Picture
PRADEEP PANDEY, DIRECTOR – BRANDING & COMMUNICATION, AEGON RELIGARE LIFE INSURANCE
"Consumers Don’t (1) Understand Ulip Risk (2) Inform Nominees (2) even go through Policy Documents"
 
Life insurance is a comprehensive financial planning tool. It fulfills the need for protection, growth, savings as well as tax benefits. One needs to understand the basic need that he/she is trying to fulfill.

At a basic level, everyone should have an adequate insurance cover. This cover should be adequate enough for the insured family to continue with the same lifestyle in case something unfortunate happens to the bread winner. Brands should try to educate consumers about this basic tenet of life insurance. Financial literacy is abysmally low in our country and the task is cut out for all the brands. As a step in this direction, we had launched our brand with the KILB (Kum Insurance Lene ki Bimari) campaign. The campaign was aimed at educating people about the concept of adequate insurance. As a thumb rule an individual should have a cover of 8-10 times of his/her annual earnings. The cover corresponding to this amount will to some extent ensure that the lifestyle of the family does not slip considerable in case of a mishap. The campaign got roaring response from the consumer who were interested in knowing how much ideally they should be insured for. The success of this campaign highlights the power of selfless education by a brand. Once this is done, the consumer too reciprocates by placing more trust in the brand.

Educating and guiding consumers has always been at the heart of our communication strategy. This has worked quite well for us, as there is something of significance for the consumer who in turn is willing to listen to the brand. We followed up the KILB campaign by a Pension campaign which did not merely exhort him to buy a pension plan for post retirement. Instead, we again calculated the approximate pension amount a person would require post retirement and then decided on the amount of money one should invest. This helps the consumer in taking an informed decision as opposed to investing without understanding the need or outcome. This win-win proposition helped us achieve substantial penetration of Pension Plans in our product portfolio.

We also launched a series of educative advertisements with the sole intention of helping the consumer plan his life better. As a brand, we passionately believe that if we are able to give right and selfless advice to consumer, we have a higher chance of winning his trust and faith. We found few gaps pertaining to consumer behaviour regarding life insurance. Some of them are as mentioned below:

Consumers never inform their nominee of the insurance cover bought. Hence the nominee is not even aware that there is a policy which can help the consumer tide over the immediate financial crisis. We launched an ad campaign asking consumers to inform their nominees of the cover they have taken.

Many policyholders do not go through their policy documents once they get the cover. Thus in case there is any error/difference in name/age, it becomes more difficult for the nominee to claim. It would help if the consumer goes through the details and confirms it to his satisfaction once he receives it.

Consumers do not understand the risk in ULIPs before investing. We launched an ad campaign explaining that the risk taking ability differs from person to person. Same applies to investing and one should gauge the risk one wants to take before investing in such policies.

There is huge opportunity for brands to simplify and showcase concepts in a simple and clear language. Each and every human being wants to save, protect and grow his earning but, is befuddled with plethora of complicated and convoluted promises. It is the role of a brand to speak to consumer in a language which he understands and relates to.

The communication objective is independent of the medium or ATL/BTL. Irrespective of the medium, the brand which focuses on simplicity and selfless advice will win in the long run.


 
Picture
Sean combs is considered the epitome of music celebrity packaging and innovation. when every new kid on the block in the industry thought about starting a career in singing, he jumped into establishing a recording company, just to be differentiated. when others followed suit, he jumped into singing rap. then hip hop. jumped again to pop rock. then to movies. then to fashion designing. and to reality television. en route, He won three Grammy Awards, two MTV Video Music Awards, one Council of Fashion Designers of America award, got listed in fortune’s global ‘forty richest people under forty’ list, fathered five children (without being married!) and even Went around with Jennifer Lopez! combs realised that in an industry where all songs sounded the same, innovation and differentiated marketing were key to leadership…and so even changed his name to puff daddy! the indian insurance industry was supposed to fly away to thunderous growth on the same simple rules – innovation and differentiated marketing. sadly, with almost all insurance products looking unnaturally similar, there is practically no differentiated marketing, and zero innovation to add to it. with many insurance firms suffering significant accumulated losses, and with bitter regulations round the corner, can the marketing rules change in the near future for this industry?

Steve Jobs, the man who leads Apple Inc, and made it the second-most valuable company in the world, once said: “Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led...” Sure, this is all tech-talk from a vanguard of the technology industry, and all that he may profess may find no space in the memos of insurance agents, but he has a point! It doesn’t require money to innovate, simply people intellect and leadership. The Indian insurance industry today has both intellect and leadership, but strangely has its back to the wall when it comes to being tested on grounds of innovation. Try the test yourself. Call medical insurance agents from different companies and compare their plans. All plans have similar pricing, similar guidelines, similar cashless benefits (or no cashless benefits; given the cartel in which health insurers operate), similar coverage, and similar rejection rates. Do the same test on life insurance companies. You’ll come out with the same results with flying colours. Similar products, similar benefits, similar marketing punchlines, similar guarantees. To understand what we’re talking about, look across the road to automobile marketing and the logic of differentiation and innovation hits one hard. What’s going wrong with the Indian insurance industry, especially health and life insurance firms?
 
