MC210: Insurance Marketing.

Outline of Presentation
The presentation would follow the outline below:
• Concept/Definition of Marketing
• Development/Evolution of Marketing
• Strategic and Operational marketing
• Service Marketing
• Marketing Mix
• Segmentation
• Marketing Communications Mix
 A. INSURANCE MARKETING

CONCEPT:
The concept of Marketing covers all concerted activities by an
organization that sees to the research, development, design, production,
finance, distribution, after sales service etc aimed at getting an
identifiable group of people to consume a particular product over a set
period of time.
Essentially, the concept involves customer orientation, organizational
integration and profitable exchange between customers and the firm.
 A. INSURANCE MARKETING

DEFINITION
1. “A total system of business activities designed to plan, price,
promote and distribute want-satisfying goods and services to
present and potential consumers”
2. “Marketing consists of individual and organizational activities that
facilitate and expedite satisfying exchange relationships in a dynamic
environment through the creation, distribution, promotion and
pricing of goods, services and ideas”
 A. INSURANCE MARKETING

3. “The achievement of corporate goals through meeting and exceeding

customer needs better than the competition”.

4. “ Marketing is the management process responsible for identifying,

anticipating and satisfying customer requirements profitably”
 A. INSURANCE MARKETING

Issues worthy of note from all definitions

1. Concerted/organized activities
2. People centered activities/relationship building
3. Profitability
 B. Market Planning

Market Planning is the process of organizing and defining the marketing aim of a
company and gathering strategies and tactics of achieving these aims. To be
effective, a marketing plan should include the following:
1. The Company’s value proposition: What is that the company exists for and
what value does it propose to bring to its customers. Some companies say
they would settle claims within three days, within 24 hours. That is their
value proposition. This must be an integral part of the plan
2. Customer or target information: There must be clear information about its
target market or customers. For you need to know who your customers are
before you can plan for them.
 B. Market Planning

3. Competitor Information: The company should be able to identify its

competitors and do a comparative positioning of the competitors in the
markets. It is very easy for a company to wrongly perceive one company as
its main competitor. This would help put the plan into focus.
4. Distribution Channels: The plan must clearly indicate what channels the
company intends to use to distribute its products or service.
 B. Market Planning

5. Promotion Strategies to be used or in use must be outlined and analyzed

in the plan.
6. The Budget allocated for the plan must be indicated in the plan. This
would serve as a guide to the implementers of the plan in their
expenditure.
 B. Market Planning
Market planning has to to be in stages.
First Stage:
• There must be a Sales Projection to help determine expected income for the period.
• Evaluation of past promotional activities to assess their effectiveness.
• Product Analysis would help determine which areas of the plan needs adjusting or more
attention
• New strategies to be Implemented need to be outlined in the plan and budget.
Second Stage
Organization of Marketing Objectives and strategies with a clear establishment of activities to
make the plan efficient.
 B. Market Planning

Some Market Planning Concepts

Some concepts of Market Planning include the following:
• Market Segmentation: organizing the market according to some identifiable
features and shared consumer patterns which enables the company to know
who are their key markets so they can put resources available to the market.
• Market Targeting: once the segmentation has come out with the key market,
that market needs to be treated as a bloc of prospective business and the
right resources deployed to service them.
 B. Market Planning

Some Market Planning Concepts (Cont)

• Budget: the right budget for the planning must be put in place with the
right forecasts about expected income. This makes it easy for top
management to decide in allocating resources.
• Marketing Mix: The marketing variables must be correct ie product,
price, place, promotion for the tangible products plus the extra three
people, process and physical evidence.
 B. Market Planning

Some Market Planning Concepts (Cont)

• Customer Relationship Management (CRM)
CRM is how the relationship with customers is managed to achieve a close
relationship between the company and its clients that would enhance
repeated sales.
 C. Strategic and Operational
Marketing
Planning
This aspect of marketing has to do with planning which can be defined as
putting together a framework that would enable you achieve a set goal.

