IDBI Federal Life Insurance Company Ltd.

:
A study of Target Customer behavior and Marketing
approach

By

Sushnato Dutta

June, 2013
 IDBI Federal Life Insurance Company Ltd.:
A study of Target Customer behavior and Marketing
approach

By

Sushnato Dutta

Under the guidance of

Mrs.Shanthi Yagyanath Dr. D.P.Sahoo

ABH, Professor
IDBI Federal Life Insurance Co. Ltd IMT, Ghaziabad

June, 2013
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 Certificate of Approval

The following Summer Project Report titled " IDBI Federal Life Insurance Company Ltd.:
A study of Target Customer behavior and Marketing approach" is hereby approved as a certified
study in management carried out and presented in a manner satisfactory to warrant its acceptance as a
prerequisite for the award of Post-Graduate Diploma in Management for which it has been
submitted. It is understood that by this approval the undersigned do not necessarily endorse or approve
any statement made, opinion expressed or conclusion drawn therein but approve the Summer Project
Report only for the purpose it is submitted.

Summer Project Report Examination Committee for evaluation of Summer Project Report

Name Signature

1. Faculty Examiner ___________________ ___________________

2. PG Summer Project Co-coordinator ___________________ ___________________

3
 Certificate from Summer Project Guides

This is to certify that Mr. Sushnato Dutta, a student of the Post-Graduate Diploma in
Management, has worked under our guidance and supervision. This Summer Project Report has the
requisite standard and to the best of our knowledge no part of it has been reproduced from any other
summer project, monograph, report or book.

D.P.Sahoo Mrs.Shanthi Yagyanath

Professor, Asst. Branch Head,
IMT, Ghaziabad IDBI Federal Life Insurance Co. Ltd.
Coimbatore Branch

Date Date:

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 Acknowledgement

With pleasure, I express my sincere gratitude to my Project guide Mrs. Shanthi Yagyanath,
ABH at IDBI Federal Life Insurance Co, who spared her valuable time, gave me support to
work and complete this project in IDBI Federal Life Insurance Co Ltd., and guided me
throughout this project. It would not have been possible for me to complete the project
without her timely encouragement and advice at every stage of the project.
My deep sense of recognition to Mr. Mahesh for his support and guidance. Thank you sir.

I would like to give special thanks to my Institute faculty Prof. D.P. Sahoo, who ensured that
I was going about my project without any issues. Last but not least I would like to thank
all my friends who have helped me with their innovative ideas and suggestions.

Sushnato Dutta
12DCP-114

5
 ABSTRACT

The insurance sector in India is a highly competitive sector with many players in the fray.
Coupled with lower risk taking tendencies of Indians, the sector can be best described as
having cut throat competition.
Under these conditions, it is extremely necessary for a player to walk the line according to the
customer’s changing needs and demands.
Also brand visibility and recognition is a must as most of the investment options are of the
nature of long term back up plans for more risky prepositions like stocks, real estate and
bullion.
Also, a product or brand can’t be everything to everybody and hence must be positioned in the
market in such a way that it specifically caters to a select few segments and slowly penetrate
into others while retaining the base.
Keeping in view the same, this study was designed to analyse and recommend on these two
areas regarding the target customer, their behavior and the effectiveness of current marketing
approaches and expectations of the customer from IDBI Federal Life Insurance Co. Ltd.
The major findings are:
1. The average population is basically risk and uncertainty averse.
2. Age and annual income affect the purchasing and investing decisions of customers.
3. Brand visibility of IDBI Federal is low.
4. Peer recommendation of a product is the ultimate validation of the same and hence
must be used for marketing purposes.
5. Customers also value ease of investment fairly highly
6. There is a marked difference in the decisions of those in the last leg of their jobs and
the rest.
7. Apart from peer recommendation, the leading channel of advertising comes out to be
newspapers

The research methodology used consisted of:

1. Interview of professionals for collecting in depth qualitative data.

6
2. Study of secondary data sources
3. Quantitative descriptive analysis
Major quantitative data sources were the random sample responses to the survey
comprising mainly of earning persons. 286 quantitative responses were collected in Pune
and Kolkata as well as other cities.

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 TABLE OF CONTENTS

PAGE NO.

