Ans.

01) Service marketing mix refers to the combination of marketing activities an organization
engages in to promote and sell intangible services, as opposed to tangible products. In addition to
the four Ps of traditional product marketing — product, price, place and promotion — the services
marketing mix includes the three Ps of service marketing: people, process and physical evidence.
The services marketing mix is also referred to as the extended marketing mix.
In case of Mutual fund, Returns are determined by Managerial efficiency and investment strategy.
Mutual fund marketing strategies is successful if it creates confidence among potential investors
and strengthens their desire to put their money with a particular fund.

1) Product: - Mutual fund as a product is the investment, which the investors hold. The steps,
which are involved in the formulation of the schemes or product designing, are conceptualisation,
drafting, test marketing, approval and authorisation of the scheme. Since mutual fund is a service,
there is a little element of physicality. Physical evidence is the Mutual fund documents and the
statements that are received periodically. Mutual fund managers want to deliver good quality at a
reasonable cost, but the managers cannot make any promises about the future performance of the
investment since a mutual fund is not a consumer product with consistency of performance. There
are number of mutual fund schemes that are floating in the market. One mutual fund house deals
in many schemes. The product line of the mutual fund houses ranges from 30 to 300 schemes in
India as market segmentation is done to cater to all the specific investment demands of the
customers. Market segmentation increases product differentiation, limiting competition to the funds
belonging to the same category, while fund proliferation increases market coverage. It relies either
on the creation of many funds in order to hide the poor performers merging them into the best
ones. Sponsors of the mutual funds make efforts to differentiate their products and bring in
recognition of their brand names in the consumers as it leads to product identification at the market
place. It is seen that Mutual funds in India have been quite successful in brand policy and brand
identification.
2) Place: - Place or the marketing channel describes the groups of individuals and companies,
which are involved in channelizing the flow and sale of product and services from the provider to
the eventual customer. In mutual fund also there are channels broadly defined as ‘direct’ or
‘indirect’. Direct channels involve the movement and sale of products directly between the provider
and the customer as in the traditional branch network, whereas in the case of indirect channels
product flows via intermediaries and middlemen. Traditionally mutual fund has been via the branch
network, but now different approaches are adopted.
3) Promotion: - With globalisation the entry of multinational corporations propelled due to which
the market changed into a buyers’ market and due to the sudden competition growth, the domestic
mutual fund industry was shaken. Promotional efforts should be stimulating and motivating enough
to generate interest in and promote a positive attitude towards a Mutual fund house so that they
will be considered favourably in comparison with the competitors. As there are so many players in
the Mutual fund Industry, to choose one mutual fund over the other becomes very difficult for the
investors. This has led the mutual fund to follow aggressive promotional techniques. Besides
leading National Dailies, funds regularly advertise in business newspapers and magazines.
4) Pricing: - Price competition involves using low prices as a competitive tool to attract customers.
As the price of the mutual fund is dependent upon the price of the underlying shares. Therefore it
is the distribution cost not the manufacturing cost in Mutual fund that separates one competitor
with another. One of the advantages of Mutual funds that it discloses its entire fee charged.
5) People: - Mutual fund marketers need to develop a high level of inter personal skills and
customer oriented attitude in employees for the simple reason that employees in services are the
key to service experience. All employees in the mutual fund house have an effect on the sale of
the products. This is true of frontline a staff that has direct control with customers; they provide the
link between the Mutual fund and the investors. To the investor they represent the Mutual fund
company. Success of mutual fund is highly dependent upon the relationship of the investors with
the employees as there is a little difference between the products the different fund houses are
offering, it is mainly the commitment that a mutual fund house makes.
6) Physical Evidence: - The allocation of greater amount of space in a mutual fund house is likely
to have a positive relationship between the company and the investors. Physical evidence also
means the offer documents and Mutual fund statements that the investors are provided with. In
order to have a better relationship with the investors, the statements should be regular, easily
understandable and all the facts should be mentioned in it.
7) Process: - Process means the process through which the investors’ money is invested in
different schemes and the returns are provided to them. The process should be less complex. The
revision of schemes should not be a very frequent task as it leads to increase in cost. The mutual
fund houses make efforts to standardise the process. In order to customise the process, so lot of
different schemes are coming into market.
Ans.02) One of the most important questions we have answer our client, when to start planning for
their retirement, is how much do they need to save or invest, to live comfortably in the retirement
years. As per the National Health Profile published in 2019, life expectancy in India is 68.7 years.
However, it is now normal to live up to 90 years and we must plan for this eventuality. What this
implies is that they need a steady income plan for at least 30 years after their retirement. In
addition, we must factor in higher costs on healthcare, care givers, lifestyle needs of the elderly,
and increase in the cost of living due to inflation. This may sound like a daunting prospect but with
intelligent and early planning, we can secure future.

