Chapter -1 INTRODUCTION AND THEORETICAL BACKGROUND

1.1 INTRODUCTION HDFC Life, one of India's leading private life insurance companies, offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC), India's leading housing finance institution and Standard Life plc (public listed company), the leading provider of financial services in the United Kingdom. HDFC Ltd. holds 72.37% and Standard Life (Mauritius Holding) Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others. The topic for research, A study on Buying behaviour and consumer satisfaction regarding products and services of HDFC Life, mainly aims to find out the factors that respondents give importance to while going for insurance and also to find out the satisfaction levels of consumer towards the products and services. Based on the analysis done my project aims to provide suggestions for increasing the market share of HDFC Life and also it helps to improve the customer satisfaction levels towards HDFC Life products and services.

1.2 MARKET OVERVIEW: The Indian life insurance industry is rapidly evolving. It has emerged as one of the fastest developing emerging markets for life insurance in the world. The industry has become fiercely competitive with the entry of private sector companies including major multinational insurers after sector deregulation. Indias share of the world life insurance business has doubled within 5 years since liberalization raising Indias global ranking to 17 in 2006 from 20 in 2000. From 0.5% of the worlds life insurance business in 2000 India today accounts for 2

1.02% of the worlds premium reflecting that the insurance business in India has more than just doubled within just 5 years. Nonetheless insurance as a business is growing faster than Indias GDP. Life insurance premium which accounted for 1.77 % of the countrys GDP in 2000 contributed 2.53% to the GDP for the 2005- 2006 fiscal year. An expert group of Confederation of Indian Industry (CII) has projected that in 2016 the size of Indian insurance market will grow to Rs.145000 Crores. This translates into an average annual growth of 19.6%. CII expects an annual growth in the pension business which is projected to rise at 29% per annum, effectively translating to an expansion of over 12 times over a period of a few years by 2016. The premium business from pension schemes is projected to grow by 22.5% within the same period. There is a large scope for Indian insurance sector to grow; only 20 lakh advisors are available for 1.22 Billion Indians. 70% of the population is below the age of 35years. Over 100 crore people in India do not have insurance.

1.3 CUSTOMER SATISFACTION: Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals.

1.3.1 Customer satisfaction in 7 steps: 1. Encourage face-to-face dealings: It is important to meet your customers face to face at least once or even twice during the course of a project.

2. Respond to messages promptly & keep your clients informed We all know how annoying it is to wait days for a response to an email or phone call. It might not always be practical to deal with all customers queries within the space of a few hours, but at least email or call them back and let them know youve received their message and youll contact them about it as soon as possible. Even if youre not able to solve a problem right away, let the customer know youre working on it. 3. Be friendly and approachable: Its very important to be friendly, courteous and to make your clients feel like youre their friend and youre there to help them out. There will be times when you want to beat your clients over the head repeatedly with a blunt object it happens to all of us. Its vital that you keep a clear head, respond to your clients wishes as best you can, and at all times remain polite and courteous.

4. Have a clearly defined customer service policy: a clearly defined customer service policy is going to save you a lot of time and effort in the long run. If a customer has a problem, what should they do? If the first option doesnt work, then what? Should they contact different people for billing and technical enquiries? If theyre not satisfied with any aspect of your customer service, who should they tell?

5. Attention to detail ( also known as The Little Niceties): Have you ever received a Happy Birthday email or card from a company you were a client of? Have you ever had a personalised sign-up confirmation email for a service that you could tell was typed from scratch? These little niceties can be time consuming and arent always cost effective, but remember to do them. Even if its as small as sending a Happy Holidays email to all your customers, its something. It shows you care; it shows there are real people on the other end of that screen or telephone; and most importantly, it makes the customer feel welcomed, wanted and valued. 6. Anticipate your clients need and go out of your way to help them out: Sometimes this is easier said than done! However, achieving this supreme level of understanding with your clients will do wonders for your working relationship.

7. Honour your promises: The simple message: when you promise something, deliver it. Never break your promises that will disturb your relationship with your customers.

1.4 CONSUMER BEHAVIOUR: Consumer behaviour is the study of when, why, how, and where people do or do not buy a product. It blends elements from psychology, sociology, social anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. 5

1.4.1 COGNITIVE VIEW: It portrays the consumer as a thinking problem solver. Within this framework, consumers frequently are pictured as either receptive to or actively searching for products and services that fulfill their needs and enrich their lives. The cognitive model focuses on the processes by which consumers seek and evaluate information about selected brands and retail outlets. Within the context of the cognitive model, consumers are viewed as information processors. Information processing leads to formation of preferences and ultimately to purchase intention. 1.4.2 INPUT-PROCESS-OUTPUT MODEL INPUT (external influences) 1. Socio-cultural inputs: Friends, family, informal sources, social classes. 2. Marketing inputs: These inputs to the consumers decision making process take the form of specific marketing mix strategies that consists of: Product (Brand name, quality ) Promotion (festival offers, discount, bundling) Price (pricing policy of company) Channels of distribution (direct company delivery, distributor). PROCESS The process component of the model is concerned with how consumers make decisions. The psychological field represents the internal influencesmotivation, perception, learning, personality and attitudes that affect consumers decision making processes. It consists of the following:

