A REPORT ON PROMOTIONAL STRATEGIES ADOPTED BY ICICI PRUDENTIAL LIFE INSURANCE CO. LTD. CONTRIBUTED BY Saurabh Singh Baghel(edited)

A REPORT ON
PROMOTIONAL STRATEGIES ADOPTED BY ICICI PRUDENTIAL LIFE INSURANCE CO. LTD.

BY
Saurabh Singh Baghel
ICICI PRUDENTIAL LIFE INSURANCE CO.LTD.


TABLE OF CONTENTS
Acknowledgement
Summary
Promotional strategies
Objective and Limitations
Methodology
Conclusion
Suggestions
Industry profile
ICICI Prudential Life Insurance Co. Ltd.
SUMMARY
A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organizations promotional strategy can consist of:
Advertising: Is any non-personal paid form of communication using any form of mass media.
Public relations: Involves developing positive relationships with the organization media public. The art of good public relations is not only to obtain favorable publicity within the media, but it is also involves being able to handle successfully negative attention.
Sales promotion: Commonly used to obtain an increase in sales short term. Could involve using money off coupons or special offers.
Personal selling: Selling a product service one to one.
Direct Mail: Is the sending of publicity material to a named person within an organization. There has been a massive growth in direct mail campaigns over the last 5 years. Spending on direct mail now amounts to £18 bn a year representing 11.8% of advertising expenditure (Source: Royal Mail 2000). Organizations can pay thousands of pounds for databases, which contain names and addresses of potential customers.
Direct mail allows an organization to use their resources more effectively by allowing them to send publicity material to a named person within their target segment. By personalizing advertising, response rates increase thus increasing the chance of improving sales. Listed below are links to organization who's business involves direct mail.
Message & Media Strategy
An effective communication campaign should comprise of a well thought out message strategy. What message are you trying to put across to your target audience?. How will you deliver that message? Will it be through the appropriate use of branding? logos or slogan design?. The message should reinforce the benefit of the product and should also help the company in developing the positioning strategy of the product. Companies with effective message strategies include:
Nike: Just do it.
Toyota: The car in front is a Toyota.
Media strategy refers to how the organization is going to deliver their message. What aspects of the promotional mix will the company use to deliver their message strategy? Where will they promote? Clearly the company must take into account the readership and general behavior of their target audience before they select their media strategy. What newspapers do their target market read? What TV programmers do they watch? Effective targeting of their media campaign could save the company on valuable financial resources.
Promotion strategies
"Push or Pull"?
Marketing theory distinguishes between two main kinds of promotional strategy - "push" and "pull".
Push
A “push” promotional strategy makes use of a company's sales force and trade promotion activities to create consumer demand for a product.
The producer promotes the product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it to consumers.
A good example of "push" selling is mobile phones, where the major handset manufacturers such as Nokia promote their products via retailers such as Carphone Warehouse. Personal selling and trade promotions are often the most effective promotional tools for companies such as Nokia - for example offering subsidies on the handsets to encourage retailers to sell higher volumes.
A "push" strategy tries to sell directly to the consumer, bypassing other distribution channels (e.g. selling insurance or holidays directly). With this type of strategy, consumer promotions and advertising are the most likely promotional tools.
Pull
A “pull” selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product.
If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers.
A good example of a pull is the heavy advertising and promotion of children's’ toys – mainly on television. Consider the recent BBC promotional campaign for its new pre-school programme – the Fimbles. Aimed at two to four-year-olds, 130 episodes of Fimbles have been made and are featured everyday on digital children's channel CBeebies and BBC2.
As part of the promotional campaign, the BBC has agreed a deal with toy maker Fisher-Price to market products based on the show, which it hopes will emulate the popularity of the Tweenies. Under the terms of the deal, Fisher-Price will develop, manufacture and distribute a range of Fimbles products including soft, plastic and electronic learning toys for the UK and Ireland.
In 2001, BBC Worldwide (the commercial division of the BBC) achieved sales of £90m from its children's brands and properties last year. The demand created from broadcasting of the Fimbles and a major advertising campaign is likely to “pull” demand from children and encourage retailers to stock Fimbles toys in the stores for Christmas 2002

Above a pull strategy (left) push strategy (right).
Communication by the manufacturer is not only directed towards consumers to create demand. A push strategy is where the manufacturer concentrates some of their marketing effort on promoting their product to retailers to convince them to stock the product. A combination of promotional mix strategies are used at this stage aimed at the retailer including personal selling, and direct mail. The product is pushed onto the retailer, hence the name. A pull strategy is based around the manufacturer promoting their product amongst the target market to create demand. Consumers pull the product through the distribution channel forcing the wholesaler and retailer to stock it, hence the name pull strategy. Organisations tend to use both push and pull strategies to create demand from retailers and consumers.

