Grand Final

WINSURANCE GIANT ‘SW
MARKETING STRATEGIES
MARKETING
Almost every marketing textbook has a different definition of the term

“marketing”. The American Marketing Association (AMA) uses the following: ‘the
process of planning & executing the conception, pricing, promotion, & distribution of
ideas, goods, & services to create exchanges that satisfy individual & organization
objectives”. From this definition, we see that:
• Marketing involves an ongoing process. The environment is

“dynamic”. This means that the market tends to change – what
customers wants today is not necessarily what they want tomorrow.
• Example: Sales of beef are declining in the United States because

consumers have become health oriented. Similarly, Tupperware
parties are less popular today than they once were because there
are fewer housewives who do not work outside the home
• This process involves both planning & implementing (executing)

the plan.
• Some of the main issues involved include:
1. Marketers help design products, finding out what customers want

& what can practically be made available given technology &
price constraints.
2. Marketers distribute products – there must be some efficient way to

get the product from the factory to the end-consumer.
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3. Marketers also promote product, & this is perhaps what we tend to

think of when we think of marketing. Promotion involves
advertising - & much more. Other tools to promote products
include trade promotion (store sales, coupons, & rebates),
obtaining favorable & visible shelf – space, & obtaining favorable
press coverage.
4. Marketers also price products to “move” them. We know from

economics that, in most cases, sales correlate negatively with price
the higher the price, the lower the quantity demanded. In some
cases, however, price may provide the customer with a “signal” of
quality. Thus, the marketer needs to price the product to:
a) Maximize profit &
b) Communicate a desired image of the product.
5. Marketing is applicable to services & ideas as well as to tangible

products.
Example: - accountants may need to market their tax preparation

services to consumers.
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MARKETING MIX 7P’s OF SERVICE INDUSTRY
Under the product, we include both goods as well as services with the prime
motto of satisfying the customer/users the marketers are supposed to make sincere
efforts for merchandising customer benefits &services with the help of the customer
oriented marketing decision. This draws our attention to the formulation sound
marketing mix. Like the goods manufacturing organizations even the service
generating organizations are required to formulate oriented programmers & policies.
Prof. Neil H. Born of the Hayward Business School first introduced the term
marketing mix. Marketing mix is the fair combination of product mix, promotion mix,
place mix & price mix. The ultimate goal of different mixes is to deliver standard
goods & services to the customer/users. All this mixes helps management in making
decisions & using innovation in the marketing process, these 4 elements make up
what is commonly known as marketing mix or the 4 P’s. The elements of marketing
mix combine in different ways just as an ingredients, the professional excellence of
marketers play a significant role.
The marketing mix is the planned package of elements that makes up the
product or service offered to the market. It is aims to reach target markets & specified
objectives. The key issues to consider it as user convenience, user cost & user
communication; taking core service & packaging them according to the needs of
specific user groups is a priority. Services: user considerations, user cost, user
convince, & user communication. The marketing mix is a key concept in marketing,
but it needs to be understood thoroughly before strategic decisions are made on its
applications.
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Is it the magic formula that will put all the rights, whatever the organization,
whatever its problems? Not, like all marketing concepts & techniques.
The marketing mix is an integral part of marketing planning that depends on

environmental scanning, market research, understanding users, readers & clients, &
offering quality product & services. But it is a substantial part of effective marketing
strategy, designed to cover all the aspects of the product or service that are important
to the customer, or user: how does it answer user needs? Is it attractive? Easy to
access? Is it marketed at right price?
The consideration of the interaction of product, price, place & promotion.
Provides a valuable structure in working towards a set of strategies. When this is

coupled with substantial market information & used against a background of careful
analysis of the micro- & macro – environment then marketing objectives are more
likely to be achieved.
a) Product: “Anything that can be offer to the market for attention, acquisition,
use or consumption that might satisfy a want or need. In includes physical
objects, services, persons, places, organizations & ideas.”
b) Price: “The amount of money charged for a product or service, or the sum of
the values that consumers exchange for the benefits of having or using the
product or service”.
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c) Promotion: “Activities that communicate the product or service & its merits to
target customers & persuade them to buy”.
d) Place: “All the company activities that make the product or service available
to target customers”.
McCarthy’s (1978) classic m0odel of the 4 P’s –

How the product or service is best presented, in attributes, price, availability &
promotion, to the desired market segment – is a development of a theory put forward
initially by Neil Borden (1965).Borden’s mix is now more precisely found in market
research &market strategy. Extra ‘P’s have been added to marketing mix
considerations for service marketing.
 People: - All people directly or indirectly involved in the consumption of the service,
example: employees or other consumers.
 Process: Procedure, mechanism & flow of activities by which services are

consumed.
 Physical Evidence: The environment in which the service is delivered. It also includes
tangible goods that help to communicate & perform the service.
THE ADDITIONAL “P” OF RELATIONSHIP MARKETING.
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Further more, in the context of relationship marketing (to consumers) or key

account management (in industrial marketing), it could be argued to add
“Partnerships” as an additional “P” to the marketing mix as well. Main reason for
this addition would be the growing focus in marketing towards long-term orientation
that needs to be considered in most marketing concepts.
SERVICES
A service is a product of human activity aimed to satisfy human needs, which

does not constitute a tangible commodity there are many types of services, ranging
from heart surgery to road construction, electricity transmission to education, and
child care to water purification. Services are important for employment and
employment growth. This is because many traditional services, including distribution,
education and social services, are labour
intensive. In many service sectors it has also
proved to more difficult to substitute capital for
labour than in manufacturing.
The expansion of services has been
driven in particular by income related demand
shifts, benefiting for example, the Hotel and
Tourist industries; the economic stimulus
resulting from new information and
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communication technologies; and the growing importance of basic infrastructural

services, including transport, communication and finance, for wide range of user
industries. Services are coming to dominate the economic activities of countries at
virtually every stage of development, making services trade liberalization a necessity
for the integration of the whole world.
A service is a bundle of features and benefits. However these benefits have

relevance to a specific target market. Hence while developing a service package it is
important that the package of benefits in the service offer must have a customer
perspective. Gronroos constructed that the services are product offers consists of 3
levels. The first level is that of basic service package which includes core service,
facilitating services and supporting services. The 2nd level is that of an augmented
service offering where accessibility interaction and customer participation is given
equal importance in delivering the service product. The third level is that of the
market communication of the service offering as in its absence the augmentation
service package doesn’t have any relevance to the customer.
FINANCIAL SERVICES/PRODUCTS
The term financial services or financial products in a broad sense mean

“mobilizing and allocating savings”. Thus it includes all activities involved in the
transaction of saving into investment. The financial products can also be called
‘financial Intermediation’. Financial Intermediation is a process by which funds are
mobilized from large number of savers and make them available to all those who are
in need of it and particularly to corporate customers. Thus, financial services sector is
a key area and it is very vital for industrial development. Today, the importance of
financial services is gaining momentum all over the world. In these days of complex
finance, people expect a financial service company to play a very dynamic role not
only as a provider of finance but also a departmental store of finance. Sophistication
and innovations have appeared in the arena of financial intermediaries.
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Financial Services is a term used to describe a whole family of resources that

can be used to help manage income and other assets. It includes basic banking
services such as checking and savings accounts, as well as:
• Credit and loans for a variety of purposes – to buy a car or home, to pay for
education -- and in many formats, including home equity lines of credit, term loans,
revolving credit lines, and a wide variety of credit cards.
• Insurance – life, property, retirement

• Investment – certificates of deposit (CDs), stocks, mutual funds
• Money management planning information and advice – online education,
community-based programs, on-site brochures, videos, personal financial advisors.
• Direct deposit, online bill paying, wire transfers, and many more convenience
systems for managing money.
FINANCIAL SECTOR IN INDIA
The financial sector is in a process of rapid transformation. Reforms are

continuing as part of the overall structural reforms aimed at improving the
productivity and efficiency of the economy. The role of an integrated financial
infrastructure is to stimulate and sustain economic growth.
The US$ 28 billion Indian financial sector has grown at around 15 per cent
and has displayed stability for the last several years, even when other markets in the
Asian region were facing a crisis. This stability was ensured through the resilience
that has been built into the system over time. The financial sector has kept pace with
the growing needs of corporate and other borrowers. Banks, capital market
participants and insurers have developed a wide range of products and services
to suit varied customer requirements. In this era Mutual Fund is also growing many
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companies are offering many types of funds for the customers. The Mutual Fund &
financial products are now able to collect the funds for their product. The Reserve
Bank of India (RBI) has successfully introduced a regime where interest rates are
more in line with market forces.
Financial institutions have combated the reduction in interest rates and

pressure on their margins by constantly innovating and targeting attractive consumer
segments. Banks and trade financiers have also played an important role in promoting
foreign trade of the country. Today, the importance of financial products is gaining
momentum all over the world. In these days of complex finance, people expect a
financial services company to play a very dynamic role not only as a provider of
finance but also a departmental store of finance where different varieties of financial
products are available for people.
MARKETING OF SERVICES
We term marketing a function by which a marketer plans, promote and deliver

goods and services to the customers or clients. In the marketing of services, the
providers are supposed to influence and satisfy the customers or users. The perception
of service marketing focuses on selling the services in the best interest of users and
customers. It is concerned with the scientific management of services, which makes
possible affair synchronization of the interests of providers as well as users. With the
change in the perception of management, we witnessed multi faceted changes with
which necessitated an analog change in the concept of service marketing. The services
generating organization released the interest of the customers and thereafter they were
compelled to assign due weightage to the interests of society in the face of the holistic
concept of the management.
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Marketing a service is meant marketing something intangible. It is marketing a

