Hdfc life insurance marketing strategies

Executive Summary This Project is about HDFC STANDARD LIFE INSURANCE including its complete profile, nature and details about its group companies, company‘s vision, mission and product range including its manpower, turnover and market share. Detailed explanation is given on strengths, weakness, opportunities and threats of the organization and also includes Best Practices/USPs that the Company follows in different functional area. The main concentration is laid on the functional analysis of the organization i.e. what are the marketing strategies of hdfc standard life insurance, how they are followed and practiced , recruitment policy for financial consultants and what is the recruitment process of HDFC SLI. In this project have also included the lessons learnt from the summer training including the few statements given for working environment, personal experience, practical knowledge gained during summer training, difficulties faced, suggestions for training of students in future and most importantly the conclusion of the report.

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Chapter – 1 Profile of the Company

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1,1 PROFILE OF THE COMPANY

Name of the firm

: HDFC STANDARD LIFE INSURANCE

Industry

: Finance, Insurance Services

Functional Area

: Marketing

Employees

: 2000

Head Quarters :

: Mumbai

Phone

: 011 4336 8900

Website

: www.hdfcife.com

Regd. Office

: Vikas Marg 1st Floor , Aditya corporate Plaza Plot no. 4,

Karkardooma , community center, Shahdara ,New Delhi

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1.2 NATUR E OF THE COMPANY HDFC is one of India‘s leading financial institutions, offering complete financial solutions that encompasses every sphere of life- from commercial banking , to stock broking , to mutual fund , to life insurance , to investment banking , the group caters to the financial needs of the individuals and corporate . GROUP COMPANIES ARE: HDFC Limited HDFC was incorporated in 1977 with the primary objective of meeting a social need that of promoting home ownership by providing long-term finance to households for their housing needs. HDFC was promoted with an initial share capital of Rs. 100 million.

HDFC Bank Limited The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive approval from the Reserve Bank of India to set up a bank in the private sector. The bank was incorporated in August 1994 in the name of HDFC Bank Limited, with its registered office in Mumbai.

HDFC Securities Limited HDFC Securities Ltd was promoted by the HDFC Bank & HDFC with the objective of

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providing the diverse customer base of the HDFC Group and other investors, a capability to transact in the Stock Exchanges & other financial market transactions. HDFC securities, provides you with the necessary tools to allocate, select and manage your investments wisely, and also support it with the highest standards of service, convenience and hassle-free trading tools.

HDFC Realty Limited HDFC Realty is a new, organized electronic marketplace for properties. HDFC realty provides the entire gamut of real estate services, bringing together the "clicks world" and the "bricks world" in a revolutionary and user-friendly way. Making available the best guidance, and the most professional, transparent, efficient service to the real estate customer.

HDFC STANDARD LIFE INSURANCE HDFC STANDARD LIFE is the name which is working as one of the best private insurance company in insurance sector. HDFC Standard Life Insurance Company Ltd was incorporated on 14th August 2000.It got the certificate of registration on 23rd October.

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COMPANY’S VALUES: 

SECURITY: Providing long term financial security to our policy holders will be our constant endeavor. This is done by offering life insurance and pension products.



TRUST: Company appreciates the trust placed by our policy holders in us. Hence, company will aim to manage their investments very carefully and live up to this trust.



INNOVATION: Recognizing the different needs of our customers, company will be offering a range of innovative products to meet these needs.

Company‘s mission is to be the best new life insurance company in India and these are the values that will guide us in this. HDFC CHUBB GENERAL INSURANCE COMPANY LIMITED With over one century of experience in the field of non-life insurance from Chubb and HDFC‘s expertise from the financial segment, HDFC Chubb General Insurance Company Limited has the consumer insight to make its product range world class and comprehensive.

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STANDARD LIFE Standard Life is Europe's largest mutual life assurance company. Standard Life, which has been in the life insurance business for the past 175 years, is a modern company surviving quite a few changes since selling its first policy in 1825. The company expanded in the 19th century from its original Edinburgh premises, opening offices in other towns and acquiring other similar businesses. Standard Life currently has assets exceeding over £70 billion under its management and has the distinction of being accorded "AAA" rating consequently for the past six years by Standard & Poor.

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1.3 COMPANY’S VISSION and MISSON COMPANY’S VISSION 

Ethical , Professional and transparent long term client relationship.



To deliver what promised on time.



All times quality services and integrated financial solution.



To provide composite range of financial services to clients.



Clear understanding of customer‘s perspective and suitability.



Be financially profitable, stable and debt free.



Maintain confidentiality of investors

COMPANY’S MISSION: To be the top new life insurance company in the market.This does not just mean being the largest or the most productive company in the market; rather it is a combination of several things like

Customer service of the highest order



Value for money for customers



Professionalism in carrying out business



Innovative products to cater to different needs of different customers



Use of technology to improve service standards



Increasing market share

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1.4 PRODUCT RANGE At HDFC Standard Life, we offer a bouquet of insurance solutions to meet every need. We cater to both, individuals as well as to companies looking to provide benefits to their employees. This section gives you details of all our products. We have incorporated various downloadable forms and product details so that you can make an informed choice about buying a policy. For individuals, we have a range of protection, investment, pension and savings plans that assist and nurture dreams apart from providing protection. You can choose from a range of products to suit your life-stage and needs. For organisations we have a host of customised solutions that range from Group Term Insurance, Gratuity, Leave Encashment and Superannuation Products. These affordable plans apart from providing long term value to the employees help in enhancing goodwill of the company. Individual Products We at HDFC Standard Life realize that not everyone has the same kind of needs. Keeping this in mind, we have a varied range of Products that you can choose from to suit all your needs. These will help secure your future as well as the future of your family.

