Sr. No.                      Contents           Page No.             Preface             Acknowledgement             Execu...
PREFACEInsurance market is growing very fast. The opportunity is also high in this sector as only5% of Indian market is co...
ACKNOWLEDGEMENTThere is always a sense of gratitude which one express to other for the helpful so needyservices they rende...
Executive SummaryThe Indian Insurance Industry is broadly segmented into public and private insurancecompanies. Before yea...
Chapter 1: INTRODUCTION1.1 OVERVIEW OF THE INDUSTRY.1.1.1 Insurance In India.The insurance sector in India has come a full...
1.1.3. Brief Review of Scenario – InsuranceInsurance      in   India   started   without   any   Regulation   in    Ninete...
1.1.4 The Insurance Regulatory and Development Authority (IRDA):Reforms in the Insurance sector were initiated with the pa...
1.1.5 Historical PerspectivePrior to 1956 -        242 companies operating1956           -       Nationalization- LIC mono...
1.2 Overview Of The CompanyBEACON INSURANCE BROKERS PVT. LTD.                 -9-
1.2.1: Company Profile-Beacon Insurance Brokers Pvt. Ltd. Introduces itself as one of the Leading Namesamongst Insurance B...
Beacon Insurance has a team of qualified MBAs, Engineers, Licentiates, Associates &Fellows of the Insurance Institute of I...
1.2.2. From the Desk:Beacon started its journey in 2005 with a modest strength of 7 persons. We have grown tostrength of 1...
Feedback mechanism from customers has immensely helped us we are thankful to themfor this. Our patrons have always been a ...
1.2.3. Mission, Vision and Philosophy:Mission:"We shall deliver excellent service and superior products to our customers, ...
Corporate Philosophy:    To work towards the utmost satisfaction of the client by always taking care of      their best. ...
Beacon’s team is a perfect blend of fresh ideas in accordance with the exhaustiveexperience of eminent professionals. And ...
Mr. Naresh VigB.Com, AIIIOver 31 years of experience in Insurance Industry. Has worked in various capacities withcompanies...
Mr. H G ShahB Sc. LIIIOver 26 years of experience in The New India Assurance Co. Ltd. He has been associatedwith Beacon si...
Mr. Sudhanshu TrivediBCA, MBAOver 4 years of experience in General Insurance Marketing. He is currently designated asHOD-S...
-:MARKETING AND SALES DEPARTMENT:-               - 20 -
Chapter 2: Marketing and sales department                 - 21 -
2.1: Basic Understanding of Marketing & Sales: 2.1.1: Meaning of marketing & sales:             "The term "sales and marke...
It is corporate objectives, including profitability, which are no less                 important than that of industries. ...
Proposer                              Proposer     is convinced                       Fills the relevant         about    ...
marketing means generating leads or prospects. Once the product is out in the market, itis the task of the sales person to...
2.1.3   Detailed Organization Structure of Marketing Department:    Beacon has a highly qualified marketing team with arou...
M.D. & Promoter                             Mr. S.K. Rastogi                           Director & Promoter                ...
2.2 Marketing Environment :Marketing Relating To Insurance Industry:Needless to say insurance industry is as interested in...
2.2.1: Concept of target and target customer:   The "Target Market" for a life insurance broking company is the type of cl...
2.2.2: Macro environment:PEST Analysis of Insurance Market:There are several forces at work in every sector and every indu...
aimed at “creating a more efficient and competitive financial system suitable for therequirements of the economy keeping i...
very competitive and have given immense competition to the on time monopoly of themarket LIC. Since the advent of the priv...
• Growing premiums: Growing premiums are obviously attracting the new players.During the financial 2004 05 alone, the life...
less than 1% of what the corporation collected by way of first premium income last fiscalyear. In contrast, private player...
particular policy. All the insurance companies follow a set standard table referring towhich they decide upon the premium ...
commitments. "Gender-neutral" insurance in the true meaning of the word is impossiblein voluntary insurance products.• Rel...
With these community based insurers mainly in the rural areas, the rural people havegood faith on them. This is one of the...
•   Internet:   Internet usage has drastically improved in the last decade. There was a tremendous   increase in the use o...
•   Call Centres and SMS services: Almost all the insurance companies have their       own call centres which cater to the...
Following is the list of competitors in Surat of Beacon Insurance Brokers Pvt. Ltd.Rajkrishna Ins. Broker Pvt. Ltd. (Earli...
Central Road No. 10,Udhna , Surat, 394                                              210.Loyal Insurance Brokers Pvt Ltd   ...
2.3: Consumer and industrial buying behavior: 2.3.1: Meaning of consumer and industrial buying behaviorConsumer Buying Beh...
2.3.2: Factor affecting Consumer buying behaviorWe analyze consumers because; this is the basis for all market strategies ...
Social factor:Consumers are also influenced by social factor for example; reference group, family, andsocial role and stat...
Personal factor:A consumer decision is also influenced by personal characteristics for example the buyerage and stage in l...
2.3.3: Process of buying behavior:Stages of Adoption Process:An innovation refers to any good, service, or idea. That is p...
2.4 Product:2.4.1: Meaning of product/Service:A service is the intangible equivalent of an economic good. Service provisio...
v) Star Union Dai-ichi Life Insurance Co Ltd.List of Non Life Insurance Companies:       1.   Bajaj Allianz General Insura...
Popular traditional products:    Term Insurance Plan: - This is the cheapest Life Insurance Policy. In this policy       ...
stage, and thus ensure protection in every step of life. The company’s philosophy hasbeen to help customers understand the...
 Scrutinizing the assessment of the loss.2.4.3: Brand & Brand equity:Beacon Insurance Brokers Pvt. Ltd. . The name itself...
2.5: PRICE:2.5.1: Meaning of price:Pricing : Underwriting results of many classes of general insurance make dismal reading...
2.6 PLACE:Definition:The place is where you can expect to find your customer and consequently, where thesale is realized. ...
Direct Distribution channel            Two-LEVEL Distribution channel     COMPANY                                COMPANY  ...
2.6.3: Functions Performed By Channel Of Distribution:- •      Risk taking – Assuming the risk connected with carrying out...
2.7: PROMOTION:Definition of Promotion:“An activity designed to boost the sales of a product or service. It may include an...
2.7.2: Elements of Promotion Mix:Beacon Insurance Brokers Pvt. Ltd has limited yet effective promotion mix. Mainly thereas...
2.7.3: Communication Process:-  We need to do 3 things to achieve this –                   1. Greet the Customer        2....
S              SmileA              AcknowledgeT              Turn the ObjectionM              Show More ValueC            ...
2.8 Strength and Weakness:                                    Promoters with                                    Rich Indus...
2.9 Marketing Control:2.9.1: Meaning and Importance of Marketing Control:There is no planning without control.Definition o...
Type of Control      Prime Responsibility        Purpose of Control               Approches1.    Annual Plan Control     •...
- 63 -
HUMAN RESOURCE MANAGEMENT DEPARTMENT                - 64 -
CHAPTER 3: Human Resource Department                                   3.1: INTRODUCTION    3.1.1: Basic Introduction Of H...
¢   Vadodara    Service centre:¢   Anand¢   Bhilwara¢   Rajkot¢   Pune           There are 40 Employees in Surat branch th...
3.1.4 :Activities Of Human Resource Manager :HR Manager look after for the HR Department and smooth functioning of the hum...
As the activities like recruitment, selection, interview etc. hold by Mr. SANJAYAGARWAL the director of the company.3.1.5:...
 RecruitmentOnce the labour forecast is done organization can identify the need for more labour in theorganization if the...
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Beacon insurance brokers pvt. ltd.

