DEVELOPING MARKETING STRATEGY FOR THE RURAL MARKET OF INDIA WITH RESPECT TO THE INSURANCE INDUSTRY OF INDIA

Submitted byUdita dasguptaBatch 2011-2013Amity institute of competitive intelligence and strategic management (AICISM)Amity university, sector-125, Noida, NCR, india-201301

Submitted to:Prof. Ajay Kumar MisraAmity Institute of Competitive Intelligence and Strategic ManagementAmity university, sector-125, Noida, NCR, india-201301

AMITY INSTITUTE OF COMPETITIVE INTELLIGENCE & STRATEGIC MANAGEMENT, NOIDAAMITY UNIVERSITY UTTAR PRADESHCERTIFICATE OF ORIGINALITY

I hereby declare that the project report titled DEVELOPING MARKETING STRATEGY FOR THE RURAL MARKET OF INDIA WITH RESPECT TO THE INSURANCE INDUSTRY OF INDIA is my original work.This has not been submitted in part or full towards any other degree or diploma.

-UDITA DASGUPTAEno- A0633511001MBA (CISM), Amity University

ACKNOWLEDGEMENT

I express my sincere gratitude to my industry guide Prof. Ajay Kumar Misra for his constant guidance, support and cooperation throughout my project, without which the present work would not have been possible. I am obliged for his invaluable encouragement and inspiration that motivated me towards the fulfillment of this work.

I would also like to thank the entire department, who made me capable enough to carry on with this dissertation work.

-UDITA DASGUPTAEno- A0633511001MBA (CISM), Amity University

TO WHOMSOEVER IT MAY CONCERNI hereby declare that the work is my original work and is done for the partial fulfillment of the award degree of Masters In Business Administration, under the supervision of Prof. Ajay Kumar Misra.The work DEVELOPING MARKETING STRATEGY FOR THE RURAL MARKET OF INDIA WITH RESPECT TO THE INSURANCE INDUSTRY OF INDIA is done completely done for the Amity University and is not submitted to any ither concern for any other purpose.

-UDITA DASGUPTAEno- A0633511001MBA (CISM), Amity University

TABLE INDEX

Ch. NoTITLEPage No.

CERTIFICATE OF ORIGINALITY

ACKNOWLEDGEMENT

TO WHOMSOEVER IT MAY CONCERN

1ABSRACT

2BACKGROUND OF THE STUDY

3LITERATURE REVIEW

4RESEARCH METHODOLOGY

5DATA ANALYSIS

RURAL INDIA OVERVIEW

INSURANCE INDUSTRY OVERVIEW

MAIN PLAYERS

6MARKET STRATEGY FORMULATION

7DATA INTERPRETATION

PILOT SURVEY

DATA INTERPRETATION

8CONCLUSION AND SUGGESTION

REFFERENCES

CHAPTER 1

ABSTRACTRural India beholds 70% of the Indias total population. Besides, 56% of countrys total consumption comes from the rural lands. Moreover the rural India has a young population amassed, with a rising disposable income with each minute ticking away. Studies have brought forth the fact, that rural India holds huge opportunities with the potential of adding 1.8 trillion USD to the Indian economy. At present, there exit a low penetration of consumer durables. Thus the young population, the rising income levels, growing awareness of health, hygiene and likewise urban products, and the low penetration level of the consumer durables in the rural ghetto, assures a great potential of demand.The paper brings into focus all the driving forces of rural India that are believed to channelize the demand and supply system of the hinterland. The paper hence analyzes the possible rural marketing strategies that can lay the basis to route in varied kinds of investments and thus helps in cashing in the rural unexploited opportunities. The paper specifically lays a focus on the insurance industry of India as the industry exclusively has a low rural penetration. As most of the establishments in the Indian insurance sector continue to have a steady growth that is more urban centric, very less number of insurance organizations could take rural under their confidence. Over the last few years the insurance sector could penetrate only 5% of the rural India where as the urban penetration increased by at least 16%. Thus the paper analyzes the existing marketing strategy of the establishments of the Indian insurance sector, the market needs and psychology of the rural India and hence tries to identify the loopholes that are causing hindrances for the insurance sector to enter the rural market completely. The paper concludes with the possible marketing strategy insurance sector should adopt so as to penetrate the rural India and cash in the underlying opportunities.