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Protection Plans You can protect your family against the loss of your income or the burden of a loan in the event of your unfortunate demise, disability or sickness. These plans offer valuable peace of mind at a small price. Our Protection range includes our Term Assurance Plan & Loan Cover Term Assurance Plan. Investment Plans Our Single Premium Whole Of Life plan is well suited to meet your long term investment needs. We provide you with attractive long term returns through regular bonuses. Pension Plans Our Pension Plans help you secure your financial independence even after retirement. Our Pension range includes our Personal Pension Plan, Unit Linked Pension, Unit Linked Pension Plus Savings Plans Our Savings Plans offer you flexible options to build savings for your future needs such as buying a dream home or fulfilling your children‘s immediate and future needs. Our Savings range includes Endowment Assurance Plan, Unit Linked Endowment, Unit Linked Endowment Plus, Money Back Plan, Children‘s Plan, Unit Linked Youngstar, Unit Linked Youngster Plus .

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Group Products One-stop shop for employee-benefit solutions HDFC Standard Life has the most comprehensive list of products for progressive employers who wish to provide the best and most innovative employee benefit solutions to their employees. We offer different products for different needs of employers ranging from term insurance plans for pure protection to voluntary plans such as superannuation and leave encashment. We now offer the following group products to our esteemed corporate clients: Group Term Insurance Group Variable Term Insurance Group Unit-Linked Plan An investment solution that provides funding vehicle to manage corpuses with Gratuity, Defined Benefit or Defined Contribution Superannuation or Leave Encashment schemes of your company Also suitable for other employee benefit schemes such as salary saving schemes and wealth management schemes

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Social Products Development Insurance Plan Development Insurance plan is an insurance plan which provides life cover to members of a Development Agency for a term of one year. On the death of any member of the group insured during the year of cover, a lump sum is paid to that member‘s beneficiaries to help meet some of the immediate financial needs following their loss. Eligibility 



Members of the development agency and their spouses with: -

Minimum age at the start of the policy 18 years last birthday

-

Maximum age at the start of policy 50 years last birthday

Employees of the Development Agency are not eligible to join the group. The group to be covered is only eligible if it contains more than 500 members.

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1.5 TURNOVER AND MANPOWER:

Total Team Size: 1250+ I. II.

Designing Resources: 100+ Development Resources: 600+

III.

Testing Resources: 500+

IV.

Content Management Resources: 100+

V. VI.

Support Team: 200+ Client Relationship Management Team: 100+ Team Structure

Turnover of the Company: Its diversified business interests include Financial Services, Infrastructure and Housing, Manufacturing, Services and Trading. The turnover of HDFC Standard Life Insurance is about 600crore. (aprox.)

Turnover

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1.6 ORGANISATIONAL STRUCTURE CEO

Chief Manager

Marketing Manager

Promotion Head

Accounts manager

Document ation

Office assistant

Fig No. 1.1- Organizational Structure

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Clerks

1.7). MARKET SHARE & POSITION OF THE COMPANY IN THE INDUSTRY. As the company is new in the market and only 22 months old hence, it is not possible to calculate the market position exactly. As the company has diversified products with unique features direct comparison is not possible with the other existing companies in the market. Credent provides set of services which are not provided by any other company in the market as Healthcare services, Accidental insurance, Medical insurance, mutal fund,bonds,securities and many other services are provided under one roof. HDFC Standard Life has recorded a strong year on year growth of 112% for the period April-March 2011- 13, in comparison with the same period 2004-05, with new business first year premium of Rs.1029 crores. The growth achieved by the company was considerably higher than the private sector industry average of 84% for 2011-06. In terms of effective premium income (EPI), which gives a 10% value to a Single Premium policy, and is an internationally accepted indicator of an insurance company‘s performance, the EPI grew by 103% from Rs.436 Cr. to Rs. 887Cr. HDFC Standard Life’s growth in new business is a result of number of lives insured as well as, an increase in the average premium. For the individual business, volume measured by the number of lives insured, witnessed a 32% growth. The average premium also increased by 62% from Rs.17,000 in 2010-11 to Rs. 27,500 in 2011-02 Commenting on the huge potential that exists in the Indian market today, Mr. Deepak Satwalekar, Managing Director & CEO of HDFC Standard Life emphasised, ―The GDP has been growing over 8% per annum and 47% of all savings are now in financial saving 15

forms; 16% of savings is in the form of insurance premiums and another 16% is in Provident Fund and Pensions i.e., 32% of India‘s financial savings of the household sector are available to be tapped. Therefore, growth for the private life insurance industry is inevitable and HDFC Standard Life is confident of maintaining a steady growth pace.‖ Highlighting HDFC Standard Life’s differentiators, Mr. Deepak Satwalekar said, ―Our Company has the most competitive fund management charge, which is the lowest in equity based products. Our fund management charge is as low as 0.8% per annum, the key to enhancing long-term returns. Our other differentiator is that we believe in offering life insurance solutions to customers based clearly on their needs, and ‗Disha‘ is the way it is done.‖ ‗Disha‘ is a Professional Sales Skills Training Program. The delegates in this program are introduced to a ‗Need-based‘ selling approach, which can cater to all our clients opting for life insurance solutions. ‗Disha‘ is aimed at providing a good service to the client and building long-term relationships Contribution to the individual business premium income by the different channels of distribution also changed significantly, compared to last year. The Corporate Agency and Bancassurance channel has grown tremendously and currently accounts for 43% of the company‘s business. Speaking on this, Mr. Satwalekar said, ―The strategy to concentrate on activating a limited number of bancasurance partners rather than going in for signing up a large number of banks in the early years, also paid off. Our key to achieving bancassurance success is our belief in a partnership approach, customized product offerings, highly ethical dealings and providing good value to our partners and their customers.‖

