A PROJECT REPORT ON

BUILDING CORPORATE IMAGE

SUBMITTED BY KARAMDEEP

KAUR BHUMRAH T.Y.B.M.S.

[Semester V]
SHAILENDRA EDUCATION SOCIETYS ARTS, COMMERCE AND SCIENCE COLLEGE. DHAISAR (EAST)

SUBMITTED TO

UNIVERSITY OF MUMBAI
ACADEMIC YEAR

2010 - 2011
PROJECT GUIDE PROF. MRS. APARNA. PATHAK.

PROJECT REPORT ON

BUILDING CORPORATE IMAGE

SUBMITTED BY

KARAMDEEP KAUR BHUMRAH

T.Y.B.M.S. [Semester V]
SHAILENDRA EDUCATION SOCIETYS ARTS, COMMERCE AND SCIENCE COLLEGE. DHAISAR (EAST)

SUBMITTED TO UNIVERSITY OF MUMBAI

ACADEMIC YEAR 2010 - 2011

NAME OF PROJECT CO-ORDINATOR PROF. MRS.APARNA. PATHAK

Date Of Submission
04 October,2010.

ACKNOWLEDGEMENTS
I wish to record my sincere gratitude to Shailendra College and its management for providing me an opportunity to build a strong base for my career. My project guide and coordinator Prof. Mrs. Aparna Pathak, who has guided and supported me throughout the project, constantly mentoring and motivating me with the project work. Mr. Ajay. Thakkar (Development Officer, LIC) for appraising me with the most contemporary issues and providing me the necessary details related to LIC.

OBJECTIVE OF THE REPORT

Corporate Image is one of the most important aspects of Public Relations for growth and sustenance of the corporate sector. Infact, it is the most essential part of the corporate growth. The objective is to find out the initiatives taken by a firm to build a good corporate image and how it is perceived by the public. I have chosen LIC because it is the most suitable example for building corporate image. Insurance sector is the most upcoming entity in todays market scenario. A lot of private foreign companies have entered this sector. LIC is still enjoying its market leadership; this is the reason why I chose LIC as an example.

RESEARCH METHODOLOGY
Primary information: Conducted a survey using questionnaire on a sample size of 50 people consisting of working class and youth in equal ratio. Semi-structured questionnaire consisting open ended and close ended questions, was put forth to the respondents in order to find out their view on LICs image. Secondary information: Reading literature, case study, articles from business magazine, newspaper, and internet. Browsing websites for secondary data pertaining to insurance sector. Limitations: 1. All segments of the society are not tapped in the survey except the upper middle class and lower middle class of the society in the urban areas. 2. Personal information pertaining to the individual was not captured.

EXECUTIVE SUMMARY
Corporate brand image building is a complex yet systematic approach if carried out with a belief that The customer is always right policy: Herein, The first requirement is Top Management Commitment to stay put and build such an image for the really long term. There are no short cuts, and no quick fixes. Secondly, the reality in the real-world of business should closely match and align with the corporate image and core values that the organization is known for. Once this happens, half the battle is won. Thirdly, it is extremely important that the core values are not gimmicks. These should be values that are clearly visible to any employee or any other stake holder at any point in time and is widely practiced as religion. Fourthly, even when the corporate image is not so good in a recessionary period, the organization should not stop doing its meaningful social work. Otherwise, the general public will start doubting the organizations integrity. Fifthly, the organizations managers and employees should mirror the core values in their social behavior as well. For example, if the organization stipulates absolute integrity, which the employee faithfully follows within the workplace, but indulges in corruption that is noticed by the public, the companys corporate image will suffer a great deal. In a corporate world, a good company image is the key. With a poor image, a lot of damaging things could and most likely, would happen. As a corporate business, an established healthy customer base from the very beginning can be very crucial. The experience a consumer receives at one location, should be consistent with service at another location. Therefore most corporate based business ensures that all their employees are trained to follow strict standards. In most cases corporate business

adopts the customer is always right policy. It is imperative, if any organization wishes

to become a globally competitive one for a very long period of time and stay in that position forever.

Keeping in line the corporate image building perspective a survey was conducted with insurance policyholders and the observations were that though LIC of India being a trust worthy government organization and with a large market share, it has to take stock of stark reality that has sprung up around it in the form of private competitors. Hence LIC has to gear up and maintain a professional outlook with world class resources to re-engineer its image in the Insurance and other arms of its businesses.

TABLE OF CONTENTS
SR.NO. 1. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.7 (a) 2.7 (b) 2.7 (c) 2.7 (d) 2.7 (e) 2.8 2.9 3 3.1 Introduction Corporate image Theory of corporate image Corporate Identity Elements of Corporate Identity How a good corporate image can be build? Importance of corporate image Benefits of corporate image Introduction to Life Insurance Corporation Of India Brief history of LIC Motto and Logo of LIC Objectives of LIC Operations of LIC all over India Position of LIC as a service brand How LIC has built its corporate image? The journey of LIC in building its corporate image A proud tradition A journey of responsibility Challenges galore A Golden Past and Present, A dynamic Future Reasons for preferring LIC to other companies Social causes served by LIC Ways adopted by LIC for the convenience of customers Publicity to corporate communication Primary Data Data Analysis PARTICULARS

3.2 4 5 6 6.1 6.2 6.3

Recommendations Conclusion Bibliography Annexure Questionnaire Review of literature Awards won by LIC

INTRODUCTION
Good image is extremely important for every individual, family, society and country. Even a child subconsciously wants his or her image to be good. Followers of every religion too want their religion to have a clean image. When a student does not get good marks in an examination, he or she is more worried about his or her image being spoiled. People are mortally afraid of what others will say. It is this strong desire of having a good image that most of us avoid doing anything wrong. Even conscience is motivated by the desire for a good image. This desire spurs us to achieve excellence in our field. A good image evokes trust and faith. This urge for good image encourages governments to weed out corrupt and tainted ministers and bureaucrats. Schools, colleges and institutions of higher learning, its meritorious students and faculty members are tracked on account of their reputation that is another name for good image. IITs and IIMs have extremely good image as seats of excellence. It therefore goes without saying that every company, firm or corporation whether in private sector or public sector should also strive for building and maintaining a good image. Without a good image no company or firm can survive for long. A corporate image actually means the way the corporation in question is perceived by its employees, shareholders, customers, general public and above all by itself. The products or services of a company will have higher sales if the image of the company is good. The image of a corporate in fact shows what the company stands for. The value of corporate image filters down to the image of the product as well and thus benefiting the product. For ex. Tatas image and its products goes hand-in-hand.

CORPORATE IMAGE
A corporate image refers to how a corporation is perceived. It is a generally accepted image of what a company "stands for". The creation of a corporate image is an exercise in perception management. It is created primarily by marketing experts who use public relations and other forms of promotion to suggest a mental picture to the public. Typically, a corporate image should appeal to the public, so that the company can create interest among consumers, create share of mind, generate brand equity and thus facilitate product sales. A corporation's image is not created by the company only. Other contributors to a company's image include news media, journalists, labour unions, environmental organizations, and concerned NGOs. Even governments, charitable organizations, criminal organizations, religious organizations, political organizations, and educational organizations want to have a good image. Corporate image, or reputation, tells about the manner in which a company, its activities, and its products or services are perceived by outsiders. In a competitive business climate, many businesses actively work to create and communicate a positive image to their customers, shareholders, the financial community, and the general public. A company that ignores its image is likely to face a variety of problems. "Reputation problems grow like weeds in a garden," Davis Young wrote in his book Building Your Company's Good Name. Some of the signs that a business has an image problem include high employee turnover, the disappearance of major customers, a drop in stock value, and poor relationships with vendors or government officials. If an image problem is left unaddressed, a company may find its cost of doing business rising, including the costs of product development, sales support, employee wages, and shareholder dividends. As consumers base their purchase decisions on trust, current and future sales levels are likely to suffer as well.

In businesses of all sizes, managers should know the importance of creating and maintaining a strong image, and they should also make their employees aware of it. It is said that corporate image begins within the offices of a company's managers. It should be based on the development of good company policies and not on controlling the damage caused by bad company policies. Young recommends that business owners and managers take the following steps toward improving their companies' image: focus on the firm's longterm reputation; base actions on substantive policies; insist on transparency in all business dealings; and uphold the stakeholders' right to know. After all, a good corporate image can take years to build and only moments to destroy.

THEORY OF CORPORATE IMAGE

In the process of building corporate image, the important variables are: corporate identity, corporate communication, corporate image, and feedback. Corporate identity is the reality of the corporationthe unique, individual personality of the company that differentiates it from other companies. Corporate communication is the aggregate of sources, messages, and media by which the corporation conveys its uniqueness or brand to its various audiences. Corporate image is in the eye of the beholderthe impression of the overall corporation held by its several audiences. The objective in building corporate image is to communicate the company's identity to those audiences or constituencies that are important to the firm, in such a way that they develop and maintain a favorable view of the company. This process involves fashioning a positive identity, communicating this identity to significant audiences, and obtaining feedback from the audiences to be sure that the message is interpreted positively. An unsatisfactory image can be improved by modifying corporate communication, re-shaping the corporate identity, or both.

CORPORATE IDENTITY
Corporate identitythe reality and uniqueness of the organizationmay be broken down into four component parts: corporate strategy, corporate culture, organizational design, and operations. Strategy is the overall plan that determines the company's product and market scope and the policies and programs it chooses to compete in its chosen markets. Corporate culture is the shared values and beliefs that the organization's members hold in common as they relate to each other, their jobs, and the organization. It defines what the firm believes is important and unimportant, and explains to a large degree why the organization behaves the way it does.

Organizational design refers to the fundamental choices top managers make in developing the pattern of organizational relationships. It encompasses issues such as whether basic tasks should be organized by function or product division, the company's overall configuration, the degree of decentralization, the number of staff, the design of jobs, and the internal systems and procedures. Operations, the fourth and final component of corporate identity, are the aggregate of activities the firm engages into effect its strategy. These activities become part of the reality of the corporation and can influence its identity in a wide variety of ways.

CORPORATE IMAGE
Corporate image is the reputation of the firm with the various audiences that are important to it. These groups which have a stake in the company are known as stakeholders. Stakeholders are affected by the actions of the company and, in turn, their actions can affect the company. Consequently, its image in the eyes of its stakeholders is important to the company. The principal stakeholders with whom most large corporations must be concerned are: customers, distributors and retailers, financial institutions and analysts, shareholders, government regulatory agencies, social action organizations, the general public, and employees. The image that stakeholders have of the company influences their willingness to provide or withhold support. Thus, if customers develop a negative perception of a company or its products, its sales and profits will decline. Government regulatory agencies, another important set of stakeholders, are required by law to monitor and regulate firms for specific, publicly defined purposes. However, these agencies have considerable discretion in how they interpret and apply the law. Where they have a positive perception of the firm, they are less likely to find fault. Each of the various stakeholder groups may have a different perception of the corporation because each is concerned primarily with a different facet of its operation. Thus, consumers are principally interested in the price, quality, and reliability of the company's products and services. Financial institutions are concerned with financial structure and performance. Employees are mainly concerned with wages, working conditions, and personnel policies.

Thus, a company should tailor its communication to each stakeholder group individually to address the special concerns of that group. Maintaining a consistent image among the several stakeholder groups is also vital. Although it is prudent to stress different facets of the firm's identity to the public, the firm should avoid projecting an inconsistent image, because the concerns and memberships of different stakeholder groups often overlap. For instance, the financial community and the shareholders would have many of the same financial and strategic concerns about the company. In fact, many shareholders rely heavily on the advice of experts from financial institutions. Similarly, both employees and the general public have an interest in the overall prestige of the firm and the reputation of its products. A social action group's criticism, whether economically effective or not, is bound to influence some customers and affect the company's public reputation. A regulatory agency will focus narrowly on the firm's safety record and policies, but the company's employees and their labour unions also have a stake in these matters.