promise. It is more selling yourself. We can’t deny the fact the selling of promises
complicate the task of marketers since they find it difficult to identify the stage or the
time where the services start degenerating or where the promises fall. Of late, we
consider marketing as customer satisfaction engineering. There is no doubt that the
organizational goal is like making profits, establishing a leadership, innovating the
marketing resources are found significant but the focal point is the users satisfaction.
In the marketing of services, we go through the number of problems directly or in
directly influencing the business index. The problems like market segmentation,
marketing information system, behavioral management are studied minutely to
simplify the task of formulating a sound mix for marketing, such as product mix,
promotion mix, place mix and price mix. It is important to mention that we find
“people” an important mix of marketing services.
FINANCIAL PRODUCTS/SERVICES MARKED BY:
The following are the various Financial Products with different Marketing
Strategies used to sell the products:
1. POST OFFICE
Post office operates as a financial institution. It collects small savings of the

people through saving Bank accounts facility. In addition, time deposits and
government loans are also collected through post offices certain government securities
such as Kisan vikas patra, national saving certificates, etc are sold through post
offices. The postal department regularly introduces new schemes in order to collect
savings of the people.
Postal savings bank schemes were popular in India for a long period as
banking facilities were limited and were available mainly in the urban areas up to
1950’s. The popularity of postal saving schemes is now reduced due to the growth of
banking and other investment facilities throughout the country. However at present
small investors use postal saving facilities for investing their savings surplus money
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for short term due to certain benefits like stable return, security and safety of
investment and loan facility against postal deposits. Even tax benefit is one
attraction for investment in post office. Investment in postal schemes is as good as
giving money to the government for economic development along with reasonable
return and tax benefit. Post Office Savings Bank (POSB) has a customer base of
more than 11 crore account holders with annual deposits exceeding Rs.70, 000 Crore
and a network of 1, 55,000 branches.
Marketing strategies:
 Personal Selling Through Agents.
 Pamphlets & broachers.
Marketing Mix of Post Office Products and Services

Product Price/ Place Promotion
Interest
Saving A/c 3.5% The distribution of all the The Promotion of the
National Saving 8%
schemes of post office is Schemes of the post office
Certificate
done through agents and is done mainly
Kisan Vikas 10.03%
direct from their post Through word of mouth
Patras
Recurring 8% offices around India publicity by the agents
Deposits There are about 1,53,256 and the customers other
Time Deposits 1yr-6.25%
Branches of post office in promotion tools are adds
2yr-6.5%
India in the newspaper and in
3yr-7.25%
government places like
5yr-7.5%
railways ,etc
Monthly 8%
Income Scheme
PPF 8%
Senior Citizen 9%
Scheme
Process People Physical Evidence
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The Process for the Schemes The People involved in these The Physical
of the Post Office is more or services is the customers who buy Evidence given by
less similar to each other the the product , the distributors i.e. the Post Office to make
money which is collected by agents and the Firm i.e. the post tangible its service
the customers is put in the Office There are approximately are of two types
government investment or about More than 1,50,000 Post  Pass Book
given to state as loans, etc and Office in India and About  Certificate
in return to their investment 38,94,500 Agents of Post Office
the customers get their Interest and about 9,00,000 staff working in
on Maturity Post Office
2. BANKING
A bank is an institution that deals with money and credit. Different people
understand the meaning of bank in different ways. For a common man bank means a
storehouse where money is stored; for a businessman it is a financial institution and
for a day-to-day customer it is an institution where he can deposit his savings.
In reality banks are service organisation selling banking services. Banks play
an important role in the Economy of any country as they hold the savings of the
public. Provide means of payment for goods and services and provide necessary
finance for the development of business and trade.
The Indian banking system has a large geographic and functional coverage.
Presently the total asset size of the Indian banking sector is US$ 270 billion while the
total deposits amount to US$ 220 billion with a branch network exceeding 66,000
branches across the country. While commercial banks cater to short and medium term
financing requirements, national level and state level financial institutions meet
longer-term requirements. This distinction is getting blurred with commercial banks
extending project finance.
Banking today has transformed into a technology intensive and customer

friendly model with a focus on convenience. The sector is set to witness the
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emergence of financial supermarkets in the form of universal banks providing a suite

of services from retail to corporate banking and industrial lending to investment
banking. While corporate banking is clearly the largest segment, personal financial
services is the highest growth segment.
Marketing strategies:
The following are the strategies used by the banks to market its product:
 Personal promotion is one of the most preferable option used by the bank to
promote the various products, especially the products like saving a/c’s.
 The second way used by the bank is conferences that are meetings with
various corporate for opening bank account of the company with their bank.
 Advertising is another way used by all the banks to promote their products.
Like Hum Hein Na…. An Ad Campaign by the well-known Bank Known as
ICICI Bank.
 The banks to promote various types of products also use publicity and also the
banks use various sales promotion methods.
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LIFE INSURANCE
INTRODUCTION
Life brings with it many surprises some pleasant and some not so good or shocking
That why another name of life is risk or uncertainty, we are always searching for
protection safety and security for ourselves and for our dear ones
Thanks a million to insurance industry

For fulfilling our protection and safety needs
Life insurance plan balances our lives
 We need life insurance because:-

 If we alive are alive:
 When we are alive we become old by the passage of time…..
 When we get old we need money and care…….
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 & If we Die/Expire various questions arise:-

 Who will take care of our family?
 What would be our children’s future?
 What about their education/ambitions?
 Who would pay our loan?
 What would be our family’s standard of living?
 Who will share our responsibilities?
All this questions make us restless and the insurance is the only solution to all the
above questions/problems
Many people or most of the people in India invest in insurance for tax benefits
under section 80c and section 80d.
HISTORY OF LIFE INSURANCE IN INDIA
The insurance sector in India has come in 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 190 years.
The business of life insurance in India in its existing form started in India in the year
1818 with the establishment of the Oriental Life Insurance Company in Calcutta.
[
Some of the important milestones in the life insurance business in India are
• 1912 - The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
• 1928 - The Indian Insurance Companies Act enacted to enable the government
to collect statistical information about both life and non-life insurance
businesses.
• 1938 - Earlier legislation consolidated and amended to by the Insurance Act

with the objective of protecting the interests of the insuring public.
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• 1956 - 245 Indian and foreign insurers and provident societies taken over by
the central government and nationalized. LIC formed by an Act of Parliament,
viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the
Government of India.
Market Share of the players iLife Insurance Industry

Market Share 2005-06
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1%1%
1%1%
1%
1%1%
2%
3%
2% LIC
ICICI Prudential
8% Bajaj Allianz
SBI life
HDFC Standard Life
Birla Sun Life
7% Max New York Life
Reliance Life
Aviva
Tata AIG
Om Kotak
71% ING Vysya
Others
In the year 2005-06 the share of LIC was 71% and Bajaj Alliance was on number 2
with 8% of market share and ICICI Prudential was third in the line with 7% market
share and SBI Life was having a 2% share
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Market Share 2006-07
LIC
ICICI Prudential
Bajaj Allianz
SBI life
HDFC Standard Life
Birla Sun Life
1% Max New York Life
1%
Reliance Life
1%
1%
Aviva
1% Tata AIG
1%
Om Kotak
1%
1%
ING Vysya
2% 74% Others
3%
6%
7%
In the year 2006-07 the Performer were the ICICI Prudential and LIC as LIC
increase its share by 3% to 74% and the ICICI Prudential became successful in
becoming no 1 in the private life Insurance Industry
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With the private insurers sweated it out for a pie of the Life Insurance cake
during FY07, the total new business premium for the insurance sector has grown by
110% to Rs 35,898 crore, beating industry expectations
MARKETING MIX OF LIFE INSURANCE
PRODUCT MIX
A product is any thing that can be offered to market for attention,
acquisition, use or consumption that satisfy a want or need
In insurance sector an insurance plan/policy is a product there are different
types of product (plan/policy) of insurance that can be classified as
1) Traditional plans
2) Market linked plans
3) Health plans
Any product is not made in one level it has many levels like wise insurance has to
go under various levels to become a final product these are
1. Basic Product
2. Expected Product
3. Augmented Product
4. Potential Product
 Basic Product: - Safety, Security, Protection, Investment, are the basics

which a insurance plan should provide
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 Expected Product: - Tax Benefit, Easy Claming procedure as well as quick

settlement, Withdrawal facility, Facility to take loan, Maturity benefits and
Death Benefits for family is the expected facilities which are very necessary
for the success of the company
 Augmented Product: - Additional Protection Riders like Accidental Death
Benefit Rider, Income Benefit Rider, Wavier Premium Rider, Critical Illness
Benefit Rider, Term Rider, etc are the benefits helps the customer to select the
product/plan, ECS Facility.
 Potential Product:- Extended Life Cover, Bonus, Giving statement every
quarter incase of ulip products, SMS Facility to Know the policy Details, etc
These are the different levels of the product Which a insurance firm keeps in mind
and designs a plan /product for offering it to people a different mix is used for
fulfilling different needs of the customers and by analyzing different needs of people
at different stages different types of plans are designed A different product mix is used
for different products
NEW PRODUCT DEVELOPMENT

The most important component of product Management is The New Product
Development as when things are changing the needs of people to take insurance are
changing so giving same product to the customer would be very bad for the growth of
the of the company A Insurance firm which is growth oriented always looks beyond
its existing product or service. And develops there quality services and also develop
new products/plans
How the Insurance Products are developed in a period of time

We can see lots of difference in the life insurance products before when it was
started with the plans like term plan, endowment plan Cash back plans, etc going
towards Education plans, pension plans, Savings with protection plans, etc And now
with Annuity plan, Unit liked insurance plans, etc which has become the reasons of
development of insurance sector
How service is developed in period of time

The services given by the insurance firm to the customer is very important due
to intangible feature of insurance the services which were provided to the customer
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previously and now there is a vast difference Before every thing was done manually
but now every thing is computerized now a customer is given a pin where he can pay
the premium get the claim forms and also can switch in case of ulip plans, Previously
only one policy was send to customer now with the policy all the related things like
claim form, policy details, etc are sent to customers before a plan was sold after
that client was not treated properly his quires were not solved his complaints were not
considered his other needs related to it were hardly fulfilled but now There call
centers were the customer can call and get his tings done and if he has any complain
there is a regulatory body were he can file a complaint against the company. As the
product basket has increase the related services to the ulip products like quarterly
reports Portfolio design,
The latest improvements done in services is providing details to the customer
with no time in their hand with the newly introduced SMS facility With this facility
the customer can see the NAV, policy status and also can use for updating the details
with the company
Comparison between the products of LIC and ICICI Prudential life insurance
A product for children’s education /Future