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HDFC Standard Life’s offerings of Employee Benefit Solutions, to the corporate sector, through Group Business, have met with increased success with year on year growth of 174%. Commenting on the strong growth of HDFC SL‘s Group Business, Mr. Satwalekar said, ―Our excellent fund performance on retirement products and increase in our client base with 150 clients cutting across a spectrum of industries spanning from multinationals to PSUs to the older business houses, have been the highlights of the year.‖ Ongoing training for conventional products and specialized training for unit linked products for more than 33,000 of our financial consultants has also helped its customers choose the products best suited for their need for protection, savings, investments and pensions. HDFC Standard Life is the only company requiring its sales force to undergo specific training in ULIPs before they are permitted to sell the same. There has been a huge jump in the number of its Financial Consultants who have qualified to become members of the prestigious Million Dollar Round Table (MDRT). From 124 members as on 31st December 2004, the number has increased to 318 members as on 31st December 2011.

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Table Showcasing Financial Results:

Apr-Mar

Apr-Mar

2011-2012

2012-2013

(Rs. Cr.)

(Rs. Cr.)

668.40

1532.21

129.23

i. New Business

486.15

1028.94

111.65

ii. Renewal

182.25

503.27

176.14

Effective Premium Income 436.08

887.30

103.47

135.15

173.58

Parameters

Total received premium

% Growth

(Total)

Group Business Premium 49.40 (EPI)

Table No. 1.1- Table Showing Financial Results

HDFC Standard Life continues to have one of the widest reaches amongst new insurance companies. The Company‘s geographical presence has also increased and covers 169 offices across the country.

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1.8.1 PRESENT LEADERSHIP: Managing Worker & Chairman

- Mr. Deepak S. Parekh

Vice Chairman

-Mr. Keki M. Mistry

Finance Director

-Mr. David Nish

Director of HDFC

-Mr. A. K.T. Chari

1.8.2 People whom we have met during internship n their level. 1. Mr. Amit Kumar

: Head-Business Development

2. Mr. Arvind Jha

: Marketing Manager

3. Mr. Ranjeet Jha

: Line Supervisor

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1.9 Source of data collection Research is not an isolated activity, but rather seeks to build on previous work as well as providing new avenues for exploration. The very prerequisite to conduct every study is to develop a research design or plan. Research design calls for determining the information needed, developing a plan for gathering it efficiently and presenting the design in the form of findings, analysis and must recommend some suggestions. Research design includes gathering of data, sampling plans and instruments and tools that will use to gather data. Research is carried out in two phases: Desk research: Desk research is the first phase of research. It includes collection of published and unpublished data available within or outside the organization. Field research: The data collection methods used for comparative research include experiments, content analysis and existing statistics. Data type/Sources of information: Data can be obtained from two important sources, namely:

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Primary source: Primary data measurement observed and recorded as a part of an original study. When the data required for a particular study can be found neither in the internal record of the enterprise nor in the published sources, may it become necessary to collect original data that is to conduct first hand investigation. The work of collecting original data is usually limited by time, money & manpower available for the study. Secondary source: When an investigator uses a data, which has already been collected by others, such data are called secondary data. Method of data collection: The secondary data has been collected through several websites, journals, business magazines and newspapers, books.

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Chapter – 2 SWOT Analysis of the Company

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SWOT analysis (alternatively SWOT Matrix) is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. The technique is credited to Albert Humphrey, who led a convention at the Stanford Research Institute (now SRI International) in the 1960s and 1970s using data from Fortune 500 companies. The degree to which the internal environment of the firm matches with the external environment is expressed by the concept of strategic fit. Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organization. 

Strengths: characteristics of the business or project that give it an advantage over others



Weaknesses: are characteristics that place the team at a disadvantage relative to others



Opportunities: elements that the project could exploit to its advantage



Threats: elements in the environment that could cause trouble for the business or project

Identification of SWOTs is important because they can inform later steps in planning to achieve the objective. 23

First, the decision makers should consider whether the objective is attainable, given the SWOTs. If the objective is not attainable a different objective must be selected and the process repeated. Users of SWOT analysis need to ask and answer questions that generate meaningful information for each category (strengths, weaknesses, opportunities, and threats) to make the analysis useful and find their competitive advantage. SWOT analysis aims to identify the key internal and external factors seen as important to achieving an objective. The factors come from within a company's unique value chain. SWOT analysis groups key pieces of information into two main categories: 1. internal factors – the strengths and weaknesses internal to the organization 2. external factors – the opportunities and threats presented by the environment external to the organization

Analysis may view the internal factors as strengths or as weaknesses depending upon their effect on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses (distractions, competition) for another objective. The factors may include all of the 4Ps; as well as personnel, finance, manufacturing capabilities, and so on. The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or in competitive position. The results are often presented in the form of a matrix. SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade its users to compile lists rather than to think about 24

actual important factors in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats. It is prudent not to eliminate any candidate SWOT entry too quickly. The importance of individual SWOTs will be revealed by the value of the strategies they generate. A SWOT item that produces valuable strategies is important. A SWOT item that generates no strategies is not important.

2.1. STRENGTHS 1. HDFC offers a range of individual and group insurance solutions. 2. HDFC has the financial expertise required to manage your long-term investments safely and efficiently. 3. The company has covered over 8,77,000 lives year ending March 31, 2007 4. Rated ‗AAA‘ by CRISIL and ICRA for the 10th consecutive year for High service standards 5. HDFC Bank industry is a rapid growing and a nobler service industry.

2.2. WEAKNESSES 1. LIC is prevalent and sustains even today a major source of population. 2. Low number of offices and network and number of life insurance agents. 25

3. Lack of knowledge and expertise. 4. Heavy management expenses and administrative costs. 5.

Low customer confidence on the private players.

