The Marketing Post

India's Bottom of the Pyramid | Advantage Brands

The Life Insurance sector in India which has grown to Rs 12 Trillion in Asets ( 12 lakh Crores) or $300 billion with LIC alone and with atleast 35% of the new business share during lean times and 65% share during growth years the Pvt sector also has an asset book of Rs One lakh crore or $ 25 billion. FDI reforms for the sector are a sure thing butt he sector has been lagging behind in social innovation to cater to its commitments of 40% business in urban poor and rural masses. 

The one response to that from the industry has been that of Max New York Life. I intend to show you the brilliant product design of this new great product Max Vijay which has all the 5 Ps of Marketing going for it rather than just branding like Kotak Life's "Chhotu kya banega" r WOM like Birla Sun Life. 

The product Vijay is a Whole Life Insurance Product and thus more affordable as insuranec cover without losing the savings..Also the new cproduct is warehousable, in that it is sold in units of Rs 1000, that are sold at cost to the company on Day ) and goes through distributors, retailers and end agents that use POS terminals to record user details on a simple form. Anyone can pay the Rs 10 ( or maybe 20) required for a Rs 1000 insurance cover, and the company has already sold it from HQ for the 770 value that accrues to the T Ledgers fro the day 1 of sale.. The mortality and the social group demographics have been factored in by actuarrial analysis while the insurer / proposer can buy it 'off the shelf' at his convenience..From my knowledge, for every 10000, the company records 775, while the whole sale distrivutor records the same at 850 or 900 to his retail agents who can be MFI or local Soap/Tobacco/grocery shop owners than can make the sale of each Rs 1000 unit for recorded value f 970. Thus the commission structure is also much more equitable and at the same tie fairly values the insurance contract. The use of POS terminals means that whenever the final sale is made unit value is updated at the CPU and thence any updates regarding renewal premiums and modifications can be made. 

The other products in the sector are basically leaning towards risky capital market based investment pools in Variable Universal Life plans or simply quasi MF investments in Units that can be tracked by their NAV. The riskiest class Equity Funds are allowed 50-60% in Equities. these products then use the family-man appeal to sell by using branding and advertising campaigns around the children / or targeting women. such an example would be Kotak's "Chhotu kya banega" 

A quick comparison above shows you the extent to which Vijay can really serve the rural mass market needs with the operationally complex product that hung IRDA approvals for over a year. As it is sold directly by the company, mis-education may however cause its neglect by the Agent Advisor force and any corporate / bancassurance partners that focus on the wealth segment. 

The final approved product from Max has three distinct flavours, Silver Gold and Diamond, much in use in Sales incentive compensation with largest retail distribution companies like ITC, HUL and thus easily understood.  The product is endorsed by regional and bollywood celebrities like Vijay and Amitabh Bachchan (Brand Ambassador)  and is expected to gather Rs 300 crores in 3 years

 

Mahindra Holidays

The Mahindra Holidays IPO looks overpriced at Rs 325 and it' will be lapped up easily by the market.
 
The company’s flagship brand ‘Club Mahindra Holidays’, has a fast growing customer base of over 79,000 members and 23 beautiful Resorts at some of the most exotic spots in India and abroad. as per the introduction on http://chittorgarh.com. With the RCI affiliation under its belt, it continues to entice and remind prospective customers of direct mail scams, chit fund scandals and other looser marketing practices that have traditionally brought our financial markets and currently the internet great disrepute and mud clinging ( much deserved!)
 
The IPO will certainly list and I'm not interested in further mud slinging and shame to this half-baked' and 'Country clubbish' scam option for millions in India whose idea of financial information is different from mine to say the least. Being a responsible marketing pro however, I feel such organizations should not be allowed untested into the IPO market, but then no one could stop Kale systems from listing on the markets.
 
