Today you have to run faster to stay in the same place
– Philip Kotler
Place mix can be defined as the “Physical distribution i.e. the delivery of goods/ services at the right time at the right place to the customers.” Place decisions involve building relationships with the wholesalers, retailers and through these intermediaries building relationships with the customers. Products and services must be at the right place, at the right time in order to be consumed. Probably the best way to perceive place is to think of the flow of products from manufacturer through intermediaries to the consumer or user. This flow can be thought of as a channel used to move goods and services.
The channel of distribution is a component of the place mix:
Channels: According to Philip Kotler, “Channels are sets of interdependent organizations involved in the process of making the product or service available for use or consumption” Marketing channel decisions are among the most critical decisions facing the management. The channels chosen intimately affect all the other marketing decisions.
In case of insurance sector, the following channel of distribution is followed according to the target market:
1) DIRECT SELLING:
- Ø Agents: The agents are selected and recruited by the development officer of the insurance company. These agents inform the customers about the various insurance policies offered by the company and convince them to buy these policies.
- Ø Financial Advisors: The financial advisors are also consulted by the customers regarding their financial matters. These advisors suggest their clients to get their goods insured against any calamity or risk. Hence they act as a channel in distribution of insurance.
- Ø Call centers: The people who require insurance call up the call centers. These call centers send their direct marketing agents who go to the customer’s place and sell the insurance policy.
2) PARTNER SELLING:
- Ø Bancassurance: With the evolution of interconnected financial services, banks are converting themselves into ‘one stop financial supermarkets’. This has promoted two big classes of financial institutions: banks and insurance companies to combine and deliver an innovative product i.e. Bancassurance. In bancassurance, the insurance products are sold through the banks network of branches.
- Ø Postal Department:India has an extremely well developed postal network, which is even stronger than the network of banks in the country. Post offices have been established even in the interior parts of the country. Insurance companies can tie up with the postal department to sell and distribute various insurance covers. This would certainly require upfront training costs, as the postal employees in turn need to educate and sell the concept and benefits of insurance to the people in rural areas. Such a tie up with the postal department would open up India’s rural areas, which are largely untapped for insurance sector. This can prove to be a sustainable source of growing revenues.
- Ø Selling Through Corporates : Insurance can be sold through corporates too.
E.g.: When a customer purchases a Maruti car, he gets the insurance of the car free from the Maruti company itself. Thus this is termed as selling insurance through corporates.
Electronic Channels: In the last decade, numbers of technological advances have taken place due to immense use of EDI (Electronic Data Interchange)
- Ø LIC on Internet: They have their own site, which is very informative. They display information about them and its subsidiaries, the product they offer. The addresses/e-mail Ids of their zonal offices, zonal training centers, management development centers, overseas branches, Divisional offices and also all Branch offices with a view to speed up the communication process.
- Ø Information kiosks: LIC have set up 150 interactive Touch screen multimedia KIOSKS in prime locations in metros and some major cities for dissemination information to general public on our products and services. These KIOSKS are enabling to provide policy details and accept premium payments.
- Ø SMS: Sims through mobile phone is recently new technology introduced by the LIC to promote their product.
LOCATION: In insurance, location, the place where office situated is not so important as mostly the agents of the insurance company goes to the place of the customers for doing most of that customers work. However they situate their office branches at important location, which is convenient for the customer to visit. (May be near station or near commercial area).
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