A SUMMER TRAINING REPORT

On “Impact of Globalization on
Marketing”

At
SBI Life Insurance Co Limited
Alakhnanda Tower 3rd Floor, City Centre, Gwalior (M.P)

Submitted To
Jiwaji University
Gwalior
For the partial fulfillment of the award of
Master of Business Administration
(2018-2019)

Submitted By
(Manendra Singh Chauhan)

Prestige Institute of Management

Opposite Deen Dayal Nagar, Bhind Road, Gwalior
Ph.0751-2470724, Fax-0751-470516
Website: prestigegwl.org

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 DECLARATION

I am Manendra Singh Chauhan, student of MBA IInd semester of Prestige

Institute of Management Gwalior; hereby declare that the Summer Training
Report entitled “Marketing Strategies Activity In Sbi life Insurance” in
Gwalior (M.P) is submitted by me in partial fulfillment of the requirement for the
Master of Business Administration Degree.

I assure that this summer training report is the result of my own efforts and that
any other institute for the award of any degree or diploma has not submitted it.

Place: Manendra Singh

Chauhan
Date: MBA-
IInd sem.

2
 Preface

Now days in this dynamic era Insurance is coming as an important tool for
reducing the effect of uncertainty and risks. It becomes an integral part and
indispensable part of human life. There are various types of Insurance Plans to
provide protection from loss and uncertainties.

So is a great opportunity for me to study on “People’s Perception and

awareness are concerning “Impact of Globalization on Marketing”The
purpose of this research is to know awareness and importance among peoples
regarding “Impact of Globalization on Marketing Activity in Sbi Life
Insurance” in Gwalior (M.P)

Manendra Singh Chauhan

M.B.A IInd sem

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 CERTIFICATE

This is to certify that Manendra Singh Chauhan Student of MBA IInd Sem of
Prestige Institute Of management Gwalior, has successfully completed his
Summer training report. He has prepared this report entitled “Impact of
Globalization on Marketing Activity In Sbi Life Insurance” under my
direct supervision and guidance.

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 ACKNOWLEDGEMENT

Summer Training Report is a combined effort including this one also, so I would
like to thank to all who have helped me completion of this report purposeful.

We would like to extend our heartfelt gratitude to Prof. Ashish Mehra for his
guidance throughout the project. Without his support and cooperation we would
have failed in our endeavors and targets in this project.

I also want to thank to Mr. Yog Mishra, Unit Manager in SBI LIFE Insurance
Co.Ltd. (Sales Dept.), Dr. Indra Sharma coordinator assisting me in completion
of this project.

Further I would like to thanks to all of my Teachers, Staff Members, Library

Members, and Friends for their valuable support and advices which helps me a
lot to completing this project report purposeful.

Manendra Singh Chauhan

M.B.A IInd sem

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 TABLE OF CONTENTS

SEQUENCE PG. No

1. Introduction

• History of the Insurance

2. Company Profile

• Organizational structure
• Financial Performance
• Recruitment Process
• Welfare activity
• Product and market competitors
• Market Share

• Various product lines

• Financial analysis
• SWOT analysis

3. Introduction of the topic

4. Objectives of the Study

5. Results and Discussion

6. Analysis and findings

7. Limitations

8. Recommendations & Suggestions

9. Conclusion

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History of Insurance: at a glance
Life Insurance in its modern form came to India from England in the year 1818. Oriental ife
Insurance Company started by Europeans in Calcutta was the first life insurance company on
Indian Soil. All the insurance companies established during that period were brought up with
the purpose of looking after the needs of European community and Indian natives were not
being insured by these companies. However, later with the efforts of eminent people like Babu
Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian
lives were being treated as sub-standard lives and heavy extra premiums were being charged
on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life
insurance company in the year 1870, and covered Indian lives at normal rates. Starting as
Indian enterprise with highly patriotic motives, insurance companies came into existence to
carry the message of insurance and social security through insurance to various sectors of
society. Bharat Insurance Company (1896) was also one of such companies inspired by
nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies.
The United India in Madras, National Indian and National Insurance in Calcutta and the
Cooperative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative
Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet
Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi
Life (later Bombay Life) were some of the companies established during the same period. Prior
to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life
Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance
Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations
of companies should be certified by an actuary. But the Act discriminated between foreign and
Indian companies on many accounts, putting the Indian companies at a disadvantage. The first
two decades of the twentieth century saw lot of growth in insurance business. From 44
companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total
business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies
many financially unsound concerns were also floated which failed miserably. The Insurance
Act 1938 was the first legislation governing not only life insurance but also non-life insurance
to provide strict state control over insurance business. The demand for nationalization of life

7
insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a
bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly.
However, it was much later on the 19th of January, 1956, that life insurance in India was
nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75
provident were operating in India at the time of nationalization. Nationalization was
accomplished in two stages; initially the management of the companies was taken over by
means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The
Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and
the Life Insurance Corporation of India was created on 1st September, 1956, with the objective
of spreading life insurance much more widely and in particular to the rural areas with a view
to reach all insurable persons in the country, providing them adequate financial cover at a
reasonable cost.

Some of the important milestones in the life insurance Businesses

in India are:

1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started
functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started
its business.
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective
of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 crore from the Government of India.

8
The General insurance business in India, on the other hand, can trace its roots to the Triton
Insurance Company Ltd., the first general insurance company established in the year 1850 in
Calcutta by the British.

Some of the important milestones in the general insurance

Businesses in India are :

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of
general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India, frames a code
of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency margins
and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general
insurance business in India with effect from 1st January 1973.

Indian Insurance industry:

Indian Insurance comprised mainly two Players.

 Life Insurer: the important are.
 Life Insurance Corporation of India (LIC)
 HDFC Standard Life Insurance Company Ltd.
 Max New York Life Insurance Co. Ltd.
 ICICI Prudential Life Insurance Company Ltd.
 Kodak Mahindra Old Mutual Life Insurance Limited.
 Birla Sun Life Insurance Company Ltd.
 Tata AIG Life Insurance Company Ltd.
 SBI Life Insurance Company Limited.
 ING Vysya Life Insurance Company Private Limited.
 Bajaj Allianz Life Insurance Company Limited.

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  MetLife India Insurance Company Pvt. Ltd.
 Sahara India Insurance Company Ltd.
 Aviva Life Insurance Co. India Pvt. Ltd.

General Insurer
General Insurance Corporation of India (GIC) GIC has four subsidiary companies namely:
 The Oriental Insurance Company Limited.
 The New India Assurance Company Limited.
 National Insurance Company Limited.
 United India Insurance Company Limited.
 Royal Sundaram Alliance Insurance Company Limited.
 Reliance General Insurance Company Limited.
 TATA AIG General Insurance Company Ltd.
 Bajaj Allianz General Insurance Company Limited
 ICICI Lombard General Insurance Company Limited.
 Cholamandalam General Insurance Company Ltd.
 HDFC-Chubb General Insurance Co. Ltd.

