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CONSUMER BUYING
BEHAVIOUR
Abhishek Roy
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Content
1. About
Promoters................................................................
4
2. The Company………………………………………………….5
5. Consumer analysis………………………………………….12
6. Competition analysis……………………………………….14
7. PROCESS/METHODOLOGY OF STUDy…………………16
8. DATA COLLECTIONS………………………………………19
10. CONCLUSIONS…………………………………………….31
14. Recommendation………………………………………….32
15. QUESTIONER………………………………………………35
16. Reference…………………………………………………...37
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1.a. About Promoters
For the year ended March 31, 2008, the company garnered Retail New
Business Weighted premium of Rs. 6,684 crores, registering a growth
of 68% over the last year and has underwritten nearly 3 million retail
policies during the period. The company has assets held over Rs.
28,500 crore.
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First Year Premium of Life Insurers for the Period Ended
December, 2007
5
16 Bharti AXA 7.77 - 0.01 7.78
Private 15472.5
Total 9 8825.06 3921.11 28218.75
45358.9 30258.3
Total 3 80424.34 2 156041.59
2. The Company
ICICI Prudential Life's capital stands at Rs. 42.72 billion (as of June 30,
2008) with ICICI Bank and Prudential plc holding 74% and 26% stake
respectively. For the quarter ended June 30, 2008, the company
garnered Retail Weighted New Business Premium of Rs. 1,174 crores as
against Rs 810 crores for the quarter ended June 30, 2007, thereby
posting a growth of 45% and has underwritten over 6 lakh policies over
this period. The company has assets held over Rs. 30,600 crore as on
August 31, 2008.
ICICI Prudential Life is also the only private life insurer in India to
receive a National Insurer Financial Strength rating of AAA (Ind) from
Fitch ratings. The AAA (Ind) rating is the highest rating, and is a clear
assurance of ICICI Prudential's ability to meet its obligations to
customers at the time of maturity or claims.
For the past seven years, ICICI Prudential Life has retained its
leadership position in the life insurance industry with a wide range of
flexible products that meet the needs of the Indian customer at every
step in life.
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This we hope to achieve by:
Understanding the needs of customers and offering them superior
products and service
Leveraging technology to service customers quickly, efficiently and
conveniently
Developing and implementing superior risk management and
investment strategies to offer sustainable and stable returns to our
policyholders
Providing an enabling environment to foster growth and learning for
our employees
And above all, building transparency in all our dealings
2. b. Our values:
2. c. Distribution
ICICI Prudential Life has one of the largest distribution networks
amongst private life insurers in India. It has a strong presence across
India with over 2000 branches (including 1,095 micro-offices) and an
advisor base of over 261,000 (as on August 31, 2008).
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The company has 20 bancassurance partners having tie-ups with ICICI
Bank, Bank of India, South Indian Bank, Shamrao Vitthal Co-Op Bank,
Jalgaon Peoples Co-op Bank, Ernakulam District Co-op Bank, Idukki
District Co-op Bank, Ratnagiri Sindhudurg Gramin Bank, Solapur
Gramin Bank, Wainganga Kshetriya Gramin Bank, Aryawart Gramin
Bank, Jharkhand Gramin Bank, Narmada Malwa Gramin Bank, Baitarani
Gramya Bank, Ratnagiri District Central Co-op Bank, Seva Vikas Co-op
Bank, Sangli Urban Co-Operative Bank, Baramati Co-operative Bank,
Ballia Kshetriya Co-Operative Bank, The Haryana State Co-Operative
Bank
2. d. Products
Insurance Solutions for Individuals
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InvestShield Cashbak: is a unit linked plan that provides premium
guarantee on the invested premiums along with flexible liquidity
options.
