Chapter 6, Pt. 2 Flashcards
Marketing
Describe marketing management and identify two common strategies.
Involves applying a brokerages resources to take advantage of its market opportunities. This means developing a marketing plan. Common strategies include positioning and differential advantage.
Define: Positioning advantage
How the brokerage is perceived by clients in relation to competing brokerages. The perception may be referred to as the image. The brokerage can be perceived as low priced, high on service quality, or fast to settle claims. Important to consider technologic advances in positioning, ie. offering 24-hr claims line, or offering online services.
Define: Differential advantage
Refers to any feature, service, or product the brokerage offers which differentiates it from others. These items will give the broker an advantage when the client deems these items important. Brokers that fail to keep up with trends in technology and service will face a disadvantage due to lack of convenience and accessibility.
What are the three unique components of a market plan?
Alongside Strategies, Objectives & Goals…
Financial Schedules - Analysis of forecasted sales, expenses, profits, budgets dedicated to each objective.
Timetable - Schedules and clarifies when various activities will be carried out over the coming year.
Evaluation Procedures - Outlines what will be measured, and how and when performance will be evaluated.
What is client segmentation?
Attempt to understand what clients need and want in order to satisfy their needs and wants.
What are the two approaches to client segmentation?
Top-Down: Start with mass market & divide into smaller segments.
Bottom-Up: Using client data bases, start with what you know and define the segments based on these characteristics.
Identify five client segmentation categories.
Demographics Geographic Information Psychographics Behavioural Variables Relationship Variables
Identify the six categories of demographics.
Age - Types of insurance required, children, teens, young adults, middle aged, baby boomers, seniors.
Gender - Certain items traditionally purchased by men or women.
Life Cycle - Single, married, full nest, empty nest, older singles, single parent, divorced, etc.
Education - Level of schooling may affect behaviour and expectations, occupation and income.
Occupation - Income levels, expectations, types of assets to insure.
Ethnic Background - Important to understand specific needs of various ethnic groups before putting marketing programs in place to target them.
Explain and provide examples of geographics.
City size, urban-rural, climate.
Population - Crime rates, likelihood of accidents
Urban-Rural & Climate - Firefighting & health care services
Explain and provide examples of psychographics.
Clients personality, social class, and lifestyle.
Subjective, but useful when used with demographic and geographic information.
Explain and provide examples of behavioural variables.
Does the client shop around each year? What types of policies do they have and what kind of claims have been made? Client databases may lend insight to rate of usage and product preferences. Lifestyle information may also be useful, ie. if we know the client owns a vacation home, we may be able to deduce that they have other leisure assets such as a boat.
Explain and provide examples of relationship variables.
Brokerage must understand how clients perceive their relationship with the brokerage, or if they even feel a relationship exists. Insight into the clients desire for closeness may be provided by history of service, if the client responds to questionnaires. It is of little value for a broker to attempt to get close to a client through personalized communication if the client does not want a relationship. They will end up seeking another broker to gain their privacy.
What are some considerations when selecting target markets?
Ensure target segments are compatible with goals and the image of the brokerage. Match the resources of the brokerage to with the target market. Some segments are too small or are targeted by too many brokerages to prove profitable.
Explain how you would target clients within a segment?
Targeting only those clients who are most likely to respond reduces spending on communication. These segments may be narrowed down via information obtained from client databases.
Identify and explain four target market strategies.
Undifferentiated - One approach for the entire market; all clients are treated alike
Differentiated - Different marketing mix for each of the recognized target markets; Different products, rate structures and payment schemes for different segments.
Niche Marketing - One target market selected, and all efforts concentrated on that market.
Customized Marketing - A different marketing mix for each individual client. Key is database enhancement.
