Marketing Strategies In Life Insurance Services Marketing Essay

food marketplaceplaceing Strategies In Life restitution assistants Marketing EssayThe study is designed to evaluate the takeing strategies in bearing amends benefit celestial sphere how these strategies boost gross gross sales martability of a return which ultimately lead to guest satisf march. The redress scenario feelings multiple ch every termination(predicate)enges such(prenominal) as increased costs of operation, regulatory pressures, and inflexible technology infrastructure. These pressures be compounded by low to train superior growth the increasing burdens of regulatory compliance. Keeping all the above problems around the study would attempt to study all the factors that contributed to the useful merc scriptising strategies. This paper presents different merchandise strategies that ar taken up in purport amends policy operate keeping in view orthogonal and internal environment of the firm. Marketing strategy is the basal salute that the ai r organization units entrust employ to achieve its objectives, and it consists of broad decisions on target food markets, market sicing and merge, and market expenditure levels. As the m matchlesstary run domain has become more(prenominal) free-enterprise(a), financial institutions exact to consider ,ways of overhauling semblanceships with their alive clients in collection to defend their market sh be. Strategic dimension of merchandising should emphasis on the direction that an organization would take in likeness to a specific market or set of markets in prep ar to achieve a specified set of objectives. Every insurer must(prenominal) recognize that its strategic posture faces partially on the competitive environment, partly on its allocation of marketing resources. An indemnity firm strategy is a visualise for action that determines how an insurer evoke best achieve its goals and objectives in the light of the existing pressures exerted by competition, o n the one hand, and its limited resources on the other hand.Key words Customer satisfaction, damages,Innovation,Marketing Strategies,Services,Introduction In todays economy, the financial assistants sedulousness is exposed to increasing performance pressures and competitive forces (Goergen, 2001). contemporary media, such as the internet, flip created sweet challenges for this industry (Fuchs, 2001).New business judgments, a change in client sophistication (Davis, 2006), and anincreasing number of bran-newborn competitors go into into the market, such as independent financial consultants, have changed the business models and the competitive forces that established financial redevelopments organizations be facing today worldwide.A marketing strategy serves as the earthing of a marketing envision. A marketing plan contains a list of specific actions required to successfully appliance a specific marketing strategy. A strategy is different than a tactic. While it is possib le to write a tactical marketing plan without a sound, hygienic-considered strategy, it is non recommended. Without a sound marketing strategy, a marketing plan has no instalation. Marketing strategies serve as the fundamental underpinning of marketing plans designed to reach marketing objectives. It is distinguished that these objectives have measurable results.A nigh(a) marketing strategy should integrate an organizations marketing goals, policies, and action sequences (tactics) into a viscid whole. The objective of a marketing strategy is to provide a foundation from which a tactical plan is actual. This waives the organization to carry out its explosive charge actionively and efficiently.The following techniques are implemented to device the Marketing outline for the produce/service naval divisionTargetingPositioningMarket segmentation is the offshoot in marketing of grouping a market (i.e. guests) into smaller subgroups. This is not something that is arbitrarily i mposed on society it is derived from the recognition that the total market is often made up of submarkets (called segments). These segments are homogeneous within (i.e. pile in the segment are quasi(prenominal) to each other in their attitudes about certain variables). Because of this intra-group similarity, they are likely to respond somewhat excessively to a minded(p) marketing strategy. That is, they are likely to have similar feeling and ideas about a marketing mix comprised of a given crossing or service, sell at a given price, distributed in a certain way, and promoted in a certain way.SegmentationMarket segmentation is widely defined as being a Byzantine process consisting in twain main phasesidentification of broad, tremendous marketsSegmentation of these markets in order to select the almost appropriate target markets and develop marketing mixes accordingly.PositioningSimply, positioning is how your target market defines you in relation to your competitors.A good position is1. What makes you unique?2. This is considered a benefit by your target marketPositioning is fundamental because you are competing with all the preventive out thither competing for your authorityity fans attention. If you quite a little stand out with a unique benefit, you have a chance at getting their attention. It is important to understand your product from the customers point of view relative to the competition.TargetingTargeting involves exhibiting a market into segments and then concentrating your marketing efforts on one or a few key fruit segments. Target marketing can be the key to a small businesss success. The beauty of target marketing is that it makes the promotion, price and scattering of your products and/or function easier and more cost-effective. Target marketing provides a focus to all of your marketing activities.Marketing MixMarketing professionals and specialist use many tactics to move in and retain their customers. These activities com prise of different concepts, the most important one being the marketing mix. There are two concepts for marketing mix 4P and 7P.It is infixed to balance the 4Ps or the 7Ps of the marketing mix. The concept of 4Ps has been long utilise for the product industry bandage the latter has emerged as a successful proposition for the services industry.The 7Ps of the marketing mix that are used to frame