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 Introduction
SBI LIFE – a joint venture between

74% 26%
SBI Life Insurance is a joint venture between the State Bank of India and Cardiff SA of France.
SBI Life Insurance is registered with an authorized capital of Rs 1000 core and a paid up capital
of Rs 350 carore. SBI owns 74% of the total capital and Cardiff the remaining 26% State Bank
of India enjoys the largest banking franchise in India. Along with its 7 Associate Banks, SBI
Group has the unrivalled strength of over 14,000 branches across the country, the largest in the
world. Cardif is a wholly owned subsidiary of BNP Paribas, which is The Euro Zone’s leading
Bank. BNP is one of the oldest foreign banks with a presence in India dating back to 1860. It
has 9 branches in the metros and other major towns in the country. Cardif is a vibrant insurance
company specializing in personal lines such as long-term savings, rotection products and
creditor insurance. Cardif has also been a pioneer in the art of selling insurance products
through commercial banks in France and 29 more countries.SBI Life Insurance’s mission is to
emerge as the leading company offering a comprehensive range of Life Insurance and pension
products at competitive prices, ensuring high standards of customer ervice and world class
operating efficiency. The company plans to make the insurance buying process quick, simple
and based on well-informed judgment. In 2004, SBI Life Insurance became the first company
amongst private insurance players to cover 30 lacks lives. The company expects to carve a
niche in the Indian insurance market through extensive product innovation and aims to provide
the highest standards of customer service through a technological interface. To facilitate this,
call centers have been already installed and help lines will be installed and customers will have
access to their accounts through the Internet or through SBI branches. The company proposes

11
to make available ready liquidity to its Life Insurance policies by way of loans at SBI counters.
This will make Life Insurance a liquid asset in the financial portfolio of households. SBI Life
Insurance is uniquely placed as a pioneer to usher bank assurance into India. The company
hopes to extensively utilize the SBI Group as a platform for cross-selling insurance products
along with its numerous banking product packages such as housing loans, personal loans and
credit cards. SBI’s access to over 100 million accounts provides a vibrant base to build
insurance selling across every region and economic strata in the country.

Group Corporate.

SBI Life extensively leverages the SBI Group as a platform for cross-selling insurance products
along with its numerous banking product packages such as housing loans and personal loans.
SBI’s access to over 100 million accounts across the country provides a vibrant base for
insurance penetration across every region and economic strata in the country ensuring true
financial inclusion.

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OGANISTIONAL STRUCTURE OF AGENCY

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 Management Style
MANAGEMENT STYLE

FINANCE & ACCOUNTS

INVESTMENT

ACTUARY

IT

HR

MARKETING

OPERATIONS

NEW BUSINESS

UDNERWRITING

CLAIMS

POLICY SERVICING

ISSUE & PROBLEM SOLVING

Financial Performance

SBI LIFE POSTS NET PROFIT OF Rs. 301 Crores

Sustains its all-round performance and expansion, YTD DEC FY 10 - 11:

√ Increase in net profit by 52%
√ Branch network increases to 628 branches
√ Employee strength surges to 7334 employees

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√ Moves to a new, larger and integrated corporate office building

Mumbai, January 18, 2011: Sustaining its holistic business performance, SBI Life
Insurance, the leading new generation life insurer, has posted impressive results during the first
nine months of the FY 10 - 11. Growing by 52%, the company has set a new milestone, by
crossing the landmark figure of Rs 300 Crores in net profit during the period. Reflecting its
superior efficiency in it business operations, the company maintains the lowest “expense to
GWP (Gross Written Premium)” ratio in industry of 7.43%. SBI Life’s Gross Written
Premium collection grew by 28% to Rs. 7,770 Crores The Asset Under Management jumped
by 50 % to Rs 36, 861 Crores from Rs. 24, 613 Crores as on 31st December, 2009. The
company has uniquely expanded by adding 134 new branches and increasing number of
employees by 1349, during the period, despite tough external conditions. The corporate office
has moved to a newly- acquired building in fast evolving commercial hub of Mumbai. The
new corporate building was inaugurated by Shri R Sridharan, MD and GE (A & S), State Bank
of India. Commenting on the performance, Mr. M N Rao, MD & CEO, SBI Life Insurance
said “Through continued emphasis on strengthening business fundamentals, namely customer
centricity and operational excellence, we are confident that we will sustain our profitable
growth performance. We remain committed to catering to the life insurance needs of Indian
population encompassing all socio-economic and geographical segments.”

Highlights of YTD Dec FY 10 - 11

Gross Written Premium Rs 7,770 Cr 28% ↑

Premium New Business Rs 4,699 Cr 6% ↑
Asset Under Management ( Y-o-Y) Rs 36, 861 Cr 50% ↑
All key distribution channels namely, Bancassurance, Agency and Corporate Solutions have
demonstrated profitable business growth during the period. The Agency Channel provided a
significant thrust to the overall business by contributing 44% of total premium as a result of
superior productivity levels of Insurance Advisors. Bancassurance witnessed a remarkable
growth of 43% and contributed to over 36% cent of the total premium and Group Corporate
contributed to 18% of total premium. In the recent months, the company introduced a series of
“Simple and Smart” products that encompass new IRDA guidelines compliant ULIPs, Pure
Protection and Traditional products. One of the highlights towards achieving customer service
excellence has been the national launch of customer care initiative ‘SMS SOLVE”. A first-of-
its kind in the life insurance industry, the service allows customers to have their grievances
resolved in a simpler, paperless and faster manner. An innovative SMS-based service, SMS
SOLVE provides customers the ease of accessing SBI Life 24 X 7. Customers are able to
register their grievances about SBI Life’s service by merely sending SMS ‘SOLVE’ to 56161.

15
Testifying its multi-dimensional excellence, the company has bagged numerous recognitions
and awards recently. Being adjudged the best, SBI Life’s annual report has won Gold Shield
from Institute of Charted Accountants of India (ICAI) for excellence in Financial Reporting.
Also, International Certification Services (ICS) has awarded SBI Life "ICS Quality Champion
Award - 2010" for continual improvement in the Quality Process

Management Philosophy

Vision :

"To be the most trusted and preferred life insurance provider "

Mission
"To emerge as the leading company offering a comprehensive range of life insurance and
pension products at competitive prices, ensuring high standards of customer satisfaction and
world class operating efficiency, and become a model life insurance company in India in the
post liberalization period".