  1. 1. Sr. No. Contents Page No. Preface Acknowledgement Executive SummaryChapter 1: Introduction • Overview Of The Industry • Overview Of The CompanyChapter 2: Marketing and Sales DepartmentChapter 3: Human Resource DepartmentChapter 4: Operations DepartmentChapter 5: Recommendations and Suggestions Bibliography Annexure -1-
  2. 2. PREFACEInsurance market is growing very fast. The opportunity is also high in this sector as only5% of Indian market is covered by this sector and the players are trying to extend in to therest untapped 95%.The insurance industry in India has been growing at a remarkable pace after its openingto the private players. Entry of new players into the industry has increased thecompetition which facilitated insurance companies to design newer insurance productsaccording to the needs of insured. In a country like India where insurance penetration isnot so high, there should be an intermediary between the insurers and insured who wouldnot only identify and analyse insurance needs of insured but also advise the insurancecompanies in designing the insurance products accordingly. Insurance brokers play therole of professional risk & insurance advisors who advise the client by analysing theoperational risk exposures of the client and getting proper insurance policies with the bestlowest premium determined from amongst competing insurers. -2-
  3. 3. ACKNOWLEDGEMENTThere is always a sense of gratitude which one express to other for the helpful so needyservices they render during all phases of life. We would like to express our gratitudetowards all those who have been helpful to us in getting this mighty task of training to asuccessful end.First of all, I consider it a pleasant duty to express my heart felt appreciation, gratitudeand indebtedness to Mr. Sailesh Mishra for his keen interest, invaluable pain taking &excellent guidance, patience, endurance, encouragement & thoughtful advice throughoutthe project work duration.I would also like to be thankful to Mr. Mehul Ganjawal who has given us the right way toprepare our project report at regular intervals whenever any query aroused in our mind.And last but not the least we would like to greet heartily Mr. Narendra Jadav (Principal,Navnirman Institute of Management) for providing us with an opportunity to gain properpractical knowledge and widening our mind by making us enter real corporate world andknow the system.Place: Beacon Insurance Brokers Pvt. Ltd. Akankasha Balar (12)Date: 23/6/2011 Khushboo Golcha(48) Divyesh Jain (56) Rajesh Jain (63) -3-
  4. 4. Executive SummaryThe Indian Insurance Industry is broadly segmented into public and private insurancecompanies. Before year 2000, only public sector insurance companies were allowed to dobusiness in India. But after year 2000, insurance sector was thrown open for privateinsurance companies as well.But as of now there now around 19 private life insurance companies and around 9 privatenon-life insurance companies doing business in India with around 310 BrokingCompanies.This report is prepared with an aim to provide an overview of present Indian InsuranceIndustry. Also with Beacon Insurance Brokers Pvt. Ltd., heading the broking of publicand private life insurance companies.Based on this report, the prospect will get to know a vivid description about BeaconInsurance Brokers Pvt. Ltd.. -4-
  5. 5. Chapter 1: INTRODUCTION1.1 OVERVIEW OF THE INDUSTRY.1.1.1 Insurance In India.The insurance sector in India has come a full circle from being an open competitivemarket to nationalization and back to a liberalized market again. Tracing thedevelopments in the Indian insurance sector reveals the 360 degree turn witnessed over aperiod of almost two centuries.1.1.2 A Brief history of the Insurance Sector.The business of life insurance in India in its existing form started in India in the year1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some ofthe important milestones in the life insurance in India are;1912: The Indian Life Assurance- For over 50 years, life insurance in India was definedand driven by only one company- the Life Insurance Corporation of India (LIC). With theInsurance Regulatory and Development Authority (IRDA) Bill 1999 paving the way forentry of private companies into both life and general sectors there was bound to be new-found excitement- and new success stories. Today, just three years since their entry, theircumulative share has crossed 13% (source: IRDA), far exceeding expectations. Clearlyinsurance is on a growth path. The percentage of premium income to GDP which was just2.3% in 2000-01 rose to 3.3% in 2002-03; and life insurance has emerged as thedominant contributor to this growth. The industry presented a huge opportunity. Lifeinsurance penetration, for instance, was at an abysmal 22% of the insurable population.However, private players have had to rise to many challenges. They were faced withattitudinal barriers towards the category and the perception that insurance was only a taxsaving tool. Insurance per se had lost it basic rationale: protection. It wasn’t surprisingthen that its potential lay frozen and unexploited. The challenge for private insuranceplayers was to change the established category driver and get customers to evaluate lifeinsurance as an investment-cum-protection tool. -5-
  6. 6. 1.1.3. Brief Review of Scenario – InsuranceInsurance in India started without any Regulation in Nineteenth century.It was story of a typical colonial era. A few British companies dominated the marketmostly in large urban centers.Insurance was nationalized mainly on 3 counts First, Indian lives were not insured.Second, even if they were insured, they were treated as substandard lives and extrapremium was charged. Third, there were gross irregularities in the functioning of Lifeinsurance was nationalized in the year 1956, and then general insurance was nationalizedin the year 1972. In 1999, the private insurance companies were allowed back again intoinsurance sector with maximum cap of 26 percent foreign holding.1818 The British introduce to India, with the establishment of the Oriental Life Insurance company in Calcutta.1850 Non life insurance debuts, with Triton Insurance Company.1870 Bombay Mutual life Assurance Society is the first Indian-owned life insurer1907 Indian mercantile Insurance is the first Indian non-life insurer.1912 The Indian life assurance companies’ act enacted to regulate the life insurance business.1938 The insurance act, which forms the basis for most current insurance laws, replaces earlier act.1956 Life insurance nationalized, government takes over 245 Indian and foreign insurers and provident societies.1956 Government sets up LIC1972 Non life insurance nationalized, GIC set up.1993 Malhotra committee, headed by former RBI governor R.N.Malhotra, set up to draw up a blue print for insurance sector reforms.1994 Malhotra Committee recommends re-entry of private players, autonomy ot PSU insurers.1997 Insurance regulator IRDA (Insurance Regulatory and Development Authority) set up.2000 IRDA starts giving licensed to private insurers2001 ICICI Prudential Life Insurance came into the market to sell a policy.2002 Banks were allowed to sell insurance plans, as TPAs enter the scene -6-
  7. 7. 1.1.4 The Insurance Regulatory and Development Authority (IRDA):Reforms in the Insurance sector were initiated with the passage of the IRDA Bill inParliament in December 1999. The IRDA since its incorporation as a statutory body inApril 2000 has fastidiously stuck to its schedule of framing regulations and registeringthe private sector insurance companies.The other decisions taken simultaneously to provide the supporting systems to theinsurance sector and in particular the life insurance companies were the launch of theIRDA’s online service for issue and renewal of licenses to agents. The approval ofinstitutions for imparting training to agents has also ensured that the insurance companieswould have a trained workforce of insurance agents in place to sell their products, whichare expected to be introduced by early next year. Since being set up as an independentstatutory body the IRDA has put in a framework of globally compatible regulations. Inthe private sector 12 life insurance and 6 general insurance companies have beenregistered.With the demographic changes and changing life styles, the demand for insurance coverhas also evolved taking into consideration the needs of prospective policyholder forpackaged products. There have been innovations in the types of products developed by theinsurers, which are relevant to the people of different age groups, and suit theirrequirements. Continued innovations in product development has resulted in a wide rangeof flexible products to meet the requirements for cover at different stages of life -today avariety of products are available ranging from traditional to Unit linked providingprotection towards child, endowment, capital guarantee, pension and group solutions. Anumber of new products have been introduced in the life segment with guaranteedadditions, which were subsequently withdrawn/toned down; single premium mode hasbeen popularized; unit linked products; and add-on/riders including accidentaldeath; dismemberment, critical illness, fixed term assurance risk cover, group hospitaland surgical treatment, hospital cash benefits, etc. Comprehensive packaged productshave been popularized with features of endowment, money back, whole life, singlepremium, regular premium, rebate in premium for higher sum assured, premium moderebate, etc., together with riders to the base products. -7-
  8. 8. 1.1.5 Historical PerspectivePrior to 1956 - 242 companies operating1956 - Nationalization- LIC monopoly player -Government control2001 - Opened up sector1.1.6 Contribution to Indian Economy-Life Insurance is the only sector which garners long term savings.-Spread of financial services in rural areas and amongst socially less privileged.-Long term funds for infrastructure.-Strong positive correlation between development of capital markets andinsurance/pension structure.-Employment generation.1.1.7 Insurance Industry prior to de-regulationPrior to deregulation in 2000, market was a public monopoly. • Public Monopoly - 2000 Offices - Over 800,000 agents • Distribution through tied agents only • Sales approach primarily on a tax savings platform • Traditional style product offering : Endowment and money back plans • Inadequate and inflexible products • Pensions: Small part of product offer • Limited focus on customer needs -8-
  9. 9. 1.2 Overview Of The CompanyBEACON INSURANCE BROKERS PVT. LTD. -9-
  10. 10. 1.2.1: Company Profile-Beacon Insurance Brokers Pvt. Ltd. Introduces itself as one of the Leading Namesamongst Insurance Broking Companies in India.(IRDA Licensed No. DB 307/05)Incorporation: January 31, 2005Main Objective: Act as Direct Insurance Brokers (Life & Nonlife)Paid Up Capital: INR 5 MillionNet Worth : INR 20 Million 3rd floor, ITC BUILDING, MAJURA GATE CHAR RASTA,Registered RING ROAD,Office: SURAT-395002 GUJARAT-INDIA Ahmedabad, Ankleshwar, New Delhi, Mumbai, Surat, Vadodara,Our Presence : Jaipur, Rajkot and expanding in Northern and Southern region.Corporate A-201, Taksh complex, nr. ESI hospital crossing, Gotri Road,Office: Vadodra- 390021. - 10 -
  11. 11. Beacon Insurance has a team of qualified MBAs, Engineers, Licentiates, Associates &Fellows of the Insurance Institute of India. The Organization is set up to develop corecompetency in Insurance Sector. We started our operations in the year 2005. Since thenBeacon is effectively Managing Insurance Portfolio of numbers of Individuals, Small,Medium and Large Corporates.Professionals with 20-30 years experience in Private and Public Sector blended withyoung vibrant team have come up together to emerge BEACON as a one of the lastestGrowing Insurance Broking Company.We have our Networks all over India and have in house expertise in all aspects ofProperty, Human, Liability and other insurance domains. We have stron Infrastructurewhich takes care of all needs of clients for General and Life Insurance.Beacon is committed to bring changes in the mindset of Indian Corporates abouteffectiveness of implementing insurance as Risk Management Tool. - 11 -