marketing strategies of life insurance companies can be discussed asProduct It must provide value to a customer but does not have to be tangible at the alike duration. Basically, it involves introducing new products or improvising the existing products. A product means what we pull in. If we produce goods, it means tangible product when we produce generate services, it means non physiological service product. A product is both what a seller has to sell clouder has to buy. So, insurance companies sell services services are their products. apart from life insurance as product, custo mer not that buys product but similarly services in the form of assistance advice of agent. It is ingrained that customers expect debateable returns for their dedicatements insurance companies want to maximize their profitability. Hence while deciding the product mix services or schemes should be motivational. scathe Pricing must be competitive and must entail profit. The determine strategy can comprise discounts, offers and the like. The price of insurance products not but when affects the sales volume and profitability but also influences the perceived feature in the minds of the consumers. There are several different method actings for pricing insurance, ground on the insurance marketers corporate objectives. They are the survival approach, the sales maximisation approach, and the profit maximization approach. To determine the insurance bountifulness, marketers consider divers(a) factors such as mortality rate, investment earnings, and expenses, in addition to the i ndividual guess profile based on age, health, etc., and the time period/ frequency of payment. In insurance business the pricing decisions are concerned with-The premium aerated against policies-The interest charged for defaulting the payment of premium credit facility.-Commission charged for underwriting consultancy activities.The pricing decisions may be high or low keeping in view the level or standard of customers or the policyholders. Mainly, pricing of insurance is in the form of premium rank. The three main factors used for find the premium rates under a life insurance plan are mortality, expense interest. The pricing of insurance is in form of premium rates. The three main factors for determining the premium rates under life insurance plan areMortality Average death rates in a particular area.Expenses The cost of processing, commission to agents, registration is all incorporated into the cost of installments premium sum forms the integral part of pricing strategy.Int erest The rate of interest is one of the major factors which determine citizenrys willingness to invest in insurance. People would not be willing to put their property to invest in insurance business if the interest rates provided by other financial instruments are higher than the perceived returns from the insurance premiums. position It refers to the place where the customers can buy the product and how the product reaches out to that place. This is make through different carry, like Internet, wholesalers and retailers. This component of marketing mix is cogitate to two important facets--Managing the insurance power-Locating a sectionThe worry of insurance personal should be done in such a way that gap between the services promises-services offered is bridged over. In a mass of service generating organizations, such a gap is found existent which has been implemental in making down the image problem .The insurance personnel if not managed properly would make all efforts insensitive. They are required to be given decorous incentives to show their excellence. They should be provided intensive trainings to focus mainly on behavioral management.Another important dimension to the place mix is related to the location of insurance branches. While locating branches, branch double-decker needs to consider the number of factors such as smooth accessibility, handiness of infrastructural facilities and management of branch offices and set forth.Thus place management of insurance premises needs a new vision, distinct approach an innovative style. The branch managers need professional excellence to make place decisions productive.Promotion It includes the various ways of communicating to the customers of what the smart set has to offer. It is about communicating about the benefits of victimisation a particular product or service rather than fairish talking about its features. The insurance services depend on effective promotional measures, so as to cre ate unbidden buying. Promotion comprises of advert other publicity tactics. The promotion is a fight not only for market division, but also for mind share. The insurance services depend on effective promotional measures, so as to create impulsive buying. Promotion comprises of advertising other publicity tactics. Due attention should be given in selecting the promotional tools. Personnel should be given adequate training for creating impulsive buying.People People refer to the customers, employees, management and everybody else heterogeneous in it. It is essential for everyone to realize that the reputation of the provoker that you are snarled with is in the peoples hands. Understanding the customer better allows to design appropriate products. be a service industry which involves a high level of people interaction, it is very important to use this resource efficiently in order to satisfy customers.Training, development strong relationships with intermediaries are the key areas to be unploughed under consideration.Process It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are succorful to the customers, if they are provided in time, if the customers are informed in hand about the services and many such things. The process should be customer friendly in insurance industry. The speed accuracy of payment is of large importance. The processing method should be easy to convenient to the customers. Installment schemes should be streamlined to cater to the ever suppuration demands of the customers. IT Data warehousing will smoothen the process flow. IT will help in servicing the large no. of customers efficiently and bring down overheads. Technology can every complement or supplement the convey of scattering cost effectively. It also helps to improve customer service levels helps