CHAPTER 2

BACKGROUND OF THE STUDYThe rural market of India has enough opportunity to be cashed in where as it is one of the most under penetrated market of the Indian economy. It is seen that if the rural economy is being penetrated properly and the investment is made wisely, the Indian economy can rise up three fold. Besides, the consumer disposable income is increasing with days. In addition to the fact, the rural market is opening up for urban product as well. There is a growing awareness about personal health and hygiene, and other product benefits. Thus rural markets of India hold huge potential for private and public investment. The market has already opened up for fmcg and related sectors. But it is being noticed that the financial sectors like insurance is yet to open up. The insurance sector in general has failed as yet to incorporate the awareness among the rural consumers with regards to the importance of insurance products. The rural consumers are self built men and they are tough to fooled when it comes to money. It is evident that they are yet not convinced about the benefits of insurance products. Thus, this paper tries to find out the crucial backlogs and the bottle necks of the insurance sector strategies. The paper studies the rural strategies of different companies and their short comings as according to penetrate the rural economy. Finally the paper develops an ideal strategy for the insurance companies to get hold of rural market.STATEMENT OF THE PROBLEMRural market is huge. The paper thus takes into consideration a part of rural market from every section of the country. Thus the study considers parts of rural market from each of the north, south, east and west of the country. But, considering the objectives of the study, the gap will not create a big problem since rural economy holds certain commonality with regards to the culture and demography.OBJECTIVES OF THE STUDY1) To understand the rural consumer and the rural demography2) To identify the bottlenecks of the insurance companies while trying to penetrate the rural; market3) To develop a suitable strategy to penetrate the rural economy with regard to the insurance sector.HYPOTHESIS OF THE STUDY1) Government support is evident for rural penetration2) Insurance sector is keen in penetrating the rural market3) Rural market is aware of the insurance products4) Rural market is not convinced of the insurance product benefits5) The paper takes into account only the Indian scenario6) The paper considers only the life insurance sector as no company can deal with life and general insurance at a time.7) The paper takes up a single entity functioning in the market and hence develops the strategy for that entity. The entity taken for the study is HDFC life insurance.

SIGNIFICANCE OF THE STUDYThe study is significant on the fact that the rural market is a highly potent domain for investment but the insurance sector is failing to enter as there is a lack of awareness of the benefits of the insurance products.