  12. 12. 1.2.2. From the Desk:Beacon started its journey in 2005 with a modest strength of 7 persons. We have grown tostrength of 130+ persons. We take pride in the fact that our team is known in the industryfor its professional approach. We live by our principle of “Trust, Tolerance & openness”& believe in delivering more than we promise. We have invested in systems &technology to bring to you the most modern & complete service delivery moduleensuring the best is brought to your doorstep. Continuous training & evaluation of theteam ensures razor sharp capabilities to continue giving you the best possible solutions beit simple or complex.I would like to take this opportunity to thank all of our patrons who helped us reach so farby reposing faith in us at all stages.Insurance broking requires high degree of expertise as we work as your outsourcedbusiness partners to ensure maximum protection from any unforeseen eventuality.Selection of product & insurance company becomes a key decision in this process.We act as a catalyst by associating with you in this decision making process.On behalf ofthe company, I assure you that we shall deliver more than your expectations-always.In Beacon our philosophy is “Customer satisfaction”. Each & every decision of ours istowards achieving our goal of serving the customer to his fullest satisfaction. We havelearnt a lot in the process & designed & redesigned our processes to keep on bettering theconsumer expectations. Systems & processes so created always have customers interest inmind & we keep on reinventing things to make services more & more customer friendly. - 12 -
  13. 13. Feedback mechanism from customers has immensely helped us we are thankful to themfor this. Our patrons have always been a source of inspiration for us. We would not liketo be remembered as a company doing huge business volumes. Instead, we shall bepleased to be remembered as company giving the best customer service at all facets & inall transactions.We look forward to your complaints & suggestions which shall help us inimproving ourselvesMr. S . K. Rustagi Mr. Sanjay AgarwalManaging Director Director - 13 -
  14. 14. 1.2.3. Mission, Vision and Philosophy:Mission:"We shall deliver excellent service and superior products to our customers, remainingfocused to their needs and strive for continuous improvement through communicationand technology. We will unite and operate our business through the shared value of Trust,Tolerance and Openness. Our employees shall be known and respected within theindustry for their expertise, commitment and professional integrity."Vision:  The most successful and admired life insurance company, which mean that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry. In short, “The most obvious choice for all”  For retention in the market and highest market share, we need trust of our customer. The customer should trust on our policies, services, employs and they should be friendly with us.  It wants to live in the eye and heart of the customer.  It wants to give them the easiest deal so that they cane understood the terms and policies.  As we know that profit is the main aim of any business but it think not only about his profit but also profit of the customer.  It wants to be the choice of all people on the basis of trust of customer, delivering high value to the customer, and deliver the best value of the money - 14 -
  15. 15. Corporate Philosophy:  To work towards the utmost satisfaction of the client by always taking care of their best.  Work continuosly to improve Knowledge, Skill, Attitude, and Experience, to  be most competent in the industry.  Always provide the best services as an outsource partner.  Flexibility in approach to innovate and continuosly deliver value added services. - 15 -
  16. 16. Beacon’s team is a perfect blend of fresh ideas in accordance with the exhaustiveexperience of eminent professionals. And team truly demonstrates the statement.Mr. S. K. RustagiM Sc., MBA, FIIIOver 25 years of experience in the insurance industry. Has worked with huge corporatessuch as The New India Assurance Company Ltd, IFFCO Tokio General InsuranceCompany, etc in various managerial capacities.He is the Managing Director of Beacon Insurance Brokers Pvt. Ltd. Mr. Sanjay Agrawal B Sc (Hons), DIM, FIIIOver 22 years of experience in Insurance Industry. Has worked with big companies suchas The New India Assurance Company Ltd,IFFCO Tokio General Insurance CompanyLtd,Bajaj Allianz General Insurance Company Ltd.He is the Promoter Director of Beacon Insurance Brokers Pvt. Ltd. - 16 -
  17. 17. Mr. Naresh VigB.Com, AIIIOver 31 years of experience in Insurance Industry. Has worked in various capacities withcompanies such as The Oriental Insurance Company Ltd. & Pioneer Insurance &Reinsurance Brokers Pvt. Ltd. He is the Vice President at Beacon Insurance Brokers Pvt.Ltd. Mr. Manish Shah M.Com, AIIIOver 7 years of experience in the General Insurance Industry. Has previously workedwith IFFCO Tokio General Insurance Company Ltd. He is presently designated as theVice President & Branch Head for Baroda Office. - 17 -
  18. 18. Mr. H G ShahB Sc. LIIIOver 26 years of experience in The New India Assurance Co. Ltd. He has been associatedwith Beacon since inception as a consultant & is now designated as Assistant VicePresident for Corporate Office at Baroda. Ms. Rupali Misra B.Sc, MBA (HR/Mktg)Over 4 years of experience in Insurance Marketing. She is currently designated asAssistant Vice President for Ankleshwar Office. - 18 -
  19. 19. Mr. Sudhanshu TrivediBCA, MBAOver 4 years of experience in General Insurance Marketing. He is currently designated asHOD-Strategic Marketing Group at Surat Office. Ms. Deepika Goyal B.Com, MBA, FIIIOver 5 years of experience in General Insurance Operations. She is currently designatedas Assistant Vice President and branch head for Surat Office.Ms. Radhalakshmi IyerB.Com, LLB, FIIIOver 22 years of experience in the General Insurance Industry wherein she has workedwith companies such as United India Insurance Company Ltd., & Bajaj Allianz GeneralInsurance Company Ltd. She is presently designated as Senior Manager (Operations) atAhmedabad Office. - 19 -
  20. 20. -:MARKETING AND SALES DEPARTMENT:- - 20 -
  21. 21. Chapter 2: Marketing and sales department - 21 -
  22. 22. 2.1: Basic Understanding of Marketing & Sales: 2.1.1: Meaning of marketing & sales: "The term "sales and marketing" is used so commonly that it is assumed that they are one and the same by many people - they are not. Definition for sales is the activity of taking a lead and selling the item desired. Definition for marketing is the activity of finding out what the market wants to buy"Marketing: It is a process by which: • one identifies the needs and wants of the people. • one determines and creates a product/service to meet the needs and wants. [PRODUCT] • one determines a way of taking the product/service to the market place. [PLACE] • one determines the way of communicating the product to the market place. [PROMOTIONS] • one determines the value for the product.[PRICE]. • one determines the people, who have needs/ wants then creating a transaction for exchanging the product for a value and thus creating a satisfaction to the buyers needs/wants” [PEOPLE]Insurance Marketing: - 22 -
  23. 23. It is corporate objectives, including profitability, which are no less important than that of industries. Marketing of insurance products has become an important activity in this business. Its marketing is found to be necessary both in life and non-life insurance sector. The main driver of growth in the life segment is the unit linked product and in case of non-life insurance, it has been the motor and health insurance portfolios.Sales :-What is selling?The essence of Selling involves discovering the prospect’s need, and then offeringsuitable Products, which will satisfy this need.“Selling is a process in which the salesperson makes the prospect think, feel and do, justthe way he/she wants”Selling is not cheating or conning…In fact a salesperson must be honest, friendly and helpful in order to win the confidenceof the prospects. Selling is a practical implementation and part of marketing. It oftenforms a separate grouping in a corporate structure, employing separate specialistoperatives known as salespersons (singular: salesperson. Sales is considered by many tobe a sort of persuading "art".Sales Process: - 23 -
  24. 24. Proposer Proposer is convinced Fills the relevant about Proposal Form Underwriting Insurance Plan (Assessment of Risk) Insurer evaluates the proposal form Policy document sent to policy holder Accept Revised offer Reject/Postpone sent to proposer Counter offer2.1.2: Differentiate Between Marketing & Sales:Sales and marketing are closely interlinked and are aimed at increasing revenue. As salesand marketing are closely intertwined it becomes hard to realize the difference betweenthe two. In small firms, one cannot come across much difference between sales andmarketing. But bigger firms have made clear distinction between marketing and sales andthey have specialized people handling them independently.Well, how is that sales and marketing are different? In very simple words, sales can betermed as a process which focuses or targets on individuals or small groups. Marketingon the other hand targets a larger group or the general public.Marketing includes research (identifying needs of the customer), development ofproducts (producing innovative products) and promoting the product (throughadvertisements) and create awareness about the product among the consumers. As such - 24 -
  25. 25. marketing means generating leads or prospects. Once the product is out in the market, itis the task of the sales person to persuade the customer to buy the product.Well, sales means converting the leads or prospects into purchases and orders. Whilemarketing is aimed at longer terms, sales pertain to shorter goals. Marketing involves alonger process of building a name for a brand and pursuing the customer to buy it even ifthey do not need it. Where as sales only involve a short term process of finding the targetconsumer.In concept also, sales and marketing have much difference. Sales only focuses onconverting consumer demand match the products. But marketing targets on meeting theconsumer demands. Marketing can be called as a footboard for sales. It prepares theground for a sales person to approach a consumer. Marketing as such is not direct and ituses various methods like advertising, brand marketing, public relations, direct mails andviral marketing for creating an awareness of the product. Sales are really interpersonalinteractions. Sales involve one-on-one meetings, networking and calls.Another difference that is seen between marketing and sales is that the former involvesboth micro and macro analysis focussing on strategic intentions. On the other hand, salespertain to the challenges and relations with the customer.Summary:1.Sales target on individuals or small groups. Marketing on the other hand targets a largergroup of the general public.2.Marketing means generating leads or prospects. sales means converting the leads orprospects into purchases and orders.3.Marketing involves a longer process of building a name for a brand and pursuing thecustomer to buy it even if they do not need it. Where as sales only involve a short term offinding the target consumer. - 25 -
