A SURVEY REPORT ON CONSUMER BUYING

BEHAVIOUR

Submitted To, Submitted by,Mahesh Bhingarde Abhishek Roy PGDIM ROLL NO-9

(NMIMS) ACKNOLEDGEMEMT

I am very thankful to ICICI PRUDENTIAL who has given me this opportunity to make this project.

I am greatly thankful to MR. HARENDRA PANDEY (MANAGER-MRPL), who has given me direction and support that how to complete this project.

I would like to give thanks to our fallow classmates and IT labs.

I would like to thanks to all other who helped me directly or indirectly towards completion of my project.

Abhishek Roy

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Content

1. About Promoters................................................................4

2. The Company………………………………………………….5

3. MANAGEMENT TEAM & BOARD OF DIRECTOR……….11

5. Consumer analysis………………………………………….12

6. Competition analysis……………………………………….14

7. PROCESS/METHODOLOGY OF STUDy…………………16

8. DATA COLLECTIONS………………………………………19

9. DATA INTERPRETATION GENERAL CONCLUSION….21

10. CONCLUSIONS…………………………………………….31

14. Recommendation………………………………………….32

15. QUESTIONER………………………………………………35

16. Reference…………………………………………………...37

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1.a. About Promoters

1.a.a. ICICI Bank

ICICI Bank Limited (NYSE:IBN) is India's largest private sector bank and the second largest bank in the country, with consolidated total assets of $121 billion as of March 31, 2008. ICICI Bank’s subsidiaries include India’s leading private sector insurance companies and among its largest securities brokerage firms, mutual funds and private equity firms. ICICI Bank’s presence currently spans 19 countries, including India

1.a.b. Prudential Plc

Established in London in 1848, Prudential plc, through its businesses in the UK, Europe, US, Asia and the Middle East, provides retail financial services products and services to more than 20 million customers, policyholder and unit holders and manages over £267 billion of funds worldwide (as of December 31, 2007). In Asia, Prudential is the leading European life insurance company with life operations in China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, and Vietnam. Prudential is one of the largest retail fund managers for Asian sourced assets ex-Japan. Its fund management business has expanded into ten markets, comprising of China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, Taiwan, Vietnam and United Arab Emirates.

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

Sl No.

InsurerPremium No. of Policies / Schemes

December, 07

Upto Dec, 07

Upto Dec, 06

December, 07

Upto Dec, 07

Upto Dec, 06

7 ICICI Prudential              Individual Single Premium 34.67 255.39 253.46 5518 40356 38163

 Individual Non-Single Premium 771.74 3968.52 2276.36 288716 1779137 1106798

  Group Single Premium 46.04 203.69 150.95 4 134 123  Group Non-Single Premium 81.37 388.33 269.00 7 271 233

PREMIUM UNDERWRITTEN BY LIFE INSURERS IN INDIA 2006-07

(Rs.In Crores)

Sl.No. Insurer

First Year Premium

Renewal Premium

Single Premium

Total Premium

1 LIC29886.35 71599.28

26337.22 127822.84

2 ING Vysya 440.30 239.54 27.36 707.203 HDFC Std.Lif 1316.44 1207.01 332.41 2855.874 Birla Sunlife 832.31 893.98 50.42 1776.715 ICICI Prulife 4370.61 2750.86 791.52 7912.996 Kotak Mahin 553.05 356.58 61.89 971.517 Tata AIG 567.84 722.36 76.98 1367.188 SBI Life 1717.57 364.64 846.27 2928.499 Bajaj Allianz 3084.67 1040.20 1185.12 5310.0010 Max Newyork 750.51 588.17 161.60 1500.2811 Metlife 329.04 152.27 11.40 492.7112 Reliance Life 700.37 72.55 231.74 1004.6613 Aviva 692.11 425.88 29.23 1147.2314 Sahara 20.47 8.01 22.53 51.0015 Shriram Life 89.53 3.00 92.62 185.15

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16 Bharti AXA 7.77 - 0.01 7.78

 Private Total

15472.59 8825.06 3921.11 28218.75

  Total45358.93 80424.34

30258.32 156041.59

2. The Company ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). 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.

