1) What is marketing?
- Marketing describes everything done to make a company, product, or service known to the people who could use it, make potential customers want what is offered, and sell it to those people.
2) What is branding?
- Reinforces the integrated approach of marketing by unifying all messages brought to the public.
- Refers to establishing overall consistency in the marketing function.
- All processes and materials used to lift and sustain a unique company image, product, or service to a high level of awareness and acceptance are coordinated.
3) What is market research?
- System of gathering of information about a market’s size and trends.
- To identify the size and scope of the consumer markets that insurers might want to target.
- Helps to plan a company’s promotional agenda to ensure that identified target markets will find the company appealing.
- Sources: government data about high density population areas and spending levels in major categories. Local newspaper, telephone yellow pages and regional real estate board data can be used to forecast development patterns in specific areas of interest within consumer and commercial markets.
4) What are the FOUR (4) main categories of marketing information about consumers?
- 1) Demographics: stats showing the characters of a population such as age, gender, martial status, family size, income level, education level and occupation. The demographic information for a commercial client includes its particular industry type, company size, annual revenue and geographic area.
- 2) Buying Behaviour: info on how consumers behave and buying situations of companies.
- 3) Psychographics: the study and classification of people according to their attitudes and aspirations as they relate to market research. This information evaluates what makes consumers buy a certain product. Depending on the nature of the product or service, they may involve for example, finding out about the hobbies of potential clients.
- 4) Location: differentiates consumers by where they live or work and business by whether they are local, regional, national or international in scope.
5) What does behavioural segmentation examine?
- Breaks a large group of customers into smaller sections.
- A segment is a particular subgroup of customers.
- Segmentation allows for concentrated marketing efforts.
6) What is psychographics?
- 3) Psychographics: the study and classification of people according to their attitudes and aspirations as they relate to market research. This information evaluates what makes consumers buy a certain product. Depending on the nature of the product or service, they may involve for example, finding out about the hobbies of potential clients.
7) Why does a company divide the market into segments?
- Markets are divided, using market research data, into segments of the population that have similar needs, circumstances, and traits, and that will respond similarly to a particular product, service or strategic marketing program.
- Dividing up the market allows a marketing team to identify which segments are big enough to justify funding, which have the potential for growth and increased value, which are not dominated by competitors, and which show a genuine need for the products and services offered.
8) How does demographic segmentation differentiate consumers?
- Customizing products and modifying promotions allows companies to capitalize on the best competitive features in each market segment.
- People within a target group may perceive the benefits or value of products differently than expected.
- Research can help to dispel any unfounded assumptions about the way that consumers think.
- Because every policy comes with a separate set of perks, each one is likely to appeal to a particular group of consumers.
- A niche market is an identifiable group of risks that require specialized products/services have been developed.
- Results of segmentation may lead a brokerage to target middle-aged Canadians with high incomes (demographic) that purchase high-value property (behavioural), and who live or work close to the broker office (geographic).
9) Why does a company conduct a marketing self-audit?
- Data gathered from current and past initiatives allows companies to evaluate their sales by location, type, customer and product.
- An organization must understand its current marketing programs for existing clients, products, or services because they can be used to develop new marketing plans.
- Reviewing vision and mission statements reassures a company that is doing what it says it is doing. What the company thinks it is providing to customers must match what the customer thinks he/she is buying.
10) Why might a market dislocation situation arise?
- When an insurer leaves the market, it creates market dislocation for its existing customers who must find another source of insurance.
- The insurer may have decided not to service a geographic area, remove itself from a line of business, or wind up the business entirely.
- Remaining insurers must be pared to examine the implications of any such move: it may be an opportunity to grow.
- Underwriting managers who are current with what is happening in the industry
11) What are FOUR (4) general strategies related to achieving growth for an organization?
- 1) Increase sales to existing customers;
- 2) Target new customers;
- 3) Diversify by market base;
- 4) Intensify sales efforts.
12) Why do companies try to retain their customers?
- A strategy to retain existing customers as well as increase their buying rate is often a crucial element of insurance-related enterprises.
- Acquiring a new customer is expensive for a broker, often costing more than it is covered by the first year’s commissions.