6.

Poor retention percentage of tied up agents.

2.3. OPPORTUNTIIES 1. HDFC has captured its mere15 – 20% growth therefore a wide open untapped market is open to the company to develop, grow and measure its success. 2. Still the number of companies are few and company has every capabilities to grow and forward its performance areas to the widest

2.4. THREATS 1. People are hesitant to invest and put their hard earned money to the private life insurance company with the fear of getting lost. 2. Belief Banks (government) corporation phobia is continue to surmount the people of India despite lots of flaws and development and liberalization of life insurance. 3. Alternative financial services such as mutual fund, banking services, share and securities also pose problems and threats to the working of the life insurance sector.

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4. Illiteracy and unemployment also pose threat.

2.2.1 Best Practices/USPs that the Company Follows in different Functional Area Hdfc is also creating its vantage position in service sector for Indians residing overseas. MLM (Multi level marketing) or direct marketing is followed by the company. The good example of its products with clear USP is ―Sharing Your Responsibilities‖. Hdfc is offering its services in terms of Plans and each of them has their own unique feature i.e. ‗Unique Selling Proposition‘. These features allow company to be used as a branding tool that deploys strategy to how to attract people from the market.

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Chapter 3 Functional analysis of at the Company

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MARKETING STRATEGY OF HDFC Banking Industry is one of the most important service industries which touches the lives of millions of people. Its service is unique both in social and economic points of view of a nation. Earlier the attitude of banking service was that it was not professional to sell one's services and was unnecessary in the sense that traditional relationships and quality of products were sufficient to carry forward the tasks. Before the mid 1950's the banks had no understanding or regard for marketing. The bank building was created in the image of a Greek Temple to impress the public about the importance of a bank. The interior was austere and the teller rarely smiled. Bankers maintained austere dignity and they hardly maintained friendliness Marketing strategy is defined by David Aaker as a process that can allow an organization to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage. Marketing strategy includes all basic and long-term activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives

It was in the late 1950's that marketing in banking industry emerged in the west. It emergence was in the form of advertising and promotion concept. At that time, personal setting could not get a significant place. (.3radually there was a change in the attitude of bankers, probably in time with the attitudinal change in customers. The idea of customers'

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satisfaction began in the late 1950's, flourished in 1960's and became an integral part of the banking services in the 1970's. But the same trend could not be applicable, especially in developing countries and to be more specific in India because of socioeconomic and political reasons. Marketing came into Indian banks in the late 1950's not in the form of marketing concept but in the forms of advertising and promotion concept. Soon it was realised that marketing transcends advertlslng and friendliness'. Till 1950 it was recognised that personal selling was not necessary. The bankers went out of their way to avoid being accused of selling. The bankers even eliminated the word 'selling' and they called the function of customer contact 'business development function'. The bankers' attitudes and comprehensions about marketing changed in the 1960's. They began to realise that marketing was a lot more than smiling and friendly tellers2. The idea of customer convenience began in the late fifties and it flourished in the 1960's. Bankers were beginning to understand the concept of market segmentation in the late 1960's. The bank marketing profession changed dramatically in the 1970's. Marketing positions in banks were created and marketing was accepted as an organisational imperative. To understand how banking services can be marketed better, one must examine bank~nga s a service industry, in the content of a swiftly changing environment, redefine marketing to suit a banker's needs, analyse how the marketing of financial services differs from that of other products, identify the tasks involved there in and set forth a series of steps for effective bank marketing

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Marketing Strategy of HDFC The frantic pace of branch expansion and credit disbursement during the development banking period has direct impact on the health of public sector banks. The real outcome was the proliSt*ration of loss-making branches. The problem of communication and tl.anspot-t network in the countryside, rising customer dissatisfaction with banking services, and resultant apathy of bank staff towards developmental work are the basic reasons for this. The RBI urged coinmercial banks to take stock of the state of affairs, to consolidate their gains and go slow on branch expansion, thus ushering in the period of consolitiation. The bank visualises the r ~ s kin herent in continuing to do business as before. So there is a growing awareness that market~ng was an essential tool in the hands of the banker, an inescapable necessity without which perhaps survival itself might become difficult in future. The most importarit factors which have given a momentum to the bank marketing in the country are Financial Disintermediation. The basic job of a banker IS to accept deposits from investors and or depositors and after probiding funds for statutory obligation like SLR and CRR bank extend loan to borrowers. The difference between deposit interest rate and the loan interest rate is the banker's 'spread'. Thus the bank acts as an interlinking factor and this is called financial intermediation Financial Intermediation of HDFC In another angle, the banker brings together those who have surplus fund and thosr who are in need of it. This has been the process for the last few decades in India. Now due to the opening of new avenues for both deployment of surplus fund and also for securing funds, meeting of depositor and borrower via banks are now meeting without the 31

mediation of bank. There are a number of non-banking alternat~vesf or the depositor like share market, Post-office saving, UTI, mutual funds and company fixed deposit. All these are investment avenues and many other similar ones have flooded in to the Indian financial market. Furthermore, it is an unavoidable process of rapid economic growth. The outcome of these processes is undermining the traditional banking function of intermediary between investors and borrowers. This is known as the process of financial disintermediation DEPOSITOR BANKER BORROWER Financial Disintermediation The baslc outcon~e is that the process of financial disintermediation cut tlic. roof of traditional banking. On the one side, deposit mobilisation is threatened because of alternative lucrative investment avenues are available to depositors. Similar is the case for lending aspect also because borrowers can now access cheaper and less cumbersome avenues tor raising resources. In a nutshell, financial disintermediation has created a serious threat to the very survival and growth of basic banking activities. In such a situation, banks have been frantically looking for alternatives to survive and thrive. It is here that bank marketing came to their rescue. With its emphasis on the centrality of the customer to entire banking operations, the bank marketing concept has provided a way out in the form oi' a host of new banking services and instruments.

