Difference between consumer buying behavior (Rural area & Urban area)

MARKET ANALYSIS ON CONSUMER BUYING BEHAVIOR

 Objectives

• To conduct market surveys on a sample selected from the entire population & study the consumer buying behavior
• To identify the customer demand
• To analyze the need & satisfaction level of customer
• Is there any difference between Urban Area & Rural Area consumer buying behavior

 

 

Literature review-

Life insurance is a form of insurance that pays monetary proceeds upon the death of insured covered in the policy. A life insurance policy is a contract between the named insured & insurance company wherein the insurance company agrees to pay an agreed upon sum of money to the insured’s named beneficiary so long as the insured’s premiums are current. With a large population & the untapped market area of this population insurance happens to be a very big opportunity in India. Today its stand as a business growing at the rate of 15-20% annually. Nearly 80% of Indian populations are without life insurance cover & the health insurance. This is an indicator that growth potential for the insurance sector is immense in India. Insurance is the business of providing protection against financial aspects of risk, such as those to property. There are two types of life insurance:-

Life insurance

Non life insurance.

Benefits of life insurance:-

Life insurance encourages savings & forces thrift.

It is superior to a traditional savings vehicle.

It helps to achieve the purpose of life assured.

It provides valuable tax relief.

Principles of life insurance:-

A positive duty to voluntary discloses, accurately & fully, all facts, material to the risk being proposed whether requested or not.

Relationships with the subject matter which is recognized in law & gives legal right to insure that person.

Limitations-

Some of difficulties & limitations faced during my training are as follows-

 

 

• Lack of awareness among people- this is the biggest limitation found in this sector. Most of the people are thinking life insurance in a negative way. They wanted to invest money in share market.
• Perception of the people towards insurance sector- people till date consider insurance is just tax saving device. So today also there is always rush to buy insurance policy only at the end of the financial year.
• Insurance does not give good returns- still today people think that the insurance sector does not give good return. They are thinking that if they buy life insurance they will get back 5-6% return.
• Increased competition- today the competition in the insurance sector has became stiff. Currently there are more than 24 life insurance companies working in India. Today each & every company is trying to increase their insurance advisors so that they can increase their reach in the market. The situation has created a scenario in which to recruit Life Insurance Advisors & to sell life insurance policy has become very difficult.

 

Research Methodology-

• Details About Sampling Design-

it is not possible to study whole population it is necessary to obtain representative samples from the population to understand the characteristics.

• Sampling Area- Urban Area(Kolkata) & Rural Area (Suri & Kubirpur)
• Sampling unit- individuals respondents for studying consumer buying behavior selected randomly from different parts of Kolkata, Suri & Kubirpur
• Sampling technique- Random Sampling
• Sample size-60
• Research Instrument- Structured Questionnaire
• Contact Method- Direct Interview

 

Data includes facts & figures which are required to be collected to achieve the objectives of the project. In order to determine the consumer buying behavior of customer.

 

a)Primary data-

the data that is being collected for the first time or to particularly fulfill the objectives of the project is known as primary data.

Responses of customer

Identifying pros & cons of the brand

Data collection method- for the given project the primary data this need to collect first time which is very significant. This type of information gathered through survey technique. This survey is completed through use of questionnaire

Sampling- sample is a small group taken under consideration from the total group. In the project the market research which was ask to be studied was West Bengal Market( difference between rural & urban area buying behavior).

Data evaluation- the data collection is not simple. It will contain unnecessary information & over or under emphasized facts. Therefore, only relevant data are included in the report. Which will help to achieving the objective of the project?

 

Scope-

• As large insurance market is still untapped so based on the survey the potential of the Indian Market can be evaluated
• New distribution channel & marketing strategies can be evaluated based on awareness among the masses regarding Kotak Life Insurance
• Life Advisor license to be used part time basis to generate revenue for the company & income for self

 

 

 

• Findings & Analysis-
• Findings-
• Based on the survey it was found that 93% people thinks that life insurance is necessary
• Most of the people prefer LIC
• More than 50% people are satisfied with their policy
• The people buy life insurance for future uncertainty

 

• Analysis

 

In fig 1 we can see that 66.7% people are from urban area & 33.3% people are from rural area

 

In fig 2 we can see that 71.7% people have life insurance policy & 28.3% people don’t have life insurance policy

 

In fig 3 we can see that 93.3% people thinks that life insurance is necessary

In fig4 it shows that more than 50% people prefer to LIC & 24.6% people prefer to kotak life insurance

In fig 5 it shows that 50% people buy insurance for features & facilities & 29%people buy insurance for terms & conditions

 

In fig 6 we can see that 62.5% thinks that life insurance is a savings & investment plan, 25% people thinks that life insurance is a protection plan

 

In fig 7 we can see that 58.9% thinks that life insurance helps to covers futures uncertainty, whereas 28.6% people thinks life insurance helps for tax savings

 

In fig 8 we can see that 44.6% people buy life insurance only for money back guarantee

In fig 9 shows that 61.5% people buy life insurance policy through insurance company/agent approaching the customer

 

In fig 10 it shows that 55.4% people are satisfied with the life insurance

 

 

In fig 11 it shows that 50% people want to buy life insurance policy at the age between 25-30yrs

• SPSS Analysis-

Finding a relation that gender is either dependent or not Dependent with the choice of the life insurance company

H0: They are related

H1: they are not related.