Values
• Trustworthiness

• Ambition

• Innovation

• Dynamism

• Excellence

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The recruitment process flowchart that we have gone through in
our project period

GETTING KNOWLEDGE ABOUT THE COMPANY AND RECRUITMENT

GETTING KNOWLEDGE ABOUT BENEFIT OF LIFE ADVISOR

GETTING KNOWLEDGE ABOUT DOING THE SALES CALL

SEGMENTING THE MARKET

TARGETING THE MARKET

PROCESS OF CAPCTURING ELEGABLE CANDIDATE

FILLING OF I.S.F. FORM

SHORTLISTING ON THE BASIC OF ‘Q’ SCORE

CONDUCT AN INTERVIEW

BOP PRESENTATION

FILLING OF COMPULSORY IRDA /NAAF FORM

THREE DAYS IRDA REFRESHER TRAINING

CONDUCTION OF EXAMINATION

TWO DAYS PRODUCT TRAINING

Welfare Activities

Gift Drishti

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 One of our corporate ethos, enhancing our SBI Life brand value, is about
giving back to the society. In line with our Corporate Social Responsibility
(CSR) initiatives, the cause of supporting our Elderly Citizens was initiated.
Incidence of cataract blindness, annually at 3.28 million, is one of the most
prevalent health ailments suffered by old people, particularly in rural pockets of our country.
On the occasion of World Elder's Day on 1st October, CSR initiative - "Gift Drishti" (Restoring
vision) was launched in partnership with HelpAge India, a registered national level voluntary
body, working for the cause of disadvantaged aged persons. Restoring vision is done through
Intra Ocular Surgery (IOL).

Read India Pledge

SBI Life undertook the Corporate Social Responsibility (CSR) initiative,

aimed at driving the cause to make children read and write. The campaign,
"Read India Pledge" sensitized general public towards the cause and urged
them to pledge & support the cause monetarily or by devoting time.The
campaign was partnered by Pratham, one of the leading child-cause related NGOs and Radio
Mirchi, a leading radio station.

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Read India Camps

Distribution channels of SBI Life Insurance

SBI Life

Credit
Bancassurance Agency Life Corporate
Group

Insurance Agents Corporate Brokers

Agents

Insurance Agents:

Insurance agents are those individual persons who work for one particular insurance company.
An insurance agent cannot work for more than one particular at one point of time.

Corporate Group :

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Targeting Corporate for Gratuity and Group Pension products.

Agency Channel:

Agency channel have the most productive and active force of more than 25,000 Advisor. Our
approach is to provide door-to-door need-based insurance solution to customers after taking
into account protection and wealth creation needs. Agency channel has grown more than 300%
over the last year and contributed more than 45% to the company’s new business premium
collection.

PRODUCT & MARKET

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 PROCESS OF INSURANCE OPERATION

A Without prejudice to the other express terms and conditions of this Agreement and all and
any implied rights of SBI Life Life Insurance after the termination of this Agreement, the
Advisor shall not:

• Use for his own benefit or the benefit of any other person; or

• Disclose to any person;

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 • Through any failure to exercise all due care and diligence, cause or permit any
unauthorized disclosure of any trade secrets or confidential information of or relating
to SBI Life Life Insurance which he may have received, used or obtained during the
term of this Agreement. Any such trade secrets and confidential information shall at
all times remain the property of SBI Life Life Insurance.

a. For the purposes of this clause, trade secrets and/or confidential information shall
include, but not be limited to, lists of and information concerning customers,
Policyholders, employees, Advisors and agency managers of SBI Life life Insurance,
information relating to the working of any product, process, invention, improvement or
development carried on or used by SBI Life Life Insurance, information relating to
research projects, know-how, prices, rates, discounts, mark-ups, business strategies,
marketing, tenders and any price sensitive information concerning SBI Life Life
Insurance.

b. Access to SBI Life Life Insurance computer resources, electronic data and the like may
be given to and shall be utilized by the Advisor only for the purpose of carrying out the
duties embodied in the Agreement.

c. The forgoing provisions on confidentiality and non-disclosure also apply to employees

of both the parties to this Agreement and the sad parties assume liability for the breach
or violation in any manner by their employees.

SALES & MARKETING

Key Milestones

Financial Year 11-12:

Awarded the most coveted NDTV Profit Business Leadership Award, twice in a row, 2010 &

22
2011.Awarded ‘Most Trusted Life Insurance Brand - II By The Economic Times, Brand
Equity and Nielsen, Most Trusted Brands 2011.

Globally topped the prestigious Million Dollar Round Table (MDRT) for having the aximum
number of MDRT members, for three years consecutively.

CRISIL reaffirmed its AAA / Stable rating to SBI Life, indicating highest financial strength
to meet policyholder obligations.
• ICRA reaffirmed its iAAA rating indicating highest claims paying ability and a
fundamentally strong position.
• Won one of the most prestigious quality distinction, IMC Ramkrishna Bajaj
National Quality Awards 2011- "Certificate of Merit"
• Awarded Silver Shield by ICAI for Excellence in Financial Reporting for FY 2010
– 11 under the Insurance category
• Won ‘Best Presented Accounts Award‘by The South Asian Federation of
Accountants (SAFA), in the Insurance Category for the Annual Report FY 2009-10.

Financial Year 10-11:

• SBI Life won the coveted Bloomberg UTV Financial Leadership Award 2011 - "Life
Insurer of the year".
• Won the most coveted NDTV Profit Business Leadership Award 2010.

Globally topped the prestigious Million Dollar Round Table (MDRT) 2010 for having the
maximum number of MDRT members. Awarded the Gold Shield by Institute of Chartered
Accountants of India (ICAI) for Excellence in Financial Reporting. Won the ‘ICS Quality
Champion Award 2010’ for Continual Quality Improvement. Adjudged Best Life Insurer

2010 - Runner Up by Outlook Money

• Launched an innovative customer care initiative - SMS ‘SOLVE’ for prompt
Grievance Redressal.

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 • Appraised at Maturity level 3 of Capability Maturity Model Integration (CMMI)
Version 1.2 for its ISG Division.
ICRA reaffirmed ’iAAA’ rating to SBI Life, indicating highest claims paying ability and
meeting policyholders obligations.
CRISIL, country’s leading rating agency, reaffirmed its highest financial rating AAA/Stable to
SBI Life.

Financial Year 09-10:

• Reported a robust Net Profit of Rs.276 Crores.
• Crossed Rs.10,000 Crores in Gross Written Premium (GWP).
• Ranked No.1, in New Business Premium, amongst private life insurance companies.
• Assets under Management (AUM) grew by 96% to Rs.28, 551 Crores.
• ICRA reaffirmed iAAA rating to SBI Life indicating highest claims paying ability.
• Awarded ISO Certification (ISO/IEC 27001:2005) for Information Security
Management System (ISMS).

