INTERNATIONAL JOURNAL OF MARKETING, Online Available at indianresearchjournals.

com
FINANCIAL SERVICES & MANAGEMENT RESEARCH
Vol.1 No. 2, February 2012, ISSN 2277 3622

A STUDY OF BRAND LOYALTY WITH SPECIAL

REFERENCE TO LIFE INSURANCE CORPORATION OF INDIA
DR.D.T.CHAVARE
C.D.Jain College of Commerce, Shrirampur.

ABSTRACT
The abstract is the form of the concluding statement that provides the quick review of the paper.
This abstract is helpful to make aware the readers about the subject under study. In this paper researcher has
attempted to provide detailed information regarding Brand Loyalty with respect to Life Insurance
Corporation of India. The paper titled "A STUDY OF BRAND LOYALTY", With reference to, "LIFE
INSURANCE CORPORATION OF INDIA". At present, investment of saving has assumed great
importance. According to the study of the market, it is being observed that markets are being doing well in
Insurance. In near Future a proper financial planning is required to invest money in all type of financial
project because there is good potential in market to invest In this paper great emphasis is given in
understanding the perception of investors towards the brand. The main objective of this project is to know
various determinants of brand loyalty. The researcher has drawn certain conclusions, which are based on
the analyzed data. In addition researcher has made an attempt to suggest some remedies to improve gray
areas of the services of organization. After analyzing the feedback the conclusion has been made that the
respondent are very loyal towards brand LIC.
Key words: Brand Loyalty, Customer relationship management, Life Insurance Corporation of India,

INTRODUCTION particular product, Instrument and on Brand of that

In modern era there is cut throat competition in the product.
market. Many times any organization not success A brand is the key aspect of purchasing the
because of its good product or with huge capital, but it product or invests the money. Brands are important to
is possible with the help of backbone of good brand. consumer as they provide them with choice, a means of
Brand is an important term from the point view of simplifying the decisions, Quality assurance, Risk
market. Brand is the identity of the product. Corporate avoidance and self-experience.
are more & more working or spending more on the While making the decision of investment, people
brand and corporate identity. think on different parameters. A brand & Brand
While investing the money investors think over Loyalty is also one of the important parameter, key
the key aspects of any investments that are time & risk. element of decision making of investment. The
Investors have wide range of investment avenues element Brand Loyalty affects more on decision of the
available to them. They may be classified into the investor. In Insurance business this brand Loyalty is
various categories i.e. Non-Marketable Financial found in regards to Life Insurance Corporation of
Assets, Shares, Mutual Funds Scheme, Life insurance India. People are more loyal towards this Company.
policies etc. The decision of investor or the particular The concept brand Loyalty has a wide scope to
customer is not only depending upon the risk, return, study & understand from the point view of research. It
and on convenience, but also depends upon that is difficult too corporate or any organization to stand in
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the market without the brand & Loyalty. Some well- 1.2 OBJECTIVES OF THE STUDY: -
situated organizations are trying to get benefit or their 1. To study the concept of Brand Loyalty.
reputed brand & it's Loyalty. Brand Loyalty is a 2. To study the Brand Loyalty of LIC.
conscious or unconscious decision expressed through 3. To find out determinants of Brand Loyalty.
intention or behavior to repurchase a brand
continually. Loyalty reflects the consumer attitude, 1.3 SCOPE OF THE STUDY
faith, and behavior, toward the brand. By purchasing This study includes the concept Brand Loyalty, the
the particular brand regularly customer show's Brand organization LIC of India. The study is conducted in
Loyalty. Satara to analyze the investor's preference regarding
The industry is trying to retain their customer by Loyalty of Brand in Life Insurance sector. To analyze
various ways. The CRM (Customer relationship the data researcher used simple analytical techniques
management) is taking places in the market, but and tools such as pie charts, and ranking.
industry and market has another way of retaining and
increasing customer that is a Brand Loyalty. Mental 1.4 LIMITATIONS OF THE STUDY: -
attachment of customer with brand is helpful to 1. It is difficult to researcher to find out the
increase business. It is expensive to gain new customer determinations of Brand Loyalty, i.e. Changes
& relatively in expensive to keep the existing one, sample to sample.
especially if they are satisfied and more so, if they like 2. The investors knowledge about Life insurance
the brand. Companies don't want to miss any of the Company's is so less, or may be they are not aware
loyal customers. about the New Company.
In insurance sector Life Insurance Corporation of 3. There is a possibility of personal bias while
India, stands for last 50 years. The LIC created best answering the questionnaire.
service brand in India last three years regularly. It is 4. Illiteracy of the respondents may affect the study.
interesting to study the Brand Loyalty of LIC in the
growing insurance sector. 1.1 RESEARCH DESIGN- 1.5 IMPORTANCE OF THE STUDY
The following Research design is adopted for this The research is conducted to study the concept 'Brand
paper : Loyalty' with respect to LIC of India. The study is of
1.1.1 Management Problem: - significance to the organization and to the investors of
Management wishes to know & want to study the Life Insurance Policies.
concept of Brand Loyalty, and also want to know the 1.5.1 Importance to the Life Insurance
determinants of Brand Loyalty, in insurance business Corporation of India
with reference to the LIC of India. 1. The study will helpful to the organization to
1.1.2 Statement of Research Problem:- understand the 'Brand Loyalty' of LIC in Satara .
The title of the paper is "A study of Brand Loyalty 2. The study will be of help to organization to
with special reference to the LIC of India." This identify the grey areas in insurance service and to
signifies study of Brand Loyalty on the basis of choice take steps to improve it.
of the investors to the brand.. 1.5.2 Significance to the Investors
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 A STUDY OF BRAND LOYALTY WITH SPECIAL REFERENCE TO LIFE INSURANCE CORPORATION OF INDIA