CORPORATE COMMUNICATION
Corporate communication provides the link between corporate identity and corporate image. Companies communicate identities in different ways. Communication can include almost anything the company does, from the way telephones are answered to the involvement of company employees in community affairs. Some of the principal sources of corporate communication include company and product names and logos, formal statements (mission statements, credos, codes of ethics, annual reports, advertising copy, and company slogans), and behavior during important events. These events include events such as open houses and anniversary sales and unscheduled events such as lawsuits or negative press coverage.

FEEDBACK
Feedback is essential to the management of corporate image. Business owners and managers need accurate information on how they and their company are perceived if they are to make sound decisions. Ideally, feedback should be continuous. As a practical matter, continuous feedback can be elicited from salespeople, clients, employees, and other local business owners. Based on such input, modifications may be made in the company's communication methods or, if warranted, a formal study of the corporate image may be initiated. In addition to systematically utilizing internal sources, it is prudent to undertake a serious review of the business's reputation (both internally and externally) on a regular basis.

CORPORATE IDENTITY

A corporate identity is the "persona" of a corporation which is designed to accord with and facilitate the attainment of business objectives. It is visibly manifested by way of branding and by the use of trademarks. Corporate identity comes into picture when there is a common ownership of an organizational philosophy that is manifest in a distinct corporate culture the corporate personality. The public should feel that they have the ownership of the philosophy. In general, this amounts to a corporate title, logo, and supporting devices assembled within a set of guidelines. These guidelines govern how the identity is applied and confirm approved colour palettes, typefaces, page layouts and other such methods of maintaining visual continuity and brand recognition across all physical manifestations of the brand. Many companies, such as McDonald's and Electronic Arts, have their own identity that runs through all of their products and merchandise. The trademark "M" logo and the yellow and red colours appear consistently throughout the McDonald's packaging and advertisements. Many companies pay large amounts of money for an identity that is extremely distinguishable, so it can appeal to its targeted audience. Corporate identity is composed of three parts:

Corporate design (logos, uniforms, etc.) Corporate communication (advertising, public relations, information, etc.) Corporate behavior (internal values, norms, etc.)

Corporate identity has become a universal technique for promoting companies and improving corporate culture. Most notable is the company PAOS, founded by Motoo Nakanishi in Tokyo, Japan in 1968. Nakanishi fused design, management consulting and corporate culture to revolutionize corporate identity in Japan.

Organizational point of view

In a recent monograph on Chinese corporate identity, Peter Peverelli, proposes a new definition of corporate identity. This definition regards identity as a result of social interaction:

Corporate identity is the way corporate actors (persons who act on behalf of the company) make sense of their company in ongoing social interaction with other actors in a specific context. It includes shared perceptions of reality, ways-to-dothings, etc., and interlocked behavior.

In this process the corporate actors are of equal importance as those others; corporate identity pertains to the company (the group of corporate actors) as well as to the relevant others;

Corporate actors construct different identities in different contexts.

Corporate visual identity

Corporate visual identity plays a significant role in the way an organization presents itself to both internal and external stakeholders. A corporate visual identity expresses the values and ambitions of an organization, its business, and its characteristics. Four functions of corporate visual identity can be distinguished. Three of these are aimed at external stakeholders. 1. A corporate visual identity provides an organisation with visibility and "recognizability For all profit and non-profit organizations, it is of vital importance that people know that the organization exists and remember its name and core business at the right time. 2. A corporate visual identity symbolizes an organization for external stakeholders, and, hence, contributes to its image and reputation. Van den Bosch, De Jong and Elving (2005) explored possible relationships between corporate visual identity and reputation, and concluded that corporate visual identity plays a supportive role in corporate reputations.

3. A corporate visual identity expresses the structure of an organization to its external stakeholders, visualizing its coherence as well as the relationships between divisions or units. Olins (1989) is well-known for his "corporate identity structure", which consists of three concepts: monolithic brands for companies which have a single brand, a branded identity in which different brands are developed for parts of the organization or for different product lines, and an endorsed identity with different brands which are connected to each other. Although these concepts introduced by Olins are presented as the corporate identity structure, they merely provide an indication of the visual presentation of parts of the organization. It is therefore better to describe it as a "corporate visual identity structure". 4. Internal function of corporate visual identity relates to employees' identification with the organization as a whole and the specific departments they work for. Identification is crucial for employees, and corporate visual identity plays a symbolic role in creating such identification. The definition of the corporate visual identity management is: Corporate visual identity management involves planned maintenance, assessment and development of a corporate visual identity as well as associated tools and support, anticipating developments both inside and outside the organization, and engaging employees in applying it, with the objective of contributing to employees' identification with and appreciation of the organization as well as recognition and appreciation among external stakeholders. Special attention is paid to corporate identity in times of organizational change. Once a new corporate identity is implemented, attention to corporate identity related issues generally tends to decrease. However, corporate identity needs to be managed on a structural basis, to be internalized by the employees and to harmonize with future organizational developments. Efforts to manage the corporate visual identity will result in more consistency and the corporate visual identity management mix should include structural, cultural and strategic aspects.

Guidelines, procedures and tools can be summarized as the structural aspects of managing the corporate visual identity. The structural aspects must be complemented by two other aspects. Among the cultural aspects of corporate visual identity management, socialization i.e., formal and informal learning processes influence the consistency of a corporate visual identity. Managers are important as a role model and they can clearly set an example. They need to be aware of the impact of their behavior, which has an effect on how employees behave. If managers pay attention to the way they convey the identity of their organization, including the use of a corporate visual identity, this will have a positive effect on the attention employees give to the corporate visual identity. It is important that the organization communicates the strategic aspects of the corporate visual identity. Employees should have knowledge of the corporate visual identity of their organization not only the general reasons for using the corporate visual identity, such as its role in enhancing the visibility and recognizability of the organization, but also aspects of the story behind the corporate visual identity. The story should explain why the design fits the organization and what the design in all of its elements is intended to express.

ELEMENTS OF CORPORATE IDENTITY

LOGO
A logo is a graphical element that forms a trademark or a commercial brand. Typically, a logo's design is for immediate recognition. The logo is one aspect of a company's commercial brand, or economic or academic entity, and its shape, colors, fonts, and images usually are different from others in a similar market. Logos are also used to identify organizations and other non-commercial entities.

Ex:

LOGO DESIGN
Logo design is an important area of graphic design, and is difficult to perfect. The logo is the image embodying an organization. Because logos are meant to represent companies brands or corporate identities and encourage immediate customer recognition, it is counterproductive to frequently redesign logos. Due to design, the colour, the shape, and eventually additional elements of the logotype, each one can easily be differentiated from other logotypes. For example, a box of Kellogg's cereals will be easily recognized in a supermarket's shelf from a certain distance, due to its unique typography and distinctive red coloring. (The same will be true when one is at the

airport looking for the booth of the Hertz Rent-A-Car company. The logotype will be recognized from afar because of its shape and its yellow color.)

Some well-known logos include Apple Inc.'s apple with a bite missing, which started out as a rainbow of colour, and has been reduced to a single colour without any loss of recognition. Coca Cola's script is known worldwide, but is best associated with the colour red; its main competitor, Pepsi has taken the colour blue, (although they have abandoned their script logo). IBM, also known as "Big Blue" has simplified their logo over the years, and their name. What started as International Business Machines is now just "IBM" and the colour blue has been a signature in their campaign as they have moved to become an IT services company. There are some other logos that must be mentioned when evaluating what the mark means to the consumer. Automotive brands can be summed up simply with their corporate logofrom the Chevrolet "Bow Tie" mark to the circle marks of Volkswagen, Mercedes-Benz and BMW, to the interlocking "RR" of Rolls-Royce each has stood for a brand, and clearly differentiated the product line. Other logos that are recognized globally: the Nike "Swoosh" and the Adidas "Three stripes" are two well-known brands that are defined by their corporate logo. Corporate identities are often developed by large firms who specialize in this type of work. (However, Paul Rand is considered the father of corporate identity and his work has been seminal in launching this field. Some famous examples of his work were the UPS package with a string (replaced in March 2003) IBM, and NeXT Computer.) An interesting case is the refinement of the FedEx logo, where the brand consultants convinced the company to shorten their corporate name and logo from "Federal Express" to the popular abbreviation "Fed Ex". Besides creating a shorter brand name, they reduced the

amount of colour used on vehicles (planes, trucks) and saved hundreds of thousands of dollars in paint costs. Also, the right-pointing arrow in the new logo is a (subliminal) hint of motion.

LOGOS IN SUBVERTISING
The wide recognition received by the most famous logos provides the brand's critics with the possibility of meme-hacking, a process also known as subvertising, turning the marketing message carried by the logo (either in its pristine form, or subtly altered) into a vehicle for an alternative message, frequently highly critical to the brand in question. An example is the AdBusters' corporate flag, a U.S. flag with the stars replaced by major corporate logos.

All distinctive design elements related to brands or logos can become subject to subvertising. The best-known organizations subverting established logos and brands are ark and Adbusters)

COLOUR
Colour is important to brand recognition. Some colours are associated with certain emotions that the designer wants to convey. For instance, loud colours, like red, are meant to attract the attention of drivers on highways, they are appropriate for companies that require such attention. In the United States red, white, and blue are often used in logos for companies that want to project patriotic feelings. Green is often associated with health foods, and light blue or silver is used to reflect diet foods. For other brands, more subdued tones can communicate dependability, quality, relaxation, etc. Colour is also useful for linking certain types of products with a brand. Warm colours (red, orange, yellow) are linked to hot food and thus can be seen integrated into many fast food logos. Cool colors (blue, purple) are associated with lightness and weightlessness, thus many diet products have a light blue integrated into the logo.

Example:

ADVERTISING SLOGAN
Advertising slogans are short, often memorable phrases used in advertising campaigns. They are claimed to be the most effective means of drawing attention to one or more aspects of a product. Its purpose is to emphasize a phrase that the company wishes to be remembered by, particularly for marketing a specific corporate image or connection to a product or consumer base. Effective slogans: Advertising slogans often play a large part in the interplay between rival companies. An effective slogan usually:

States the main benefits of the product or brand for the potential user or buyer Implies a distinction between it and other firms' products - within the legal constraints Makes a simple, direct, concise, crisp, and apt statement Is often witty Adopts a distinct "personality" of its own Gives a credible impression of a brand or product Makes the consumer feel "good" Makes the consumer feel a desire or need Is hard to forget - it adheres to one's memory ,especially if it is accompanied by mnemonic devices, such as jingles, ditties, pictures or film

Ex. 1.Mercedes-Benz car brand Ad Slogans: Unlike any other Mercedes-Benz. The Future of the Automobile Engineered to move the human spirit 2. Apple Computers Ad slogans: Think different. Apple Macintosh. The computer for the rest of us. The Power to Be Your Best. Macintosh. It Does More. It Costs Less. It's that Simple. 3. Wrangler jeans brand Ad slogan: Wrangler. There's a bit of the West in all of us.

TRADEMARK
A trademark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or services from those of other entities. A trademark is designated by the following symbols:

TM SM

(for an unregistered trademark, that is, a mark used to promote or brand goods); (for an unregistered service mark, that is, a mark used to promote or brand

services); and

(for a registered trademark).

A trademark is a type of intellectual property, and typically a name, word, phrase, logo, symbol, design, image, or a combination of these elements.

BUSINESS CARDS
Business cards are cards bearing business information about a company or individual. They are shared during formal introductions as a convenience and a memory aid. A business card

typically includes the giver's name, company affiliation (usually with a logo) and contact information such as street addresses, telephone number(s), fax number, e-mail addresses and website. It can also include telex, bank account, and tax code. It is an element of corporate identity. The web site, presentations, promotional materials, stationery are all elements of corporate identity.

HOW A GOOD CORPORATE IMAGE CAN BE BUILD?