Here are some points which help our client to save for their retirement plan.
1) Plan for more than you may need: - At the cusp of retirement, or earlier, we must have a
general idea of our income needs after retirement. As a rule it’s better to be cautious and plan for
more than we may need. It is important to start with an estimate of all the expenses. Generally,
people feel that they may only need about 70% of their last drawn income. However, it is prudent
to assume that they may need more.
2) The 4 per cent rule: - It is important to know how much income we could draw down from our
investments. The 4 per cent rule was derived by financial planner William Bengen. According to
him, a retiree with an investment portfolio of 50% equity and 50% bonds should be able to outlive
the funds if they draw down only 4% of the investment every year, adjusted for inflation. In effect
this rule also means that the investments must be long term and last for 30 years. The 4% rule
guides us but is not necessarily perfect since it relies on past data and not on current market
estimates or future risks.
3) Start retirement planning early: - If we use the 4% rule as a guideline, and wish to drawdown
Rs 1 lakh per month after our retirement, it means that our investment corpus must be at least Rs
3 crore. As with any investment, the earlier that we start our investments, the better the yields. As
a rule, we should definitely start retirement planning and creating a retirement investment portfolio
as early as in our 20s. Compound interest on our early investments add up to significant multiples.
However, if we haven’t started investing from an early age, we must invest significantly more to
achieve the Rs 3 crore target.
4) Invest in real estate: - One of the best ways to create a guaranteed income stream is to own
property and lease the property to earn a rental yield. In case of multiple assets, the rental income
is higher. In fact, many seniors lease out their residences and move into a senior care community.
Since rents increase every year, this form of income also helps stay ahead of inflation. So, it is
prudent to invest in property when we are younger and create a steady and guaranteed income
stream. In addition, we can also sell the real estate asset and create an addition corpus for
investment.
5) Reverse mortgage: - Another way of creating an income stream from property is to opt for
reverse mortgage. Reverse mortgage is not very popular in India. However, it is a good solution for
creating an income stream.
6) Senior Citizens Saving Scheme: - Public sector banks such as SBI have an investment
scheme for senior citizens. This account is applicable for seniors above the age of 60 years, with
an investment of up to Rs 15 lakh and offers an interest of 8.6%. The scheme qualifies for tax
benefits under section 80C of the Income Tax Act. Though the interest earned is taxable, the
scheme offers one of the highest interest rates.
7) Monthly Income Scheme at Post Office: - This investment scheme offers a guaranteed return
of 7.7% per annum, offers a monthly fixed income, keeps the initial capital intact and yields better
results than other debt instruments. The scheme also provides for a recurring deposit into which
the income can be parked. This accelerates savings. The maturity period is 5 years. There is no
TDS for this scheme but the interest earned is taxable. The scheme does not qualify for tax
benefits under section 80C of the Income Tax Act.
8) Mutual funds: - It is also prudent to invest in mutual funds. These investments have higher
liquidity and allow the investor to earn a steady income. They carry lesser risks than investing in
the primary market and yet offer good returns on investment.
9) Pension Funds: - In addition, seniors should invest in pension funds and saving schemes.
Though these investment options are low risk and help them preserve their capital, they also offer
much lower returns.
10) Investing in a senior living community: - It is a known fact that costs of living increase as
we get older, especially after retirement. The increase in costs of living may include hiring
caregivers, higher healthcare costs, physiotherapy, security and lifestyle services. It is, therefore,
prudent to invest in a senior living community. At a senior living community, the community is
sharing the resources and its costs. Therefore it is easier to live a better lifestyle, in comparison to
living alone. In addition, offering healthcare facilities, quality housekeeping, chef prepared meals,
curated wellness programs, sports and recreation facilities would be difficult to support financially
by an individual.
Ans.Q.3a) An investment is an asset or item acquired with the goal of generating income or
appreciation. Appreciation refers to an increase in the value of an asset over time. When an
individual purchases a good as an investment, the intent is not to consume the good but rather to
use it in the future to create wealth. An investment always concerns the outlay of some asset today
—time, money, or effort—in hopes of a greater payoff in the future than what was originally put in.