Vision & Values

2.a. Our vision:To be the dominant Life, Health and Pensions player built on trust by world-class people and service. 

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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  The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of the values describes what the company stands for, the qualities of our people and the way we work. We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth.

2. b. Our values:

Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundary less, Ownership, and Passion. These values shine forth in all we do, and have become the keystones of our success

2. c. DistributionICICI 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). 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

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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. ProductsInsurance Solutions for Individuals ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to create a customized solution for each policyholder. Savings & Wealth Creation Solutions

Save'n'Protect: is a traditional endowment savings plan that offers life protection along with adequate returns. CashBak: is an anticipated endowment policy ideal for meeting milestone expenses like a child's marriage, expenses for a child's higher education or purchase of an asset. It is available for terms of 15 and 20 years. LifeTime Gold: is a unit-linked plan that offers customers the flexibility and control to customize the policy to meet the changing needs at different life stages. It offers 7 fund options - Preserver, Protector, Balancer, Flexi Balanced Multiplier, R.I.C.H and Flexi Growth. LifeStage RP: is unit linked plan that provides you with an option of lifecycle-based portfolio strategy that continuously re-distributes your money across various asset classes based on your life stage. This will help you achieve the right Asset Allocation to meet your desired financial goals. LifeLink Super: is a single premium unit linked insurance plan, which combines life insurance cover with the opportunity to stay invested in the stock market. Premier Life Gold: is a limited premium-paying plan specially structured for long-term wealth creation. InvestShield Life New: is a unit linked plan that provides premium guarantee on the invested premiums and ensures that the customer receives only the benefits of fund appreciation without any of the risks of depreciation. 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

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investor’s money across various asset classes based on his life stage and risk appetite

Protection Solutions

LifeGuard: is a protection plan, which offers life cover at low cost. It is available in 3 options - level term assurance, level term assurance with return of premium & single premium. HomeAssure: is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner.  Education Solutions

SmartKid New ULRP: provides guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the child's life. SmartKid plans are also available in traditional form.  Retirement Solutions

ForeverLife: is a traditional retirement product that offers guaranteed returns for the first 4 years and then declares bonuses annually. LifeTime Super Pension: is a regular premium unit linked pension plan that helps one accumulate over the long term and offers 5 annuity options (life annuity, life annuity with return of purchase price, joint life last survivor annuity with return of purchase price, life annuity guaranteed for 5, 10 and 15 years & for life thereafter, joint life, last survivor annuity without return of purchase price) at the time of retirement. LifeStage Pension: is a regular premium unit linked pension plan that provides you with a unique lifecycle-based strategy that continuously re-distributes your money across various asset classes based on your life stage, eventually providing you with a customized retirement solution. LifeLink Super Pension: is a single premium unit linked pension plan. 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.  

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Health Solutions

Health Assure Plus: Health Assure is a regular premium plan which provides long term cover against 6 critical illnesses by providing policyholder with financial assistance, irrespective of the actual medical expenses. Health Assure Plus offers the added advantage of an equivalent life insurance cover. Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions. Cancer Care Plus: is a wellness plan that includes all the benefits of Cancer Care and also provides an additional benefit of free periodical cancer screenings. Diabetes Care: Diabetes Care is a unique critical illness product specially developed for individuals with Type 2 diabetes and pre-diabetes. It makes payments on diagnosis on any of 6 diabetes related critical illnesses, and also offers a coordinated care approach to managing the condition. Diabetes Care Plus also offers life cover. Diabetes Care Plus: is a unique insurance policy that provides an additional benefit of life cover for Type 2 diabetics and pre-diabetics Hospital Care: is a fixed benefit plan covering various stages of treatment - hospitalization, ICU, procedures & recuperating allowance. It covers a range of medical conditions (900 surgeries) and has a long term guaranteed coverage upto 20 years. Crisis Cover: is a 360-degree product that will provide long-term coverage against 35 critical illnesses, total and permanent disability, and death. MediAssure: is a health insurance policy that provides assured insurability till age 75 years, assured coverage for accepted pre-existing illnesses after 2 years and an assured price for 3 years.  Group Insurance Solutions ICICI Prudential Life also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees.