CHAPTER 3

LITERATURE REVIEW

Rural market of India is said to hold immense investment opportunities that is still untapped. Aviva Life Insurance Chief Executive Officer and Managing Director T R Ramachandran said on the sidelines of launch of retail format of sale of insurance products in rural India along with Basix and Royal Sundaram Alliance General Insurance (RSA) said, "There is still so much to do in the life space. Rural India is still under-penetrated in life insurance, The opportunities are getting identified in rapid paces and rural Indian market in present days tops the charts of potential market. Corporate from all sectors have started to look into rural market of India for their expansion strategies.The dynamics of the rural consumers are changing at a constant pace. The urbanization of rural India is making way for urban products through the rural boundaries. V. Mukunda Das, director of Patna-based Chandrapur Institute of Management gave a statement in the business line that, In states like Bihar; more than 60 per cent of the rural people are first generation consumers of urban products. Business line also quotes that, There are many psychological factors affecting the positive valence in consumers as a result of increased access to cash income and better awareness. V. Mukunda Das reasoned the change in such dynamics as, Increased cash income, made available through rural development programmes, is substantially changing consumption pattern of rural people. These are manifested in their increased purchase of consumer products, including national brands. It has been found that every increase in cash income generates an impetus among rural consumers to go in for urban-based consumer products.AC Neilsen survey estimated that the consumer market sector in rural and semi-urban India will cross $20 billion by 2018 and $100 billion by 2025. Ranjeet Laungani, Executive Director, Nielsen, has said in the report which is quoted as, The demand revolution has percolated down to middle India and these towns will behave like the metros of tomorrow, as quoted by an MXM India. He said that rural India would prove to be critical for volumes in the long run. The paper has taken into consideration the insurance sector for the study at the backdrop of rural market of India. In the rural market, it has been seen that the financial products have not done as well as that of the consumer products. Still the rural market is believed to hold the huge potential for all kinds of innovation. According to Dr Damien Marmion, CEO, Max Bupa, The penetration of health insurance is still confined largely to urban centres as awareness levels and medical infrastructure are superior. Likewise, Aviva Life Insurance Chief Executive Officer and Managing Director T R Ramachandran said, There is still so much to do in the life space. Rural India is still under-penetrated in life insurance. However, the government is aware of the criticality of the insurance and is helping in spreading the awareness and importance of insurance in the rural sectors of india. For instance, in Tamil Nadu, the state funded insurers are making the insurance available at a much affordable price in the towns and villages and hence insuring the people. Mr S. Premkumar, CEO, Apollo Hospitals has said, State-funded insurance in States such as Tamil Nadu is driving affordability in small towns and bringing more people under insurance cover. Again, Mr Suresh Sugathan, Head-Health Administration Team, Bajaj Allianz quoted, Many insurers are also tying up with regional rural banks, which help us reach out to these areas better. Thus the companies are getting assistances from the government as well in orer to penetrate the rural market. Rural market of India is very reserved in terms of money. The rural consumers cannot be befooled at any cost. They thus invest only in such services or products that hold value in their eyes. Insurance products offered by the public entities are unreliable in the eyes of the rural customers. Thus the paper finds out the strategies to promote the insurance products in the rural market of India.

CHAPTER 4

PURPOSE OF THE STUDYThe study intends to find out the reasons behind the bottlenecks of the insurance products in rural market of India. The insurance products of India inevitably, have penetrated considerably over the years. But the penetration rate and the depth of penetration is yet not impressive. The study finds out the marketing techniques of the major players in the Indian market and rates them against the rural demand and supply parameters. Hence the purpose of the study is to come out with a full proof marketing strategy for the insurance products keeping in mind the rural demography and psychographic needs.

RESEARCH DESIGNThe research done is partially descriptive and partially exploratory. The initial research done is secondary by nature and after the benchmarking is being done, the market strategy is being developed.The developed market strategy is then tried on a selected sample to prove its worth. The Raipur village of Noida, New Delhi is chosen for the sample survey. INSTRUMENT OF DATA COLLECTIONThe research is partially secondary and partially primary. The study starts with the secondary research of the usual marketing tactics followed by the major players in the insurance industry in the rural market f India. The secondary research is mainly used for the purpose of identifying the underlying trends of the rural market of India, the insurance industry of India and the usual marketing tactics used by the players of the Insurance Industry to promote their products and services in the rural market of India. The primary research comes in to the scene when the marketing strategy has been developed after benchmarking the industry practices pertaining to the insurance industry in the Indian rural market. The primary research is being done to ratify the developed marketing strategy. The marketing strategy developed is expected to be effective and efficient enough to communicate the messages with regards to the insurance products and services to the rural customers so as to create a need of insurance products in the said market.

CHAPTER 5

DATA ANALYSIS:The section comes out with the environment analysis of the target market and the concerned industry. This chapter also benchmarks the marketing strategies aligned in accord to the rural psychology, the demographics and their needs. It has been noticed that rural market of India is very conservative when it comes to the matters of money. They still find it tough to trust the private firms with money. Thus the section tries to analyze the reasons and the trends of rural customer behavior and hence finally, cuts down to the properly aligned marketing strategy for the rural segment of the country.