Sterling Holiday resorts before this and some very illustrious company deposit schemes of the 20th century to tart started this trend and this plagues bonafide issuers in the private circulation shares market who come there strapped and unable to go public for the lack of venture capital and equity, give in to usury and live on the edge. Our venture capitalists are still untested like in the global markets and tey are not much more than rubber stamps for proven and piloted successes. A company like Mahindra Holidays will promote a market making for such direct marketing scams and further cloud the market presence for brokers, private companies and groups that form the third tie of effective businesses in this country and the world at large.
 
examples like chittorgarh.com, vccircle.com and closer home my own ventures and those of friends look forward to be proven wrong and a show of responsible management from Club Mahindra, but it seems impossible with the lack of transparency and liquidity in the adopted business model
 
Amit Mittal

Indian Market Tweets – June 17, 2009 | @zyakaira

Infosys unlikely to save Q2 as clients try to raise budgets with internal sponsors. Top 5 consulting likely to continue their hold on budget
- half a minute ago from TweetDeck
 
IBM finds new success in the Indian IT Services and Outsourcing market with Tata Sky and the other DTH service. Where’s WIPRO?
- 1 minute ago from TweetDeck
 
Soft interest rates mean Kotak and JM lose heavily on Capital protection schemes as fixed income schemes perform better #Indian #Investments
- 3 minutes ago from TweetDeck
 
Since the start of 2009, almost $1.7 billion has been raised by home builders, according to Thomson Reuters data another $2 bn in the works
- 5 minutes ago from TweetDeck
 
ICICI and HDFC Bank go slow on Credit Cards, recall dormant accounts #Indian #Banks
- 6 minutes ago from TweetDeck
 
Indian Banks have actually stopped the personal loans line of business esp HSBC and Barx. #Indian #Banks
- 6 minutes ago from TweetDeck
 
@anitamacklin hey! you’re welcome
- 7 minutes ago from TweetDeck in reply to anitamacklin
 
We hve two sub continent teams in the #t20 semis..I can smel a racist ICC meeting again!! We will live for #IPL http://tr.im/ipldeccan
- 8 minutes ago from TweetDeck
 
What will Budget sops of 3 lakshs plus loow interest on home loans translate to in the market #budget @zyaada @boutblack @boutwhite
- 10 minutes ago from TweetDeck
 
Indian Banks have actually sopped the personal loans line of business esp HSBC Barx
- 14 minutes ago from TweetDeck
 
B’lore promo #1: Fast Social media updates leave you dizzy? Feel priceless about it with the New Nokia N97.. http://tr.im/N97BLR #bangalore
- about 1 hour ago from web
 
@Charispalmer: Australia’s web infrastructure incl online banking? My comments to @bhowarth for Nett mag http://tinyurl.com/lmdmdf
- about 1 hour ago from twibble
 
@zyakaira @zyaada The cost of Healthcare reform | Washington Post: President Obama’s pla.. http://tr.im/hlth1706
- about 1 hour ago from Ping.fm
 
RT @investtwit: Reliance Infrastructure top gainer on Nifty http://tinyurl.com/koy4j6
- about 1 hour ago from twibble
 
Reliance Infrastructure Fund looks good. may mop up more than 5000 crores? _TYY4
- about 1 hour ago from twibble
 
What do new private sector entrants plan to achieve on the Indian Banking scene _TYY4
- about 1 hour ago from twibble
 
Will budget proposals specify this year’s disinvestment targets _TYY4
- about 1 hour ago from twibble
 
India needs specific plans for disinvestment _TYY4
- about 1 hour ago from twibble
 
@fnindia yes bank cannot effectively compete in the market place with such small ticket business #indian #stocks
- about 1 hour ago from twibble in reply to fnindia
 
B’lore promo #1: Fast Social media updates leave you dizzy? Feel priceless about it with the New Nokia N97.. http://tr.im/N97BLR #bangalore
about 2 hours ago from web
 
 
 
Amit Mittal
zyaadakairaada@gmail.com
 
Amit Mittal
Mob: 919972442877
amit.mittal@me.com
MD, Advantage Research Pvt Ltd
@Innovative Film City, Bidadi 562109
On the web Advantage 'zyaada' http://advantages.us/zya