UNIT-3

MARKETING OF FINANCIAL SERVICES

Financial Institutions Financial sector plays an indispensable role in the overall development of a country. The most important constituent of this sector is the financial institutions, which act as a conduit for the transfer of resources from net savers to net borrowers, that is, from those who spend less than their earnings to those who spend more than their earnings. The financial institutions have traditionally been the major source of long-term funds for the economy. These institutions provide a variety of financial products and services to fulfill the varied needs of the commercial sector. Besides, they provide assistance to new enterprises, small and medium firms as well as to the industries established in backward areas. Thus, they have helped in reducing regional disparities by inducing widespread industrial development. The Government of India, in order to provide adequate supply of credit to various sectors of the economy, has evolved a well developed structure of financial institutions in the country. These financial institutions can be broadly categorised into All India institutions and State level institutions, depending upon the geographical coverage of their operations. At the national level, they provide long and medium term loans at reasonable rates of interest. They subscribe to the debenture issues of companies, underwrite public issue of shares, guarantee loans and deferred payments, etc. Though, the State level institutions are mainly concerned with the development of medium and small scale enterprises, but they provide the same type of financial assistance as the national level institutions. National Level Institutions A wide variety of financial institutions have been set up at the national level. They cater to the diverse financial requirements of the entrepreneurs. They include all India development banks like IDBI, SIDBI, IFCI Ltd, IIBI; specialised financial institutions like IVCF, ICICI Venture Funds Ltd, TFCI; investment institutions like LIC, GIC, UTI; etc. 1. All-India Development Banks (AIDBs):- Includes those development banks which provide institutional credit to not only large and medium enterprises but also help in promotion and development of small scale industrial units.

Industrial Development Bank of India (IDBI):- was established in July 1964 as an apex financial institution for industrial development in the country. It caters to the diversified needs of medium and large scale industries in the form of financial assistance, both direct and indirect. Direct assistance is provided by way of project loans, underwriting of and direct subscription to industrial securities, soft loans, technical refund loans, etc. While, indirect assistance is in the form of refinance facilities to industrial concerns.

Industrial Finance Corporation of India Ltd (IFCI Ltd):- was the first development finance institution set up in 1948 under the IFCI Act in order to pioneer long-term institutional credit to medium and large industries. It aims to provide financial assistance to industry by way of rupee and foreign currency loans, underwrites/subscribes the issue of stocks, shares, bonds and debentures of industrial concerns, etc. It has also diversified its activities in the field of merchant banking, syndication of loans, formulation of rehabilitation programmes, assignments relating to amalgamations and mergers, etc. Small Industries Development Bank of India (SIDBI):- was set up by the Government of India in April 1990, as a wholly owned subsidiary of IDBI. It is the principal financial institution for promotion, financing and development of small scale industries in the economy. It aims to empower the Micro, Small and Medium Enterprises (MSME) sector with a view to contributing to the process of economic growth, employment generation and balanced regional development. Industrial Investment Bank of India Ltd (IIBI):- was set up in 1985 under the Industrial reconstruction Bank of India Act, 1984, as the principal credit and reconstruction agency for sick industrial units. It was converted into IIBI on March 17, 1997, as a full-fledged development financial institution. It assists industry mainly in medium and large sector through wide ranging products and services. Besides project finance, IIBI also provides short duration non-project asset-backed financing in the form of underwriting/direct subscription, deferred payment guarantees and working capital/other short-term loans to companies to meet their fund requirements.

2. Specialised Financial Institutions (SFIs):- are the institutions which have been set up to serve the increasing financial needs of commerce and trade in the area of venture capital, credit rating and leasing, etc.

IFCI Venture Capital Funds Ltd (IVCF):- formerly known as Risk Capital & Technology Finance Corporation Ltd (RCTC), is a subsidiary of IFCI Ltd. It was promoted with the objective of broadening entrepreneurial base in the country by facilitating funding to ventures involving innovative product/process/technology. Initially, it started providing financial assistance by way of soft loans to promoters under its 'Risk Capital Scheme' . Since 1988, it also started providing finance under 'Technology Finance and Development Scheme' to projects for commercialisation of indigenous technology for new processes, products, market or services. Over the years, it has acquired great deal of experience in investing in technology-oriented projects. ICICI Venture Funds Ltd:- formerly known as Technology Development & Information Company of India Limited (TDICI), was founded in 1988 as a joint venture with the Unit Trust of India. Subsequently, it became a fully owned subsidiary of ICICI. It is a technology venture finance company, set up to sanction project finance for new technology ventures. The industrial units assisted by it are in the fields of computer, chemicals/polymers, drugs, diagnostics and vaccines, biotechnology, environmental engineering, etc.

