Product differentiation may be referred to as the points or the qualities that a firm has in its product, which makes the product different from its competitors’ product.
The product differentiation as far as the insurance sector and LIC in particular is concerned are as follows—-
- Bonus– insurance companies issue bonus to their policyholders when they make a substantial amount of profit. If a company issues a high amount of bonus, it delights the customer and creates a good image in the eyes of the customer.
- Past records– the differentiation can be done on the basis of past records. Customers choose to take policy from that company which has well past records in terms of claim settling periods, premium collection intervals etc.
- Market reputation– a company with a good market reputation and goodwill is perceived to deliver the best of the service quality and customer satisfaction.
- Technology– technology plays an important part in product differentiation. For eg: – LIC was the first company in the insurance sector to introduce use of I.T and Computers. This makes customers feel that the company is not lagging behind the world and is capable of making the full use of technology to satisfy the customers.
- Feedback– feedback from customers also is an important tool with which product of the company can be differentiated. If effective steps are been taken on the feedback of the customers, it leaves a long lasting impression on the minds of the customers.
- Price– if a particular company charges more for the same product as compared to their competitors, it may loose the customers and vice versa.