Abhishek Ghatak

Xavier Institute of Management

&Entrepreneurship
Batch 19
Primary Objective:
To find out the various promotional strategies
being presently implemented by IDBI Federal Life
Insurance Co. Ltd and to find out the effectiveness
of these promotional strategies.
To find out whether celebrity endorsement would
help IDBI Federal in any way
Secondary Objective:
An attempt to suggest new promotional strategy or
an efficient way which would enhance the
consumer awareness about the company by
strengthening the present promotional strategies
Marketing
Mix
Product
Price
Place
Promotion
The three important products that were given
to us were-
Lifesurance
Incomesurance
Childsurance
It is a fixed term non-linked participating endowment plan that provides the twin
benefits of long term savings & life cover.
Benefits of Lifesurance:
On maturity of this policy we get-
Maturity sum insured, Vested guaranteed additions, Vested reversionary bonuses (if
any), Terminal bonus (if any)
In case of Death Benefit we get-
Death sum insured, Vested guaranteed benefits, accrued till the date of death, Vested
reversionary bonuses, accrued till the date of death, Interim bonus (if any), Terminal
bonus (if any)
In case of Accidental death benefit we get-
In case of unfortunate event of accidental death of the life insured beneficiary gets
additional payout up to the end if policy term. It is equal to the maturity sum insured &
is paid out in addition to the death benefit.
Tax Benefit-
Deduction under Sec 80 C: The premium that we invest in Lifesurance is eligible for
deduction under Sec 80 C of the Income Tax Act up to the limit of Rs 100000.
Tax free benefit under Sec 10(10D): The maturity benefit as well as the death benefit
that we receive is tax free under Sec 10(10 D) of the Income Tax Act. 1961

The important features of this products are-
Guaranteed annual payouts for crucial milestones: It gives annual payouts
either in the last 3 or 5 years of the policy, depending on the policy term.
Future premiums waived off in case of an unfortunate event.
Plan continuation: Even in the event of death, the guaranteed annual payouts
& bonuses will be paid on their respective due dates.
Two tax benefits: It provides for tax deductions under section 80C on the
premiums we pay & tax free maturity amount under Sec 10(10D) of the
Income Tax Act, 1961.
Policy term: Minimum policy tern is 10 years & the maximum is 25 years. The
guaranteed annual payouts are given for 3 years for policy term of 10 to 14
years & 5 years for policy term of 15 to 25 years.
Premium payment term: We can choose a premium payment term which is
either equal to or 5 years less than the policy term
The important features of this product are:
Incomesurance has a limited premium paying term of 5 years. This is
ideal for people who are looking to pay for a short duration only.
Annual payouts are guaranteed at the end of each year from 6
th
to 10
th

year. For these 5 years we will receive guaranteed annual payouts which
are defined percentage of annual premium. This percentage depends on
the age of the client.
In case of death of the life insured during the policy term, nominee gets
the death sum assured, which is highest of:
10 times of annualized premium
105% of all premiums paid
Maturity sum assured
Tax benefits of Sec 80C & 10(10D)
In the insurance business the pricing decisions are concerned with:
The premium charged against the policies
Interest charged for defaulting the payment of premium and credit facility, and
Commission charged for underwriting and consultancy activities

The premium rates are revised if there are any significant changes in any of these
factors:
Mortality (deaths in a particular area): When deciding upon the pricing strategy the
average rate of mortality is one of the main considerations. In a country like South
Africa the threat to life is very important as it is played by host of diseases.
Expenses: The cost of processing, commission to agents, reinsurance companies
as well as registration are all incorporated into the cost of installments and
premium sum and forms the integral part of the pricing strategy.
Interest: The rate of interest is one of the major factors which determine peoples
willingness to invest in insurance. People would not be willing to put their funds to
invest in insurance business if the interest rates provided by the banks or other
financial instruments are much greater than the perceived returns from the
insurance premiums
This component of the marketing mix is related to two important
facets:
Managing the insurance personnel, and
Locating a branch.
While recruiting agents, the branch managers need to prefer
local persons and provide them training and conduct seminars.
In addition to the agents, the front-line staff also needs an
intensive training program to focus mainly on behavioral
management.
Another important dimension to the Place Mix is related to the
location of the insurance branches. While locating branches, the
branch manager needs to consider a number of factors, such as
smooth accessibility, availability of infrastructural facilities and
the management of branch offices and premises