Particulars/ ICICI Prudential Life LIC
Features Insurance Co.
Product Name Smart Kid Komal Jeevan
Age of child 0 to 12 years 0-10 years
Age of parent 20to 60 years NA
Term Matures between 22-25years of 16-26 years
the Childs age. Term is 10-25 Y
Sum assured Rs.1Lac to Rs.30Lac Rs.1Lac to Rs.25Lac
(In multiples of 25000)
Life Assured Parent Child
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Death Benefit SA is paid up front. Child gets Sum Assured + GA

the guaranteed payments as
chosen earlier. All future
premiums are waived.
Death of Child Option to continue or surrender Death benefit
the policy
Survival Two structures: The SA will be paid as under

Benefits 1) When the child reaches his :
critical milestone (Xth, Xllth, a}20% of the SA when LA
graduation, post graduation) i.e. attains the age of 18 Years
in the years; Term-7, Term-5, b}20% of the SA when LA
Term-2 and on maturity. Payouts attains the age of 20 Years
as following as a 5 of SA- c}30% of the SA when LA
20%,25%,25%,(30%+GA+VB) attains the age of 22 Years
2) Last 4 years before maturity d}30% of the SA when LA
& on Maturity The payouts are attains the age of 24 Years
as follows as a % of SA- 25%,
20%,20%,20% (20%+GA VB)
Bonus & GA + VB on maturity GA
Additions
Surrender Value Available after 3 Premiums are Available after 3 Premiums are
paid paid
Free-Look Available NA
Period
Riders IBR,ADBR Term rider benefit
Age of a Parent 30 30
Age of child 4 2
Term of 22 26
illustration
Premium 18 18
Payment Term
Sum Assured 200000 200000
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Premium 12646 14562

Survival 200000 140000
Benefits Paid at
intervals
Benefits paid on 197428 Rs.210000+Loyalty Benefits
Maturity
PRICE MIX
The price is the exchange value for a product or service, expressed in

terms of money. The price of the service is the service value attached to it by the
service provider and it must respond with the customer perception of value. Price is
the only P which generates revenue for the company as it is two sided sword so it
should neither be priced high nor low, it should be priced perfectly Pricing is an
important tool in the hands of the marketer
PRICE IN INSURANCE INDUSTRY
In Insurance plan premium which a customer pays for the plan or policy is
the price of the plan, it consists of various charges which are named differently in
different companies. They are:-
$ Administrative charges,
$ Mortality charges,
$ Risk Charges,
$ Allocation charges, etc
Price in any industry is largely influenced by cost in this the cost of insuring a
physically fit person for a specific amount is calculated and decided by the
underwriting department of the insurance company this department while designing
the product works out with various things like
$ Population growth
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$ Inflation
$ GDP growth
$ Different ratios
$ Death Ratio
And finally after considering all statistics data it formulates the premium
table for the plan in the age wise term wise
Below in the table an example is given of a Smart Kid a product of ICICI

Prudential.
Age/term 10 11 12 13 14 15
20 130.54 116.86 105.55 96.04 87.93 81.63
21 130.57 116.89 105.58 96.07 87.96 81.67
22 130.59 116.92 105.61 96.10 88.00 81.71
23 130.62 116.95 105.64 96.13 88.04 81.75
24 130.64 116.98 105.67 96.17 88.08 81.80
25 130.67 117.01 105.71 96.22 88.13 81.86
The above rates are given for per thousand of sum assured
A case were the age is 22 and the term taken is 14 years and the sum assured
chosen is 100000 than the premium would be calculated as 88*100000/1000=8800
In this way a basic premium chart is made for calculation of premium but as
every person differs from other the risk associated to his life is also different so the
price should also be different the following are factors which effects price i.e.
premium of a plan from person to person
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Factors effecting Pricing Decision
 Age,
 Sex,
 Health:-Height, weight
 Habits:-Tobacco, alcohol, any narcotic
 Any disease suffering from
 In case of female Pregnant or not, other related health problems
 Family Health status
 Job place (Hazardous E.g. chemical factory)
 Job type (Risky e.g. military)
 Type of work i.e. indoor or traveling
Are the important determinants of a price i.e. premium of an insurance policy/plan
The IRDA Insurance Regulatory development Authority is also having an eye

on the price fixed by these Insurance firms
Demand of the products like High demand of ULIP products also is a major
determinant of price in ULIP products
In this way the basic premium and after considering all other things i.e. other
factors like If job of person is risky or he is over weight or his sugar level is high,
other health problem, etc than (XRT) Extra premium is charged than after adding it to
the basic premium the final price/premium to be charged is calculated
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PLACE MIX
Insurance Distribution Channels
Agents
Agency has been the traditional way in which insurance was transacted in the
Indian market. Agents act as the representatives of insurance companies. In the
nationalized era, agents were a very important source of business for the Public Sector
Insurance Companies, as broking was not allowed. Agents still hold a very large book
of insurance business mainly in the personal lines.
Corporate Agents
Corporate Agents are corporate entities who acted as representative of
insurance companies and procured business on their behalf. However this concept of
corporate agency was done away with by the IRDA after broking was introduced in
the market
Insurance brokers
Brokers have been allowed to operate in the market from April 2003. To
ensure presence of serious players in the market, IRDA has stipulated a capital
requirement of INR 5 million for direct insurance brokers, INR 20million for
reinsurance brokers and INR 25 million for composite brokers. The rule for foreign
equity participation is applied similarly as for insurance companies.
Broking was relatively a late entrant in the market in 2002 when IRDA allowed
insurance broking in India. In a very short span of two years, broking has gained good
momentum. This is evident from the fact that the number of brokers has increased to
186 within this short span. Prominent Insurance brokers have widened the typical role
of an insurance broker, offering various value added services such as Risk
Management and Performance manuals.
Banc assurance
Banc assurance as well is gaining momentum in the Indian market. Insurance
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companies are increasingly using the banking network to improve their distribution
system.
Distribution in Life Insurance Corporation of India
LIC is the eldest member in the list of life insurer it has a huge network
of distribution it has tie ups with several banc assurance and with other Financial
Institutions and its own network is to strong it has its corporate office in Mumbai and
its seven zonal offices plus 100 divisional offices
LIC has more than 2048 branches and its sales force that the agents recruited
till now are about 10, 02,149.
27
Distribution in ICICI Prudential Life Insurance Company
ICICI Prudential has one of the largest distribution networks amongst private
life insurers in India, having commenced operations in 100 cities and towns in India.
The company has seven banc assurance tie-ups, having agreements with ICICI
Bank, Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank and many
more, and some co-operative banks, as well as over 150 corporate agents and brokers.
It has also tied up with NGOs, MFIs and corporates for the distribution of rural
policies and organizations like Dhan for distribution of Salaam Zindagi, a policy for
the socially and economically under privileged sections of society.
To fuel its continuing growth, ICICI Prudential has expanded its distribution
footprint, and has grown both location and branch network by adding around 300
branches over the past nine months. The company’s distribution ramp-up has been
matched with an increase in its staff base, which now stands in excess of 15,000
employees across more than 360 locations. In addition, the company has over 175,000
advisors as well as several partners both for distribution and operations.
28
PROMOTION MIX
Insurance is a service which needs a good support of promotion. A promotion

encourages the sales a promotion mix is a combination of various things which create
awareness among the customers it consist of various tools as follows
1. Advertising
2. Sales Promotion
3. Personal Selling
4. Word of Mouth Communication
5. Public Relation and Publicity
6. Sponsorship
7. Direct Marketing
Off the above seven all are used by the insurance industry the
important one are advertising, sales promotion, word of mouth
communication, but the advertisement is the expensive tool of promotion and
effective too
LIFE insurance advertising on television between January and November 2004

registered a rise of 84 per cent over the corresponding period in 2003. The total
amount spent up to November was Rs 257.5 crore (Rs 139.7 crore). Life Insurance
29
Corporation of India was the biggest spender, accounting for 27 per cent of the ad
spend by insurance firms.
According to data from AdEx India, a unit of TAM Media Research, the amount spent
on advertising in the second half of 2004 (up to November), was lesser than the first
half. From 2000 to 2003, there has been a 353 per cent increase in the add spends.
ICICI Prudential Life Insurance has been the second big spender (with 25 per cent of
the share). Tata AIG Life Insurance was the third largest spender but accounted for
only 9 per cent; Dabur CGU and Max New York 8 per cent each. Other companies'
share collectively stood at 23 per cent. Some of these companies are SBI Life,
MetLife India and Kotak Mahindra Old Mutual.
Insurance Sector Advertising on the new phase

Insurance advertising, which is worth over Rs 300 crore now, is set to enter a new
phase from August this year and Consumers may no longer be lured by attractive ads
and tall promises .
Almost all insurance companies are working on last-minute changes in the fine print
of their existing ads, both on their corporate brands as well as product- specific
advertisements. This follows the insurance regulator's strong directive to insurers to
come up with clear and fair communication without misleading consumers on various
'latent intricacies' of insurance communication. .
The genre of insurance ads have changed over time in the way marketers have tried to
position life insurance as a category, shifting from corporate brand recall to
introducing solutions. Today life insurance is not associated with death and despair as
much as it is with hope and security, which is getting reflected in insurance
advertising.
30
ICICI Prudential Life Insurance Company
Advertising
Over the last few months, ICICI Prudential has been advertising in outdoor,
TV and press. The company launched a corporate television campaign – Saat Phere –
which took the emotions and thoughts of initial Sindoor corporate film a few steps
further.
The film highlights the strength of promises that a husband makes to his wife,
through the depiction of everyday situations, and then goes on to emphasise that
ICICI Prudential will stand by the husband to help him fulfill all these promises. The
TV campaign has also been extended to outdoor.
“The company has also undertaken press and internet

campaigns to inform customers about benefits of some of its products,
particularly retirement solutions, through the Chintamani campaign,”
said Bhatia.
After the hugely successful Chintamani (retirement) and Saat Phere

