A PROJECT REPORT ON

COMPARISON BETWEEN PROMOTIONAL TOOLS USED BY HDFC LIFE INSURANCE COMPANY LTD. AND LIC AND EFFECTIVENESS OF EACH TOOL.
Submitted to PUNJAB TECHNICAL UNIVERSITY JALANDHAR

Bachelor of Business Administration (BBA)

Submitted By : Payal

Submitted To : Mr. Pardeep Bawa. Lectuarer in GNA-IMT

PHAGWARA.

(SESSION 2007-2010)

GNA-INSTITUTE OF MANAGEMENT AND TECHNOLOGY, PHAGWARA.

ACKNOWLEDGEMENT
I feel immense pleasure to give the credit of my project work not only to one individual as this work is integrated effort of all those who concerned with it. I want to owe my thanks to all those individuals who guided me to move on the track. This report entitled The comparative study of promotional tools used by HDFC. and LIC and effectiveness of eachis the outcome of my project work. I would like to express my deep sense of gratitude to staff members of GNAInstitute Of Management And Technology, Phagwara who introduced me to the subject and under whose guidance I am able to complete my project. Last but not least, I would thank all my colleagues, faculty members and all respondents who rendered their precious time for contributing their skills and to fill the questionnaire, which made my project more appealing and attractive.

EXECUTIVE SUMMARY
Someone has rightly said that practical experience is far better and closer to the real world than mere theoretical exposure. The practical experience helps the students to view the real business world closely, which in turn widely influences their perceptions and arguments their understanding of the real situation. The phenomenon of creation is a long process requiring time, energy and dedications well as skill and experience of those people engaged in the task, ultimately in the outcome as the final form of embodiment of the creators vision. Research work constitutes the backbone of any management education programme. A management student has to do research work quiet frequently during his entire span. The research work entitled Comparative study of promotional tools used by HDFC. and LIC and effectiveness of each". For this purpose the respondents from PHAGWARA. city have been chosen. In the first phase, profile of HDFC. After that a market research is

performed with a sample size of 30 respondents. The research study was limited to PHAGWARA. Here, in my survey; I have contacted the respondents through personal interviews with the help of questionnaire. The main objective of the research to comparative study of promotional tools used by HDFC. and LIC and effectiveness of each. In the last phase of the report findings and recommendations have been drawn.

TABLE OF CONTENTS

SR.N O.

PARTICULARS CHAPTER-I : INTRODUCTION TO COMPANY

1.1 1.2 1.3 1.4 1.5 1.6 1.7 2.1

Profile Of The Company Company History Mission & Values Management of Company Product Of The Company Associates companies Awards of Company

CHAPTER- II: INRODUCTION TO PROJECT

Scope Of The Project Introduction To LIC History of LIC Present status of LIC Subseries of LIC

CHAPTER- III : RESEARCH METHODOLOGY

3.1 3.2 3.3 Objective Of The Project Primary And Secondary Data To Be Collected Sample Design, Size And Methods To Be Used Sampling Technique Questionnaire 3.4 Limitation Of The Project

CHAPTER- IV: ANALYSIS AND FINDING

4.1 Project Analysis With The Help Of Data Collected

CHAPTER- V: SUGGESTION,CONCLUSION AND RECOMMENDATIONS

5.1 5.2 Bibliography Appendix

INTRODUCTION OF HDFC.

HDFC Bank Ltd.

Type Industry Founded Founder(s)

Public (BSE: 500180, NYSE: HDB) Banking Insurance Capital Markets and allied industries 1994 Mr Deepak Parekh of HDFC

Headquarters Mumbai, India

Key people Products Revenue Net income Total assets Employees Website

Mr. Aditya Puri, Managing Director Mr. Harish Engineer, Executive Director Financial services[1]

Rs. 197.5 billion (2009)[2] Rs. 2.24 billion (2009) Rs. 1.8 trillion (2009)
52,687 (2009) www.hdfcbank.com

HDFC LIFE INSURANCE

HDFC Bank Ltd. is a commercial bank of India, incorporated in August 1994, after the Reserve Bank of India allowed establishing private sector banks. The Bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank has 1,412 branches and over 3,295 ATMs, in 528 cities in India, and all branches of the bank are linked on an online real-time basis Total annual earnings of the bank increased by 58% reaching at Rs.19,622.8 crore in 2008-09.

