentation also follow the life stage in the people, they are
providing the pension policies products offered to the customers as
income during their years of retirement after their termination in their job.
They are launched several products especially for children for their further
education in the future. Genter based segmentation are happening in the
LIC, especially for the women they develop many attractive product.
LIC also has a policy schemes for people who are on the poverty. They
develop the policy like health insurance ,property insurance ,auto
insurance ,home insurance, causality insurance ,liability insurance ,credit
insurance ,etc.

Most of the LIC segmentation are based to both individual and corporate
in the market. The corporate policies of a LIC include group insurance
schemes such as group gratuity schemes, group term insurance schemes,
group savings linked insurance scheme and group leave encashment
schemes.

2.3 ) choose a targeting strategy for a selected

product /service
A target market consists of a set of buyers who share common needs or
characteristics that the company decides to serve. Market targeting can
be carried out at several different levels. After evaluating the different
segments, the company must decide which and how many segments it
will target.
LIC mainly targets children who are basically into schooling, by targeting
the childrens they design many attractive policy for the students for their
future study. By targeting this segment the company can ensures the
company market share in the insurance industry. There are a lot of
students are getting many benefits through this policy in their further
study. People in earning periods and senior citizens who have got retired
from their respective services. It not only targets the urban people but
also the rural people.
They are also mainly targeting the old people to take enter in the
insurance market. As a part they are providing pension plan for the old
people when they retired from the organisation.

2.4 ) demonstrate how buyer behaviour

affects marketing activities in different
buying situations.
Buying behaviour of a buyer changes according several things some
purchases are simple and habitual. Here we are trying to analyse the
buying behaviour of the life insurance consumer on the different buying
situation. In my analyses life insurance consumer are more complex
buying behaviour, according to Philip Khotler Consumer buying behaviour
in situations characterized by high consumer involvement in a purchase
and significant perceived differences among brands.
In now a days the there are a lot of insurance company are working
together to increase their market share, so there is tight competion is
happening in this industry. The consumers are planning taking insurance
are highly involved to analyse the different in the offers and service in the

each insurance company. They are not only conscious about the product
but all the elements needed for them to satisfy them to buy the product.
For this type of customers LIC should need to help buyers learn about
different policies, services and their relative importance in the insurance
industry. So in order help the buyer to learn more about the product,
service core competency LIC a providing as much information through
their website ,social medias and many personal contact classes Mainly
they are trying differentiate the product of the company with other
leading brand in the industry and also describe benefits through using the
product rather than the others. The company should motivate agents
other marketing department to influence the customers in the time of
negotiation with them.

2.5 ) proposing new positioning for a

selected product /service
According to Philip Khotler Positioning is the arranging for a market
offering to occupy a clear, distinctive, and desirable place relative to
competing products in the minds of target consumers.
LIC positions itself as the most cloud influenced insurance company
providing financial solutions to the people in India. It is very popular
among the people in this country because it is owned by the government
of India and they are first insurance company introduced life insurance in
the country.
LICs positioning in the insurance market mainly based by its mission
statement that is states that the organisation aims to 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.
The vision of the LIC are also position their brand in the insurance
industry, that is becoming a transnational competitive financial
conglomerate of significance to societies besides being the pride of India.
This has made LIC a financial institution that enjoys the all most trust of
its client through out the country. The brand LIC has been rated as one of
the most trusted brands in India by The Economic Times.

LO3 Understand the individual elements of the extended

marketing mix

3.1) Explain how product are developed to

sustain competitive advantages
Most of the organization are not more bother about the management
concept about the Marketing mix, so here i am trying to generate some
information regarding about the product and how it can be developed to
sustain the competitive advantages. Product is the one of the most
important elements in the marketing mix. According to Philip Khotler
Product is anything that can be offered to a market for attention,
acquisition, use, or consumption that might satisfy a want or need.
Now we can analyse how a marketer are developed the product to satisfy
the customer value and sustain the competitive advantages. When
developing products, marketers first must identify the core customer
value that consumers seek from the product. They must then design the
actual product and find ways to augment it to create this customer value
and the most satisfying customer experience.
In LIC, the life insurance are designed several products in accordance with
the requirement of the common people. Most of the people are taking the
insurance as a purpose of protecting the family members in case of death,
so we can say that LIC meet the core customer value.
In now a days LIC offers various product to the customers to maintain a
competive advantages in the market like health insurance ,property
insurance ,auto insurance ,home insurance, causality insurance ,liability
insurance ,credit insurance ,etc.LIC are launched several products
especially for children, senior citizens, women and handicapped.LIC also
has a schemes for people who are on the poverty.
LIC maintain a good relationship with consumers through LIC mini store
throughout the villages. As a result the consumer can easily pay the
premium and they are also get all the information regarding to the
organization policy and schemes and also provide a toll-free telephone
number and Web site to use if they have problems or questions about the
organisation.

