Marketing Strategies In LIFE INSURANCE COVERAGE Services Marketing Essay

The study is designed to evaluate the marketing strategies in life insurance service sector how these strategies enhance sales & marketability of something which in the end lead to customer satisfaction. The insurance situation faces multiple issues such as increased costs of procedure, regulatory pressures, and inflexible technology infrastructure. These pressures are compounded by low to average premium growth & the increasing burdens of regulatory conformity. Keeping all the above problems around the analysis would try to review all the factors that added to the effective marketing strategies. This paper presents different marketing strategies that are taken up in life insurance coverage services keeping in view external and internal environment of the company. Online marketing strategy is the essential approach that the business units will use to accomplish its objectives, and it consists of wide decisions on goal markets, market setting and blend, and marketing expenditure levels. As the financial services sector is becoming more competitive, financial institutions need to consider, means of developing relationships with their existing customers to be able to guard their market share. Strategic aspect of marketing should give attention to the direction that an organization would ingest relation to a particular market or set of markets in order to accomplish a specified group of objectives. Every insurance provider must recognize that its "strategic good posture" depends partially on the competitive environment, partially on its allocation of marketing resources. An insurance firm strategy is a plan to use it that decides how an insurance provider can best achieve its goals and aims in the light of the existing stresses exerted by competition, on the one hand, and its limited resources on the other hand.

Key words: Client satisfaction, Insurance, Innovation, Marketing Strategies, Services,

Introduction: In today's economy, the financial services industry is exposed to increasing performance pressures and competitive forces (Goergen, 2001). Modern multimedia, such as the internet, have created new problems for this industry (Fuchs, 2001). New business concepts, a big change in client sophistication (Davis, 2006), and anincreasing range of new competitors entering into the market, such as indie financial consultants, have improved the business models and the competitive pushes that founded financial services organizations are facing today worldwide. A marketing strategy serves as the foundation of an marketing plan. A marketing plan includes a list of specific actions required to successfully implement a specific marketing strategy. A strategy is different when compared to a tactic. Although it is possible to create a tactical marketing plan with out a sound, well-considered strategy, it isn't recommended. Without a sound marketing strategy, a marketing plan has no foundation. Marketing strategies serve as the essential underpinning of marketing strategies designed to reach marketing targets. It is important that these goals have measurable results. An excellent online marketing strategy should integrate an organization's marketing goals, plans, and action sequences (practices) into a cohesive overall. The aim of a online marketing strategy is to give a foundation that a tactical plan is developed. This allows the organization to carry out its objective effectively and efficiently.

The following techniques are put in place to device the Marketing Strategy for the product/service:

Segmentation

Targeting

Positioning

Market segmentation is the process in marketing of grouping a market (i. e. customers) into smaller subgroups. This is not something that is arbitrarily enforced on modern culture: it is derived from the reputation that the total market is often consisting of submarkets (called 'segments'). These segments are homogeneous within (i. e. people in the segment act like the other person in their attitudes about certain parameters). Because of this intra-group similarity, they are likely to respond somewhat similarly to a given online marketing strategy. That's, they are likely to have similar sense and ideas in regards to a marketing mix comprised of a given service or product, sold at a given price, allocated in a certain way, and promoted in a certain way.

Segmentation:

Market segmentation is greatly defined as being truly a intricate process consisting in two main stages:

identification of wide, large markets

Segmentation of these markets to be able to select the most appropriate target markets and develop marketing mixes consequently.

Positioning:

Simply, placement is how your target market defines you in relation to your competitors.

A good position is:

1. What makes you unique?

2. That is considered an advantage by your aim for market

Positioning is important because you are contending with all the current noise away there competing for your potential admirers attention. If you can stick out with a unique advantage, you have an opportunity at getting their attention. It is important to comprehend your product from the customer's perspective relative to your competition.

Targeting:

Targeting entails breaking market into segments and then focusing your marketing attempts using one or a few key sections. Target marketing could possibly be the key to a little business's success. The beauty of target marketing is that it makes the promotion, charges and distribution of your products and/or services easier plus more cost-effective. Target marketing offers a focus to all of your marketing activities.

Marketing Mixture:

Marketing professionals and specialist use many techniques to get and retain their customers. These activities comprise of different concepts, the main one being the marketing combine. You can find two ideas for marketing blend: 4P and 7P.

It is essential to balance the 4Ps or the 7Ps of the marketing combine. The idea of 4Ps has been long used for the product industry while the latter has emerged as an effective proposition for the assistance industry.