  26. 26. 2.1.3 Detailed Organization Structure of Marketing Department: Beacon has a highly qualified marketing team with around 400 sales agents working for the Surat Branch. - 26 -
  27. 27. M.D. & Promoter Mr. S.K. Rastogi Director & Promoter Mr. Sanjay Agrawal Marketing Manager Deepika Goyal Assistant Assistant Manager Manager Direct Marketing (General Insurance)(Life Insurance) Rana Pradeep Singh Ritesh Nai Pragnesh Soni Sales Agents - 27 -
  28. 28. 2.2 Marketing Environment :Marketing Relating To Insurance Industry:Needless to say insurance industry is as interested in optimum result as any otherindustry. it has corporate objective, including profitability, which are no less importantthan that of other industries. before proceeding to talk at marketing and its modern trends,one has to take note of some of its special characteristics.Any undertaking where there is a risk of financial loss, there is a need for insurancecover. merchants universally have long discussed such problems with businessmen inconvenient meeting places such as the now famous coffee house in which Edward Lloydmet ship owners,Seafaring men and merchants who had a common interest in shipping and marineinsurance. the main classes of risk covered in those early days were marine and firethoughts agents. Development of communications and expansion of industrial activity inthe 19th and 20th centuries led to the formation of more insurers and eventually toestablishment of branch network by successful companies, which absorbed localconcerns. Competition development between various forms of intermediaries like agentsand brokers and between insurers. - 28 -
  29. 29. 2.2.1: Concept of target and target customer: The "Target Market" for a life insurance broking company is the type of client that they want to concentrate on, based on income bracket, neighborhood, type of business, like Beacon Insurance Brokers Pvt. Ltd. Highly focuses on Marine Insurance and Fire Insurance in General Insurance sector while in life insurance sector almost every human being is the target customer of the company which defies very clearly that how much big is the scope for the company to unveil. Some companies want to target the low - middle income families. Some want to target the higher income families. Some want to write mostly blue collar workers, while others want to concentrate on the white collar workers. Some insurance companies just want to sell to business groups. So generally when we see the target customers of Beacon Insurance Brokers Pvt. Ltd. Is mainly the target customers of the insurance companies itself. Apart From This every company wishes to sell minimum possible number of policies to very aged persons because there is a high risk of insuring them. Although companies have target markets, they still have the underwriting capabilities to cross over into other markets to write business, but the majority of their business will come from their target market - 29 -
  30. 30. 2.2.2: Macro environment:PEST Analysis of Insurance Market:There are several forces at work in every sector and every industry of an economy. Thedynamic nature of every industry keeps the pulses of the companies operating in eachsector racing. PEST refers to all political, economic, social and technological factorsaffecting insurance industry. Following are the different factors affecting the insurancesector:Political:• Malhotra Committee: Till the year 1993, the insurance sector accounted to just 2% ofthe GDP whereas the world average was 8%. To improve the penetration of insurance asa percentage of GDP, the government set up a committee called as the MalhotraCommittee in 1993. In 1993, Malhotra Committee headed by former Finance Secretaryand RBI Governor R. N. Malhotra, was formed to evaluate the Indian insurance industryand recommend its future direction. The Malhotra committee was set up with theobjective of complementing the reforms initiated in the financial sector.The reforms were - 30 -
  31. 31. aimed at “creating a more efficient and competitive financial system suitable for therequirements of the economy keeping in mind the structural changes currently underwayand recognizing that insurance is an important part of the overall financial system whereit was necessary to address the need for similar reform.” In 1994, the committeesubmitted the report and some of the key recommendations included: o PrivateCompanies with a minimum paid up capital of Rs.1bn should be allowed to enter theindustry o Foreign companies may be allowed to enter the industry in collaboration withthe domestic companies o Only one State Level Life Insurance Company should beallowed to operate in each state The committee emphasized that in order to improve thecustomer services and increase the coverage of the insurance industry should be openedup to competition. But at the same time, the committee felt the need to exercise caution asany failure on the part of new players could ruin the public confidence in the industry.Hence, it was decided to allow competition in a limited way by stipulating the minimumcapital requirement of Rs.100 crores.The committee felt the need to provide greater autonomy to insurance companies in orderto improve their performance and enable them to act as independent companies witheconomic motives. For this purpose, it had proposed setting up an independent regulatorybody.• The Insurance Regulatory and Development Authority (IRDA): Reforms in theInsurance sector were initiated with the passage of the IRDA Bill in Parliament inDecember 1999. The IRDA since its incorporation as a statutory body in April 2000 hasfastidiously stuck to its schedule of framing regulations and registering the private sectorinsurance companies. The other decision taken simultaneously to provide the supportingsystems to the insurance sector and in particular the life insurance companies was thelaunch of the IRDA’s online service for issue and renewal of licenses to agents. Theapproval of institutions for imparting training to agents has also ensured that theinsurance companies would have a trained workforce of insurance agents in place to selltheir products, which are expected to be introduced by early next year. The IRDA sinceits incorporation as a statutory body has been framing regulations and registering theprivate sector insurance companies. IRDA being an independent statutory body has put aframework of globally compatible regulations.• Privatization of Insurance sector: The introduction of private players in the industry hasadded to the colours in the dull industry. The initiatives taken by the private players are - 31 -
  32. 32. very competitive and have given immense competition to the on time monopoly of themarket LIC. Since the advent of the private players in the market the industry has seennew and innovative steps taken by the players in this sector. The new players haveimproved the service quality of the insurance. As a result LIC down the years have seenthe declining phase in its career. The market share was distributed among the privateplayers. Though LIC still holds the 80% of the insurance sector but the upcoming naturesof these private players are enough to give more competition to LIC in the near future.• FDI in insurance sector: Then, the issue came of amount of FDI to be allowed by aforeign player in the insurance sector. The government had allowed the private players tohave foreign equity up to just 26 %. Efforts are going on to raise this to 49 %. After theopening up of the sector, a total of 18 private sector companies have entered the lifeinsurance business and all of them have entered with a foreign partner.Economical:• Indian economy – growth projections: By 2025 the Indian economy is projected to beabout 60 per cent the size of the US economy. The transformation into a tri-polareconomy will be complete by 2035, with the Indian economy only a little smaller than theUS economy but larger than that of Western Europe. By 2035, India is likely to be alarger growth driver than the six largest countries in the EU, though its impact will be alittle over half that of the US. India, which is now the fourth largest economy in terms ofpurchasing power parity, will overtake Japan and become third major economic powerwithin 10 years. All these facts or forecasts only drive at one point. India is booming as amarket. The global insurance industry has a big eye on India owing to its big opportunity.India is the next big thing in the global insurance industry. Many new insurancecompanies are planning to enter Indian markets. South African major Sanlam recentlyannounced a tie up with Chennai based Shriram Group for life insurance business. Frenchmultinational Axa, which has been studying the Indian market for long, is expected tofinalize its plan this year. Dutch insurer Aegon, on its second visit to the country after agap of four years, is scouting for a partner and has set up an office. Korean giantSamsung, the newest kid on the block, also has set up a representative office. - 32 -
  33. 33. • Growing premiums: Growing premiums are obviously attracting the new players.During the financial 2004 05 alone, the life insurance premium grew by 35% to over US$ 13.5 billion in 2004-05. According to Mumbai based research agency CrystaliseResearch, over the next five years, Crystalise believes this figure to zoom past the US $33.5 billion mark. The numbers at the industry level perhaps tell only one part of thestory. The entry of private insurers in India has changed the way in which life insurancebusiness has been done in India. Premiums of each of the dozen private players has goneup significantly within two years of operations, and the incumbent, LIC is being forced topull up its socks. SBI Life Insurance reported a rise of 166% in its premium income toUS $ 138 million for the financial year 2004-05, compared with US $ 53 million itcollected in 2003-04. HDFC Standard Life’s premium incomes went up from US $ 67million to US $ 113 million for fiscal 2004-05.In terms of first year premium revenue, the biggest gainer has been Bajaj Allianz, with agrowth of 446.9%. The increasing premium rates are a reason why multinational insurersare flocking to India.•Per capita GDP: According to a study by Swiss Re, a leading global reinsurancecompany, once per capita GDP touches $10,000, life insurance premium collection takesoff. India’s per capita GDP is hovering around $ 3000 but is expected to go up steeplygiven the economic growth projections. Also, India, despite being the second largest interms of population and insured lives, posts a very low figure in terms of the country’sshare of life insurance premium in the world’s total life premium collection – about 0.8%.This shows that the insurance sector provides ample untapped market for insurers.• Bank assurance: Bank assurance - selling life insurance through bank branches - hasalso driven life insurance business over the two years. Here’s why. First, banks’ depositsas a percentage of total financial assets of the household sector have gone down fromabout 46% in 1980 to about 30% now. This means that banks have to seek other avenues,beyond just interest income, to remain profitable. Banks have found that selling lifeinsurance policies is a great way to make profits. LIC distributes over US $ 1.6 billion ascommission to its sales force every year. Even if banks succeed in capturing 10% of thisamount, they would have revenue opportunities in the range of US $ 162 million, not asmall sum for many banks. Result: As many as 32 banks have tied up with LIC to sell itslife covers to their customers. LIC may have begun firming up its relations with banks,but by way of bank assurance, it has collected only around US $ 335 million, which is - 33 -