For any corporation it is very important to create a distinct image in the market. This is known as Corporate Image which distinguishes the corporation from its competitors and provides a picture of it to the general public. It depicts the principles, beliefs, productivity of the company. This image is responsible for increasing the sales of the product and to achieve brand equity. Corporate image creation is a strenuous and time consuming process and is carried out by experts qualifying in perception management. Basically, the creation involves marketing experts who used various kinds of promotion methods and public relations. Since this image is targeted to attract the customers it should be highly appealing. Besides the marketing experts critics play an important role too. The name of the corporation and its catch line should reflect its belief like Wal-Mart, which says that it sells for less. A logo should also be designed accordingly. Like the corporation FedEx has an arrow incorporated in its logo which depicts its fast and efficient service. Once the image is created by the corporation the next step is advertising and product distribution in the market. Like if the corporation creates luxury products, they should rope in big names in the advertising experts and the models to be featured in these ads should be super stars. Likewise, they should not distribute their products to every other store; instead they should target more hi-fi malls. Time to time, advertising and branding budget should be reviewed to cut down on cost and to be in-sync with the technology. This also helps in revamping the corporate image according to the fast changing demands of the consumer. Testimonies of news papers, magazines, and labor union can enhance or deteriorate a wellcreated corporate image. Simplest of controversies can be exaggerated by the media and spoil the name of the company. Controversies are born by the interference of organizations related to environment, religion, crime, politics, education and charity. Once the corporate image is created, it should be retained. It should not be like here today and gone tomorrow. This image should be reflected in all the brands and product line of the corporation. Even if one of the products is not up to the mark, it will lead to confusion

among the consumers and will hit the sales of the company. Like recently there was controversy about a particular contact lens solution of a company. It was supposed to be infecting the users with a rare disease. This not only affected the sales revenue of that particular product but also made the customers think and raise question about the authenticity of other products of that particular company. Another companys products had hidden non-vegetarian ingredient in a vegetarian product. This led to the decrease of trust among the customers. In such a case the company should either advertise itself as a company selling non-vegetarian food or it should invest in promoting the company as vegetarian by introducing more vegetarian products. So the image of each individual product of the company makes up for the complete image of the corporation. And last but not the least, the image should be very realistic, truly representing its values and should leave a personal touch with the consumers. The important areas of building corporate image are as follows:

1. Superior Products and Services:

Corporate image plays a very important role in the progress and financial health of the company. Contrary to popular belief, a corporate image cannot be built or sustained solely on the basis of Public Relation exercise. It is extremely important that the products and services must be of excellent quality and cost-effective. This is the most basic requirement of building and sustaining a good corporate image. Then and only then the Public Relation exercise supplements and sustains such a corporate image. If the products and services are not up to the mark then the customers and clients and even wholesalers and retailers will see through the game of Public Relation exercise which will prove to be futile. The sales will certainly dip and the company may find it difficult to survive. Apart from products and services being of good quality, industrial relations in the company should also be good. The management, the workers, the wholesalers, the retailers and the customers should all have a sense of belonging to the company.

There should be transparency in the working of the company. Optimum use should be made of most modern, state-of-the-art production facility, technology like computerization, good communication, etc. Proper and periodical training and counseling of the staff will go a long way in building and sustaining corporate image. It should appear to the customers and clients that the company has a customer friendly attitude and a human face.

2. Public Relations:
Not only should the company relate constructively to customers, suppliers, and dealers, it must also relate to a large number of interested public. A public is any group that has an actual or potential interest in or impact on a companys ability to achieve its objectives. Public Relations involve a variety of programs designed to promote or protect a companys image or its individual products. A wise company takes concrete steps to manage successful relations with its key public. Most companies have a public relations department that monitors the attitudes of the organizations public and distributes information and communications to build goodwill. The best Public Relations departments spend time counseling top management to adopt positive programs and to eliminate questionable practices so that negative publicity does not arise in the first place. They perform the following five actions: 1. Press relations Presenting news and information about the organisation in the most positive light. 2. Product publicity Sponsoring efforts to publicize specific products. 3. Corporate communications Promoting understanding of the organisation through internal and external communications 4. Lobbying Dealing with legislators and government officials to promote or defeat legislation and regulation. 5. Counseling Advising management about public issues and company positions and image during good and bad times.

Marketing public relations: Many companies are turning to marketing public relations to support corporate or product promotion and image making. Marketing Public Relations, goes beyond simple publicity and plays an important role in building the corporate image in a way that reflects favorably on its products. Public Relations Activities: Publications: Companies rely extensively on published materials to reach and influence their target markets. These include annual reports, brochures, articles, company newsletters, and audiovisual materials. Events: Companies can draw attention to new products or other company activities by arranging special events like news conferences, seminars, road shows, trade shows exhibits, contests and competitions and anniversaries that will reach the target publics. Sponsorships: Companies can promote their brands and corporate name by sponsoring sports, cultural events and highly regarded causes. News: One of the major tasks of PR professionals is to find or create favorable news about the company, its products, and its people, and get the media to accept press releases and attend press conferences. Speeches: Increasingly, company executives must field questions from the media or give talks at trade associations or sales meetings, and these appearances can build the companys image. Public-Service activities: Companies can build goodwill by contributing money and time to good causes. Identity Media: Companies need a visual identity that the public immediately recognizes. The visual identity is carried by company logos, stationery, brochures, signs, business forms, business cards, buildings, uniforms, and dress codes.

3. Social Obligation:

No one can build a corporate image just through development of Public Relations announcements. The company must get involved in the community. They must come forth with donations, in order to begin to build a company face with a smile, committed to the good of the community. Only PR announcements are fluff and will not be taken seriously. What is it that the company is "doing" to ensure that it will be taken seriously? These are the items: Activities like Womens shelter, Aids shelter, Homeless shelter, Children and family shelter, Primary education facilities for girls and women empowerment should be promoted. Any attempt at fluff, will be immediately recognized and disregarded. The media will then begin to criticize the company and the company will have big trouble.

A good example of fulfilling social obligation set by Infosys: The Chief Mentor of Infosys, Mr Narayanmoorthy, is now known the world-over for his supreme faith in values like honesty and integrity, highly meaningful corporate social responsibility, sharing in profits with even the lowest paid employees, providing with even the lowest paid employees, providing a world class integrity and honesty and his role in steering the organization to do excellent community work

IMPORTANCE OF CORPORATE IMAGE

Corporate image ranks as most important element in customer satisfaction: Corporate image topped the list of what factors affect customer satisfaction. Customers are responding to the credibility represented by strong corporate images," said Zaiba Nanji, directortelecommunications services for J.D. Power. "Overall, corporate image is starting to play a bigger role." Importance of corporate image in todays business: Several factors have increased the importance of corporate image in recent years. For example, the business climate has acquired environmental complexity and change. This has forced many business enterprises to alter their strategies accordingly. Globalization is another catalyst in the rise of corporate image programs, as companies have sought ways to spread their reputations to distant markets. A related factor is that as a corporation expands its operations internationally, or even domestically, through acquisitions, there is a danger that its geographically dispersed business units may project contrary images to the detriment of corporate image. Social behavior: Another factor stimulating the current interest in corporate image is society's growing expectation that corporations should be socially responsible. Many consumers consider the environmental and social image of firms in making their purchasing decisions. Some companies have recognized this reality and have reaped benefits by conducting themselves in a socially and environmentally responsible manner. Some of these companies act out of genuine altruism, while others act out of a simple recognition of the business benefits. A good corporate image nurtures consumer relations: Consumer look up to corporates as the key model that streamlines societal growth. The society upholds values of corporates if they lead towards a successful life and well being of the general public. Good corporate image elevates the standard within the market thus when offers of merger come up, they ideally get smooth transition, for e.g. Merger of Ranbaxy with Daichi. A good corporate image encourages attaining of reasonable rates. This sustains the corporate internal framework.

A good corporate image enhances its public relations. This secures prospective consumers who acknowledge the corporate initiatives; it thus facilitates desirable public relations. Consumer relations are essential when it comes to business performance that capitalizes on constant growth and development of the corporate. Well established and maintained consumer relations reflect the impact of the corporate performance in the short term or long term period. Corporate interests reflect the consumer interests and with streamlined public relations, the objectives of both parties are attainable. Good Corporate image provides visibility: Corporate image secures the brand name that it presents to the general public. Brand identity in the diversified market is a critical factor that determines the popularity of its services and sales. The types of brands offered in the market present a competitive market that is dependent on many factors. Sustaining the sales of a commodity requires immense input from the corporate. Corporate successes assured if indeed its image within the general public and consumers is recognized as a formidable structure within the market. A good image facilitates a faster brand recall: When presenting placements of advertisements, the corporate has a significant impact on the recipient mass audience or readership. When the corporate image is of substance, it acts as the first impression when disseminating advertisements. Active or passive audience will definitely reckon the brand name thats presented on the advertisement. Persuasion comes a long way, but with a good corporate image that is embedded on the mass population or consumers conscience, it is bound to overwhelm and pull the masses to the corporate products or services. Good corporate image secures excellent media relations: Essentially the media will portray the corporate positively on all medium of communication. This establishes relative value for the corporate which will be diversely acknowledged by the mass population. The media highlights corporates whose image is astounding. The mass audience or readership is nurtured if the corporate products or services are portrayed positively. Corporate products or services that are showcased are bound to overwhelm the customers with interest to purchase. On the other hand the programs that the media presents will equally get high mass

audience viewership. Corporate image improves both the sales of the corporate and of the print media. Good Corporate image strengthens Corporate Identity: The business market is ever competitive, it is an incentive if a corporate posses a good image. Good corporate image reflects on its profits that trickle within the structures of corporate transactions. Consumers and other business entities will indeed have the corporate as their first choice when pursuing services or products that the corporate presents in the market. This strengthens the corporate identity. Internal growth is nurtured facilitating successive business both internal and external. In todays competition in global business, a corporate image is something that no business organization can do without. The world globalization has acquired a new meaning- how else can one explain how an Indian or Chinese company breaks new ground in the US, acquires a company, and then turns it around, so quickly that one wonders what really has happened, and what lessons can be learnt from the experience? IBM, Microsoft, Apple, General Electric, each of these organizations, among several hundreds of similar others, have a good corporate image, that makes them stand out in a crowd. The image makes several thousands of young people from around the world wanting to work for each of them. In very simple terms, what is this entire corporate image all about? Stripped of any management jargon, it simply means an image carefully and very meaningfully built through years of hard work, years of sweat and toil. It is an image that immediately evokes visions of a very dynamic organisation, where the individual employee does matter, but the sum total of knowledge and skills is far higher than individual brilliance. In other words, men may come and go, but the organizations stays on forever. Such a good corporate image goes hand in hand with Visionary leadership, which means that the organization has a great number of leaders who are always willing and are competent to take on the mantle of steering the organization through trying times, whether

at home or abroad. For instance, Tata has mastered the strategy of being the market leader in every business it operates in, anywhere in the world. It has a great focus that lends it the flexibility of leveraging its globally competent managerial expertise at any point of time. Unilever is another example, of a great organization that has one major image-it is the best poaching ground for the world-class managers, who mean business, eat business and sleep business where in India, in China, in the US or UK or anywhere else. It does not mean that only the best known US organizations have a good corporate image. Many organizations in growing economy like India are also cultivating the habit of having excellent corporate images of highly ethical organisations that do not bend any rule, at any time, to secure new business or create infrastructure, or win favours from the government. Three excellent organizations in the IT industry in India- Tata Consultancy Services, Infosys Technologies and Wipro have such an image, that the best of brains from the best of engineering colleges opt to work for them. In fact, the global reach of each of these organizations is now part of Indian business history and case studies in the countrys best business schools.

Benefits of a Strong Image

Products have lives. According to A.C. Nielson, 30 brands that are currently leaders in their respective categories will lose their positions in less than two years. A strong corporate image can extend product lives and can also buy a firm through the inevitable sales valleys by providing:

A complete awareness among managers of the firm's long-range goals More clearly defined corporate objectives and direction Improved insights into competitive positions and market conditions Improved internal and external communications A positive accounting to customers of the firm's position in the industry and the marketplace

Improved understanding of the organization within the financial community Better understanding of the company, its objectives and its direction by employees, suppliers, directors, and the media .

