Hdfc Life Insurance: Building a Service Brand

HDFC LIFE INSURANCE: BUILDING A SERVICE BRAND

EXECUTIVE SUMMARY:

The problem started arising for insurance companies when they started receiving global competition in 2012. This made a typical product oriented industry to make aggressive schemes and focus on service. This soon led to online insurance services. At about this time, HDFC Life and Standard Life, came into a joint venture. HDFC Life was part of various service oriented schemes to make their offering seem more relatable to the customer. They did this by having marketing campaigns in the Indian Premiere League for cricket and various other popular mediums. HDFC Life maintained the same message across all channels, which was one of the reasons that helped people resonate with their branding strategy.

HDFC Life catered to various segments like Unmarried, Just married, Buying a home, children and education, and support for old age. The message that HDFC Life wanted to send was such that they wanted their target audience to become independent and start a family on their own. They catered to a more urban target segment that had internet at home and had a decent lifestyle and wanted to make some investments to help them be more independent.

ICICI offered insurance services online and they were the leaders in the market because of their low cost plan. The main USP of the service was that it catered to the fact that online insurance banking was a simple process that can be done in under 10 minutes. In terms of marketing, they offered varied services whether it was for individuals or start-ups and whether they needed an investment plan or for their retirement, and they used different taglines to resonate to their needs, as opposed to HDFC Life.

SBI Life Insurance was a joint venture between SBI and BNP Paribus Assurance. People were using their services however they were yet to launch an online insurance method. SBI Life wanted to focus on gaining trust among the consumers and thus they catered on a more traditional approach.

Problem Statement:

HDFC Life Brands has to identify as to how to strengthen HDFC Life Brands online presence on their website and generate business using the channel.

Problem Analysis:

Porter’s Five Force Analysis of the Insurance Industry with respect to HDFC

[pic 1]

- Rivalry: The insurance industry is becoming highly competitive. There are 3 key players in insurance industry, which are HDFC Life, are ICICI Prudential Life and SBI Life Insurance.  ICICI Prudential Life is a company who succeeded with low-cost online insurance plan in Indian market. Whereas in contrast, SBI Life Insurance leverages on the networks of its branches to sell its insurance products. A lot of international insurance companies entered the Indian market in joint-ventures with Indian companies

- Power of suppliers: because most of insurance companies have strong capitals so the suppliers of capital might not pose a big threat.

- Power of customers: Each individual doesn’t put much of a threat into insurance industry. Whereas in contrast, large corporate clients have a lot more power with insurance companies.

- Threats of new entrants: The penetration of health insurance products is quite low and it has been proved by appearance of many joint-venture insurance companies since 2012. Another threat for many insurance companies is other financial services companies, such as investment banks, entering the market and start offering insurance products.

- Threats of substitute products: There are plenty of substitutes in insurance industry for both online and offline platforms. There is a large range of products from education, retirement to houses and wedding ceremonies and most insurance companies offer similar suites of services with the same customer segmentations.

What HDFC is doing right and wrong in terms of digital marketing as compared to the competitors?

• Differentiation strategy: Since the products offering in the insurance sector is similar for every brand then the different brands must try to position themselves uniquely in the eyes of the customer. Using Rajasthan Royals to highlight the success, self-belief, pride and confidence, company was successful in showing the significance of brand value.
• Have multi distribution channels: Not only distribute products through agents or distributors, HDFC Life increase their distribution mix through the website and establish an online channel to generate business. It is due to their objectives that increase brand visibility and strengthen brand value.
• Have wide range of target segments: Most of their products are online, so the geography is not limited. Target segment includes both executives and businessmen, with 5 different life cycles.
• What HDFC could learn for ICICI : Dominant online market of ICICI Prudential Life: ICICI Prudential Life is famous in low-cost online term plan. With innovative products, aggressive marketing activities and strong online channel, the company is enable to sell their various product easily. In addition, they also used Amitabh Bachchan to attract customers to visit their website and convince them to complete the entire of buying process in less than 10 minutes

FUTURE COURSE OF ACTION

• HDFC should lay greater focus on the ease of taking an insurance policy through the internet media and have more aggressive campaigns to show the reliability of the sites. They should also include reviews from customers to highlight their easy experience showcasing reliability of the HDFC experience and products. As in the Exhibit 2 and 3 it is mentioned that the HDFC customers are looking for information regarding the products. In the Exhibit 4, it is mentioned that the customers who are looking for insurance trust online medium so HDFC should harness on that and project themselves as the most reliable and easy in this terms.
• According to the Exhibit 4, the customers now take opinions of friends and family on the social media when buying insurance products. So HDFC, should also focus on building strong social media campaigns. They could start movements like give challenge to people “I HAVE INSURED MYSELF, HAVE YOU?” and ask friends to tag their friends it. This campaign will also be successful because According to Exhibit 3, most customers feel a sense of social approval on taking an insurance plan .
• According to Exhibit 4 , the customers have given a similar rating for all the 3 competitors i.e ICICI, HDFC and SBI so they is no brand loyalty in the minds of the customers. So the key focus of HDFC should be to do what is not done before .The key focus of all the industries who are proving products is to provide an exemplary service with the products .HDFC should plan on building a strong customer support.  They can incorporate the live chat feature on their website wherein a person can resolve any issue he faces while taking an online insurance immediately. They can also know about the information on varied products being offered online with the help of this feature. This feature is required also because in Exhibit 3, the customers have comparatively given a low average score to HDFC to the point when they try and gather information about their products.
• Since the customers are looking for more health and education related campaigns , so HDFC can earn publicity by holding campaigns at schools and colleges where parents go and in hospitals as well so thy are more visible to the customers.
• They are sites like policy bazaar these days which compares the best insurance prices online and people have started to use them, so HDFC must make sure they try to top the search parameters there and do advertisement on those sites so that they are visible to customers.
• HDFC can also go for banner advertisements on the websites to increase their coverage.