Need recognition The buying process starts when the buyer recognizes a problem or need trigged by internal or external stimuli. With an internal stimulus, one of the persons normal needs- hunger, thirst, sex-rises to a level and become a driver; or a need can be aroused by an external stimulus. Pre-purchase search Consumers often search for limited amounts of information. Major information sources to which consumers fall are: Personal: family, friends, neighbors, acquaintances. Commercial: Advertising, web sites, sales persons, dealers, displays. Public: Mass media, consumer rating organizations. Experiential: Previous usage. Evaluation of alternatives: When evaluating potential alternatives, consumers tend to use two types of information. (1) Evoked set: Within the context of consumer decision making, the evoked set refers to the specific brands a consumer considers in making a purchase within a particular product category.

(2) The criteria they will use to evaluate each brand. This is where the customer evaluates products based on chosen criteria such as quality,

durability, warranty, price, after sale services and quality on competitive basis. This will help to make the brand and product choice.

Expectancy value model: The consumer arrives at attitudes toward various brands through an attribute evaluation procedure. This model of attitude formation posits that consumer evaluates products and services by combining their brand beliefs the positive and negative attributes according to their importance. Purchase Decision: This is where the customer makes the final choice and ends up effectively purchasing the product. Once the purchase decision is made it cannot be changed. Here customers may follow non-compensatory model of consumer choice like conjunctive heuristic, where the customer sets minimum acceptable cut off level for each attribute and chooses the first alternative that meets the minimum standard for all attributes. Lexicographic heuristic, where customer chooses the best brand on the basis of its perceived most important attribute. Elimination by aspect heuristic, where the customer compares the brands on an attribute and select probabilistically. OUTPUT: This is the behaviour of the consumer upon consuming the good. Post purchase behaviour could be of two forms:

Positive post purchase behaviour This is where the consumer holds a positive feedback about the product and happy with the product quality. When there is positive post purchase behaviour he will engage in repeat purchases and spread positive word of mouth about the product encouraging others people to buy the product.

Negative post purchase behaviour This is where the customer is dissatisfied with the product and holds a negative feedback about the product. This will result in bad word of mouth about the product. Organizations should always try to avoid negative post purchase behaviors. An important part of post purchase evaluation is the reduction of uncertainty or doubts that the consumer might have about the selection. As part of this post purchase analysis, consumers try to reassure themselves that their choice was a wise one; that is they attempt to reduce post purchase cognitive dissonance.

Chapter -2 RESEARCH METHODOLOGY

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2.1 Rationale of the project This study intends to help in analyzing the buying behavior and satisfaction levels of the customers towards HDFC LIFE products and this may also help the company to come up with better marketing strategies to cater to the needs of the customers by creating better products and services. 2.2 OBJECTIVES OF THE STUDY:2.2.1 Primary objective: To determine the factors that influence respondents buying behavior towards HDFC Life products To determine the factors that influence the satisfaction levels of consumers towards HDFC Life products and services 2.2.2 Secondary objective: To find out the post purchase experience of consumers about the HDFC Life products

2.3 RESEARCH METHODOLOGY: 2.3.1 Type of research Exploratory research has been done to determine the variables and the impact of the variables on customer satisfaction and buying behavior. The research was based on Primary data.

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2.3.2 Sampling plan The sampling plan used is Convenient sampling. The population for the sample is the existing customers and the prospective customers of HDFC Life. The sample size is limited to 150. The samples are collected from different areas of Bangalore. 2.3.3 Data collection Structured questionnaire was used to collect data from sources such as HDFC Life existing customers and non customers of HDFC Life. Separate questionnaire was used for both the segments of customers. 2.3.4 Data Analysis The data analysis was done with the help of data collected through questionnaire. Tool like Mean square, Average, Percentages are used to analyze and software such as MS EXCEL was used to interpret the data. 2.3.5 Limitation of Study: The study was limited to the urban areas of Bangalore The time taken for the research was sixty working days

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Chapter -3 INDUSTRY, COMPANY AND PRODUCT PROFILE

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3.1 INDUSTRY PROFILE The advent of life insurance business in India started in 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1870 saw the enactment of the British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies. In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and non-life business transacted in India by Indian and foreign insurers including provident insurance societies. Insurance Act, 1938 amended with comprehensive provisions for effective control over the activities of insurers. The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of insurance companies and the level of competition was high. There were also allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business. An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector

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In 1993, the Government set up a committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose recommendations for reforms in the insurance sector. The committee submitted its report in 1994 wherein, among other things, it recommended that the private sector be permitted to enter the insurance industry. They stated that foreign companies are allowed to enter by floating Indian companies, preferably a joint venture with Indian partners. In 1999, the Insurance Regulatory and Development Authority (IRDA) were constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders interests. Today there are 24 general insurance companies including the ECGC and Agriculture Insurance Corporation of India and 23 life insurance companies operating in the country. The insurance sector is a colossal one and is growing at a speedy rate of 1520%. Together with banking services, insurance services add about 7% to the countrys GDP.