1. The customer of Life Insurance would get the Universe of this research is infinite in nature, so
benefit of this Research while making the next researcher has used Non-Probability Convenient
decision of their investment in Life Insurance. Sampling method, all samples are from Satara District
2. The general investors would get the benefit of this only. The size of sample is 200.
research, by considering different determinants of 1.6.5 Data Analysis:-
Brand Loyalty in decision making. Data collected from Primary and Secondary
3. The people or investor's can get knowledge of Sources is analyzed. The analyzed data is formulated in
market position of other companies. to the tabular and graphical form.
1.6.6 Research Tools used for Analysis:-
1.6 RESEARCH DESIGN:- In order to derive meaningful result, researcher
Research Design of the study deals with understanding has used the pie charts and ranks. Data analysis is done
the Brand Loyalty of Insurance Company with special for finding Investors Brand choice & preferences.
reference to Life Insurance Corporation of India. It is
adopted for this study as follows:- 2. BRAND LOYALTY: An overview
1.6.1 Data required for the study:- Brand Loyalty concept is related with the faith of
To carry out the research, the various data is brand. The customers trust on brand it results in to the
required such as conceptual knowledge about Brand brand Loyalty. Product without brand name
Loyalty, Policy holder's information about their cannot meet the customer requirements in the name of
preferences, choices, investment awareness in Life the brands; companies want to charge more or try to
Insurance, with respect to different Company. exploit the customer. Brand matters more either for
1.6.2 Data Sources: - company or for customer. If customers are indifferent
A. Primary Source: - to the brand and buy with respect to features, price,
To study the Brand Loyalty of LIC of India data and convenience with little concern to the brand name,
collected through Primary Source. i.e. Interviews, there is likely little equity. The brand Loyalty of the
discussions & Questionnaires. customer base is often the core of brad equity.
B. Secondary Source: - In any business, gaining new customer is quite
The Secondary data have been collected through difficult and expensive, and requires lot of marketing
the books, magazines, broachers, Journal's & annual effort with uncertainty. But retain the customer and
general report, socioeconomic profile and web sites. maintain customer base is relatively easy and
also used. 1.6.3 Instruments:- inexpensive, that's why organizations are trying to
To collect the primary data questionnaire is achieve the last step of Branding i.e. maintaining brand
prepared. This questionnaire consists close-ended Loyalty. Loyalty is one of the important brand assets.
questions. The questionnaire is a siphon off For increasing the asset or maintaining the asset,
information viz. individual profile, company organizations are trying different way like CRM &
preferences, choices, determinants etc. The BRM. Loyalty reflects the consumer's attitude towards
questionnaire is then executed on samples. the brand, especially when there is a change either in
1.6.4 Sampling:- price of product features.
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Brand Loyalty has different levels; each level India and for setting up of the Life Insurance
provides different equity to the brand. There are five Corporation of India. The bill as passed is known as the
different Levels of Brand Loyalty from the bottom to Life Insurance Corporation Act.
top. The Loyalty adds sum type of value to the market. The corporate started functioning from
The strategic value of Brand is in the form of reducing September 1, 1956, with the effect from this date the
Marketing Costs, Trade Leverage, Attracting new corporation became the sole agency for carrying on life
customer, Timely response to competitive threats. The insurance business in the country. The corporation has
Loyalty of Brand helps the organization to increase its got monopoly to carry on Life Insurance business. The
business. LIC transacts business throughout India and also in
some foreign countries through its branches,
2.1 THE NATURE OF BRAND LOYALTY: - particularly in U.K. Mauritius, Srilanka, Fiji &
A study of repeat purchase behavior for nine Bahrain.
products based on a Chicago Tribune purchase panel Life Insurance Corporation of India is a body
suggested that there were four brand loyalty patterns as corporate having a perpetual succession and common
follows. seal with power to acquire, had and dispose of property
1. Undivided loyalty is exhibited by families and may by its name sue or be sued. The corporation
purchasing brand A in the following sequence A consists of such number of persons not exceeding is as
A A A A A. the central government thinks fit to appoint there to
2. Divided loyalty is exhibited by the family and one of them is appointed by the central govt. to be
purchasing brands A and B in the following the chairmen there of the head office of the LIC is at
sequence A B A B A. Mumbai. It has seven zonal offices, 100 divisional
3. Unstable loyalty is shown by the family buying offices and more than 2000 branch offices spread over
brands A and B in the following sequence. A A A the India.
A B B B. Thus Life Insurance Corporation was born
4. No loyalty is shown by families buying brands A, committed to the socio-economic welfare of the
B, C, D, E, and F in the following sequence. A B people with its three basic objectives:
C D E F. 1. Harnessing the saving.
2. Providing security.
3. INTRODUCTION TO THE 3. Utilizing people's money for people welfare.
ORGANIZATION
The life insurance business developed in India after 3.2. PRODUCT DETAILS: -
independence. Before 1950 there were 245 companies LIC is dealings with financial products, i.e.
in private sector doing Life Insurance business. From insurance, more than 50 years. The organizations
January 19, 1956, the Life Insurance business comes always stand from customer's side for more return
under the control and ownership of central safety & risk. From the starting LIC include summary
government. In June 1956, the parliament passed the Life insurance policies of & investment plan for child,
bill for nationalization of the life Insurance business in youngsters, couple, and old use people. A Few
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specified, popular products of LIC are as follows: 4. DATA ANALYSIS