Influences on Image
Advertising and publicity are only two aspects in the establishing a firm's image. Everything a company is, says and does is a component of its corporate image:

The product: Consistent high quality from people like Hewlett Packard, Compaq, IBM, Tektronix, and others has positioned these companies above their competition. Service: IBM may not have the most advanced products, but no one questions the level of service they provide. Finance: When well-known, reputable companies have short-term setbacks in sales and earnings, there is little concern in the marketplace. The financial strength of organizations such as Microsoft, IBM, Compaq, Apple, DEC, HP and others is a strong factor in purchasing decisions and affects the future successes of those firms.

Employees: Happy, productive employees are a powerful market influence. The attitudes of a firm's employees often influence the way it is perceived by clients, trade partners and competitors.

Acquisition Policy: A company's growth through acquisition generally tells its many publics that the firm is growing. But hostile takeovers, greenmail and similar activities can adversely affect a company's image. The ability to assimilate new acquisitions into existing corporate structures is also important, as Gould and Xerox have realized.

Launching an Image
There are certain steps which must be followed in launching a corporate image communications program. They are:

To evaluate the strengths and weaknesses of the company's current image. To define the factors which determine that image and assess the underlying emotion attributed to these factors. Negative images dictate the need for basic changes in corporate policies and practices. Neutral images require that a choice be made between maintaining status quo and promoting expansion and growth. Corporations with positive images should seek to perpetuate and expand on them.

To define the image that the firm wants to project. Every firm wants to be perceived as profitable, well-managed, forward-looking, research-oriented, rapidly growing and rapidly diversifying as well as kind and beneficial to its employees, stockholders and customers. It should carve out a niche which is unique to the organization.

To determine a course of action that appeals to the largest possible number of target audience. To create audience-specific selling themes. Make certain each selling theme is compatible and in line with the overall image theme. To coordinate every channel of communications to build the desired image. This includes advertising, sales people, letterhead, shipping labels, invoices, employee training manuals, brochures, posters, business cards, samples, trademarks, product labels, articles, news releases, trade booth displays and other internal and external promotional vehicles.

Image Audiences
The way to launch an effective image development and reinforcement campaign is to define target publics. Most companies seek to influence:

Consumers: Utilize every resource to research and define the consumers. Then find the most effective method to present the firm to this crucial group. Shareholders: By knowing the shareholders, their degree of involvement in the company and their interests, the company can develop a communication program that will create a strong net work extension of the sales force.

The Investment Community: Management has a new and vital job in keeping security analysts, brokers and bankers aware of the company, its management, its plans and its successes.

Employees: By working with this influential group, management can instill a sense of involvement in common goals which will increase productivity, curb turnover and create a working environment which will make it easier to attract the types of people necessary to ensure future corporate success.

Communities: When an understanding of one anothers goals is achieved between a company and the community in which it operates, the result is usually a solid working relationship.

Suppliers: These people can have a strong influence on the success or failure of the corporate image campaign and the firm. To cultivate a feeling of trust and interdependence. Both sides should feel that they are an integral part of the other's success.

The Media: Establish, maintain, and constantly reinforce the relationship with members of the media at all levels nationally and locally. A good relationship can assist in communicating or amplifying the firm's position.

Reaching Audiences
Once the company has identified and prioritized its various audiences, it is ready to develop and execute specific programs and plans to reach and influence these audiences:

Shareholder Relations: Use management and public relations to develop and maintain the image with shareholders via a carefully planned and executed program of communications, annual reports, quarterlies, special reports and shareholder meetings.

Financial Community Relations: Senior management should be responsible for regularly contacting financial analysts, brokers and bankers. Provide them with company "white papers" and regular mailings to keep them well informed.

Employee Relations: Make certain that employees understand that their skills, attitudes and dedication are a large part of what makes up the company's image and helps ensure the firm's future success.

Customer Relations: Let present and prospective customers know that the firm realizes that its success is closely tied to its customers' initial and repeated acceptance of the company, its products and its services.

Industry and Trade Relations: Every company is part of an industry which includes customers, suppliers and competitors. Each of these groups influence the company's image. Management should regularly communicate its image within the industry by:

Keeping the press informed Participating in trade associations Participating in trade councils Becoming spokespersons for industry needs and goals Promoting for the overall good of the industry

Plan of Action
Once an audit of the company's image has been completed and priorities established on the various aspects of the image program, management is ready to move forward. A good image deserves a proper presentation. The program must be directed to the right people at the right time. It must be presented in the most beneficial atmosphere. Generally, the molding of a corporate image is not a program that can focus on near-term results. An undesirable corporate identity is a lot like obesity. It takes a long time to develop the symptoms, and it will probably take just as long, if not longer, to achieve significant improvement. It is a multifaceted activity that includes everyone in the organization.

A sound corporate image is no substitute for fair dealings and quality products. However, first impressions have a lasting effect. A company's ability to communicate a favorable and progressive image to its many publics places it ahead of its competition, and subsequently has a profound effect on the bottom line.

CASE STUDY SUBJECT: Insurance Sector Company: LIFE INSURANCE CORPORATION OF INDIA

INTRODUCTION TO LIFE INSURANCE CORPORATION OF INDIA

After independence, it was found that the private insurance companies were dishonest and the poor customers were being fleeced and cheated. Many malpractices were going on unchecked. Several one-night companies had sprung up like mushrooms. The government therefore decided to come to the rescue of the poor policy holders by nationalizing all the private insurance companies. This was done by an Act of Parliament. Thus was born Life Insurance Corporation of India on 1 September, 1956. It is popularly known as LIC .Clear rules were laid down so that there was no ambiguity in any transaction and claims. A very large number of LIC branches were opened in all the major cities and towns. The ultimate aim is to cover even the people living in the villages so that no one remains without life insurance. LIC appointed a very large number of agents who actually come in contact with the people, explain them the advantages of life insurance and convince them to go in for life insurance. In fact, these agents are the eyes and ears of the organization. Although they are not employees of LIC, but they are the pillars of LIC without whom it could not have come up to its present level. At present there are about fifteen lakh (15, 00,000) agents working for LIC. It is therefore clear that the agents should have thorough knowledge about insurance, rules and regulations of LIC and should be able to interact with the potential and existing clients. The agents act like a bridge between a policy holder and LIC. They should therefore keep the interest of the clients and the organization in their mind. They must not give false assurances and should be able to help the potential client in choosing the correct policy, mode of payment, term, amount of insurance. The agent should also come forward to render help in case of claim at the time of maturity or unfortunate death. Fortunately a very large number of agents belong to this category and this is one of the reasons that LIC enjoys great reputation. Thus it can be said that the agents have contributed to a large extent in building up the image of LIC.
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Development officers are employees of LIC. Each development officer has several agents under him. The development officer is expected to guide, encourage and help the agents in ensuring that the progress of life insurance continues unabated. LIC as an organization has completely modernized itself. All its branches have been completely computerized. Premium of a policy can be paid at any branch throughout the country. This has come as a huge relief to the policy holders. Grievances are promptly attended to and customer satisfaction is ensured. At all levels of working, transparency is observed. There is no chance of malpractice. The LOGO has 2 palms protecting the flame of a small earthen lamp with a shloke from Geeta written below the palms, Yogakshemam Vahamyaham. In this shloke lord Krishna gives an assurance to protect and add to the prosperity of the devotee. The motto set the tone for service to the numerous staff, agents, development officers and the customers spread all over the country. Incidentally the name of the headquarters building of LIC in Mumbai is Yogakshema.

Brief History of LIC

Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years. Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. With the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. In 1907, Hindustan Cooperative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed.

The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. Life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Re-organisation of LIC took place and large numbers of new branch offices were opened. As a result of re-organisation servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about 200.00 crore of New Business in 1957 the corporation crossed 1000.00 crore only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But with re-organisation happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies. Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7 zonal offices and the corporate office. LICs Wide Area Network covers 100 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LICs ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and

many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future. LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued over one crore policies during the current year. As on 31 March, 2008 the Total Income of LIC is 2, 06,363 crores, its Total Assets: 8, 03, 820 crores, Total Premium Income: 1, 49,706 crores, Total claim settled: 139 lakhs, Total Amount paid: 37, 206 crores. From then to now, LIC has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families.
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MOTTO OF LIC
Life Insurance holds out a golden promise with the LIC, backed by the Government of India, is bound to fulfill. Your welfare is my responsibility. These are the words which the Corporation has adopted for its motto. And these sacred words are in themselves an irrevocable pledge.

LOGO OF LIC

The protective hands of Life Insurance and assuring continuance of the glow of life (symbolized by the luminous flame of a lamp) from the insignia of the Life Insurance

Corporation of India. This was designed by Advertising and Sales Promotion Associates, a leading advertising agency. Source: Yogakshema, Vol. 1 (May 1957)

OBJECTIVES OF LIC
LIC explains its objectives to general public and its own employees. 1. To spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. 2. To maximize mobilization of people's savings by making insurance-linked savings adequately attractive. 3. To bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in trust, without losing sight of the interest of the community as a whole; the funds to be deployed to the best advantage of the investors as well as the community as a whole.

4. To conduct business with utmost economy and with the full realization that the moneys belong to the policyholders. 5. To involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy.

Mission of LIC:
"Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns, and by rendering resources for economic development."

Vision of LIC :
"A trans-nationally competitive financial conglomerate of significance to societies and Pride of India."

LIC OPERATES ALL OVER INDIA

LIC has been one of the pioneering organizations in India who introduced the leverage of Information Technology in servicing and in their business. Data pertaining to almost 10 crore policies is being held on computers in LIC. LIC has gone in for relevant and appropriate technology over the years. 1964 saw the introduction of computers in LIC. Unit Record Machines introduced in late 1950s were phased out in 1980s and replaced by Microprocessors based computers in Branch and Divisional Offices for Back Office Computerization. Standardization of Hardware and Software commenced in 1990s. Standard Computer Packages were developed and implemented for Ordinary and Salary Savings Scheme (SSS) Policies. These actions increased the popularity of LIC.

OPERATIONS OF LIC
FRONT END OPERATIONS With a view to enhancing customer responsiveness and services , in July 1995, LIC started a drive of On Line Service to Policyholders and Agents through Computer. This on line service enabled policyholders to receive immediate policy status report , prompt acceptance of their premium and get Revival Quotation, Loan Quotation on demand. Incorporating change of address can be done on line. All the 2048 branches across the country have been covered under front-end operations. Thus all the 100 divisional offices have achieved the distinction of 100% branch computerization. All these modules help to reduce time-lag and ensure accuracy. METRO AREA NETWORK A Metropolitan Area Network, connecting 74 branches in Mumbai was commissioned in November, 1997, enabling policyholders in Mumbai to pay their Premium or get their Status Report, Surrender Value Quotation, Loan Quotation etc. from any Branch in the city. The System has been working successfully. More than 10,000 transactions are carried out over this Network on any given working day. Such Networks have been implemented in other cities also. WIDE AREA NETWORK All 7 Zonal Offices and all the MAN centres are connected through a Wide Area Network (WAN). This enables a customer to view his policy data and pay premium from any branch of any MAN city. At present, LIC of India has 2048 branches networked under WAN.

INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS) IVRS has already been made functional in 59 centers all over the country. This would enable customers to ring up LIC and receive information (e.g. next premium due, Status,

Loan Amount, Maturity payment due, Accumulated Bonus etc.) about their policies on the telephone. This information could also be faxed on demand to the customer. LIC ON THE INTERNET LIC has displayed information about its offices on the internet with a view to speed up the communication process. Efforts are on to upgrade the LIC web site to make it dynamic and interactive. PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNET LIC has given its policyholders a unique facility to pay premiums through Internet absolutely free and also view their policy details on Internet premium payments. INFORMATION KIOSKS LIC has set up 150 Interactive Touch screen based Multimedia KIOSKS in prime locations in metros and some major cities. These KIOSKS are able to provide policy details and accept premium payments. INFO- CENTRES LIC has set up 8 call centres, manned by skilled employees to provide information about the Products, Policy Services, Branch addresses and other organizational information.