3.2 COMPANY PROFILE HDFC Life is one of India's leading private life insurance companies, offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC), India's leading housing finance institution and Standard Life plc, the leading provider of financial services in the United Kingdom. 15

HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others. HDFC Life's product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health. Customers have the added advantage of customizing the plans, by adding optional benefits called riders, at a nominal price. The company currently has 29 retail and 5 group products in its portfolio, along with five optional rider benefits catering to the savings, investment, protection and retirement needs of customers. HDFC Life continues to have one of the widest reaches among new insurance companies with more than 500branches servicing customer needs in over 700 cities and towns. The company has a strong base of Financial Consultants. To ensure long-term sustainable growth HDFC LIFE concentrated their focus on expansion of branch network, organizing an efficient and well trained sales force, and setting up appropriate systems and processes with optimum use of technology. As all these areas form the basic infrastructure for establishing the highest possible customer service standards. HDFC LIFE is the first private player to be registered with the IRDA and the first to issue a policy on December 12, 2000. HDFC LIFE is the first private life insurer to break the ice using the idea of selfrespect instead of 'death' to convey their brand proposition (Sar Utha Ke Jiyo). Today, they are one of the few brands that customers recognize, like and prefer to do business. Moreover, the brand thought, Sar Utha Ke Jiyo, is the most recalled campaign in its category. HDFC Life investment focus is based on the primary objective of protecting and generating good, consistent, and stable investment returns to match the investor's long-term objective and return expectations, irrespective of the market condition. Despite the criticality of life insurance, sales in the industry have been characterized by over reliance on tax benefits and limited advice-based selling.

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Their eight-step structured sales process 'Disha' however, helps customers understand their latent needs at the first instance itself without focusing on product features or tax benefits. Need-based selling process, 'Disha', the first of its kinds in the industry, looks at the whole financial picture. Customers see a plan not piecemeal product selling. HDFC Life has initiated and implemented many new processes, some of which were found useful by the IRDA and later made mandatory for the entire industry. The agents who successfully completed this training only, were authorized by the company to sell ULIPs. This has now been made compulsory by IRDA for all insurance companies under the new Unit Linked Guidelines VISION: 'The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry'. 3.3 HDFC LIFE PRODUCTS 3.3.1 Protection plans: To safeguard familys financial independence Security against uncertainties Financial cushion in case of an eventuality Types of protection plans:1. HDFC TERM Assurance plan 2. HDFC Premium Guarantee Plan 3. HDFC Loan Cover Term Assurance Plan

3.3.2 Childrens Plans: To Fulfill Childrens dreams 17

 Economic support when child needs it most Types Conventional plans HDFC Childrens plan Unit linked insurance plans HDFC SL Young Star Super II HDFC SL Young Star Super Premium

3.3.3 RETIREMENT PLANS: Monetary Security Financial independence even after retirement To live carefree in golden years. Types Type Conventional Plans HDFC Personal Pension plan HDFC Life classic Pension Insurance Plan Unit Linked Insurance plans Regular Premium

3.3.4 Saving & Investment Plans: Dual benefit of protection and long term savings Provide an assured sum for future needs Inculcate a habit of regular savings.

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Type Regular Premium

Conventional Plans 1.HDFC SL New Money Back Plan 2.HDFC Endowment Assurance Plan 3.HDFC Life Sampoorn Samridhi Insurance Plan

Unit Linked Insurance Plans 1.HDFC SL Pro Growth Super II 2.HDFC SL Pro Growth Flexi

Single Premium

1.HDFC Single Premium Whole of HDFC Life Insurance Plan

SL

Pro

Growth

Maximiser

3.3.5 Health Plans To secure health costs Financial independence despite illnesses Meeting medical expenses effortlessly Types HDFC Critical Care Plan HDFC Surgicare Plan

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Chapter -4 DATA ANALYSIS AND INTERPRETATION

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For Non customers of HDFC Life The following table shows the Age group of the respondents TABLE - 4.1: Age group of the respondents: CATEGORY BELOW 25 25 40 ABOVE 40 FREQUENCY 21 43 11

15% 28% below 25 25 - 40 above 40

57%

Figure 4.1 Age group of respondents Out of 75 respondents 28% are below 25, majority of the respondents that is 57% are between 25 and 40 and only 15% are above 40.

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The following table shows the gender of the respondents TABLE - 4.2: Gender of the respondents CATEGORY Male Female FREQUENCY 51 24

32% male female

68%

Figure 4.2: Gender of the respondents Out of 75 respondents majority of them that is 68% are male and 32% of them are female.

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The following table shows the occupation of the respondents. TABLE - 4.3: Occupation of the respondents: OCCUPATION Professional Business person Govt. Employee FREQUENCY 36 18 21

28% professional 48% business person govt. employee

24%

Figure 4.3: Occupation of the respondents. Out of 75 respondents majority of them that is 48% are professionals, 24% of them are business person and 28% of them are govt. Employees.