LifeStage Assure: a unit linked insurance plan that provide upto 450
% of first year premium guarantee on maturity, with the additional
advantage of a lifecycle based portfolio strategy that allocates the
investor’s money across various asset classes based on his life stage
and risk appetite
Protection Solutions
Education Solutions
Retirement Solutions
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Immediate Annuity: is a single premium annuity product that
guarantees income for life at the time of retirement. It offers the
benefit of 5 payout options.
PremierLife Pension: is a unique and convenient retirement solution
with a limited premium paying term of three or five years, to suit
professionals and businessmen, especially those who require more
flexibility and customization while planning their finances.
Health Solutions
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manner and also avail of tax benefits as applicable to approved
gratuity funds.
• Group Term Plan: ICICI Prudential Life's flexible group term solution
helps provide an affordable cover to members of a group. The cover
could be uniform or based on designation/rank or a multiple of salary.
The benefit under the policy is paid to the beneficiary nominated by
the member on his/her death.
ICICI Prudential Life offers flexible riders, which can be added to the
basic policy at a marginal cost, depending on the specific needs of the
customer.
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Waiver of Premium: In case of total and permanent disability due to
an accident, the future premiums continue to be paid by the company
till the time of maturity. This rider is available with SmartKid, LifeTime
Plus, LifeTime Super and LifeTime Super Pension.
Income benefit rider: In case of death of the life assured during the
term of the policy, 10% of the sum assured is paid annually to the
nominee on each policy anniversary till the maturity of the rider.
4. S.W.O.T Analysis
4. a. Strengths
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Product is price competitive compare with the competition and its
upfront charge has been always lower since from inspection.
Automatic balance the debt and equity component of the portfolio
every quarter and first to come up with health product (diabetics).
Average age of its policyholder is approx 8 year lower than LIC
policyholder.
Strong agent network that bring 60% of the total premium (lower
commission but high volume)
4. b. Weakness
4. c. Opportunity
4. d. Threats
Player like Bajaj and Birla Sun Life with low premium for same plan
Entry of other private company with equal strong experience and
financial strength of partner making the competition difficult and
saturating the urban market.
Current Govt. policies do not encourage in gross domestic saving. If the
tax liabilities of the service rise the customer will have little money to
invest
13
LIC has woken up from sleep and is following competitive strategies. Its
huge surplus in life fund gives a capability to lodge price war
Product differentiation is difficult in market (bancassurance)
Competition is getting keener in couple of year
High opportunity expenses will be in future
5. Consumer analysis
5. a. Cultural factor; -
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class does not want insurance. Upper lower class wants insurance for
saving purpose. Working and middle class want insurance for
protection and saving purpose and lastly, upper class want to purchase
insurance for investment tax benefit and saving purpose.
5. b. Social factor; -
5. c. Personal factor; -
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because in that time they have no dependent. However, some people
have some dream and dependent also. They are in such stage where
they can take more risk so they mostly prefer to invest in ULIP.
Second stage is newly married. In that stage people need and buying
decision is influenced from their future plan and earning capability. If
they have to plan for purchase flat that time, they will need term
insurance. There after stage is one or two children after marriage, they
will be influenced from future need. They will accumulate fund for
children marriage and education, they can be plan time-to-time
vacation. In forth stage, they want to accumulate for retirement.
People want to live alone after old age or in peaceful place so they are
ready to start saving for old age.
Attitude also affect consumer behavior positive attitude (about his life)
person will take pension plan because people think that they will live
more. But negative attitude person will take life insurance because
they worry about their life.
6. Competition analysis
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threat as mainly by LIC for ICICI Prudential. Due to this reason price
war, advertisement, and new product innovation will be expensive in
future.
7. PROCESS/METHODOLOGY OF STUDY
7. a. Procedure:
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Studying the product
Decision on objective needed to be work on.
Developing Survey instruments
Getting questionnaire filled through interacting with different age
groups, sex, monthly income and occupation.
Finally analyzing the data of various areas and trying to study about
various influence factors.
7. b. Process adopted:
Reading about the product was the first step undertaken. This gave
not only in depth knowledge about what is been offered by the
insurance but also proved useful while developing the questionnaire.