Communication Model - AIDA

AIDA is a communication model which can be used by firms to aid them in selling their product or services. AIDA is an Acronym for Attention, Interest, Desire, Action.. When a product is launched the first goal is to grab attention. Think, how can an organisation use it skills to do this? Use well-known personalities to sell products? Once you grab attention how can you hold Interest, through promoting features, clearly stating the benefit the product has to offer? The third stage is desire, how can you make the product desirable to the consumer? By demonstrating it? The final stage is the purchase action, if the company has been successful with its strategy then the target customer should purchase the product.

Promotion through the Product lifecycle. -
As products move through the four stages of the product lifecycle different promotional strategies should be employed at these stages to ensure the healthy success and life of the product .
Stages and promotion strategies employed.( product life cycle)
Introduction
When a product is new the organizations objective will be to inform the target audience of its entry. Television, radio, magazine, coupons etc may be used to push the product through the introduction stage of the lifecycle. Push and Pull Strategies will be used at this crucial stage.
Growth
As the product becomes accepted by the target market the organization at this stage of the lifecycle the organization works on the strategy of further increasing brand awareness to encourage loyalty.
Maturity
At this stage with increased competition the organization take persuasive tactics to encourage the consumers to purchase their product over their rivals. Any differential advantage will be clearly communicated to the target audience to inform of their benefit over their competitors.
Decline
As the product reaches the decline stage the organization will use the strategy of reminding people of the product to slow the inevitable


