Each of the companies in the industry has their own core competency. Each of them fights on their basis of one of 4Ps of marketing, Product, Price, Promotion or Place. And if it happens to be the service industry, you can add 3 more Ps of People, Process and Physical evidence. The insurance industry is no different. LIC banks on its trust factor, Bajaj Allianz on its product customization, ICICI Prudential on Price, HDFC and SBI on emotional appeal. So what should a company do more to get extra from its products?
A comparative analysis of the 4Ps but taken two at a time can be done. On one graph plot price vs. product and on the other, place vs. promotional spend. The gap in each graph can then be explored to make a niche for you and increase chances of growth.
Following are the factors that can be taken for each P:
Product:
1. Riders i.e. how many, less is better for customer understanding, but more riders done simplistically for a better product offering.
2. Liquidity: more the better for the customer but it increases chances for redemption resulting in loss for the company. A trade-off between liquidity and redemption pressures has to be arrived at.
3. Flexibility: switching cost and types
Price:
How much is the cost for the product. An oblivious point to mention but listed for a comprehensive structure.
Frequency of premium- people do not like to be reminded of premium payment frequently. So ideally it should be once or twice a year.
Place: i.e. the distribution reach
1. Sales force strength in numbers
2. Indirect channels
3. Direct channels
4. Bancassurance
Promotion: advertisement spend (easiest to compare)
Thus weightage to each factor helps in plotting the graph and arriving at the gap mentioned initially.
The 4P analysis always help if its done accurately. And appropriate weightage is given to each factor if its done properly then its boon of success to insurance companies
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