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The following table shows the annual income of the respondents TABLE - 4.4: Annual Income of the respondents: INCOME LEVEL (yearly) 1.5 lakh 5 lakh 5 lakh 10 lakh Above 10 lakh 51 19 5 FREQUENCY

7%

25%

1.5 lakh - 5 lakh 5 lakh - 10 lakh above 10 lakh 68%

Figure 4.4: Annual income of the respondents Out of 75 respondents 68% of their annual income is in between 1.5lakh 5 lakh, 25% of them are in between 5 lakh 10 lakh, and only 7% of them are above 10 lakh

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The following table shows the investment schemes that respondents give much preference TABLE - 4.5: Preference towards Investment schemes Various schemes Life Insurance Fixed Deposits Properties Mutual funds Rating (mean square value) 3.37 3.64 4.02 3.25

23%

24%

life insurance fixed deposits 28% 25% properties mutual funds

Figure 4.5: Preference towards investment schemes Out of 75 respondents majority of them that is 28% prefer for properties, 25% of them prefer fixed deposits, 24 % of them prefer Life Insurance and only 23% of the respondents prefer mutual funds. 25

The following table shows that the respondents opinion about Life insurance TABLE - 4.6: Importance of having Life Insurance Attitude Most important Important Neutral Least important Not important Frequency 18 27 23 4 3

40% 35% 30% 25% 20% 36% 15% 24% 10% 5% 5% 0% Most Important important neutral least important not important 4% 31%

Figure 4.6: Importance of having Life Insurance 24% of the respondents think its most important to have Life insurance, 36% of them think it is important, 31% of them are in neutral, 5% of them think it is least important and only 4% of them think it is not important.

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The following table shows that the number of respondents having insurance from any company TABLE - 4.7: Number of respondents having Life insurance Insurance holder Yes No Frequency 39 36

48% 52%

Yes No

Figure 4.7: Number of respondents having Life Insurance Out of 75 respondents 52% of them have taken Insurance from other companies and 48% of them havent taken Insurance from any company.

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The following table shows that the important factors that the respondents rated in a Life Insurance Company TABLE - 4.8: Important factors in a Life insurance company Factors Brand name Better services Innovative Plans Accessibility Rating (mean square value) 3.50 3.90 3.17 3.98

90% 80% 70% 60% 50% 40% 70% 30% 20% 10% 0% Brand name better services innovative plan accessibility 78% 63% 80%

Figure 4.8: Important factors in a Life Insurance company Out of 75 respondents 70% of them give importance to brand name, 78% of them give importance to better services, 63% of the give importance to innovative plans and majority of them that is 80% of them give importance to accessibility.

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The following table shows the important factors that are considered by the respondents while purchasing a Life Insurance policy TABLE - 4.9: Important factors when purchasing Life insurance policy Factors Tax benefit Saving Protection Pension Investment Rating (mean square value) 2.56 3.4 3.89 3.38 2.57

investment

51%

pension

68%

protection

78%

saving

68%

tax benefit 0% 10% 20% 30% 40% 50%

51% 60% 70% 80% 90%

Figure 4.9: Important factor when purchasing a Life insurance policy Out of 75 respondents 51% of them look for tax benefit, 68% for saving, and majority of the respondents that is 78% for protection, 68% for pension and 51% of them for investment. From this we can say that most of them are taking insurance for protection purpose. 29

The following table shows that the respondents prefer a policy with premium spread over TABLE - 4.10: Preference for premium spread over Premium spread over Less than 5 years 5 10 years 10 15 years More than 15 years Frequency 13 24 27 11

more than 15 years

15%

10 - 15 years

36%

5 - 10 years

32%

Less than 5 years

17%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Figure 4.10: Preference for premium spread over 17% of the respondents prefer a policy with premium spread over less than 5 years, 32% of them prefer for 5-10years, majority of the respondents that is 36% prefer with a premium spread over for 10-15years, and only 15% of them prefer more than 15 years.

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The following table shows the rating given by the respondents for the services that they expect from Life insurance providers. TABLE - 4.11: Rating for services expected by respondents Features Bonus Provision in case of dues Rating (mean square value) 4.33 4.21 Rank 1 2 3

Easy access ability to 4.01 deposit centre Time to time premium 3.61 collection

90% 87% 85% 80% 80% 84%

75% 72% 70%

65% easy access ability to deposit centre time to time premium collection provision in case of dues bonus

Figure 4.11: Rating for services expected by respondents From the graph it is seen that 80% of the respondents are expecting easy access ability to deposit centre, 72% for time to time premium collection, 84% for provision in case of dues, and a majority of the respondents that is 87% for bonus. 31

The following table shows that the respondents opinion in which areas should Life Insurance companies should work on TABLE - 4.12: Rating for the areas where company should work Features Less complicated procedures Fewer premiums More returns Transparency Rating (mean square value) 3.97 3.42 4.46 4.26 Rank 3 4 1 2

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 Less complicated procedures fewer premiums more returns transparency 3.97 3.42 4.46 4.26

Figure 4.12: Rating for the areas where company should work From the table we can conclude that respondents are giving first importance to more returns, 2nd to Transparency, 3rd to less complicated procedures, and last preference to fewer premiums.