A. Whole Life Policy. To know the brand loyalty researcher has conducted a
B. Endowment Policy. survey of LIC employees. Preferences and choices
C. Group Insurance scheme. considered by customer are taken in to account. The
D. Pension Plans. experience of the LIC employee has considered for
E. Unit linked plan. preferences and choices and the benefit of LIC Brand
F. Special Plan. that LIC enjoying. Table No. 4.1 - Benefits of Well
G. Money back Plan. positioned Brand according to LIC employees

(Source: Primary data)

The above table reveals the Benefits of well- competitive threats, Brand induce the customer in
positioned brand according to LIC employee. terms of quality perception and Brand may give
'Existing loyal customer help marketers to get more marketer greater control over marketing strategy'. The
business through prospecting customer has a first rank Brand induce the consumer in terms of price
in the analysis. Another benefit to attract new perception this benefit has an last rank in the table.
customers has a 2ndrank. 3rd rank commonly acquired
by the benefit, 'Reduce marketing cost, Buyers buy Table No. 4.2. - Experience of LIC Employees
only brand name, People pay higher price for well regarding preferences of client for
known brand'. Like wise fourth rank also commonly Selecting Company
acquired by benefit, 'time to respond to the

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(Source: Primary data)

According to this table, safety has considered on consistency in service, service standards and product
the first rank by the client in the eye-view of LIC flexibility are some what important because these are
employees. The parameters of trust, value for money on 5,6,7,8, rank respectively.
and companies track record, following the ranking as 4.1. Data Analysis of policyholder's response
The samples collected from the Satara city are
second, third and fourth. As per the table, parameters
analyzed by using statistical tool .The weighted
like professional money management, usage of
average calculated for giving rank to the parameter .
technology & the management team has not much
considered by client, it has least importance to the
Table No. 4.3 Classification of respondent
inverters. But parameters like peace of mind, according to Education Qualification
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(Source: Primary data)

GraphNo.4.1 Classification of respondent according to Education Qualification

The preceding table reveals the education samples from Graduate / PG professional category.
qualification of the investor. In the research 1%
samples are illiterate. The majority samples from the Table No. 4.4 Classification of respondent
Graduate / PG general category that is 40% and 30% according to their Occupations
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(Source: Primary data)