Planning can be looked at from two different directions: Strategic and

operational.
Strategic Planning
This is the act of putting together long-term strategies that would enable the
firm achieve a set objective. Long term here could mean 5, 10 or 15 years.
 C. Strategic and Operational
Marketing
In certain situations, the long term could even be one or two years.
Revisions: Once done, strategic plans are hardly revised during their life
span, they are however reviewed, and immediate changes are effected to
the operational plans.
Who Drives Strategic Marketing:
Strategic Marketing needs top level approval/endorsement/involvement
to succeed. Board Level, Executive Management level and then the
operational level. Beyond this, the whole company must be carried along
to ensure success.
 C. Strategic and Operational
Marketing
Example of Strategic Marketing:
1. An insurer/broker decides to move from one of the smallest companies
to the top five bracket over a five year period is a plan that can be achieved
through strategic marketing. This would clearly outline, the markets that
the company wants to actively enter to achieve that growth. This strategic
plan would be spearheaded from the very top which is the board and then
management would carry it along to all staff. This plan would show
milestones of what is to be achieved over what period of times etc.
 C. Strategic and Operational
Marketing
Operational Planning
This refers to the specific operational marketing plans and activities
covering specific tasks, timetables, personnel etc that would see the
strategies through.
Operational plans are derived from the strategies. More or less like
breaking down long term plans into smaller components in order to make
delivery and monitoring possible.
 C. Strategic and Operational
Marketing
To be successful, operational marketing requires frequent monitoring at
least on a monthly bases. This allows quick remedies to bring things back
on track should they be veering off.
 C. Strategic and Operational
Marketing
• Unlike strategies which are developed by the top level and would
require board approval, Operational plans/marketing are developed
and implemented by Management and executives on the job. In other
words the “Desk People”.
• While Strategic Marketing is long term, operational Marketing is short
term. The essence here is to allow for effective delivery, monitoring
and revision if necessary.
 C. Strategic and Operational
Marketing
On a more functional note, operational marketing involves the fine details that would
ensure the effective marketing of a product. This includes the
• Redeployment of the right people to do the job
• Right media work
• Right support resources
• Packaging of product or service
It also entails effective monitoring of results on a scaled down time frames. The
key essence of monitoring is that it must clearly show the return on investment accruing
to the business. In other words, is the cost of the operation reasonable. Is it leading to
unnecessary losses? (losses in themselves may not be bad)
 C. Strategic and Operational
Marketing
Operational Marketing should be able to provide senior management with the
right operational intelligence to support strategic and tactical decisions.
Essence of Operational Marketing:
It is designed to help a company attract and keep customers by satisfying their
needs with prompt customer service timeously and cost effectively. This
would enable them meet and exceed customer expectations.
Operational Marketing must blend into the marketing mix.
 C. Strategic and Operational
Marketing
Role of Information in Operational Marketing:
Information is key to the success of operational marketing.
1. The customer needs the right information to make decisions about what to
consume, when to consume it, how to consume it and at what price.
Marketers must ensure the right information is available at any point in
time.
2. The company/business needs information from the field about how well
the operational strategies deployed are faring, what competition is doing,
the situation of your products etc.
 D. Marketing of a Service

Nature of Services:
Services unlike goods are economic activities and not tangible products.
Services are expected to be rendered
• Within a defined time span (perishable)
• To bring about a defined result/value
• In exchange for money.
• Heterogeneous
 D. Marketing of a Service

History of Services Marketing:

• Gained importance towards the end of the 20th Century. Until the
1980s, it was considered as a part of general marketing.
• The impact of services in post industrial societies and their
contribution to employment creation and GDP growth pushed for
this paradigm shift.
• By the 1990s, services marketing had fully developed.
 D. Marketing of a Service

Essential Aspects:
Among other things, service marketing has some key essentials which
include:
• Service Quality: Most products are the same and so the key
differentiator is the quality of service delivery which the people in the
producing firm give to the consumer. This differentiates a firm from its
competitors.
• Relationship: The product being offered is intangible and so the buyers
 D. Marketing of a Service

decision to consume is hinged on the extent to which they trust the

seller. This makes it imperative to listen to what the prospective
consumer wants and then deliver on your word and ensure you build a
relationship with him. This would lead to repeat sales.
• Customer Retention: Due to competition, it is necessary to ensure
retention of customers than attraction of new ones. This can be done
by ensuring that the client enjoys the consumption of the services by
taking into consideration, their expectations and feedback. This
would reduce the churn of the insurer.
 D. Marketing of a Service