ACKNOWLEDGEMENT 5
ABSTRACT 6
TABLE OF CONTENTS 8
LIST OF FIGURES 10
LIST OF TABLES 11
LIST OF ABBREVIATIONS 12

1. INTRODUCTION 13

1.1 INDUSTRY PROFILE 13

1.2 COMPANY PROFILE 16
1.3 PRODUCT RANGE 19
1.4 MANAGERIAL PROBLEM UNDER STUDY 21
1.5 BENEFITS TO THE COMPANY 22
1.6 PROBLEM FORMULATION 22
1.7 LITERATURE REVIEW 23
1.7.1 BENCHMARKING 23
1.7.2 INSURANCE 24
2. RESEARCH PROBLEM 26

3. RESEARCH DESIGN 27
3.1 METHODOLOGY 27
3.2 SAMPLE OR DATA SOURCES 27
3.3 DATA COLLECTION PROCEDURE 28
3.3.1 INTERVIEW 28
3.3.2 SURVEY 30

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 3.4 DATA ANALYSIS AND INTERPRETATION 30
3.4.1 QUALITATIVE DATA ANALYSIS 30
3.4.2 QUANTITATIVE DATA ANALYSIS 32
4. RESULTS AND CONCLUSION 39
4.1 QUALITATIVE 39
4.2 QUANTITATIVE 39

5. RECOMMENDATIONS 46
6. REFERENCES 47

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 LIST OF FIGURES

Figure Particulars Page No.

1. Figure 1 Market share of Insurance firms in India 16

2. Figure 2 Share of holding companies in IDBI Federal Life Insurance Co. Ltd.
17
3. Figure 3 External influences on buying decision process 24
4. Figure 4 Age distribution of respondents 33
5. Figure 5 Income distribution of respondents 34
6. Figure 6 Recalling advertisement campaign by IDBI Federal Life Insurance Co. Ltd.
37
7. Figure 7 AIDA scores 38

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 LIST OF TABLES

Table No. Particulars Page No.

Table 1 Risk, uncertainty and comfort in investment 34

Table 2 Segmentation and comparisons 41

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 LIST OF ABBREVIATIONS

1. GDP- Gross Domestic Product

2. LIC- Life Insurance Corporation
3. ICICI- Industrial Credit and Investment Corporation of India
4. SBI- State Bank of India
5. NSE- National Stock Exchange of India Limited
6. SHCIL - Stock Holding Corporation of India Ltd),
7. CARE - Credit Analysis and Research Ltd)

12
 CHAPTER 1

INTRODUCTION

Insurance is a sector that thrives mostly on an individual’s desire to minimize the

uncertainties of the future. The uncertainty could be regarding anything ranging from life
to commodities, income and various assets (animate or inanimate)
In 2011 -12, the Indian economy, in terms of GDP measured a growth rate of 6.5%. A
reduced GDP means reduced disposable income amongst general population and hence
reduced spending on financial instruments. Thus, in 2011-12, the growth rate of the
“Banking, Financial services and Insurance” sector slowed down from 10.4% to 9.6%

1.1 INDUSTRY PROFILE

As already introduced above, insurance means managing risk and uncertainties of the
unforeseeable future.
As in the case of life insurance, the insured person tries to safeguard against his/her
unforeseen demise. This is especially done when they have dependent family members. The
insurance company works mainly by collecting premiums from policy holders, investing the
money (usually in low risk investments), and then reimbursing the same money along with
added benefits when the policy matures or, the person passes away in accordance with the
premeditated policy terms .

Shorter the probable life span, the higher the premium that person has to pay so as to
safeguard his interests. The case is the same for all other types of insurance, including
automobile, health and property.

The Insurance Act of 1938 was the first legislation governing all forms of insurance to
provide strict state control over insurance business.

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Life insurance in India was completely nationalized on January 19, 1956, through the Life
Insurance Corporation Act. All 245 insurance companies operating then in the country were
merged into one entity, the Life Insurance Corporation (LIC) of India.

But economic liberalizations of early 90s opened up the market for private players who
willingly entered the market seeing immense potential in the huge progressive population.

As of September, 2012, there were 52 insurance companies operating in India; of which 24

are in the life insurance and 27 in the non-life insurance business. In addition, General
Insurance Corporation (GIC) is the sole national reinsurer.

The life insurance industry recorded a negative growth of 1.57% in 2011-12 as compared to
the previous fiscal year. Private sector insurers suffered more with a decline of 4.52% (11%
growth in previous year) in the premium income, whereas Life Insurance Corporation (LIC)
registered a 0.29% decline (9.35% growth in previous year).

The insurance sector in India has grown at a fast rate post-liberalization in 1999. In the last
decade, total premium grew at a CAGR of 25% and reached a total of $67 billion in 2010.
Indian Life insurance industry (contributing 88% of total Life and General insurance premium
in India) has emerged as the 9th largest life insurance market in the world. Yet, Insurance
penetration (which is the ratio of premium underwritten to GDP) was only at 5.2 % in 2010 –
significantly lower than Asian counterparts like South Korea, Taiwan, Japan and Hong Kong
which boast an insurance density greater than 10%.

This gives interested service providers an excellent opportunity to tap the untapped market.
This has resulted in a fast growth of the insurance sector throughout the previous decade.

Growth for this sector is being fuelled by the following:

1. Growing population base,
2. Rising purchasing power,
3. Increased insurance awareness,
4. Increased domestic savings and

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 5. Rising financial literacy.

