Chapter 6, Pt. 1

Question 1

What are the three types of marketing in insurance?

Answer 1

Brokerage placing business with an insurer.
Insurance companies promoting their products to brokerages.
Insurance companies promoting their products to consumers.

Question 2

Define marketing.

Answer 2

A system of business activities which are designed to plan, promote, price, and distribute want-satisfying products, services, and ideas to target markets in order to achieve the objectives of both the consumer and the company.

Question 3

Describe how “a system of activities” fits into the definition of marketing.

Answer 3

Number of different tasks that work together. A variety of different people are involved. Marketing is the responsibility of everyone in the brokerage.

Question 4

Define the meaning of value within the definition of marketing.

Answer 4

Clients must perceive value in what they are receiving. The product must be created with the consumer in mind.

Question 5

What is special about “Products, Services, and Ideas” in the definition of marketing, as it relates to insurance?

Answer 5

As these products are intangible, more of the marketing should be focused on the sale of services.

Question 6

What are the objectives of the consumer and the organization?

Answer 6

Clients must be satisfied that a product meets their needs, and the company must achieve its objectives in order for a relationship to be built. Companies want clients to come back time after time instead of shopping elsewhere for each new purchase.

Question 7

Identify and explain three marketing strategies.

Answer 7

Marketing Segmentation - Deciding which segments of the client market it wants to do business with.
Differentiation - Doing things that set the company apart from the competition. Giving reasons for a client to deal with them instead of the competition.
Market Positioning - Deciding what kind of company it wants to be and what position it wants to occupy in the market.

Question 8

Explain marketing culture.

Answer 8

Today, marketing is genuinely a part of corporate culture. Everything the company does is focused on the client and achieving client satisfaction.

Question 9

Describe the public image of insurance brokerages.

Answer 9

Negative - based on perceived value. Insured pays for a product they cannot touch, taste, or see, and must hope they don’t need to use it. They only hear about bad experiences, and due to the nature, are not always well enough educated.

Question 10

What are the 5 P’s of the marketing mix/marketing toolkit?

Answer 10

Price
Place
Product
Promotion
People

Question 11

Marketing Mix

What does price refer to?

Answer 11

Price for the product, credit terms, and fees.

Question 12

Marketing Mix

What does place refer to?

Answer 12

Where should a brokerage locate its facilities. How convenient is the brokerage to deal wtih, and how easy is it for the client to buy from the brokerage.

Question 13

Marketing Mix

What does product refer to?

Answer 13

What product line to offer, the services surrounding the core products, choice of brand, and manner in which products will be packaged or bundled together.

Question 14

Marketing Mix

What does promotion refer to?

Answer 14

Communications via personal presentations, special promotions, advertising, public relations, and direct marketing.

Question 15

How can a brokerage use personal presentations as a part of their marketing strategy?

Answer 15

Any situation where an employee makes a presentation to a prospective client with a view to selling insurance.

Question 16

How can a brokerage use special promotions as a part of their marketing strategy?

Answer 16

Rare in insurance. Usually involve bundling multiple products in order to produce a more attractive offer

Question 17

How can a brokerage use advertising as a part of their marketing strategy?

Answer 17

Brokerage may develop a campaign directed at a certain market segment, or simply advertise that they are knowledgeable insurance people. They may advertise how easy it is to do business with them, creating a positive image for themselves along the way.

Question 18

How can a brokerage use public relations as a part of their marketing strategy?

Answer 18

PR activities are those which are designed to earn the acceptance and confidence of the public. Generating news or creating a positive impression of the brokerage in the community. This may include issuing news releases, or donation and sponsorship activities.

Question 19

How can a brokerage use direct marketing as a part of their marketing strategy?

Answer 19

Marketing efforts directed at individual clients based upon the brokerages knowledge of the characteristics of the individual client. Communication may take place through direct mail, telemarketing, or the internet.

Question 20

Marketing Mix - People

Answer 20

The employees of the brokerage who are building relationships with the consumers. Services are often inseparable from those who produce them for the client.