• Group Gratuity Plan: ICICI Prudential Life's group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner and also avail of tax benefits as applicable to approved gratuity funds.

• Group Superannuation Plan: ICICI Prudential Life offers a flexible market linked scheme that provides substantial benefits to both employers and employees. Both defined contribution (DC) and defined benefit (DB) schemes are offered to optimize returns for members of the trust and rationalise cost. Members have the option of choosing

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from various annuity options or opting for a partial commutation of the annuity at the time of retirement.

• Group Immediate Annuities: ICICI Prudential Life realises the importance of prudent retirement planning. With this in mind, we have developed a suite of annuity products that not only give you an income for life but also provide you options to match your needs. In addition to the annuities offered to existing superannuation customers, we offer immediate annuities to superannuation funds not managed by us.

• 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.  Flexible Rider Options 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. Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If an accident results in total and permanent disability, 10% of rider sum assured will be paid each year, from the end of the 1st year after the disability date for the remainder of the base policy term or 10 years, whichever is lesser. If the death occurs while travelling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit.

Critical Illness Benefit: protects the insured against financial loss in the event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death.

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.

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3. MANAGEMENT TEAM & BOARD OF DIRECTOR

Shri K.V. Kamath, Chairman Mr. Mark Tucker Smt. Lalita D. Gupte Mr. Danny Bardin Mrs. Kalpana Morparia Shri M.P. Modi Mr. John Caouette Shri S.P.Subhedar, (Alternate Director to Mr. Danny Bardin) Mr. Derek Stott, (Alternate Director to Mr. Mark Tucker)Ms. Shikha Sharma, Managing DirectorMr. Kevin Wright, Executive Vice President - Sales & DistributionMs. Madhavi Soman, Chief - Strategic InitiativesMr. V. Rajagopalan, Appointed Actuary Mr. Sandeep Batra, Chief Financial Officer & Company SecretaryMr. Saugata Gupta, Chief - Marketing & Service

4. S.W.O.T Analysis

4. a. Strengths

The biggest strength of this origination is;Money power, which makes them ignorant about the gestation periodBrand image, business experience and innovation productThe agents are very selectively chosen have excellent communication skillService quality which is crux of missionLarger network branches which is help to customer for paymentTheir strategy has been to grow the portfolio large enough so that there is an in built fund hedge and in market where the portfolio has a large element of saving rather then protectionProduct 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)

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4. b. Weakness

High target for financial advisor and for sales departmentMany competitions in the market offer same product by the title difference in the premium and offeringSustainable to risk associated with investment in money marketTry to catch middle lower level people also.High expenses on advertisementMost of the plans are too complicated in understanding for simple person so most of person avoids such type of planMore than 70% people live in rural area but ICICI Prudential is more centric in urban area.

4. c. Opportunity

Huge market is literally untapped, out of 320 million insurable markets only 25% of the people insuredHealth insurance and pension scheme, an estimated market potential of approximately $15 billionICICI Prudential should give the insurance coverage both to the parents and children so that their life should be covered in both cases the customer do not mind paying some premium for thatIndia is fast growing market and 80 to 85% people are below age of 45Leverage the customer base of Bancassurance partner Strong distribution networkInsurance awareness are increasing in India

4. d. Threats

Player like Bajaj and Birla Sun Life with low premium for same planEntry 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 investLIC has woken up from sleep and is following competitive strategies. Its huge surplus in life fund gives a capability to lodge price warProduct differentiation is difficult in market (bancassurance) Competition is getting keener in couple of yearHigh opportunity expenses will be in future

5. Consumer analysis

We analyze consumers because; this is the basis for all market strategies like segmenting, targeting, and positioning. Without an

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understanding of customer, it would be impossible for the market to drive the offer. A consumer’s buying behavior is influenced by cultural, social and personal factor.