- Consider the collective cost of gathering information for applications, cost evaluations, appraisals, site inspections, initial and follow-up meetings with the client, and marketing the account to interested insurers.
- It usually takes a financial incentive (lower premium) or an extensive communication program (sales force effort) to attract clients away from competitors. Once clients are on board, the renewal costs are lower and more profitable.
- Loyalty is profitable resulting in significant increases in the lifetime profits per customer.
- Existing customers form a stable base from which companies and brokers can slowly increase sales by cross-selling.
13) What is the difference between a feature and benefit of a product or service?
- A feature is one of its characterising, something it can do for the customer. I.E. the insurer provides discounted motorist assistance service.
- A benefit to the consumer relates its features to how the buyer’s life will improve as a result of the purchase. I.E. insured pays less for a valuable service, related to driving, for which he/she already subscribes.
14) What media are used to conduct advertising?
- Advertising can be done through magazines, newspapers, billboards, radio or TV spots or sponsored programs, product packaging and inserts, posters and flyers, directory listings, or in-office displays.
- New methods using new technologies are click-through advertisements (web-site banners, buttons, sidebars, pop-ups)
- Newsletters and brochures are a proven and effective public relations tool, using direct mail or e-mail to reach prospects and to keep in touch with present clients.
- Trade magazines serve as a venue to feature new products/services.
15) On what TWO (2) levels must advertising messages approach markets in order to be successful?
- Effective advertising messages tend to approach markets on both 1) emotional and 2) intellectual levels.
- We assume people make rational choices based on analyzed information but in reality, the choices that people make are tied to emotions and experiential elements.
16) What benefits can be gained by scheduling press releases?
- Press releases can be scheduled so that various media sources publish information that builds on itself, progressively revealing new items about a specific topic.
- The public relations message conveyed in a press release must be newsworthy and interesting.
17) What must marketing literature accomplish?
- Marketing literature present a company’s image very clearly and offer support to marketing and sales efforts.
- The quality of the entire piece, the visual images used, and the content all combine to project a certain image.
- Marketing literature and related materials are designed to resonate with a target audience and may include creating content for sales presentations in a flexible configuration. This allows anyone in the organization to use the content as a base to tailor it for a specific application.
18) What are some tools used to develop information to evaluate marketing efforts?
- Surveying customers are conducted to find out what customers think about the company’s products and services.
- Complaints offer a rich bank of data for companies to analyze and provide an opportunity for companies to come up with solutions.
19) What approach is recommended for handling negative questions from the press?
- Crisis communication to handle negative, speculative or controversial questions tends to have good results when met with public-spirited, plain-talking message delivered professionally by the CEO.
- Statements such as “no comment” are rarely advisable because they tend to elicit a negative public reaction.
- When dealing with the media, it is best to arrange for an interview and determine what the interview topics and issues will be in advance.
- Because the media contact person has been prepared with the best possible responses he/she will be best equipped to keep control of the exchange.
- Deferring or redefining the question and using the ideas already prepared in the series of supporting statements are recommended.
- Denying inflammatory acquisitions is not recommended.
20) During crisis communication what reaction might be elicited from the public if the company media contact person seems bureaucratic and does not speak plainly?
- Positively minded messages should be pared in advance to avoid defensive, reactive and negative messages.
- Anyone in contact with the media should talk plainly, in everyday language.
- Members of the public are likely to be offended or feel alienated when approached with messages delivered in “business speak” or that seem bureaucratic
- Employees representing a company must be prepared with appropriate facts and stats about the industry. Presents information about the results of topical research and an array of prepared examples that illustrate concerns, innovations within the knowledge and new products requires that a base of knowledge be cultivated before speaking to the media.
20) What action might an insurer take when the effects of government imposed reforms are unknown?
- Projects for premium, loss ratio, and ROE made before the changes must be redeveloped.
- Some insurers may shelve business strategies to achieve organic growth or to expand territorially until the effects of government actions are made clear.
- Other insurers may consider withdrawing from their jurisdiction, adjusting marketing plans for the affected area, or reserving any financial decisions until the regulator’s plans are announced.
- This in turn reduces automobile insurance capacity in the insurer’s jurisdiction.
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