The 7Ps of the marketing combination that are used to body marketing strategies of life insurance companies can be reviewed as:

Product - It must definitely provide value to a customer but doesn't have to be tangible at exactly the same time. Basically, it involves introducing new products or improvising the prevailing products. Something means that which we produce. If we produce goods, it means tangible product & whenever we produce & create services, this means intangible service product. Something is both what a seller must sell & buyer has to buy. So, insurance firms sell services &services are their products. Apart from life insurance as product, customer not only buys product but also services by means of assistance & advice of agent. It really is natural that customers expect affordable returns because of their investments & insurance firms want to maximize their success. Hence while deciding the product combination services or strategies should be motivational.

Price - Costs must compete and must entail income. The costing strategy can include discounts, offers and so on. The prices of insurance products not only influences the sales amount and success but also influences the perceived quality in the minds of the consumers. There are several different options for pricing insurance, predicated on the insurance marketer's corporate and business objectives. They will be the survival approach, the sales maximization strategy, and the revenue maximization approach. To determine the insurance high quality, marketers consider various factors such as mortality rate, investment income, and expenses, as well as the individual risk profile based on age, health, etc. , and the time period/ consistency of payment. In insurance business the pricing decisions are concerned with:

-The premium costed against policies

-The interest priced for defaulting the payment of superior & credit facility.

-Commission charged for underwriting & consultancy activities.

The rates decisions may be high or low keeping in view the level or standard of customers or the policyholders. Mainly, costs of insurance is in the form of top quality rates. The three main factors used for identifying the premium rates under a life insurance coverage plan are mortality, expense & interest. The prices of insurance is at form of prime rates. The three main factors for deciding the superior rates under life insurance coverage plan are:

Mortality: Average death rates in a particular area.

Expenses: The expense of processing, percentage to agents, registration is all contained into the price of installments & prime sum & sorts the important part of pricing strategy.

Interest: The rate of interest is one of the major factors which determine people's willingness to purchase insurance. People wouldn't normally be willing to place their funds to purchase insurance business if the interest levels provided by other financial musical instruments are higher than the perceived dividends from the insurance premiums.

Place - It refers to where the customers can buy the product and how the product grows to out to that place. That is done through different channels, like Internet, wholesalers and retailers. This component of marketing mix is related to two important facets-

-Managing the insurance personnel

-Locating a branch

The management of insurance personal should be achieved so that gap between the services promises-services offered is bridged over. In most service generating organizations, such a distance is available existent which has been instrumental in making down the image problem. The insurance employees if not monitored properly would make all initiatives insensitive. They are required to be given adequate incentives showing their excellence. They should be provided intensive trainings to focus mainly on behavioral management.

Another important sizing to the area mix relates to the location of insurance branches. While locating branches, branch administrator needs to consider the number of factors such as smooth accessibility, availability of infrastructural facilities and management of branch offices and premises.

Thus place management of insurance premises needs a new vision, unique approach & an impressive style. The branch managers need professional brilliance to make place decisions profitable.

Promotion - It offers the various means of communicating to the clients of what the company has to offer. It is about communicating about the benefits of using a particular service or product rather than simply discussing its features. The insurance services be based upon effective promotional methods, to be able to create impulsive buying. Campaign comprises of advertising & other promotion tactics. The promotion is a fight not limited to market share, also for mind share. The insurance services rely upon effective promotional options, so as to create impulsive buying. Campaign consists of advertising & other publicity tactics. Scheduled attention should get in selecting the promotional tools. Employees should get sufficient training for creating impulsive buying.

People - People make reference to the customers, employees, management and everyone else involved in it. It is essential for everyone to understand that the reputation of the brand that you are associated with is in the people's hands. Understanding the client better allows to create appropriate products. Being truly a service industry which involves a high level of folks interaction, it is vital to utilize this resource efficiently to be able to satisfy customers. Training, development &strong romantic relationships with intermediaries are the key areas to be maintained in mind.

Process - It refers to the methods and process of providing a service which is hence necessary to have a thorough knowledge on whether the services are beneficial to the customers, if they're provided in time, if the customers are informed in hand about the assistance and many such things. The process should be customer friendly in insurance industry. The acceleration & accuracy and reliability of payment is of tremendous importance. The control method should be easy to& convenient to the customers. Installment strategies should be streamlined to focus on the ever growing requirements of the customers. IT & Data warehousing will smoothen the procedure flow. IT will help in servicing the top no. of customers proficiently and bring down overheads. Technology can either match or complement the channels of circulation cost effectively. In addition, it helps to improve customer service levels & helps to find out profitability & probable of varied customers product segments.