 It is a joint venture between Housing Development Finance Corporation Limited (HDFC Limited), India's leading housing finance institution and a Group Company of the Standard Life Plc, UK. HDFC Limited, Indias premier housing finance institution has assisted more than 3.3 million families own a home. It has international offices in Dubai, London and Singapore with service associates in Saudi Arabia, Qatar, Kuwait . As of December 2008, the total asset size has crossed more than Rs. 95,000 crores including the mortgage loan assets of more than Rs. 82,800 crores.

HISTORY OF

HDFC .

History
HDFC Bank was incorporated in the year of 1994 by Housing Development Finance Corporation Limited (HDFC), India's premier housing finance company. In a milestone transaction in the Indian banking industry, Times Bank Limited (promoted by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India. As per the scheme of amalgamation approved by the shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank.

In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. The balance sheet size of the combined entity is over Rs. 1,63,000 crore. The amalgamation added significant value to HDFC Bank in terms of increased branch network, geographic reach, and customer base, and a bigger pool of skilled manpower.

MISSION &

VALUES.

Our Vision & Values Our Vision 'The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry'.

'The most obvious choice for all'. Our Values Values that we observe while we work:

Integrity Innovation Customer centric People Care One for all and all for one Team work Joy and Simplicity

MANAGEMENT TEAM

OF HDFC.

Mr. Amitabh Chaudhry Managing Director and Chief Executive Officer

Mr. Paresh Parasnis Executive Director and Chief Operating Officer

Ms. Vibha Padalkar Chief Financial Officer

Mr. Sharad Gangal General Manager, Human Resources and Administration

Mr. Vikram Mehta General Manager, Sales and Marketing

Mr. Prasun Gajri Chief Investment Officer

PRODUCTS OF HDFC.

Home Loan for Construction and Purchase * Home Improvement Loan * Home Extension Loan * Top up Loan (Only for Existing

Customer) * Land Loan * NRP Loans for Professionals * Equity Loan

ASSOCIATES COMPANIES

OF HDFC.

HDFC Limited

HDFC Bank

HDFC Mutual Fund

HDFC Sales

AWARDS

OF HD FC.

AWARDS & ACCOLADES

HDFC ranked among the top 3 Best Managed Companies in India by Finance Asia in 2007 Selected as the best Indian company in the FIs / NBFCs / Financial Services sector at the Dun & Bradstreet American Express Corporate Awards 2006 and 2007

 Best Investment Management Company in India by EUROMONEY 2007 HDFC is featured in the Limca Book of Records 2006, for the landmark achievement of Rs. One trillion in home loan approvals HDFC was awarded the Gold Shield in the Finance Sector by ICAI for excellence in Financial Reporting in 2005. This is the 14th time HDFC has been selected for this award. HDFC has been awarded the 'Business Superbrand' status. HDFC has been awarded the 'Best Home Financier' title by Outlook Money 2005 Economic Times Corporate Citizen of the Year Award - November 2004

INTRODUCTION

OF LI C.

LIC :Life Insurance Corporation of India

The Life Insurance Corporation (LIC) of India founded in 1956 is the largest life insurance company in India owned solely by the Government of India. Headquartered in Mumbai, which is considered the financial capital of India, LIC presently has 7 Zonal Offices and 100 Divisional Offices situated all around the country

. In addition to an even distribution of 2048 branches located in different towns and cities of India, LIC also has a network of around one million agents who solicit life insurance policies to the public.

HISTORY

OF LIC.

The first 150 years of the British Rule in India were characterized by turbulent economic conditions. The first war of independence in 1857, the World Wars 1 and 2 (1914-1918 and 1939-45) and India's national struggle for freedom in between had adverse effect on the economy . In addition to this the period of world wide economic crisis in between the two World Wars termed as the period of Great Depression led to the high rate of

bankruptcies and liquidation of most Life Insurance Companies in India that existed during that time. These occurrences led to loss of faith in insurance of the people of India. The Life Insurance Companies Act and Provident Fund Act both passed in 1912 provided regulatory mechanisms to the Life Insurance Industry in India for the first time. After undergoing several other such reforms in the following decades and nearly a decade after India achieved independence, the Parliament of India passed the Life Insurance of India Act on 19 th June, 1956 following which the Life Insurance Corporation (LIC) of India on 1 st September of the same year. The Company began its operations with 5 Zonal Offices , 33 Divisional Offices and 212 Branch Offices .

PRESENT STATUS

OF LIC .

Existing as a towering insurance company for over 50 years, LIC has acquired almost monopoly power in the solicitation and sale of life insurance policies in India.

In addition to the summary regarding the present stature provided at the beginning, LIC has extended its activities in 12 countries other than India with the objective of catering to the insurance needs of Non Resident Indians.