Specific Questions/Scale
Question/Scale Measurement
Measurements format is
been evaluated.
Step
Step 45 developed.
Step 9
Revise the questionnaire layout if needed .
7. c. Customer Survey:
7. d. Research Design:
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A two stage Research been conducted:
• Secondary Research:
• Primary Research:
7. e. Sampling Plan:
Elements:
The target population of the study included the general population
above the age of 25 yrs
Sampling design and sampling unit are as follows:
Target population: Adults meeting qualifications-over 25 years, working
class, businessman, personnel having children
Sampling frame- Urban class in the Mumbai region
Sample size: 50
Sampling unit: urban class personnel
Through this we would focus on the following area;
To identify critical factor (internal and external) which influence the
buying behavior of individual,
Why people purchase insurance policy.
To know about mindset of people.
To analysis of customer perception of the quality of product, so that to
take steps to maximization of customer satisfaction.
8. DATA COLLECTIONS
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8. a. Data Collection Plan:
The first of Research consisted of secondary data search from the
following sources:
Catalogues
Websites
2) Attitudes/Opinions:
3) Awareness/Knowledge:
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4) Motivation:
5) Behavior:
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reason to purchase insurance
saving investment
10% 12%
tax saving
26%
security
52%
objective behind it
social relaxation
6%
cover liabilities
34%
fear
20%
Finding:-40% votes has come for life stage need, here people think
that insurance is goods tools for fulfilling time to time need due to
compulsory saving (i.e. Child education), some people invest in
insurance for cover liabilities, means if a individual faces 3D’s (death,
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deceases, disability) that time who will pay EMI/loan. So 34% votes has
comes for cover liabilities, only 20% people buy insurance due to fear;
means insurance awareness is increasing, In India because approx 74%
people are thinking about life stage need and cover liabilities. Only 6%
people agree that insurance give social relaxation.
Finding:-Out of 100% people 10% have very satisfied from the return
of their policy and 49% are only satisfied. On the other hand , 28%
people are not much satisfied from their policy return and 13% people
fell dissatisfaction. So for the attraction of 41% of people, Insurance
Company
have to need to concentrate that, how to give/increase return to the
policy
holder.
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criteria for selecting insurance company
100%
2 2 2 2
80%
4
no of people in %
60% 4 2 2
realibility
service
40%
6 2 income
6 5 4 policy scheme
20%
3
0%
25-30 30-35 35-40 40-45 45-60
realibility 2 2
service 2 4 2
income 4 2 2 2
policy scheme 6 6 3 5 4
age
25
investment age/income
100% 0 0 0
1 3 1
90% 3
1 0 1 1
80%
0
70% 6 1
2 0
3
% of people
60%
50% 1
5 4 4
40%
2 0
30% 2
20%
2
1 1 1
10% 5 1
1 1 1
0%
25-30 30-35 35-40 40-45 45-60
other 0 0 1 0 1
equity 1 3 1 3
pension 1 0 0 2 0
insurance 3 6 1 4 1
mutual fund 2 5 4 2 0
gold 1 2 1 1 0
real estate 1 5 1 1 1
age
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purpose for buying life insurance
circumstances saving
23% 23%
for fullfillment of
for family needs
different needs
29%
25%
for old age saving for family needs for fullfillment of different needs for opposite circumstances
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which type of policy is popular amoung people
45-60
3 1
40-45
7 4 3
w hole life
35-40
6 1 1 1 endow nment
age
ULIP
epuity
30-35
5 6 1
25-30
1 4
0 2 4 6 8 10 12 14 16
no of people
28
which factor is more important
4
no of customer
0
25-30 30-35 35-40 40-45 45-60
brand 2 5 3 3 2
policy scheme 3 5 2 5 2
relationship 1 2 1 2
service 1 1 1 1
age
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where people like to purchase policy
Series1
25
24
20
15
14
no of peole
10
5
4
30
mode which people prefer to pay premium
100%
90%
80%
70%
% of people
60% monthly
brand &
advertisment
24%
family
41%
professonal &
trade union
14% friends &
neighbour
21%
family friends & neighbour professonal & trade union brand & advertisment
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Finding:-In insurance mostly people’s buying decision (41%) influence
by their family, means they take insurance according to their family
needs in another word they insurance is taken because after death of
earning person family don’t feel insecure. After that their buying
decision influence from brand and advertisement (24%), due to
advertisement insurance awareness ratio increase in India. Lastly they
influence from friends & neighbor (21%), and professional & trade
union (14%).