3.2) Explain how distribution is arranged to

provide customer convenience

Most of the organisations are use intermediaries to bring their products to

market but some few producers sell their goods directly to final users.
According to Philip Khotler A distribution is a set of interdependent
organizations that help make a product or service available for use or
consumption by the consumer or business user.

Life insurance is a service oriented industry, so the distribution of its

products and facilities is done through direct and indirect.LIC are taking
numerous routes to reach their product and service to their potential
customers. The basic channel of the organisation is the insurance agent.
The organization channel of distribution consist of agents ,brokers,
development officers, retail service ,branch office ,banks and distributers,
corporate agencies and proper and well maintained infrastructure.
For distributing the product to the customers the branch managers need
to prefer local persons and provide them training and conduct seminars by
awareness about the product and service. In addition to the agents, the
front line staff also needs an intensive training programme to manage the
sales agents and proper organisation behaviour in the organisation. The
organisation is providing a adequate incentives to show their excellence in
the performance. While recruiting agents as the distribution agent they
have targeted to specific location under the control of the branch
manager.
While locating branches, the branch manager needs to consider a number
of factors, such as smooth accessibility, availability of infrastructural
facilities and the management of branch offices.

3.3) Explain how prices are set to reflect an

organizations objective and market
conditions
According to Philip Khotler Price is the amount of money charged for a
product or service; the sum of the values that customers exchange for the
benefits of having or using the product or service.

A suitable pricing policy is a very important factor in the successful

running of an insurance company as it is the pricing policy that affects the
sales volume of a company. In LIC, the policyholder has to pay a premium
that is paid either annually, half-yearly, quarterly or in some cases
monthly. The management takes the decision of fixing the premium of
every policy relating to a particular period.

Through a complete market analysis is done by the LIC each year and
they get information about various facts in the current market, and they
also anaylse the what are the economic and financial condition of the
market at that particular time. This study helps in making the fair and
reasonable pricing policies.

The management also makes pricing decisions about the premium mode,
premium level, investment return, loan interest and the commissions. By
comparing LIC products with other insurance products, then we can
understand that LIC is very much a value for money product. With its
excellent brand value, and service quality, a customer can get full value
as per the price paid for an LIC product.

3.4) Illustrate how promotion activity is

integrated to achieve the marketing
objectives

According to Philip khotler Promotion mix consists of the specific blend of

advertising, public relations, personal selling, sales promotion, and directmarketing tools that the company uses to persuasively communicate
customer value and build customer relationships.

Product introduction and product retention in the mind of the customers is

the major objective of promotions by Life insurance corporation. The
promotional strategy of LIC is very simple and straight forward. The main
aim of their promotional activity is to inform the consumers about its
various policies and its procedure. The company has taken several steps,
like personal selling, exhibitions, demonstrations at events, advertising
and new schemes. Bags, diaries calendars are distributed as gifts and
incentives to the policyholders. Advertisements are shown on televisions,
newspapers, billboards as promotional activities.

The company providing a mobile van for publicity across the rural areas
creating awareness about the company. LIC has its own website and
webpage where all the detailed information about every possible
questions regarding about the company to satisfy the consumers.

The majority of the peoples are taking the insurance basically according
to the promotional activity, but the company cannot reach their
promotional activity in the rural area due to low literacy and lack of
communication problems. In now a days there are developing many
promotional strategy for reach the company product in the rural area.
The company should always given free freedom for the sales agents in
selecting the promotional tools. They also have to be given proper training
in order to create impulsing the peoples to buy the product. Advertising
and Publicity, organisation of conferences and seminars, incentive to
policyholders are impersonal communication. Company also arranging
exhibitions, participation in fairs and festivals both in the rural and urban
area.

3.5) analyze the additional elements of the

extended marketing mix
In the modern world the marketing experts are also highly consider the
other factors rather than the product, place, promotion, price in the 4 ps
in the marketing mix they are people, process, and physical distribution
they are now known as the 7 p s of marketing mix. Now we can analyse
the additional elements in the marketing mix in the life insurance industry.
In now a days LIC is conscious about the people in the marketing mix, by
proper understanding the customers and design appropriate product to
the customers. The company give a vital important in using the resource
effectionly in order to satisfy customers. They are also maintaining
training, development and strong relationships with intermediaries,
training the employees, use of internet efficiency both at the staff level
and agent level, is one of the important differentiation of this organisation.
Process is the one of the elements in the marketing mix. In the LIC the
process should always customer friendly in insurance industry. This is
mainly because they are providing high speed and accuracy of payment
through out the areas.LIC is always maintaining easy processing method
to attain and retain the customers. Through out using IT & technology
they are smoothening their process of their organisation.
Physical distribution is a key determinant of success for all insurance
companies. Building a distribution network is very expensive and time
consuming. Basically insurance known as a complex product should need
high advice and service component, so most of the cases the buyers
prefer a face-to-face interaction with LIC agents.