The enforcement of New Economic Reforms in 1991 coupled with the formation of Insurance Regulatory and Development Authority Act (IRDA) of 2000 (which started issuing licenses to private life insurers ) has diluted the monopolistic attitude commanded by LIC.

SUBSIDIARY UNDE R LIC.

Life Insurance Corporation (LIC) of India International A joint venture offshore company promoted by LIC which

commenced its operations in July, 1989 with the objective of offering policies denominated in US $ to NRIs residing in the Gulf.

LIC Nepal Formed in 2001 in joint venture with Vishal Group of Industries, Nepal. LIC Lanka Formed in 2003 in joint venture with Bartley Group of Companies, Sri Lanka LIC Housing Finance Established in 19 th June,1989 in Dubai with the objective of providing long term finance for construction of houses or apartments. LIC Housing Finance Limited Care Homes A wholly owned subsidiary of LIC Housing Finance which builds Assisted Community Living Centers for senior citizens.

Advertisements used by lic:-

RESEARCH METHODOLOG Y

Introduction and Meaning

Research is a careful investigation or inquiry especially through search for new facts in branch of knowledge or to establish relationship between effect and

cause. And especially marketing research that helps in problem solving in the marketing field, demands critical analysis of the problems that are latent or potential in nature. Research methodology, is considered a kin to clinical operations where in-depth diagnosis, prescription and medicines are applied. Research methodology is the sketch and plans to define a problem, appropriating research design, designing instrument for collection of data, and data interpretations etc. In general, Research problem is the one that requires a researcher to find out the best solution for the given problem that is to find out the course of action, the action the objectives can be obtained optimally in the context of a given environment.

Objective Of The Study

The foremost objective of the study is to find out the various promotional tools used in insurance industry. To find out the different promotional tools like advertising, personal contact, sales promotion etc. To study the most commonly used tools used by LIC and HDFC. To find out which is the most effective among these used by LIC and HDFC. to sell a policy to their customer. To know how people rate HDFC. in comparison to LIC.

RESEARCH DESIGN

The research design of this survey has been considered as descriptive research as the survey is directed towards eliciting public opinion towards HDFC. A well-structured questionnaire qualifying objectivity of the survey is used to collect data from the respondents.

Sampling Design
Universe for this project is PHAGWARA city of Punjab state. .

Sample size
In view of the constraints, sample size was restrained to 30.

Sampling unit
Any person whether holding or not holding life insurance policy, in the age slab of 20 to 60 years and residing in the PHAGWARA city.

Data Collection
To accomplish the objectivity of this survey, primary data were needed, however, secondary data of the HDFC and other companies were used for literature review and to have general inferences. To elicit data from the survey universe, PHAGWARA, a well-structured questionnaire was administered. The secondary data required were explored from company information brochures and Internet.

Interviewing
The personal interviewing was carried out to elicit information from the respondents who were selected at random or convenient sampling in the PHAGWARA city.

Analysis and Interpretation

After the data collection, it was compiled, classified and tabulated manually and with help of computer. Then the task of drawing inferences was accomplished with the help of percentage and graphic method. Different suggestions given by me to the Company after analyzing the views of every respondent are also given in the report.

LIMITATIONS OF THE STUDY

It is said, Nothing is perfect and if the quite is true, I am sure that there would be few shortcoming in this project also. Sincere efforts have been made to eliminate discrepancies as far as possible but few would have reminded due to limitations of the study. These are:

1.Limited scope
The survey was conducted in PHAGWARA. thus the respondents belonged to only this region of the country. This could have brought bias into the study.

2. Nature of the study

The survey concentrated on personal information about income, saving and investment. All these issues are highly sensitive and of secretive nature therefore there could have been untrue answers to some of the questions.

3.Ambiguous replies
Some of the respondents gave ambiguous replies for certain questions or omitted the responses to some of them. The interpretation of such responses becomes difficult and could generate wrong results.

4. Unrepresentative sample size

The sample size taken for the purpose of the study does not very significantly represent the whole society and their saving investment patterns may not clearly bring out the average trends existing in the market.

RESEARCH METHODOLOG Y

Introduction and Meaning

Research is a careful investigation or inquiry especially through search for new facts in branch of knowledge or to establish relationship between effect and cause. And especially marketing research that helps in problem solving in the marketing field, demands critical analysis of the problems that are latent or potential in nature. Research methodology, is considered a kin to clinical operations where in-depth diagnosis, prescription and medicines are applied. Research methodology is the sketch and plans to define a problem, appropriating research design, designing instrument for collection of data, and data interpretations etc. In general, Research problem is the one that requires a researcher to find out the best solution for the given problem that is to find out the course of action, the action the objectives can be obtained optimally in the context of a given environment.