POSITION OF LIC AS A SERVICE BRAND

According to survey conducted by AC NIELSEN ORG MARG, LIC has been the No.1 service brand in the country for the last consecutive 6 years. Top 5 service brands in India are listed below: 1. LIC 2. RAILWAYS 3. BHARTI AIRTEL 4. SBI 5. SBI CREDIT CARDS

HOW LIC HAS BUILT ITS CORPORATE IMAGE? Introduction

The Life Insurance Corporation of India was born on 1
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September 1956 with the

nationalization and integration of 245 private companies. Today, after completing 52 years of its service to the nation, LIC continues to be the dominant player with over 230 million policies in force, giving rise to its now famous line There is safety in numbers. LIC Why go anywhere else? LIC has an enviable track record and is recognized by consumers and businesses alike as a Super brand year after year-it has been voted the countrys Numero Uno Service Brand for five years in a row in the Brand Equity Most Trusted Brands survey; it recently won the Golden Peacock Innovative Product Award 2009; it walked away with the top honours at Loyalty Awards, 2009; it won the CNBC Awaaz Consumer Award; NDTV Profit Business Leadership Award; NASSCOM IT User award; Asia Brand Congresss Brand Leadership award; and the SKOCH Challengers Award 2008 for its much-talked about micro insurance product Jeevan Madhur, tailor made for the less privileged sections of society.

LIC has 45 schemes that cater to the changing needs of different segments. The offerings include whole life, endowment, money back, term assurance, pension plans and unitlinked plans. Most of these plans come with options like term and critical illness riders to offer greater flexibility to the customer. LIC also offers attractive group insurance products and social security schemes, which provide life insurance and other benefits at a lower cost than traditional schemes. Over the years, LIC has diversified its operations in the Indian financial sector. LIC Housing Finance Ltd is one of the most successful companies in the field. It has also set up LIC Mutual Fund & LIC pension Fund Limited. The LIC Golden Jubilee Fund (LIC DGF), showcases LICs commitment to the concept of Corporate Social Responsibility. The corporation has also extended its operations to the international arena, through joint ventures and subsidiaries operating in as many as 10 countries. To cater its huge customer base, all branches of LIC are connected through its wide area network. The corporation has tie-ups with various banks and service providers to offer online premium collection facilities in select cities, besides ECS, and payment of premiums through ATMs and SMS. On-line kiosks, IVRS, Info Centres and Satellite Offices have been launched to provide easy access to clients. The Companys website (licindia.in) is interactive, providing various general and policy related information to policyholders and facilities for on-line payment of premiums. Every time LIC wins an award, it humbles us. says T.S. Vijayan, Chairman, LIC, It encourages us further to live up to the expectations of our customers who have placed their unflinching trust in us. Source: Readers Digest (special advertising feature)

The journey of LIC in building its corporate image A Proud Tradition A Journey of Responsibility
The growth of the Life Insurance Corporation of India is a saga of faith the faith of LICs founder, Dr.C.D.Deshmukh, that nationalization of life insurance would script an era of wider coverage and ethical practices the faith of the first generation of LICians, who struggled against all odds but were sure of laying a firm foundation the faith of the next generations of LICians who not only built a strong structure but added newer chapters of achievement with every passing phase, and most important of all, the faith of LICs policyholders who have ensured LICs market leadership even after re-entry of private companies in the Indian insurance market. It is now for LIC to deliver to their customers what they expect and much more than what they expect. To remain a leader LIC continues to think like a beginner innovating & experimenting, dreaming, thinking & acting differently. The legacy is something that LICians are proud of. But pride always comes bundled with obligations. In order to ensure that LICs conduct is worthy of a market leader- No compromise on ethical practices is tolerable even in the race to win the market. LIC firmly believes in the words of legendary Management Guru, Peter Drucker, Rank does not confer privilege or give power. It imposes responsibility. When the Corporation started its journey as a merged entity, there were a number of formidable problems. Beginning from establishing a unified organizational structure to achieving emotional integration of staff absorbed from offices of erstwhile life insurers there were problems that had no ready-made answers. But the valiant efforts of LICians, over generations, succeeded in effectively surmounting every impediment and today the corporation can, with pride, look back upon the magnificent achievements.

In a competitive era the path to progress traverses through the customers heart. The West may have suddenly woken-up to Relationship Marketing but in LIC this has been their culture. Relationship marketing coupled with professionalism only can satisfy todays discerning customer. LIC has remarkably improved their customer servicing in the past few years they settle about two claims every second. For LIC a policyholder is not a mere number but is an individual and for this reason even a single dissatisfied customer becomes a reminder of the excellence to be achieved. The history of Indias economic growth and development cannot be written without LIC. Today LIC stands as a shining example of successful public enterprises in India and its success has been a result of exceptional leadership and exemplary efforts of generations of LICians. If Indias success cannot be spelt without LIC, LICs success cannot be spelt without the twenty three crore Indians who have chosen LIC for providing them protection and care. LICians have in the past not only responded but have also proactively met the policyholders expectations, which have progressed continuously from cost benefit to value addition ,and from delight to lifestyle experience. The Satellite Sampark branches and Web-Portals are the latest in LICs ongoing efforts in providing world-class services to its policyholders. The last decade has been a witness of rapid increase in customer expectations. Despite being a mammoth organization, LIC has changed itself and successfully delivered on the strength of the unstinted support of its marketing and administrative staff and the agent. Yogakshema, the mouthpiece of LICians has entered its fiftieth volume. One of the best ways to create an energized workplace is to communicate openly and honestly. Effective communication is crucial to the success of any business. It goes without saying that Yogakshema has not only been successful in enabling effective communication but also added that motivation to the lives of LICians that has enhanced their performance levels.

The Corporation has been built on solid foundations. The last 25 years have been a period of great progress in many directions. It has faced up to competition in recent years with remarkable resilience. The LIC is a giant organization, which has done a great job in mobilizing savings and in providing some measure of social security to millions of families. No other insurer anywhere in the world has so many policies or settles so many claims each year as the LIC does. It is one of the success stories of the Public Sector. Over the years, LIC has recorded a steady growth of business. No other insurer in the world sells as many individual policies as LIC, which sold about 2.4 crore policies last year. Its life fund is in the region of 400,000 crore. LIC has thus grown and matured into a worldclass insurer. It has also emerged as a national organization of high repute as evidenced in recent surveys, which have ranked LIC as the best brand in the financial services industry. LIC needs to maintain and improve its competitive edge in its traditional line of business of individual insurance. LIC has recently entered into arrangements with some banks to market its products. LIC should continue to broaden its distribution channels and reduce procurement costs. It is also gratifying that LIC has made steady progress in using IT to improve its service operations and customer interface. Customer satisfaction is crucial while facing competition and it is necessary for LIC to concentrate on efforts in this area to further improve efficiency in operations, customer service and satisfaction. It should optimize use of technology in all aspects to ensure seamless operations and cost reduction. Coupled with improved investment performance, LIC can give better returns to its policyholders and help retain its client base and expand it. LIC is the one of the most successful public sector corporations in India. Since the beginning, it has spread insurance to every nook and corner of India, in particular to the rural areas and for this it has a broad-based network. Such is the resilience of the LICs team that it has competed extremely well with the private sector companies and has shown excellent growth. Another milestone is the claim settlement work in which LIC has excelled. For this purpose, several indices were developed to inspire the divisional & branch offices to show excellence in this most important element of servicing of the policyholders.

CHALLENGES GALORE
The foremost among them was the working out of the compensation amounts to be paid to the various insurance companies operating in India for the takeover of their life insurance business. The act of nationalization had provided that the companies should be divided into three broad categories for working out the compensation. The categories were: 1. Companies which were making profit 2. Companies which were showing deficits in their valuation and 3. Companies which were mutual, i.e. owned by the policyholders. There were in all 245 insurance companies, a few of them were mutual, and most others were profitable. Another unique job involved working out amounts payable to foreign insurance companies for taking over their Indian business. The companies had claimed that they had brought assets in excess of liabilities to support the Indian business. This involved not only the valuation of their liabilities that actuaries usually do, but also involved revaluation of their assets. The job was executed in such an efficient manner that eminent actuaries of those companies had to praise the abilities of the Indian actuaries. Other problem was the classification of the companies taken over into groups based on their profit earning capacity vis--vis LIC. The next assignment came thereafter in the investment department when the investment research section was formed. Here also there was a challenge to be faced, as it was a new activity. The research activity involved a study of the past performance of every company, industry, managing group and geographical area of operation. New procedures were laid down and a detailed analysis was made without any computers. In respect of any new project which sought financial assistance from LIC, detailed appraisals had to be made to work out the feasibility of the project. LIC was the only single major financial institution then giving such assistance. Very wise investment was done after proper research, survey and careful study of the company in which the investment was made. It was done so

effectively that when IDBI was set up, LIC notes were studied with regard to investment by IDBI. LICs investments have proved to be extremely good. This added to its reputation. The decision of the LIC to install computers in the Mumbai and Kolkata divisions opened up a new avenue. LIC was one of the pioneering institutions to consider using computers in business operations. The use of computers in India was until then largely restricted to academic institutions like IIMs and IITs and research institutions like TIFR. Several public sector institutions entered the field along with LIC. In 2003, LIC has been adjudged the best user of information technology by NASSCOM. The tasks handled included the implementation of the Government instructions about recruitment of Scheduled Castes and Scheduled Tribes and the use of Hindi in administration. There was also the need to find a formula for the restoration of increments for Development Officers, which they were loosing because of lack of adequate performance. The effect of all these measures was reflected in LICs performance in those years. LIC even won the shield for the best Hindi implementation programme in the public sector. The importance of Hindi implementation was realized: In one of the agents meetings in Varanasi an agent stood up and said that he was not able to understand much as the proceedings were in English and he felt ashamed of it. There Chairman M.G.Diwan felt ashamed that they were talking in English when everyone around was familiar with Hindi. Thereafter, the whole Kanpur Zone was instructed to work in Hindi while corresponding within the Zone. This made LIC very popular among the Hindi-speaking people who formed a very large bulk of customers. This brought about an immediate improvement in performance and efficiency of operations. In the early eighties, the LIC felt the need for reorganization of its operations as the public perception of its servicing standards began falling. Decision-making was decentralized from divisional office to the branch office. The operations were transferred from the Divisional level to the Branches to take servicing to the doorstep of the policyholder. The LIC made the policyholder the focal point of decision making. Until

then, what was convenient to the office and its personnel was considered most important than the policyholders convenience. These two measures made LIC extremely customer-friendly. Delays were drastically cut down. LIC earned the reputation of being prompt, efficient and above all, customer friendly. This improved the business-performance of LIC which surged ahead of private competitors in the field of insurance. By adopting state-of-the art technology, instilling customer friendly among its staff, officers and agents, LIC was able to create the perception, Trust, thy name is LIC. Management Committees were constituted at the branches with powers more than any individual branch official including the Manager in charge. These changes took a long time to be established. Ultimately, the desired improvement in the public image was established. This led to perceptible improvement in new business performance. The effects of these organizational improvement actions have led to LIC facing the competition effectively after the life insurance industry was opened up to the private sector.

A GOLDEN PAST AND PRESENT, A DYNAMIC FUTURE

The organization itself has perceived as a signal to what it has tried to be doing - being able to say Trust, thy name is LIC. Trust is one major factor that has seen the LIC grow and develop in the manner it has done. Certainly, the organization has seen difficult days, has had to face criticism in regard to lapses attributed to it. But, it is the basic degree of trust retained by the organization that has enabled LIC to pull through, gear itself up for an indeed larger and widening role and push ahead with confidence. LIC is one of the few public sector organizations which have consistently generated profits for the customers and the exchequer throughout their existence and provided quality service to the customers. This has been possible because of the devotion of all persons connected with the LIC in different capacities, the employees in different cadres, the agents, etc.

