Marketing Strategies Used By Lic Commerce Essay
Life Insurance Corporation of India was established in 1956. It comprises of 8 zonal offices and 101 divisional offices. LIC is fully government-owned. It provides individual insurance, group insurance and pension plans. The subsidiaries of life insurance corporation of India are LIC International, LIC Nepal, LIC Lanka, LIC Housing Finance.
MARKETING STRATEGIES USED BY LIC
LIC followed these strategies–
It got the first mover advantage.
There was intense product differentiation.
Market segmentation was done intensely to include people of almost all ages.
LIC took help of advertisements to promote its brand value.
They have used creative slogans so that they can hit the customer’s mindset.
Attacked customers emotionally with these slogans.
It avoids any interference w.r.t communication to the customers and reduces the number of advertisement agencies so that the correct message reaches all the customers so that the main objectives are fulfilled.
SWOT ANALYSIS OF LIC
Strength
It ranks first amongst the insurance companies.
After sales service, long term plans hold the most importance.
Provides employment to 1,15,000 people
Has around 2000 branches across India and 10,00,000 agents.
Weakness
since it is government-owned, therefore ther is very little innovation.
gets affected by bureaucracy and red tape.
it becomes difficult to manage the huge workforce in the times of economic crises.
Opportunity
Effective service can be provided to the urban sector with more use of technology.
It can involve good brand proportion.
There has to be proper implementation of the government schemes.
Threats
It poses threat since the government policies keep changing.
The entry of insurance sector.
BCG MATRIX OF LIC
Market
Growth
highStar
Jeevan anand
Money plus policy
Pension plus
Question mark
New Bima Nivesh
New Jeevan Shree
lowCash cow
Group Scheme
Health Plans
Dog
Amulya Jeevan
l o w
h i g h
R e l a t i v e M a r k e t S h a r e
DOG- it means low share of low market growth with no cash generation at all. It might even lead to break-even.
Eg- Amulya Jeevan
CASH COW- it means high share of low market growth, there is economic profit and even funds other brands.
Eg- Group schemes and health schemes.
QUESTION MARK- it means low share of high market growth and it consume resources.
Eg- New bima nivesh and new jeevan shree.
STAR-there is high market share and high market growth, there is high cost and low profit and it generates high profit.
Eg- Jeevan anand, pension plans and money plus policy.
PORTER’S FIVE FORCES OF LIC
BARGAINING POWER OF CUSTOMERS
THREAT OF SUBSTITUTE PRODUCTS
BARGAINING POWER OF SUPPLIERS
COMPETITIVE RIVALRY WITHIN AN INDUSTRY
THREAT OF NEW ENTRANTS
CUSTOMER SATISFACTION
Customer satisfaction refers to the phenomenon which shows how much the customers are satisfied the product or the services provided by the agencies.
CUSTOMER SATISFACTION OF LIC :
It encourage face-to-face dealing with the customers.
It includes responding to the messages promptly and keeping all the clients well-informed.
It is readily approachable and amicable in this tough competition with the other insurance players.
The customer service policy must be clearly stated and well-defined.
MARKETING ENVIRONMENT
Macro-environment :The company and all the other actors operate in a large macro environment that shapes the opportunities and pose threat to the company. Major forces are :
Demographic
-since literacy and education increases employability, higher earning jobs also bring the change in perception about the need for insurance.
Economic
-Inflation rate: High inflation reduces the insurance business particularly life insurance quota, because the real value of money decreases with with increase in inflation rate.
Technological
– more innovative channels like bank, post office, ATMs should be introduced.
political and legal
-IRDA act, 1999: bill allowed for 26% for an equity participation in the insurance sector.
cultural
-The work culture in the organisation was sloppy and strong trade union made it difficult for managers so that the job is done.
Micro-environment: It consist of five components:
Organising Internal Environment: Its several departments and management levels
Marketing Channel Firm: Supplier and marketing intermediaries within it
It consists of 5 types of markets in which organization can sell: consumer, producer, reseller, government and the international market
Competitors – Basically the other insurance companies like, Tata AIG, Bajaj Alliance, etc.
All types of publics that have an actual interest in the organization ability to achieve its goal.
CONSUMER BUYING BEHAVIOR
First, let us know what influences consumer buying behaviour.
They are:-
Cultural factors
Social Factors, and
Personal factors
Cultural factors:
-LIC is a trusted brand in India and is totally owned by the government.
-There can be unnatural events like death, sudden crisis, etc.
Social Factors:
-LIC focuses on both the reference group and family status of the people.
-In joint families, there is less stress on buying behaviour.