Tourism Finance Corporation of India Ltd. (TFCI):- is a specialised financial institution set up by the Government of India for promotion and growth of tourist industry in the country. Apart from conventional tourism projects, it provides financial assistance for non-conventional tourism projects like amusement parks, ropeways, car rental services, ferries for inland water transport, etc.

3. Investment Institutions: - are the most popular form of financial intermediaries, which particularly catering to the needs of small savers and investors. They deploy their assets largely in marketable securities.

Life Insurance Corporation of India (LIC):- was established in 1956 as a whollyowned corporation of the Government of India. It was formed by the Life Insurance Corporation Act, 1956, with the objective of spreading life insurance much more widely and in particular to the rural area. It also extends assistance for development of infrastructure facilities like housing, rural electrification, water supply, sewerage, etc. In addition, it extends resource support to other financial institutions through subscription to their shares and bonds, etc. The Life Insurance Corporation of India also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom . Besides the branch operations, the Corporation has established overseas subsidiaries jointly with reputed local partners in Bahrain, Nepal and Sri Lanka. Unit Trust of India (UTI):- was set up as a body corporate under the UTI Act, 1963, with a view to encourage savings and investment. It mobilises savings of small investors through sale of units and channelises them into corporate investments mainly by way of secondary capital market operations. Thus, its primary objective is to stimulate and pool the savings of the middle and low income groups and enable them to share the benefits of the rapidly growing industrialisation in the country. In December 2002, the UTI Act, 1963 was repealed with the passage of Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, paving the way for the bifurcation of UTI into 2 entities, UTI-I and UTI-II with effect from 1st February 2003. General Insurance Corporation of India (GIC) :- was formed in pursuance of the General Insurance Business (Nationalisation) Act, 1972(GIBNA), for the purpose of superintending, controlling and carrying on the business of general insurance or non-life insurance. Initially, GIC had four subsidiary branches, namely, National Insurance Company Ltd , The New India Assurance Company Ltd , The Oriental Insurance Company Ltd and United India Insurance Company Ltd . But these branches were delinked from GIC in 2000 to form an association known as 'GIPSA' (General Insurance Public Sector Association).

State Level Institutions Several financial institutions have been set up at the State level which supplements the financial assistance provided by the all India institutions. They act as a catalyst for promotion of investment and industrial development in the respective States. They broadly consist of 'State financial corporations' and 'State industrial development corporations'.

State Financial Corporations (SFCs):- are the State-level financial institutions which play a crucial role in the development of small and medium enterprises in the concerned States. They provide financial assistance in the form of term loans, direct subscription to equity/debentures, guarantees, discounting of bills of exchange and seed/ special capital, etc. SFCs have been set up with the objective of catalysing higher investment, generating greater employment and widening the ownership base of industries. They have also started providing assistance to newer types of business activities like floriculture, tissue culture, poultry farming, commercial complexes and services related to engineering, marketing, etc. There are 18 State Financial Corporations (SFCs) in the country:1. Andhra Pradesh State Financial Corporation (APSFC) 2. Himachal Pradesh Financial Corporation (HPFC) 3. Madhya Pradesh Financial Corporation (MPFC) 4. North Eastern Development Finance Corporation (NEDFI) 5. Rajasthan Finance Corporation (RFC) 6. Tamil Nadu Industrial Investment Corporation Limited 7. Uttar Pradesh Financial Corporation (UPFC) 8. Delhi Financial Corporation (DFC) 9. Gujarat State Financial Corporation (GSFC) 10. The Economic Development Corporation of Goa ( EDC) 11. Haryana Financial Corporation ( HFC ) 12. Jammu & Kashmir State Financial Corporation ( JKSFC) 13. Karnataka State Financial Corporation (KSFC) 14. Kerala Financial Corporation ( KFC ) 15. Maharashtra State Financial Corporation (MSFC ) 16. Odisha State Financial Corporation (OSFC) 17. Punjab Financial Corporation (PFC) 18. West Bengal Financial Corporation (WBFC) State Industrial Development Corporations (SIDCs):- have been established under the Companies Act, 1956, as wholly-owned undertakings of State Governments. They have been set up with the aim of promoting industrial development in the respective States and providing financial assistance to small entrepreneurs. They are also involved in setting up of medium and large industrial projects in the joint sector/assisted sector in collaboration with private entrepreneurs or wholly-owned subsidiaries. They are undertaking a variety of promotional activities such as preparation of feasibility reports; conducting industrial potential surveys; entrepreneurship training and development programmes; as well as developing industrial areas/estates. The State Industrial Development Corporations in the country are:1. Assam Industrial Development Corporation Ltd (AIDC) 2. Andaman & Nicobar Islands Integrated Development Corporation Ltd (ANIIDCO) 3. Andhra Pradesh Industrial Development Corporation Ltd (APIDC) 4. Bihar State Credit and Investment Corporation Ltd. (BICICO) 5. Chhattisgarh State Industrial Development Corporation Limited (CSIDC) 6. Goa Industrial Development Corporation 7. Gujarat Industrial Development Corporation (GIDC)