Rebecca C. Amoroso, Vice Chairman & US insurance industry leader, Deloitte writes in one of her papers, “In practice, most [insurance] companies play it safe and stay close to what works today.” That’s precisely the reason why the whole industry – especially life insurance companies – went into a state of panic when disagreements over ULIPs sparked off between regulators IRDA and SEBI. The truth was that the said life insurance companies had focused less on pure insurance products and more on ULIPs, which account for 70% of premiums from new policies. As a result, the whole life insurance segment was virtually surviving on ULIPs. It wasn’t the best of starts for the life insurance industry this year.

The point is, insurance in India is sold – and therefore bought – for the “wrong reasons”. For instance, with all due respect to the marketing gimmicks, complex designs and cumbersome processes, despite the fact that insurance is a risk cover, most of us are cajoled to consider it as nothing more than a mere investment and tax saving instrument. Even agents (who are ethically meant to guide consumers) try to push insurance plans under the dole of investments. Customers who dread going through the brochures which contain complex terminologies fall prey to promotional material, without ever understanding what the policy actually provides. P. Nandagopal, CEO, IndiaFirst Life Insurance, agrees, “Everyone needs life insurance, for example, but not many actually understand the nuances of how life insurance actually works.”

Is the insurance industry facing a lack of cash flows that is stopping them from educating customers properly, or advertising innovatively? That’s far from the truth. Expenditures on print ads by the overall insurance industry in India surged y-o-y by 26% during FY 2009-10. The same figure was a healthy 20% in the TV ad-space. Here comes the real treat – the life insurance segment accounted for 74% and 84% of the total insurance industry adspend on print and TV respectively. In fact, all insurance companies in India saw the first quarter of calendar year 2010 account for up to 40% of their ad spend. The motive was clear – sell tax saving instruments to those individuals scampering for a last minute solution to save on taxes. Little wonder that while the industry grew by 25.83% last year, the ULIPs’ segment recorded a higher 35.33% growth. And the life insurance industry specifically actually managed a 25% growth (y-o-y) during the previous financial year – thanks purely to proactive marketing measures. Obviously, as stated earlier, tax-saving instruments formed the major chunk of business for even life insurance firms! SEBI caught on to the brouhaha and put a ban on 14 life insurance agencies on April 9, 2010, a move that resulted in the much-publicised SEBI tiff with IRDA. Deepak Sood, MD & CEO, Future Generali India Life Insurance shares with 4Ps B&M, “While the impact of these guidelines may look favourable currently, in the long run, these changes could seriously impact the choice of investment options to customers, restrict product design-innovation, and increase new business strain.” In an industry where national penetration is just 4%, this is a worrisome outlook.


 
It combines the force of India’s second largest realty player, Unitech Ltd. and Norwegian giant Telenor, the 6th largest mobile communications player in the world. But is that enough to get heard in the cluttered Indian telecom market? What else is Uninor doing? 4Ps B&M quizzes its Executive Vice President, Delhi Hub, Allan Bonke
 
Though Uninor, a joint venture between Norwegian telecom major Telenor and India’s second largest real estate company Unitech Ltd, was a bit late in entering the Indian market, it seems to have compensated the move with its innovative offerings like ‘Dynamic Pricing’ especially designed for the Indian consumers. Result: The company has not only shown some really impressive surge in the recent past, but has also become the second most preferred new operator in the country (as per the recent numbers revealed by TRAI). In fact, going gung ho over its recent success, the company, which holds a pan-India licence to offer mobile telephony services, is now looking forward to increase its presence in India (Uninor is operating in 13 circles at present). 4Ps B&M, caught up will Allan Bonke, Executive Vice President, Delhi Hub, Uninor to understand how the company is trying to break into the cluttered Indian telecom market. Excerpts of the interview:

With several established brands already around, don’t you think that you entered the Indian telecom market a bit late?
With just about 8-9 operators offering their services to a population of over 1.2 billion people, we think that there is still plenty of scope for us. We are not afraid of the fact that we are late entrants in the Indian market as it has still not saturated. In fact, our aim is to get closer to our customers and provide them with better services. To make this happen we already have a decentralised hub model in place that gives us the liberty to work independently as separate SBUs. Then, we have the support office that takes care of several activities which include product development, pan-India interaction with our partners, legal compliance, et al.

You mean to say that you entered India at the right time.
Yes, we entered the Indian market at the right time. Here we have the right technology and the right kind of audience. It’s a right time for us to start our operation in India because there is a technology boom in the market. In fact, India is not the only market where we have entered late, we have done it in the past in other markets as well. Despite entering that market late we have become leaders there, and in no time. And we can repeat the same success in India as well.

