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

Presented By: Sushnato Dutta (IMT Ghaziabad)`

Introduction

 IDBI Bank48%

Federal Bank26%

Ageas26%

Market Leader!!!!

LIC

70%

The 30%!!!Kotak Mah

4% Met Life5%

Tata AIG7%

Aviva3%

ING Vysya2%

Shriram life1%

Others1%

ICICI Pru22%

Bajaj Allianz14%

SBI Life10%

HDFC Standard8%

Birla Sunlife7%

Reliance Life8%

Max New York8%

The Product

• http://www.idbifederal.com/Products/Incomesurance/Pages/default.aspx

Managerial Problem!!!

1. Lack of brand awareness of IDBI Federal Life Insurance Co. Ltd.

2. Constant comparison with LIC3. Different behavioural and perceptive patterns 

across various demographic groups.4. Lack of trust

Solution & objective: Proper segmentation and differentiated marketing

Qualitative Analysis1. 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)

Segments1. The Beginners• New to the professional world and looking forward to consolidation of their  social and professional 

position• 22 to 28 year old• Below 6 lpa2. The Crossovers• Professionals who have matured into reliable entities in their respective fields of work. Highly optimistic 

about investments and more willing to take risks with fallback plans.• 6 to 10 lpa.• 28 to 35 years old3. The Achievers• 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. But invest big.• 10 to 18 lpa• 35 to 50 years old4. The Desperate Fliers• Looks for providing to children, pure life insurance seekers.• 18 lpa and above• 50 to 60 years old5. The underachievers• Low income group• Behaviour and perceptions are similar to the beginners. Suspicious• Ceiling income is 2 lpa

The Result1. The Beginners:Analysis: If advised correctly or attracted with investment options of lower dimension(Below Rs. 10000 p.a.) this segment feels much more comfortable. Also, backing upinvestment options through elders increases the chances of conversion

2. The CrossoversAnalysis: If played on their risk taking tendencies correctly then a complete set of plans canbe sold to them. Plans which offer higher flexibility and liquidity are more attractive to them.

3. The AchieversAnalysis: Large volume on single sales is possible. Since peers are important for thissegment, penetration marketing is a good practice.

4. The Desperate FliersAnalysis: If presented with an option which can give guaranteed returns on a time boundbasis, this segment will go for the same. Time and returns are of essence for this segment

5. The underachieversAnalysis: Though financially weak, this segment exists of a huge chunk of population as islucrative because of its numbers. Ignoring the same is not advisable.

Quantitative Research

• https://docs.google.com/forms/d/1Npi3ZsVVKfLxnqQjZ-bOs0Uf-EYSaGo-vmzxUXhOyJ0/viewform

1. Sample Size: 2862. Scope: Salaried professionals throughout 

India

Results

22 to 28 years75%

28 to 35 

years5%

36 to 50 

years13%

51 to 60 years8%

1. What is your age?

Below Rs.2 lakhs

25%

Rs.2 lakhs to Rs.6 lakhs45%

Rs.6 lakhs to Rs.10 

lakhs19%

Rs.10 lakhs to Rs.18 lakhs6%

Rs. 18 lakhs and above5%

2. What is your present Annual Income?

Yes23%

No77%

Attention seeking

Interest generating

Desire Creating

Action inducing

1 1.5 2 2.5 3 3.5 4 4.5 58. View our website through the link below and rate the following attributes on a scale of 1 to5?

7. Can you recall any advertisement campaign by IDBI Federal Life Insurance?

Results

Attribute Sample Average

Risk 2.75

Uncertainty 2.34375

The plan being presented by

an unknown person 2.40625

Liquidity 3.171875

Payment Options 3.484375

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

4. Whenever you hear about Insurance, which two companies come to your mind?•higher the brand awareness, higher is the market share of the product.•LIC and ICICI Prudential

5. How much do you prefer insurance over other instruments like shares, gold, FD etc?•2.83

6. What is your preferred channel of communication regarding Insurance and allied products?•Peer referral is the most widely preferred channel of communication.•Newspaper follows closely followed by magazines and TV commercials.•Cold calling is the most unpopular channel.

Result (plz magnify) S.No. Questions Sample Average of segments (Based on Income)   Average of segments (Based on Age)

      Below Rs.2 lac Rs.2 lac to Rs.6 lac Rs.6 lac to Rs.10 lac Rs.10 lac to Rs.18 lac Rs. 18 lac and above

 

22 to 28 years 28 to  35years 36 to 50 years 51 to 60 years

1 What is your age?   22 to 28 years 22 to 28 years 36 to 50 years 51 to 60 years 51 to 60 years x x x x

2 What is your present Annual Income   x x x x x Up to 6 lac Rs.6 lac to Rs.10 lac Rs.10 lac to Rs.18 lac Rs. 18 lac and above

3

For good returns from an investment, how much of the

following attributes are you ready to endure?

Risk 2.8 2.5 2.9 2.8 2 2 2.8 4.7 2.3 2.2

Uncertainty (of the amount of return) 2.3 2.1 2.3 2.5 2 3.3 2.3 4 2.3 2.2

The plan being presented by an unknown person 2.4 2 2.5 2.8 1.8 2.7 2.4 3.3 2.5 2.2

Liquidity ( Ease of conversion to cash) 3.2 2.9 3.2 3 3.5 3 3.2 3 2.9 3.6

Payment Options 3.5 3.4 3.6 3.5 2.5 3.3 3.6 3.3 3 3

4Whenever you hear about Insurance, which two companies come to your

mind?

LIC LIC LIC LIC LIC LIC LIC LIC LIC LIC

ICICI ICICI and Bajaj Allianz ICICI No clear preference No clear preference ICICI ICICI No clear preference ICICI No clear preference

5 How much do you prefer insurance over other instruments like shares,

gold, FD etc? [] 2.8 2.2 3 3.1 2 3.7 2.7 4.7 2.8 3

6What is your preferred channel of communication regarding Insurance

and allied products? Peer referral, Newspapers Peer referral, Newspapers Peer referral, Newspapers Peer referral, Magazines Peer referral, Newspapers Peer referral, Newspapers Peer referral, Newspapers Peer referral, Newspapers Peer referral, Newspapers Peer referral, Newspapers

7Can you recall any advertisement campaign by IDBI Federal Life

Insurance? No No No No Yes No No Yes No No

8

View our website through the link below and rate the following

attributes on a scale of 1 to 5? 1 being the least and 5 the highest

score.

Attention seeking 3.1 2.6 3.1 3.8 2.5 2.3 3 4 3.6 2.6

Interest generating 3.1 2.7 3.1 3.3 2.8 3.3 3.1 3.7 3 3

Desire Creating 2.7 2.4 3 2.9 2 2 2.8 4 2 2.2

Action inducing 2.5 2.3 2.8 2.4 1.8 1.3 2.7 3 1.6 1.8

Recommendations1. 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.

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