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The following table shows that the numbers of respondents are aware of HDFC Life products TABLE - 4.13: Respondents awareness towards HDFC Life products Awareness Yes No Frequency 15 60

19%

yes no

81%

Figure 4.13: Awareness towards HDFC Life products

Out of 75 respondents only 19% of them are aware of HDFC Life products and 81% of them are not aware of the products.

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The following table shows how respondents come to know about the HDFC Life products. TABLE - 4.14: Source of awareness towards HDFC Life products Source Newspaper Television Internet Reference Group Financial Journals Agents Frequency 0 0 7 4 0 4

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 0% News papers 0% television internet reference group 0% financial journals agents 27% 27% 47%

Figure 4.14: Source of awareness towards HDFC Life products Out of 15 respondents 47% of them are come to know about the products through internet, 27% of them come to know through reference group and 27% through agents. 34

The following table shows that the numbers of respondents are interested to make an investment with HDFC Life TABLE - 4.15: Investment with HDFC Life Investment with HDFC Life Yes No Not yet decided Frequency 11 09 50

15%

12%

yes no Not decided

73%

Figure 4.15: Investment with HDFC Life Out of 75 respondents only 15% of them are ready to make an investment with HDFC Life, and 12% of them are not willing to do investment with HDFC Life. And a majority of the respondents that is 73% are not yet decided whether to go for HDFC Life or not.

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The following table shows the rating that the respondents gave for HDFC Life plans TABLE - 4.16: Respondents preference towards HDFC Life plans Plans Retirement plans Health Plans Rating (mean square value) 4.18 3.54 Rank 2 4 3

Savings and investment 3.72 plans Childrens plan Protection plans 3.27 4.45

5 1

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 retirement plans health plans savings and investment plans children plans protection plans 4.18 3.54 3.72 3.27 4.45

Figure 4.16: Respondents preference towards HDFC Life plans From the table we can conclude that out of 11 respondents, 1st importance is given for Protection plans, 2nd for Retirement plans, 3rd for savings and investment plans, 4th for health plans and 5th for childrens plan.

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For existing customers of HDFC Life

The following table shows the age group of the respondents. TABLE - 4.17: The age group of respondents CATEGORY FREQUENCY PERCENT

BELOW 25 25 40 ABOVE 40

7 59 9

9% 79% 12%

12%

9%

below 25 25 - 40 above 40

79%

Figure 4.17: Age group of the respondents Out of the 75 respondents, only 9% of respondents are of the age group of below 25 years and majority of the respondents, that is 79% are in the age group of 25 40 years and 12% of the respondents are of the age group of above 40 years.

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The following table shows the Gender of the respondents. TABLE - 4.18: Gender of the respondents CATEGORY Male Female FREQUENCY 61 14 PERCENT 81% 19%

male

female

19%

81%

Figure 4.18: Gender of the respondents 81% of the respondents are males and 19% of the respondents are females. So we can say that male population is more exposed to the insurance products.

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The following table shows the Occupation of the respondents TABLE - 4.19: Occupation of the respondents OCCUPATION Professional Business person Govt. Employee FREQUENCY 48 12 15 PERCENTAGE 64% 16% 20%

20%

professional business person 16% 64% govt.Employee

Figure 4.19: Occupation of the respondents. Out of 75 respondents majority of the respondents, that is 64% are professionals, 16% are business person and 20% are government employee.

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The following table shows the annual Income of the respondents. TABLE - 4.20: Annual income of the respondents: INCOME LEVEL (yearly) 1.5 lakh 5 lakh 5 lakh 10 lakh Above 10 lakh 45 23 7 60% 31% 9% FREQUENCY PERCENT

9%

1.5 lakh - 5 lakh 31% 60% 5 lakh - 10 lakh above 10 lakh

Figure 4.20: Annual Income of the respondents From the graph we can find that 60% of the respondents are of the income group of 1.5 lakh 5 lakh, 31% are of the income group 5 lakh- 10 lakh and only 9% are of the income group of above 10 lakh.

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The following table shows the various sources from which the respondents are aware about HDFC Life are shown in the table TABLE: 4.21: Source to know about HDFC Life SOURCE News Paper Television Friends and Relatives Direct selling agents Internet Other FREQUENCY 09 11 21 19 15 0

12% 20% News paper Television friends & relatives direct selling agents 25% 28% internet

15%

Figure 4.21: Source of awareness The various sources by which HDFC Life customers are aware about the products are 12% by News paper, 15% through television, major part 28% of awareness by friends and relatives, 25% by direct selling agents and 20% by internet. 41

The following table shows the various products that the respondents bought from HDFC Life. TABLE - 4.22: Products those respondents bought from HDFC Life PRODUCTS Retirement Plans Health plans Savings and Investment plans Children plans Protection plans FREQUENCY 18 08 09 11 29

45% 40% 35% 30% 25% 20% 15% 10% 5% 0% retirement plans health plans savings & investment plans children plans protection plans 24% 11% 12% 15% 39%

Figure 4.22: Products that respondents bought from HDFC Life Out of 75 respondents 24% took retirement plans, 11% of the respondents took Health plans, 12% of the respondents took Savings and Investment plans, 15% of the respondents took childrens plan and majority of the respondents that is 39% took protection plans. From this graph we can say that protection and retirement plans are fast moving products in HDFC Life.