RURAL MARKET OF INDIA: It is said that a rural man is the toughest to con. A rural man is a self built man. He learns from the experiences of life. He learns from life itself. Thus, a rural man works with strong logic and reasoning. A rural man never agrees easily.About 68% Indians are from rural India. Rural economy has developed considerably over years. The rural population has increased by 12% in last decades. Rural market consists of 40% of the total Indian economy. Rural economy has witnessed consistent and constant improvements over the years. The rural customers, having increased disposable income with time, are now aspiring for the rights, roads, electricity and good governance, that are normally associated with the middle class people of the urban India. Thus the demand for the goods and services that were associated with urban India until now is increasing.The infrastructure in rural India is also developing at a fast pace. The connectivity with regards to rail, road and technology is improving with years and day, with more number of investments coming in the nation, rural India. Along with the huge population in Indian rural market and the huge untapped market, the insurance sector grew by 47% approx in 2005-2006, surpassing the 32% in 2004-2005. But over the last 6 years, the penetration of insurance sector in rural market of India, remained low.INSURANCE SECTOR OF INDIA: AN OVERVIEWINSURANCE: AN INTRODUCTIONInsurance is an effective way of transferring a portion of the financial risk to the insurance service provider. Insurance is financial contract between two parties, the insurance provider and the insurance receiver. The insurance provides the financial security to the insurance receiver against any unforeseen and unexpected events. While a person buys insurance products, he transfers a part of the risk to the insurer. Inevitably there are clauses attached to every insurance product. In lieu of the protection, the insured person has to pay a certain amount to the insurer. Thus the protection comes at a price. However, the price is nominal such that the insured people at any stage of life do not find it overburdening. To define, Insurance is a contract by which insurance agrees to pay the insured a compensation for specified damage loss or injury suffered in exchange for periodic payment called premium. Moreover, Insurance cannot prevent the occurrence of the event; it can only protect the person from the financial losses he might suffer after the happening of the event.

TYPES OF INSURANCE:The insurance products can be of two types, namely, life insurance and general insurance. The life insurance provides the protection to the income earning capacity insured person and provides with the payment of the sum insured on the death of the insured due to natural cause or on the expiry of the certain number of years if the insured person is still alive.

BENEFITS OF LIFE INSURANCE:Life insurance provides the protection against the risk of untimely death. It also provides with the financial security during the old age. Besides, the life insurance also helps in generating savings. In lieu of the protection that the life insurance is providing, the insured person has to pay premiums which can also be withdrawn later under certain particular schemes. The termination of any life insurance product brings in termination of certain benefits. Thus, life insurance in a way encourages savings. In addition to the above benefits, life insurance also serves as a security to the education funds or charity funds. Besides, a policy holder also has the right to issue loans from the insurance company instead of his life insurance after 3 years of premium payment. Apart from these, the life insurance holder can get tax benefits under section 88, on the premium payments and on the matured sum. Moreover, under section 6 of the married womans property act, if the insurance holder is a married man, then all the benefits of his life insurance will get transferred to his wife and children in case of his untimely death. Thus life insurance also provides financial protection to the family of the insurer.

