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Services Marketing

            

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« 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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