People look upon the LIC as a brand for Trust and Security. LICs strength has been its employees, agents and associates, who make a well knit family unit and who have reached out to the people for providing the safety of life insurance. LIC is one of the best brands in the country. It has won praise from all quarters for its outstanding growth of Life Insurance and for its contributions to the Social and Economic infrastructure. It has become a household name and a powerhouse of economic growth. A Life Fund of a few hundred crore rupees has now grown to around four hundred thousand crore rupees, making a very vital contribution to the Indian Economy. Recently LIC expressed its interest in expanding into the Health Insurance segment. This is a vast untapped area requiring a lot of expertise and innovation. With its long reach and the medical expertise available, it could develop good products with business potential and expand its image as a protector of Life and Health, interested in improving the quality of life of its large and expanding base of policyholders. An innovative feature could be to build in routine medical examinations as preventive healthcare, in insurance and health plans, to be proactive in preventing major diseases and in nipping malignancy in the bud. With improving longevity, healthcare and income after retirement are the two major necessities. It is well known that countries spend almost 8 percent to 12 percent of the GDP on Healthcare. With expectation of life at age 60 improving almost every year, the funding for a pension on retirement is on every working and earning persons agenda. Here, an approach of the right amount of equity and debt investments is necessary in developing desirable innovative plans. Pension Products are now more sophisticated and require expert fund management and flexible designs. Group insurance is a very economic means of covering large groups and expanding penetration of life insurance. LIC has been in the forefront. Here, it could develop comprehensive plans to look after all the insurance needs of the staff of companies, including term, accident and health insurance, critical illness riders, and pensions in one group plan. Bancassurance has yet to take-off in a big way. With the increasing spread of banking, almost every earner would be having a bank account. It is necessary to tap this

medium proactively, as payment of premia, settlement of maturity claims and health insurance claims can effectively be done through this medium. It is nice to know that LIC is actively planning expansion of business overseas in the same way as global insurers would like to foray into the Indian market through joint ventures here. Such expansion first started to tap business from our large number of overseas Indians. Non Resident Indians do look to their mother country to look after their kin, build houses and invest part of their wealth here. With the LIC Housing Finance Ltd., LIC Mutual Fund and LIC (International), it should be possible to develop this business. However, to really develop such business, one should be able to compete effectively with plans, systems, and personnel competent enough to match the leading global companies. Success in these ventures would also expose LIC to the best global practices that would further enhance its image and business here in India. Good, effective and competent personnel are the key to success in this people- oriented business. It is necessary that LIC builds a very strong team of competent insurance professionals, specialists and generalists. It should develop experts in Marketing , Finance and Investment Management, Legal, Engineering, Medicine and Healthcare, Economics, Information Technology and Actuarial science to manage its gigantic business. It has grown in the past and present through the dedicated service of such professionals. It is imperative that such expertise continues to be encouraged, fostered and developed to remain at the cutting edge of this competitive business and to retain a dominant market share. The continuous infusion of qualified, young and energetic personnel and constant dynamic innovation should be the vision for the Future. LIC as an organization has become the insurer of choice from the status of the only insurer, through securing leadership in the face of deregulation. Values and Commitment to the customers provided the driving force for retaining the patronage the customers, to which the progress of the organization is invariably linked. Shaping the corporate behavior the totality of the way in which the organization presents itself through internal and external exercises, by adopting Corporate Identity Programmes, infusing Competition Sensitivity among the internal public and embracing Customer Orientation as a way of life were some

of the thrust areas for the corporation, which was set to imbibe the qualities of both the sprinter and the long distance runner to face the impending competition.

REASONS FOR PREFERRING LIC TO OTHER COMPANIES

A huge brand value that makes Life insurance or even insurance synonymous with LIC, and an excellent and even unmatched track record of customer service aided by world class technology. Irrespective of where you took your policy from or where you were subsequently located, you can pay your life insurance premiums anywhere in the country; you do not have to remind the LIC or its Branch office about the survival benefit or the maturity claim that is due on your policy; it gets paid to you before you realize it was due. Technology and human interface have worked hand-in-hand with utmost harmony to strengthen the bond that the policyholders of LIC and more generally the people of India have formed with the LIC. It is a truly Indian Organization where different regions and religious entities have merged to make it a unique Indian institution that is truly secular and above narrow ethnic or communal considerations. There are then the different situations that you get exposed to, which should make, and quite often do, an LIC official a whole individual competent to deal with varying, diverse and quite often challenging situations. There is not a place big or small where the LIC is not represented through its ubiquitous agent. LIC is in several ways the largest life insurer in the world. It services the largest number of policies, settles the highest number of maturity and death claims and has by far the largest number of agents working for it. In respect of Claims settlement, which is a vital area for performance, LIC has crossed a new milestone by settling 99.26% of the claims payable. The statistics about the LIC and the extent of its operations and its reach will overawe the most knowledgeable experts. LIC is enjoying high visibility today in the print and electronic media, on hoardings and billboards. One notices this not only in the bigger cities but in smaller towns also. Life insurance is all about relationships and the insurer who is able to establish a strong

relationship with customers will be able to score over competitors. The need of the hour therefore is for LIC to cement its relationship with the external customer as well as the internal customer. LIC is much more than a life insurance major even if it is the biggest life insurer in the world. Its contributions to the economy of the nation, in 5the rapid development of the countrys infrastructure and generally in improving the lot of every man is stupendous and unparalleled. LIC today services nearly 180 million policies but much more than it touches the lives of most Indians policyholder or not. LIC has made notable contributions in the development of the capital market which is so essential for the economic development of the country. Apart from participating directly in the growth of the equity market, it has participated in the establishment of a number of institutions such as the National Stock Exchange, NCDEX, Stock Holding Corporation of India, Clearing Corporation of India, IDBI Trusteeship Company, UTI, UTI Bank, LIC Mutual Fund, LIC Housing Finance Corporation Ltd., National Insurance Academy, etc.

SOCIAL CAUSES SERVED BY LIC

1. In the middle sixties, the Corporation started re-examining its investment pattern so as to identify what new channels would lead to larger social benefits. Loans for water supply schemes were initiated for the benefit of the urban and semi-urban communities. Today, LIC loans have helped over 800 Municipalities to provide water supply and sewerage to its residents. It has increased its contributions to the State Electricity Boards and investments in housing. 2. Extended insurance cover has been given to the poorer sections of the population in rural as well as urban areas and to women and handicapped persons. Help has also been given in times of drought and floods. 3. Apart from Government securities the LIC has invested a large amount in nation-building activities like State Electricity Boards, State Finance Corporations, Land Development Banks, Housing, Water Supply and Drainage. It has continued to finance industrial enterprises in the Private Sector, though on a smaller scale. 4. The savings of the people collected by the way of premia have been most usefully utilized for the welfare of the community. Particularly gratifying are the sizeable investments in projects like launching of janata insurance and group insurance schemes covering scavengers, bidi workers, tea plantation labourers, cashew workers, fishermen, municipal workers, railway porters etc., through their representative organizations. 5. Efforts are also being made to procure maximum business from rural areas so that the rural masses can avail themselves of the benefits of insurance. With increased agricultural production and development of rural areas through various schemes, the capacity of the rural people to save for the future has gone up and LIC is trying its best to mop up these resources and in the process extending the benefits of life insurance protection and developing the habit of thrift amongst the rural population.

6. LIC receives Blood Donation shield-True to its motto Yogakshemam Vahamyaham the staff of the Life Insurance Corporation of India has contributed its mite to yet another humanitarian cause donation of blood. While living up to its objective of extending security to millions, it has also proved how, in times of need, it could help in preservation of human life. These were the sentiments expressed and shared by many. LIC was rewarded by the St. Georges Hospital Voluntary blood Transfusion Service. Source: Yogakshema (Golden Jubilee Special Issue of LIC)

DIFFERENT WAYS ADOPTED BY LIC FOR THE CONVENIENCE OF CUSTOMERS

1. Premium collection through Post Offices Shri Morarji Desai, Union Finance Minister, inaugurated the pilot scheme for collecting life insurance premiums of policy holders living in villages through Post offices; it was really an extension of the larger scheme of rural insurance on which the Life Insurance Corporation of India has continued to place increased emphasis from year to year. In 1962, the village of Chandlai, was to receive the Finance Minister of the Government of India, the Chief Minister and his colleagues from Rajasthan, the Director General of Posts and Telegraphs, Shri Nanjappa and the Chairman of the Life Insurance Corporation, Shri B.K.Kaul, for it was on Chandlai that the privilege of leading the country, in according yet another facility that the Corporation strives to provide for policyholders, was conferred. The Chandlai Post Office, servicing a number of villages within a radius of three miles, was selected for the launching of a pilot scheme under which 50 similar post offices in the Jaipur District would collect life insurance premiums from the policyholders of the Corporation residing within their respective jurisdictions. Having carried the message of life insurance to the villages, it was found that the growing number of policyholders was finding it difficult to pay the premiums. The remote countryside lacks banking facilities. The distance between villages and the towns proved another hurdle. Many policies would lapse only because the premiums could not be remitted. The present scheme has now been devised jointly by the LIC and the Posts and Telegraphs Department to add to the existing facilities. The Corporation expects, in the near future, to extend this scheme to 50 other rural post offices in Jaipur District. Later, it will be further extended to other rural areas elsewhere in the country. The scheme, which is the first of its kind in India and drawn up jointly by the LIC and the Directorate General of Posts and Telegraphs, will enable policyholders in the villages to pay their premiums at the village post office.

2. Premium payment through Internet This facility was added to the website in the year 2001 and it provides for renewal premium payments through the Internet. LIC has tied up with various Banks and Service Providers for collection of Premium. The policyholder has to register in the website of LIC, Designated Banks or Service providers to use this facility. 3. Premium payment through ATM LIC, in liaison with a few banks, launched the facility of accepting premiums from ATM Card holders in December 2003. Policyholders who are ATM Cardholders of the associate banks can make payment of premium whenever they want from ATMs. A separate cell called Premium Collection Management Centre was established. 4. Premium payment through ECS and Kiosk The facility of Premium Payment through ECS was started in the year 2004 and is receiving warm response from policyholders. The option of payment through Kiosks is already available in the online Kiosk installed in Mumbai. 5. SMS Service The latest breakthroughs in Communication Technology, Mobile phones, are also being used to our advantage. This initiative was started in 2004. Latest information is sent via SMS to Agents, Employees and Policyholders. 6. Satellite Branches With a vision of providing easy access to its policyholders, LIC has launched its Satellite Sampark office across many cities. These satellite offices, which are attached to the respective parent branches, are basically an extension of the large parent branches in metro

and urban centres where new townships are coming up speedily. This is another major stride by LIC in leveraging the latest technology and moving closer to the customer. The technology has been developed in-house, the satellite Sampark offers Customer Interface Services like accepting insurance proposals through the Green Channel and providing information on policies. These satellite offices also accept insurance premia. This fiscal, 29 such satellite offices spread across metros like Mumbai, Kolkata, Delhi, Pune, Hyderabad, Chennai and Bangalore are being flagged off. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other facilities in the future. 7. Dedicated Portals The LICs Enterprise Portals were inaugurated in Chennai on 15
th

November, 2005 by

Honorable Union Finance Minister, Shri P.Chidambaram. One Stop sites, called Portals for services to Customers, Agents and Employees envisage catering to various requirements of customers, agents and employees. The Portals provide site users with a convenient, single point of access to a wide variety of content and services to all kinds of client devices over the web. The Portal aggregates information in a way that is pleasing and relevant to the user. The main opening page contains links to various services available. It also contains a login facility whereby users can register for availing themselves of specific services based on their profile. This profile can be of three different categories viz. Visitors, Policyholders and Agents of the Corporation. 8. Online Data Store EAI is a generic term for software infrastructure that enables diverse platforms to pass data to one another in real time. Once EAI is successfully implemented, it would be possible to have an Online Data Store i.e., a Data Store will be created at a central level by pooling the branch data and this central data will be aligned with the Branch Data as all the transactions will be updated online. The benefits derived from having an ODS are real time access to data , Portal For Agents, providing mission critical, high performance data storage and serving capabilities for LICs operations in e-business.

9. On the Spot policies In 1962, LIC started issuing on the spot policies. This kind of issuing of spot-policies, has not been tried by any insurance institution in the world. Such policies will help the millions of our people all over the country who would like to get their policies as soon as they pay their premiums.