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Bank marketing has ernerged as the principal survival strategy for banks confronted with an accelerating pace of disintermediation. Another face of the growth of Indian economy in recent years has been the fantastic increase in needs and expectation of banking customers, Important factors for this change are - The spread of Television, including access to international channels, - Rise of Indian middle-class with considerable financial resources ant1 furthermore, a higher propensity towards consumption, - Entry of foreign and private sector banks in India, - Break-up of the joint family system in urban India, and - Govt. intervention for protecting the interest of consumers. All these and similar other developments have combined to produce a typical bank customer who is no longer prepared to accept things lying down. HI: has started harbouring higher-expectations from banks to fulfil his newfound needs and has become quite articulate about them". Now due to the change in the attitude of' customers, banks cannot continue with their "take it or leave it" attitudes. If they do so they will lose their customers because customers have a number of other options. So banks must be closer to the customer in order to satisfy them. In other words, this is exactly what bank marketing is. An offshoot of economic liberalisation is the phenomenal growth in competition in the banking industry. A number of private sector banks with considerable financial might and expertise have already made an entry. In addition to this, foreign banks have also made their presence in the country Besides, a large number of Non-banking Finance Companies as awe11 as recently proposed local area banks are competing to get the maximum share of the market. So for the first

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time, bank customers in lndia are going to have a choice. This situation brings 'bank marketing' to increase business and profit. Marketing strategies serve as the fundamental underpinning

of marketing

plans designed

to

fill

market

needs

and

reach marketing objectives. Plans and objectives are generally tested for measurable results. Commonly, marketing strategies are developed as multi-year plans, with a tactical plan detailing specific actions to be accomplished in the current year. Time horizons covered by the marketing plan vary by company, by industry, and by nation, however, time horizons are becoming shorter as the speed of change in the environment increases. Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. See strategy dynamics. Marketing strategy needs to take a long term view, and tools such as customer lifetime value models can be very powerful in helping to simulate the effects of strategy on acquisition, revenue per customer and churn rate. Marketing strategy involves

careful

scanning of

the

internal

and

external

environments Internal environmental factors include the marketing mix andmarketing mix

modeling,

environmental

plus factors

performance include

analysis

customer

and

strategic

constraints External

analysis, competitor

analysis, target

market analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement. Once a thorough environmental scan is complete, a strategic plan can be constructed to identify business alternatives, establish challenging goals, determine the optimal 34

marketing mix to attain these goals, and detail implementation. A final step in developing a marketing strategy is to create a plan to monitor progress and a set of contingencies if problems arise in the implementation of the plan. Marketing Mix Modeling is often used to help determine the optimal marketing budget and how to allocate across the marketing mix to achieve these strategic goals. Moreover, such models can help allocate spend across a portfolio of brands and manage brands to create value. The customer of HDFC bank today is most discerning. With banks operating in a buyer's market, the customer looks for a bank which can meet all his present ant1 future requirements at an affordable competitive cost. He is also increa:;ingly quality-conscious. Almost everyone would appreciate that no two classes of customers are alike. Therefore in any environment relating to a banks branch or region, the potential clientele can always be classified into different homogeneous segments and distinct 4 Ps package judiciously offered to each segment. Market segmentation is the strategy of dividing markets inorder to conquer them, a continuous policy of looking for differences, geograph~cal or otherwise in the total market and the continuous exploitation of these differences2'. Market segmentation differentiates customers with similar banking needs from those with dissimilar needs. If homogeneity is greater in needs and behaviour of a group of customers then it is easier to understand them. In addition to that, segmentation provides a solid basis upon which the marketing strategy of a bank can be designed. Furthermore, segmenting the market also helps to evolve a distinctive marketing package for each segment based on the needs of

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different customer segment. This in turn helps the marketer to cultivate in the customer's mind a perception of psychological membership of bankers' offerings. A customer is more likely to have a feeling that the given marketing package has been specially designed for a person like him only, and not for everyday. This will result in greater satisfaction of customer needs which will inturn result in to higher return for every rupee spent.

Marketing literature is teeming with information about the different basis on which market segmentation may be attempted. Some of the popular basis of segmentation are geographic, demographic, psychological, volume., benefit2' etc. Geographic segmentation in the banking context, one may have variations like metropolitan, urban, rural, north west, east, south, large city, small city on the b;asis of population, hill area, tribal area and desert area. By this segmeni.ation, it is assumed that customers in a given geographic region would show a high degree of homogeneity in their banking needs. As geographic region are already demarcated, it is the easiest way of segmenlation. Generally, geographic segmentation could be further extended on the basis of demographic segmentation of customers. Typical demographic parameters in use are age, sex, income, occupation education, social class etc. In India, geographic and demographic segmentation combined together are likely to yield far more homogeneous segments than either of them individually.

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HDFC Customer Focus are: 

The extent to which what customers say they want does not match their purchasing decisions. Thus surveys of customers might claim that 70% of a restaurant's customers want healthier choices on the menu, but only 10% of them actually buy the new items once they are offered. This might be acceptable except for the extent to which those items are money-losing propositions for the business, bleeding red ink. A lesson from this type of situation is to be smarter about the true test validity of instruments like surveys. A corollary argument is that "truly understanding customers sometimes means understanding them better than they understand themselves." Thus one could argue that the principle of customer focus, or being close to the customers, is not violated here—just expanded upon.