Here is plan for Mr Raj and Mrs Pooja for their children higher education for the long term,
1) PPF: - This is the best scheme to invest for a number of reasons. It is a 15-year scheme where
you can build a corpus for your child's education. The current interest rate of 8 per cent by far
beats interest rates of banks, which are at 7.5 per cent. With the RBI hiking interest rates and bond
yield rising, it is hoped that the government would revise the interest rates from the coming
quarters. The interest earned is tax free in the hands of investors. Apart from this you get a tax
rebate of upto Rs 1.5 lakhs under Sec 80C of the Income Tax Act. PPF can be extended beyond
the 15 years in blocks of five years and there is no limit on the number of blocks which can be
extended. Another distinguished feature of this plan is the PPF account can be retained with or
without making any further contribution and the corpus will continue to earn interest until the
account is closed.
2) Sukanya Samriddhi Account: - Another good scheme to invest and which can help build a
corpus for your child's education and is an excellent child investment plan is the Sukanya
Samriddhi Account. This scheme offers an interest rate of 8.5 per cent and is tax free. Of course,
you can consider this only if you have a girl child. There is also a tax benefit offered under Sec
80C of the income tax act. One has to be careful that this scheme is only for the girl child. So, if
you have a girl child and plan to save for her marriage or her education, you can go for this
scheme. Again, the lock-in is the only worry, but, then you are building a sound corpus for a longer
time. The only problem with this scheme is that there could be revision in interest rates from time
to time. The interest rate offered is way higher than banks, which is a big positive.
3) Equity mutual funds: - Everybody often goes gung-ho with equity mutual funds to generate
wealth for children. However, this has some risks. The problem is one is not sure at the time of
redemption or if your child needs the money, how the markets would be. For example, if you want
to redeem all your units in 2030 to meet a child need you are not sure if the markets would be
buoyant at that time. However, many equity mutual funds have beaten returns from even bank
deposits and have given sizeable returns. So, if you are a long term investor, these tend to give
you returns like no other. If you are planning to save money for your children's education or other
such plans, look no further then equity mutual funds.
Ans.3b) Insurance, investment and saving for emergencies are three main elements of any sound
financial plan. Mixing these elements is usually not advisable. However, there are insurance
products that provide pure protection and some have an investment component attached. Keeping
in mind the fact that every financial product has its own pros and cons, it becomes imperative for
investors to debate on products they consider for buying to get more clarity on thoughts. ULIP vs.
term insurance is one such main debate. Knowing each product in detail, its pros and cons and
comparison with each other can give a better idea to take sound financial decision.

ULIPs vs. Term Insurance

ULIP
Insurance cum investment plan
Part of the premium is invested in different funds
Suitable for long-term investors looking for insurance
element along with it
It is a market-linked investment. Hence, returns
depend on the type of funds chosen for investment
and prevailing market conditions
ULIP is a hybrid product that involves multiple
charges like premium allocation charges, mortality
charges, policy administration charges, fund
management charges, switching charges, premium
redirection charges etc.
ULIP comes in various types which can be chosen as
per the investment need and goal
Term Insurance
Pure insurance plan
Premiums are not invested
Suitable for everyone looking to secure family against
future financial uncertainties
There are only death benefits. No return of the
premium paid.
Premium comprises of only mortality charges to
provide life protection
It is advisable to buy adequate coverage as early as
possible to get complete protection.

There is no lock-in period. Premiums are to be paid to

ULIP product comes with five year lock-in period. ensure the continued coverage for the defined term.
Term should be chosen according to age. It’s wise to
ULIP plans are suitable for 10 to 15 years term to get have cover till your family is financially dependent on
the potential return on investment you.
As per comparison between ULIP and Term Insurance I like to suggest Mr. Raj for Term Insurance
because it will help family future secure even after the death of Mr Raj.