Graph No.4.2 Classification of respondent according to their Occupations

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As per above table, majority samples are self worker petty traders and Industrialist.
employed professional i.e. 22% samples. After that
18% respondents are officer / executive. There is less Table No. 4.5 Classification of respondent
number of sample from the category of unskilled according to income group

(Source: Primary data)

Graph No.4.3 Monthly Income Frequency

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Graph No.4.4 House holds Income Frequency

From the table No. 4.5 and Graph No. 4.3 it is of house hold income, Graph No.4.4 depicts that 23%
found that, majority samples from the Income class of respondent are in the income group of 10001-15000,
Rs.5001- 10000 and 10,001- 15,000 i.e. middle & 19% in the group of 15001-20000 and 16% in the
higher middle income group has an 50% hold in group of 5001-10000.
sampling. The income classes started from 30000 to
40000 have a few numbers of respondents. In respect Table No. 4.6. Investment Pattern of Respondents.

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(Source: Primary data)

Table No.4.6 indicates the typical mind set up of Indian systematic investment plan are hardly preferred by the
traditional Investors. They preferably invest in Bank respondent. The investment avenue like ELSS, NBFC
Deposit, Insurance & Gold as they get ranking 1, 2 and scheme, Debt insurance not aware by investors.
3 PPF, PO scheme and real estate are another Table No. 4.7 Table showing preferences of
instrument preferred by policyholder on No. 4, 5 and investor for Future investment in Insurance
6. Instrument like shares, company deposit's, Company.

(Source: Primary data)

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The above table reveals the preference of investors placed on rank 5th, 6th and 7th respectively.
for his investment in future, in insurance company. The Companies like Sahara, METLIFF, New York, Bharti
LIC get first rank for future investment. ICICI, Bajaj are not preferred by respondent that's why these
and Tata have got 2nd, 3rd, and 4th ranks respectively. companies stood at last in the ranking.
Also respondent given good ranking to the companies Table No. 4.8 Benefit Considered by Investor
like HDFC, Reliance & Birla Sunlife, these companies while selecting insurance company

(Source: Primary data)

Table No.4.8 depicts that 'safety' benefit is The traditional mind setup of investors has not
primarily considered by respondent to select insurance considered the benefit of 'Professional Money
company. 'Value for Money' is second important Management' and 'High Quality Service Standard'
benefit according to investors. It has got second rank. that's why it has a last rank.
The 'Service Performance' of insurance company and
'peace of mind' after investment has got third and Table No. 4.9 Parameters Consider by investors
fourth rank respectively. while selecting insurance company:

(Source: Primary data)

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Respondent consider various parameters for are on rank 3rd, 4th and 5th respectively. Technology
selecting insurance company. First and important factor and management team factor has not much
parameter of decision marking is the 'Trust' on the important parameters for investors; these parameters
company. Company's track record is second parameter place at last in ranking.
for selection of insurance company. Investors also
consider product flexibility and transparency, financial Table No. 4.10 Additional parameters consider by
strength of promoters and parentage parameters; these investors while selecting insurance company.

(Source: Primary data)

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Graph No.4.5 Additional Parameter for selecting on.5th and 6th respectively.
insurance company according to policyholder Additional parameters like effective advertising,
There are some other parameters that investor regular communication from company, and claim
consider for selecting insurance company. The right settlement experience are not that much influence the
product features and right price of the product are investors, these parameters have ranked lower. At the
mostly preferred additional parameters they have 1st end product range of company has taken place on 17 in
and 2nd rank respectively. Perceived image of company ranking as a parameter for selecting company.
and perceived level of quality of product this factors
place at rank No. 3rd & 4th respectively. The faith on Table No. 4.11 most preferred insurance company
sales person and reference from well wishers are ranked in India by investors.