Physical (information) - It refers to the knowledge of utilizing a service or product. When a service is out to the customer, it is vital that you help him see what he is buying or not. For example- brochures, pamphlets etc provide this purpose. Facts is an integral aspect of success for any insurance companies. Physical facts can be provided to insurance customers by means of policy certificate and premium payment receipts. Any office building, the atmosphere, the service workers etc. of the insurance company and their brand and brand in advertisements also add to the physical evidence. To reach a profitable mass of customers, then new syndication avenues & alliances will be necessary. Initally insurance was looked upon as a sophisticated product with a high advice & service element. Buyers favor a face to face conversation & they place a higher premium on brand names & stability.

Review of literature: Sankaran M (1999) analyzed the measures that could help local players in financial services sector to boost their competitive efficiency, and therefore to reduce the transfer costs. The study found that the specific set of sources of sustainable competitive edge relevant for Financial Service Industry are: product and process inventions, brand collateral, positive influences of 'Communication Goods ', corporate culture, experience effects, scale results, and information technology. Trevor Watkins (1989) while studying the current talk about of the financial services industry worldwide identified four major trends: the style towards financial conglomeration, globalization, it operating marketing; and new methods to financial services marketing. These developments, it was concluded, will have an effect on the marketing of bankers and other financial services in the 1990s. Marisa Maio Mackay (2001) analyzed whether differences are present between service and product market segments, which warrant different marketing procedures through the use of ten existing consumer based mostly actions of brand equity to a financial services market. The results found that most options were convergent and correlated highly with market show in the predicted path, 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 claims that a company's online marketing strategy will depend on many factors, one which is its size and position in the market. From this assertion he shows that one method of classifying marketing strategies is to put the firm relative to its competitive position; specifically as to if they are market leaders, challengers, enthusiasts, or nichers. In effect they are behavioural strategies purchased in relation to the company's market share.

Impetus for online marketing strategy: India is a jumbo-sized chance of life insurance need scarcely belaboured. This is a nation of the billion people, of whom just 100 million people are covered with insurance. And, significantly, even those who do have insurance are grossly underinsured. The rising middle class populace, growing affluence and the lack of a interpersonal security system incorporate to make India one of the world's most attractive life insurance coverage markets. Regardless of how you consider it - whether in conditions of life insurance premiums as a percentage of GDP or top quality per capita - the market is under penetrated and people are under-insured. In the country where there is high unemployment and where cultural security systems are absent, life insurance supplies the basic cover against life's uncertainties. India has usually been a savings-oriented country and insurance takes on a critical role in the development of the Indian current economic climate. The role of insurance in the economy is essential as it able to mobilize premium repayments into long-term investible cash. Consequently, it is an integral sector for development. So marketing strategies are important and inevitable sensation to tap huge untapped potential. Effective offering of insurance policies depends to a huge scope on the marketing strategies preferred. As the marketplace for insurance is vibrant and combined with immediate changes in the environment due to improvements in technology and uncertain financial conditions, coupled with inflation, increased attention must get in the foreseeable future to selecting marketing strategies.

Components of marketing strategies:

Pricing

Personal selling

Advertising

Word of mouth area selling

Institutional image

Quality control

Marketing orientation

New approaches to strategize the productization of life insurance services: Latest tools and techniques are being used by marketers of life insurance coverage products to boost the sales to ensure customer satisfaction and brand building. Some are the approaches to survive in this circumstance are as under:

Innovation: Innovation in the delivery system identifies the internal organizational arrangements that have to be were able to allow service personnel to execute their job properly, and also to develop and provide innovative services. All of the insurance firms have a organised internal company team with customer support groups for the delivery of the service. In depth training is directed at the service contact staff who are called the financial consultants or Agent advisers. Service development, service design and delivery are intricately intertwined. All celebrations involved in any facet of the new service must work together at this time to delineate the facts of the new service. (Valarie A Zeithmal and Mary Jo Bitner, 2003). The necessity and importance of the customers involvement in the service advancement process is known as to be of perfect importance by all the life span insurance firms as the existing market forever insurance is customer centric. They also express their opinion that the new services developed currently are based on customer focus. The degree of engagement of the client has slowly but surely increased in the last five years. In the last 2 yrs customers get excited about the new service process as information providers.