List of Life Insurance companies in India in descending order as per the market share:

1. Life Insurance Corporation of India

2. ICICI Prudential
3. SBI Life Insurance Company Limited
4. Reliance Life Insurance Company Limited - Formerly known as AMP Sanmar LIC
5. Max New York Life Insurance
6. HDFC Standard Life
7. TATA AIG Life Insurance
8. Bajaj Allianz Life Insurance
9. Birla Sunlife
10. MetLife India Life Insurance
11. ING Vysya Life Insurance
12. Kotak Life Insurance
13. Aviva Life Insurance
14. ING Vysya Life Insurance
15. Bharti AXA Life Insurance Co Ltd
16. IDBI Federal Life Insurance Co Ltd

As per the IRDA 2011-12 annual report:

1. LIC has a total share of 70% in the total premium collected

2. Private sector companies have only 30% combined.

This 30% share is further shared up by the other players as follows:

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 Max New York Kotak Mah
Met Life
8% 4%
Reliance Life 5%
Tata AIG
8% 7% ING Vysya
Aviva 2%
Birla Sunlife 3% Shriram life
7% Others 1%
1%
HDFC Standard
8%
ICICI Pru
SBI Life
22%
10%
Bajaj Allianz
14%

Figure 1

In such a competitive market, differentiation in the services provided becomes necessary for
profitable growth. In the new order, innovating across the business lifecycle has become a
necessity. The competition in this sector has intensified post reforms.

1.2 COMPANY PROFILE

IDBI Federal Life Insurance Co Ltd is a joint-venture

venture of IDBI Bank, Federal Bank and
Ageas, a multinational insurance giant based out of Europe. In this venture, IDBI Bank owns
48% equity while Federal Bank and Ageas own 26% equity each
each.

Equity holding pattern:

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 Ageas
26%
IDBI Bank
48%
Federal
Bank
26%

Figure 2

Having started in March 2008, in just five months of inception IDBI Federal became one of
the fastest growing new insurance companies to garner Rs
Rs.100
100 Cr in premiums.

The company offers its services through a vast nationwide network across the branches of
IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners. As on
January 31st 2011, the company has issued over 2.68 lakh policies.

Sponsors of IDBI Federal Life Insurance Co Ltd

IDBI Bank Ltd.

Created in 1956 to support India’s industrial backbone, IDBI Bank has since evolved into a
powerhouse of industrial and retail finance. Today, it is amongst India’s foremost commercial

17
banks, with a wide range of innovative products and services, serving retail and corporate
customers in all corners of the country from 783 branches and 1328 ATMs.

The Bank offers its customers a variety of services including project financing, term lending,
working capital facilities, lease finance, venture capital, loan syndication, corporate advisory
services and legal and technical advisory services to its corporate clients as well as mortgages
and personal loans to its retail clients.

IDBI Bank was instrumental in sponsoring the development of many key institutions of
Indian financial sector like:

1. National Stock Exchange of India Limited (NSE)

2. National Securities Depository Ltd,
3. SHCIL (Stock Holding Corporation of India Ltd),
4. CARE (Credit Analysis and Research Ltd).

Federal Bank is one of India’s leading private sector banks, with its main presence in
Kerala. It has a strong network of over 739 branches and 797 ATMs spread across India. The
bank provides over four million retail customers with a wide variety of financial products.
Federal Bank is one of the first large Indian banks to have an entirely automated and
interconnected branch network.

In addition to interconnected branches and ATMs, the Bank offers a wide variety of services
expected of a modern bank. The Bank has been a pioneer in providing innovative
technological solutions to its customers and has won several awards and recommendations.

Ageas is an international insurance company with a legacy of more than 180 years. One of the
top 20 insurance companies in Europe, Ageas aims to concentrate its business activities in
Europe and Asia, which take up the king’s share of the global insurance market. They are
grouped around four business segments: Belgium, United Kingdom, Continental Europe and
Asia.

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It is an undisputed leader in the Belgian market for individual life and employee benefits, as
well as a leading non-life player, through AG Insurance. Internationally Ageas has a strong
presence in the UK, where it is the third largest player in private car insurance.

Ageas employs more than 11,000 people worldwide and has annual inflows of almost 16
billion Euros.

1.3 PRODUCT RANGE

IDBI Federal has a wide range of products ranging from life to non-life insurance products.
All the products are as follows:

INCOMESURANCE: IDBI Federal Incomesurance Endowment and Money Back Plan is

loaded with lots of benefits which ensure that you get Guaranteed
Annual Payout along with insurance. Incomesurance Plan is very
flexible and allows the policy holder to customize their plan as per their
individual and family’s future requirements. Moreover it also allows
flexible Premium Payment Period, Payout Period, Payout Options and
more.