Financial Year 08-09:

• Ranked among global top three in terms of number of Million Dollar Round Table
(MDRT) members.
• Bagged the coveted personal finance award-Outlook Money NDTV Profit "Best Life
Insurer 2008".
• CRISIL, country’s leading rating agency, reaffirmed its highest financial rating AAA/
Stable to SBI
• Life. In 2007, SBI Life became the first life insurer in India to receive this rating from
CRISIL.
• ICRA assigned iAAA rating indicating highest claims paying ability to SBI Life
Insurance

• Retained ISO 9001:2000 certificate for superior claim settlement process.

Financial Year 07-08:

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 • Ranked amongst global top five life insurance companies in the number of MDRT
members.
• Rated as the ’The Most Trusted Private Life Insurer’ according to a survey conducted
by Brand quity in association with AC Nielsen ORG-MARG and the Economic Times
Intelligence Bureau.
• Received the highest financial rating ’AAA’ from CRISIL.
• Forayed into micro insurance with the launch of ’Grameen Shakti’ in Bhubaneshwar,
Orissa for the economically underprivileged sections of society.
.

Financial Year 06-07:

• Second consecutive year of Profitability.

• More than 6.40 Million lives covered Financial Year 05-06: Reported a robust net
profit of Rs. 2.02 Cr

MARKET SHARE

SBI LIFE LEADS GLOBALLY AT MILLION DOLLAR ROUND TABLE (MDRT) 2011
Mumbai, September 28, 2011 - SBI Life Insurance, the leading private life insurer, retains the
unique distinction of being the only Life Insurer from India, topping the prestigious Million
Dollar Round Table (MDRT) 2011 across the globe. For the third consecutive year, SBI Life

25
has reached the pinnacle of the international coveted league by having 2,661 MDRT members
in 2011. Amongst these, 200 have achieved Court of Table (COT) and 30 Top of Table (TOT)
membership statuses. SBI Life has been consistently featuring amongst the top five insurers,
worldwide, since last five years. Globally, the company ranked 5th in 2007, 3rd in 2008, and
1st in 2009, 2010 and 2011. Reputation, standard of sales excellence and high ethical standards
are some of the key values that are associated with the MDRT brand. The MDRT membership
is an exclusive honor that is achieved by less than 1 percent of the world's life insurance and
financial services advisors. Life Insurance professionals aspire to attain the privilege of being
an MDRT member Mr. M. N. Rao, MD & CEO, SBI Life, said, "Across the globe, both, Agent
and Insurance Facilitator at bank, continue to be a reliable source of personal financial advise.
Our accomplishment on a global platform testifies the professional approach followed by our
distributors. We will continue to focus on equipping them with relevant support to enable
advisory-based delivery of life insurance solutions to our customers." Mr. Rajiv Gupta,
Executive Director, Marketing, SBI Life added "This accomplishment resonates our
commitment towards creating quality advisors who can be looked upon as world-class
benchmarks. Providing need based solutions, professional advice and unmatched service will
remain the focal delivery points for our Advisors ". An opportunity to represent one of the most
trusted brands in the country, superior training program and attractive reward and recognition
programmes are some of benefits availed by SBI Life Insurance Advisors. Mr. Anand Pejawar,
Executive Director, Marketing, SBI Life added "In addition to highly productive Retail Agency
Channel, our integrated bancassurance approach continues to create value for Bank customers
and Facilitators of our products.

Rank Company Name Country 2010 Members

1 SBI Life Insurance India 2,661
2 New York Life USA 2,067
3 Samsung Life Insurance Rep of Korea 2,052
4 LIC Of India India 1,993
5 Northwestern Mutual USA 1,260
13 HDFC Standard Life India 489
21 ICICI Prudential Life India 341
31 TATA AIG Life India 207

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33 Max New York Life India 203

SWOT ANALYSIS

 SBI LIFE INSURANCE CO. LTD AT A GLANCE

 Joint venture between State bank of India and BNP Paribas Assurance.
 The Company started its operations in 29th March2001.
 Provides Life Insurance Solutions to Individuals and Corporates.

STATE BANK OF INDIA:

 Largest and oldest banking franchise of India dating back to 1806 AD.
 6 Associate Banks, 16000 Branches all over the country.

BNP PARIBAS ASSURANCE:

 4thLargest Insurance Company in France.
 The Insurance arm of BNP Paribas Bank, the largest bank of France.Operations in 41
countries around the world.
 One of the oldest foreign banks with a presence in India dating back to1860 AD.
 A worldwide leader in Creditor insurance products offering protection toover 50
million clients.

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 STRENGTHS

 No.1 Private Life Insurance company in India (as on 2009-10).

 Leverages the State Bank Group Relationship as a platform for cross-selling insurance
products.
 As it sells its products through banc-assurance division of SBI,therefore less need on
spending money for establishing separate branch offices.
 Market share of 18.34% among private life insurers and a total market share of 6.44%.
 SBI·s access to over 100 million accounts across the country provides for a vibrant
base for insurance penetration in the country.
 Growth at a rate of 40%.
 IRDA has never banned any of SBI Life·s product.
 One of the market leaders in Unit Linked Plans by offering products asSmart ULIP,
UNIT +, UNIT +2, UNIT +3 etc.
 Profitable business growth demonstrated by all key distribution channels.

 Certifications of ISO 9001:2000, ISO 2700:2005 (Information security) AAA rating by

ICRA, CRISIL etc.
WEAKNESSES
 Less sales force than others (LIC·s 3 field advisor: SBI·s 1field advisor) Low
productivity of banc-assurance people.
 People at top management/decision making level are from SBI. So,typical PSU attitude
in many aspects.
 Hassle free online purchase of insurance policy is not available
 Is less aggressive in generating business compared to other private life insurance
players.
 Over dependence on the banc-assurance channels.
 Less branch office compared to others.

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OPPORTUNITIES

 As only 12% of the 40 crores insurable population is insured, thus, a huge opportunity
to reach out to more people.

It has an edge over LIC as far as service is concerned. So, it can grab moremarket share
from LIC by giving it a tough competition.
Not so much requirement on establishment of Brand (already have a good brandimage
of SBI).
 A huge revolutionary change (PARIBARTAN) in SBI is going to happen,so there is an
immense opportunity for SBI Life in future.
 Huge market potentiality in Rural markets which has been untapped till now.
 Higher market penetration by being more aggressive in banc-assurance channelof
distribution.
 Huge opportunity to grab customers by being more active through otherdistribution
channels as mall-assurance, brokers etc..
 Lower premium ULIP policy (<10000) can attract lower income segment market.