to find out profitability potential of various customers product segments.Physical ( evidence) It refers to the experience of using a product or service. When a service goes out to the customer, it is essential that you help him contact what he is buying or not. For example- brochures, pamphlets etc serve this purpose. Evidence is a key element of success for all insurance companies. Physical evidence can be provided to insurance customers in the form of policy certificate and premium payment receipts. The office building, the ambience, the service personnel etc. of the insurance company and their logo and commemorate name in advertisements also add to the physical evidence. To reach a profitable mass of customers, then new distribution avenues alliances will be necessary.Initally insurance was looked upon as a complex product with a high advice service component. Buyers prefer a face to face interaction they place a high premium on brand names reliability.Review of literature Sankaran M (1999) studied the measures that would help domestic help players in fi nancial services sector to improve their competitive efficiency, and thereby to rationalize the transaction costs. The study found that the specific set of sources of sustainable competitive advantage relevant for Financial Service Industry are product and process triggers, brand equity, positive influences of Communication Goods ,corporate culture, experience effects, cuticle effects, and information technology. Trevor Watkins (1989) while studying the current state of the financial services industry worldwide identified four major trends the trend towards financial conglomeration, globalization , information technology in service marketing and new approaches to financial services marketing. These trends, it was concluded, will affect the marketing of banks and other financial services in the 1990s. Marisa Maio Mackay (2001) examined whether differences exist between service and product markets, which imprimatur different marketing practices by applying ten existing consumer b ased measures of brand equity to a financial services market. The results found that most measures were focused and correlated highly with market share in the predicted direction, where market share was used as an indicator of brand equity. Brand recall and familiarity, however, were found to be the best estimators of brand equity in the financial services market. P. Kotler rightly states that a companys marketing strategy depends on many factors, one of which is its size and position in the market. From this assertion he suggests that one method of classifying marketing strategies is to place the firm in accordance with its competitive position namely as to whether they are market leaders, challengers, followers, or nichers. In effect these are behavioural strategies ordered in relation to the companys market share. heading for marketing strategy India is a jumbo-sized opportunity for life insurance need hardly belaboured. Here is a nation of a billion people, of whom further 100 million people are control. And, significantly, even those who do have insurance are grossly underinsured. The emerging middle class population, growing affluence and the absence of a social security system mingle to make India one of the worlds most attractive life insurance markets. No matter how you look at it whether in terms of life insurance premiums as a percentage of GDP or premium per capita the market is under penetrated and people are under-insured. In a country where there is high unemployment and where social security systems are absent, life insurance offers the basic cover against lifes uncertainties. India has traditionally been a savings-oriented country and insurance plays a slender role in the development of the Indian economy. The role of insurance in the economy is vital as it able to mobilize premium payments into semipermanent investible funds. As such, it is a key sector for development. So marketing strategies are important and inevitable phenomenon to tap huge untapped potential. Effective merchandising of insurance policies depends to a large extent on the marketing strategies selected. As the market for insurance is dynamic and accompanied by rapid changes in the environment due to advancements in technology and uncertain economic conditions, couple with inflation, increased attention must be given in the prospective to the selection of marketing strategies.Components of marketing strategiesPricingPersonal interchange denoteWord of mouth exchangeInstitutional imageQuality influenceMarketing orientationNew approaches to strategize the productization of life insurance services modish tools and techniques are used by marketers of life insurance products to boost the sales to ensure customer satisfaction and brand building. Some are the approaches to perish in this scenario are as underInnovation Innovation in the delivery system refers to the internal organizational arrangements that have to be managed to allow service ci pherers to perform their job properly, and to develop and offer innovative services. whole the insurance companies have a structured internal organization team up with customer service teams for the delivery of the service. Extensive training is given to the service contact personnel who are called the financial consultants or Agent advisers. Service development, service design and delivery are intricately intertwined. All parties elusive in any aspect of the new service must work together at this stage to delineate the details of the new service. (Valarie A Zeithmal and Mary Jo Bitner, 2003). The need and importance of the customers involvement in the service innovation process is considered to be of prime importance by all the life insurance companies as the current market for life insurance is customer centric. They also express their opinion that the new services developed before long are based on customer focus. The degree of involvement of the customer has gradually increa sed in the last five years. In the last two years customers are involved in the new service process as information providers.Product/Service differentiation In case of product differentiation, new products, customized products, tailored products, bundled products can be introduced and new target segments