HEALTHSURANCE: This insurance plan offers a host of features and benefits that are
designed to help manage the extra financial burden that comes with
hospitalization.

CHILDSURANCE: It allows the policyholder to create, build and manage wealth by

providing several choices and great flexibility according to specific
needs. However, what makes Childsurance unique is its powerful
insurance benefits. It allows protecting the holder’s child plan with triple

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insurance benefits so that the wealth-building efforts remain unaffected by unforeseen events.

HOMESURANCE: IDBI Federal Homesurance Protection Plan provides

full insurance cover for properties even under construction, thus ensuring
that the beneficiary gets the full sanctioned amount in case of any
unfortunate event. It also has an innovative fixed period cover for those
who would aim to prepay their loans early.

WEALTHSURANCE: The Wealthsurance Milestone Plan enables the policyholder to save

and build wealth to meet their financial goals. This Plan comes with a
wide range of 13 investment options and 7 insurance benefits - all
packaged with a low charge structure and flexibility.

BONDSURANCE: Bondsurance is designed for customers looking for

guaranteed returns which will not get affected by financial market
conditions. It offers guaranteed return on investment along with life
insurance cover.

MICROSURANCE: IDBI Federal Microsurance Plan is a one of its kind insurance plan

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which can be very useful for various Micro Financial Institutions and NGOs, wherein not only
the members but even the member’s family gets an insurance cover.

TERMSURANCE: IDBI Federal Termsurance Protection Plan offers the unique Increasing
Cover option that automatically increases the cover every year without
increasing the premium.

LOANSURANCE: Loansurance is a cost-effective way to ensure that the outstanding debt is

settled in the unfortunate event of death of the insured member. This
term assurance plan provides cover to a person directly liable for loan
repayment (and the partners, in case of a partnership), as per the benefit
schedule.

1.4 Managerial Problem under study

During the course of initial selling phase, I came across a variety of prospective consumers
who had varied degrees of willingness to accept the product. But a common pattern also was
emerging. Some of which were:
1. Lack of brand awareness of IDBI Federal Life Insurance Co. Ltd.
2. Constant comparison with LIC
3. Different behavioural and perceptive patterns across various demographic groups.
4. Lack of trust
All these factors together fired the extreme need for proper segmentation of various customer
bases and hence different approach for each of them.

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The current selling techniques of referrals and cold calls are tried, tested and well exploited
but a few more options can be exercised so as to extract maximum benefits from each of the
marketing activities.

1.5 Benefits to the company

Knowing the target and its weaknesses is half the battle won. By bringing out the various
traits and preference patterns, the marketing approach has to be streamlined and modified
according to the target market needs. It is well known that one approach can’t be used for all.
Unfortunately this is the norm nowadays and before approaching a customer, knowing his
preferences is a wise idea.
Through this research, I will try to bring out certain shortcomings of the company regarding
their marketing or managerial activities.

1.6 Problem Formulation:

• Being a new player in the market, the company needs a strong brand awareness
campaign as it is pitted against a heavyweight i.e. LIC
• How to approach a prospective client and what to expect from them.
• Why a person may or may not buy your product.
• Awareness of financial instruments in India varies from section to section. Increasing
this awareness level in certain areas might increase the customer base of IDBI Federal.
• Today, a huge section of the population avoids financial instruments due to low
income and mistrust. Tapping this market may give volume and result in economies of
scale for the company.

Therefore, the objectives would be:

To differentiate the consumers/prospective consumers into identifiable segments

To ascertain the strengths and weaknesses of each segment

Formulate differential strategies for each segment
The final question is:

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 1. What is the brand awareness of IDBI Federal Life Insurance Co. Ltd?
2. What is the general attitude of different segments

1.7 Literature Review:

1.7.1 Consumer Behaviour:

Consumer behavior is the study of individuals, groups, or organizations and the processes
they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy
needs and the impacts that these processes have on the consumer and society.
Nowadays it is absolutely necessary to modify and present the products according to
consumer needs because in the era of open markets and perfect competition, if you don’t do it
someone else will and you will lose out.

Categories that Effect the Consumer Buying Decision Process

A consumer, making a purchase decision will be affected by the following three factors:

1. Personal: This is an absolutely personal decision due to personal traits like

demographic characteristics
2. Psychological: This effect is basically a reaction to the emotions that a particular
product or its marketing evokes
3. Social: The social structure and acceptance level determines the decision process

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The marketer must be aware of these factors in order to develop an appropriate Marketing mix
for its target market.

Figure 3

1.7.2 Benchmarking
Benchmarking is the procedure of comparison of attributes against pre set standards or
existing practices.
For benchmarking, a specific indicator is required. This indicator basically acts as a scale or
measurement unit and could be anything from efficiency, effectiveness, mileage, cost per unit
etc etc.
In the current study, thee suggested benchmarking types are:

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1. Process Benchmarking: To observe and investigate business processes for identifying the
best business practices.
2. Functional Benchmarking: To focus on one specific function.
3. Best -in-class Benchmarking: The best competitor has to be studied.
4. Performance benchmarking - Allows the initiator firm to assess their competitive position
by comparing products and services with those of target firms.