Venture Capital Financing 'Venture Capital' is an important source of finance for those small and medium-sized firms, which have very few avenues for raising funds. Although such a business firm may possess a huge potential for earning large profits in the future and establish itself into a larger enterprise. But the common investors are generally unwilling to invest their funds in them due to risk involved in these types of investments. In order to provide financial support to such entrepreneurial talent and business skills, the concept of venture capital emerged. In a way, venture capital is a commitment of capital, or shareholdings, for the formation and setting up of small scale enterprises at the early stages of their life cycle. Venture capitalists comprise of professionals of various fields. They provide funds (known as Venture Capital Fund) to these firms after carefully scrutinizing the projects. Their main aim is to earn huge returns on their investments, but their concepts are totally different from the traditional moneylenders. They know very well that if they may suffer losses in some project, the others will compensate the same due to high returns. They take active participation in the management of the company as well as provide the expertise and qualities of a good banker, technologist, planner and managers. Thus, the venture capitalist and the entrepreneur literally act as partners. The venture capital recognises different stages of financing, namely:

Early stage financing - This is the first stage financing when the firm is undertaking production and need additional funds for selling its products. It involves seed/ initial finance for supporting a concept or idea of an entrepreneur. The capital is provided for product development, R&D and initial marketing. Expansion financing - This is the second stage financing for working capital and expansion of a business. It involves development financing so as to facilitate the public issue. Acquisition/ buyout financing - This later stage involves:i. ii. iii. Acquisition financing in order to acquire another firm for further growth Management buyout financing so as to enable the operating groups/ investors for acquiring an existing product line or business and Turnaround financing in order to revitalise and revive the sick enterprises.

In India, the venture capital funds (VCFs) can be categorised into the following groups:

Those promoted by the Central Government controlled development finance institutions, for example:

ICICI Venture Funds Ltd. IFCI Venture Capital Funds Limited (IVCF) SIDBI Venture Capital Limited (SVCL)

Those promoted by State Government controlled development finance institutions, for example:

Gujarat Venture Finance Limited (GVFL) Kerala Venture Capital Fund Pvt Ltd. Punjab Infotech Venture Fund Hyderabad Information Technology Venture Enterprises Limited (HITVEL)

Those promoted by public banks, for example:

Canbank Venture Capital Fund SBI Capital Markets Limited

Those promoted by private sector companies, for example:

IL&FS Trust Company Limited Infinity Venture India Fund

Those established as an overseas venture capital fund, for example:

Walden International Investment Group SEAF India Investment & Growth Fund BTS India Private Equity Fund Limited

All these venture capital funds are governed by the Securities and Exchange Board of India (SEBI) . SEBI is the nodal agency for registration and regulation of both domestic and overseas venture capital funds. Accordingly, it has made the following regulations, namely, Securities and Exchange Board of India (Venture Capital Funds) Regulations 1996 and Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations 2000. These regulations provide broad guidelines and procedures for establishment of venture capital funds both within India and outside it; their management structure and set up; as well as size and investment criteria's of the funds. Merchant Banking A Merchant bank is a financial institution primarily engaged in internal finance and long term loans for multinational corporations and governments. It can also be used to describe the private equity activities of banking. Merchant banks tend to advise corporations and wealthy individuals on how to use their money. The advice varies from counsel on mergers and acquisitions to recommendation on the type of credit needed. The job of generating loans and initiating other complex financial transactions has been taken over by investment banks and private equity firms. Thus, the function of merchant banking which originated, and grew in Europe was enriched by American patronage, and these services are now being provided throughout the world by both banking and Non-banking Institutions. The word Merchant Banking originated among the Dutch and the Scottish Traders, and was later on developed and professionalized in Britain.