THREATS

 Huge competiti on from other pre-existing 22 players in the Life Insurance sector in
India.
 ICICI Prudential, the market giantal ready pipped SBI Life to regaint opposition,
garnering new business worth Rs.303 crores (source Economic Times,26th May·10)
New entrants in the pipe line of the life insurance business.
 New tie-ups of competitors with innovative distribution channels.The New Insurance
guidelines from September·10 onwards is really a big challenge or SBI Life·s bus

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Benefit

• Commission

• Renewal Commission

• Bonus

• Quarterly gifts

• ACER club membership facility

• MDRT

• Promotion factor for an agent

Opportunity/

• Advisor require no capital investment

• They can chose there own working hour according to there convenience.

• They are there own boss.

• Unlimited earning potential

• Represent a strong trusted brand.

OPPORTUNITY

Advisor requires no capital investment:- For starting any business we require a huge
infrastructure but here in SBI Life the Advisors do not require any capital investment other
than RS. 825 IRDA examination fees, which is very nominal and on return the Advisors get
free phone calling facility, Xerox facility etc. They can choose there own working hour
according to there convenience:- Advisor are free to work in there convenient hours because
the advisors working here comes from different profession like Doctor, Engineer, Student,
Medical Representative, contractor etc

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 MARKETING STATEGIES & ACTIVITY

Marketing strategy consists of the analysis, strategy development, and implementation

activities in: “Developing a vision about the market(s) of interest to the organization, selecting
market target strategies, setting objectives, and developing, implementing, and managing the
marketing program positioning strategies designed to meet the value requirements of the
customers in each market target”. Strategic marketing is a market-driven process of strategy
development, taking into account a constantly changing business environment and the need to
deliver superior customer value. The focus of strategic marketing is on organizational
performance rather than a primary concern about increasing sales. Marketing strategy seeks to
deliver superior customer value by combining the customer-influencing strategies of the
business into a coordinated set of market-driven actions. Strategic marketing links the
organization with the environment and views marketing as a responsibility of the entire
business rather than a specialized function. Because of marketing’s boundary orientation
between the organization and its customers, channel members, and competition, marketing
processes are central to the business strategy planning process.

Marketing Strategy Process

The marketing strategy analysis, planning, implementation and management process is

described below. The strategic situation analysis considers market and competitor analysis,
market segmentation, and continuous learning about markets. Designing marketing strategy
examines customer targeting and positioning strategies, marketing relationship strategies and
planning for new products. Marketing program development consists of product, distribution,
price, and promotion strategies designed and implemented to meet the value requirements of
targeted buyers. Strategy implementation and management consider organizational design and
marketing strategy implementation and control.

31
Stage 1: Strategic Situation Analysis

Marketing management uses the information provided by the situation analysis to guide the
design of a new strategy or change an existing strategy. The situation analysis is conducted on
a regular basis after the strategy is under way to evaluate strategy performance and identify
needed strategy changes.

Market Vision, Structure, and Analysis.

Markets need to be defined so that buyers and competition can be analyzed. For a market to
exist there must be (1) people with particular needs and wants and one or more products that
can satisfy buyers’ needs, and (2) buyers willing and able to purchase a product that satisfies
their needs and wants. A product-market consists of a specific product (or line of related
products) that can satisfy a set of needs and wants for the people (or organizations) willing and
able to purchase it. The term product is used to indicate either a physical good or an intangible
service. Analyzing product-markets and forecasting how they will change in the future are vital
to business and marketing planning.

Segmenting Markets. Market segmentation looks at the nature and extent of diversity of
buyers’ needs and wants in a market. It offers an opportunity for an organization to focus in
business capabilities on the requirements of one or more groups of buyers. The objective of

32
segmentation is to examine differences in needs and wants and to identify the segments
(subgroups) within the product-market of interest. Each segment contains buyers with similar
needs and wants for the product category of interest to management. The segments are
described using the various characteristics of people, the reasons that they buy or use certain
products, and their preferences for certain brands of products. Likewise, segments of industrial
product-markets may be formed according to the type of industry, the uses for the product,
frequency of product purchase, and various other factors. Each segment may vary quite a bit
from the average characteristics of the entire product-market.

ACTIVITY
In the insurance industry there is a new way of thinking which determined the passage from
transactional marketing to a holistic marketing concept. In this paper five key elements of
holistic marketing are presented: relationship marketing, integrated marketing, internal
marketing, social responsibility marketing and international marketing. In order to be
successful insurance companies have to be able to convince their clients of the usefulness of
their products and of the solidity of their businesses. In the current crisis situation, trust is a
vital element for the insurance industry and even if on short term, liquidity is the target, as it
ensures survival, on long and medium term the objective has to be the consolidation of the trust
of consumers in insurance companies and the goal of the managers must be to win customer
loyalty. Keywords: holistic marketing in insurance, relationship marketing, integrated
marketing, internal marketing, social responsibility marketing, international marketing, trust,
customer loyalty, crisis Today the success of an insurance company is based on the quality of
the long term relationship established between the company and its “partners”: customers,
employees, broker dealers, banks, hedge funds etc. In the insurance industry this new way of
thinking determined the passage from transactional marketing to a holistic marketing concept.
The traditional transaction marketing focused on meeting customers’ needs so that the
company could obtain an immediate advantage. This approach wasn’t always benefic for the
insurance companies and for their clients An integrated marketing is a must in the insurance
industry. The insurance company must have a coherent marketing mix in order to satisfy
efficiently the needs of their clients. The marketing department of the insurance company must
coordinate and integrate all the activities included in the marketing mix in order to maximize

33
their joint effects: the insurance products and services offered must be conceived as a solution
for the needs of the client and the setting of the premiums, distribution channels and company
communications must be done in an integrate perspective.

OBJECTIVES OF THE STUDY

The objective of the recruitment process is to obtain the number and quality of employees that
can be selected in order to help the organization to achieve its goals and objectives.

Following are other objectives of recruitment process-

1. Support the organization ability to acquire, retain and develop the best talent and skills.

2. Increase the effectiveness of various recruiting techniques.

3. This study provides the student a practical insight of various activities and functions of
the company.

4. The will also be able to develop in depth knowledge of Human Research sector. The study
is also required for the partial fulfillment of the requirement for the degree of M.B.A. as per
the curriculum

5. The study would help SBI to know the Employee`s attitude towards the company.

6. To know the latest trend of the company.

Insurance advisor

A life adviser is a broker or intermediary authorized to sell or advise on the policies of life
insurance and financial products, such as unit trusts. Typical examples of companies which
employ financial advisers are banks, insurance and life companies, general brokers, estate
agents and building societies The presence of a life insurance policy is essential in every

34
individual's financial portfolio. But at the same time, it is also important that the right insurance
products be bought and that too for the right reasons. With so many insurance products vying
for a place in the individual's portfolio, conducting a proper evaluation can become quite a
task. Taking the help of an insurance advisor/agent can help solve this problem. An insurance
advisor/agent can play the part of the direct link between the insurance company and the
insurance seeker i.e. you. He is the one who can help you select the right policy i.e. one which
can help you fulfill your insurance needs. But for this, it is important that you connect with an
expert and qualified insurance advisor/agent. The task is to choose the good quality advisor
those who are having the following quality.