There are two types of promotion:
Above the line promotion: promotion in mass media (e.g. TV, radio,
Newspapers, internet, mobile phones) in which the advertiser pays an
advertising agency to place the advertisement.
Below the line promotion: All other promotion. Much of this is intended
to be subtle enough for the consumer to be unaware that promotion is
taking place e.g. sponsorship, testimonials, sales promotion,
merchandising, direct mail, personal selling, public relations, trade
shows
The basic objective of promotion is to:
To present information to consumers as well as others
To increase demand
To differentiate a product
Commercial Ads
Print Ads
Events
Personal Selling
Word of mouth
Viral Marketing
The following are the aspects which are covered by advertising

Pervasiveness: Advertising permits the seller to repeat a message many times
it also allows the buyer to receive and compare the messages of various
competitors .large scale advertising says something positive about the
sellers size, power and success.
Amplified Expressiveness: Advertising provides opportunities for
dramatizing the company and its products through the artful use of print,
sound and color.
Impersonality: the audience does not feel obligated to pay attention or
respond to advertising. Advertising is a monologue in front of, not a dialog
with the audience
Sales promotion tools offer three distinctive benefits
Communication: they gain attention and may lead the
customer to the product
Incentive: They incorporate some concession, inducement, or
contribution that gives value to the customer.
Invitation: They include a distinct invitation to engage in the
transaction now
The appeal of public relations and publicity is based on three
distinctive qualities:
High Credibility: News, stories and features are more authentic and credible
to readers than ads.
Ability to catch buyers off guard: Public relations can reach prospects that
prefer to avoid salespeople and advertisements.
Dramatization: Public relations have the potential for dramatizing a company
or product

Events and experiences reach out to the customer and can
be used for brand- building as well as selling products.
There are many advantages to events and experiences.
Relevant: A well chosen event or experience can be seen as highly relevant
because the customer gets personally involved.
Involving: Given their live, real time quality, events and experiences are more
actively engaging for customers.
Implicit: Events are an indirect soft sell.

Word of mouth marketing also takes many forms, online or
offline. Three noteworthy characters are:

Credible: Because people trust others they know and respect, word of mouth
can be highly influential.
Personal: Word of mouth can be very intimate dialogue that reflects personal
facts, opinions and experiences.
Timely: It occurs when people want it to and when they are most interested,
and it often follows noteworthy or eventful events or experiences
Personal selling is the most effective tool at later stages of the
buying process, particularly in building up buyer preference,
conviction and action. Personal selling has three distinctive
qualities:
Personal interaction: Personal selling creates an immediate and interactive
episode between two or more persons. Each party is able to observe the
others reaction.
Cultivation: Personal selling also permits all kinds of relationships to spring
up, ranging from a matter of fact selling relationship to a deep personal
friendship.
Response: The buyer may feel under some obligation for having listened to
the sales talk
Newspaper: IDBI Federal has attained notice through many articles and
advertisements published in various national and regional newspapers in
India like the Economic Times, Times of India, The Hindu , Samachar Jagat,
Vir Arjun, Meghalaya Guardian etc. IDBI Federal spends around Rs 1040 per
sq.cm for promotional activities through newspapers. They position the ads
and articles in such a way that it catches the eye of the reader as soon as
they start reading the newspaper (See appendix for the articles).
Hoardings: IDBI Federal has also tried making their potential customer aware of
their products and policies through billboards and hoardings by positioning them
in strategic locations throughout the nation. As of now, the total number of
hoardings which are put up in Hyderabad region counts to a good 17 number. The
total expenses spent by the company for this promotional activity is Rs 4 lacs.
Pamphlets: Pamphlets are distributed across India at least 5 times in a month
without any cost. Its done to create maximum awareness about the
products/services.
Magazines: There is no specific magazine in which advertisement is given. Its
given in magazines depending upon their sales and reputed magazines like
Outlook, Money, etc. The advertisement is given every month at least once in any
magazine

Mainly, the advertisement is shown on cricket channels, Star channels. The
main promotions were done during FEB & MARCH to:
Highlight Tax benefits.
To combat competition as all the Insurance companies would advertise
during this time at a great frequency.
The complete cost of making a commercial which includes all the equipments,
actors, etc is approximately Rs. 20 lacs. The company has tie-up with Ogilvy
and Mather as its advertising agency along with Equinox (TLG) as its media
partner. The life of usage of a single television commercial is 2 years. Mainly
the ads are shown in between TV serials and cricket matches to gain
attention of the consumers.