Securities and Exchange Board of India (Merchant Bankers) Rules, 1992 A merchant banker has been defined as any person who is engaged in the business of issue management either by making arrangements regarding selling, buying or subscribing to securities or acting as manager, consultant, adviser or rendering corporate advisory services in relation to such issue management. Functions of merchant Banking: (i) Corporate counseling: Corporate counseling covers counseling in the form of project counseling, capital restructuring, project management, public issue management, loan syndication, working capital fixed deposit, lease financing, acceptance credit etc., The scope of corporate counseling is limited to giving suggestions and opinions to the client and help taking actions to solve their problems. It is provided to a corporate unit with a view to ensure better performance, maintain steady growth and create better image among investors. (ii) Project counseling: Project counseling is a part of corporate counseling and relates to project finance. It broadly covers the study of the project, offering advisory assistance on the viability and procedural steps for its implementation. a. Identification of potential investment avenues. b. A general view of the project ideas or project profiles. c. Advising on procedural aspects of project implementation d. Reviewing the technical feasibility of the project e. Assisting in the selection of TCOs (Technical Consultancy Organizations) for preparing project reports f. Assisting in the preparation of project report g. Assisting in obtaining approvals , licenses, grants, foreign collaboration etc., from government h. Capital structuring i. Arranging and negotiating foreign collaborations, amalgamations, mergers and takeovers. j. Assisting clients in preparing applications for financial assistance to various national and state level institutions banks etc., k. providing assistance to entrepreneurs coming to India in seeking approvals from the Government of India. (iii) Capital Structure: Here the Capital Structure is worked out i.e., the capital required, raising of the capital, debtequity ratio, issue of shares and debentures, working capital, fixed capital requirements, etc., (iv) Portfolio Management: It refers to the effective management of Securities i.e., the merchant banker helps the investor in matters pertaining to investment decisions. Taxation and inflation are taken into account while advising on investment in different securities. The merchant banker also undertakes the function of buying and selling of securities on behalf of their client companies. Investments are done in such a way that it ensures maximum returns and minimum risks. (v) Issue Management: Management of issues refers to effective marketing of corporate securities viz., equity shares, preference shares and debentures or bonds by offering them to public. Merchant banks act as intermediary whose main job is to transfer capital from those who own it to those who need it. The issue function may be broadly divided in to pre issue and post issue management. a. Issue through prospectus, offer for sale and private placement. b. Marketing and underwriting c. pricing of issues (vi) Credit Syndication: Credit Syndication refers to obtaining of loans from single development finance institution or a syndicate or consortium. Merchant Banks help corporate clients to raise syndicated loans from commercials banks. Merchant banks helps in identifying which financial institution should be approached for term loans. The merchant bankers follow certain steps before assisting the clients approach the appropriate financial institutions. a. Merchant banker

first makes an appraisal of the project to satisfy that it is viable b. He ensures that the project adheres to the guidelines for financing industrial projects. c. It helps in designing capital structure, determining the promoters contribution and arriving at a figure of approximate amount of term loan to be raised. d. After verifications of the project, the Merchant Banker arranges for a preliminary meeting with financial institution. e. If the financial institution agrees to consider the proposal, the application is filled and submitted along with other documents. (vii) Working Capital: The Companies are given Working Capital finance, depending upon their earning capacities in relation to the interest rate prevailing in the market. (viii)Venture Capital: Venture Capital is a kind of capital requirement which carries more risks and hence only few institutions come forward to finance. The merchant banker looks in to the technical competency of the entrepreneur for venture capital finance. (ix)Fixed Deposit: Merchant bankers assist the companies to raise finance by way of fixed deposits from the public. However such companies should fulfill credit rating requirements. LEASING Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments. The lessee is the receiver of the services or the assets under the lease contract and the lessor is the owner of the assets. The relationship between the tenant and the landlord is called a tenancy, and can be for a fixed or an indefinite period of time (called the term of the lease). The consideration for the lease is called rent. A gross lease is when the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership from lawnmowers and washing machines to handbags and jewelry.[1] Under normal circumstances, a freehold owner of property is at liberty to do what they want with their property, including destroys it or hand over possession of the property to a tenant. However, if the owner has surrendered possession to another (the tenant) then any interference with the quiet enjoyment of the property by the tenant in lawful possession is unlawful. Similar principles apply to real property as well as to personal property, though the terminology would be different. Similar principles apply to sub-leasing, that is the leasing by a tenant in possession to a sub-tenant. The right to sub-lease can be expressly prohibited by the main lease. Finance Lease and Operating Lease: Finance lease, also known as Full Payout Lease, is a type of lease wherein the lessor transfers substantially all the risks and rewards related to the asset to the lessee. Generally, the ownership is transferred to the lessee at the end of the economic life of the asset. Lease term is spread over the major part of the asset life. Here, lessor is only a financier. Example of a finance lease is big industrial equipment. On the contrary, in operating lease, risk and rewards are not transferred completely to the lessee. The term of lease is very small compared to finance lease. The lessor depends on many different lessees for recovering his cost. Ownership along with its risks and rewards lies with the lessor. Here, lessor is not only acting as a financier but he also provides additional services required in