BENEFITS OF GENERAL INSURANCE:General insurance, unlike Life insurance, provides financial protection to every other physical loss, arising out of theft, fire, accident, etc. general insurance is of majorly three types, viz., Fire insurance, Marine insurance, and Miscellaneous insurance. While Fire insurance covers every loss or damage of the movable and immovable property leading to a financial loss, the marine insurance covers every kind of loss or damage occurring during the transit by rail, road, sea or air. Miscellaneous Insurance covers every other monetary loss that is not covered under fire and marine insurance. The Miscellaneous insurance includes motor claims, burglary claims, cattle and crop claims, and so on.INSURANCE INDUSTRY PROFILE: History of the insuranceThe first insurance company came into existence in 1732. However it only covered fire claims. In United States, the sale of the life insurance products started in 1960s. Indian market saw huge reforms when it comes to insurance sector. In 1818 the first insurance company, Oriental Insurance Company, entered the Indian market. In 1870, Bombay mutual life insurance society came into existence. This was the first Indian life insurance company. In 1912, Indian life insurance companies act was passed as the statute to the Indian insurance industry. 1928 saw the enactment of Indian insurance companies act and hence enabled the Indian government to maintain a database regarding the life and nonlife insurance business. In 1938, the earlier legislation consol got amended so as to protect the interest of the insured customers. By 1956, 245 Indian and foreign insurers and provident societies got nationalized.INDIA FACT SHEET: Economy: India is considered to be the fifth largest country in terms of purchase GDP growth rate: the growth rate of the nation has maintained an average of 6% over the last decades Savings rate: The countrys savings rate is maintained at around 26% of GDP Estimated middle class population: around 300 million people are considered to be middle class in India. The families with annual income between Rs 3.4 lac to 17lac are considered middle class. India currently has 300 million people who belong to the middle class segment. However, reports say that at present, in India, there is another set of 300 million people who are believed to belong to a virtually middle class segment. The virtual middle class segment are wealth wise weaker than that of the middle class segment. But they aspire for the rights, roads, electricity and good governance, that are normally associated with the middle class people. Over the years, the middle class population in India is growing in number. Besides, the income bracket of the middle class segment is also rising with the years passing by. The more investments are coming in, the more employability is generated. This is leading to more income and thus, the more purchasing power. Thus with the increasing number of middle class and the voluntary middle class people and their income power, the Indian market is becoming a obvious choice for any foreign investments. Insured population: about 70 million people are only insured till date.INDIAN INSURANCE SECTOR REFORMS: as on 2010IRDA rules and regulations with effect from sept 1st, 2010: The minimum duration of the policy is increase from 3 years to 5 years. That means premium has to be paid compulsorily for 5 years. This is called the lock-in period. The charges for the policies are divided equally for these 5 years. The amount of insurance should be at least 10 times of the premium. This was only 5 times recently. For people who are 45 years of age, this should be 7 times the premium. For single premium policies the amount of insurance should be 1.25 times the premium and for 45 year old persons it is 1.1 times. No indirect with drawls are allowed in pension schemes. This should give an annual income of 4.5% or as directed by IRDA.

LIFE INSURANCE COMPANIES IN INDIA AT PRESENT:Sl. No.InsurersForeign Partners

1Life Insurance Corporation of India---

2HDFC Standard Standard Life Assurance, UK

3Max New York New York Life, USA

4ICICI-Prudential Prudential Plc, UK

5Kotak Mahindra Old Mutual Old Mutual, South Africa

6Birla Sun Life Sun Life, Canada

7TATA-AIG American International Assurance Co., USA

8SBI Life BNP Paribas Assurance SA, France

9ING VysyaING Insurance International B.V., Netherlands

10Bajaj Allianz Life Allianz, Germany

11Metlife India Metlife International Holdings Ltd., USA

12Reliance ---

13AVIVAAviva International Holdings Ltd., UK

14Sahara ---

15Shriram Sanlam, South Africa

16Bharti AXA AXA Holdings, France

17Future Generali IndiaGenerali, Italy

18IDBI Federal Ageas, Europe

19Canara HSBC OBC HSBC, UK

20Aegon Religare Aegon Netherlands

21DLF Pramerica Prudential of America, USA

22Star Union Dai-ichiDai-ichi Mutual Life Insurance,Japan

23IndiaFirstLegal & General Middle East Limited, UK

Note: The paper will focus on the life insurance sector of India and hence will take up HDFC as the functioning entity for which the marketing strategy to be developed.