5. a. Cultural factor; -

Culture is fundamental determinant of a person’s needs and behavior. People acquire a set of value, perception and behaviors through his or her family and other institution. Indian people want achievement and success, comfortable efficiency and practicality, freedom and youthfulness. In other word there are multicultural environment in India.Indian loves their family and they want to secure their family from unnatural event. Indian give first preference to his family after than others. They do not want to take loan and they want to invest their money in long-term investment for child education and marriage. When we say about metropolitan city, dependency on old age on son is decreasing. People want to accumulate some fund for old age so ICICI Prudential should concentrate on gratuity or pension plan.Indian people also affected from sub culture. Urban people want to take more insurance comparison than rural (due to high per capita income, insurance awareness, social security, investment purpose, tax saving purpose). Religion also effect on insurance. ICICI Prudential is using this thing very well. They use sinduor and marriage in their advertisement and show that when you marriage from someone, her all liabilities is your liabilities and we will help you in this situation. We will make relation as like as sindur (here means long term stable relationship). In other word ICICI Prudential want to say that we will cover you at every step in life (sorrow or happiness). Consumer behavior is also affected from reference group. Firstly, people see that which insurance is bestseller after that they purchase. They also influence from agent. People do not concentrate on their need due to agent’s influence. Social class also affect on consumer behavior. Lower 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; -

Consumers are also influenced by social factor for example; reference group, family, and social role and status. Consumer behavior is firstly influenced from membership group such as family, neighbor and co-

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worker. Insurance is such type of product where people awareness is very low so people do not very much about insurance. They think, insurance is only tax saving instrument so they fully dependent on agent for taking insurance. When agent say about any product, that time they inquiry from neighbor and co-worker about that product. If any body suggests that, this product and I have also taken this product. Individual think that, this product also best for him. He does not concentrate on his need and requirement.Secondly, he is influenced by information influences. If he goes to purchase insurance, he makes enquiry about this product from his personal sources. He study newspaper and search on Internet and gather all information related product. If he is satisfied from that information, he decides to buy insurance. People also influence from opinion leader, this opinion leader may be Mukhiya, or Surpanch in rural area or this may be any leader, actor or cricket player in urban area. If opinion leader say or advertise about any product, people are influenced from opinion leader because opinion leader keep good position in society. Family and household pattern also influence consumer behavior. Due to less security of individual family, people want to purchase insurance, but in joint family people give less attention in buying insurance. If all family are well earning, there are given less attention on insurance in such family. But if earning member is less and dependent is more in such type of family insurance is very important. Women want more security so women are taking main role in purchase decision where, women influence consumer behavior.

5. c. Personal factor; -

A consumer decision is also influenced by personal characteristics for example the buyer age and stage in life cycle, occupation and economics circumstances, personality, self-concept, life style and value.When we say about age and life, first is bachelor stage. They are generally young independent and they are in early stage of his carrier and earning. They mostly think that they have no need of insurance 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.

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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

6. a. Threat of intense segment rivalry- Due to high stake of ICICI Prudential position this segment is good for it and second good factor is it’s brand value. But when we say about competition in this market, competition is very tough. We can say that market condition is just like same as oligopoly means a few number of large firm is providing all service partially different along line of quality, feature or services. Each competitor may seek leadership in one of that major attribute and changing a price for that attribute. For example, ICICI Prudential is specialist on to attract high net worth or urban population but LIC has large distribution network so it has specialist in rural segments. But when we say about population growth, economics growth, or government policies insurance segment is very attractive because only 25% insurable person are insured secondly 80% population are under age of 45. Aggressive market condition is in market. Main competitor of ICICI Prudential isLICBajaj AllianzHDFCBirla Sun LifeLIC has many resources and it has above 50-year experience in insurance field but ICICI Prudential has only 7 to 8 year experience in market. However, due to Prudential experience and ICICI Bank brand value, ICICI prudential has made good position in market. So there is threat as mainly by LIC for ICICI Prudential. Due to this reason price war, advertisement, and new product innovation will be expensive in future.