(corporate) campaigns, ICICI Prudential Life Insurance also introduced some
innovations in the category, such as: having a tax planner by the name of Chintamani
on radio, who would answer consumer’s queries about the role of insurance in
financial planning.
DIRECT MAMRKETING
Other initiatives included tie-up with the Dabbawalla Organisation in Mumbai
for a direct marketing exercise, to talk to the customer through a non-cluttered route,
and thereby have a higher impact. The direct mailer was about ICICI Prudential’s
retirement solutions and the tax benefits that one can avail of buy investing in any of
these. About 100,000 direct mailers were attached to the ‘dabbas’, in areas such as
Churchgate, Bandra and Andheri where there are mostly office-goers,”
31
OTHER THINGS FOR PROMOTION
In addition to advertising, the company has also initiated several activities to

raise consumer awareness about life insurance and ICICI Prudential. “It includes
seminars - ICICI Prudential regularly holds consumer awareness meets on ‘the need
for retirement planning’ in different cities such as Pune, Aurangabad, Coimbatore,
Nagpur, Bangalore and Mangalore. These are very well attended and have contributed
significantly towards increasing awareness about the category and the company. Apart
from this, we have also entered into alliances with telecom companies, as well as
companies like BPCL and Dominos to increase the awareness the company the
company also put stalls at various fairs and exhibitions, etc
Some important Logos of the Life Insurance Industry
32
33
34
PEOPLE MIX
The true strength of any company lies with its people especially in service
industry like insurance. As it is the industry with emotions people are the most
important part of the organization
People in any organization can be classified as in service triangle which
consist of
 Firm/ Management
 Employees
 Customers
Firm/ Management
Employees Customers
The most intangible thing on earth can be called as insurance and also the
most difficult thing to sell. If a person can sell insurance than he can sell any thing, it
35
is not sold as it is; a lot of efforts are required as a whole process by the people where
all the three categories are involved. A firm formulates a plan according to the needs
of the consumer by doing surveys and market research and designs a insurance plan
/policy than this policy is sold by the sales force with help of other employees i.e.
back office and others and finally the product i.e. policy reach the customer
Employees are one of the most important factors for the success of the
insurance sector. At different stages different types of employees are evolved with the
service
$ Planning Staff
$ Selling Staff
$ Operations Staff
$ Training Staff
Employees in Insurance
Industries
TRAINING
STAFF
SELLING
PLANNING OPERATIONS
STAFF
STAFF STAFF (back
office)
The best way for success is to firm is to

Employee right people
Develop them with proper training
Give them a proper blend of authority and responsibility
36
And promote team work among them

Provide them proper support system
And see the results in way of dedicated skillful employees and a firm i.e. the
management which can retain its employees an develops them must be a strong
management
And with this strong management having a vast vision and dedicated and skillful
employees the firm can reach the top in the market
Customers
Percentage of the loyal customers of the company
In the recent survey conducted by business world to gauge the loyalty and
confidence that customers have in their company, placed ICICI Prudential right at the
top of the heap of private life insurance. While LIC enjoys the confidence of two out
of every three of its customers, ICICI Prudential enjoys the confidence of one out of
two of its customers. What this means is that ICICI Prudential has a Base of loyal
customers. Of 50% which is not bad
37
PROCESS MIX
Process refers to how a service is provided or delivered to a customer.

This is the processes involved in providing a service and the behavior of people,
which can be crucial to customer satisfaction. The way the insurance service is deliver
can have an impact on the way the firm is perceived. Smart insurance firms set out
processes and set themselves targets to ensure a high quality of service to customers.
The following are the requirements of a good insurance process

 Customer friendly
 Speed and accuracy in payment i.e. claim settlement
 Method should be easy and convenient
 Installment schemes should be streamlined to cater to the ever growing
demands of the customers
 Efficient IT and data warehousing system
 Technology not only be efficient but also cost effective
38
The life insurance process starts with the planning dept when plans the policy
that manufacturing then comes the process to deliver
It starts with the
1. Agency and administration
Here the sales force is recruited by the operation that is generally agents or
also called as insurance advisors they are formally given training and are licensed by
IRDA the regulatory body of insurance and a contract is signed between the firm and
agent further this admin also looks for this sales force for their commission renewal
commission, etc.
2. Sales
This section looks for the sales of the company training is provided to the sales
force and they do sales for the company and they receive the commission for the same
this dept also includes the call center service which answers to the quires of the
customers
39
3. Policy set up
This dept looks after the underwriting of the policy when a sales person brings
a form i.e. policy it is submitted to the operations than the policy is checked and under
writing is done on the policy to the access the risk associated after that the policy is
finally issued to the customer by this department
4. Premiums
Fund applications, refunds of the rejected cases bank charges; etc things are
taken car in this process
5. Policy changes
Customer do require some services after buying the policy that to make
changes in the add to reallocate the funds, to change the mode of payment, etc in this
process a customer is given service to make changes in their policies
6. Policy benefits
This process looks that all the benefits that the customer is given in the policy
if required by the customer can be utilize by him that can be benefits like withdrawal,
surrender, loans, maturities, etc
7. Death claims
This process looks for the set up the claim process and for settlement for the
claims of the customers after making the review of the case the good will of the
company is largely depends on the working of the claim settlement department the tax
component is also looked after in this process while settlement of the claims
40
Physical Evidence
Unlike a product a service cannot be experienced before it is delivered, which

makes it intangible, this therefore means that potential customers perceive greater risk
when deciding whether or not to use a service. To reduce the feeling of risk, thus
improving success, it is often vital to offer potential customer the change to see what a
service would be like. This is done by providing physical evidence.
This physical evidence has a greater importance in insurance as it is the most

intangible service on the earth, but as a marketing mix element it can be used for
building corporate image and identity.
For making the insurance service tangible many types of physical evidences
are used the many and the very important in it is the policy document which is the
proof that the customer is the owner of that policy.
Physical Evidence include all the efforts taken by the service provider to
tangibles their services, they include
1) Physical facilities
2) Physical environment
3) Social settings
1) Physical facilities:-
In Insurance the Physical facilities given to the customer are the branches
available of the company i.e. building where a customer can come and solve their
quires, etc
The physical evidence include the essential and the peripheral evidence the
essential evidence are the technical facilities without which the service cannot be
delivered in insurance the essential evidence are the services operations department
which process the application and sends the policy to the customer i.e. Policy
document is very important. And also sending the renewal payment receipts to the
customer in time is important
41
For the customer satisfaction the quality and standard of the operations
department to send the policy to the customer and with proper details and with the
fastest way is very important
And the peripherals are the brochures, pamphlets, electronic beneficiary
statement, e-mail facility, SMS facility, call center facility, though services can be
performed without these items, still they can be used to enhance the corporate image
and influences the customer’s purchase decision.
2) Physical environment:-
Another factor which influences the customer to buy the insurance
policy is the physical environment this factor is very much less used because the
prospect to whom policy is to be sold very rarely comes to the branch or spoke
location of the company many a times the advisor or the agents goes to the
prospect for making a customer and selling the policy but even rare but this adds
to the buying decision of the customer when a customer comes to the office for
the meeting for understanding the features of a policy the physical evidence office
i.e. Ambience, space, décor of the office influences the customer it gives him a
feeling that money is in professional hands
3) Social settings:-
The social settings has a great and wide importance in the insurance
industry the appearance of the service personnel is the major aspect of the social
settings that influence the consumer attitude about the service personnel
The appearance of a person that a advisor or agent who is in front
with the customer is very much important he should be well groomed, well
dressed, and should be friendly in his approach most important he should have
knowledge about the insurance industry other products, etc he should be confident
It is rightly said that the sales in insurance takes palace 50% by the
name of company, product features, etc and the remaining 50% buy the social
settings of the agent or advisor
42
MUTUAL FUND INDUSTRY
Mutual Fund Industry in India
The origin of mutual fund industry in India is with the introduction of the
concept of mutual fund by UTI in the year 1963. Though the growth was slow, but it
accelerated from the year 1987 when non-UTI players entered the industry.
In the past decade, Indian mutual fund industry had seen dramatic
improvements, both quality wise as well as quantity wise. Before, the monopoly of
the market had seen an ending phase; the Assets under Management (AUM) were Rs.
67bn. The private sector entry to the fund family raised the AUM to Rs. 470 billion in
March 1993 and till April 2004; it reached the height of 1,540 billion.
Putting the AUM of the Indian Mutual Funds Industry into comparison, the
total of it is less than the deposits of SBI alone, constitute less than 11% of the total
deposits held by the Indian banking industry.
The main reason of its poor growth is that the mutual fund industry in India
is new in the country. Large sections of Indian investors are yet to be
intellectuated with the concept. Hence, it is the prime responsibility of all mutual
fund companies, to market the product correctly abreast of selling.
43
Overview:
The one investment vehicle that has truly come of age in India in the past
decade is mutual funds. Today, the mutual fund industry in the country manages
around Rs 100,000 crore of assets, a large part of which comes from retail investors.
And this amount is invested not just in equities, but also in the entire gamut of debt
instruments. Mutual funds have emerged as a proxy for investing in avenues that are
out of reach of most retail investors, particularly government securities and money
market instruments.
History:
The mutual fund industry can be broadly put into four phases according to the
development of the sector. Each phase is briefly described as under.
1. First Phase - 1964-87:
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament.