THE PLAYERS IN LIFE INSURANCE SECTOR:HDFC Life Insurance: COMPANY OVERVIEWHDFC Life Insurance is one of the premiere private insurance companies in India. It is the first among all the private sector life insurance company to get the certificate of registration from IRDA. It was the joint venture between the Housing Development Finance Corporation and Standard Life.The associate companies of HDFC are: HDFC LTD HDFC BANK HDFC MUTUAL FUND HDFC SALES HDFC ERGO ENERAL INSURANCEThe company mission statement states the four priority areas of the company which are as follows: Customer service Value for money for customer Use of technology to improve service standards Increasing market shareIntegrity, innovation, customer centric, team work, and joy and simplicity are the company values. HDFC has over 30000 employees in total. With the intentions of providing quality service, HDFC has divided the whole country into 10 major zones and each zone are then further divided into territories.

COMPANY SWOT ANALYSIS:The followings are the strength-weakness-opportunities and threat analysis of the company HDFC Life Insurance:STRENGTHS Wide range of individual and group insurance solutions along with various riders Financial expertise to manage the long term investments Rated AAA by the CRISIL and ICRA for 10 consecutive years.

WEAKNESSES No presence in the rural market of India. Only target market is the youth. OPPORTUNITIES The private companies in the insurance sector are still numbered. So the level of competition is still considerable. There is a wide open untapped market in India. The whole of rural market in India, the tier II cities are still yet to be covered properly.THREATS HDFC has a strong presence in the cities. They have mainly targeted the youth section, just in the threshold of their corporate lives. However, almost all the companies are trying to tap the urban cities since they are the easiest catch. However, the battle may become bloody in coming years if HDFC do not extend their presence outside the Tier I cities. The rural India still has a fascination towards the government organizations when it comes to the financial and non financial banking products and services. Illiteracy and unemployment can be a major threat. Alternates of the life insurance like mutual funds, banking services, share and securities can create bottlenecks for HDFC life insurance products. Rise of real estate industry as mostly people are investing their money in that now days.COMPANY PERFORMANCE HIGHLIGHTS IN 2011-2012: FY10-11 saw significant regulatory changes that were focused on long term customer interests, however, impact the new business premium collections for the industry. Despite the dynamic external environment, Company saw strong growth in new business premium and renewal premium during the FY 10-11. premium income grew by 21% (over FY09-10) and renewal premium collected grew by 36%( over FY09-10). Total premium (including Group business) registered a 29% growth. . The sum assured in force for the overall business at the end of the current year stood at ` 98,917 crore as compared to ` 72,610 crore for the previous year. company increased its market share (weighted received premium of individual business) in private life insurance space to 13% from 9% in the previous year Operating expense ratio (total expenses excluding service tax to total premium) reduced from 20% in 2009-10 to 16% in 2010-11. The annual losses as per Indian GAAP reduced from ` 275 crore in 2009-10 to ` 99 crore in 2010-11. During the year the Company continued with its ongoing efforts on customer service and building awareness about insurance.

LIFE INSURANCE CORPORATIONIt came into existence in India about a hundred years ago. Currently, LIC holds the maximum market share. But considering the range of product and service portfolio offered by LIC to the Indian market, the market share seems to be quite nominal. There is a huge scope of LIC to turn round and overthrow any competition in the market. LIC is also the most trusted since it is a public sector organization. Public sectors are always trusted above the private sectors when it comes to the financial and non financial banking sector products and services. Thus LIC has an advantage over every other private sector organizations in India. COMPANY SWOT ANALYSIS:The followings are the strength-weakness-opportunities and threat analysis of the company LIC (Life Insurance Corporation) :STRENGTHS: Brand Image is very strong Government guarantee LIC is one of the most trusted brands in India, according to The Brand Trust Report. LIC has the maximum market share in the rural market of India. Large product portfolioWEAKNESS: It lacks innovation and flexibility Staffs are lethargic Top bosses are mediocre Large scale corruption inside LIC Ultra slow decision making process Cost is too high for LIC.OPPORTUNITY: Government schemes should be implemented. The use of technology should be done to cater the rural population more efficiently and effectively.THREATS: Economic crisis and very high inflation Changes in the government policies with regards to the insurance products and services.