 

Null hypothesis rejected, because we can see that the pearson chi square value is 0.119 &  the cramer’s value is 0.411. so we can predict that gender is not related with the choice of the life insurance company

 

 

 

Comparing the annual individual income with the choice of the life insurance plan

H0- they are related

H1- they are not related

 

Null hypothesis is accepted. Here we can see that the pearson’s value is 0.869 & the cramer’s value is 0.235. so we can predict that  there is  a relation between the choice of the life insurance plan with the annual Individual income.

 

 

 

 

 

Finding a relation between choice of the life insurance plan with the choice of the life insurance company

Null hypothesis is rejected. . Here we can see that the pearson’s value is 0.000 & the cramer’s value is 0.506. so we can predict that There is a no relation between the choice of life insurance plan with the choice of life insurance company

 

 

 

 

 

 

 

 

 

Finding a relation between the features of the life insurance with the life insurance company

 

Null hypothesis is rejected. . Here we can see that the pearson’s value is 0.000 & the cramer’s value is 0.510. so we can predict  that there is a no relationship between thee features of life insurance plan with the life insurance company

 

 

 

 

Is there any difference between urban area & rural area consumer buying behavior.

H0- there is no difference

H1- there is a difference

 

 

Null hypothesis is rejected. In this analysis we can see that the pearson chi-square value is 0.038 & the camer’s V value is 0.400 that means there is a difference between urban area & rural area consumer buying behavior

 

• Conclusion-
• During the survey, it has been found that people have great awareness about various companies but a lot more has to be done. 23% people know about Kotak life insurance.
• But more than 50% people have trust on LIC, because it is a very old company & people thinks that it is a Government
• People in general have been influenced by the marketing activities of insurance companies. A high penetration of print media, TV & web add over the years is beginning to have its impact now.
• Another important trend was in terms of people viewing life insurance as a future uncertainty

 

 

• Analysis of objective of study-
• Above 50% people are satisfied with their product
• There is a difference between urban area & rural area buying behavior
• Future Scope of Study-
• Create more customer awareness
• To launch new product like one girl child savings plan, old people pension plan
• Focus on market penetration in rural area
• Recommendations & Suggestions-
• Suggestions-
• As the LIC is still the most recalled brand among the masses so more advertisement needs to be done via TV, Web Add, CSR activities, promotional activities
• Group insurance should be provided to schools, colleges, societies & different organizations
• As majority of the population lives in rural areas so that they can purchase simple & affordable plan
• Recommendations-
• The company should come up with the value of lesser premium so that the people with lower income can afford to buy insurance policy.
• The company should create more awareness about the products and scheme available with them.

 

• The company should have good brand advertising.
• The company should introduce new product for the rural market
• The company should extend their area
• The company should enhance their distribution channel
• The company should take a suggestions from each & every customer
• The company should give special offer to customer
• The company should think about push strategy selling process
• The company should apply new & innovative technique for selling the insurance
• Annexure-
• Questionnaire-
• Questionnaire on consumer buying behavior-
• Name-

 

• Email Id

 

 

3)Age-

1. a) <20 yrs
2. b) 25-30yrs
3. c) 30-35yrs
4. d) above 35 yrs

 

• Gender

1. Male
2. Female

 

5) Education qualification

 

6) Marital status-

1. a) Single
2. b) Married

 

7) Area-

1. a) Rural
2. b) Urban

 

8) Profession-

1. a) Business
2. b) Professional
3. c) Service
4. d) Other

 

9) Annual income-

1. A) <2lakh
2. b) 2-5lakh
3. c) 5-10lakh
4. d) 10-15lakh
5. e) >15lakh

 

10) Do you have life insurance policy?

1. a) Yes
2. b) No

 

11) Do you think life insurance is necessary-

1. a) Yes
2. b) No

 

12) If yes, then which company’s life insurance will you prefer

1. a) LIC
2. b) ICICI life prudential
3. c) HDFC life standard
4. d) SBI life insurance
5. e) Kotak life insurance
6. f) TATA AIG life insurance
7. g) Reliance life insurance

 

13) How could you recognize your insurance company?

1. a) Features & facilities
2. b) Terms & conditions
3. c) Logo
4. d) Brand name
5. e) Slogan

 

14) Which plan do you prefer

1. a) Protection plan
2. b) Children’s plan
3. c) Savings & investment plan
4. d) Retirement plan
5. e) Women’s plan

 

15) What do you think are the benefits of life insurance

1. a) Covers future uncertainty
2. b) Tax savings
3. c) Investments
4. d) Other

 

16) Which feature of life insurance policy will you consider while buying?

1. a) Money back guarantee
2. b) Larger risk coverage
3. c) Low premium
4. d) Company’s creditability
5. e) Easy access to agents

 

17) How you have bought a life insurance policy?

1. a) Customer approaching insurance company/agent
2. b) Insurance company/agent approaching the customer
3. c) Online
4. d) Through bank

 

18) Are you satisfied with your policy?

1. a) Highly satisfied
2. b) Satisfied
3. c) Average
4. d) Not satisfied

 

19) According to you what is the right age to buy the policy?

1. a) <20yrs
2. b) 25-30yrs
3. c) 30-35yrs
4. d) 35-40yrs
5. e) Anytime