  34. 34. less than 1% of what the corporation collected by way of first premium income last fiscalyear. In contrast, private players have excelled in bank assurance. SBI Life, which hasvaulted to the second position among private players, owes as much as 67% of itspremium income to bank assurance. SBI Life has tied up its promoter and India’s largestcommercial bank, State Bank of India, which has more than 10,000 branches spreadacross the country, for selling its policies. Account holders with the bank are offered lifecovers for as little as Re 1 per month. For most of the private insurance firms, bankassurance has contributed to about 50% of premium income.• Tax benefits: Payment of insurance premium had also been included in the service taxnet in the 2004 budget. Although 2004 seemed to be a dampener for individuals insured,the Budget 2005 was a delight. Section 88 benefits have been scrapped. This means thattax rebate under Section 88 will not be applicable to an individual anymore. It has nowbeen replaced by Section 80C. Under Section 80C, one can now invest a sum of up to Rs100,000 in investment avenues like NSC, PPF, infrastructure bonds and/or life insuranceand the same will be deducted from an individual’s taxable income. This is a welcomemove. For one, there was a limit of Rs 70,000 on life insurance premium to avail ofSection 88 benefits. This ceiling has now been raised to Rs 100,000. An individual cannow allocate an enhanced amount to insure himself adequately and still get a tax benefit.He can also manage his portfolio better without having to worry about tax benefits. Forexample, he can increase his insurance coverage by buying a term plan (pure risk coverplan) and allocate a sizable amount from his portfolio towards retirement planning. Thechanges in this year’s budget have also come as a welcome move for individuals whoseannual earnings exceed Rs 500,000. Until now, these individuals did not benefit from thetax-saving on account of paying a life insurance premium. But this year’s budget hasremoved this anomaly and they too can now look at life insurance up to a ceiling of Rs100,000 premium to avail of tax benefit.Social:• Life expectancy & Mortality rate: The life expectancy is defined as the number of yearsfor which a new born baby will live in the prevailing mortality condition of that particularyear. The mortality or crude death rate refers to the number deaths per thousand people.Both these factors are very important as they are used to derive the premium of a - 34 -
  35. 35. particular policy. All the insurance companies follow a set standard table referring towhich they decide upon the premium rates. This is generally prescribed by thegovernment. Following is the life expectancy and death rate in India:• Demographics: One of the major influences on the premiums or prices charged byinsurance companies is on the basis of the demographics. Premium rates largely dependon the age, sex of the individual insured. All the insurance policies have a different rate ofpremiums to be paid. This is mainly due to the difference in the risk involved of differentindividuals insured.• Gender discrimination: Gender based discrimination is rampant in any industry. In theinsurance industry the companies have different premium rates for men and women. Thiscannot be actually called as gender discrimination. As is said earlier the premium dependson the life expectancy in the particular country. More often than not the life expectancy isdifferent for men and women. Usually the women are expected to live more than the menand the difference is 5 years and greater. Hence, what the insurers argue is that thewomen are a relative less risk than the men and hence the premium charged is more forwomen.• Demographics: One of the major influences on the premiums or prices charged byinsurance companies is on the basis of the demographics. Premium rates largely dependon the age, sex of the individual insured. All the insurance policies have a different rate ofpremiums to be paid. This is mainly due to the difference in the risk involved of differentindividuals insured.• Gender discrimination: Gender based discrimination is rampant in any industry. In theinsurance industry the companies have different premium rates for men and women. Thiscannot be actually called as gender discrimination. As is said earlier the premium dependson the life expectancy in the particular country.More often than not the life expectancy is different for men and women. Usually thewomen are expected to live more than the men and the difference is 5 years and greater.Hence, what the insurers argue is that the women are a relative less risk than the men andhence the premium charged is more for women. Insurers are providing cover against riskIn order to provide them with cover against potential liabilities (that they can pay claimsor the right level of benefits), pricing would have to be biased towards the most secure-and often least favorable- variant. This is to allow insurers to fulfill all their - 35 -
  36. 36. commitments. "Gender-neutral" insurance in the true meaning of the word is impossiblein voluntary insurance products.• Religion – Islam: In its modern form, insurance was introduced in Muslim countrieswhen many of them were occupied by Western powers, or when they came underWestern influence. In some cases, its introduction was delayed in a country until itsinternational business flourished. Like everything that came with a “colonial” or Westerncolour, insurance was first viewed by Muslim scholars with grave suspicion. A verdict ofdisapproval was common to most things thought to be introduced by non-Muslims.Muslim scholars are divided on the subject of the permissibility of life insurance. Someconsider it forbidden on the assumption that it involves a kind of gambling and it goesagainst the principle oftaqdir in Islam. Most of the insurance organizations today areinvolved inriba and other islamically prohibited transactions. It is for this reasonimportant that Muslims should have their own insurance companies based on Islamiceconomic principles. Insurance can be re-organized under Islamic principles so that it isfree from all prohibited practices. After Islamic banking, it’s the turn of Islamicinsurance. Even as the Reserve Bank of India is exploring Islamic banking opportunitiesfor Indian banks, the Life Insurance Corporation of India has set the ball rolling ontakaful(Islamic insurance). LIC’s new international joint venture company - Indo-SaudiInsurance Company — will be the first to introduce takaful. This Arabic word means‘guaranteeing each other’ or joint guarantee. The entire pricing will be different as thebenefits differ from conventional insurance policies. Its actuarial team has startedworking on the pricing mechanism and senior officials have been sent to Saudi Arabia tolook into the product, he added. Takaful can be described as cooperative insurance wherepolicyholders contribute a certain amount of money to a common pool. Each memberpays his subscription (premium) to help those that need assistance. • Insurance offered by NGO’s/ community based health insurance: Community-basedschemes are typically targeted at poorer populations living in communities, in which theyare involved in defining contribution level and collecting mechanisms, defining thecontent of the benefit package, and / or allocating the schemes, financial resources.Such schemes are generally run by trust hospitals or nongovernmental organizations(NGOs). The benefits offered are mainly in terms of preventive care, though ambulatoryand in-patient care is also covered. Such schemes tend to be financed through patientcollection, government grants and donations. - 36 -
  37. 37. With these community based insurers mainly in the rural areas, the rural people havegood faith on them. This is one of the main reasons why the rural areas remain untappedby most of the insurance companies. The rural population associate themselves well withthese community based insurers which makes life difficult for the big companies waitingto enter the rural areas.• Improving standard of living: If, by 2030 AD 50% Indian population reaches the levelof middle class, Indian market for Insurance Sector will reach the level of 600 millionfrom conservatively estimated present level of 100 million. Even at the present level of100 million, Indian market is big enough by global standards for vigorous developmentas the premium density is only 0.6% as compared to 3 to 5% for developed markets.Prospects for conventional insurance development in Indian market in 21st Century arebright provided its transformation takes place in the right form and right type of strategyis developed to transform hidden potential into business.• Consumer attitude and preferences: Insurance was always viewed by people as a safetynet. Indians specially are very emotional as far as family members, security, social statusand other such issues are concerned. The insurance industry is primarily based on the factthat people live their family their belongings and hence want them to be with themforever. This is the basic attitude of people towards insurance. The Indians, hence, aremore vulnerable and tend to pay more attention towards the insurance advertisements andinsurance products.• Other factors: There are many other social factors that affect the insurance industry. Theconsumer’s mindset is such that insurance is viewed as a liability. This happens because,the policyholders have to pay regular premiums in the policy and as long as they livethere is no benefit. Thus, this is a classic irony of insurance. One has to die to avail of thebenefits. This brings about a negative picture of insurance as a product.TECHNOLOGICAL: • Computerization: Initially in the late 1950s the insurance companies used unit record machines to process data punched into cards. Computers were introduced in the mid 1960s and by the 1980s the Unit Phased Machines were phased out and the entire process was computerized. This brought about greater efficiency and quick service delivery. - 37 -
  38. 38. • Internet: Internet usage has drastically improved in the last decade. There was a tremendous increase in the use of technology by LIC during the late 1990s. The company launched its website www.licindia.com in the mid 1990s to offer basic services such as modifying polices and querying the status of policy.But Today, the internet has completely changed the service delivery process. Internet istoday used to even selling insurance policies. Internet is infact proving to be one of thewidely used distribution networks for selling insurance policies. Also internet is used forsending premium notices to policy holders through e-mails.Also LIC has a special feature on its website. It has a premium calculator whichaccurately displays the amount of premium month wise and the remaining balance. Onejust has to enter the age, name of the insurance policy, the sum assured and weather thereis an accident cover or not.By keying in this information, the entire premium amount are shown within no time. Thishas helped the customers in a way so that he/she does not have to travel all the way tobranch to ascertain the amount of premium to be paid. • Electronic Clearance Service (ECS): Almost all the big organizations today provide the ECS facility to its customers. A policy holder having an account in any bank which is a member of the local clearing house can opt for ECS debit to pay premiums. The advantage here is that once the option is exercised, the policy holder need not visit a branch for paying the premium or collecting the receipts. On the day indicated by the policy holder, the premium amount will be directly debited to the bank account of the policyholder and the receipt will be issued by the designated branch office. • Bank ATM’s: Many insurance companies have a tie-up with commercial banks so as to enable policyholders to use the facility of paying premiums through the bank ATM’s. ICICI Prudential has a tie up with ICICI bank; LIC has a tie-up with Corporation bank and UTI Bank. - 38 -