Objective Of The Study

The foremost objective of the study is to find out the various promotional tools used in insurance industry. To find out the different promotional tools like advertising, personal contact, sales promotion etc. To study the most commonly used tools used by LIC and HDFC. To find out which is the most effective among these used by LIC and HDFC. to sell a policy to their customer. One of the hidden objective of the study was also to know how many people among the selected sample is using these tools while purchasing a insurance policy from any of the company among LIC and HDFC. To know how people rate HDFC. in comparison to LIC.

RESEARCH DESIGN
The research design of this survey has been considered as descriptive research as the survey is directed towards eliciting public opinion towards HDFC. A well-structured questionnaire qualifying objectivity of the survey is used to collect data from the respondents.

Sampling Design
Universe for this project is PHAGWARA .

Sample size
In view of the constraints, sample size was restrained to 30.

Sampling unit
Any person whether holding or not holding life insurance policy, in the age slab of 20 to 60 years and residing in the PHAGWARA city.

Data Collection
To accomplish the objectivity of this survey, primary data were needed, however, secondary data of the HDFC and other companies were used for literature review and to have general inferences. To elicit data from the survey universe, PHAGWARA, a wellstructured questionnaire was administered. The secondary data required were explored from company information brochures and Internet.

Interviewing
The personal interviewing was carried out to elicit information from the respondents who were selected at random or convenient sampling in the PHAGWARA. city.

Analysis and Interpretation

After the data collection, it was compiled, classified and tabulated manually and with help of computer. Then the task of drawing inferences was accomplished with the help of percentage and graphic method. Different suggestions given by me to the Company after analyzing the views of every respondent are also given in the report.

LIMITATIONS OF THE STUDY

It is said, Nothing is perfect and if the quite is true, I am sure that there would be few shortcoming in this project also. Sincere efforts have been made to eliminate discrepancies as far as possible but few would have reminded due to limitations of the study. These are:

1.Limited scope
The survey was conducted in PHAGWARA. thus the respondents belonged to only this region of the country. This could have brought bias into the study.

2. Nature of the study

The survey concentrated on personal information about income, saving and investment. All these issues are highly sensitive and of secretive nature therefore there could have been untrue answers to some of the questions.

3.Ambiguous replies
Some of the respondents gave ambiguous replies for certain questions or omitted the responses to some of them. The interpretation of such responses becomes difficult and could generate wrong results.

4. Unrepresentative sample size

The sample size taken for the purpose of the study does not very significantly represent the whole society and their saving investment patterns may not clearly bring out the average trends existing in the market.

DATA ANALYSIS

F ig u r e 1 .

43% 56%

To know number of person having insurance policy in the chosen population.

The evident from below finding showed that out of 30 respondents, 56% having the insurance policy whether 43% people are not having any insurance policy.

Table 1. Persons having insurance policy 17 Persons not having insurance policy 13

Number of persons of having insurance policies with HDFC. and LIC , so that we can have a overview for the comparison of HDFC. and LIC . The below evident shows that out of the 40% respondents dealing with LIC, 46% respondents were dealing with HDFC. and 0% dealing with both the companies and 13.3% are dealing with other insurance companies. Table 2. HDFC LIC BOTH OTHER 14 12 0 4

Figure 2.

To know about different promotional tools used by both the companies. The below figures shows as electronic and print media helps in promotion but agents do a lot work for that as 13.3% respondents come to know about the policy through the agents of the company. Table 3. ELECTRONIC MEDIA PRINT MEDIA AGENTS OTHER 15 8 4 3

Figure 3.

To know people how much depends upon the promotional tools used by companies or they go for any other resource before adopting any insurance product. As the below figure depicts that mostly respondents buy insurance policy on the basis from where they get the information about the policy, unless 53.3 of the total respondents are confirming about the policy before investing Table 4. YES 16 NO 14

From which source As the below figure depicts that the customers mostly prefer 33.3% in personal contact, 26.6% in company branch, 40% in existing customer, & there is no any information collect from any other source used by customer. Table 5. PERSONAL CONTACT COMPANY BRANCH FROM EXISTING CUSTOMER OTHER 10 8 12 0

Figure 5.

To know customers are satisfied from the company or not.