the course of using the asset or equipment. Example of an operating lease is music system leased on rent with the respective technicians. Sale And Lease Back and Direct Lease: In the arrangement of sale and lease back, the lessee sells his asset or equipment to the lessor (financier) with an advanced agreement of leasing back to the lessee for a fixed lease rental per period. It is exercised by the entrepreneur when he wants to free his money, invested in the equipment or asset, to utilize it at whatsoever place for any reason. On the other hand, direct lease is a simple lease where the asset is either owned by the lessor or he acquires it. In the former case, the lessor and equipment supplier are one and the same person and this case is called bipartite lease. In bipartite lease, there are two parties. Whereas, in the latter case, there are three different parties viz. equipment supplier, lessor, and lessee and it is called tripartite lease. Here, equipment supplier and lessor are two different parties. Single Investor Lease and Leveraged Lease: In single investor lease, there are two parties lessor and lessee. The lessor arranges the money to finance the asset or equipment by way of equity or debt. The lender is entitled to recover money from the lessor only and not from the lessee in case of default by lessor. Lessee is entitled to pay the lease rentals only to the lessor. Leveraged lease, on the other hand, has three parties lessor, lessee and the financier or lender. Equity is arranged by the lessor and debt is financed by the lender or financier. Here, there is a direct connection of the lender with the lessee and in case of default by the lessor; the lender is also entitled to receive money from lessee. Such transactions are generally routed through a trustee. Domestic and International Lease: When all the parties of the lease agreement reside in the same country, it is called domestic lease. International lease are of two types Import Lease and Cross Border Lease. When lessor and lessee reside in same country and equipment supplier stays in different country, the lease arrangement is called import lease. When the lessor and lessee are residing in two different countries and no matter where the equipment supplier stays, the lease is called cross border lease.

Marketing of Insurance Wherever there is uncertainty there is risk. We do not have any control over uncertainties which involves financial losses. The risks may be certain events like death, pension, retirement or uncertain events like theft, fire, accident, etc. Insurance is a financial service for collecting the savings of the public and providing them with risk coverage. The main function of Insurance is to provide protection against the possible chances of generating losses. It eliminates worries and miseries of losses by destruction of property and death. It also provides capital to the society as the funds accumulated are invested in productive heads. Insurance comes under the service

sector and while marketing this service, due care is to be taken in quality product and customer satisfaction. While marketing the services, it is also pertinent that they think about the innovative promotional measures. It is not sufficient that you perform well but it is also important that you let others know about the quality of your positive contributions. The creativity in the promotional measures is the need of the hour. The advertisement, public relations, word of mouth communication needs due care and personal selling requires intensive care. INSURANCE MARKETING: The term Insurance Marketing refers to the marketing of Insurance services with the aim to create customer and generate profit through customer satisfaction. The Insurance Marketing focuses on the formulation of an ideal mix for Insurance business so that the Insurance organisation survives and thrives in the right perspective. MARKETING MIX FOR INSURANCE COMPANIES: The marketing mix is the combination of marketing activities that an organisation engages in so as to best meet the needs of its targeted market. The Insurance business deals in selling services and therefore due weightage in the formation of marketing mix for the Insurance business is needed. The marketing mix includes sub-mixes of the 7 Ps of marketing i.e. the product, its price, place, promotion, people, process & physical attraction. The above mentioned 7 Ps can be used for marketing of Insurance products, in the following manner: 1. PRODUCT: A product means what we produce. If we produce goods, it means tangible product and when we produce or generate services, it means intangible service product. A product is both what a seller has to sell and a buyer has to buy. Thus, an Insurance company sells services and therefore services are their product .In India, the Life Insurance Corporation of India (LIC) and the General Insurance Corporation (GIC) are the two leading companies offering insurance services to the users. Apart from offering life insurance, they also offer underwriting and consulting services. When a person or an organisation buys an Insurance policy from the insurance company, he not only buys a policy, but along with it the assistance and advice of the agent, the prestige of the insurance company and the facilities of claims and compensation. It is natural that the users expect a reasonable return for their investment and the insurance companies want to maximize their profitability. Hence, while deciding the product portfolio or the product-mix, the services or the schemes should be motivational. 2. PRICING: In the insurance business the pricing decisions are concerned with, i) The premium charged against the policies, ii) Interest charged for defaulting the payment of premium and credit facility, and iii) Commission charged for underwriting and consultancy activities. With a view of