  39. 39. • Call Centres and SMS services: Almost all the insurance companies have their own call centres which cater to the phone based queries of the policyholders. This service is 24x7 and they have the Interactive Voice Response (IVR) systems at all the branches. Also, LIC and other companies now provide SMS services going with the new trends like SMS banking in the banking sector2.2.3: Details of competitors:Overview of the competitors:The insurance sector is a booming sector in India, the competition in insurance industry isincreasing day by day and so is with the insurance broking companies. As only 10% ofIndian market is covered so far in terms of Life Insurance there is a rising scope in bothInsurance Companies as well as the Insurance Broking Companies.In all there are 410 competitors of Beacon Insurance Brokers Pvt. Ltd. All over India. - 39 -
  40. 40. Following is the list of competitors in Surat of Beacon Insurance Brokers Pvt. Ltd.Rajkrishna Ins. Broker Pvt. Ltd. (Earlier Rajkrishna House, 4th Floor, Opp: SMCknown as Raj Assurances) Pumping Station, Near Navjivan Circle, Udhna Magdalla Road, Surat-395 017.SNK General Ins. Pvt. Ltd SNK House, 31-A, Adarsh Society, Opp. Seventh Day Adventist School, Athwalines, Surat-395001NJ Insurance Brokers Pvt Ltd NJ Centre, `B` Tower, 9th Floor, Udhna Nagar Sangh Commercial Complex, - 40 -
  41. 41. Central Road No. 10,Udhna , Surat, 394 210.Loyal Insurance Brokers Pvt Ltd Near Mahavir Cardiac Hospital, Athwa Gate,, 55, Maher Park, A-Wing,, Surat, Gujarat 395001Havmor Insurance Brokers Pvt Ltd 1022, World Trade Centre, Udhana Darwaja, Ring Road, Surat - 395002Aviva Life Insurance Company India Pvt 4th Floor, Hiral Shopping Complex, NearLtd State Bank Of Indore, Ring Road, Surat - 395002 - 41 -
  42. 42. 2.3: Consumer and industrial buying behavior: 2.3.1: Meaning of consumer and industrial buying behaviorConsumer Buying Behaviour:The Purchase Decisions:The purchase decision in general is prompt by number of factors viz. Psycho graphical,Economical, Social, Politico legal and Demographical. The list is not exhaustive but it issufficient to have the deep understanding of the factors influencing the decision.Psycho graphical Factors are those factors that includes the behavioral aspect of theindividual viz. lifestyle, living standard. Here purchase decision in influenced by thoseissues that affect the lifestyle of the consumer or in the other that reflects the status. Fore.g.: purchase decision related to buying of car and that to Mercedes Benz. Talkingspecifically to the insurance sector, here customer will buy only that policy that has gothigh premium or that type of policy which company is promoting to limited high-incomelevel group only. For e.g. "Classic Life premier" policy of Birla Sun life insurance ismeant for only those individual who can pay at least Rs. 25000/- per annum.Economical factors affect the purchase decision by influencing the issues pertaining tomoney and income level of the individual. Consumer will buy only that product whichwill not have any negative effect on his pocket. For e.g. decision to buy an insurancepolicy is influenced by the deepness in the pocket.Social factor affect the purchase decision by influencing the issues pertaining to socialbeliefs and morals.Political and legal is the macro level environment. It effects in a way, say IRDA hasrestricted the sale of Key Man Insurance policy through Term Plan only.Demographical factor is that factor which has got the maximum of its effect in thepurchase decision of the product and specially if that product is life insurance product. Itis so because these factors incorporate other above said factors and includes those factorsthat can influence the buying decision to maximum extent viz. Occupational factor(service/business), Age factor, Gender, Marital status factor and Income level etc. - 42 -
  43. 43. 2.3.2: Factor affecting Consumer buying behaviorWe analyze consumers because; this is the basis for all market strategies like segmenting,targeting, and positioning. Without an understanding of customer, it would be impossiblefor the market to drive the offer. A consumer’s buying behavior is influenced by cultural,social and personal factor.Cultural factor; -Culture is fundamental determinant of a person’s needs and behavior. People acquire a setof value, perception and behaviors through his or her family and other institution. Indianpeople want achievement and success, comfortable efficiency and practicality, freedomandyouthfulness. In other word there are multicultural environment in India. Indian lovestheir family and they want to secure their family from unnatural event. Indian give firstpreference to his family after than others. They do not want to take loan and they want toinvest their money in long-term investment for child education and marriage. When wesay about metropolitan city, dependency on old age on son is decreasing. People want toaccumulate some fund for old age so Beacon concentrates on gratuity or pension plan.Indian people also affected from sub culture. Urban people want to take more insurancecomparison than rural (due to high per capita income, insurance awareness, socialsecurity, investment purpose, tax saving purpose).Religion also effect on insurance. Consumer behavior is also affected from referencegroup. Firstly, people see that which insurance is bestseller after that they purchase. Theyalso influence from agent. People do not concentrate on their need due to agent’sinfluence. Social class also affect on consumer behavior. Lower class does not wantinsurance. Upper lower class wants insurance for saving purpose. Working and middleclass want insurance for protection and saving purpose and lastly, upper class want topurchase insurance for investment tax benefit and saving purpose. - 43 -
  44. 44. Social factor:Consumers are also influenced by social factor for example; reference group, family, andsocial role and status. Consumer behavior is firstly influenced from membership groupsuch as family, neighbor and co- worker. Insurance is such type of product where peopleawareness isvery low so people do not very much about insurance. They think, insurance is only taxsaving instrument so they fully dependent on agent for taking insurance. When agent sayabout any product, that time they inquiry from neighbor and co-worker about thatproduct. If any body suggests that, this product and I have also taken this product.Individual think that, this product also best for him. He does not concentrate on his needand requirement. Secondly, he is influenced by information influences. If he goes topurchase insurance, he makes enquiry about this product from his personal sources. Hestudy newspaper and search on Internet and gather all information related product. If he issatisfied from that information, he decides to buy insurance. People also influence fromopinion leader, this opinion leader may be Mukhiya, or Surpanch inrural area or this may be any leader, actor or cricket player in urban area. If opinionleader say or advertise about any product, people are influenced from opinion leaderbecause opinion leader keep good position in society. Family and household pattern alsoinfluence consumer behavior. Due to less security of individual family, people want topurchase insurance, but in joint family people give less attention in buying insurance. Ifall family are well earning, there are given less attention on insurance in such family. Butif earning member is less and dependent is more in such type of family insurance is veryimportant. Women want more security so women are taking main role in purchasedecision where, women influence consumer behavior. - 44 -
  45. 45. Personal factor:A consumer decision is also influenced by personal characteristics for example the buyerage and stage in life cycle, occupation and economics circumstances, personality, self-concept, life style and value. When we say about age and life, first is bachelor stage. Theyare generally young independent and they are in early stage of his carrier and earning.They mostly think that they have no need of insurance because in that time they have nodependent. However, some people have some dream and dependent also. They are insuch stage where they can take more risk so they mostly prefer to invest in ULIP. Secondstage is newly married. In that stage people need and buying decision is influenced fromtheir future plan and earning capability. If they have to plan for purchase flat that time,they will need term insurance. There after stage is one or two children after marriage,they will be influenced from future need. They will accumulate fund forchildren marriage and education, they can be plan time-to-time vacation. In forth stage,they want to accumulate for retirement. People want to live alone after old age or inpeaceful place so they are ready to start saving for old age. Attitude also affect consumerbehavior positive attitude (about his life) person will take pension plan because peoplethink that they will live more. But negative attitude person will take life insurancebecause they worry about their life. - 45 -
  46. 46. 2.3.3: Process of buying behavior:Stages of Adoption Process:An innovation refers to any good, service, or idea. That is perceived by someone as new.The idea may have long history, but it is an innovation to the person who sees it as new.Innovation takes time to spread through the special system. The consumer adoptionprocess focuses on the mental process through which an individual passes from firsthearing about an innovation to final adoption. Adopters of new products have movedthrough the following five stages.1.AWARENESS: The consumer becomes aware of the innovation but lacks informationabout it.2.INTEREST: The consumer is stimulated to see the information about the innovation.3.EVALUATION: The Consumer considers whether to try the innovation or not.4.TRIAL: The consumer tries the innovation to improve his estimate of its value.5.ADOPTION: The consumer decides to make full and regular use of the Innovation. - 46 -
  47. 47. 2.4 Product:2.4.1: Meaning of product/Service:A service is the intangible equivalent of an economic good. Service provision is often aneconomic activity where the buyer does not generally, except by exclusive contract,obtain exclusive ownership of the thing purchased. The benefits of such a service, ifpriced, are held to be self-evident in the buyers willingness to pay for it. Public servicesare those society pays for as a whole through taxes and other means.2.4.2: Types & Classification of Products & Services Offered By Organization:List of Life Insurance Companies: a) Bajaj Allianz Life Insurance Company Limited b) Birla Sun Life Insurance Co. Ltd c) HDFC Standard Life Insurance Co. Ltd d) ICICI Prudential Life Insurance Co. Ltd e) ING Vysya Life Insurance Company Ltd. f) Life Insurance Corporation of India g) Max New York Life Insurance Co. Ltd h) Met Life India Insurance Company Ltd. i) Kotak Mahindra Old Mutual Life Insurance Limited j) SBI Life Insurance Co. Ltd k) Tata AIG Life Insurance Company Limited l) Reliance Life Insurance Company Limited. m) Aviva Life Insurance Company India Limited n) Sahara India Life Insurance Co, Ltd. o) Shriram Life Insurance Co, Ltd. p) Bharti AXA Life Insurance Company Ltd. q) Future Generali India Life Insurance Company Limited r) IDBI Federal Life Insurance Company s) Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd. t) AEGON Religare Life Insurance Company Limited. u) DLF Pramerica Life Insurance Co. Ltd. - 47 -