Publicity to Corporate Communication

A report on the working of the Public Relations and Publicity Department of LIC Produced and released over 200 advertisements in 700 dailies and periodicals in 13 languages; Produced and distributed over 27,00,000 copies of the booklets and leaflets, over 61,00,000 copies of the posters in 13 languages; Produced 30,000 card and plastic policy wallets; also other sales-aids like presentation-sheets, ADS albums, Tax-Law brochures etc. Erected over 125 hoardings in urban and rural areas; Participated in three major exhibitions and over 250 country fairs and festivals; Used bus panels over 750 routes in mofussil areas; Put up publicity neons in prominent cities; Produced 7 short films and exhibited them through nearly 4,000 theatres for over 7,900 weeks, supplied over 900 prints of the films in 35mm. and over 2,400 prints in 16mm. to offices of the Corporation and other Govt. and Semi-Govt. organizations; Produced 10 slide-ons and exhibited them in over 1,100 theatres for more than 17,700 weeks; Supplied 35 projectors and 35 sets of exhibition stands to Divisional Offices and 50 kerosene projectors to Central Zone; Built and commissioned 16 Mobile Publicity Vans;

Held over 30 Press Conferences and released 50 press notes and news items and 15 stories to over 1,000 publications in 13 languages; Produced 4, 75,000 Calendars and 2, 50,000 Diaries. Produced Yogakshema, the house magazine of the Central Office.

Source: Yogakshema, Vol.9 (Aug-Sept 1961)

PRIMARY DATA Survey on LIC

1. What is the first thing that comes to your mind when you hear the name LIC? What do you think about LIC?
80 Response as a % 60 40 20 0 Ins & Pol Series1 76 Logo of Govt. org Returns LIC 2 12 Response types 6 Series1

Savings 4

2. Are you a policy holder of LIC?

Policyholders of LIC
80 Response as a % 60 40 20 0 Series1 Series1

Yes 72 Response types

No 28

3. Why opted for LIC?

Why opted for LIC?

60 50 Response as a % 40 30 20 10 0 Govt. org Series1 48 Tax benefits 8 Low Premium 2 Response types Good return s 14 Not applicable 28 Series1

4. If not LIC which company you have taken your insurance from? Insurance taken from Private companies
80
Response as a%

60 40 20 0 Aviva Bajaj Series1 2 Series1

Birla HD F Allian Sunlif C 6 2 4

ICICI ING Kota Max MetLi Relia Saha Prud Vysy k New fe nce ra 4 0 0 2 2 0 0 Response types

SBI Tata Not Life AIG appli 4 2 72

5. Why not LIC is preferred?

Why not LIC?

80 70 Response as a % 60 50 40 30 20 10 0 Pvt Co's are better 24 Not interested in Not applicable LIC schemes 4 Respone types 72 Series1

Series1

6. Are you happy or satisfied with the schemes that LIC offer?

Satisfaction with the schemes of LIC

100 Response as a % 80 60 40 20 0 Series1 Yes 82 No 12 Response types No response 6 Series1

7. How will you rate the services of LIC on a scale of 1 - 6? [1-not preferred, 2- least preferred, 6-Always preferred]

Scale of preference
50 Response as a% 40 30 Series1 20 10 0 Not Least Less Preferre Most Always preferred preferred preferred d preferred preferred 4 2 4 28 44 18 Response types

Series1

8. Does LIC give you a sense of security?

LIC providing Sense of security

100 Response as a% 80 60 Series1 40 20 0 Series1 Yes 84 No 12 Response types No response 4

9. Do you invest in LIC because of the tax benefits you get?

Investments in LIC because of Tax benefits

80 Response as a % 60 40 20 0 Series1 Yes 74 No 20 Response types No response 6 Series1

10. What kind of image does LIC have in your eyes?

Image of LIC
40 Response as a % 30 20 10 0 Trust worthy Series1 38 A Reliable and Good returns Not reliable safe govt.trusted 30 14 Response types 6 12 Series1

11. Have you any time come across a claim lodged with LIC by anybody in your family/relation and what was the outcome?

Coming across a claim lodged with LIC

80 Response as a % 60 40 20 0 Series1 Series1

Yes 24 Response types

No 76

Outcome:
24% respondents came across a claim lodged with LIC by their family member or relative. Of these 42% said claim was settled within a few days of death .i.e. 2-3 days, remaining 58% said that the claim was settled, but the process was slow, also the amount was paid with little resistance. 12. Have you come across a case where term of the policy of the insured has been complete and the sum insured on the promise returns are yet not paid by LIC? Coming across a case where LIC has not paid the promise returns
100 Response as a % 80 60 40 20 0 Series1 Yes 8 Response types No 92

13. Have you anytime interacted with LIC agent or a person selling LIC policies?

Interaction with LIC agents

70 Response as a % 60 50 40 30 20 10 0 Series1 Yes 66 Response types No 34

14. If yes, what is your impression about such person? Would you like to meet the person again or avoid?

Meeting the person again or avoid

50 Response as a % 40 30 Series1 20 10 0 Series1 Meet again 24 Avoid 42 Response types Not applicable 34

15. Which other arms of LIC are you aware of?

Awareness regarding other arms of LIC

80 Response as a % 60 40 20 0 LIC Mutual Funds 22 LIC Housing Finance 16 LIC Pension FundsLTD 2 Series1

None 64

Series1

Re sponse type s

16. What is the mission statement of LIC?

What is the Mission statement of LIC?

120 100 Response as a % 80 60 40 20 0 Zindagi ke saath bhi, Trust, thy name is LIC Zindagi ke baad bhi 96 Response types 4
Series1

Series1

DATA ANALYSIS
RESEARCH FINDINGS
A survey was conducted across a sample size of 50, chosen from working class and youth of equal ratio. A sizeable chunk i.e. 76% of the respondents believes in LIC from the fact that they have a high level of recall for insurance and policies, when asked about LIC. It is amply clear that the holders of the policies have not associated them with savings or returns on investments which is a meager 10%. Of the surveyed sample, 72% are policyholders of LIC thereby indicating an ongoing relationship with LIC and also indicates a major market share enjoyed by LIC. Out of the 72%, 48% policyholders represent the older generation while a healthy trend of 24% i.e. 50% of the above 48% is that of the younger generation indicating that LICs image is still good in the minds of the current generation. If we look at the reasons why people have opted for LIC, it is amply clear that 48% are inclined due to LIC being a government organization which in itself is a positive aspect. Also, 14% prefer LIC because it gives good returns. Of the remaining 28% policyholders, the insurance taken across the major different players is 6% by Bajaj Allianz and the others range between 2 4% individually. The above is the projected indication, in spite of the fact some of the major players are in the market for last 10 years. Of the 28% who are policyholders from the private sector i.e. not holding policies of LIC of India 24% feel private insurance companies are better.

Of the total people holding LIC policies 82% are happy and satisfied with the schemes offered by LIC. Further when LIC policyholders where asked to measure the service levels, on a scale of 1 to 6, 90% of them indicated their inclination on the positive side of preference i.e. 28% preferred, 44% most preferred and 18% always preferred.

84% of the LIC policyholders feel secured because of having a LIC policy. 74% of the policyholders invest in LIC because of the tax benefits derived.

88% of the LIC policyholders perceive LIC as a Trust worthy brand while 12% of the respondents feel that LIC is not a reliable company.

24% of the total respondents came across a claim lodged with LIC by their family member or relative. Of these 42% said claim was settled within a few days of death .i.e. 2-3 days, remaining 58% said that the claim was settled, but the process was slow, also the amount was paid with little resistance.

Only 8% of the total respondents have come across a case where the term of the policy of the insured has been completed and the sum insured on the promise return are yet not paid by LIC.

66% of the total respondents have interacted with LIC agent/s or a person selling LIC policies. Out of 66% respondents, 64% of the respondents would avoid the LIC agents whereas balance 34% would like to meet them again.

64% of the respondents are totally unaware regarding the other arms of LIC while only 22% and 16% are aware of LIC Housing Finance and LIC Mutual Funds respectively and a negligible 2% are aware of LIC Pension Fund Limited.

96% of the total respondents are aware of the LICs Mission statement which indicates the vital role of the advertising both print and electronic.

RECOMMENDATIONS

Since LIC has been the only key player in the market it has snapped a major market share so far. However, with the economy opening up after globalization, our own large corporate houses have sprung up and tied up with global players to further tap the ever-growing market of Insurance, both Life and Non-Life. Hence LIC has to further gear up and maintain a professional outlook to its Insurance Business to keep the lead. 1. LIC can make their schemes more interesting and perform better than private insurance companies. 2. Schemes should be customized according to the needs of the end consumer. 3. Claim settlement issue should be smooth. 4. Customer friendly training should be imparted to agents to create a strong bonding relationship as the agent would continue in all probability till the term of the policy in maximum cases. 5. LIC is not able to extend its brand identity to its other product line, it has failed to attract and become a leading name in fund investment market since it still reflects an image of a government enterprise rather than a professionally managed company. Food for thought: Why would a person who is financially trained passing out from IIM Ahmedabad join LIC and not a blue chip bank? If LIC recruits professionally trained people and sets up technically advanced resources the answer to the above question would be in the affirmative.

CONCLUSION
Your welfare is my responsibility these are the words which LIC has adopted for its motto. LIC has been true to its motto. For years, LIC continues to be the dominant life insurer even in the liberalized scenario of Indian Insurance Market. LIC is the only profit making insurance company in India. Being a government undertaking, social welfare is its sole objective. It has spread Life Insurance widely and in particular to the Rural India providing them adequate financial cover against death at a reasonable cost. It is providing employment to lakh of people in the form of agents and development officers. Especially the women force that constitute a large portion of LIC agents thus resulting in women empowerment. Ms. Ritu .Nanda being a pioneer example of LIC agent. LIC provides a number of advantages to its policyholders: protection, tax benefits, liquidity i.e. availability of loans against policies, long term savings through easy installments. It provides housing facilities to its employees. Easy accessibilities to payment through internet, ATM, Postal services, SMS has given new avenues to LIC. The logo statement of LIC states Trust, thy name is LIC which presents that LIC stands for the peoples trust in it. Image of LIC is so good that it has become synonymous to Insurance. When a person wants insurance he immediately thinks of LIC. This shows how well LIC has built and managed its image for years. It comes as no surprise that according to survey conducted by AC NIELSEN ORG MARG, LIC has been the No.1 service brand in the country for the last 6 consecutive years. Now the time has come for LIC to take stock of things that can usurp its leading position in times to come by its competitors who have currently built the groundwork and are now consolidating their positions by increasing the head count. It is very much possible as has happened in the aviation industry where Indias leading government held Airline has gone in the red. The aviation industry has also seen the bigger players cannibalizing the smaller players. In the current Insurance segment the private players market share based on the survey is between 2% and 6% individually with a total share of 28%. It is possible for a key

player in the private segment to takeover the small players which can pose a big threat to LIC. Therefore it is recommended that LIC should re-engineer its insurance business by recruiting new professional staff, re-orienting its existing staff, enhance its infrastructure and use technology to its advantage. LIC has to change its image in the general public which still perceives it as a Government runned body and hence is not able to come at par with its competitor. LIC Housing Finance, LIC Mutual Funds, LIC Pension Fund Limited still lacks visibility, professionalism, market prominence. To overcome this LIC should aggressively market its various products. It should build word class infrastructure and bring in professionals to revolutionalize its existence.

BIBLIOGRAPHY
BOOKS
Public Relations - Frank Jeffkins Marketing Management Philip Kotler. Published by Dorling Kindersley (India) Pvt. Ltd., licensees of Pearson Education in South Asia.

MAGAZINES
Yogakshema (Golden Jubilee Magazine ,issued in August, 2006) Readers Digest (Special advertising feature issued in April,2009)

NEWSPAPERS
Economic Times dated September 2, 2005 and April 23, 2008. The Hindu - Business Line dated March 4, 2009.