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The following table shows the number of policies that the respondent took from HDFC Life TABLE - 4.23: Number of policies NUMBER OF POLICIES One Two Three More than three FREQUENCY 52 16 7 0

80% 70% 60% 50% 40% 69% 30% 20% 10% 0% 1 policy 2 policies 3 policies 21% 9% 0% >3 policies

Figure 4.23: Number of Polices From this graph we can say that majority of the respondents that is 69% had bought 1 policy, 21% bought 2 policies, 9% bought 3 policies and no one had taken more than 3policies.

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The following table shows that number of years being customers of HDFC Life. TABLE - 4.24: Number of years being the customers of HDFC Life NUMBER OF YEARS Less than 1 year 1 2 years 2 5 years More than 5 years FREQUENCY 11 24 31 9

more than 5 years

12%

2 - 5 years

41%

1 - 2 years

32%

< 1 year

15%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Figure 4.24: Number of years being the customers of HDFC Life The majority of the respondents that is 41% are between 2-5years, 32% are between 1-2years, 15% are less than 1year and only 12% are more than 5years.

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The following table shows the premium amount that respondents are paying annually. TABLE - 4.25: Annual premium payment by respondents PREMIUM Less than 10,000 10,000 20,000 20,000-30,000 More than 30,000 FREQUENCY 0 13 26 36

more than 30000

48%

20000-30000

35%

10000-20000

17%

less than 10000

0%

0%

10%

20%

30%

40%

50%

60%

Figure 4.25: Annual premium payment by respondents From this graph we can say that majority of the respondents that is 48% are paying more than 30000, 35% of respondents are paying in between 20000-30000, 17% are paying between 10000-20000 and no one is paying below 10,000. 45

The following table shows the satisfaction levels of respondents towards their products. TABLE - 4.26: Satisfaction levels of the respondents SATISFACTION LEVEL Extremely satisfied Slightly satisfied Neutral Dissatisfied Extremely Dissatisfied FREQUENCY 12 38 21 4 0

60% 50% 40% 30% 51% 20% 28% 10% 0% extremely satisfied slightly satisfied neutral 16% 5% dissatisfied 0% extremely dissatisfied

Figure 4.26: Satisfaction levels of the respondents From this graph we can infer that only 16% of the respondents are extremely satisfied, and a majority that is 51% of the respondents are slightly satisfied, 28% are in neutral and few respondents are dissatisfied with their product. Finally we can say about 67% of the respondents are satisfied with the product they own. 46

The following table shows that whether the respondents got the information about various polices available at that time when they purchased the policy. TABLE - 4.27: Information about other policies INFORMATION Yes No FREQUENCY 68 7

9%

yes No

91%

Figure 4.27 Information about other policies From the above pie chat we can infer that a majority of respondents that is 91% got information about other policies at the time of their purchase, only a few like 9% didnt get information about other policies.

47

The following table shows that the number of the respondents felt that benefits received by their policy are attractive and preferable. TABLE - 4.28: Benefits of the policy NUMBER OF RESPONDENTS YES NO 53 22

29%

Yes No

71%

Figure 4.28: Benefits of the policy From the pie chart it is infer that 71% of the respondents said the benefits received by their policy is attractive and preferable and 29% of respondents says that they are attractive and preferable.

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The following table shows that whether the respondents received any compensation and reward was it given in time as specified at the time of purchasing the policy. TABLE - 4.29: Compensation and rewards IN TIME Yes No FREQUENCY 41 34

34 41

yes No

Figure 4.29: compensation and rewards 41% of the respondents said that they received compensation and reward in time and rest that is 34% said they didnt received.

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The following table shows the company ability to satisfy customer needs TABLE - 4.30: Ability to satisfy customer need Ability to satisfy the need Strongly Agree Agree Neutral Disagree Strongly Disagree Frequency 9 33 25 8 0

strongly disagree

0%

disagree

11%

neutral

33%

agree

44%

strongly agree

12% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Figure 4.30: Ability to satisfy customer need From the graph it is infer that 12% of the respondents strongly agree that the customer need is properly judged by the company, majority of respondents that is 44% agree, 33% of the respondents are in neutral, and only 11% of the respondents disagree. Over all we can say that the company is able to satisfy the customer need properly. 50

The following table shows the ability of employees to solve customer queries TABLE - 4.31: Ability of employees to solve customers queries Ability to solve queries Excellent Good Average Fair Poor Frequency 11 31 21 7 5

45% 40% 35% 30% 25% 20% 15% 10% 15% 5% 0% excellent good average fair poor 9% 7% 41%

28%

Figure 4.31 Ability of employees to solve customers queries Out of 75 respondents 15% of them felt the ability employees is excellent in solving their queries, 41% felt good, 28% felt average, 9% felt fair, and only 7% said they are poor to solve their queries.