  48. 48. v) Star Union Dai-ichi Life Insurance Co Ltd.List of Non Life Insurance Companies: 1. Bajaj Allianz General Insurance Co. Ltd. 2. ICICI Lombard General Insurance Co. Ltd. 3. IFFCO Tokio General Insurance Co. Ltd. 4. National Insurance Co.Ltd. 5. The New India Assurance Co. Ltd. 6. The Oriental Insurance Co. Ltd. 7. Reliance General Insurance Co. Ltd. 8. Royal Sundaram Alliance Insurance Co. Ltd 9. Tata AIG General Insurance Co. Ltd. 10. United India Insurance Co. Ltd. 11. Cholamandalam MS General Insurance Co. Ltd. 12. HDFC ERGO General Insurance Co. Ltd. 13. Export Credit Guarantee Corporation of India Ltd. 14. Agriculture Insurance Co. of India Ltd. 15. Star Health and Allied Insurance Company Limited 16. Apollo Munich Health Insurance Company Limited 17. Future Generali India Insurance Company Limited 18. Universal Sompo General Insurance Co. Ltd. 19. Shriram General Insurance Company Limited. 20. Bharti AXA General Insurance Company Limited 21. Raheja QBE General Insurance Company Limited, 22. SBI General Insurance Company Limited 23. Max Bupa Health Insurance Company Ltd. 24. L&T General Insurance Company LimitedNOTE: As we can see Beacon deals with a huge number of products which is nearlyimpossible to study for a project hence we have classified all its products intodifferent categories of Insurance Industry. - 48 -
  49. 49. Popular traditional products:  Term Insurance Plan: - This is the cheapest Life Insurance Policy. In this policy the Insurance is covered for a fixed amount for Fixed Term. If unfortunately the Life Assured passes away during the Policy Term than the full Sum Assured is paid to the Nominee. If everything goes well and the Life assured is alive on Maturity than nothing is payable on Maturity. It is just like a General Insurance Policy the only difference is that it is along term contract & not a Yearly Contract.  Whole Life Insurance Plan:- In this policy the risk cover continues for the whole life but the premium is either to be paid in Single Mode, Limited Payment or Whole Life. The Sum Assured is payable only on Death either with or Without Bonus as per the Policy Condition.  Endowment Insurance Plan :- In this plan the Policy is for a Fixed Term & in case of unfortunate Death the Sum Assured with or Without Bonus as per the policy Condition paid to the Nominee & if everything goes well than on Maturity the Sum Assured is paid to the Life Assured with or Without Bonus as per the policy Conditions.  Money Back Insurance Plan :- This is also one type of Endowment plan but in this plan very 3rd. 4th or 5th year a part of Sum Assured is paid to the Life Assured as Survival Benefit & in case of unfortunate death during the policy term the Full Sum Assured without deduction of Survival Benefits will be paid to the Nominee With or Without Bonus as per the Policy Condition & in case everything goes well the Sum Assured after deducting the Survival Benefits will be paid to the Life Assured With or Without Bonus as per the Policy ConditionBeacon promise is financial security. A strong brand certainly boosts sale, but withoutcustomer-friendly, innovative products, even the best brand would not last long.Beacon’s product range has been developed on the understanding that different peoplehave their own sets of needs at various stages of their lives. It has thus built a flexibleportfolio of products that can be customized to cater to varying needs of people at each - 49 -
  50. 50. stage, and thus ensure protection in every step of life. The company’s philosophy hasbeen to help customers understand their financial needs and work closely with them tocustomize a product that would meet. Advisors can offer a complete range of products–Savings plans, Child plans, Market-linked plans, Protection plans, and Retirement plans–and tailor a flexible solution to meet customers’ changing needs at every stage of life.-Add on services provided by the insurance companies:  Flexible Rider Options Insurance companies offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer.  Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If an accident results in total and permanent disability, 10% of rider sum assured will be paid each year, from the end of the 1st year after the disability date for the remainder of the base policy term or 10 years, whichever is lesser.  Critical illness benefit: Critical Illness Benefit Rider provides protection against critical illnesses to the policyholder when attached to the basic plan. After Sale Services:  Doorsteps claim settlement.  Cheque pick up facility.  Call Reminders on policy lapsing and other facilities.  Site Visit  Query Solving.  Survey within the 24 hours of the loss  Preparation of documents of claims.  Regular follw up with surveyor. - 50 -
  51. 51.  Scrutinizing the assessment of the loss.2.4.3: Brand & Brand equity:Beacon Insurance Brokers Pvt. Ltd. . The name itself is a brand in itself which providesunmatched services unlike any other insurance broking company. Beacon InsuranceBroker Pvt Ltd is known as a hub for insurance policies where one can avail its superiorexperienced services.Life or General there are no bars in Beacon, it provides all kinds of insurance policies ofalmost all the major players of insurance industries under one roof. Hence one can say itis a combination of goodwill of all the major players of insurance industry of India. Notjust India now Beacon has international partner as well. Beacon has tied up with UNIBArisk solution partners which has one of the largest independent broker networkinternationally.The key Features that make Beacon a Brand which is unlike any other broking companyare-- Team of Professionals- Blend of Experience and Youth.- Wide network of offices worldwide.- Impact of any adverse condition is countered effectively and speedily.- Beacon’s logo of light house indicates that it is a light in one’s life that guides themaway from contingencies of future.- Complete Range of Insurance Products/Services/ Risk Management.- Beacon’s Branding is so strong that it does not require any advertisement for itspromotion, the customer references does the trick for its boosting sales figure.- Beacon is a NSIC-CRISIL rated Company (SE 2B) FINANCIAL STRENGTH HIGH MODERATE LOW PERFORMANCE HIGHEST SE 1A SE 1B SE 1C CAPABILITY HIGH SE 2A SE 2B SE 2C MODERATE SE 3A SE 3B SE 3C - 51 -
  52. 52. 2.5: PRICE:2.5.1: Meaning of price:Pricing : Underwriting results of many classes of general insurance make dismal reading.The history of motor and marine cargo rates over the years release a steady erosion ofpremium income by rate cutting and bad underwriting in the face of competition,particularly marine cargo. And, Motor had a tariff to boot. Fire, the cash cow all alongwith the tariff ruling high, is heading for bad days with the abolition of tariff control. Onefactor in the deterioration of the fire account has been the interplay of variouscompetative elements. Whereas one might consider the growth of broker control businessas such as element, it must be remember that it is the underwriter who is finallyresponsible for setting the rate of premium. Not unnaturally broker have competed forlarge accounts and have striven to preserve and enlarge the business by getting the bestpossible terms for their clients, but the real competition has been between underwriters.Much comments is made on the present day lack of business ethics. But who can blamethe underwriter who is presented with a proposition of fixing too find a rate for securing abusiness that was too hotly contested. The effect of competition from life insurer isprobably more marked in the sphere of term insurance and in particular, group lifeinsurance, where rates of premium would almost appear to have reached levels which aretoo find even for present day mortality. Yet, as long as company are judged on total suminsured rather than premium income , group life and term insurance will be attractive as"Window Dressing".2.5.2: Pricing Policies Adopted By The Organization:Beacon Insurance Brokers Pvt. Ltd. Is a very sound and sensible company. Its pricingpolicy is also as simple as its simplicity. As Beacon deals with all kind of insurancepolicies of several companies its pricing policy is almost same with all the companies.Every policy sold under Beacon will be entitled of 15% commission (Average) from theinsurance company. Other charges applicable to the customers are based upon the policysold. Price of every policy differs from company to company. In case of GeneralInsurance Beacon may provide additional discounts from its own pocket. Hence we cansee that how simple its pricing policy is. - 52 -
  53. 53. 2.6 PLACE:Definition:The place is where you can expect to find your customer and consequently, where thesale is realized. Knowing this place, you have to look for a distribution channel in orderto reach your customer.2.6.1: Meaning:This term really refers to any way that the customer can obtain a product. Provision of aproduct can occur via any number of distribution channels, such as in a retail store,through the mail, via downloadable files, on a cruise ship, in a hair salon, etc. The easeand options through which you can make your product available to your customers willhave an effect on your sales volume.2.6.2: Channel of Distribution used by Organization:There are basically two types of distribution channel Direct Channel and IndirectChannel. Beacon Insurance Brokers Pvt. Ltd follows both types of Distribution channels.Under Beacon a customer can opt for having an insurance policy directly from beacon orthey may buy it from beacon through an agent. Hence beacon follows both two levelchannel and three level channel - 53 -
  54. 54. Direct Distribution channel Two-LEVEL Distribution channel COMPANY COMPANY BEACON (BEACON INSURANCE BROKERS PVT LTD) INSURANCE BROKERS PVT LTD INSURANCE AGENTS CUSTOMERS CUSTOMERS - 54 -
  55. 55. 2.6.3: Functions Performed By Channel Of Distribution:- • Risk taking – Assuming the risk connected with carrying out channel work or being a part of a channel • Negotiations – Reaching an agreement on pricing and other terms which may be a part of the transaction • Matching – Placing order with the manufacturers and matching the orders to the actual requirement. • Contacts – Maintaining contacts with existing customers as well establishing contacts with potential customers and maintaining the same with the regulatory bodies • Promotions – Carrying out effective communications to stimulate purchasing • Information – Gathering information about potential customers, competition as well as tracking the environmental factors. • Providing Physical proof of policy to the customers • Market Research • Reporting • Maintaining customer relations • Providing after sale services - 55 -
  56. 56. 2.7: PROMOTION:Definition of Promotion:“An activity designed to boost the sales of a product or service. It may include anadvertising campaign, increased PR activity, a free-sample campaign, offering free giftsor trading stamps, arranging demonstrations or exhibitions, setting up competitions withattractive prizes, temporary price reductions, door-to-door calling, telemarketing,personal letters on other methods”.2.7.1: Meaning of Promotion:More than any other element of the promotional mix, sales promotion is about “action”. Itis about stimulating customers to buy a product. It is not designed to be informative – arole which advertising is much better suited to.Sales promotion is commonly referred to as “Below the Line” promotion.Sales promotion can be directed as:• The ultimate consumer (a “pull strategy” encouraging purchase)• The distribution channel (a “push strategy” encouraging the channels to stock theproduct). This is usually known as “selling into the trade”Under PULL STRATEGY Beacon tries to attract the customers through its unmatchedservices like updating the customers through phone calls and letters, through door to doorvisits, by providing the services of all the insurance companies under one roof,negotiating with companies for special offers to offer to the customers and on top of allthe after sales services of company acts like a cherry on the cake.Under PUSH STRATEGY the company tries to update the agents by organizing a smallparty under which the are informed about the new products and the company’s expectedtarget is set before them with attractive offers for the agents through which they aretempted to work for the company from their soul and whatever that comes from withinwill always be in favour of the company’s growth. - 56 -