The extent to which customers are currently ignorant of what one might argue they should want—which is dicey because whether it can be acted upon affordably depends on whether or how soon the customers will learn, or be convinced, otherwise. IT hardware and software capabilities and automobile features are examples. Customers who in 1997 said that they would not place any value on internet browsing capability on a mobile phone, or 6% better fuel efficiency in their vehicle, might say something different today, because the value proposition of those opportunities has changed Types of market research Market research, as a sub-set aspect of marketing activities, can be divided into the following parts: 37



Primary research (also known as field research), which involves the conduction and compilation of research for a specific purpose.



Secondary research (also referred to as desk research), initially conducted for one purpose, but often used to support another purpose or end goal.

By these definitions, an example of primary research would be market research conducted into health foods, which is used solely to ascertain the needs/wants of the target market for health foods. Secondary research in this case would be research pertaining to health foods, but used by a firm wishing to develop an unrelated product. Primary research is often expensive to prepare, collect and interpret from data to information. Nevertheless, while secondary research is relatively inexpensive, it often can become outdated and outmoded, given that it is used for a purpose other than the one for which it was intended. Primary research can also be broken down into quantitative research and qualitative research, which, as the terms suggest, pertain to numerical and non-numerical research methods and techniques, respectively. The appropriateness of each mode of research depends on whether data can be quantified (quantitative research), or whether subjective, non-numeric or abstract concepts are required to be studied (qualitative research). There also exist additional modes of marketing research, which are: 

Exploratory research, pertaining to research that investigates an assumption.



Descriptive research, which, as the term suggests, describes "what is".



Predictive research, meaning research conducted to predict a future occurrence.

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

Conclusive research, for the purpose of deriving a conclusion via a research process.

3.1. RECRUITMENT POLICY for Financial Consultants In today‘s rapidly changing business environment, a well defined recruitment policy is necessary for every organization so as to respond to its human resource requirements in time. HDFC SLI thus believes that it is important to have a clear and concise recruitment policy in place, which can be executed effectively to recruit the best talent pool for the selection of the right candidate at the right place quickly. Recruitment policy of any organization is derived from the personnel policy of the same organization. In other words the former is a part of the latter. However, recruitment policy by itself should take into consideration the government‘s reservation policy, policy regarding sons of soil, etc., personnel policies of other organizations regarding merit, internal sources, social responsibility in absorbing minority sections, women, etc. Recruitment policy should commit itself to the organisation‘s personnel policy like enriching the organisation‘s human resources or servicing the community by absorbing the retrenched or laid-off employees or casual/temporary employees or dependents of present/former employees, etc.

39

A clear and concise recruitment policy helps ensure a sound recruitment process. It specifies the objectives of recruitment and provides a framework for implementation of recruitment program. It may involve organizational system to be developed for implementing recruitment program and procedures by filling up vacancies with best qualified people. HDFC SLI has formulated its recruitment policy giving consideration to the following factors: 

Organizational objectives



Personnel policies of the organization and its competitors.



Government policies on reservations.



Preferred sources of recruitment.



Recruitment costs and financial implications

3.2. RECRUITMENT PROCESS IN HDFC SLI The job evaluation of the vacancy is done so as to understand to understand the skills required in the candidate. Recruitment when done via external sources generally follows the following process in HDFC SLI: 3.2.1 CV Submission Information regarding the vacancies and required eligibility criteria is published in the newspapers, websites, employment magazines etc. Potential candidates interested in joining the Co are required to send their complete curriculum vitae. An acknowledgement of receipt is sent for all submitted applications to the candidate's email.

40

3.2.2 Application Evaluation The Human Resources department evaluates all incoming applications, against prerequisite abilities and skills set for all current openings. All applications are kept based on strengths and specialization, for future reference. 3.2.3 Ability Tests Potential candidates will be invited to participate in aptitude tests i.e. numerical, verbal, English and psychometric, when deemed necessary. 3.2.4 Capability Based Interviews To ensure that our recruitment process is fair and consistent, all candidates who are successful at the exams are invited for a capability based interview. Interviews are based against capabilities, required for each position for which the candidate is interviewed for. A capability or competency is an ability described in terms of skills & behaviors that are essential to effectively perform within a job. Apart from the educational and academic capability, the chief attributes HDFC SLI looks out for in a candidate are as follows:  We look out for a candidate who values Integrity  Has a zeal for Excellence  Is focused on Results  Is Self driven and Enthusiastic  Is a good Learner and Team Player  Is dedicated to Customer Satisfaction

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3.2.5 Reply Letters At all stages of the process candidates are kept informed of the status of their application with an email reply letter. 3.2.6 Job Offer If a candidate successfully reaches the final stage, a position offering is made in conjunction with a competitive reward package. 3.2.7 FACTS AND FINDINGS HDFC SLI‗s recruitment policy is well structured and provides the company with a competitive edge due to the following reasons: 

The recruitment policy focuses on recruiting the best potential people.



It ensures that every applicant and employee is treated equally with dignity and respect.



It is an unbiased policy.



It aids and encourages employees in realizing their full potential.



IT allows transparent, task oriented and merit based selection.



It abides by relevant public policy and legislation on hiring and employment relationship.



It Integrates employee needs with the organizational needs

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EXCELLENT OPPORTUNITY 

Join HDFC Standard Life Insurance as a Financial Consultant



Flexible work timings – You can work whenever you like.

and earn a rewarding career

You can work full-time or part-

time, depending on your convenience. However, the time you invest will determine your success 

Anyone can join

- Young graduates, Housewives, Retired Personnel, Self-employed

or Working Professionals. 

Zero Investment

- There is no start-up capital required. Be your own boss with

flexible working environment, unlimited earning potential and opportunities to be part of a world class sales team. 

Attractive Remuneration - Company offers excellent commissions, award and rewards for the performers.

You have unlimited earning potential. Commission structure is pretty handsome and is 15-40% and renewal commission of 5% second year onwards till the policy is in force.



Certificate by IRDA- You will get world class training free of cost and certification by Insurance Regulatory Development Authority.