•Confidence
•Self motivation And Persuasion
•Urge to be financiallyindependent
•Relationship skills
I have to recognize where a person (whom I meet to recruit him/her as an advisor) havingall
these characteristics or not .If some person is closed enough to these characteristicsthen. I
discussed the following support pattern.After getting all these information an advisor basically
asked about the workingenvironment. Then I discussed the working environment and try to
convince him/her that he/she has the potential to become an agent/advisor.
1. To be part of a world class sales team.
2. Work from his/her (advisor) own office or residence.
3. Work full time or part time.
4. Earn commission, bonus and incentives.
5. No upper limits on earnings.
6. Flexible career.Therefore the first and for most problem is to convinced that person
thosewhohaving enough patience to listen my companies idea/views.The role of the advisor
is to quite effective to search a good prospect.

35
FUNCTION OF ADVISORS:
Advisors provide on-going financial advice for his /her client/prospect. In our official term
prospect is a person who can buy life insurance from us. The advisors study the prospects needs
and persuade them to buy a policy. Complete all formalities for proposal of new insurance,
including filling up forms. Collecting premium. Arranging medical examination, collecting
proofs (of age/income), reports and information required by the underwriter. After having sold
a new insurance policy, the advisor has to ensure that the policy continues.
Without a lapse. Till it becomes a claim for that reason an advisor has to do the following:

1. Keep in touch with the policy holder to make sure that renewal premiums are paid in time.
2. Ensure that nominations are made or changed, if necessary
3. Assist in collecting claim amounts. As an advisor you contribute in bringing in new business
for the company offer world class pre and post sales service to the clients with the support
of the organization. But an advisor to us means much more than a salesman or a,
saleswoman, at SBI LIFE recognize our advisors as the ambassadors of our organization in
the market place and we consider the advisor force would be our biggest differentiating
factor in the coming years. That is why; we take a lot of care in recruiting and developing
our advisor force, so that we can maintain our standards of quality in service and
salesmanship. The competition and the customer awareness have forced the times to be a
knowledge oriented marketplace. Appreciating the same we strive to get people with
reasonably good graduation background as our advisors. We also acknowledge and
recognize prior 11sales experience of the persons; at the time of recruitment. The other
function is to be of assistance to the policy holder in case he/she needs a loanunder the policy.

ROLE OF AN ADVISOR:
1. Identify future clients/prospect
2. Making appointment.
2. Conduct financial review meeting with prospect.
4. Close sale.
5. Get referral
6. Provide service to clients/prospect.

36
7. Follow internal sales and reporting system.After analyzing the quality (which the company
is looking for), back office service(which the company is giving to that person). Functions
to be performed, role to be played .I used to describe the benefits which the advisor can get
out of his/her joiningas an advisor in SBI Life Insurance Company.

ROLE OF UNIT MANAGERS

In fulfilling his obligations under the Agreement, Advisor shall scrupulously adhere to, follow
and be bound by the Statutory provisions governing life insurance Advisors and more
particularly the code of conduct contained therein, as in force from time to time. Without
prejudice to the generalify of the obligations of the Advisor to SBI Life Life Insurance, the
Advisor shall:

a. Faithfully and diligently promote the business of SBI Life Life Insurace;

b. Ensure that any representation made and information provided is accurate;

c. Act diligently and carefully in providing any advice and ensure that such advice is
based on thorough analysis and take into account available alternatives;

d. Ensure that any advice is reasonable in view of the customer’s circumstances;

e. Not admit any liability or make any false, misleading, deceptive or reckless statement
to the customer in respect of life insurance generally or any particular product of SBI
Life Life Insurance;

f. Solicit proposals for insurance for SBI Life Life Insurance as SBI Life Life Insurance
may from time to time determine during the term of this Agreement;

g. Service the needs and requirements of customer introduced by self or assigned by

SBI Life life Insurance;

h. Meet the validation specified by SBI Life Life insurance including production and
persistency;

i. Attend all training, meetings and seminars arranged or required by SBI Life Life

37
 Insurance and perform such other duties as requested by SBI Life Life Insurance;
j. Begin soliciting proposals for various insurance products at dates set by SBI Life
Life Insurance;

k. Be fully responsible and accountable for all its acts and omissions;

TRAINING AND COACHING OF ADVISORS

Refresher training is the basic given to the trainee advisors about what is insurance, types of
insurance, present scenario of life insurance in India and scope and career growth in insurance
with legal ideas related to insurance.

i. The applicant shall have to undergo at least 100 hours’ practical training in life or general
insurance business which may be spread over three to four weeks, where such applicant is
seeking license for the first time to act as an insurance agent.

ii. The training duration should be minimum 18 working days excluding Sundays and
holidays.

iii. No product training/market survey should be included into this hundred 100 hours training.
The product training, if any, to be given by the insurance company should be over and
above the minimum training hours prescribed by the Authority

iv. The attendance record of the trainees should be maintained at the Institute for necessary
inspection at any given point of time.

v. In case of short-fall of attendance, extra class may be permitted but the extra hours may be
specified separately with proper attendance and details of faculty.

vi. Every Institute should have at least one qualified permanent faculty who is an Associate or
Fellow from the Insurance Institute of India for each stream i.e. for Life and Non-Life.

38
 vii. The attendance register of the faculty members should be maintained at the training
institutes.

viii. The record of the payment made to faculty should be maintained at the training institute
i.e. batch-wise payment detail should be maintained.

ix. The faculty should provide details of the other Institutes with whom they have been
empanelled as part-time/guest faculty.

x. Register should be maintained at the training institute giving details of batches completed,

strength of the each batch, number of candidates decertified, name of the sponsored insurer

and details of faculty who imparted the training with dates.

xi. The seating capacity of each class-room should not exceed 40.

xii. fresh accreditation will be given on need basis after assessing the needs of the particular
city/town.

Types of insurance

Insurance is generally classified into three main categories:

1. Life Insurance.

2. Health Insurance.

3. General Insurance.

To get insurance an individual or an organization can approach to Insurance Company directly,

through Insurance agent of the concerned company or through intermediaries.