Personal factors:
-LIC has different insurance plans according to the needs of the people concerning their age, lifestyle, values, personality and wealth.
Key psychological process:
-LIC has always motivated the customers by its influential insurance plans and its offers. People has a perception of buying LIC because it is government-owned and is considered number one in paying claims.
SEGMENTATION, POSITIONING AND TARGETTING
Segmentation:
LIC in India was divided into 2 basic segments: individuals and corporate people. The first segment comprised of individual customers. It is further divided into four sub-segments – protection, investment, savings and pension.
Protection products gives only protection to the different customers from risk. These don’t provide any savings facility to the policyholder.
Investment products offer long-term investment growth and insurance cover.
Savings products like endowment and money back policies provide both protection and investment benefits.
Pension policies are products offered to the customers as income during their years of retirement after they quit their respective jobs.
The corporate segment was divided into three sub-segments – protection, statutory savings and pension.
Down the line, LIC catered to both individual and corporate segments. Individual insurance policies include Endowment Policies, Money Back Policies, Term Assurance Plans, Periodic Money Back Plans and Joint Life Plans. The corporate policies include group insurance schemes such as group gratuity schemes, group term insurance schemes, group savings linked insurance scheme and group leave encashment schemes.
Targetting:
Targeting is the actual selection of the segment you want to serve the target market is the group of people or organizations whose needs a product is specifically designed to satisfy.
LIC mainly targets children who are basically into schooling, people in earning periods and senior citizens who have got retired from their respective services. It not only targets the urban people but also the rural people.
Positioning:
Positioning is a marketing strategy so that people can form a ‘mental image’ of the product in their minds (relative to other products).
LIC positions itself as the most sort after insurance company providing financial solutions to the people. It is very popular among the people because it is government owned.
BRAND EQUITY
LIC has done a good job in reinforcing its brand image of the ‘folded hands’ to the people. It is readily trusted by the people as it is one of the most oldest insurance player in the country. Its tagline “ZINDAGI KE SAATH BHI ZINDAGI KI BAAD BHI” has gained popularism not only in urban but also in rural areas.
The slogan of LIC is “Yogakshemam Vahamyaham” which translates from Sanskrit to “Your welfare is our responsibility”. The literal translation from Sanskrit to English is “I carry what you require”. The slogan, written in Devanagiri script, is found below the hands holding the lamp.
PRODUCT LIFE CYCLE
QUESTIONNAIRE
MARKETING SURVEY
PERSONAL INFORMATION
NAME: ……………………………………………………………………………………………………..
ADDRESS: ……………………………………………………………………………………………………….
……………………………………………………………………………………………………………….
CITY: ……………………………………..STATE: ………………………………………………………
PINCODE: ………………………………..
GENDER: ………………………………… MOBILE NO.: ……………………………………………
MAIL ID: …………………………………………………………………………………………………..
Please tick (√) in the boxes, as relevant:
What is your major reason for opting LIC as an investment policy?
Investment
Insurance
Investment and insurance
If others, please specify
…………………………………………………………………………
Does anyone else in your family have any kind of policy?
Yes
No
If yes, please provide the details of the LIC policy your family is currently using.
Term……………………………………………………………………………………
Maturity year……………………………………………………………………………….
Premium…………………………………………………………………………………
Insurance coverage amount……………………………………………………………………
Why did you opt for this particular LIC policy?
……………………………………………………………………………………………………
Have you ever been hospitalized in the last 3 years?
Yes
No
If yes, what was the reason for getting hospitalized? Also, please state the expenses that you incurred during the hospitalization.
………………………………………………………………………………………………………
What is the current amount of premium per month that you are paying in this policy?
Less than Rs 500
Rs 500 – Rs 1000
Rs 1001 – Rs 2000
Rs 2001 – Rs 4000
More than Rs 4000
Have you ever bought an insurance policy from any one of the following companies?
TATA AIG life insurance
LIC of India
Metlife
Birla Sunlife Insurance
If yes, then please mention the type of policy that you bought
………………………………………………………………………………………………………
Do you currently own a life insurance policy?
Yes
No
If yes, which of the following policy is it?
Term insurance
Permanent life insurance
Whole life insurance
Universal life insurance
Limited pay life insurance
Endowments
Accidental death
Others
Have you made a claim on your existing insurance policy? If yes, please mention the type and amount of claim?
Yes
No
Type of claim……………………………………………………………….
Amount of claim…………………………………………………………..
How much is your current insurance cover per month?
Less than Rs 10000
Rs 10001 – Rs 25000
Rs 25001 – Rs 50000
More than Rs 50000
Are you satisfied with your insurance policy?
Yes
No
Are you looking for a better LIC policy?
Yes
No