The below figures shows that customers are more satisfied from the LIC i.e 76.6% & there is 23.3% customers are satisfied from HDFC. Table 6. COMPANY NAME LIC YES 23 NO 7

HDFC

17

13

Figure 6.(LIC)

HDFC

Figure 6.(HDFC)

To know that why the customers are not satisfied with the company and customers.

The below figures depicts that the most of customers are not satisfied from LIC due to lack of claim related, & most of customers not satisfied from HDFC due to agent services. Table 7. COMPANY NAME LIC COMPANY SERVICE 7 CLAIM RELATED 13 AGENT SERVICES 8 OTHER

HDFC

11

13

Figure 7. (LIC)

HDFC

Figure 7. (ICICI)

To know the opinion of respondents about the best advertising media.

The below figures shows that 50% respondentss opinion is internet i.e better then any other sources for the advertisement. Table 8. SOURCE T.V. NEWSPAPER INTERNET OTHER PERCENTAGE 7 8 15 0

. Figure 8.

Comparison of HDFCs and LIC. The below figures shows that most of the respondents rate average to HDFC. in comparison to LIC.

Table 9. RATING GOOD PERCENTAGE 19

AVERAGE

POOR

Figure 9.

To know the future plans of the respondents. The below figures depicts that most of the respondents will purchase insurance policies in future. Table 10. YES 27 NO 3

Figure 10. .

To know the future plans of the respondents to invest in LIC and HDFC. The below figures shows that 73.3% respondents would like to adopt LIC in future. Table 11. COMPANY NAME LIC HDFC PERCENTAGE 73.3% 26.6%

Figure 11.

FINDINGS AND CONCLUSIONS

FINDINGS

On finding it is noticed that most of the people invest their money in LIC.

On finding it is noticed most of the respondents gets information about the policy from the agent of the companies thats mean advisor are paying their best.
On finding it is noticed that few customers verifies before investing from

their contacts and company branch. On finding it is noticed that most of the respondents consider newspapers as the best advertising media. On finding it is noticed that most of the respondents are interested to invest in the future. On findings it comes out that some of existing customers are not satisfied from the agent services of both the companies. On finding it comes out that respondents are more satisfied with company services of LIC than HDFC.

RECOMMENDATOINS

As per my study what I analyzed is that although HDFC. Company is are using more promotional tools than but LIC of the total market share . So first of all HDFC .should use some of sales promotional tools as LIC having the benefit of brand name.
HDFC. can go for more advertisements in newspapers as respondents regards

it as best advertisement media. It should try to fall out variety of plans in market as per the actual needs of the customer. It should try to concentrate on the rural areas also as LIC is emphasising more in rural area this year. It should use personal selling and agents services more in rural area as some of the customers are not aware of the different insurance plans. It should try to give better services to its existing customers as many of respondents go for investigating about the company from their personal contacts and existing customer. If existing customers are satisfied then it would lead to free advertising for the company as words of mouth plays important role in creating brand image in the minds of the company.

CONCLUSION
LIC is bless to the mankind which has awakened many new hopes and aspirations for humankind a vision of a new, just equitable and fair global order governed by a time tested value system based on a noble human passion of love, compassion, tolerance and mutual understanding.

To introduce innovative products offering a right mix of flexibility/risk/return depending, which will suit the requirement of the customers and should target specific niches, which are poorly served or not served at all? Number of formalities should reduce, as customer feels irritated with lots of formalities. It is seen that till today a large portion of population is aware of various insurance plans, these include educated professionals also. Therefore, the Private sector insurance companies should focus on improving facilities and the increase the understanding about insurance plans thus increasing their scope of sale. LIC should lay more stress on advertisements, both in print as well as in other and give better agent services. Opening up the sector will certainly mean new products, better packaging and improved customer service. Both new and existing players will have to explore new distribution and marketing channels. Potential buyers for most of this insurance lie in the middle class. New insurers must segment the market carefully to arrive at appropriate products and pricing. Recognizing the potential, in the past three years, the nationalized insurers have already begun to target niches like pensions, women or children.

BIBLIOGRAPHY
BOOKS: Kothari C.R. (1990) Research Methodology: Method and Techniques; Wishva Prakashan, New Delhi. Bodie.Z, Kane.A & Mracus.J: Essentials of Investments. Prof. E Gordon & Dr. K. Natrajan Banking Theory Law and Practice. Kotler, Phillip Marketing Management (Prentice Hall India, 2004)

 WEBSITES
www.bimaonline.com

www.iciciprulife.com
www.icraindia.com

www.google.com