Internet promotion.
The development of the World Wide Web has changed the business environment forever. Dot COM fever has taken the industry and stock markets by storm. The e-commerce revolution promises to deliver a more efficient way of conducting business. Shoppers can now purchase from the comfort of their home 24 hours a day 7 days a week. However, particularly in the UK the e-commerce revolution is hindered by two factors. Firstly the cost of logging on to the net. Consumers are still weary of the time-spent surfing, the high cost is slowing down the take-up. The number of homes that are linked to the web in the UK is only 25% of all house owners. If e-commerce businesses are to succeed the home penetration rate of Internet access must also increase. Secondly, most homes are linked to modems of 56K. As the growth of people signing on-line grows the access speed slows down. In America most consumers only spend 10 seconds browsing on a web page, before they change sites, within the UK it is 2 minutes. The future seems to be with ADSL networks which will speed up access to the Internet dramatically running at 512K per second. However, again whether this format is adapted depends much on the cost.
Owning a website is a now a crucial ingredient to the marketing mix strategy of an organization. Consumers can now obtain instant information on products or services to aid them in their crucial purchase decision. Sony Japan took pre-orders of their popular Playstaion 2 console over the net, which topped a 1 million after a few days; European football stars are now issuing press releases over the web with the sites registered under their own names. Hit rates are phenomenal.
Objective
To know the promotional strategies of Icici prudential.
To know how they face their competitor’s strategies.
To know how they survive in the cutthroat competition.
To know the products of the Icici pru .
To know the product life cycle of the Icici pru .
Limitation
Many customers are not aware about Life Insurance Companies investment cum insurance plans.
Many customers do not believe Private Company like ICICI PRUDENTIAL LIFE INSURANCE.
In market many private insurance players are dealing so that competition is very high infect in the insurance sector there is cut throat competition.
Some customer were disdissatisfied with ICICI Prudential Life Insurance and responded in anger.
Some of the customer do not gave actual information as they showed a lot of hurry.
Research methodology
Research methodology is a strategy that guides a research in providing answers to research questions and for this, research survey is being done. “Accuracy of the study depends on the systematic application of the method”. The researcher has to decide the method to be used that helps him to get a desired direction in a systematic way. This study in the following manner.
METHODOLOGY ADOPTED
QUESTIONNAIRE DESIGN
The questions were designed in an easily understandable way with the help of Ms. Shweta Dubey (Faculty Guide) and Mr. Prashant Upadhyay (U.M.) ICICI Prudential Life Insurance (Company Guide). That the respondents may not have any difficulty in answering them. The questionnaire also contained a comments section. This section was included so as to get opinion of the people regarding the ICICI Prudential Life Insurance
RANDOM SAMPLING
Sampling can be defined as a part of population. Thus random sampling may be defined as the selection of a portion from the whole population in which each elements of the population has an equal chance of being selected. A more please definition is that each element in the population has a non-zero and known probability of selection a randomly drawn sample is an unbiased sample. In this research survey 100 people were surveyed at random to get the relevant information.
SAMPLE SIZE
The sampling techniques used in this project is probability sampling techniques and the methods used in cluster sampling.
Sample Units : Jabalpur and Narsinghpur
Sample Size : 100 people
Sampling Area : The are covered in this survey was the
Jabalpur and Narsinghpur Region.
The branch covered in this survey is Jabalpur
DATA COLLECTION
STRUCTURED QUESTIONNAIRE
In this collection data, structured questionnaire is used as a tool by asking a set of standardized questions to know the behavior of the people for the ICICI Prudential Life Insurance.
INTERVIEW
The next step involved in collecting information requires discussion with people. Thus valuable information was gathered informal friendly talks with the people.
SECONDARY DATA COLLECTION
Various websites were consulted to collect literature relevant to the topic.
INTERPRETATION
Interpretation refers to the task of drawing inference from the colleted facts after an analytical study, in fact it is a search for broader meaning of research findings it is through interpretation that the researcher can well understand the abstract principle that respondents beneath his findings. The simple statistical tools will used to analyze the data collection, Bar Graphs have been used to illustrate the findings diagrammatically
ICICI PRUDENTIAL Life Insurance Co.Ltd. Advertisement like Chintamani and Jeetey Raho these are advertisement impacts on their future investments .
They are ready to invest their money in ICICI PRUDENTIAL Life Insurance Co.Ltd., if proper knowledge given by financial advisor regarding investment cum insurance plans
They are ranked no 1 in promotional ratings but they also said ICICI PRUDENTIAL Life Insurance Co.Ltd.is a branded company and it not wants any promotional strategy.
If new product launched by company so it might want induction through advertisement, so people know the new products new products launched.
They invest if new fund offered discount provided by financial advisor and tax rebates, gifts.
ICICI Pru has 40% of private life insurance market TNN[ SUNDAY, FEBRUARY 29, 2004 11:00:22 PM]
MUMBAI: ICICI Prudential Life Insurance has increased its market share among private life insurers to nearly 40%, from 33% as of end-December. The company’s first-year premium income in the April-January period stood at Rs 464.6 crore, accounting for 39.3% of the Rs 1,364 crore premium booked by all private life insurers together. Considering the entire life market, including the Rs 9,780 crore booked by Life Insurance Corporation, ICICI Pru’s market share works out to around 4.17%. The life insurance market continues to be dominated by LIC, which has about 87.8% share. This is only a marginal dip from its 88.2% share in end-December. These comparisons are only for first year or new business premium. If renewal premium were to be taken into account, LIC’s share would increase further to over 96%. According to business figures brought out by the Insurance Regulatory and Development Authority (IRDA), the first-year premium mobilized by ICICI Prudential Life Insurance in the first ten months of `03-04 amounted to Rs 464.4. This is more than twice the premium income generated by its closest rival Birla Sun Life which raised Rs 195 crore during the same period. HDFC Standard Life and Tata AIG have retained their third and fourth positions. Interestingly, there are three companies that are neck-and-neck in the battle to be among the top five with a market share of close to 7% — Allianz Bajaj, Max New York Life and SBI Life Insurance.