As gauged from the results of the study, proper benchmarking standards would be suggested.
1.7.3 Insurance
Insurance is in simple terms a way of reducing the risk associated with uncertainty of the
future.
This uncertainty is reduced by paying premiums and claiming compensation along agreed
lines in case of any eventuality.

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 Chapter 2
Research Problem
The whole research that is being conducted is based on the product called Incomesurance. The
reasons behind focusing the study on a particular product are as follows:
1. The sales connection of our internship with Incomesurance.
2. Availability and accessibility of sample population for systematic analysis.
3. Scope and duration of project constrains the studying of the huge insurance
sector as a whole.
Incomesurance aims to target the salaried class, so we can safely assume that they are our
target customers.
A qualitative study has been planned to ascertain the following:
1. Segmentation of the market (Salaried class is the market)
2. Customer perception of the product
3. Identifying the types of customers we are supposed to deal with.
4. Forming a brief character description and hence strategizing a different approach for
each of the segments
Segmentation is necessary as a full out marketing strategy can not only consume valuable
resources but also result in dilution of brand value.
If one thing is available to everyone without any change in its value or at least perception, it
becomes a general product. To avoid these problems, segmentation is necessary. But for the
segmentation to take place, a systematic interview process is to be carried out throughout a
sizeable heterogeneous sample population so that we can have a rough hang of the population
while discussing and implementing strategies.

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 Chapter 3
Research Design
The research was designed to collect necessary data from the sample population in step wise
fashion. Also the two stage process ensured formation of segments as a hypothesis and
vindication of the hypothesis through extensive surveys.
3.1 Methodology
For the same an extensive market research programme was carried out in two stages:
1. Interview and evaluation of sample population for the purpose of segmentation.
2. Survey (Both online and door to door) to help in target setting of target segments and
also to collect a heterogeneous data for cross checking against the assumed hypothesis.

The two different methods will produce qualitative as well as quantitative data that will help
in the following ways:

1. Qualitative data will help in looking at the physical and emotional side of the
prospective consumers and at the same time quantitative data will pin point at various
aspects of our research in accordance to the existing scenario.
2. Both kinds of data will cross check against each other.

This methodology involves extensive field exposure at both the levels and data was collected
on the basis of pure interviews as well as during sales calls so they are based very much on
the views and perceptions of the end consumers and free of any bias.

3.2 Sample or data sources

All the data that has been collected are primary data collected through personal endeavours on
and off the field.

Sample for interviews:

1. Professionals in Pune
2. Professionals in Kolkata

Sample for survey:

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

3.3 Data collection procedure

As already stated, data collection happened in two stages for both the qualitative and
quantitative data.

The two stages for data collection were:

1. Interviews
2. Survey

Below are the detailed data collection procedures for both the stages.

3.3.1 Interview

For the interview purpose, the following questions were asked:

1. What is your age?
2. What is your salary?
3. At this level of your career, at what salary would you think that you have gone up by a
level? (This question is important for setting different income brackets)
4. What are your biggest needs and drivers for investment? That too if required? (Open
ended question)
5. Your perception and evaluation of various investment options available? (Open ended
question)
6. Your views about Insurance? (Open ended question)

These questions were designed to bring out a marked trend regarding similarities or
dissimilarities of different individuals being interviewed.

The initial target was to interview more than 100 professionals from all walks of life but the
scope and time constraints made it possible to interview only 100 professionals from all walks
of life and different backgrounds.
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Though the results that were achieved were pointing towards a clear differentiation of
segments.

For the segmentation purpose, the following parameters would be considered:

1. Understanding of the different investment options:
A policy or a financial instrument can be sold or not sold to a person based upon his
or her understanding of money and investment. This plays a significant part in
targeting a consumer as we can easily talk to those who have a basic idea of the option
they have in their hands.

2. Risk aversion:
A person who is risk averse is more likely to invest in traditional plans than in market
related plans. In some cases, this risk aversion may also lead to extreme investment
behavior where the investor refuses to invest in private sector instruments.
3. Work experience:
Work experience is a vague indication of age and experience with financial situations.
The more mature a person is in these areas, the better is his understanding and easier it
is to convey the different benefits being provided.
4. Income:
A person’s income lets him or her decide on the various expenses he or she would be
making. Generally the relation is higher the income, higher the expenses.
5. Disposable income:
Disposable income is another indicator of the ability of a particular person to invest
6. Existing investments:
Existing investments play a big role in determining the propensity of a person to invest
in newer instruments.