It was set up by the Reserve Bank of India and functioned under the Regulatory
and administrative control of the Reserve Bank of India. In 1978 UTI was de-
linked from the RBI and the Industrial Development Bank of India (IDBI) took
over the regulatory and administrative control in place of RBI. The first scheme
launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700
crores of assets under management.
44
2. Second Phase - 1987-1993 (Entry of Public Sector Funds):
Entry of non-UTI mutual funds. SBI Mutual Fund was the first followed by
Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89),
Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda
Mutual Fund (Oct 92). LIC in 1989 and GIC in 1990. The end of 1993 marked
Rs.47, 004 as assets under management.
3. Third Phase - 1993-2003 (Entry of Private Sector Funds):
With the entry of private sector funds in 1993, a new era started in the
Indian mutual fund industry, giving the Indian investors a wider choice of fund
families. Also, 1993 was the year in which the first Mutual Fund Regulations came
into being, under which all mutual funds, except UTI were to be registered and
governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was
the first private sector mutual fund registered in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in 1996. The industry now
functions under the SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual
funds setting up funds in India and also the industry has witnessed several mergers
and acquisitions. As at the end of January 2003, there were 33 mutual funds with total
assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44, 541 crores of assets
under management was way ahead of other mutual funds.
45
4. Fourth Phase - since February 2003:
This phase had bitter experience for UTI. It was bifurcated into two
separate entities. One is the Specified Undertaking of the Unit Trust of India with
AUM of Rs.29, 835 crores (as on January 2003). The Specified Undertaking of
Unit Trust of India, functioning under an administrator and under the rules framed
by Government of India and does not come under the purview of the Mutual Fund
Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB
and LIC. It is registered with SEBI and functions under the Mutual Fund
Regulations. With the bifurcation of the erstwhile UTI which had in March 2000
more than Rs.76, 000 crores of AUM and with the setting up of a UTI Mutual
Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers
taking place among different private sector funds, the mutual fund industry has
entered its current phase of consolidation and growth. As at the end of September
2004, there were 29 funds, which manage assets of Rs.153108 crores under 421
schemes.
46
Major players & their Market share

Assets under Management (AUM) of Some of the Major Players on the Indian
Mutual Fund Scene as at the end of Aug-2007 (Rs in Lak):
Sr. AssetMmanagement Company AUM

No. Rs (in Lacks)
1. ABN AMRO Mutual Fund 663075.8
2. BIRLA SUN LIFE MUTUAL FUND 2705849.11

3. HDFC MUTUAL FUND 4087149.23
4. HSBC MUTUAL FUND 1716617.57
5. ING VYSYA MUTUAL FUND 871400.1

6. PRUDENTIAL ICICI MUTUAL FUND 5061189.31
7. STATE BANK OF INDIA MUTUAL FUND 2204932.07
8. TATA MUTUAL FUND 1994898.76
9. KOTAK MAHINDRA MUTUAL FUND 1922570
1 UNIT TRUST OF INDIA MUTUAL FUND 4169856.76
0.
11 RELIANCE MUTUAL FUND 6759765.06
.
1 STANDARD CHARTERED MUTUAL FUND 1546463.68
2.
1 FRANKLIN TEMPLETON INDIA MUTUAL 2999214.31
3. FUND
1 MORGAN STANLEY MUTUAL FUND INDIA 336030.16
4.
1 LIC MUTUAL FUND 1281126.39
5.
47
Market share (Asset Under Management) of Mutual fund Industry Category wise
18% 15%
3%
29% 28%
7%
Bank sponsored
Institution (LIC)
Private Indian
Private Foreign
Private J V Predominantly
Indian
Private J V Predominantly
Foreign
Marketing Mix of Mutual Fund Industry
PRODUCT MIX
48
A PRODUCT IS ANY THING THAT CAN BE OFFERED TO MARKET

FOR ATTENTION, ACQSITION USE OR CONSUMPTION THAT SATISFY A
WANT OR NEED
In case of Mutual Fund Industry, the product mix comprises of various types
of funds that are offered to the customer by the companies.
Subject to the SEBI regulations, an AMC is free to design its schemes/product
to suit the needs of the various types of investors. Mutual Fund in India presently
offers more than 400 products/ services/ options/ plans across various categories.
The product mix of the Mutual Fund Co. includes all different product lines a
company innovates to cater to the needs such as financial objective, risk tolerance,
return expectations, etc. The product line of a fund might easily include many
different schemes. In today's competitive scenario, it has become very necessary for
an AMC to provide it’s customer with a wide variety of schemes & the best
performance to attract them.
Wide variety of Mutual Fund Schemes exists to cater to the needs such as
financial position, risk tolerance and return expectations etc. The info below gives an
overview into the sting types of schemes in the Industry.
Any product is not made in one level it has many levels like wise mutual fund
has to go under various levels to become a final product these are
1. Basic Product
2. Expected Product
3. Augmented Product
49
4. Potential Product
 Basic Product: - Protection, Investment, growth Good returns are the basics
which a mutual fund scheme should provide
 Expected Product: - Tax Benefit, liquidity, Partial Withdrawal facility i.e.

partial selling of units, Better Returns, is the expected facilities which are very
necessary for the success of the Mutual fund scheme
 Augmented Product:-Insurance Cover, Higher dividends, high Growth, E-pin

facility, Sending quarterly or half yearly details to the customer are the
benefits helps the customer to select the Mutual fund scheme,
.
 Potential Product:-Selling New Scheme at a discount price Providing other
Portfolio services SMS Facility to Know the Mutual fund scheme Details, etc
These are the different levels of the product Which a AMC should
keeps in mind and designs a Scheme for offering it to people a different mix is
used for fulfilling different Purpose of the customers and by analyzing
different Purpose of people at different stages different types of plans are
designed,
New Product Development

The most important component of product Management is The
New Product Development as when things are changing the Purpose i.e. objective of
people to take buy Mutual fund are changing so giving same product to the customer
would be very bad for the growth of the of the company An AMC which is growth
oriented always looks beyond its existing product or service. And develops there
quality services and also develop new products/Schemes
Development of the Mutual fund scheme over a period of time
Initially the first scheme launched was Unit scheme 1964, then the public
sector like LIC, GIC, Canbank mutual fund other than UTI came with their schemes
50
which were not so much growth oriented and diversified but when private sector
entered in the industry they came up with different and a wide variety of schemes for
the public and they had not stop their product development hence now we different
types of schemes like Equity, Debt, Balanced, MNC Opportunity i.e. offshore funds,
Commodity, Gold funds, Sector Funds, Index Funds, Unit Linked Plans, Liquid
Funds, Income Funds, etc
Development of the services given by Mutual Fund industry
Before when the mutual fund was introduced in the economy the service provided by
them was not satisfactory the procedures of sending application and receiving Scheme
documents was very lengthy and time consuming and if a person A wish to sell his
units to a person B than also it was not a easy job to transfer the units or sell the units
back to the company but as a time has passed the service delivered by the AMC to the
unit holders have improves now every thing is computerized one can buy, sell, its
units partially and wholly through the demat A/c with a very less period of time he
gets his cheque if he sells his units and now the AMC sends the quarterly or half
yearly reports of the growth of the funds to their unit holders which help them a lot in
their decision making
51
Fund ICICI Prudential ICICI Prudential Tax Plan
Name WINSURANCE
Flexible Income Plan GIANT ‘SW
Type Open-ended MARKETING STRATEGIES
Income Fund Open-ended Equity Linked Saving
Scheme
Investment 10 - 100% = Money market and Equity & Equity related instruments
Pattern Debentures with residual upto 90% & Debt, Money Market
maturity of less than 1 year. 0 to and Cash upto 10%.
90% = Debt instruments with
maturity more than 1 year.
Investment To generate income through To seek to generate long-term capital
Objective investments in a range of debt appreciation from a portfolio that is
instruments and money market invested predominantly in equity and
instruments of various equity related securities
maturities with a view to
maximizing income while
maintaining the optimum
balance of yield, safety and
liquidity.
Options Cumulative and Dividend Growth & Dividend
Reinvestment (Daily & Weekly
Frequencies)
Default Dividend Reinvestment with Dividend Reinvestment
Option Fortnightly frequency.
Application Rs 5000/- (plus in multiples of Rs.500/- (plus in multiples of Re. 1)
Amount Re 1)
Min. Rs.500/- and in multiples Rs.500/- and in multiples thereof
Additional thereof
Investment
Portfolio Quarterly Quarterly
Disclosures
Entry Load Nil (i) For investments of less than Rs. 5
Crores : Entry load at 2.25% of
applicable NAV.(ii)For investments of
Rs. 5 crores and Above : Nil
Exit Load Investments made: (a) before Nil
July 24, 2006 - Nil (b) on or
after July 24, 2006 - 0.50% of
the applicable NAV, if the
redemption is made within one
month from the date of
investment. Investment made
on or after March 28,522007 -
0.25% of the applicable NAV, if
PRICE MIX
The price is the exchange value for a product or