6. b. Threat of new entrance- Due to aggressive competition and high entry exit barrier, this is not attractive segment for new player. For entering in insurance field, mandatory capital is 100 crores. Secondly, foreign stake limited with 26%, third Indian company have no experience in insurance business. Exit barrier are also very high because, no company can leave market after entering due to loss

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because firstly, 100 crores will be lost secondly, their compensation (customer or other company) will be very high or more than deposited money. So in long run, company will try to less their business but they will not leave market. So this is good factor for ICICI Prudential because, where entry or exit barrier are high, profit potential are also high.

6. c. Threat of substitute product- this is not attractive market in view of substitute goods because there is many substitute in market but only service style is different. Different insurance company provide at least same product but presentation is different. In case of lower substitute (means investment purpose) many product in India for example, share, mutual fund, fixed deposit. Substitute place a limit on price and on profit. Bajaj Allianz launch same type of product of ICICI Prudential but in lower price.

6. d. Threat of buyer’s growing power- in India buyer’s growing power are increasing because they have more concentrated or organized towards market. Government has established insurance regulator (IRDA) in India for growing buyer’s barging power. Due to lowest switching, buyers are very price sensitive and buyers have many sources for knowing about different company product. Due to education buyer can analysis that, which product is good for him. So due to growing buyers power this segment is not good for new player.

6. e. Threat of supplier’s growing power- Due to oligopoly market condition insurance company cannot raise price but they can increase their profit from selling more policies in market. In India, supply-growing power (agent, broker, bancassurance) are growing due to lot of company availability in India and this is not good for ICICI Prudential. 7. PROCESS/METHODOLOGY OF STUDY

7. a. Procedure:

The procedure that followed enlisted below:Studying the productDecision on objective needed to be work on.Developing Survey instrumentsGetting 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:

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Gaining knowledge about the product:

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.

Steps in the Development of the Survey Instruments

The main instruments required for survey was a well-developed questionnaire. The questionnaire development took place in a series of steps as described below:

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Research objectives been transformed into information objectives.

Research objectives been transformed into information objectives.

The appropriate data collection methods been determinedStep 2

Step 3The information required by each objective is being

ermined.

Specific Questions/Scale Measurement format is developed.

Step 6

The number of information needed is being determined.

Step 7

The questionnaire and layout been evaluated.

Step 1

Step 4

Research objectives been transformed into information objectives.

Step 5Question/Scale Measurements been evaluated.

7. c. Customer Survey:

The survey is important tool as clear perception of people about the product can be estimated and known. The need levels of the people regarding the insurance product been observed through survey. It was very useful in knowing about the requirements of the people.

Referred to brochures and websites of competitors: To understand the competitors product brochures and websites of various insurance were referred and a competitive analogy of all the rates and necessary features of the Insurance policy is been made. The table is been attached in the Appendix.

7. d. Research Design:

A two stage Research been conducted:

Secondary Research:

Collection of data from websites and catalogues to understand the product and the charges of the different Insurance Company.

Primary Research:

A Primary Research been conducted:

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Step 8

Step 9 Revise the questionnaire layout if needed.

Step10

The Questionnaire format been finalized.

The questionnaire was prepared for the companies and following areas covered:Distribution Channel of Insurance Company Consumer profileSatisfaction level with the current Insurance Company on the basis of returnReason for the selection of specific insurance policy and companyDesirable features of the product and risk aptitude

7. e. Sampling Plan:

Elements:The target population of the study included the general population above the age of 25 yrsSampling design and sampling unit are as follows:Target population: Adults meeting qualifications-over 25 years, working class, businessman, personnel having childrenSampling frame- Urban class in the Mumbai regionSample size: 50Sampling unit: urban class personnelThrough 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

8. a. Data Collection Plan:The first of Research consisted of secondary data search from the following sources:

CataloguesWebsites

For the conclusive research, questionnaires been developed on basis of secondary data to gather information on the research objective.I conducted a pilot study to test these questionnaires. In this sample of 10 people picked up from the target population on convenience

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basis, as to determine the limitation and deficiencies in the questionnaires. The final draft of the questionnaire (see Appendix) was then prepared on basis of the observations from the pilot study. These then finally filled by 50 consumers, for the conclusive study.Finally, the data collected fed into the data analysis software- SPSS, to be analyzed using statistical techniques: frequencies, means, t-tests, Chi square distribution, cross tabs and analysis of variance (ANOVA) etc.