24
25
20
15 13
no of people
10
5 3 3
0
death disabilities diseases all
Series1 13 3 3 24
factor
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some factor, which increase attractiveness of insurance
other bonus
15% 12%
return depend
on market
22%
guarenteed
bonus
51%
10. CONCLUSIONS
Questionnaire Analysis
The important factor, which has been recognized from the data,
collected analysis regarding the life insurance buying behavior of
individual are that, people give most important to their security, so
other factors (saving, investment and tax saving) increases
attractiveness of insurance among people. Due to security reason,
term insurance is very popular among people.
Insurance give help to fulfill life stage need i.e. child marriage and
education. People think that insurance is good financial tool to face
influence and accumulating fund (due to compulsory saving). Mindset
is changing, now people take insurance according to their need and not
due to their fear, they understand their needs. So due to this reason
now people first concentrate on policy scheme and brand, when they
are going to choose Insurance Company and policy.
Whole life policy is popular due to family need, endowment policy is
popular due to life stage need (money back policy) and ULIP is popular
due to old age saving and fulfill different life stage need. In insurance,
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relationship and service is also important, so mostly people want to
buy insurance direct from company and agent, because agent and
brand fulfill relationship and service need.
Premium mode also influences buying behavior of customer. Every
income group likes annual and half yearly mode. Insurance buying
decision is mainly influenced by family. Due to brand and
advertisement (aggressive) people are aware about insurance and they
are changing their mindset towards it. Now people know that it is
important for everyone and it gives us protection from 3d’s (death,
disabilities, and diseases), approx 80% people accept this fact. More
than half of the people agree that guarantee bonus will increase the
attractiveness of insurance, because in India people do not take more
risk and more important they want to secure towards safety of their
money.
Network reach and visibility of Insurance is a very important criterion
for the customer while buying an insurance policy. We can also
conclude from our analysis that network reach in terms of Branches is
directly proportional to the market share in case of Private Players.
11. Recommendation
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saving and investment tool, this will do work as a value added
service which will increase penetration of India.
6) Now only product knowledge is not sufficient for selling
insurance, some thing should be added up in training program
(age/front liner) i.e. human behavior, CRM, knowledge of another
financial tools, communication program, and especially how to
improve way of delivery.
7) In insurance, process is too much time taking, when we compare
to other financial tools, so process work should be less, effective
and flexible.
8) People are not much aware of alternative policy scheme (health,
diabetics), so there are need to increase awareness of such type
of policies among people.
9) Mostly, people are not satisfied from the post service of
insurance companies due to dependence on agents or no
knowledge about process, so there should be need to increase
awareness about self service and awareness among people by
training and advertisement.
10) Insurance is long term contract and saving tool, after a time
people feel less interested towards it, so time to time motivation
is important that they are doing a good job.
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\
Name:______________________________________ Age……..
Q5. Are you satisfied with the return on investment, which you are getting
from your policy?
1. 2. 3. 4.
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Very satisfied satisfied not much satisfied dissatisfied
Q15. Amongst the following which one is most important for which you
would be tempted to secure or take insurance?
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a. death b. disability c. diseases d. all
Signature-……………..
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Reference:
Books; Marketing Research
Marketing and Management
Sales Management
Customer Relationship Management
Class Notes
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