ICICI PRUDENTIALIt is a joint venture between ICICI bank and UK based prudential plc. The organization has a network of 50000 advisors and 7 bank assurance tie ups. Presently, ICICI is being ranked 1 amongst all the private players in the insurance sector. COMPANY SWOT ANALYSIS:The following is the SWOT analysis of ICICI Life:STRENGTH: second largest bank in terms of total assets and market share located in 19 countries strong and transparent balance sheet has PAN India presence of around 2,567 branches and 8003 ATMs Marketing and advertising strategies of ICICI have good reach compared to other banks in India

WEAKNESS: Customer support of ICICI section is not performing well in terms of resolving complaints High customer charges Stressed employee pool

OPPORTUNITY: Minimum number of nonperforming assets. Rural market is yet to be tapped.

THREATS: Rural market competition is against micro credits. FDI has been opened; foreign players may pump into the economy anytime.

CHAPTER 6

MARKET STRATEGY FORMULATION:The followings are the market strategy formulated so as to position the insurance products against the rural backdrop. Thus, the strategy formulated is divided in three parts: The communication strategy, the operations strategy and the financial strategy.

OPERATION STRATEGY:The operations strategy comes up with the operations that needs to be adopted to clear the rural market bottle necks with regards to the life insurance products Education Camps:The conservative and skeptical thoughts regarding the insurance products need to be addressed before doing any kind of marketing. The rural population must be educated about the difference between the banking benefits and the insurance benefits. The rural population must be made aware of the different benefits of life insurance products.

Tie up with micro finance institutions:Micro finance institutions in rural market are one of most trusted with money and savings. Thus, tying up with any local micro institution in the locals of the target rural India will give the target customers enough boost of moral towards the life insurance products.

Launch of a joint project with the government of India and make the company visible to the rural market:Any joint project with the government institutions will bring in visibility to the company. The project can be a CSR initiative. That might change the perception in the rural minds and the rural population may decide of trusting the company. Government hospitals tie ups:The government hospitals are trusted in rural market of India. Thus, tying up with the government hospitals will boost confidence among the rural customers and will drive them to trust the company. providing multiple payment options to customersMultiple payment options can be given keeping in mind the customer convenience. The more a company is customer centric, the more it will get the customer preference. Free Checkup Camps:Free checkup camps in regular intervals can be arranged. This will take care of the branding of the company. This will also ensure the customer loyalty and customer preferences. The rural man thinks by his heart. If you take care of him, he will return back his favor. Need Based Selling:It is very crucial to consult every customer individually and recommend the insurance products as per his requirements. The sales force should be motivated and genuine enough to work for the rural market with sincerity. Selling for the sake of selling will not ensure the long term sustainability. Moreover in rural India, once a thief, you are always a thief. Thus, genuine need based selling of insurance products must be done.

COMMUNICATION STRATEGY: Reducing of expectation gap:The rural customers must be guided thoroughly by the product offerings, incentives and premium structures. The gaps between the product expectations and the product offerings must be reduced to the maximum extent possible. Thus there must be a welcome calling to every new policy holder to ensure that there are no expectation mismatches at the time of policy purchase.

Advertisements with regards to the new policies and highlighting the strengths of the organizations:The technology has made its way much inside the rural India. The mobiles, the televisions and the radios are very common in todays date. Thus, digital advertisements must be made frequently not only to communicate the new policies coming out, but also to congratulate the policy holders for making the right choice. The rural man never forgives if once he is cheated with his hard earned money. But if he is made to feel the pride and respect for belonging to the company as one of the atke holders, he will be forever loyal to the company.