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3.3.2 Survey

The survey was floated on the internet for disseminating it to a large number of public over
the internet so that it can overcome the possible limitations that occurred during the
qualitative data collection only over two geographical areas. In principle, Pune and Kolkata
have a cosmopolitan population due to presence of many industries.

The survey was at first prepared using google docs and the link was sent to professionals via
emails and professional group discussions.

To also include people from various walks of life, door to door surveys were conducted on
pen and paper. Random people were approached and asked to respond to the survey
questions.

The results provide some conclusive proofs which are discussed in the following sections
under relevant titles.

3.4 Data analysis and interpretation

3.4.1 Qualitative data analysis

As discussed in the methodology, the people interviewed on the basis of the questions posed
to them clearly show formation of distinctive segments with marked differences from each
other.

This analysis made use of the Grounded Theory as well as Case Study approach for collection
and analysis of data.

Analysing the interviews, the following segments have come up:

1. The Beginners:
Profile analysis: New to the professional world and looking forward to consolidation of their
position both socially and professionally. Highly optimistic about saving and investment yet
depend a lot on their seniors (parents, boss, college seniors etc) for advice. They come under

30
the income bracket of up to 6 lakhs p.a. Work experience varies from 0 to 5 years. Age limit
is 22 to 28

2. The Crossovers
Profile analysis: Professionals who have matured into reliable entities in their respective fields
of work. Highly optimistic about investments and more willing to take risks. They prefer
playing it safe and have a minimum fallback plan just in case their risks don’t pay off. Most of
the people in this age group also start understanding the value of money and hence
investment. A starting point for having a family, this segment also thinks on lines of savings
for family and future but still avoid big investments. They come in the income bracket of 6 to
10 lakhs p.a. and work experience varies from 5 to 10 years. Age bracket is 28 to 35 years
3. The Achievers
Profile analysis: Professionals who have reached a level in their lives where they can cool
their heels for a time. This segment looks for ease of options and retains the risk taking habits
of the crossovers up to some extent. But family and other responsibilities tend to make this
segment increasingly more risk averse. Professional peers are a big source of inspiration for
this segment. But this segment looks forward to investing in big amounts and hence is ripe for
approach. But many of them already have investments from their previous stages so count
tends to be low. Income bracket for this segment is 10 to 18 lakhs. Work Experience is 10 to
25 years and age is between 35 to 50 years.

4. The Desperate Fliers

Profile analysis: Professionals who have spent their lifetime looking after their own needs and
now aspire to provide for their children. They go for term based plans and many of them opt
for pure Life Insurances too. This segment suffers from a realization of ending innings and
often look for assured investment options that are safe, guarantee income and provide
liquidity. The age bracket for this segment is 50 to 60 years .Income bracket is 18 lakhs and
above.

31
5. The underachievers
Profile analysis: This segment is an amalgamation of those professionals who come under the
low income group. Surprisingly, their behavior is same across the ages and is somewhat
similar to the beginners but a few factors like lower literacy and higher sense of insecurity
make them absolutely suspicious about such investments. Yet, the amount of peer trust is very
high in this segment and hence peer referrals work wonders. If they do invest, their instrument
of choice is Post office RDs and at the most LIC. But this untapped market may sway in
favour of any instrument that might demand a premium of Rs. 5000 or less p.a. and at the
same time with flexibility of payment options. This segment is low income with income
ceiling of 2 lakhs p.a.

3.4.2 Quantitative data analysis

The quantitative data collected was analysed on the basis of the step by step questions posed
to the respondents and the responses recorded. Since the quantitative data was gained from
online as well as door to door approaches, they provide additional insights too.

The following is the step by step analysis of each and every question and the corresponding
responses.

Before that, a few important data regarding the survey:

1. Sample Size: 286

2. Scope: Salaried professionals throughout India

The following are the question wise analysis:

32
 1. What is your age?
This question served two purposes at the same time:
a. It helped ascertain the age distribution of the sample
b. It acted as an ice breaker so that the respondent could reply at ease
without any bias.

The age distribution of the respondents was as follows:

51 to 60 years
8%
36 to 50 years
12%
28 to 35
years
5%

22 to 28 years
75%

Figure 4

This age distribution truly reflects the consistent census reports which claim that India is a
young country. Indeed it is!!!

2. What is your present Annual Income?

Annual income also indicates the likelihood or at least the approachability of the subject.

The following income profile shows a few revealing facts

33
Figure 5

It should be noted that the category of “below Rs. 2 lakhs” are the ones who could be
approached. If proper efforts are made then hi
considerably.