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 A STUDY OF BRAND LOYALTY WITH SPECIAL REFERENCE TO LIFE INSURANCE CORPORATION OF INDIA

(Source: Primary data)

The above table predicts that LIC has a first rank then a then only investors will purchase a policy.
as most preferred insurance company in India by 10. There is less impact of advertising on investors
investors. ICICI, Bajaj has an 2nd & 3rd rank. Also that he can't recall the advertisement.
there is competition from Tata & HDFC these are 5.2. Specific findings:-
placed at no.4th &5th ranks respectively. In short 1. Loyal customer of LIC helps LIC to get more
period Reliance placed good ranking in the table it has business. Brand name of LIC attracts new
at no.6, Birlasunlife and SBI are also have a good share customers, and reduces marketing cost to LIC.
and placed at No. 7th and 8th rank. O t h e r LIC have a strong loyalty Base, this is competitive
Companies that are ING VAYSA, AVIVA, threat to other companies. Brand LIC does not
MAHINDRA, BHARATI, SHRI-RAM, SAHARA, induce the consumer in terms of price perception.
MET-LIFE, and New York are last in the ranking at 2. Safety & Trust are the important parameters that
No. 9, 10, 11, 12, 13, 14, and 15 respectively. These investors consider while selecting insurance
companies are not popular in Satara city. company, value for their money and company's
track record is also important parameters for
5. FINDINGS selecting insurance company according to LIC
5.1. General findings: - employee for investors. Investors never think
1. Insurance is an inevitable part of human being much about management team and technology
today. the company uses.
2. People are much more aware about insurance. 3. Investors invest more in bank deposits, insurance
3. Brand LIC have a monopoly in the market. & gold, because these are more safety than other.
4. LIC is most trusted company in the market. Investment instrument like Art objects, NBFC
5. Many investors don't know the other Company scheme, precious stone, Debt instrument are not
except LIC. popular in the investors.
6. Investors hardly know about the foreign brand of 4. LIC is the most preferred insurance company in
insurance companies. India, but LIC facing competition from other
7. While investing money people generally think companies like ICICI, Bajaj, Tata, HDFC, and
benefit of safety & value for money. Reliance.
8. Trust, image, goodwill, track record is considered 5. While selecting insurance company, safety and
most by investor. value for many benefits are mostly considered by
9. If Investor's get aware & convinced by the adviser investors. Trust as well as company track record
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are important parameters according to investors selecting insurance company, therefore LIC
for selecting insurance company should maintain 'Trust' and improve effective
6. Features of the product, price of the product and track record. (From table No. 4.9)
perceived image of company are important 5. LIC should minimize the gap between investor
additional parameters that respondent consider and company and build healthy relation and
for decision making firstly and secondly. regular communication. (From table No. 4.10)
7. Many investors mostly consider the reference 6. LIC should concentrate on direct marketing
from well-wishers and their experience as a rather than huge advertising (From table
guideline for selecting insurance company. No.4.10)
7. There should be easy procedure and less
6. SUGGESTIONS documentation in respect of purchasing new
After careful study of "A study of Brand Loyalty" with policy. (From table No. 4.10)
reference to Life Insurance Corporation of India, the 8. LIC should adopt aggressive marketing strategy
researcher has to make the following suggestions. LIC like wise other private companies (ICICI, Tata,
is a well-established brand in the market because of its Reliance and Bajaj). Also it should increase the
long market standing and loyalty. After observation of sales force to compete with aggressive private
the other company's presence in the market, LIC player. (From table No. 4.11)
should think on following points.
6.1 General Suggestions: - REFERENCES:-
1. LIC should try to take more and more benefit A) Books
from their loyal customers. 2. LIC should make 1. Bhave.S.R., Saga of Security, LIC of India.
aware people more and more about Insurance. 2. Henry D., Road to brand equity, Himalaya
3. There should be separate customer relationship Publishing House.
program in the organization like CRM. 3. Dr. Gupta.S.L., Brand Management, Himalaya
4. LIC should concentrate on below poverty line Publishing House.
people and farmer living in rural area. 4. Dr. Joshi .C.J., Textbook of Insurance (B.Com-
5. LIC should try to increase their bonus rates 1), Phadake Prakashan.
compared to other private companies. 5. Jha S.M., Service Marketing, Himalaya
6.2 Specific Suggestions: - Publishing House.
1. LIC should concentrate more on customer care 6. Kotler Philip, Marketing Management.
and after sale services (From table No. 4.2) 7. Sengupta Subroto, Brand positioning, Tata Mac-
2. LIC should highlight skill of their people as well grew hill Publishing co. Ltd.
as usage of technology, which will attract B) Journals
investors. (From table No. 4.2) 1. LIC annual report. 2005-2006.
3. LIC should try to aware investor's about benefit's 2. Manual for agent, LIC of India
of their, professional money management and C) Websites
high quality service standard, to increase the 1. www.licindia.com 2. www. yahoo.com
sale.(From table No. 4.8) 3. www. google .com 4. www. Wekipedia.com
4. Companies track record' and 'Trust' are major 5. www. tutor2.com
parameters that are considered by investor while
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