51

The following table shows how frequently customers are been contacted by the company. TABLE - 4.32: Company contact with customers Frequency Monthly Quarterly Half-yearly Yearly Number of respondents 15 17 20 23

20% 31% monthly quaterly half-yearly 23% yearly

27%

Figure 4.32: Company contact with customers 20% of respondents are been contacted by the company monthly, 23% are been contacted quarterly, 27% are contacted half-yearly and majority of the respondents that is 31% are been contacted yearly. 52

The following table shows the rating that the customers gave for the type of service system they prefer. TABLE - 4.33: Preference of service system Type of system Personal Telephone Online Internet Rating (mean square value) 4.05 2.30 3.73

personal

telephone

online internet

37%

40%

23%

Figure 4.33: Preference of service system Majority of respondent that is 40% prefer personal, 37% of the respondents prefer Online Internet, and 23% of them prefer Telephone.

53

The following table shows the overall rating given by respondents for the services of HDFC Life. TABLE - 4.34: Overall rating for services. Rating Poor Average Good Excellent Frequency 7 21 43 4

70% 60% 50% 40% 30% 20% 28% 10% 9% 0% poor average good 5% excellent

57%

Figure 4.34: Overall rating for services Out of 75 respondents 9% of them rate the service system of HDFC Life as poor, 28% of them rate as average, majority of them that is 57% rate it as good and only 5% of them rate it as excellent. 54

The following table shows that whether the respondents will recommend others to take the products of HDFC Life TABLE - 4.35: Recommendation of HDFC Life products to others Recommendation Strongly recommend To some extent Not recommend Frequency 4 53 18

5% 24%

strongly recommend to some extent not recommend

71%

Figure 4.35 Recommendation of HDFC Life products to others. Only 5% of the respondents strongly recommend HDFC Life products to other, majority of 71% recommend to some extent and 18% of them will not recommend. 55

Chapter- 5 FINDINGS AND CONCLUSION

56

From the analysis done a number of findings have been made and they are divided in to two categories. 5.1 Finding from non customers of HDFC Life a) Accessibility and better services are the important factors that 80 % of the respondents are giving importance to Life insurance companies. b) Protection and Pension plans are the main consideration that respondents are looking for while purchasing Life Insurance policy. c) 87% of the respondents are looking for bonus and 84% of them are expecting provision in case of dues from Insurance companies. d) 89% and 85% of the respondents suggesting the company needs to work upon more returns and transparency. e) 81% respondents are unaware about HDFC Life products, 13% who are aware have their main source of awareness from Agents, Internet, and reference group. f) 73% of respondents have not yet decided to make investment with HDFC Life, because they are not aware of the products and benefits that they get out of them. 15% of respondents who are interested to invest with HDFC Life prefer protection and retirement plans. 5.2 Finding from existing customers of HDFC Life g) 39% of the respondents bought protection plans and 24% bought retirement plans. h) 67% of the respondents who bought products from HDFC Life are satisfied with their policies, 28% are in neutral and only 5% of the respondents are dissatisfied that because of lack of knowledge of product on the part of agents and their ability to explain the same to the customers.

57

i) Respondents are unhappy with the communication of information on due dates for paying premiums. Company is informing them 15 days before the grace period of payment is over. j) 71% of the respondents agree that the benefits of their policy are attractive and preferable. k) 40% of the customers prefer personal service system and 37% of them are for Online internet system. l) 63% the respondents are happy with the service system provided by the HDFC Life. m) 70% of the respondents are willing to recommend the products of HDFC Life to other. Only 30% are not willing to recommend.

5.3 CONCLUSION: A customer gives more preference to certain factors before making an investment in an insurance company. So HDFC Life should focus on these aspects to gain competitive advantage. Primarily, the firm must identify such factors that are creating dissatisfaction to the customers and must endeavor to remove these to compete with other leading firms. Also suggestions from the customers are very much vital in bringing necessary changes.

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Chapter- 6 SUGGESTIONS AND RECOMMENDATION

59

6.1 Recommendations: Some of the recommendations to the company are: a) HDFC Life should provide better services and accessibility, it may be better if they recruit a team to monitor and take care of these aspects. b) It is recommended that the company should come up with new products that provide better returns and transparency. c) To improve awareness about the products there should be increase in advertisements on TV channels and newspapers focusing on the products and their benefits. d) The company should go for sponsorship events like reality shows, stage shows etc., so that people get familiar with the brand. e) Proper training should be provided to the agents for improving their product knowledge. This will improve their effectiveness in explaining complete details about the products, regarding the change of policies and benefits of the policies. f) Maintaining relationship between the company and the customers should be a continuous effort, not only during the payment of premiums but throughout the years. g) At least 45 days prior intimation should be given for annual premium payments.