service, expressed in terms of money. The price of the
service is the service value attached to it by the service
provider and it must respond with the customer perception
of value. Price is the only P, which generates revenue for
the company. While pricing a great care should be taken
as, it is two-sided sword so it should neither be priced
high nor low it should be priced according to the situation.
Pricing is an important tool in the hands of the marketer
Price in mutual fund industry
In Mutual Fund Industry, the entry load and the exit load, which a customer
pays for the Scheme, is the price of the Mutual fund scheme, the price factor also
includes the various charges, which can are called as Recurring Expenses.
53
These all price/charges which a customer or a buyer pays is for the following
expenses of the AMC
$ Marketing Expenses
$ Operational/ Administrative Expenses
$ Fund Managers fees
$ Commission for distributors
$ Miscellaneous Expenses, etc
Price in any industry is largely influenced by cost in this the cost of managing
the funds and providing with him timely services is decided at the starting point i.e.
when the scheme is introduced
There are four basic kinds of costs associated with owning mutual funds:
Management Fees
These are paid to the company that manages the investment portfolio
Distribution Fees
These are paid to the broker or adviser that sells the fund and services the account. In
some cases, it's a straight up-front sales commission ("load") or a surrender fee you
pay when you sell the fund. But other funds – "no-loads" – may charge an annual
"12b-1 fee." It seems small compared with a sales commission – except that it nicks
you year after year after year. (In still other cases, the fund manager simply uses part
of its management fee to pay for marketing and distribution. You thought that hefty
fee was going to a team of brilliant analysts, but some of it was going to pay brokers
or buy ads.)
Transaction Costs
54
These are incurred by the fund as it buys and sells securities. Trading costs money,
and it comes out of your money. There are brokerage commissions, of course. (And
they are not always rock bottom. Sometimes, to keep its reported management fee
low, a fund will pay for investment research with what are called "soft dollars" –
higher commissions than they might otherwise have to pay.) Beyond commissions,
there are spreads. With a Picasso, a gallery that would sell it to you for ten million
might buy it from you for only five. With 10,000 shares of a stock, the spread between
"bid and ask" prices will be much smaller – but meaningful nonetheless. And there's
another aspect to this. If you or I want to trade 500 shares of stock, it rarely "moves
the market." What we add to the supply (if we're selling) or demand (if we're buying)
is insignificant. But what if, like a mutual fund, we were trying to buy or sell 200,000
shares – let alone in a hurry? We might sell the first 5,000 shares at 50, but have to
accept as little as 49 or 48, on average, to move them all. Buying, we might find that
our demand for these shares had bid their price up to 51 or 52 by the time we had
gotten them all.
Mutual fund managers are generally sensitive to this, of course, and attempt to trade
cheaply and wisely. But the same Mark Carhart quoted above found that, on average,
a fund with 100% annual turnover give up nearly 1% in transaction costs. A fund with
25% turnover would give up only a quarter as much. A fund with 300% turnover –
three times as much.
Transaction costs are not incorporated in a fund's "total expense ratio." They are taken
directly out of shareholder assets.
Taxes
The fund itself does not pay taxes. Shareholders who own the fund in taxable
accounts pay taxes on dividends and capital gains distributed by the fund. And there's
reason to think that many fund managers don't worry too much about this. Indeed,
because they know shareholders feel good when they get distributions, some will
actually realize gains unnecessarily, just to have something to distribute. This may be
good marketing, but it's bad financial strategy.
55
PLACE MIX /PHYSICAL DISTRIBUTION

Distribution in marketing mix is concerned chiefly with two main
issues: accessibility and availability. Place or distribution is important element of the
marketing mix, which focuses on providing services to the ultimate customer at the
nearest place possible. Physical distribution is the delivery of mutual funds to
customers at right time and at the right place.
Types of Distribution channels:

The following are the various types of Distribution channels used by
the Mutual Fund companies. Types of
Distribution
channel
Distribution Direct Individual

Companies Marketing Agents
56
Banks & Post
NBFC’S Offices
1. Distribution Companies:
Availing of the services of established distribution companies is a

practice accepted by mutual funds internationally. This practice evolved with a view
to circumvent the huge administrative mechanism required to support a large direct
sales force.
Instead of having to deal with several individual distributors, a fund

can interact with the distribution company that has several employees or sub-brokers
under it. A distribution company usually manages distribution for several funds
simultaneously and receives commission for its services.
Many private funds have preferred to adopt this practice because of its
sophisticated nature and because they benefit from the specialist knowledge and
established client contacts of these marketing firms. In India, there are few large
distribution companies in addition to a few hundred smaller ones.
The following can be the Distribution Companies:
a. Banks and NBFC’s:
In developed countries, banks are important marketing vehicles for

mutual funds, given that banks themselves have large depositor/client base of their
own. Over the past years, we have seen the opening up of this new channel in
India. Several banks (private, public & foreign) are involved in fund distribution
by providing services similar to those of distribution companies, on a commission
basis. Some non-banking companies also provide such services. Most funds now
57
use this channel. An increasing use of bank networks for mutual fund distribution
has been a major recent development.
b. Post Offices:
Many mutual fund companies have begun tie-ups with Post Offices
for distribution of their schemes. This opens up yet another channel for fund
distribution, one that will cover possibly the widest geographical area.
2. Individual Agent as Distributors:
Use of agents has been the most widely prevalent practice for
distribution of funds over the years. By definition, an agent acts on behalf of a
principal- in this case, the mutual fund. An agent is essentially a broker between a
fund and the investor. In India, we also have unique system whereby a broker has a
number of sub-brokers working under him. The vast sub-broker network ensures a
larger geographic coverage than otherwise.
The Mutual Fund agents are not exclusive but usually sell other
financial products as well. The system has the advantage that the distributor has a
broader knowledge of financial services available, and is therefore potentially in a
position to act as investment advisors. Investors expect the right kind of the
recommendations from the agent. From the perspective of the mutual funds
themselves, such multi-product distributors mean loss of exclusivity in the marketing
of their particular products. However, the drawback can be converted into a benefit
for the funds, if the agents are properly trained in their role and responsibility as
financial advisors to investors.
3. Direct Marketing:
58
Direct marketing means that the mutual funds sell their own products
without the use of any intermediaries. Usually, this takes the form of the sales officers
and employees of the AMC approaching the investors and accepting their contribution
directly. However, in India independent individual distributors may really be treated
as a direct marketing channel, in this sense that they do not form a well-knit,
independent and organized single entity and act more liked fund’ agency force. Other
channels like the distribution companies or banks or even stockbrokers are clearly
distinct and independent intermediaries.
Direct marketing by the funds themselves accounts for a very small
percentage of mutual fund sales. Many AMCs require that investments into any of
their scheme be routed only through registered brokers and they do not accept
direct subscriptions from investors.
Mutual funds often use their employees to mobilized funds from high net
worth individuals and institutional investors. In case of short/medium term
investment in liquid and/or income funds targeted at companies, funds often resort
to direct marketing.
The greatest challenge in the mutual fund distribution is the choosing

the right channels, convicting them to work as partners, the higher the number of
channels, the greater the company’s Market coverage and rate of growth of its
sales.
The place does not only means creating the distribution agents, but also
having support office for these distribution agents at proper places which can be
easily assessable by these distribution agents so that they can easily submit the
application form with these offices
The new innovation in place has came out for the individual agents because
organization like NJ Fundz Network, J P Morgan, etc are developed to help them by
reducing there burden to register with all the AMU’s now they can get themselves
register with all only by registering to one organisation, by this the Agents are
increasing very fast.
59
abc
9/14/2007 1
PROMOTION MIX
A promotion encourages the sales a promotion mix is a combination of various
things which create awareness among the customers it consist of various tools as
follows
1) Advertising
2) Sales Promotion
3) Personal Selling
4) Word of Mouth Communication
5) Public Relation and Publicity
6) Sponsorship
7) Direct Marketing
60
Word Of Mouth
Sales Promotion Communication
Promotio Sponsorship
Direct
Marketing n Mix
Tools
Public
Advertisement Personal Relation &
Selling Publicity
Off the above seven all are used by the Mutual fund industry the
important one are advertising, sales promotion, word of mouth
communication, and the sales promotion but the advertisement is the
expensive tool of promotion and effective too
The expresses for making add concept and other related expenses are
very high, but there is a restriction on these expenses that an AMC can not go
beyond 1% of the total expected collection through the fund
MARKETING STRATEGIES ADOPTED BY THE MUTUAL FUNDS:
The present promotion/marketing strategies of mutual funds can be divided into

following main headings:
1. Direct marketing
2. Selling through intermediaries.
61
3. Joint Calls
Following is the detail of strategies used by the Mutual Fund companies

to market the various products and schemes:
1. Direct Marketing:
This constitutes 20 percent of the total sales of mutual funds. Some of the
important tools used in this type of selling are:
a. Personal Selling:
In this case the customer support officer or Relationship Manager of the fund
at a particular branch takes appointment from the potential prospect. Once the
appointment is fixed, the branch officer also called Business Development Associate
(BDA) in some funds then meets the prospect and gives him all details about the
various schemes being offered by his fund. The conversion rate in this mode of selling
is in between 30% - 40%.
b. Telemarketing:
In this case the emphasis is to inform the people about the fund. The names and
phone numbers of the people are picked at random from telephone directory.
Some fund houses have their database of investors and they cross sell their other
products. Sometimes people belonging to a particular profession are also
contacted through phone and are then informed about the fund. Generally the
conversion rate in this form of marketing is 15% - 20%.
c. Direct mail:
This one of the most common methods followed by all mutual funds. Addresses
of people are picked at random from telephone directory, business directory,
62
professional directory etc. The customer support officer (CSO) then mails the
literature of the schemes offered by the fund. The follow up starts after 3 – 4 days
of mailing the literature.
The CSO calls on the people to whom the literature was mailed. Answers their
queries and is generally successful in taking appointments with those people. It is
then the job of BDA (Business Development Associates) to try his best to convert
that prospect into a customer.
d. Advertisements in newspapers and magazines:
The funds regularly advertise in business newspapers and magazines besides in

leading national dailies. The purpose is to keep investors aware about the schemes
offered by the fund and their performance in recent past.
e. Advertisement in TV/FM Channel:
The funds are aggressively giving their advertisements in TV and FM Channels to

promote their funds.
f. Hoardings and Banners:
In this case the hoardings and banners of the fund are put at important locations of
the city where the movement of the people is very high. The hoarding and banner
generally contains information either about one particular scheme or brief
information about all schemes of fund. The best example is while going to
international Airport Mumbai we come across various hoardings and banners.
2. Selling through intermediaries:
63
Intermediaries contribute towards 80% of the total sales of mutual funds. These
are the people/ distributors who are in direct touch with the investors. They
perform an important role in attracting new customers. Most of these
intermediaries are also involved in selling shares and other investment
instruments. They do a commendable job in convincing investors to invest in
mutual funds. A lot depends on the after sale services offered by the intermediary
to the customer. Customers prefer to work with those intermediaries who give
them right information about the fund and keep them abreast with the latest
changes taking place in the market especially if they have any bearing on the fund
in which they have invested.
Regular Meetings with distributors:
Most of the funds conduct monthly/bi-monthly meetings with their