8. b. Types of Primary Data collected:

1) Demographic /Socioeconomic Characteristics: Demographic and socioeconomic characteristics sometimes called “states of being” in that they represent the type of people. The factors on which we are working are age, sex and occupation. Monthly income is also an important parameter but it is difficult to verify. Although the amount of money that an individual earns in a month is an absolute, not a relative quantity but it is a sensitive topic in our society and it is difficult to determine.

2) Attitudes/Opinions:

Through the questionnaire we have tried to get hold of individual’s preference, inclination and requirement from the products that the insurance company delivers to the customer. Attitude is an important notion in the marketing literature, since generally it is previewed that the attitudes are relating to the behavior of individual.

3) Awareness/Knowledge:

They are used in marketing research refers to what respondents do or do not know about the product.

4) Motivation:

Through questionnaire have tried to find the hidden need or want of an individual and have tried to find out that why people buy insurance.

5) Behavior:

Behavior concerns what subjects have done or are doing. Through made questionnaire I have tried to find out the behavior of the individuals regarding the product and their responses;What do you think about insurance?

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Why do you have taken insurance police?Your objective to take Insurance cover is forWhat is he looking for in an insurance policy?Thus, it helps to draw a comparison between the Purchase and the observed behavior of the individuals.

6) Obtaining the Primary Data:

The data collection was primarily through communication. Communication involves questioning respondents to secure the desired information, using a data collection instrument called questionnaire. The questions were in writing and so were the responses.

9. DATA INTERPRETATION GENERAL CONCLUSION

Finding:-52 % people say that main reason is to purchase insurance is family security 26 % people purchase insurance for tax saving, 12 % buy insurance for investment and lastly 10% buy it for discipline saving. So majority think/buyinsurance for security (52%).

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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, 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.

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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 Companyhave to need to concentrate that, how to give/increase return to the policyholder.

Finding:-Here all age of people give preference to choose insurance company on the basis of policy scheme firstly, and then second

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selection base is income, third chosen criteria is service and last criteria of chosen of insurance company is reliability and creditworthiness. So on the basis of this survey we can say that people mainly give importance of chosen an insurance company is what type of policy Scheme Company has, means policy fulfill individual need or not.

Finding:-Today mainly insurance company provide facility of insurance and pension, and in this survey all age group give preference to invest in insurance and pension due to discipline saving (income-saving=consumption) and post tax benefit. Then they give preference to mutual fund due to earn income from market at the low risk then they give preference to real estate, equity, gold and other. After age of 45 then do not want to invest in equity due to high risk. So we can say that; due to low risk and stable income instrument, people give to prefer investment in insurance and pension.

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Finding:-People invest in insurance due to four reason i.e. old age saving, family needs, time to time for fulfillment of different need, and lastly for opposite circumstances. In this survey, people first purpose to investment in insurance is family need (29%), then second purpose is fulfillment of different needs (25%), and lastly they give equal important to old age saving and opposite circumstance (i.e. disability and deceases).

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Finding:-Above graph show that majority of people have invested in whole life insurance plan, after that endowment and ULIP is popular among people. People are giving last preference to invest in equity. Means till now in India people take less risk. They firstly give preference to family and security of money after that return.

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Finding:-For time of buying insurance policy mainly peoples (all age group) consider two things equally, first brand and second policy scheme, after that they give preference to relationship and they think about service. In another word policy scheme do main role in selection of insurance company (above mention) and policy scheme.

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Finding: - Out of 42 people, 24 people give preference to purchase from agent (more than half people), another 14 person give preference to buy insurance direct from company, and lastly 4 people would like to buy insurance through broker. With the help of above chart we can say that agent or tied agency is most popular distribution channel in insurance field.