can be identified. For example, life, health and personal accident insurance can be bundled together. Similarly Home Loan and insurance covert fire and burglary can be put together. The life insurance companies provides only packaged policies whereas new players have been providing several Riders. Rider in insurance parlance is an option that gives the policyholder additional coverage without disturbing the fundamental danger coverage. The service in the field of life insurance has amend strikingly with the entering of multinationals and rising competition. The customer should have the option to continue or to swap over or to come out of the given policy. The service in the fi eld of life insurance has improved greatly with the entry of multinationals and rising competition. The customer should have the option to continue or to switch over or to come out of the given policy.Advertising and sales promotion Advertising and publicizing have a positive effect on the prospective customers as well as personal selling. both(prenominal) the direct and indirect strategies have to be balanced and mixed well to get the desired result. Discounts and incentives promised along with the policy have to be presented in detail to the customers. The companies must provide a tangible and rational reason to the customers to buy a particular policy. Unity and honesty must be maintained by the company and the frontline executives at any cost to attract the customers in the long term. Various creative and innovative strategies should be developed to promote various different life insurance policies. Finding an lofty mix of customers with high disposable income and targeting th em with specific policies is another good promotional strategy. Life insurance may be one of the most problematic products to sell, but with an effective promotional strategy it can be sold easily.Technology Information Technology progress is a major number one wood behind the structural change in the Life insurance industry to enhance risk transfer efficiency. Ebusiness opens up new ways to reduce costs while lowering market entry barriers and facilitating the break-up of the traditional insurance value chain. Insurance clients will benefit from greater transparency, lower prices and improved services not just in the sales area, but also in claims management. New information and communication technologies are making it easier for insurers to break up the value chain and outsource individual functions to specialized providers. In the long-term basis the information technology units control the potential for new service delivery since all new products represent a more sophisticate d delivery of the service. Although it is argued that service innovations are often non technological, this is still the center field of much analysis and debate (Kandampully, 2002).Customer relationship management Insurance companies experiencing competition from within and abroad. Making this problem-situation into an opportunity lies always on the prudent management adopting or adapting tactics and strategies. In line of this, customer relationship management is a measure of winning competitiveness as it is the information-driven approach to customer analysis and process automation and thereon supplement customer-value proposition. An action on tangible services act and accurate issue of document, prompt and fair settlement of claim ,good listening mechanism, better problem work approach, reliable manner of service and meet requirement of customers on time every time in lieu of intangible promises would give result satisfaction to customers, the customer relationship manage ment provides better service to the insured protecting him against perils or risks and the insurer enabling to retain the existing customers and deliverance in new customers in his ambit of businessDistribution channels The distribution network is most important in insurance industry. Insurance is not a high cost industry like telecom sector. Therefore it is building its market on goodwill and access on distribution network. We cannot deny that insurance are not bought, it is sold. The market has a great scope to grow. This can be better done by more innovative channels like a super market, a bank, a post office, an ATM, departmental store etc. these could be used to increase channels of insurance. But such growth in channels shall increase with time. Till then agents seem to be the most important distribution channel in this industry. Agents connect with people and influence them to buy any insurance policy. For the same such agents charge commission on the policies they get for the company. There is a fixed percentage of commission for which these agents work. In the field of distribution channels, many innovative techniques can be adopted. For example, Bancassurance and selling through postal network will make a great deal of difference. In Europe 25 percent of insurance policies are sold through banks. Bancassurance, as a package of financial services that can fulfill both banking and insurance needs, if implemented correctly can bring vast benefits to stakeholders such as banks, insurance companies, shareholders and consumers.Bancassurance will relieve mass selling of insurance products through banks. Banks can act as large financial supermarkets. Distribution of insurance will be ironed through wider number of branches of the banks. Customer database, personalized service, rural penetration, cross-selling of products (e.g. car impart along with car insurance), being cheaper than agents are some of the greatest advantages of Bancassurance. At present the distribution channels that are available in the market are listed belowDirect sellingCorporate agentsGroup sellingBrokers and cooperative societiesBancassuranceMallassuranceConclusion Life insurance industry requires new strategies in order to survive and survive successfully .To tap the insurance potential to maximum industry needs to frame such plans and strategies that will help to capture the market. Companies instead of focusing only on improving the signifier of products needs to focus on targeting new segments and implement innovative strategies in order to achieve sustained growth and ensure profitability of business as well as growth of insurance coverage.