distributors. The objective is to hear their complaints regarding service aspects from
funds side and other queries related to the market situation. Sometimes, special
training programmes are also conducted for the new agents/ distributors. Training
involves giving details about the products of the fund, their present performance in the
market, what the competitors are doing and what they can do to increase the sales of
the fund.
3. Joint Calls:
This is generally done when the prospect seems to be a High Net Worth Investor.
The BDA and the agent (who is located close to the HNI’s residence or area of
operation) together visit the prospect and brief him about the fund. The conversion
rate is very high in this situation, generally, around 60%. Both the fund and the
agent provide even after sale services in this particular case.
 Meetings with HNI’s:
64
This is a special feature of all the funds. Whenever a top official visits a particular
branch office, he devotes at least one to two hours in meeting with the HNI’s of
that particular area. This generally develops a faith among the HNI’s towards the
fund.
PEOPLE
In service industry like Mutual Fund the true strength lies with its people, as it
is the industry with Money Management, People are the most important part of the
organization
People in any organization can be classified as in service triangle which
consist of
 Firm/ Management
 Employees
 Customers
65
Firm/ Management
Employees Customers
The mutual fund also all the three kinds are their firm/ management customers and the
employees of the firm, for the successful growth of AMC a firm must have a strong
Management Good finance Trained and motivated employees and the loyal customers
if all the things are achieved the success is in the hands of the company
In Mutual Fund sector, the customer needs to be guided in a lot of matters,

which is possible only with the help of the service provider. The position in the eyes
of the customer will be perceived by appearance, attitude and behavior of the
customer contact employees. Not only does the customer contact employee influence
the customer’s perception but also the customer base of the organization does so.
In the mutual fund industry for the distribution of the mutual fund from the producer
till the consumers various kinds of people are involved without which the delivery
process could not have been possible these people are
Ρ Sponsor
Ρ Custodian
Ρ Fund manger
66
Ρ Broker
Ρ Depository participants
Ρ Transfer agents
Ρ Auditor
Ρ Legal advisor
Ρ Marketing department
Ρ Operations department, etc
PROCESS
Process refers to how a service is provided or delivered to a customer.
67
In Mutual fund process is the very important part of marketing mix the over all
process of the mutual fund should be fast accurate, and should be easy for the
consumers as well as the distributors
This is the processes involved in providing a service and the behavior of
people, which can be crucial to customer satisfaction. Smart AMC’s set out processes
and set themselves targets to ensure a high quality of service to customers.
The following are the requisites of a Mutual Fund process

 Method should be easy and convenient
 Speed and accuracy in payment
 Friendly for the Customers and Distributors
 Installment schemes should be streamlined to cater to the ever growing
demands of the customers
 Efficient IT and data warehousing system
 Technology not only be efficient but also cost effective as the cost is
ultimately bared by the customer
Let’s take for example the process for application for a particular fund from Fund
Company. Now this mainly involves following things:
1. The company provides Offer document to the investors with a description of

the procedure for purchase of units with respect to the required application
form, permissible places of payments, minimum subscription required (for
new applications and additional units).
2. The funds appoint “registrars” for the purpose of accepting the request for
new subscriptions and redemptions from the investors. Investors and
distributors need to know which registrar or center would be the most
conveniently located for them.
3. The key Information Memorandum contains the application form to be filled

by the investors. The form is generally distributed through many distributors
such as agents or banks and can also picked up by directly from the offices of
68
the Asset management company. Some funds permit the investors to apply
through the internet, instead of filling up a physical application form.
4. The application form has to be accompanied by payment of the amount to be

invested. The mode of payment is usually by cheque, demand draft or cash (in
certain cases). Investors are also now required to submit the photocopy of the
PAN (Permanent account Number) with the application form.
5. Once the investors submit the application form then the units of the funds are
allocated to the investors with in 40 working days. The units are allocated as
per the NAV of the fund on the day of allotment.
6. And finally the documents i.e. physical evidence is sent to the customers the
investors of the mutual fund scheme.
The process should be as simple as it can be, so that the customer is able to
understand what steps he should follow to invest in Mutual Fund, and also how he can
easily get back his money with good returns.
Physical Evidence
Physical Evidence is termed as the social environment along with the tangible
cues. Unlike a product a service cannot be experienced before it is delivered, which
69
makes it intangible, this therefore means that potential customers perceive greater risk
when deciding whether or not to use a service. To reduce the feeling of risk, thus
improving success, it is often vital to offer potential customer the change to see what a
service would be like. This is done by providing physical evidence.
Physical evidence include all the efforts taken by the service provider to tangibilise
their services, they are:
a. Physical facilities, and

b. Physical environment.
c. Social settings
The following is the detail coverage of all efforts taken by the service provider to
tangibilise their product:
a. Physical facilities:
On the basis of physical evidence like building, furniture, equipment,

stationery, etc the investor’s forms an impression about the fund company. Physical
evidence includes essential evidence and peripheral. Essential evidence is the
technical facilities without which the service delivery is not possible. In mutual fund
industry the essential facilities include the technical facilities through which the daily
subscription of the mutual fund scheme is done and the very important calculating
NAV and giving the information of the same to the consumer The peripheral evidence
can actually change hands during the services transaction, they include stationary,
brochures, account statement, E-pin i.e. internet id where he can get all information
and can buy and sell, though services can be performed without these items, still they
can be used to enhance the corporate image of an Asset Management Company.
b. Physical environment:
70
Another factor influencing consumer expectations of service quality and

satisfaction of service quality and satisfaction is the physical setting or the service
environment within which the services take place. The important elements of physical
settings are like no of offices, branches, etc of the fund company. This is the good
marketing tool. As many a time’s customers are attracted towards the appearance of
the office of a company. They make a perception that if the office is good then the
service will be good. This happens with big customers like big companies which
invest crores of money in the funds so the Fund companies should also give
importance to the physical evidence.
c. Social settings
The social settings has a great and wide importance
in the Mutual Fund industry The appearance of the service personnel is the major
aspect of the social settings that influence the consumer attitude about the service
personnel
The appearance of a person that agent who is in
front with the customer is very much important he should be well groomed, well
dressed, and should be friendly in his approach most important he should have
knowledge about the insurance industry other products, so that he can give the
advice according to the needs of the customer and can help him to invest in the
best fund which suits his investment objective and he should be very much
confident while taking to the customer as its confidence win the customer
confidence about the company and the scheme.
It is rightly said that the sales in Mutual Funds sales takes palace 50% by the
name of company, product features, etc and the remaining 50% buy the social settings
of the agent.
AN EXTRA P IN MUTUAL FUND MARKETING MIX
Performance
71
The performance is an act of performing or doing something successfully;

using knowledge as distinguished from merely possessing it. In Mutual fund Industry
the performance is the most important thing, performance of fund means good returns
and the return is the only thing for which investors invest in the fund. Many investors
feel that a simple way to invest in mutual funds is to just keep investing in award
winning funds a fund company gets award on various categories like consistent
performance, risk adjusted returns, total returns and protection of capital. Consistent
return really focuses on risk. If someone is afraid of negative returns, consistency will
be a more important measure than total return i.e. growth in NAV as well as dividend
received. Various investors have different measure to measure the fund performance.
Fund prospectuses will clearly tell investors that "past performance is no

indicator of the future", but, on the other hand, many analysts will tell that sustained
performance over a reasonably long period of time is a good criteria. There is truth in
both points of view. While past performance reflects the success of the fund manager,
the broad investment strategy and related factors, it serves as no guarantee that the
strategy will work equally well in the future. A change in the external environment
could necessitate a change in investment strategy too. Again, past successes could
imply that the probability of future successes is respectably high. So it's one of those
issues where investors have to rely partly on information and partly on intuition.
The fund company can take benefit of the past performance and can sell the
product by reflecting the past performance of the other products of the company. So it
can be used as one type of marketing tool.
Today, Mutual Fund Industry is growing faster than any other industry in
India. So far India is concerned many domestic as well as foreign companies are
trying to increase the AUM and more customer base by introducing new NFO’s every
month. There are many companies introducing NFO frequently. These companies take
the advantage of stock market buoyancy. Companies show performance to the
customers through intermediaries and marketing channels.
72
There are many Fund houses that try the strategy of selling by showing their
past performance: Like
 Reliance sells by saying that they have a largest AUM than any other
company in Mutual Fund industry.
 Sundaram promote by showing the awards they get as better performer.
Recently,
 Tata started the same promotion strategy i.e. for selling the Asia fund they are
showing their performance they have given for the infrastructure funds.
• Performance
The performance is the most important factor for the mutual fund industry.
Any fund house not performing well will have close down his shutters. When we talk
73
about the performance of the funds of UTI and RELIANCE most of the time Reliance
has been better than the UTI.
When we compare the Reliance and UTI there has been a difference in the
performance of the funds of the both companies.
Let’s take the same scheme funds of Reliance and UTI. (Aug – 31 update).
Scheme 1 Reliance Cap Mutual Fund ---- Reliance Banking Fund - (D)
Scheme 2 UTI-II Mutual Fund ---- UTI-Banking Sector Fund (D)
Scheme 1 Scheme 2
Return Return
Details NAV NAV
(%) (%)
1 Week Aug 29, 2007 47.67 4.52 23.57 4.47
1 Month Aug 03, 2007 48.43 2.89 24.57 0.24
3 Month Jun 05, 2007 44.10 12.99 23.22 6.05
6 Month Mar 05, 2007 33.63 48.14 18.75 31.30
1 Year Sep 05, 2006 31.62 57.56 16.43 49.86
3 Year Sep 05, 2004 17.04 43.00 8.71 41.40
5 Year N.A. N.A. N.A. N.A.
In the table when we see Reliance has always been a better performer in term
of returns. While the UTI has not performed well the reason for the poor performance
is that the AMC i.e. problem is that it has too many funds. This was not only one fund
74
there are many Fund Schemes in which the performance of UTI is not satisfactory. As
customer always wants performance, if you can perform you can get the Maximum
AUM in the industry.
Besides this UIT-I In February 2004 has sought the permission of SEBI to
prematurely close 7 assured plans. Among these schemes are four long-term full
assurance schemes with remaining maturities ranging between 18 and 22 years. These
schemes were launched with an assured return of 13-14%. However due to the present
market conditions the schemes are getting returns much below what has been
promised. This has been partly due to the fact that some of the investments made by
UTI have turned into Non Performing Assets. While when we talk about Reliance,
Reliance has always given the better returns to the customers. This is the reason why
Reliance is NO.1. In AUM.
Over all it can be stated that Reliance has always been a better performer in
terms of most of the schemes as compared to UTI.
75
SUGGESTIONS
Financial products are the services which make the proper ultilisation of
funds according to the individual different needs like insurance, tax planning,
growth, protection, etc. Marketing of these services should be done with Proper
care as the people of India that the investors are not very much aware about the
various financial products their pros and cons. The process of marketing
financial products should stick to the highest ethical and professional standards.
Moreover the use of sophisticated technology should be encouraged so