In the group insurance market, LIC’s share in the country is around 93%. Among the private companies, SBI Life, Birla Sun Life and HDFC Standard Life dominate the group insurance segment. SBI Life, with its group policies for mortgage loan protection and depositor insurance, has close to 45.8% of the group market among private companies. Birla Sun Life has a 23.4% share, followed by HDFC Standard Life which has a 18.4% share. Except these three companies, other players have a negligible presence in the group market
But, with over a month to go for the close of financial year, the rankings could still change dramatically. More so, because insurance companies, particularly LIC, go into an overdrive in mobilizing new business.
ICICI Prudential began their operations in 12th December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Their nation-wide team comprises, about 500 offices, over 200,000 advisors; and 22 banc assurance partners
Suggestions about product promotional strategies of ICICI Prudential
The suggestions have been classified into two categories.
Action oriented suggestions which have been further subdivided into categories.
People (HR) oriented suggestions.
ACTION ORIENTED SUGGESTIONS
An intense AIDA model needs to be adopted the AIDA model (Awareness, Internet, Desire ,Action).
AIDA: customers are aware of majority of products of ICICI PRUDENTIAL Life Insurance Co.Ltd.
TO CREATE AWARENESS REGARDING PRODUCTS
Print & Electronic Media Advertisement should be done ( As we can see intense ad campaign of HDFC Standard Life and Bajaj Allianz.)
After the initial promotional campaign the relative advantage of ICICI PRUDENTIAL Life Insurance Co.Ltd. Over its competitor should be highlighted.
Hoardings at prime areas should be used.
PEOPLE ORIENTED SUGGESTIONS
Creating offers like lucky draws for the users of Internet.
Giving free gifts for the customer.
Industry profile
A brief history of the insurance sector
The business of life insurance in India in its existing from started in India in the year 1818 with the establishment of the Oriental Life Insurance company in Calcutta.
Some of the important milestones in the life insurance business in India are:
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.
1912: The Indian Life Assurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance business.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.
The general insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.
Some of the important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. Set up, the first company to transact all classes of general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India assurance Company Ltd., the Oriental Insurance Company Ltd. And the United India Insurance Company Ltd. GIC incorporated as a company.
Insurance sector reforms
In 1993, Malhotra Committee, headed by former Finance secretary and RBI Governor R.N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction.
The Malhotra Committee was set up with the objective of completing the reforms initiated in the financial sector.
The reforms were aimed at “ creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms…”
In 1994, the committee submitted the report and some of the key recommendations included:
1. Structure
Government stake in insurance companies to be brought down to 50%.
Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations.
All the insurance companies should be given greater freedom to operate.
2. Competition
Private Companies with a minimum paid up capital of Rs. 1bn should be allowed to enter the industry.
Nop Company should deal in both Life and General Insurance through a single entity.
Foreign companies may be allowed to enter the industry in collaboration with the domestic companies.
Postal Life Insurance should be allowed to operate in the rural market.
Only one state Level Life Insurance Company should be allowed to operate in each state.
Regulatory Body
The Insurance Act should be changed.
An Insurance Regulatory body should be set up.
Controller of Insurance (Currently a part from the Finance Ministry) should be made independent.
Investments
Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%.
GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time).
Customer Service
LIC should pay interest on delays in payments beyond 30 days.
Insurance companies must be encouraged to set up unit linked pension plans.
Computerized of operations and updating of technology to be carried out in the insurance industry.
The committee emphasized that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry
Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs. 100 crores. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body.
The Insurance Regulatory and Development Authority
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies.
The other decisions taken simultaneously to provide the supporting systems to the insurance sector and ion particular the life insurance companies was the launch of the IRDA’s online service for issue and renewal of licenses to agents.
The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products.
Which are expected to be introduced by early next year. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 15 life insurance and 15 non-life insurance companies have been registered.
Before insurance sector was opened to the private sector Life Insurance Corporation (LIC) was the only insurance company in India. After the opening up of Insurance sector in India there has been a glut of insurance companies in India. These companies have come up with innovative and flexible insurance policies to cater to varying needs of the individual. Opening up of the Insurance sector has also forced the LIC to tighten up its belt and deliver better service. All in all it has been a bonanza for the consumer
REFERENCE SITES:-
http://www.tutor2u.net/newsmanager/templates/?a=1396&z=83
http://economictimes.indiatimes.com/articleshow/527342.cms