3. For good returns from an investment, how much of the following attributes are you ready to
endure?

This question was designed to ascertain the risk taking/av

respondents.
Most literatures and publications describe Indians as risk averse. Hence, people in India
mostly rely on instruments that are reliable and low risk

The results are tabulated as follows:

Attribute

Risk
Uncertainty 2.34375

The plan being presented by an unknown

person 2.40625

Liquidity 3.171875

Payment Options 3.484375

Table 1

The technique used here is the five point Likert scale. A five point Likert scale gives the
respondent a chance to give an unbiased response.
As per the Likert scale used in this particular question, the below illustration will help in
clearing up a few doubts:
Likert scale for Tolerance
1______2______3______4______5
As we can see, any value below 3 is indication of somewhat low tolerance level and above 3
tends to be higher.
As we can see from the table above, the average of the samples pertaining to risk taking and
uncertainty is somewhat at lower tolerance levels (below 3).
Whereas when provisions are sought for ease of consumers, the tolerance suddenly becomes
high.
4. Whenever you hear about Insurance, which two companies come to your mind?
This question had been deliberately left as open ended to ascertain two things:
1. To gauge the brand awareness of different brands
2. Knowledge of life insurance instruments.
And the analysis gives some excellent results on the lines of higher market shares.

35
The analysis of this shows that higher the brand awareness, higher is the market share of the
product.
5. How much do you prefer insurance over other instruments like shares, gold, FD etc?
The likert scale has been again used in this case.
Likert scale for preferance
1______2______3______4______5

Result of the survey using Likert scale again shows us the sample average which is 2.83 i.e.
on the low preference side.
Thus insurance is surely not an instrument of choice for investment purposes amongst
Indians.
6. What is your preferred channel of communication regarding Insurance and allied products?
This question aims at directly asking the customer as to how they would prefer to be intimated
regarding latest offers. The result could be used for a marketing approach in selling insurance
policies. But as it is, the prevalent strategy in the insurance sector is push strategy and selling
concept where the product is shoved at the consumer at our own terms and not according to
the consumer’s needs.
The response for the question was intended to encompass all the preferred channels of
communication and not just one, so most of the respondents gave multiple answers.
By analyzing the responses, the following could be ascertained:
1. Peer referral is the most widely preferred channel of communication.
2. Newspaper follows closely followed by magazines and TV commercials.
3. Cold calling is the most unpopular channel.
7. Can you recall any advertisement campaign by IDBI Federal Life Insurance?
This was a real life testing of the marketing efforts of IDBI Federal Life Insurance Company.
The results are as follows:

36
 Yes
23%

No
77%

Figure 6

Only 23% remember an ad campaign by IDBI Federal Life Insurance Company.

This is a big wakeup call for the firm and may be held accountable for the low brand
awareness compared to the other brands. It also reaffirms the classic belief that awareness
brings business.
8. View our website through the link below and rate the following attributes on a scale of 1 to
5? 1being the least and 5 the highest score.
The website is a gateway and first impression of the company. It can either make or break
business. So the respondents were shown the website and were asked to rate the website on
the basis of AIDA (Attention Interest Desire Action
Action) plan.
The following is the graphical representation of the average of the sample population against
Likert scale.

37
 Action inducing

Desire Creating

Interest
generating

Attention seeking

1 2 3 4 5

Figure 7

It could be seen that the website scores fairly in getting the consumer’s attention and
generating interest but scores lowly on the desire and action front.

38
 Chapter 4

Results and Conclusion

4.1 Qualitative

1. The Beginners:
Analysis: If adviced correctly or attracted with investment options of lower dimension
(Below Rs. 10000 p.a.) this segment feels much more comfortable. Also, backing up
investment options through elders increases the chances of conversion
2. The Crossovers
Analysis: If played on their risk taking tendencies correctly then a complete set of plans can
be sold to them. Plans which offer higher flexibility and liquidity are more attractive to them.
3. The Achievers
Analysis: Large volume on single sales is possible. Since peers are important for this
segment, penetration marketing is a good practice.
4. The Desperate Fliers
Analysis: If presented with an option which can give guaranteed returns on a time bound
basis, this segment will go for the same. Time and returns are of essence for this segment
5. The underachievers
Analysis: Though financially weak, this segment exists of a huge chunk of population as is
lucrative because of its numbers. Ignoring the same is not advisable.

4.2 Quantitative

The above analysis presents a general view of the sample which can be an indicator of the
population as a whole. But to achieve aggressive targets and maximise profits, IDBI Federal
Life Insurance Company Ltd. Should identify target segments and focus on its marketing
strategies accordingly.

For the same purpose we can see that though the relatively small sample size is not that much
reliable but a clear trend emerges from the various data collected.

39
The results have been summarised in the following table and very clearly shows that most of
our segmentation done under qualitative research is validated. But it also throws up some
unexpected results.

The table is as follows on the following page.

