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Why are insurance cos taking an integrated marketing route?

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Why are insurance cos taking an integrated marketing route?

To gain an edge over rivals, Indian life insurance majors are now chanting a new mantra:‘Integrate mass media advertising with rural, direct marketing and CRM initiatives’. For instance, SBI Life Insurance and Tata AIG Life Insurance are stepping up their below-the-line activities to support their mass media advertising plans. The accent is clearly on an ‘effective marketing mix’ in the Indian life insurance industry.

Yet another leading player in this segment, HDFC Standard Life Insurance is planning to focus equally on both mass media advertising and below-the-line activities to promote its products in the highly competitive sector. Gone are the days when lead players in this segment focused only on mass media advertising plans to gain mindshare.

On Tata AIG’s marketing plans, says Tata AIG marketing head Rohit Mull: “Recognising the importance of direct and rural marketing, we have launched a host of below-the-line initiatives in the last few months. Insurance as a category is a high-involvement product. And today consumers are carefully evaluating various options.”

Direct marketing techniques are bound to play an increasingly important role in the marketing mix and in the business that comes through alternate business channels. “Lintas IMAG Group handles our direct marketing and CRM initiatives, while Bates India handles our creative advertising,” he adds.

According to Lintas IMAG director Ashish Bhasin, insurance majors are increasingly opting for three specific areas in their integrated marketing plans which include, rural, direct marketing and CRM initiatives. “Currently, insurance companies are spending 80 per cent of their ad budget for above-the-line activities while 20 per cent is kept for below-the-line plans. However,in the next few years, I see this ratio becoming 50:50,” says Mr Bhasin.

Incidentally, Tata AIG Life Insurance Company was licensed to operate in India on February 12, 2001, and started operations on April 1, 2001.

As part of its future plans, Tata AIG is planning to look at an aggressive growth in acquisitions through the direct marketing route. On the rural front the company has tied up with an NGO—The Bridge Foundation which has helped it reach out to the rural market under the DFID-assisted micro insurance project which the company has undertaken in Andhra Pradesh.

In addition, Tata AIG Life is increasingly using below-the-line activities to reach out to its customers. “These activities have enabled the company to interact with customers directly besides giving an opportunity to the consumer to experience the brand personally which is not possible by using traditional advertising mediums,” says Mr Mull.

In the past few months, the company has conducted a host of on-ground events in Mumbai and Delhi to promote its products like Health First.

On the other side of the spectrum, SBI Life is stepping up its below-the-line activities to support its mass media plans. Says SBI Life chief marketing officer S Murlidharan: “Initially, we used mass media to promote our products. But now we are exploring various options like PoS, merchandising, CRM, direct marketing and outdoor media initiatives.”

In addition, SBI Life is laying more emphasis on rural communications in local languages and direct marketing mode to popularise its products, informs Mr Murlidharan. At present, Ogilvy & Mather India is handling the account of SBI Life.

On the growing significance of below-the-line activities in the insurance sector, says Ogilvy & Mather India head financial practices Ajay Kakar: “In the early stage, companies ‘wasted’ money just to make their presence felt. Today, the time has come to prove what role insurance comapanies can play in your life. It’s not only about presence but also about creating relevant communication.”

Today, insurance companies need to reach out to customers to develop a personal bond through direct marketing and CRM initiatives, he adds.

Across the road, HDFC Standard Life is planning to give equal weightage to both mass media advertising as well as below-the-line activities. Says company marketing head Pankaj Seth: “Seeing the effectiveness of direct marketing, rural communications and CRM initiatives in the last one-and-half years, we’ll continue to focus on these. In fact, below-the-line activities have been far more impactful than mass media advertising at our company.”

Incidentally, the company plans to hike its adspend for mass media advertising this year.

In the final analysis, says Mr Kakar: “The insurance category worldwide is one of the largest brand spenders. One of the reasons leading to this is that insurance as a category is sold and not bought.”


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