influencing the target market or prospects the formulation of pricing strategy becomes significant. In a developing country like India where the disposable income in the hands of prospects is low, the pricing decision also governs the transformation of potential policyholders into actual policy holders. The strategies may be high or low pricing keeping in view the level or standard of customers or the policyholders. The pricing in insurance is in the form of premium rates. The three main factors used for determining the premium rates under a life insurance plan are mortality, expense and interest. 3. PLACE: This component of the marketing mix is related to two important facets i) Managing the insurance personnel, and ii) Locating a branch. The management of agents and insurance personnel is found significant with the viewpoint of maintaining the norms for offering the services. This is also to process the services to the end user in such a way that a gap between the services- promised and services offered is bridged over. In a majority of the service generating organizations, such a gap is found existent which has been instrumental in making worse the image problem. 4. PROMOTION: The insurance services depend on effective promotional measures. In a country like India, the rate of illiteracy is very high and the rural economy has dominance in the national economy. It is essential to have both personal and impersonal promotion strategies. In promoting insurance business, the agents and the rural career agents play an important role. Due attention should be given in selecting the promotional tools for agents and rural career agents and even for the branch managers and front line staff. They also have to be given proper training in order to create impulse buying. Advertising and Publicity, organisation of conferences and seminars, incentive to policyholders are impersonal communication. Arranging Kirtans, exhibitions, participation in fairs and festivals, rural wall paintings and publicity drive through the mobile publicity van units would be effective in creating the impulse buying and the rural prospects would be easily transformed into actual policyholders. 5. PEOPLE: Understanding the customer better allows designing appropriate products. Being a service industry which involves a high level of people interaction, it is very important to use this resource efficiently in order to satisfy customers. Training, development and strong relationships with intermediaries are the key areas to be kept under consideration. Training the employees, use of IT for efficiency, both at the staff and agent level, is one of the important areas to look into. 6. PROCESS:

The process should be customer friendly in insurance industry. The speed and accuracy of payment is of great importance. The processing method should be easy and convenient to the customers. Installment schemes should be streamlined to cater to the ever growing demands of the customers. IT & Data Warehousing will smooth the process flow. IT will help in servicing large no. of customers efficiently and bring down overheads. Technology can either complement or supplement the channels of distribution cost effectively. It can also help to improve customer service levels. The use of data warehousing management and mining will help to find out the profitability and potential of various customers product segments. 7.PHYSICAL DISTRIBUTION: Distribution is a key determinant of success for all insurance companies. Today, the nationalized insurers have a large reach and presence in India. Building a distribution network is very expensive and time consuming. If the insurers are willing to take advantage of Indias large population and reach a profitable mass of customers, then new distribution avenues and alliances will be necessary. Initially insurance was looked upon as a complex product with a high advice and service component. Buyers prefer a face-to-face interaction and they place a high premium on brand names and reliability. As the awareness increases, the product becomes simpler and they become off-the-shelf.

Marketing of Not-For-Profit Organization A non-profit organization (also known as an NPO) is an organization that uses its funding to pursue a specific purpose, such as a charitable cause, rather than pursuing profits for its own benefit as a for-profit business does. Some might not believe that investing in marketing strategies is necessary for non-profits, but it is quite beneficial for an NPO to effectively market itself. Non-profits use marketing tactics to assist with growth, funding and prosperity. Without these things, the overall mission of the NPO is diminished. Target Market Just as a for-profit business targets a certain audience with its marketing, so should a non-profit. NPOs should develop a picture of the person most likely to support them in their cause or benefit and create promotion and advertising around that target. Recent television advertising campaigns reflecting a large religious affiliation reach out to those who have walked away from their faith and those who need the support and guidance the church can provide. A church group would probably not spend advertising dollars on those who already regularly attend church services, but rather on attracting new church goers.