  57. 57. 2.7.2: Elements of Promotion Mix:Beacon Insurance Brokers Pvt. Ltd has limited yet effective promotion mix. Mainly thereason behind this limited promotion mix is that the company’s brand image is the bestpart of it which does the trick to boost their sales. Beacon provides a high level ofcustomer satisfaction so the the customers themselves becomes the promoters of thecompany when they give reference of the company to their relatives.Following are the promotion mix performed by the company:-Sales Promotion: There are around 400 sales agent working for beacon insurancebrokers pvt. Ltd. Promoting the sales by providing information to the customers about ourproducts to the customers. They find out the customer requirements and cater with thebest option available for them. Apart from sales the provide information to the companyas well that what is the customer demand in the market through which company maynegotiate with the insurance companies also.-Personal Selling: Beacon Insurance Brokers pvt ltd believes that there should be no thirdparty between them and their customers which creates a sound communication betweenthem and they can cater them with a personal touch. Beacon provides personal sellingwherein they sell the insurance policy to the customers without any agents and enabling ahaste free environment.-Direct Marketing: Beacon also holds Direct Marketing handled by Rana Pradeep Singh.Direct marketing is a form of advertising that reaches its audience directly throughmultiple channels including email, direct mail, social media, catalogs, online advertising,interactive television, etc. Businesses communicate straight to the consumer withadvertising techniques such as fliers, catalog distribution, promotional letters, and streetadvertising. Direct Advertising is a sub-discipline and type of marketing. There are twomain definitional characteristics which distinguish it from other types of marketing. Thefirst is that it sends its message directly to consumers, without the use of interveningcommercial communication media. The second characteristic is the core principle ofsuccessful Advertising driving a specific "call to action."-Publicity: As such in Beacon there is no publicity done externally but of course as saidearlier customers of beacon are the core part of their publicity the customer bringscustomers for Beacon and this is how it goes. - 57 -
  58. 58. 2.7.3: Communication Process:- We need to do 3 things to achieve this – 1. Greet the Customer 2. Briefly state purpose 3. Ask for time Always state most relevant Features Features of the product first Advantages Explain the advantages of the features Benefits Emphasize the Benefits that the prospect would derive - 58 -
  59. 59. S SmileA AcknowledgeT Turn the ObjectionM Show More ValueC Close Probe thoroughly, until you Identify the Need Be relaxed. Business-like, and yet unhurried… Carry Conviction - 59 -
  60. 60. 2.8 Strength and Weakness: Promoters with Rich Industry Experience Experienced Provision of And Web Enabled Responsive Services Team OUR STRENGTHS Good Network of Organizational Offices Across Infrastructure IndiaWeakness:Unavailability of Equity, Mutual funds, Fixed Deposits and other investment options. - 60 -
  61. 61. 2.9 Marketing Control:2.9.1: Meaning and Importance of Marketing Control:There is no planning without control.Definition of Marketing control :“Marketing control is the process of monitoring the proposed plans as they proceed andadjusting where necessary. If an objective states where you want to be and the plan setsout a road map to your destination, then control tells you if you are on the right route or ifyou have arrived at your destination.” - 61 -
  62. 62. Type of Control Prime Responsibility Purpose of Control Approches1. Annual Plan Control • Top To examine whether • Sales analysis Management the planned results • Market Share are being achieved. • Middle analysis Management • Sales-to-expense ratios • Financial analysis • Market-based scorecard analysis1. Profitability Ratio Marketing Controller To examine where Profitability by: the company is • Product making and losing • Territory money. • Customer • Segment • Trade Channel • Order Size1. Efficiency Control Line and Staff To evaluate and Efficiency of: management Marketing improve the spending • Sales force Controller efficiency and impact • Advertising of marketing expenditure. • Sales Promotion • Distribution1. Strategic Control Top Management To examine whether • Marketing- Marketing Auditor the company is effectiveness rating pursuing its best instrument opportunities with • Marketing Audit respect to markets, products and • Marketing channels experience review - 62 -
  63. 63. - 63 -
  64. 64. HUMAN RESOURCE MANAGEMENT DEPARTMENT - 64 -
  65. 65. CHAPTER 3: Human Resource Department 3.1: INTRODUCTION 3.1.1: Basic Introduction Of Human Resource Department : Beacon provides excellent opportunities to deserving people. Work atmosphere is thoroughly professional & a lot of encouragement is given to new ideas & innovations. We nurture talent & motivate people to work in an entrepreneurial environment. All employees have a pre decided career path with excellent growth prospects. The team comprises of a committed workforce of more than 100 persons who are from diverse backgrounds & educational streams including engineers, MBAs & CAs. We are looking for dynamic & committed professionals with an excellent track record who like to work with no boundaries attached. If you are dreamer & want to make big in life, please mail your resume at the following e mail id. We also welcome freshers in the organization. Training has always been an aspect of greatly emphasized upon at Beacon. Our employees are constantly updated with the latest developments in the Insurance industry, with the help of prominent Trainers (in hours & external). This help us cost effective solutions to suit all your insurance needs under roof. 3.1.2: No. Of Employees And Branches : Branches :¢ Ahmedabad¢ Ankleshwar¢ Delhi¢ Mumbai¢ Surat - 65 -
  66. 66. ¢ Vadodara Service centre:¢ Anand¢ Bhilwara¢ Rajkot¢ Pune There are 40 Employees in Surat branch that is near majura gate in International Trade Center on 3rd floor and round about 700 employees all over the india . 3.1.3: Organizational Structure : Every Company has different Organization Structure according to their comfortless . “Beacon Insurance Broker Pvt. Ltd” has a vertical authority structure. It consist of various Managers at different level according to the requirement. At the very important level there is a National Manager who have the highest Authority. There are Zonal Heads for West & North Zones. And under each Zonal Head there are various Area Head which takes care for their respective Areas. Under each Area head there are various Branch Managers which takes care of the working of their branches. And all the Sales Manager comes under their Respective Branch Manager. There are 3 posts under Sales Manager which are Deputy Agency Manager, Manager Distribution and Chief Agency Manager. - 66 -
  67. 67. 3.1.4 :Activities Of Human Resource Manager :HR Manager look after for the HR Department and smooth functioning of the humanresource department.• Resourcing & Capability Development: comprises of Talent Acquisition and Capability Development• Rewards & Performance Management: comprises of HR Operations, Performance Management and Employee Engagement, administration and property.• Here the Human Resource Activities are hold by Ms.VRUNDA JAVERI and SANJAY AGARWAL the director of the company.• The activities of Ms. VRUNDA JAVERI is to o to appoint people. o Registration. o Code. o to make accounts. - 67 -
  68. 68. As the activities like recruitment, selection, interview etc. hold by Mr. SANJAYAGARWAL the director of the company.3.1.5: Activity of Human Resource department:Human resource (HR) department deals with wide range of activities from strategicplanning level to the day to day operations level. Therefore defining roles andresponsibilities of HR manager is a quite complex task but some of the functions carriedare summarized below.  Involvement in the strategic planning processHR manager gets involved in the strategic planning process of the organization andidentifies HR as a core competency of the organization. When HR is assumed as acore competency HR becomes a competitive advantage for the organization and HRmanager is responsible of developing the HR of organizations to bring the statedcompetitive advantage to the organization.  Forecasting the labour requirementThe HR manager holds the responsibility of forecasting the labour requirement of theorganization in the future based on the future level of sales/production level of theorganization. The labour forecast may identify the need for need for hiring or firingemployees.Ladies Men Ladies MenSarees Formal Full Sleeve Shirts Denim Pants or Denim Denim Pants or ( *Ties required if interacting with Skirts/Track Pants. Shorts/Track external clients only) pants.Salwar Formal Trousers T Shirts T ShirtsSuitsFormal Western Wear Blazers/Formal SuitsFormal Shoes ( toes Sports Shoes Sports Shoes, Sandals,covered) Slippers etc. - 68 -
  69. 69.  RecruitmentOnce the labour forecast is done organization can identify the need for more labour in theorganization if the existing workforce is not sufficient to handle the future workload. Insuch a situation HR manager has to recruit new potential candidates to fill the vacancies.Recruitment is the process of creating a pool of potential candidates who can beemployed to fill the vacancies.  SelectionSelection is the process by which the most suitable candidate is selected from therecruited pool of candidates. Selection is done by carrying out various types of tests andinterviews. HR department/manager is responsible of selecting themost suitable employees to fill existing vacancies.  InductionInduction is the process by which new employees are made familiarized with theorganizational environment. Once the employees are selected they need to be introducedto other staff of the organization and they should be given necessary guidelines about theorganizational culture and the procedures.  TrainingOnce the employees are done with the induction they become an employee of theorganization but the skills they possess may not be adequate to carry out required tasks.The need for training arises when the there is a gap between expected level of skills andthe current level of skills of an employee. If a there is a training need HR department hasto design training programs and execute them.  MotivationHR manager is responsible of motivating employees to carry out their duties of a timelyand accurate basis.  Performance AppraisalThis is where the employees performance are evaluated based on expected level and theactual level of the performance. HR department needs to design performance appraisalsystems to appraise the employee performance on a fairly manner. - 69 -

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