All the new players that have entered the Indian telecom market have played on the pricing flank to gain initial momentum. What about you?
We are very clear about the fact that we don’t want to be the price leader. If you would have noticed we are the only one who has never come out with pay-per-second plans. Instead, we want to be competitive on all fronts and as such have focused more on innovative offerings. For instance, the latest and the most innovative offering by Uninor is ‘Dynamic Pricing’, wherein call tariffs change as the time or the place of the call changes. In fact, Uninor is the first one to offer such innovative and exciting tariff plan. The endeavour is not to offer the lowest price but to add value through innovative offerings that the customer can value and appreciate.
 
So, what exactly is your core competency?
We have outsourced most of our functions including IT support, network support and customer support. This model helps us in being readily operational, which is a great thing for a new operator. Our focus is on speed and accuracy apart from offering our customers the latest technology and innovative products. We also have a huge focus on our people as a brand and ensure that all our employees get the maximum exposure, experience and have a career progression path ahead of them at all times.

Click on IIPM Article.

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
Arindam Chaudhuri – Everything is not in our hands
Planman Technologies – IT Solutions at your finger tips
Planman Consulting
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine

IIPM ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website

---------------------------------------------------------------------------------------------------------------------------------------------------------
 
FACE2FACE WITH SHAHZAD AHMED, CEO, MIDDLE EAST, AFRICA & INDIA, SIEMENS GIGASET

Gigaset, one of the world’s biggest manufacturers of cordless phones under the brand name Siemens Gigaset, recently entered the Indian market. Here, Shahzad Ahmed, CEO, Middle East, India and Africa opens up on the Indian market and his company’s strategy
 
What prompted Gigaset to enter India?
We appreciate India’s buying power and are here to serve the market. With an average annual GDP growth rate of over 7% for the past two decades, Indian economy is among the fastest growing in the world. The penetration of cordless in Indian households is less than 15%. Hence there is enough opportunity for all cordless manufacturers in India. The communications market is estimated to grow at an average 2.6% annually from Rs.21,100 crores in 2008 to Rs.24,000 crores in 2013.

Evidently, the company’s global strategy was the reason Gigaset saw an impressive growth in Europe and Middle East. Any special strategy for India?
Gigaset Communications is the clear market leader in Europe for DECT phones. In Germany, you find Gigaset phones in about every second household. In Europe, we have a market share of 33%. It’s important for us to strengthen our presence in other fast growing markets [like India]. We are setting trends and develop products to fit different customers’ needs. For example, we were the first to have an integrated answering machine to be operated from handset without any base keys in 2.4 Ghz range in the Indian market. Furthermore, Gigaset was the first manufacturer launching a colour display within a cordless phone.

Yes, the designs are stylish with great functionality, equipped with cutting edge technology. But do you think this can influence Indian consumers?
We launched six models in the Indian market in the very first phase. We are now producing tailor-made products for India that meet customers’ needs. It’s our objective to produce all products for the customer’s comfort, so that everyone can enjoy cordless telephony that is safe, reliable, flexible. I am glad to announce to the Indian media that we are launching five new models in this cordless category within this quarter.

What according to you will be the challenges that you are likely to face in the Indian market?
First of all, due to size of the country, the logistics supply chain is the one which we and our distributor partners have to manage efficiently. Secondly, we need to ensure that Quality products such as Siemens Gigaset are backed by service centers which provide satisfaction to Indian customers. To sum up, both the logistics and service set up is the one where we are constantly monitoring at head office level and we believe this is the core ingredient for winning the Indian consumer’s mindset.
 
What according to you is the USP of the company?
Gigaset products are developed and manufactured in Germany. In the awarded factory at Bocholt, Germany, the Gigaset telephones are manufactured under the highest quality and environmental standards. Even in India, the models which we launch at first stage are made in Germany. The sole purpose was to allow the Indian consumer to have the experience of using such high quality products made in Germany. Gigaset stands for German engineering and therefore for highest quality and customer orientation. Each and every model has a unique selling point and therefore fits various customers’ needs. We offer telephones as well for dedicated followers of technology as for non-technically oriented customers. There are Gigasets that fit the needs of brand-oriented, value-for-money as well as price-oriented people.

How is competition in this sphere and how do you plan to fare in comparison with your competitors?
As a policy, we do not comment on competition. We believe the competition is beneficial to end user and ultimately the customer gets choice of several brands. We will offer high quality products to Indian customers and give them value for money proposition.

What is your vision for the company in the coming two to five years?
Gigaset should become the number one brand for cordless telephony in India. The Gigaset phones will be available in every major retail outlet. Within five years, we expect to have a pan India presence and sell our products through 3000 retail outlets.

Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
Arindam Chaudhuri – Everything is not in our hands
Planman Technologies – IT Solutions at your finger tips
Planman Consulting
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine

IIPM ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website

---------------------------------------------------------------------------------------------------------------------------------------------------------