Branding It is crucial for the non-profit to build its brand. The brand is typically a logo, wording, motto or design that identifies the group. The look and content of all communication, events, service, leadership, alliances and the organizations office expresses the brand of the non-profit. The experiences that clients have with the NPO also lead to the overall brand of the organization. The brand allows donors, supporters and clients to remember, recognize and trust the organization. It keeps the NPO separate from similar organizations by building an identity. Offline Practices Typical marketing practices by a non-profit organization include large and small-scale events, print materials, alliances and networking. Print materials are highly important for educational and promotional purposes. Events offer fundraising opportunities in the non-profit world, whether it is a small silent auction or a five-course banquet offered to hundreds of potential donors. Creating alliances with other local NPOs builds a larger mass of people who hear of the groups goals while building the brand through other philanthropists. In addition, networking is very effective marketing for non-profits as people spread the word about the goals of the organization. Online Practices A primary focus of an NPO's marketing strategies are dynamic, quality websites that are designed to allure new donors, share the groups mission, display images, build awareness of the cause, educate the public, reduce printing and mailing costs and establish credibility. E-mail communication with current and potential donors builds relationships and loyalty. Many NPOs are also entering the world of social networking, with the goal of becoming personal to donors and clients and spreading their message. Public Relations Non-profits are beneficial for individual groups of people, but they also benefit the community. For this reason, public relations are a large part of marketing. The local press should know the story of the non-profit and be aware of new programs that reach out to the community. NPOs should utilize newspaper stories to share statistics, provide pictures and advertise fundraising events and community services. The NPO should include media outlets in events by inviting them directly. Local news outlets should be on NPO mailing lists for newsletters and other informational mailings. TIPS for Marketing It may seem that marketing a non-profit is counter-intuitive, but company owners must concede that no matter what your business, you are always competing for support. To make your nonprofit successful you need to develop sound promotional strategies. According to branding expert Laura Reis, the more powerful a non-profit brand is, the more money it will raise and the more volunteers it attracts.

Branding Like any business, philanthropies have no choice but to compete for supporters money. The best way to do so is by creating a strong brand. According to ARCH, a national resource for respite and crisis care centers, in order to best market the business your company must identify its constituents, design programs to suit their needs, measure the constituents' satisfaction with their programs, and use the results to fine tune their program. Once your program is clear, you are able to present your service--your brand--to potential supporters. One way to strengthen your brand is to develop a slogan. For example, Building community deep in the hearts of Texans is the slogan of Texas Nonprofits. Publish Your Message When selling a message or viewpoint, and not simply a product, communication is a necessity. Every non-profit should have a newsletter or electronic newsletter (e-mail) according to Community Driven Institute. By writing for the general public or for membership associations or others interested in your work, in conjunction with your community distributions, your written wisdom will not just go to those who already know you, but to those who do not know you yet. Non-profits should attempt everything from starting a blog to publishing a book or telling your story in as many publications as possible. Actively writing about your work allows you control over perceptions about the company and will give supporters a better understanding of what they are taking part in. Public Speaking One great attribute for your non-profit is a spokesperson. According to Reis, Ideally, the founder is the best person to take on this role. He or she has a powerful connection to the brand and can sell the story to the media, donors, volunteers and supporters. Many supporters question how contributions are used. When you provide them with a person who actively engages with them, answers questions, shares stories and relates successes, they become immediately involved in who you are and what you do. Community Outreach In the world of community outreach, consistency is the key to success, says Reis. Determine the best programs to suit your mission and work on those until they are stable and you do them every year. People appreciate being able to see how their time and money are used; and it feels good to see the results of your donation continue year after year. To figure out what programs help your constituents the best, you must ask them, otherwise what you plan may not appropriately serve their needs. Once you implement a program, innovate constantly, advises Non Profit Times. Always search for better ways to reach your goals, and to allow your company to branch out in the future while continuing programs already in place.

An Online Presence Online accessibility is an important marketing tactic. Create a web page for your non-profit and build a social media presence. Put your cause out there, writes Network for Good, optimize your search engine marketing. Get as many good links to your companys web page as possible and make sure all your online outreach and presences enable two-way conversation with your supporters, fans and non-fans. Tourism Marketing Tourism involves travelling to relatively undisturbed or uncontaminated natural areas with the specific objects of studying, admiring and enjoying the scenery and its wild flora and fauna, as well as other existing cultural and historical aspects. A visit with a motto to know these areas is nothing but tourism. Places of tourist interest are numerous and of varied nature. These include places of archeological and historical importance, pilgrimage centres, sanctuaries, national parks, hill resorts and sea beaches, etc. The number of foreign tourists have been increased to more than 21 lakhs by 2001. India has a minimal share of only 0.39% of the world tourism trade. India employs nearly 10 million people in this industry making it the second largest employer of the country. Recent political unrest, fear of violence, terrorism, strikes and epidemics etc. are detrimental to our tourism business. However, considering the recent development, it is hoped that India will get her due share in world tourism. Differences between tourism marketing and other services The marketing of services dependent much on interdependence of Marketing, Operations, and Human Resources. The differences between tourism marketing and other services are, (1) Principal products provided by recreation/tourism businesses are recreational experiences and hospitality, (2) Instead of moving product to the customer, the customer must travel to the product (area/community), (3) Travel is a significant portion of the time and money spent in association with recreational and tourism experiences, (4) Is a major factor in peoples decisions on whether or not to visit your business or community?
Components of Tourism