A strong network of distributors and parent advisors also helps a lot in
promoting products/services of IDBI Federal by word of mouth.
A Viral campaign is also run on the Internet by wherein flash videos of
working of products are explained in a very humorous manner. The same is
shown on www.bosskaboss.com
For the study an extensive market research program was carried out in two
stages:
1. Interview
2. Survey (Both online and door to door)
The two different methods will produce qualitative as well as quantitative data
that will help in the following ways:
1. Qualitative data will help in looking at the physical and emotional side of the
prospective consumers and at the same time quantitative data will pin point
at various aspects of our research in accordance to the existing scenario.
2. Both kinds of data will cross check against each other.
This methodology involves extensive field exposure at both the levels and data
was collected on the basis of pure interviews as well as during sales calls so
they are based very much on the views and perceptions of the end
consumers and free of any bias
The research population comprised of government employees, self-
employed, private employees, retired people. The Sample Size was
restricted to 150 above the age group of 20 which comprised of
mainly people from Mumbai & Delhi. The type of sampling used for
the research is simple random sampling where the population has
an equal chance of being selected.
All the data that has been collected are primary data collected
through personal endeavors on and off the field.
Sample for interviews:
1. Professionals in Mumbai
2. Professionals in Delhi

Sample for survey:
1. Professionals on the internet (Those who were personally invited by
email or invited in professional groups)
2. Professionals in Mumbai (From whom data was collected personally)

The questions are designed in the easily understandable way in
the topic Study of Promotional Strategies for Life Insurance
Products With Reference To IDBI Federal
Data collection is done through questionnaire. Different types of
graphs & Charts have been used to illustrate the findings
diagrammatically. They are,

Bar graphs
Pie Chart
Line Chart
Area chart
Likert Scale

These charts and graphs help to illustrate the output in the
diagrammatic way. Thus, the data is interpreted with the help of
graphs and charts and the findings have been arrived
The qualitative analysis (interview process) is done
through interview which involves of following
questions & analysis is given below:
1. What is your age?
2. What is your salary?
3. At this level of your career, at what salary would you
think that you have gone up by a level? (This question
is important for setting different income brackets)
4. What are your biggest needs and drivers for
investment? That too if required? (Open ended
question)
5. Your perception and evaluation of various
investment options available? (Open ended question)
6. Your views about Insurance? (Open ended question)

The quantitative analysis is done by means of questionnaire. The survey
was floated on the internet for disseminating it to a large number of
public over the internet so that it can overcome the possible limitations
that occurred during the qualitative data collection only over two
geographical areas. In principle, Delhi & Mumbai have a cosmopolitan
population due to presence of many industries.
The survey was at first prepared using Google docs and the link was sent
to professionals via emails and professional group discussions.
After analysis of the responses collected from the respondents the following
observations, conclusions & recommendations were made:


Television for entertainment and gaining information. So it
is the best media for promotion.
People dont give more importance to the advertisements
while compared to brand, tax benefit, death benefit,
security and low premium.
It is found that people are least bothered about the
celebrity endorsements.
The message and creativity is important for insurance
product.
The promotional efforts and word of mouth is most
influencing while compared to internet.
Advertisements play a major role in influencing a person
to buy an insurance policy.
Insurance companies dont need a brand ambassador to
endorse the product.

The research is confined to a certain parts of Delhi & Mumbai due to time
constraints and does not necessarily shows a pattern applicable to all of
Country. Also the sample size might not be appropriate.
Some respondents were reluctant to divulge personal information which can
affect the validity of all responses.
In a rapidly changing industry, analysis on one day or in one segment can
change very quickly.
The environmental changes are vital to be considered in order to assimilate
the findings.

Insurance sector was opened for private players with the starting of the 20th
century, after economic reforms in 1991, economy was liberalized. Since
then there has a rampant and dynamic growth in the field of insurance. The
insurance sector has intensified and companies are formulating survival
strategies due to immense competition in a de-tariff scenario. This study was
focused on the role and impact of advertisement in the promotional
strategies of various products adopted by Insurance sectors. The study
reveals the advertisements are the major strategy that helps the insurance
companies to promote their products.
As it is evident from the findings that for insurance companies
advertisements play a major role in promotion of their products,
several different ways of advertising are recommended which can
enhance their product sales & build a larger customer base.
Some of them can be-
Agency Mascot
Emergency information wallet cards
Host a window etching event
Harnessing the power of Facebook
Host seminars
Apart from all these there are many more ways to enhance the
marketing & advertising of insurance products which are
explained in detail later