The segments highlighted by green are the probable target segments. They have been chosen
as such because:

1. Similar preferences
2. They match our qualitative profiling
3. Responses are conducive to investment

40
S.
Questions Sample Average of segments (Based on Income) Average of segments (Based on Age)
No.
Rs.6 Rs.10 Rs.
Rs.2 lac 28 to
Below lac to lac to 18 lac 22 to 28 36 to 50 51 to 60
to 35year
Rs.2 lac Rs.10 l Rs.18 l and years years years
Rs.6 lac s
ac ac above
36 to
What is your 22 to 28 22 to 28 51 to 60 51 to 60
1 50 x x x x
age? years years years years
years
Rs.6 Rs.10 Rs.
What is your
Up to 6 lac to lac to 18 lac
2 present Annual x x x x x
lac Rs.10 l Rs.18 l and
Income
ac ac above

For Risk 2.8 2.5 2.9 2.8 2.0 2.0 2.8 4.7 2.3 2.2
good
returns
Uncert
3 from
ainty
an 2.3 2.1 2.3 2.5 2.0 3.3 2.3 4.0 2.3 2.2
(of the
invest
amount
ment,
of

41
 how return)
much
of the The
followi plan
ng being
attribu present
tes are ed by 2.4 2.0 2.5 2.8 1.8 2.7 2.4 3.3 2.5 2.2
you an
ready unkno
to wn
endure person
?
Liquidi
ty (
Ease of 3.2 2.9 3.2 3.0 3.5 3.0 3.2 3.0 2.9 3.6
convers
ion to
cash)
Payme
nt 3.5 3.4 3.6 3.5 2.5 3.3 3.6 3.3 3.0 3.0
Option

42
 s

Whenever you
LIC LIC LIC LIC LIC LIC LIC LIC LIC LIC
hear about
Insurance, which
4
two companies ICICI No No No No
come to your and clear clear clear clear
ICICI ICICI ICICI ICICI ICICI
mind? Bajaj prefer prefere prefere prefere
Allianz ence nce nce nce
How much do
you prefer
insurance over
5 other 2.8 2.2 3.0 3.1 2.0 3.7 2.7 4.7 2.8 3.0
instruments like
shares, gold, FD
etc? []
What is your
Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer
preferred
referral referral referral referr referral referral referral referral referral referral
channel of
6 , , , al, , , , , , ,
communication
Newspa Newspa Newspa Magaz Newspa Newspa Newspa Newspa Newspa Newspa
regarding
pers pers pers ines pers pers pers pers pers pers
Insurance and

43
 allied products?

Can you recall

any
advertisement
7 No No No No Yes No No Yes No No
campaign by
IDBI Federal
Life Insurance?
View Attenti
our on 3.1 2.6 3.1 3.8 2.5 2.3 3.0 4.0 3.6 2.6
website seeking
throug Interes
h the t
8 3.1 2.7 3.1 3.3 2.8 3.3 3.1 3.7 3.0 3.0
link generat
below ing
and Desire
rate Creatin 2.7 2.4 3.0 2.9 2.0 2.0 2.8 4.0 2.0 2.2
the g

44
 followi
ng
attribu
tes on
a scale
of 1 to
Action
5? 1
inducin 2.5 2.3 2.8 2.4 1.8 1.3 2.7 3.0 1.6 1.8
being
g
the
least
and 5
the
highest
score.
Table 2

45
 Chapter 5

Recommendations

The following are the recommendations suggested for IDBI Federal Life Insurance Company
Limited based on the results of the qualitative and quantitative research:

1. Targeting the segments that have an income of below 2 lacs and up to 10 lacs will give
optimum results.
2. The product (Incomesurance) has to be positioned as a low risk, sure returns back up
plan for risky and high returns investments. A direct clash with established brands will
result in comparison over a whole range of products.
3. Marketing efforts have to be increased through peer recommendations (referrals) and
newspapers as customers find them very reliable.
4. Unfortunately, these target segments are the ones who have no recollection of any
IDBI Federal Marketing activities, so we are losing out on valuable market share due
to lack of visibility. Another reason to beef up the marketing activities
5. Benchmarking against LIC and ICICI for best instrument and operational practices is a
good idea as customer aspirations are gauged against these two giants mainly.

46
 Chapter 6

References

Books

• Bogan, C.E. and English, M.J. (1994:). Benchmarking for Best Practices: Winning
through Innovative Adaptation. New York: McGraw-Hill
• Kotler, Philip & Keller, L. Kevin (2012). Marketing Management 14e. Pearson
Education Limited 2012
• Zikmund, W.G.; Babbin, Barry J.; Carr, Jon C. and Griffin, Mitch (2013), Business
Research Methods, South-Western CENGAGE Learning, USA.

Article in a Newspaper

• Brooks Peter (2011), Indian investors are less risk taking compared to Hong Kong,
Taiwan and Indonesia: Peter Brooks, Barclays Wealth,The Economic Times, Jul 8

Websites

• www.idbifederal.com
• www.policybazaar.com

47