Through increasing the awareness about the product to the customer, the
product becomes simpler and they become premium buyer of the product.
In now a days LIC have successfully used remote distribution channels
such as telephone or internet so as to reach more customers, avoid
intermediaries, bring down overheads and increase profitability.

LO4 Be able to use the marketing mix in

different contexts
4.1 plan marketing mixes for two different segments in
consumer markets.
Many companies face a problem when they developing new products ,to
create successful new products, a company must understand its
consumers, markets, and competitors and develop products that deliver
superior value to customers.
In current situation none of the any insurance company are not providing
much good policies in agricultural and Farming sector .So my analysis LIC
have better option to add their agricultural policies as their product to
increase the business in the rural area. This product is most basically
developed according to the need arises from agricultural areas. So this
product should full fill need of these customers and also the company
increases their profit share in these segment. There should be good
pricing strategy needed for a new product to entering into the market.
There are many pricing strategies are used different organisation to lead
product in the market. In this product it is better to select the market
penetration pricing. This pricing strategy mainly according to set low
initial price to penetrate the market quickly ,deeply and attract a large
market share. By attaining the high sale volume the company can reduce
the cost of the product.
People in the rural area are not supported to buy the product with high
price, so they can always need the product with low price. Making
awareness about the policies and services is the one of the main
promotional strategy should take the company sales In the rural area. So
the company providing a mobile van through out the area for making
awareness about the product. The location based distribution is
appropriate distribution channel for these product in the rural area. For
integrating the distribution there will be better to build a mini store
through out the village.

4.2 illustrate differences in marketing

products and services to businesses rather
than consumers
Business market is market in which an organisation acquire goods and
service for the production of their product and services. In modern world
both consumer market and business are facing some relatively challenges
in the society. But there are many difference between these industries
,here i am trying to explain the contrast between these two market.
The business market are basically deals with the larger buyers than the
consumer market, in business market purchasing is happening in more
professionally because most of the business goods are purchased by
trained purchasing agent of the company. These agent should follow their
organisation purchasing policies. But in the consumer market request for
quotations, proposal and purchase contract are not found in this market.
The professional buyers have a good idea about to buy better. From this
we can analyse that in business markets have a good technique data
about the competitor product in the market.
In business market there a more people are influence in buying decision
rather than in the consumer market. In business market they build a
buying committee consist of technical expert and the managers .In this
type of market the marketers have a need well trained representives and
sales teams to deal with the well trained buyers.
The demand for the business goods are derived from the demand for the
consumer goods. Because of this reason business marketers are closely
monitor the buying pattern of ultimate consumer. In business the total
demand for business goods and service are inelastic because they do not
buy much more resource when the price of the resource is falls ,and also
they not buy much less resource if the price rises. But in the consumer
market the total demand for goods and service are elastic because they
buy more when the price falls and they buy less when the price of the
product increases.

4.3 show how and why international

marketing differs from domestic marketing
Domestic marketing is the practice of marketing within a firms home
country. But the International marketing is the practice of marketing in a
foreign country. A domestic marketing is restricted to the geographical
boundaries of a country. A company marketing only within its national

boundaries has to consider as the domestic competition. Globalization has

made many impact on international marketing. More and more markets
have become open to international organizations as the cost of operating
overseas has been reduced by globalization .
International marketing providing a wide variety of opportunity different
people in the world but the domestic marketing is only providing
opportunity to a specific country only. Through international marketing
many company like ford, Toyota etc are start their manufacturing factory
in developing countries like India ,China, etc due to lower labour cost and
production cost. As a result many companies can able to price their
products at lower and they provide a broader employment opportunity
many people across different countries.
In international market the marketers are should face the customers with
wide variety of culture but in the domestic market the marketers are to
much culture difference rather than the international market. There are a
lot of challenges faced by McDonalds in India, when they introduce their
business they are not consider the value of cow in the people Indian
people consider the cow as their god ,McDonalds come with beef items,
from starting itself they face caviar problem in the Indian society. The cow
is considered as scare d according to Hindu beliefs so; McDonalds forced
to alter its menu and offer mutton and chicken instead of traditional beef
burger for catching the market of India. McDonalds now has 130
restraunts in India and planned more.

MARKETING PRINCIPLES

Submitted by:
MUHAMMAD SHAFI
TO: RAUF SIR