• Value Added Service: When it is difficult to differentiate the physical

service, it is in order to add value added service.
 E. Marketing Mix for Products and
Services
Definition of Marketing Mix:
Marketing Mix is the term used to describe the relationship of the inputs
which constitute the core of the company’s marketing system.
They are 4 Ps in product marketing and 3 Ps extra in service marketing.
They are as follows: [{Product, Price, Promotion, Place} and People,
Process and Physical Evidence].
 E. Marketing Mix for Products and
Services
Features of the Seven Ps
• These Ps be they 4 or 7 are internal variables that are controllable by
the firm.
• They are interrelated, interdependent or intertwined.
• They compliment each other.
 E. Marketing Mix for Products and
Services
The seven Ps in detail
1. Product: This is the essence of being in business and so it must be in the
right shape, form and quality to make it desirable. In the service industry, it
is intangible, heterogeneous and perishable. Production and
consumption is inseparable and so the firm must hold customer encounter
in high esteem. Customization to suit customer request should be
entertained. The ability to modify the product from time to time based on
customer feedback is key to separate one from competition.
 E. Marketing Mix for Products and
Services
To remain relevant, a company should have a clear plan for the development of the
product through the various phases of its Life Cycle.
Branding and Packaging is key in the relevance of the product.
2. Price: It is necessary for a firm to ensure that it is charging the right price for the
product in 1 above. This right price would have to cover all the costs incurred in
producing it plus a mark up for profit. In the tangible product market, it is easy to add
up all the costs of the factors of production and mark it up for profitability but in the
service sector, labour and overhead costs would have to be added to take care of the
personal touch in the service delivery as well as costs of the ambiance of the vicinity.
 E. Marketing Mix for Products and
Services
3. Place/Distribution Channel: The place has to do with the venue where
the product/service is consumed or through which the product or service is
distributed. So it would be a particular venue in the case of a restaurant or a
hospitality centre for example. In the case of insurance as a service, the
distribution mix varies from direct marketing to branch network to broker
distribution. They all come with their related variables. In the case of a venue
like a restaurant, adequate funds should go into preparing the place to make it
appealing etc. The location is key as it must be sited at a place that would attract
and help retain the patrons.
 E. Marketing Mix for Products and
Services
4. Promotion: This has to do with persuading the consumers about the
product or service being offered. This is necessary especially in the
service sector where most of the competitors produce goods of a similar
quality and so promotion becomes the differentiating factor. This is a
huge cost factor and must be managed to ensure it does not get out of
hand. The right media must also be chosen else it would be a wasted
effort.
The timing must also be monitored.
 E. Marketing Mix for Products and
Services
5. People: This is the first of the extra 3Ps that are relevant to service
marketing. The production and consumption of a service can hardly be
separated and so the people who facilitate this process must be up to the
task. They must be qualified and experienced in the field in question and
must have the mind set that sells the company’s product very well to the
outside well.
There should not be a weak link in the chain so that service delivery
would be consistent. To achieve this, customer service training is key.
 E. Marketing Mix for Products and
Services
6. Process: This is the second of the 3Ps and it talks about the procedure
through which the service is delivered. It is necessary to have a consistent
process so that the customer can enjoy the same level of service delivery
so as to want to make a repeat sale and also a recommendation to others.
There should be a mechanism that would continuously evaluate the
process to ensure continuous betterment for the purpose of achieving
customer satisfaction and loyalty.
 E. Marketing Mix for Products and
Services
7. Physical Evidence: This is the last of the additional 3Ps. It seeks to
bring in a tangible phase to the service market that deals in intangible
services. For example, the location of the firm’s office, how nice the office
is, the cars used by the marketing personnel, how well they are dressed etc.
This enhances the image of the company in the view of the consumers and
makes do for the lack of tangibility of the service.
 F. Marketing in Relation to Insurance

Essence
Having come this far, we have established that insurance is a service and bears the
features of intangibility, perishability and relationship dependent etc.
This makes it necessary for insurance to be marketed differently from tangible
products.
It would be prudent for insurance marketers to ensure that they develop the
needed relationships with their markets and use physical evidence to give
insurance some tangibility. Customer Service must be consistently at it peak to
ensure customer retention.
 F. Marketing in Relation to Insurance

Insurance and the Marketing Mix

Insurance marketers must understand the Marketing Mix and its
implication on their activities. This would enable them adopt it to
perfection. In detail, the seven Ps can be illustrated as follows;
• Product: The right policy that meets the client’s needs should be
developed to make it easy to sell. The wholesale policies should be
discouraged and a lot more customization should be encouraged to
suit clients.
 F. Marketing in Relation to Insurance

Pricing: Most policies in the industry are rated but there is a lack of
discipline to stick to these tariffs. The essence here is to charge the correct
premium that would make the policy sell as well as enable the insurer meet
claims and make provision for profitability. Undercutting to get business
should be discouraged.
Place: In insurance, it is necessary to appreciate the right distribution
channels which includes Brokers, clients (direct business), Reinsurance
Brokers, Bancassurance outlets, other institutional distribution channels like
Travel Agencies for Travel Insurance, Real Estate Agent for House Hold
Insurance, Auto Houses for Motor Insurance Etc.
 F. Marketing in Relation to Insurance