39
Life insurance or life assurance is a contract between the policy owner and the insurer, where
the insurer agrees to pay a sum of money upon the occurrence of the insured individual's or
individuals' death or other event, such as terminal illness or critical illness. In return, the policy
owner agrees to pay a stipulated amount called a premium at regular intervals or in lump sums.
There may be designs in some countries where bills and death expenses plus catering for after
funeral expenses should be included in Policy Premium.

NEED OF LIFE INSURANCE

. The functions of Insurance can be bifurcated into two parts:

1. Primary Functions
2.Secondary Functions
3. Other Functions

The primary functions of insurance include the following:

Provide Protection - The primary function of insurance is to provide protection against

future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but
can certainly provide for the losses of risk. Insurance is actually a protection against economic
loss, by sharing the risk with others.

Collective bearing of risk - Insurance is a device to share the financial loss of few among
many others. Insurance is a mean by which few losses are shared among larger number of
people. All the insured contribute the premiums towards a fund and out of which the persons
exposed to a particular risk is paid.

Assessment of risk - Insurance determines the probable volume of risk by evaluating

various factors that give rise to risk. Risk is the basis for determining the premium rate also.

Provide Certainty - Insurance is a device, which helps to change from uncertainty to

certainty. Insurance is device whereby the uncertain risks may be made more certain.

40
The secondary functions of insurance include the following:

Prevention of Losses - Insurance cautions individuals and businessmen to adopt suitable

device to prevent unfortunate consequences of risk by observing safety instructions;
installation of automatic sparkler or alarm systems, etc. Prevention of losses causes lesser
payment to the assured by the insurer and this will encourage for more savings by way of
premium. Reduced rate of premiums stimulate for more business and better protection to the
insured.

Small capital to cover larger risks - Insurance relieves the businessmen from security
investments, by paying small amount of premium against larger risks anduncertainty.

Contributes towards the development of larger industries - Insurance provides

development opportunity to those larger industries having more risks in their setting up. Even
the financial institutions may be prepared to give credit to sick industrial units which have
insured their assets including plant and machinery.

The other functions of insurance include the following:

Means of savings and investment - Insurance serves as savings and investment,

insurance is a compulsory way of savings and it restricts the unnecessary expenses by the
insured's For the purpose of availing income-tax exemptions also, people invest in insurance.

Source of earning foreign exchange - Insurance is an international business. The

country can earn foreign exchange by way of issue of marine insurance policies and various
other ways.

Risk Free trade - Insurance promotes exports insurance, which makes the foreign trade
risk free with the help of different types of policies under marine insurance cover.

41
LIMITATION

RECOMMENDATION AND SUGGESTIONS

Recommendations-
Following are suggestions made for the benefits and augmentation of the sound working of the
company –SBI life insurance

1. Need to train and develop life insurance agents with more comprehensive knowledge and
skills to counter every queries of the customer.

2. It is suggested that company should not left any stone unturned towards soundadvertisement
and promotional measures on every section whether it is printed, media or air via radio.

3. It is also suggested that skilled management graduates need to be places on sales and
marketing of financial services that can render their best ideas for the accomplishment of the
company goals and objectives to the best extent.

4. Also, care need to be taken that every customer’s grievance should be met with delight
whether before purchase or after sales.

5. Life insurance Products should be made flexible so as to suit every section of society.

Suggestions-
Following are suggestions made for the benefits and augmentation of the sound working of the
company –SBI life insurance:

1. Need to train and develop life insurance agents with more comprehensive knowledge
and skills to counter every queries of the customer.

2. It is suggested that company should not left any stone unturned towards sound
advertisement and promotional measures on every section whether it is printed, media or air
via radio.

42
3. The advisors should be made aware and educated so that they can extend their services
not only in terms of collection of premium checks from the customer but also to educate them
about the insurance and the latest nontraditional plans.

4. All the company should come out of a unit link product that should aid every selection
of the society.

5. It is also suggested that skilled management graduates need to be places on sales and
marketing of financial services who can render their best ideas for the accomplishment of the
company goals and objectives to the best extent.

6. Also, care need to be taken that every customer’s grievance should be met with delight
whether before purchase or after sales.

7. There should be an expansion measure for more offices and location of more centers
for offices of the company be established sop that company may grow its network.

43
 CONCLUSION

Summer training is a best example for a trainee to learn about the company working, corporate
culture under which is operating the functions. SBI life insurance company under which I
gained a significant knowledge with respect to life insurance, its importance and applicability
as well as undertook the task to recruit capable life insurance advisors which is conducive for
the company to grow with more prosperity. What I taught in the management institute utilized
them fruitfully leading to the best advantage to the company and to the best experience for
mine. In all Public Service jurisdictions, new approaches to recruitment are being used.In many
territories, the strategies are manual but, as automated methods become more pervasive; those
mechanisms that support its use will assume greater popularity. Whatever the strategies
selected for use, the objective is to recruit the most qualified, committed individuals into the
organizations and ensure that the provision of government services to the public is timely and
effective, that the goods are of consistent high quality and that the organizations achieve the
objectives for which they have been established. Life insurance is a noble service which is very
important for every citizen to learn and realize its importance because this is the only source
which can remain the status where one is with the family bread earner and ever when he is
not.With the growing financial sector I would like to opt this industry for my future career
advancement and as an opportunity to service this indus

44
INTRODUCTION

Overview

Globalization has caused dramatic changes to business practices around the world.
Companies such as IBM, Intel, Microsoft, and Philips have started to outsource
specialists from various parts of the world, causing job shifts and changes in companies’
structures (Engardio, Bernstein, and Kripalani, 2003). Alliances among automakers (e.g.,
GM-Ford- DaimlerChrysler, Ford-Mazda, and GM-Honda), petroleum manufacturers
(e.g., BP-Mobil, NUPI-Chevron Texaco), and airlines (e.g., star alliances) are other
examples of changes driven by this phenomenon. Therefore, this dissertation investigates
the effects of globalization on business firms with a particular interest on how it affects
firms from both emerging economies (i.e., Thailand), and developed economies, (i.e., the
U.S). In this study, “globalization” refers to the process of increasing social and cultural
inter-connectedness, political interdependence, and economic, financial and market
integrations that are driven by advances in communication and transportation
technologies, and trade liberalization (Eden and Lenway, 2001; Giddens, 1990; Molle,
2002; Orozco, 2002). The dissertation is comprised of three related studies. The first
study is empirical research designed to examine the effects of globalization on the
performance of exporting firms in Thailand and in the U.S. The second study examines
the relationships between the effects of globalization and the degree of co-marketing
alliance and international marketing performance of firms. The last study makes an
empirical investigation of the effects of globalization on the degree of co-marketing
alliance and international marketing performance of firms from two distinct economic
contexts—developed and emerging economies, which are represented by American and
Thai firms, respectively. Thailand and the U.S. are appropriate research settings 2 since
these two countries differ greatly in their degree of globalization (Foreign Policy, 2001,
2003, 2004), level of economic development, and national competitiveness (Porter, et al.,
2000; Porter and Schwab, 2003).

