DEVELOPING MARKETING STRATEGY FOR THE RURAL MARKET OF

INDIA WITH RESPECT TO THE INSURANCE INDUSTRY OF INDIA

Submitted by
Udita dasgupta
Batch 2011-2013
Amity institute of competitive intelligence and strategic management (AICISM)
Amity university, sector-125, Noida, NCR, india-201301

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

AMITY INSTITUTE OF COMPETITIVE INTELLIGENCE & STRATEGIC MANAGEMENT, NOIDA
AMITY UNIVERSITY UTTAR PRADESH
CERTIFICATE OF ORIGINALITY

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







-UDITA DASGUPTA
Eno- A0633511001
MBA (CISM), Amity University


ACKNOWLEDGEMENT


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

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



-UDITA DASGUPTA
Eno- A0633511001
MBA (CISM), Amity University


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


-UDITA DASGUPTA
Eno- A0633511001
MBA (CISM), Amity University



TABLE INDEX


Ch. No TITLE Page No.
CERTIFICATE OF ORIGINALITY
ACKNOWLEDGEMENT
TO WHOMSOEVER IT MAY CONCERN
1 ABSRACT
2 BACKGROUND OF THE STUDY
3 LITERATURE REVIEW
4 RESEARCH METHODOLOGY
5 DATA ANALYSIS

RURAL INDIA OVERVIEW


INSURANCE INDUSTRY
OVERVIEW


MAIN PLAYERS

6 MARKET STRATEGY FORMULATION
7 DATA INTERPRETATION

PILOT SURVEY


DATA INTERPRETATION

8 CONCLUSION AND SUGGESTION
REFFERENCES
























CHAPTER 1











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




























CHAPTER 2










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

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









CHAPTER 3











LITERATURE REVIEW

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





























CHAPTER 4











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

RESEARCH DESIGN
The research done is partially descriptive and partially exploratory. The
initial research done is secondary by nature and after the benchmarking
is being done, the market strategy is being developed.
The developed market strategy is then tried on a selected sample to
prove its worth. The Raipur village of Noida, New Delhi is chosen for
the sample survey.

INSTRUMENT OF DATA COLLECTION
The research is partially secondary and partially primary. The study
starts with the secondary research of the usual marketing tactics
followed by the major players in the insurance industry in the rural
market f India. The secondary research is mainly used for the purpose of
identifying the underlying trends of the rural market of India, the
insurance industry of India and the usual marketing tactics used by the
players of the Insurance Industry to promote their products and services
in the rural market of India.
The primary research comes in to the scene when the marketing strategy
has been developed after benchmarking the industry practices pertaining
to the insurance industry in the Indian rural market. The primary
research is being done to ratify the developed marketing strategy. The
marketing strategy developed is expected to be effective and efficient
enough to communicate the messages with regards to the insurance
products and services to the rural customers so as to create a need of
insurance products in the said market.



























CHAPTER 5












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

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

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

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

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

LIFE INSURANCE COMPANIES IN INDIA AT PRESENT:
Sl.
No.
Insurers Foreign Partners
1 Life Insurance Corporation of
India
---
2 HDFC Standard Standard Life Assurance, UK
3 Max New York New York Life, USA
4 ICICI-Prudential Prudential Plc, UK
5 Kotak Mahindra Old Mutual Old Mutual, South Africa
6 Birla Sun Life Sun Life, Canada
7 TATA-AIG American International Assurance
Co., USA
8 SBI Life BNP Paribas Assurance SA, France
9 ING Vysya ING Insurance International B.V.,
Netherlands
10 Bajaj Allianz Life Allianz, Germany
11 Metlife India Metlife International Holdings Ltd.,
USA
12 Reliance ---
13 AVIVA Aviva International Holdings Ltd.,
UK
14 Sahara ---
15 Shriram Sanlam, South Africa
16 Bharti AXA AXA Holdings, France
17 Future Generali India Generali, Italy
18 IDBI Federal Ageas, Europe
19 Canara HSBC OBC HSBC, UK
20 Aegon Religare Aegon Netherlands
21 DLF Pramerica Prudential of America, USA
22 Star Union Dai-ichi Dai-ichi Mutual Life
Insurance,Japan
23 IndiaFirst Legal & General Middle East
Limited, UK

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













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



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

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

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

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

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

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

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
































CHAPTER 6









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

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

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

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

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

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

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






























CHAPTER 7






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

Name:
Age: Gender:
Your Occupation:
Your Monthly Income:
Your Family size:
Number of earning units in your family:
Are you aware of insurance?
If yes, would like to buy it?
Are you aware of the insurance benefits?
If the micro finance institutions advice you to get insurance, will you
consider it?
If the village panchayat leaders recommend the life insurance
products, will you consider it?
The insurance products purchase allows you free health checkups in
the government hospitals twice a year- what you have to say about
this?
Do you worry that if anything happens to you, then your family may
fail to support for themselves?
Then do you think that Life insurance will provide you with the
security?
Rank the following:
Government offering you life insurance products
Private company offering you life insurance products
Private company along with government support offering you
life insurance products
Is life Insurance essential?

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























CHAPTER 8






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

CONCLUSION:

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





















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