Strong PR team for building strong brand value with special regards to the rural areas:Personal relationships must be maintained to the prospect customers and the present customers. The company PR team should maintain good relations with the village heads and all the important decision makers of the rural India, for instance, the Gram Panchayats, the village head, or the village decision makers. They hold the key to any locked door.

CHAPTER 7

DATA INTERPRETATION:The marketing strategy, developed, needs to be tested, so as to see its efficiency. Thus the pilot survey has been conducted as per the convenience with a sample size of 50.The sampling was being done by stratified random sampling. The stratified random sampling is done through dividing the whole village into homogeneous strata and then selecting few from every stratum.A total of 80 people were being interviewed, out of which 50 people were being selected to zero down to a conclusion.PILOT SUREVEY:Around 50 people were being interviewed to check if the marketing strategy developed is befitting or not. The village selected for the survey is Jharsa Gaon of Gurgaon. The people living in the village mostly earn their living by selling petty products or petty services. Their monthly income does not exceed Rs.10000/.The following is the questionnaire for the pilot survey:

Name:

Age:Gender:

Your Occupation:

Your Monthly Income:

Your Family size:

Number of earning units in your family:

Are you aware of insurance?

If yes, would like to buy it?

Are you aware of the insurance benefits?

If the micro finance institutions advice you to get insurance, will you consider it?

If the village panchayat leaders recommend the life insurance products, will you consider it?

The insurance products purchase allows you free health checkups in the government hospitals twice a year- what you have to say about this?

Do you worry that if anything happens to you, then your family may fail to support for themselves?

Then do you think that Life insurance will provide you with the security?

Rank the following: Government offering you life insurance products Private company offering you life insurance products Private company along with government support offering you life insurance products

Is life Insurance essential?

DATA INTERPRETATION:Almost 40% people interviewed had no clue about the benefits of life insurance. However, the people who are aware of life insurance products and services are hesitant to buy any kind of life insurance products. a few of the lot who said that they might consider buying, said that they trust only LIC and not any other private organization. Insurance is more like expenditure to them. Hence it is clear that the communication has not been done properly. The rural India can be a potential market. But several factors are not favoring the insurance industry to penetrate the rural market of India. The psychological backlogs must be cleared in order to make the rural customers pro insurance. In addition to that, insurance, especially for rural population must be made, with low premium structures.

CHAPTER 8

SUGGESTIONS:Insurance companies must make special efforts to find the right men who will market their products, i.e., the agents. The post office agents sell savings certificates. The insurance companies can keep these agents to market their products. This is because the rural customer they serve, now trusts them. The local cable TV operators can also be used as the agents. They are mostly educated and have access to most of the local domiciles. He also visits every home once a month to collect his subscription. This is what makes him an ideal for the insurance agent. Finally, the youth clubs in the village remains active. The members of these youth club work mainly for the welfare of the rural area they belong to and hence have won trusts from all the domiciles in their locality. This, hence, also makes the members of youth clubs suitable as insurance agents. Besides, doctors and school teachers are generally aware of the insurance products and their benefits. Thus they can also make a good insurance agent.

CONCLUSION:

Vijay Kumar, Actuary Manager at LIC says, I believe, given the established role played by the individual agency force in selling insurance products, and its particular relevance in rural areas, it is essential to fortify this channel with a set of new inputs. These is a rapid change witnessed in the market in the complexion of insurance products, with the end of the era of high, assured return instance policies. Insurance products should be that are relevant to people at different life stages and enable an individual to get the best value for the objectives he or she has in mind.Insurance plays a very important role in todays world. Given the fact that the product holds so much of importance in the present times, the product is unable to penetrate the rural market of India. The bottle necks to this are not something that is arising out of technical reason. The psychological backlogs in the rural mind are creating the hindrances to the penetration. The effective communication and marketing strategies are the only way of clearing the backlogs and confirming the successful penetration in the rural market of India.

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