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Bibliography BOOKS: Kotler, Philip. Marketing Management. 12th Edition. India: Pearson Education, Dorling Kindersley Pvt. Ltd, 2007. LG. Schiffman, Leslie Lazar Kanuk. Consumer Behavior. 8th Edition. India: Asoke K. Ghosh, Prentice-Hall Private Limited, 2006. Malhotra, Naresh. Marketing Research-:An applied orientation.4th Edition. New Delhi: Prentice- Hall, 2006. Nargundkar, Rajendra Marketing Research, 2nded, New Delhi: Tata McGraw-hill, 2003. D.C., Shrivastava and S. Shrivastava. Indian Insurance Industry: Transition and Prospects. New Delhi: New Century Publications, 2001. Mishra, M.N. Principles and Practices of Insurance. New Delhi: Sultan and Chand Limited, 2002. Web Sites 4 jul 2011. http://www.hdfclife.com/AboutUs/AboutUsIntroduction.aspx 5 jul 2011http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.aspx? page=PageNo4&mid=2 10 jul 2011. http://www.irda.gov.in/ADMINCMS/cms/frmGeneral_NoYearList. aspx?DF=RL&mid=4.2 12 jul 2011. http://www.insuranceinstituteofindia.com/InsuranceInst/Home/ASPX/ Index.aspx 28 jul 2011. http://en.wikipedia.org/wiki/Customer_satisfaction 18 aug 2011. http://www.learnmarketing.net/consumer.htm 61

Appendix 1 Questionnaire for Non customers of HDFC Life

Which Age group you belongs to? Below 25 25 40 Above 40

Gender:

Male

Female

Occupation: Professional

Business Person

Govt. Employee

Any other (please specify)

Annual Income (Rs): 1.5 lakh 5lakh Above 10 lakh

5 lakh 10 lakh

62

1. Which Investment schemes you prefer (Rate them, 1 being least and 5being highest)? Features 1 Life Insurance Fixed Deposits Properties Mutual funds Other(specify) 2 Rating 3 4 5

2. Do you think is it essential to have Life Insurance? Most important Important Neutral Least Important Not Important

3. Have you taken any Life Insurance from any company? Yes No If yes please specify the Name of the Company. Plan .. Premium .

63

4. Rate the factors that you give importance in a Life Insurance company? Features 1 Brand Name Better Services Innovative Plans Accessibility 2 Rating 3 4 5

5. Main consideration that you look at while purchasing a Life Insurance policy. Most important Tax benefit Saving Protection Pension Investment Important Neutral Least important Not important

6. You will prefer a policy with premium spread over. Less than 5 years 5 10 years 10 -15 years More than 15 years

7. Prioritize the Services you expect from Life Insurance providers (1 being the lowest and 5 being the highest)? 64

Features 1 Easy access ability to 2

Rating 3 4 5

deposit centre Time to time premium

collection Provision in case of dues Bonus and other schemes

8. According to you, in what areas should the Life Insurance companies work upon?( 1 being the lowest and 5 being the highest) Features 1 Less complicated procedures Fewer premiums More returns Transparency 2 3 Rating 4 5

9. Are you aware of HDFC Life Products? Yes No

10. How do you come to know about HDFC Life products? News Papers 65

 Television Internet Reference Group Financial Journals Any other (specify):

11. Are you willing to make an investment with HDFC Life? Yes No Not yet decided If No Specify reasons:

12. If yes which of the following plans you prefer to buy from HDFC Life. (1 being the lowest and 5 being the highest)? Features 1 Retirement Plans Health Plans Savings and Investment Plans Children Plans Protection Plans 2 Rating 3 4 5

Appendix: 2 66

Questionnaire for customer satisfaction towards HDFC Life Products and Services Which Age group you belongs to? Below 25 25 40 Above 40

Gender:

Male

Female

Occupation: Professional

Business Person

Govt. Employee

Any other (please specify) Annual Income (Rs): 1.5 lakh 5lakh Above 10 lakh 5 lakh 10 lakh

1. How do you come to know about HDFC Life? News Paper Television Friends and relatives Direct selling agents Internet Other (please specify)

2. Which of the following products you bought from HDFC Life?

67

 Retirement plans Health Plans Savings and Investment Plans Children Plans Protection Plans

3. How many policies do you have in HDFC Life? 1 2 3 >3 4. For how many years have you been the customers of HDFC Life? Less than 1 Year 1 2 Years 2 5 Years More than 5 Years

5. What is the Premium amount you are paying annually? Less than 10,000 10,000 20,000 20,000 30,000 More than 30,000

6. Are you satisfied with the policy you own? 68

 Extremely satisfied Slightly satisfied Neutral Dissatisfied Extremely dissatisfied

7. Were you given information about all the different policies available at the time you purchased the policy Yes No

8. Are the benefits received by your policy attractive and preferable? Yes No.

9. If you received any compensation and reward was it given to you in time as specified at the time of purchasing policy? Yes No

10. Do you agree that the customer need is properly judged by the company? Strongly agree Agree Neutral Disagree Strongly disagree 11. How do you feel about the ability of the employees to solve your queries? 69

 Excellent Good Average Fair Poor

12. How frequently are you contacted by company? Monthly Quarterly Half-yearly Yearly

13. What type of service system do you prefer? (Rank them)

Features 1 Personal Telephone Online internet 2

Rating 3 4 5

14. Are you satisfied with the HDFC Life Products that you own? 70

 Extremely satisfied Slightly satisfied Neutral Dissatisfied Extremely dissatisfied

15. How would you rate the overall services given by HDFC Life? Poor Average Good Excellent

16. Your opinion about the HDFC Life? Very good Good Average Bad Very bad

17. Would you like to recommend HDFC Life products to others? Strongly recommend To some extent Not recommend

18. Suggestions for HDFC Life?

71