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Finding:-When we say about premium mode, all income groups give preference to pay premium in annual mode, after that half yearly premium pay mode is their second option, third option is monthly premium, and lastly very few person (above 10 lakhs) want to pay premium in single mode.

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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%).

Finding:-Out of 43 people, 24 people think that 3D’s (death, diseases, disabilities) do main role in taking insurance, or all 3 factor are most influence factor in taking insurance. After that 13 people believe that only death factor is most important influence factor, which does main role in buying insurance. Only few people think that disabilities and diseases also influence buying behavior separately.

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Finding:-51 % people think that guaranteed bonus could increase attractiveness of insurance among public, and 49% people think that bonus and return, which depend on market can also increase attractiveness insurance among people.

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

1) Insurance policy gives good return but it cannot compete with other financial tools (i.e. equity). So this is basic need to increase return in the field of insurance sector.

2) Due to AIG (it was going to be insolvent) and deflation financial environment, mostly people think that LIC is better than other private insurance company (due to Government protection). So in this time private company needs to know that how to win people’s belief.

3) There are lot of alternative distribution channel in insurance industry, but due to less awareness of the people they do not know/like to buy insurance from such type of alternative channel i.e. bancassurance, NGO’s. So there is some need to increase awareness of such type of alternative channel among public.

4) Policy scheme is main factor to choose insurance company. If insurance companies give more concentration on policy scheme then they can compete with another financial tool in better way (i.e. equity and mutual fund).

5) In India people think that insurance is tax saving and protection tool, and not investment tool. If insurance company increase awareness among public, that insurance is good alternative

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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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\

Survey of life insurance buying behaviors

Name:______________________________________ Age……..

Occupation: 1. Service 2. Business .3 Self employed 4.Retired

Income category: a. 2 to 3Lac /p.a . b. 3 to 5 Lac/p.a c. 5 to 7Lac/p. a d. 7 to 10Lac /p.a e. Above 10Lac /p.a

Q1. What do you think about insurance? Ans. …………………………………………………………………….

Q2. Why do you have taken insurance police? a. Investment b. tax saving c. security d. discipline saving

Q3. Your objective to take Insurance cover is for a. Social relaxation b. life stage needs c. fear d. cover liabilities

Q4. Which criteria do you apply for selecting insurance company? a. Policy scheme b. income c. service d. reliability

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

Q6. Where do you have invested in? a. real estate b. gold c. mutual fund d. insurance e. pension g. equity h. other Q7.which type of insurance policy do you want to entertain with increase in return? a. whole life policy (5 to 6 % low risk) b. endowment (9% moderate) c. ULIP (>15% high risk) d. equity (very high risk)

Q8. What is your purpose for buying insurance policy? a. for old age saving b. for your family needs c. time to time for fulfill different need d. for opposite circumstances

Q9. What is the importance of your family in your life? 1. 2. 3. 4. 5.very important important some what not very not at all Important important important

Q10. How will you prefer to buy insurance policy?a. Through broker b. direct from company c. through agent d. other (bancassurance etc.)

Q11. What will you more attract in insurance? a. bonus b. guaranteed bonus c. return depend on market d. other (if other please specify)-…………………………………. Q12. Which will give you preference in buying a insurance policy? a. brand b. policy scheme c. relationship (agent) d. service

Q13. What mode would you prefer to pay premium? a. single premium b. annually c. half yearly d. monthly

Q14. In buying insurance policy, your decision is influenced by a. family b. friends & neighbors c. professional & trade union group d. brand & advertisement 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

Q16. Your experience with your existence insurance companyAnswer……………………………………………………………………………………………………………………………………………………

Q17. Your suggestion (to improve insurance sector)Answer……………………………………………………………………………………………………………………………………………………..

Q18. Would you like to receive a summary report of this survey.No, thank you Yes, Send to my email address…………………… Address:__________________________________________________________

Signature-……………..

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Reference:Books; Marketing Research Marketing and Management Sales Management Customer Relationship Management Class Notes

Web site; www.google.com www.wikipedia.com www.iciciprulife.com www.pgpmiflyhigh.com www.marketresearch.com www.irda.org

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