Services Marketing
« Banking Industry
Chapter 25 : Marketing of Financial Services (Banking,
Insurance, Mutual Fund & Portfolio Management Services)
Insurance Industry
Market Segmentation in Insurance Industry
Marketing Mix for Insurance
Industry
Product Price
Place Promotion Process People Physical
Evidence
Recent Trends in Insurance Marketing
Section Summary - Insurance Industry
The insurance business is based on customers'trust and confidence as it
deals with the finances of the customer. The basis for a well-planned and
well-executed marketing strategy is effective market segmentation. Insurance
is broadly segmented into individuals, institutions, industry, and trade
customers. Most industry players offer specialized services to cater to the
needs of these segments.
Some marketers target niche markets and offer customized services. The scope
of insurance has increased with more private and foreign players entering
the market. They have introduced many innovative services targeted at
different segments. Price plays an important role in marketing of insurance
as it determines the premium to be paid by the customer.
Pricing of insurance products is influenced by competitor strategy and the
prevailing interest rate, but is basically determined by the risk involved.
The higher the risk involved for the marketer, the higher the price. As
insurance needs to be ‘pushed'in the market, the importance of interaction
between the service deliverer and the customer increases.
Therefore, agents, brokers and employees of the company become important
channels of distribution for the service. Though unconventional channels
like bancassurance, the Internet and tie-ups with automobile marketers have
emerged, the role of agents cannot be discounted. Insurance companies have
simplified their processes of service design and delivery to offer greater
convenience to customers and reduce their perceived costs.
Physical evidence can be provided to insurance customers in the form of
policy certificate and premium payment receipts. The office building, the
ambience, the service personnel etc. of the insurance company and their logo
and brand name in advertisements also add to the physical evidence. Private
and foreign players entered the Indian insurance market in 1999 after the
reforms were initiated.
Their entry ushered in new competition and improved the service quality
offered to the customer. With awareness increasing, customer expectations
also increased. New distribution channels and innovative promotional
strategies also evolved because of the increased competition. All these led
to the development of the insurance industry and expanded the market in
India.
Mutual Fund Industry »
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