that the customer service can be improvised and the regulation of the
Government should try to stop Scamps and ghotaalaas and should see that any
of there activity should not come in the way of the development of the financial
sector in India.
“LIFE INSURANCE” is the important part of the Indian financial

system, it is the very first option of the Indian investor for tax planning. A person
should buy the insurance only if he needs not if his brother or his friend has taken
the agency and he should identify his core need then select the product
accordingly and a person should take an insurance cover of 10 to 20 times of his
current annual income
The penetration of the Life Insurance industry is only 4.1% of GDP. It is

the big challenge to penetrate for the industry which can be converted into
opportunity by following appropriate measures:
* Private players should be encouraged to take part as it has been

witnessed that with the few how in 5 years the market has developed now adding
numbers in the list of insurance company’s would be better for the sector. The
76
services given to the customers should be improved by using Integrated Logistics

Systems and IT development and innovation in the products and services rendered
by the company The new insurance products and their benefits should be made
aware to the customers; the awareness can be increased by various tools of
promotion and by increasing the distribution Channel and by increasing Channel
partners and Banc assurance
“MUTUAL FUNDS” have become so much of a mainstream investment

alternative in India that the time has come to pay serious attention to best practices
in their back offices Although Both SEBI and mutual funds have set such high
standards in the regulations there are lot many things which a mutual fund
industry have to do for making the M F investment the better investment avenue
for the Indians
Mutual funds, should solicit money from investors, not with assurances
of returns but with assurances of professional management and good practices.
The process of investment management must stick to the highest ethical and
professional standards for investors to get the required comfort in the fund.
Following are the suggestion to the mutual fund industry to increase their market
share and create the awareness about the mutual funds:
1. Tapping the up coming market:
Semi Urban Market as there is a lot of opportunity. Most of the

Mutual Funds are operating in the metros and big cities as per their present
branch office locations. If they have to increase their market size they have to
open more distribution centers at the various urban and semi-urban markets
2. To create the awareness:
To increase the awareness about the different products and benefits of

Mutual Funds, Various Promotional tools can be used and for the better
penetration of the mutual fund in the capital market
The awareness can be increased in the following ways:
* For making the children aware the concept should be shown in the
cartoon films or through technology the children generally pass their time.
77
The awareness can be increased by making the benefits of the mutual

fund clear in the Movies and in the T.V. Programs of Star plus which are
watched in every Indian House.
3. To provide some kind of curriculum:
To provide some kind of curriculum at the school/college level to create

awareness regarding Mutual Fund and by sponsoring shows in which there are
games related to mutual funds and by doing campus selection in the colleges.
4. Attention to cost:
There is great attention to the fees paid to service providers to deliver these
services, but little attention to the actual expenses on postage, courier,
(unnecessary) fact sheets, news-letters, miscellaneous communications and
balance sheets sent to investors who really make no use of them. The cost of
such paper unnecessarily sent, together with associated courier and postages,
can often be substantial, and is ultimately charged to the assets of the fund.
Investors in mutual funds are currently over serviced, and are flooded with
unnecessary information. Many of them would rather earn a few rupees more
on their investment than get an unnecessary report this can be avoided by
putting a option in the offer document about the reports send by the company
by explaining them the benefit of cost on the other side the interested of them
that may be 25-35% should be given and further all the reports can be made
available on the company’s site
The time has come for the industry to examine what services and
information is really desired by the investor, and target delivery in a precise
manner. In a low interest rate scenario, even a 0.1 per cent improvement in
yield with reduction of expenses will be appreciated by an investor.
78
CONCLUSION
The financial sector in India is growing rapidly. The life style as well as the
income of people in India has risen which has made the Financial Sector to innovative
products and specially the mutual funds and the life insurance industry these both are
very much supportive to the development of the financial sector the financial system
in India the Insurance segment and the Mutual Fund Together have a corpus of over
Rs. 5, 60,000 crore of savings. They play a crucial role in the capital market, while
providing security to people.
The risk appetite of the consumers in India is growing, now people invest in
risk bearing instruments, this has brought up new opportunities for the Mutual Funds
companies to come up with different financial products & because of this the
insurance has come up with ULIP products.
The mutual funds industry and the Insurance Industry are growing rapidly. The
AUM of all the companies is increasing on the same side the competition has also
increased in the mutual fund industry, Where as in Insurance the Premium has
increased very high, the total increase in the premium this year was about 110%.and
also the numbers to the 16 companies sooner this would be 25 in the next financial
year which has made the companies to go for the various types of promotion
strategies. The companies are coming up with different types of ads through which the
customers are attracted.
The mutual funds industry is coming up with various types innovative products like
global funds this funds will invest in the international markets. This means the
companies are also trying to attract investors by providing innovative products.
And the Insurance is also adopting the same theory of marketing the goods they are
also innovating the products like for diabetes and for cancer, etc and also by providing
79
ulip products where the customers gets the benefit of both the things high returns and
also security and protection.
BIBLIOGRAPHY
1. Books Magazines and publications:

• Services Marketing
• Indian Financial System
• Business India articles.
• The Insurance Times
• The DNA Money Newspaper
• The Economic Newspaper
2. Webliography
• www.google.com
• www.mutualfundsindia.com
• www.amfiindia.com
• www.mfmarketnews.com
• www.indiainfoline.com
• www.etstrategicmarketing.com
• www.hdfcinsurane.com
• www.irdaindia.org
• www.licindia.com
• www.iciciprulife.com
• www.marketresearch.com
• http://www.iloveindia.com/finance/indian-mutual-funds/kotak-
mahindra.html
• http://www.iloveindia.com/finance/indian-mutual-funds/reliance.html
• www.utimf.com/
80

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WINSURANCE GIANT ‘SW

Almost every marketing textbook has a different definition of the term

• Marketing involves an ongoing process. The environment is

• Example: Sales of beef are declining in the United States because

• This process involves both planning & implementing (executing)

• Some of the main issues involved include:

1. Marketers help design products, finding out what customers want

2. Marketers distribute products – there must be some efficient way to

3. Marketers also promote product, & this is perhaps what we tend to

4. Marketers also price products to “move” them. We know from

a) Maximize profit &

b) Communicate a desired image of the product.

5. Marketing is applicable to services & ideas as well as to tangible

Example: - accountants may need to market their tax preparation

MARKETING MIX 7P’s OF SERVICE INDUSTRY

The marketing mix is an integral part of marketing planning that depends on

The consideration of the interaction of product, price, place & promotion.

Provides a valuable structure in working towards a set of strategies. When this is

McCarthy’s (1978) classic m0odel of the 4 P’s –

 Process: Procedure, mechanism & flow of activities by which services are

THE ADDITIONAL “P” OF RELATIONSHIP MARKETING.

Further more, in the context of relationship marketing (to consumers) or key

A service is a product of human activity aimed to satisfy human needs, which

communication technologies; and the growing importance of basic infrastructural

A service is a bundle of features and benefits. However these benefits have

The term financial services or financial products in a broad sense mean

Financial Services is a term used to describe a whole family of resources that

• Insurance – life, property, retirement

FINANCIAL SECTOR IN INDIA

The financial sector is in a process of rapid transformation. Reforms are

Financial institutions have combated the reduction in interest rates and

We term marketing a function by which a marketer plans, promote and deliver

Marketing a service is meant marketing something intangible. It is marketing a

FINANCIAL PRODUCTS/SERVICES MARKED BY:

Post office operates as a financial institution. It collects small savings of the

 Personal Selling Through Agents.

 Pamphlets & broachers.

Marketing Mix of Post Office Products and Services

Process People Physical Evidence

Banking today has transformed into a technology intensive and customer

emergence of financial supermarkets in the form of universal banks providing a suite

Thanks a million to insurance industry

 We need life insurance because:-

 & If we Die/Expire various questions arise:-

HISTORY OF LIFE INSURANCE IN INDIA

• 1938 - Earlier legislation consolidated and amended to by the Insurance Act

Market Share of the players iLife Insurance Industry

Market Share 2006-07

MARKETING MIX OF LIFE INSURANCE

 Basic Product: - Safety, Security, Protection, Investment, are the basics

 Expected Product: - Tax Benefit, Easy Claming procedure as well as quick

NEW PRODUCT DEVELOPMENT

How the Insurance Products are developed in a period of time

How service is developed in period of time

A product for children’s education /Future

Death Benefit SA is paid up front. Child gets Sum Assured + GA

Survival Two structures: The SA will be paid as under

Premium 12646 14562

The price is the exchange value for a product or service, expressed in

Below in the table an example is given of a Smart Kid a product of ICICI

Factors effecting Pricing Decision

Are the important determinants of a price i.e. premium of an insurance policy/plan

The IRDA Insurance Regulatory development Authority is also having an eye