Product/Service differentiation: In case of product differentiation, new products, customized products, personalized products, bundled products can be created and new aim for sections can be identified. For example, life, health and personal crash insurance can be bundled alongside one another. Similarly MORTGAGE LOAN and insurance covering fire and burglary can be placed together. The life span insurance companies provides only packed insurance policies whereas new players have been providing several Riders. Rider in insurance parlance is an option that provides the policyholder additional coverage without troubling the essential risk coverage. The service in neuro-scientific life insurance coverage has better greatly with the accessibility of multinationals and increasing competition. The client should have the choice to continue or even to switch over or even to come out of the given plan. The service in neuro-scientific life insurance has improved upon greatly with the admittance of multinationals and increasing competition. The client should have the choice to continue or even to switch over or even to come out of the given policy.

Advertising and sales campaign: Advertising and publicizing have a good influence on the prospective customers as well as personal advertising. Both the immediate and indirect strategies have to be balanced and mixed well to get the desired result. Discount rates and incentives promised along with the policy have to be presented at length to the clients. The companies must provide a tangible and rational reason to the customers to buy a particular plan. Unity and honesty must be taken care of by the business and the frontline professionals 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 coverage policies. Finding a perfect mix of customers with high disposable income and focusing on them with specific regulations is another good promotional strategy. Life insurance may be one of the most difficult products to market, but with an effective promotional strategy it could be sold easily.

Technology: Information Technology progress is a major drivers behind the structural change in the life span insurance industry to improve risk transfer efficiency. Ebusiness opens up new ways to lessen costs while cutting down market entry obstacles and facilitating the break-up of the original insurance value string. Insurance clients will benefit from higher transparency, lower prices and improved upon services - not only in the sales area, but also in promises management. New information and communication technologies are making it easier for insurance providers to split up the value chain and outsource individual functions to specialized providers. Within the long-term basis the information technology items control the potential for new service delivery since all new products represent a far more sophisticated delivery of the service. Though it is argued that service innovations tend to be non technical, this is still the guts of much evaluation and argument (Kandampully, 2002).

Customer romance management: Insurance firms experiencing competition from within and in foreign countries. Making this problem-situation into an opportunity sits always on the prudent management adopting or adapting strategies and strategies. In type of this, customer marriage management is a measure of being successful competitiveness as it is the information-driven approach to customer evaluation and process automation; and thereon supplementation customer-value proposition. An action on tangible services - prompt and accurate problem of document, prompt and fair arrangement of promise, good listening device, better problem dealing with approach, reliable manner of service and meet requirement of customers promptly each time - in lieu of intangible promises would give maximum satisfaction to customers, the client marriage management provides better service to the covered by insurance guarding him against perils or risks and the insurer enabling to wthhold the existing customers and attracting clients in his ambit of business

Distribution channels: The distribution network is most significant in insurance industry. Insurance is not really a high cost industry like telecom sector. Therefore it is building its market on goodwill and gain access to on syndication network. We can not refuse that insurance are not bought, it comes. The market has a great range to grow. This is better done by more impressive channels like a excellent market, a loan company, a post office, an ATM, departmental store etc. these could be used to increase programs of insurance. But such growth in stations shall increase as time passes. Till then providers seem to be to be the most crucial distribution channel in this industry. Agents hook up with people and effect these to buy any insurance policy. For the same such realtors charge fee on the insurance policies they get for the business. There is a fixed percentage of commission that these providers work. In neuro-scientific distribution stations, many progressive techniques can be adopted. For example, Bancassurance and retailing through postal network can make significant amounts of difference. In Europe 25 percent of plans can be purchased through bankers. Bancassurance, as a bundle of financial services that can gratify both banking and insurance needs, if put in place correctly may bring vast benefits to stakeholders such as finance institutions, insurance companies, shareholders and consumers. Bancassurance will help in mass offering of insurance products through banking institutions. Banks can become large financial supermarkets. Circulation of insurance will be smoother through wider number of branches of the finance institutions. Customer database, customized service, rural penetration, cross-selling of products (e. g. car loan along with car insurance), being cheaper than real estate agents are a few of the greatest advantages of Bancassurance. At the moment the distribution programs that are available in the market are listed below:

Direct selling

Corporate agents

Group selling

Brokers and cooperative societies

Bancassurance

Mallassurance

Conclusion: Life insurance industry requires new strategies in order to endure and survive efficiently. To touch the insurance potential to maximum industry needs to frame such ideas and strategies that will assist to capture the market. Companies instead of centering only on enhancing the variety of products needs to focus on targeting new segments and implement innovative strategies to be able to achieve sustained progress and ensure profitability of business as well as expansion of insurance coverage.

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