Tourism has many components comprising 1. Travel experience 2. Accommodations 3. Food 4. Beverage services 5. Shops 6. Entertainment 7. Aesthetics and 8. Special events Let us look at the 8 Ps in detail. 1. Product

Product in Tourism is basically the experience and hospitality provided by the service provided. In general the experience has to be expressed in such a way that the tourists see a value in them. 2. Process The process in Tourism include, (a) trip planning and anticipation, (b) travel to the site/area, (c)recollection, (d) trip planning packages. The trip planning packages include, maps, attractions enroute and on site, information regarding lodging, food, quality souvenirs and mementoes 3. Place and Time Location and Accessibility The place and time in tourism is providing directions and maps, providing estimates of travel time and distances from different market areas, recommending direct and scenic travel routes, identifying attractions and support facilities along different travel routes, and informing potential customers of alternative travel methods to the area such as airlines and railroads. 4. Productivity and Quality
This is similar to other service industries. The quality is assessed by time taken for a service, the promptness of the service, reliability and so on.

5. Promotion and Education Like other services, the promotion should address, the accurate and timely information helping to decide whether to visit target audience, the image to be created for the organization, objectives, budget, timing of campaign, media to be selected, and evaluation methods. 6. People People is the centre for Tourism. It is more a human intensive sector. For hospitality and guest relations it is very important to focus on people. It also plays a vital role in quality control, personal selling, and employee morale. 7. Price and other user costs The price of the tourism services depend on business and target market objectives, cost of producing, delivering and promoting the product, willingness of the target, prices charged by competitors offering similar product/service to the same target markets, availability and prices of substitute products/services, and economic climate. The possibility of stimulating high profit products/services by offering related services at or below cost. 8. Physical Evidence In Tourism the physical evidence is basically depends on travel experience, stay, and comfort. Here, the core product is bed in case of stay. Marketing of shipping services The marketing of shipping companies activating in merchant shipping, is the science of Business to Business Marketing (B2B marketing), which deals with the satisfaction of charterers shippers needs for the carriage of goods by sea, with main aim the profit of the enterprise. This satisfaction presupposes on the one hand correct diagnosis of the shipping market to better understand and forecast clients (charterers shippers) transport needs and on the other hand appropriate organization, planning and control of the shipping enterprises means. The more the shipping enterprise tries to discover what its clients need, to adapt the chartering policy to their requirements, to offer appropriate transport services, to negotiate the freight as a function to what it offers, as well as to communicate effectively with the market it targets, the more are the possibilities to achieve the most appropriate, efficient and long-lasting commercial operation of its vessels.

1. All shipping enterprises have limited capabilities concerning the means, the resources and the management abilities for their ships. This means that it is impossible to exploit all the chances of the shipping market with

equal effectiveness. The matching of the shipping enterprise capabilities with the needs and the desires of its clients is fundamental for the provision of the desired transport services, the satisfaction and retention of charterers and thus the commercial success of the enterprise. 2. The shipping company must organize its resources in such a manner as to be able to apply the marketing process stages and to achieve a long-lasting and more effective commercial operation of its ships. The application of marketing presupposes correct diagnosis, planning, organization, implementation and control of marketing effort. This process is continuous and it is presented at figure 1. Figure 1: Stages of Marketing Implementation in Shipping Companies

AIRLINES AS A SERVICE INDUSTRY

The Airline industry came into existence during the 17th centuries. Origin of Indian aviation industry can be traced back to the year 1912. Air travel remains a large and growing industry. It facilitates economic growth, world trade, international investment and tourism and is therefore central to the globalization taking place in many other industries India has the private airlines as its key players 75% of the market share is owned by the private sector. India is the 9th largest aviation market in the world.

THE SERVICE MARKETING TRIANGLE One can better understand the workings of airlines by looking at its marketing triangle.

Product Mix Giving a Feel For The Product Inside a Service Wrapper . Consumers are demanding not products, or features of products but the benefits they will be offered. The airline product includes of two types of services: 1. On the Ground Services. 2. In-Flight Services. Price Mix Premium pricing:- Use a high price where there is a uniqueness about the product or service. Such high prices are charge for luxuries Cheap-value pricing:- This approach is used where external factors such as recession or increased competition force companies to provide 'value' products and services to retain sales APEX fares:- Apex or advance purchase fares are special fares valid on economy class on specified sectors. They are much lower than the normal fares. Place mix Online 24-hour reservation Systems. Tour Operator

Travel Agent Promotion Mix Advertising- keep in mind the image of the country, tourist attraction, cultural heritage Publicity- Travel agent, PRO, media people Sales promotion- Tour operators, frontline staff