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Desired Profile: Age: 18Yrs to 65 Yrs Education: Intermediate or more Experience: Not mandatory Type of Job: Full Time or part time

Documents Required: 8 photograph Age proof (passport, Birth certificate, College Leaving Certificate, Driving License) Address proof Education proof Copy of PAN Card Duely Signed Cancelled Cheque of self A candidate needs to bring a DD of Rs. 925/- in case of offline training and Rs.825 in case of online training towards HDFC SLIC LTD payable at Mumbai.

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Recruitment process of FCs

Fill up of Agency form

IRDA Training (100 hrs)

IRDA Exam

Fail

Pass

Exit

Product Training

Tradition Product

ULIP Product

Internal Assessment

Fail

Exit Fig. No.3.1 – Recruitment Process of Financial Consultants

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Pass

Certification

The Career Path in HDFC Standard Life Insurance Company Ltd. mainly has two operations in its all branches. HDFC Standard Life Insurance Company Ltd. has divided its operation into two departments for the better management. These departments are:  Channel Development Department 1. Area Managers 2. Channel Development Managers 3. Channel Development Executives 4. Recruitment Consultant  Sales Department 1.

Territory Manager

2.

Business Development Managers

3.

Sales Development Managers

4.

Financial Consultants

3.3.Channel Development Department Channel Development Department is department which plays a major role in the organization. This department is engaged in recruiting the effective and efficient FCs for the organization so the people they are recruiting is capable to bring the business for the organization and fulfill the organizational goals and objectives. Recruiting the FCs not only task for the channel development department but to provide the IRDA training to the selected candidate and preparing for the IRDA exams for getting the IRDA license. After getting the IRDA license a candidate is able to sell the insurance product and become the

46

Financial Consultant, and he/she transferred to the sales department for the further process.

3.3.1Role of CDMs 1. Team building The first step for any CDM is make a team for the recruitment process. A CDM can use the different resource for the recruitment like Recruitment Consultants & Project. Through these resource of recruitment a CDM can move for the further process. 2. Training & Induction The next step is to provide the training & induction programs for his/her team (i.e. recruitment resource) and he/she should has to do field work with his/her team. 3. Planning & Implementation of Lead Generation Activities. A CDM required minimum one BOP per week, he can use the canopy, road shows, BTL activities as well for better recruitment for the organization. 4. Resource Motivation and Drive. One Vendor Review meet per Week ( Channel Development Manager to Review) One Vendor Meet per Month( AM-CD to Address) Felicitation & Rewards to top performers 5. IRDA Training & Examination A CDM has to arrange FC‘s 50 hours training tracking through LC & RC‘s. and IRDA Examination tracking through increasing I/O Ratio.

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6. Relationship Management at Local Level A CDM has to be regular branch visits to keep the better relationship with local level: 

Relationship Management



FC Recruitment, Licensing & Business Updates to Retail functions



Updating Ops-Agency Co-Ordinator on Process Change

7. Checking Quality Parameters 

Q Score



Q Score >3 is not allowed



FC Pre Login Interview Sheet



Fulfillment of RI documents

8. Recruitment Activity Monitor 

Ensure you update RAM daily



100 % adherence

3.4.Sales Department Sales Department is the most important department for any organization, without it no organization move further. All the business is depends on the sales department and all the operations are done for promoting the sales. So i.e. the better management and better sales executive are require for increasing the sale of Insurance products (Insurance Policies).

The Territory Manager monitors the branch and all the BDMs are the

subordinate of him. TM keeps the eyes on all the activities or a branch and his/her 48

subordinates like BDMs, SDMs, CDMs, FCs and others.

The Channel Development

department helps in recruiting the best Financial Consultant to the organization so he/she would be able to take more business (large amount of Premiums) and helps in achieving the organizational goal. After getting the IRDA licence FCs are transferred to sales department from channel development department under different SDMs & BDMs. Then sales department provides them product and other training which can make them to go in the market and to sell the insurance policies

3.4.1Job Description for Financial Consultants: 3.4.11 Pre sales role 

Identifying prospective clients.



Meeting prospective clients.



Understanding the need of the client.



Presenting solutions to client.



Closing sales.

Post sales role 

Taking 1-2 references from the client



Providing timely updates to the client for maintaining Lifelong relationship.

HDFC Company was a strategic merger of HDFC(banking powerhouse in India) and Standard Life – largest insurer in the UK and is also the 28th largest company in the world. In India, the company is marketing life insurance products and unit linked investment plans. From my research at HDFC SLIC, I found that the company has a lot of competition from other private insurers like ICICI, Aviva, Birla Sun Life and Tata 49

AIG. It also faces competition from LIC. To compete effectively HDFC SLIC could launch cheaper and more reasonable products with small premiums and short policy terms

(the

number

of

year‘s

premium

is

to

be

paid).

Insurance sector has become more dynamic and critical for thriving existence in today‘s uncertain world. Selling insurance as a product is a lot difficult in practicality as it looks theortically. One has to get an insight into this field to resolve it.Working for such objective will definitely hone us and once accomplished it provides a great satisfaction of fulfillment. It also helps us to understand the real organizational problems, perceptions and challenges. This will add a very useful knowledge to our repertoire in the form of knowledge about the nitty-gritty of one of the most promising sectors in India i.e the banking and insurance sector GROWTH AND MARKETING In good times and bad, HDFC Bank sticks to its 30 per cent profit growth. Delivering such growth, quarter after quarter, is a carefully crafted strategy. It‘s a well known fact that the bank increases its provision cover for its loans, such that it can deliver 30 per cent growth in more challenging years. This strategy is evidently paying off this year. Though the net interest income has grown at 22.3 per cent in the first quarter compared to the corresponding one last year, the bank has managed to deliver a 30 per cent net profit growth. The bank is nimble-footed enough to change its loan mix in different scenarios. With corporate India going through a difficult phase, the bank has increased the share of retail loans to 52 per cent now from under 50 per cent last year. Analysts say the bank is growing ahead of the sector across most retail segments. According to Emkay Global, the 50

