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  1. 1. „CUSTOMER VALUE MANAGEMENT‟ AT ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD. BANGALORESubmitted in partial fulfillment of the requirements for the award ofMasters of Business Administration Degree of Bangalore University Submitted By: Ms. Divya Ramesh ( Reg. No. 02XQCM6019 ) Under the guidance of Dr. K.V.PRABHAKAR (Adjunct Professor) M.P.BIRLA INSTITUTE OF MANAGEMENT ( Associate BHARATIYA VIDYA BHAVAN ) RACE COURSE ROAD, BANGALORE – 560 001 OCTOBER – 2004
  2. 2. DECLARATIONThe research work embodied in the dissertation entitled „CustomerValue Management‟ at ICICI Prudential Life Insurance Company Ltd.,is an original work carried out by me under the guidance andsupervision of Dr.K.V.Prabhakar, Adjunct Professor, M.P.BirlaInstitute of Management, Bangalore (Internal Guide) andMr.Raghavendra Bhat, Unit Manager, ICICI Prudential Life InsuranceCompany Ltd., Bangalore (External Guide) and has been submitted inpartial fulfillment of the requirements for the award of MBA degree ofBangalore University.The findings of this study are based on the data collected by me andhave not formed the basis for the award of any other Degree/Diploma ofany other University or Institution.Place : Bangalore (Ms.Divya Ramesh)Date : 13 September 2004
  3. 3. COMPANY CERTIFICATESeptember 13, 2004 TO WHOMSOEVER IT MAY CONCERNThis is to certify that Ms. Divya Ramesh, bearing register no. 02XQCM6019, astudent of M.P.Birla Institute of Management, Bangalore has succesfulycompleted the Project Work titled „Customer Value Management‟ at ICICIPrudential Life Insurance Company Ltd., Bangalore as a partial fulfilment ofMBA program, during the months of May to August 2004.We wish her all success in her future endeavors.Mr.Raghavendra Bhat, Mr.Sivaram,Unit Manager Sales Manager
  4. 4. CERTIFICATEI hereby certify that the research work embodied in this dissertation entitled,“Customer Value Management” at ICICI Prudential Life Insurance CompanyLtd., Bangalore has been undertaken and completed by Ms.Divya Ramesh,bearing Register Number 02XQCM6019 under my guidance and supervision.I also certify that she has fulfilled all the requirements under the covenantgoverning the submission of dissertation to the Bangalore University for theaward of MBA Degree.Place : Bangalore Dr.K.V.Prabhakar Adjunct ProfessorDate : 13 September 2004 (Internal Guide)
  5. 5. CERTIFICATEThis is to certify that this dissertation entitled, “Customer Value Management” atICICI Prudential Life Insurance Company Ltd., Bangalore is an offshoot of theresearch work undertaken and completed by Ms.Divya Ramesh under theguidance of Dr.K.V.Prabhakar, Adjunct Professor, MPBIM, Bangalore (InternalGuide) and Mr.Raghavendra Bhat, Unit Manager, ICICI Prudential LifeInsurance Company Ltd., Bangalore (External Guide)Place : Bangalore (Dr.N.S.Malavalli)Date : 13 September 2004 Principal
  6. 6. ACKNOWLEDGEMENTI express my immense gratitude to Dr.K.V.Prabhakar, Adjunct Professor,M.P.Birla Institute of Management, Bangalore. He has been my mentor and guideand his continuos encouragement and valuable suggestions helped me at everystage of this project.I am grateful to Principal, Directors and the staff of M.P.Birla Institute ofManagement for their comments and encouragement at various phases of this project.I thank Mr.Raghavendra Bhat, Unit Manager, ICICI Prudential Life InsuranceCompany Ltd., Bangalore for giving me this opportunity to successfully completethis project. His ideas, continuous support and comments have been quite usefulfor the completion of this study.I also thank Mr.Sivaram, Sales Manager at ICICI Prudential Life Insurance CompanyLtd., Bangalore for giving me permission to carry out this project in the Company.I extend my gratitude to the staff of the Sales Department at ICICI PrudentialLife Insurance Company Ltd., Bangalore for their co-operation while carryingout this project.My grateful thanks are also due to Ms.Veena, Insurance Advisor with ICICI PrudentialLife Insurance Company Ltd., Bangalore and my parents for their incredible support.Place : BangaloreDate : 13 Sept. 2004 (Ms. DIVYA RAMESH)
  7. 7. CONTENTSSl. No. CHAPTERS Page No. Executive Summary 1-2 PART „A‟ ± THEORITICAL SETTING I Introduction 1. Conceptual Framework of CVM 3 ±4 2. Problem Statement 5 3. Need & Significance of the Study 6±7 4. Objectives of the Research 8 II Review of Literature 1. Purpose 9 ±14 2. Conclusion 15 3. Methodology 16 4. Benefits from the Literature Review 16 III Research Methodology 17 -18 1. Scope of the Study 2. Type of Research 3. Data Collection 4. Sampling Technique 5. Sample Size 6. Sample Description 7. Instrumentation Technique 8. Tools used for Hypotheses testing 9. Limitations of the Study IV Company Profile 19 - 26
  8. 8. CONTENTSSl. No. CHAPTERS Page No. PART „B‟ ± SURVEY FINDINGS V Data Analysis & Interpretation 1. Statement of Hypotheses 27 2. Hypotheses Testing 28 ± 36 3. Inferences from the analysis 37 - 50 PART „C‟ ± CONCLUSION & RECOMMENDATIONS VI Summary, Conclusion & A scheme of Recommendation 1. Major Research Findings 51 ± 52 2. A scheme of Recommendation 53 ± 54 3. Directions for further research 55 Annexure 1. Select Bibliography 56 - 57 2. Questionnaire 58 ± 61 3. Research instrument used 62 4. Data incidental to research  IEPA Attribute Model 63 ± 65  Product Comparison 66 ± 71  Task assigned by the company - Survey 72 - 79