45
Globalization and its effects
Globalization is an interesting phenomenon since it is obvious that the world has been
going through this process of change towards increasing economic, financial, social,
cultural, political, market, and environmental interdependence among nations. Virtually,
everyone is affected by this process. Given these changes, globalization brings about a
borderless world (Eden and Lenway, 2001; Ohmae, 1989a). Globalization drives people
to change their ways of living, 3 prompts firms to change their ways of conducting
business, and, spurs nations to establish new national policies. Events transpiring in
different parts of the world now have dramatic consequences to other parts of the world
at a faster pace than anyone could imagine in the past. For example, the Asian financial
crisis in 1997 has severely affected businesses around the world (McLean, 2001; Woo,
2000) and the outbreak of SARS (Severe Acute Respiratory Syndrome) in 2003 has
shown how globalization permits the rapid spread of the disease (Anthony, 2003;
Meredith, 2003), which affects many airlines, the hospitality industry, and other
businesses around the globe. On the positive side, globalization enables firms to
outsource and find customers around the world, e.g., the auto and electronics industries.
The globalization of production and operations benefits firms through the realization of
economies of scales and scope (Corswant, 2002; Reyes, Raising Hani, and Singh, 2002).
Hence, no one can deny that globalization has changed the way we conduct business.

Globalization and business

The opportunities and threats evoked by globalization have caused firms to adapt their
organizational structures and strategies accordingly (Jones, 2002; Knight, 2000). Firms
that respond to these trends have been found to improve their performance (Knight,
2000). Although many scholars have often discussed these two effects of globalization,
a review of related literature reveals that empirical work on such effects and business
firms is still scarce (Clougherty, 2001; Eden and Lenway, 2001; Oxley and Schnietz,
2001). Therefore, this dissertation specifically aims at analyzing the effects of global

46
market opportunities and threats on 1) a firms’ overall performance, and 2) a firms’
cooperation in marketing alliances and international marketing performance.

Globalization and firm performance

Since the effects that global market opportunities and threats have on firm performance
are almost unexplored, the two studies included in this dissertation are designed to study
the relationships between these two effects of globalization on firms’ performance and
their international marketing cooperation and performance. On the one hand, it is
suggested that global market opportunities enable firms to access worldwide resources
and expand into many new overseas markets; thus, enhancing firm performance (Hafsi,
2002; Jones, 2002; Levitt, 1983; Shocker, Srivastava, and Ruekert, 1994). On the other
hand, global market threats can be destructive to firm performance due to an increasing
number of competitors and an increase in intensity of competition coupled with higher
market uncertainty (Eng., 2001; Fawcett and Closs, 1993; Hafsi, 2002; Jones, 2002;
Levitt, 1983; Sanchez, 1997). However, no conclusion can yet be drawn on how these
two aspects of globalization effects relate to firm performance due to the absence of an
empirical study that tests these relationships. Hence, investigating the magnitude and
directions of the relationships between these two globalization effects and firm
performance will help us gain a better understanding about the directions of the effects,
and determine appropriate strategies to better manage these effects and help firms stay
competitive in a globalized era.

Globalization and cooperative arrangements among firms

47
The fact that globalization is affecting business is undeniable since we have witnessed
remarkable changes in the business environment that have caused transformations and/or
alterations in business conduct and marketing activities of firms around the world. To
achieve superior marketing performance in the globalization era, firms need to manage
relationships with 6 partners, customers, and different parties in the value chain
(Webster, 1992). As a result, there has been an increasing trend towards more
cooperation among firms (Evans, 2001; Hoskisson, Hitt, and Ireland, 2004). Building on
two prominent theoretical perspectives—the transaction cost economics (Williamson,
1975, 1981) and the classical industrial organization (the market power perspective)—
cooperative arrangements such as strategic alliances offer an excellent alternative for
business firms to manage the effects of globalization and attain superior performance.
The expansion of a firm’s strategic capabilities and the reduction of competition are two
main motives for the proliferation of cooperative strategies such as strategic alliances in
today’s business environment (Burgers, Hill, and Kim, 1993; Kogut, 1988).

Types of cooperative marketing relationships

Building on the conceptualization of Morgan and Hunt (1994), strategic alliances
represent one form of lateral partnership between competitors. Figure 1.1, taken from
Morgan and Hunt (1994), illustrates the relational exchanges in relationship marketing.
The supplier and buyer partnerships (1, 2, 6 and 7) indicate vertical relationships between
a focal firm and its suppliers and/or buyers. While internal partnerships (8, 9, and 10)
deal with horizontal relationships within an organization, lateral partnerships (3, 4, and
5) are more concerned with the focal firm’s relationships with external parties such as
competitors, non-profit organizations, and government. It is the cooperative relationships
between the focal firm and its competitors (3) that is the focus of this study

Globalization and marketing cooperation

Among the various types of cooperative arrangements mentioned above, co-marketing
alliances are the focus of this dissertation since they are considered a specific type of

48
strategic alliances whose scope is limited to marketing activities (Varadarajan and
Cunningham, 1995). They involve the coordination of one or more aspects of
marketing—ranging from research and development to production (Bucklin and
Sengupta, 1993)—which are central to most types of strategic alliances. Coordinating
marketing activities to achieve superior marketing performance in terms of sales, market
share and profitability is the fundamental task of most interfirm cooperation. Moreover,
co-marketing alliances are quite common in many industries in which staying at the
forefront or markets that require huge investments in R&D is difficult to attain (Bucklin
and Sengupta, 1993). This problem of continually maintaining cutting-edge positions in
the markets becomes even more serious given the fast pace of technological changes in
the phase of globalization such as is found in today’s business environment (Ohmae,
1989b). As a result, there has been an increasing trend towards more marketing
cooperation among competitors in this business era (Hoskisson, Hitt, and Ireland, 2004;
Webster, 1992). Nonetheless, limited research attention has been given to these specific
types of strategic alliances (Bucklin and Sengupta, 1993; Sheth and Sisodia, 1999).
Hence, an investigation of the degree of cooperation 9 in co-marketing alliances should
provide more insights on how globalization drives cooperation in international marketing
activities, and how such cooperation, in turn, affects the firms’ international marketing
performance

49