Promotion: The right promotional activity is required to inform and

persuade the consuming public. The organization has to know its target
market and deploy the correct media and must of necessity be mindful of
cost.
People; The right people should be employed, trained and motivated to
do the right things that would enable them acquire and retain customers.
These people must be outgoing, extroverts and affable people who are
ready to go the extra mile for the customer.
 F. Marketing in Relation to Insurance

Process: The company must deploy the right and convenient processes
that would be friendly to their customers. These processes must be
consistently monitored and reviewed to ensure they remain relevant.

Physical Evidence: To make up for the lack of tangibility in the

insurance service, the firm must provide a good physical evidence in office
premises, cars, dressing of employees etc.
 G. Elements of Good Customer
Service
1. Respect: Let the customer feel respected and appreciated even if
they are being difficult and unreasonable. Know when and how to
apologize. Make it possible for them to complain and take their
complaints seriously and not for granted.
2. Understanding: know and understand your customer and their
operations so as to enable you identify and anticipate their problems
and needs. This would enable you present a valuable service/product
to meet that need. This requires a closer relationship between you and
your customers.
 G. Elements of Good Customer
Service
3. Listening:
In order to offer good customer service, a firm must be listening and observant to
gather market intelligence on customers, competitors, regulators etc. the firm should
welcome feedback and suggestions from customers so as to be pro active and not
reactive.
4. Responding:
Following the feedback that would be gathered, the firm has to respond appropriately by
trying to meet the clients needs without necessarily compromising company integrity.
5. Serving: Serve your customers, make them happy so they return to consume the
service again.
 H. Segmentation

This is the act of grouping customers into identifiable units to facilitate

effective delivery of service. With such groupings, a firm would be able to
identify its high valued clients so as to put at their disposal, high valued
service.
The essence here is that it must lead to profitability.
If a particular group is identified as a key profit center, it is necessary that
the group is accessible and sufficient. Efforts must be made to grow the
group and also offer them with tailor made products/services if necessary.
 H. Segmentation

It is also necessary that adequate resources commensurate the income of

group must be made available to help service the group.
The key objective of Segmentation is that it enables straight to the point
marketing which leads to efficiency in marketing.
 Marketing Communication Mix
It is necessary that the right communication mix is used to get the
information about the product/service to the consumer else irrespective
of the quality of the product/service or its price, no one would know of
the existence of the product.
The essence of Marketing Communications Mix therefore is to make
customers who are unaware of certain products/services to become
aware and proceed to consume them.
In the mist of doing this, NOISE would always be in the environment
interfering with communication and must be dealt with.
 Marketing Communication Mix

The components of the Marketing Communications Mix include the ff:

1. Advertising: This helps in the creating of awareness, promoting solutions
and repeating messages so as to get to stick in the memory of the public.
This should be used as part of a coordinated strategy and the cost aspect
should be watched carefully. This is good for a service.
2. Sales Promotion: This is a deliberate effort to sell more by offering more to
the clients or intermediaries at the going price. It can be used to clear stock,
hold off competition or make an otherwise unknown product known.
 Marketing Communication Mix

3. Direct Marketing: This is the act of making direct contact with prospective
clients via telephone, direct mail, telemarketing, e-marketing etc. The key
advantage is getting to the target faster and at a lower cost than other media. This
is also good for service marketing.
4. Personal Selling: This is face to face selling which allows the salesman to deliver
the marketing message and deal with queries instantly. The marketing interaction
here is key as it enables the building of a relationship. It helps the service market
sales team to establish integrity. Can be expensive. Seminars are another form of
personal selling. This is very conducive for insurance.
 Marketing Communication Mix
5. Sponsorship: This is the act of sponsoring an event to which you invite
customers and prospective ones like a Golf Tourney or sponsoring a
sports team, a social agency like a hospital. Visibility is key here as the
customers must see. For example AON and Manchester United.
6. Public Relations: This is the act of managing the Good Will and
relationship between the company and its environment. These come in the
form of publications, events, media stories, exhibitions etc. It should
support the marketing plan and dovetail into the overall strategic
marketing plan.
 Marketing Communication Mix

7. Emergency Communications Plan: These are relevant for

emergency issues that need to be rectified and put straight.