  10. 10. EXECUTIVE SUMMARYThis project is done for ICICI Prudential Life Insurance Company Ltd. Intoday‟s environment the customers have become sovereign authorities. Theyconstitute the focal point for any business. The effectiveness of Customer ValueManagement helps a business enterprise to create and sustain differentiatingvalue, which has been focussed in this study.Customer Value Management represents the best practices used today bycompanies worldwide to attain their visions of finding out what customers wantand giving it to them. Customer Value Management provides a rational set oftechnology; methods and strategies to weave needs and wants of customers intokey process designs and management activities of a company.Customer Value Management is a vehicle to understand what the customers wantfrom the Company and how it can go about aligning its business to deliver thesame consistently. Every Company has perspectives about Finance, Customers,Internal Business & Growth. Customer Value Management deals with the„Customer Perspective‟ which along with the other perspectives are aligned withthe strategic intent and posture of the company.The Customer Value Map will be designed to assess where the company‟s servicestands against competitors on the relative quality versus price matrix.This Study is based on certain objectives and the research on Customer ValueManagement has been developed based on these objectives. The objectives are asfollows :  To identify the route to provide superior delivered value to customers   To unzip the direct link between customer value and the market share   To determine whether the „Customer Value Map‟ can assess the position of the company‟s service against its competitors on the relative quality – price matrix  1
  11. 11. The important findings of this study are :₃ are brand name, wide varieties of policies to choose from and good servicing of policies✁ of options and good returns policy, multiple benefits packed in a single range policy, flexibility within the same The manifestations of value of ICICI Prudential in order of ranking are – maximum✁ cover, profitable mode of investment, tax rebate, multiple benefits, pre- risk sales/during-sales/after-sales service and premium.Some of the prominent recommendations are :✁customers will find extra value in their policies The settlement of policy amount should be expedited and never unduly delayed so✁ the customer is not aggrieved. This will also help the company to avoid that migration of its customers The value of ICICI Prudential can be enhanced by being customer centric, increasing✁awareness about the company among customers, introduce new policies according to changing needs of customers, to provide switching between various options more than once a year, give guaranteed returns, handle complaints effectively and provide value for money for the customers Companies must be `customer creating and `customer satisfying organisations i.e.✁they must do the things that induce customers to do business with them. We recommend this strategy to ICICI Prudential.The Company can use this information to reengineer their business capabilitieswith a focus on customer envisioned value. 2
  12. 12. INTRODUCTION1) Conceptual Framework of CVM2) Problem Statement3) Need and Significance of the study4) Objectives of the research
  13. 13. CONCEPTUAL FRAMEWORK OF CVMThe concept of Customer Value Management was developed by Dr.JohnHenderson of Boston University together with an IBM consultant to enablemanagement teams to get an actionable customer view and take actions resultingin increased customer satisfaction, loyalty and market share.Customer Value Management (CVM) represents the very best practices used bycompanies worldwide to attain their visions of finding out what customers wantand giving it to them. It has become a leading approach to attract market share. Itis a means, by which a company can balance the demand for service and productswith an infrastructure that is customer centric, delivers increased productivity &benefits the customer‟s product line.Customer Value Management is a way to build customer loyalty and improvevalue for the company. It provides a way to understand customers‟ values andthen leverage that knowledge to prevent customer dissatisfaction or to influencebuyer behavior. It creates an alignment between customer‟s dyn amic vision ofideal value delivery and business capability to deliver that value. The companyshould focus on specific capabilities and infrastructure to deliver value and alsoreengineer business capabilities with a focus on customer envisioned value.Customer Value Management is a very powerful tool to make the company trulycustomer oriented, attain top of the line growth and bottom line results. It is a formal,systematic approach to compete and grow, based on delivering customer value. CVMis also fast emerging as the „Ruling Currency‟ to the growth of the company.In implementing CVM, how a customer perceives the company and obtains value shouldbe identified and managed. If employed correctly it can help a business enterprise createand sustain differentiating value. CVM helps a company in the following ways :a) Develop and implement a business vision to become customer centered i.e. be number one in the eyes of their customersb) Implement strategy to differentiate and compete on service and value to customers, not merely on products and pricec) Understand what drives customers‟ loyalty and give it to them 3
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