33 per cent growth in retail loans year-on-year (YoY) and 4.4 per cent quarter-on-quarter was predominantly led by automobile loans (up 19 per cent YoY), commercial vehicles (60 per cent YoY), business banking (27 per cent YoY), home loans (up 23 per cent YoY) and personal loans (34 per cent YoY). These segments cumulatively account for 80 per cent of the retail loans. Even as the rest of the industry is faced with deceleration in deposits, the bank has managed to grow its deposits by 22 per cent YoY and 4.4 per cent sequentially. The bank‘s loan/deposit ratio has moved up by 360 basis points sequentially to 82.8 per cent. The low-cost current account-savings account deposits have also grown by 14 per cent YoY. Though the bank‘s net NPAs are up 24 per cent annually and 12 per cent sequentially, Vaibhav Agarwal of Angel Broking says it has enough fire power to sustain a bottom line growth of 30 per cent even after provisions and a net interest income growth of 22 per cent Analysts say since the bank has created a buffer in good times, it would be able to deliver superior earnings even in difficult times. Would this kind of growth sustain in the years to come? Given that India‘s nominal GDP growth is 12-14 per cent, analysts believe credit growth would be in 17-20 per cent. Given that HDFC Bank‘s share in the banking sector is 4.3 per cent, there is enough room for growth. This effectively means the bank can grow at least 22-25 per cent for some more years

51

Chapter – 4 Lessons Learnt

52

4.1. Working Environment 

Company has a well motivated staff as every employee is engaged in performing

their own work. 

There is strict discipline regarding working hours in the company which reaps employee turnover.



Good working conditions are provided to the employees so that employee can perform their task efficiently.



If any employee has any doubt or clarification it can be easily resolved by consulting it with immediate superior. This makes an employee perform the tasks in the manner as required by the company.



Appropriate time for break is given to the employees of organization.

4.2. Personal Experience 

With this summer training lot information in the field of finance and insurance is now known to me.



Much information regarding performance of other companies in the same field is also known to me.



Hard work & zeal to work is very much needed to be on the top in a trading company as there is very high competition in this field.



This company is utilizing the talents of its employees in a very efficient manner as every person has been assigned different tasks to perform. This makes the work of the company in a very efficient way. 53



Working time in the company is strictly followed with which employees are also satisfied.

4.3. PRACTICAL KNOWLEDGE GAINED DURING THE SUMMER TRAINING Working under Hdfc Life has been a great help and it has helped in the following ways 1) Getting knowledge about the Indian markets. 2) Getting to know how to sell policies through telephonic conversation 3) Knowledge about the market share of various companies offering many types of services to the customers including health policies, holiday packages etc. 4) Dealing with people face to face and telling them about the company‘s products and services. 5) Solving the problem of customers is very important for the organization as it fosters long term relationship between the customers and organization. 6) As the competition in the market is very tough it is very important for the organization to offer the best services and to work hard to survive n the market. 7) The organisation must take care of the needs of the people and satisfy their needs so as to survive in the market.

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4.4. Difficulties Faced 

First of all working in new field was difficult to adapt.



As my summer training was in the field of finance and marketing, it was difficult to work as a sales executive of the company and increasing the business through selling policies and recruitments



There was a lack of time to expose, learn and analyze the environment fully as well as to complete the project.

4.5. SUGGESTIONS FOR TRAINING OF STUDENTS IN FUTURE Summer training for students is important because it is the time to obtain as much knowledge about their field. As a student, training can help you to implement the concepts you learned at your classes. It is true that without learning a concept you can't implement it, but just learning a concept doesn't mean that you can correctly implement it. Training also helps the student to get an exposure of the true business world and training develops confidence in whatever we have learned. Training helps to train the students for future challenges . So students shall be sent for Training because it proves to be helpful for the student as they learn new things and get to know the working environment of the organizations. And this is also an opportunity for the students to face the real problems which they may face in their future.

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4.6 CONCLUSION Summer training is a best example for a trainee to learn about the company working, corporate culture under which is operating the functions. HDFC is company under which I gained a significant knowledge with respect to Financial concepts, its importance and applicability as well as undertook the task to recruit capable life insurance advisors which is conducive for the company to grow with more prosperity. What I taught in the management institute utilized them fruitfully leading to the best advantage to the company and to the best experience for mine. At far I can conclude that life insurance is a noble service which is very important for every citizen to learn and realize its importance because this is the only source which can remain the status where one is with the family bread earner and ever when he is not. With the growing financial sector I would like to opt. this industry for my future career advancement and as an opportunity to service this industry. From this 40 days experience in a corporate, I got a good exposure about what really the corporate life is about. It‘s waking along with targets and mind stresses every morning. The person who can manage these target and stress are shining in those fields. The practical experience is an entirely different aspect when considered about what we learnt in classroom. This summer training report would reveal the various learning process. I have learned some of the key things like how to behave in the organization? How to talk with customers? how to communicate with senior officials?

56

The study, which I conducted on the analysis of finance and marketing, public relations of Hdfc Life , has been a great experience. As the objective was to examine the Finance department of the company the entire report has been an effort to do just that. The insight obtained has been helpful in understanding what happens in the industry.

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References/Bibliography 

http://www.hdfclife.com/



http://www.hdfclife.com/AboutUs/AboutUs.aspx



http://en.wikipedia.org/wiki/Standard_Life



Internal Experts



Company Audit Reports



Journals

58