WEBSITES
www.managementparadise.com/.../8269-corporate-image-building.html www.encyclopedia.com/doc/1G1-14105808.html www.licindia.com/online_payment.htm www.referenceforbusiness.com/.../Corporate-Identity.html www.answers.com/topic/corporate-image

ANNEXURES
Questionnaire NAME: LOCATION:_
1. What is the first thing that comes to your mind when you hear the name LIC? a. Insurance & policies b. Logo of LIC c. Government organization d. Returns e. Savings 2. Are you a policy holder of LIC? a. Yes b. No 3. If Yes, then why?

4. If not LIC, then which company have you taken your insurance from? a. Aviva b Bajaj Allianz c Birla Sunlife d. HDFC Standard e. ICICI Prudential f. ING Vysya g. Kotak Mahindra h. Max New York i. MetLife j. Reliance k Sahara l. SBI Life

m.Tata AIG 4. Why not LIC?

5. Are you happy or satisfied with the schemes that LIC offer? a. Yes b. No 6. How will you rate the services of LIC on a scale of 0-5? [0-not prefered, 1-least preferred, 5-most preferred] 0 1 2 3 4 5

7. Does LIC give you a sense of security? a. Yes b. No 8. Do u invest in LIC because of the tax benefits you get? a. Yes b. No 9. What kind of image does LIC have in your eyes?

10. Have you any time come across a claim lodged with LIC by anybody in your family/relation and what was the outcome? a. Yes b. No Outcome 11. Have you come across a case where term of the policy of the insured has been complete and the sum insured on the promise returns are yet not paid by LIC? a. Yes b. No

12. Have you anytime interacted with LIC agent or a person selling LIC policies? a. Yes b. No 13. If yes, what is your impression about such person? Would you like to meet the person again or avoid? a. Meet again b. Avoid 14. If given a chance, would you like to work for LIC? a. Yes b. No 15. If Yes, why?

16. If No, why?

17. Which other arms of LIC are you aware of?

18. What is the mission statement of LIC? a. LIC-Zindagi ke saath bhi, Zindagi ke baad bhi. b. Trust, thy name is LIC.

REVIEW OF LITERATURE
1. The Sunday Statesman Calcutta, 21 June, 1959. Three years after nationalization, the LIC has made its first big gift to the old policyholders, indicating that its management of life funds will not reduce the benefits which they normally expected from the companies taken over. Such apprehension was felt mainly by those whose policies gave them a right to share in profits on payment of higher rates of premium. Rates of bonus have been determined by the financial position of the 245 companies at the time of nationalization; though some of the rates are lower, they compare well on the whole with those given by the companies. The policyholders have thus gained satisfaction on two points. The first is that the extra premium he is charged for policies with profits will not be lost through nationalization resulting in little or no profits to share, and the second, that the wholesale merger of good and bad companies will not obliterate the distinctions between the benefits formerly provided. This is consistent with the terms of the LIC Act, 1956 and the assurances given at the time of nationalization. It should certainly enhance the LICs reputation.
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2. Economic Times, September 2, 2005. Mumbai: The policy holders of the Life Corporation of India will get a special bonus as part of the insurers golden jubilee celebrations. The bonus amount will be significantly large on old policies. The Corporation has also announced a special golden jubilee scheme, Bima Gold.

The maximum allocation has been made for those policyholders who bought insurance before March 31, 1981. They will receive an additional Rs. 50 per Rs. 1,000 insured, while policyholders between April 1981 and March 01 would receive between Rs. 45 and Rs. 6 per Rs. 1,000 insured as per their year of investment. Policy holders from April 2001 to date will get Rs. 5 per Rs. 1,000 insured. LIC will spend an additional Rs. 2,100 crore in payment of the golden jubilee bonus to its clients. The old policy holders have contributed maximum to the life insurance fund so it is only natural that they should be rewarded more, said an official. ET had reported in its edition dated August 17 that LIC was considering a golden jubilee bonus and was launching a special golden jubilee product in the first week of September. Officials expect Bima Gold to be a best seller because it is a low cost protection plan with return of 15 percent of the sum assured at the end of 4 and 8 years. The policy is likely to be closed at the end of the current financial year. The bonus was announced by finance minister P.Chidambaram at a function to mark the golden jubilee year of the Corporation, which was inaugurated by Prime Minister Manmohan Singh. Mr. Chidambaram said the total income of the Corporation during financial year 04-05 was Rs. 1,07,969 crore, including a total premium income of Rs. 70,857.98 crore and income from the Investment portfolio of Rs. 33,652 crore. Today, LIC has grown into a $100bn corporation with the assets valued at Rs. 4,40,043 crore and the Total Life Fund as on March 31, 05 being Rs. 3,85,000 crore.
th th

3. Economic Times Mumbai, April 23, 2008. LIC tops in death claim settlement While Private Insurers settle 72.7% of Claims, PSU Major Manages 96.94%

The percentage of rejected claims to total claims is much higher for private life insurance companies compared with state-owned Life Insurance Corporation (LIC). According to data released by the Insurance Regulatory and Development Authority (IRDA), private life insurers received 13,139 individual death claims in 2006-07 compared with 6.02 lakh claims recorded by LIC. Of the total number of claims received, private life insurance companies settled 72.7% of the claims, while LIC managed to settle 96.94% of claims. The number of claims rejected by private insurers as a percentage of claims booked was 13.98%in 2006-07, while the claims rejected by LIC were 1.43%. Claims pending with private insurers as on March 31, 2007 stood at 13.32% of total claims received against 1.63% for LIC. LIC paid Rs 4289.28 crore as death claim benefits against Rs 155.46 crore paid by private life insurers. Life insurers receive two types of claim, the first are the maturity claims where the policyholder gets the savings that accrue under his policy at the end of the term. Bulk of the claims comes under this category, and usually there is no dispute on maturity claims, as these payments are akin to repayment of a maturing bond. The second set of claims, which are far fewer, are death claims. Section 45 IA of the Insurance Act 1938 allows insurers to reject claims if there is suppression of material fact by the insured. In life insurance, any information that has bearing on the mortality of the proposer considered to be a material fact. So, if a proposer suffers from a serious ailment which is not disclosed, the insurer can reject his claims. However, the Supreme Court has said that the clause cannot be used unilaterally and it is for the insurer to establish that the non-disclosure has a bearing on mortality. In the first few years of operations, private life insurers did not have much of a claims experience. Therefore, a comparison on claims servicing between the private sector and LIC was not possible. Now, with the private life industry being in its seventh year, there have been a substantial number of maturity and death claims.

According to an official with a private life insurance company, repudiations were higher in group policies. Also, given that private companies have been only a few years in existence, their shares of early claims are higher. Early claims are those which occur within two years of the policyholder acquiring a policy. In such claims, insurers double check on whether the terms of the policy have been strictly met. NO OF CLAIMS REJECTED AS % AGE LIFE INSURERS Aviva Bajaj Allianz Birla Sunlife HDFC Standard ICICI Prudential ING Vysya Kotak Mahindra Max New York MetLife Reliance Life Sahara SBI Life Tata AIG Private Total LIC OF TOTAL CLAIMS 9.19 18.03 19.24 18.07 6.12 13.88 14.09 13.51 21.72 8.91 9.09 13.44 23.69 13.98 1.43

Source:Yogakshema, Vol. 2(July 1959)

4. The Hindu Business Line, March 04, 2009.

Major Private Life Insurance Companies are under loss. PROFITS SLUMP 80% FOR PVT PLAYERS Profits (Losses) of life insurance companies (Rs. Cr.) (2007-08) Birla Sun Life ICICI Prudential ING Vysya HDFC Standard Max New York Life Reliance Life Bajaj Allianz SBI Life Kotak Mahindra Tata AIG Met Life AVIVA Sahara Shriram Life Bharti AXA LIC Future Generali IDBI Fortis Total - 445 - 1395 - 191 - 244 - 257 - 768 -297 34 -72 -339 21 -202 3 5 -242 845 - 30 -26 - 3600 (2006-07) - 140 - 649 - 178 - 126 -60 -315 -72 4 -110 -72 -12 -132 -1 10 -80 774 -3 - 1162

AWARDS WON BY LIC

Golden Peacock Innovative Product / Service Award - 2009

Loyalty Awards - 2009

Readers Digest Trusted Brand Award 2008 in the Platinum category.

CNBC Awaaz Consumer Awards 2008

NDTV Profit Business Leadership Award 2008

INDY's Silver Award for Best Corporate Film

INDY's Silver Award for Best in House Magazine

IT USER 2008 NASSCOM

Business Superbrand India 2008

ASIA BRAND CONGRESS BRAND LEADERSHIP AWARD 2008

Pitch Award -" Rank 1 " India's Top 50 service Brands

SKOCH Challengers Award 2008 for Jeevan Madhur

After LIC winning so many prestigious awards, people do not perceive LIC as a mere insurance company but a lot more than that. They have welcomed or embrace it with open arms into their lives. LIC is the only company that strives for excellence.

Conclusions & Recommendations

To conclude I must say these two & half months were all about learning. I have learned a lot while working in this project. I have tried to do an in-depth analysis of the working procedure & some conclusions that I have drawn based on the findings of the project are as follows; I. When a customer go major components that for purchasing any investment they look for products the is the performance record / past

performance, withdrawal facility, tax-benefits etc. in general context. II. In the changing circumstances the components like reputation of fund manager are gaining more & more importance. III. Attitude towards investment, annual family income & savings are the most important discriminating power regarding the investment decision of a consumer. IV. Among the investment products Mutual Funds are comparatively easy to sell from the companys view point. As because they are preferred products among the customers. Among the insurances Life Insurances are little tougher to sell. This can be due to many reasons, out of them awareness about the product is a key factor. V. Among the total investment portfolio, gold products are seasonal products & they are sold on particular occasions. VI. Among the total customer base, a large portion still quite unaware about the financial market, recent changes in the market & also the product characteristics & other technical details. VII. For the above reasons there is still a high dependence on the sales people or the financial adviser of the financial institution, from the customers perspective. VIII. For seasonal products like gold the USP are sentimental value, the purity of the product etc. So marketing strategies should be very strong in this regard on a short-term basis. Another key in this regard is the visibility aspect.

Recommendations There are certain key observations during the progress of the project. There are certain problems involved the overall activity of I & S section just like any other sections. Recommendation portion deals with this area only & how can this be improved to increase the efficiency & effectiveness in procedure. These are; 1) Although aggressive selling is one of the key factor behind the success of this I&S section but still sometimes under too much pressure of target, grassroot level sales people give wrong information about the products just to sell the product & meet the target. It should be strictly monitored from long-run point of view. 2) During the working procedure it was observed by me that there is some communication gap in the management hierarchy. This creates certain problem while working. These kinds of communication gap should be reduced by way of effective communication channel building. 3) Visibility in case of seasonal products like gold is a key area. As because that creates an impact in the mind of the customer. But I personally feel after having the experience of selling gold during this project the visibility of the product & advertising should be more for the stipulated selling period. 4) While interacting with the customer I also feel sometimes few scattered cases are hampering the brand name or the brand image of the financial institution among the customer. This brand signal, 5) the dilution is a dangerous brand management department should look after this very

carefully & should take some positive steps in this regard. The promotions by way of investment mela or similar kind of activities should be increased to a greater extent under this kind of competitive environment to

create an impact in the market. This should be a flexible process & immediate feedback of its effect should be analysed to know about its actual effectiveness. This way improvement can be made in future activities.

Just to conclude I must say to reach the no.1 position is a tough task but to maintain that it is tougher. As we all know like other sectors in financial market too competition is quite fierce so as a leader to maintain the supremacy it should come up with new ideas & effective planning. Flexibility should be maintained in overall working procedure. Strong internal communication procedure is another major component in this regard. I hope my project work will help the organization not only in terms of volume of sales generated but also from the view point of adjudging the customers mind properly in terms of the findings & recommendations given above. Lastly I must say this kind of market research should be conducted on a regular basis as because the market is ever-changing & that too in a very fast pace.

Project Author Karamdeep Kaur, TYBMS 2011, Shailendra Education Society