Marketing Strategies in the Uk Car Insurance Market
Marketing
strategies
in
the
UK
car
insurance
market
Marketing of Financial Services 31/06/2011 Anne‐Sophie de Zuttere‐ George Koussis‐070007618 Kyriakos Tyllis‐100039290 Neophytos Stylianides‐100059219
1.0 Introduction Due to the high level of regulation that exists in the insurance industry differentiation is limited as products and services need to be compliant. In regards to car insurance, where competition is intense, insurance premiums and policies are similar. Marketing of insurance products should be carefully designed so that the main message about various insurance services would be easily understandable to the potential customer, appealing with interest and trust but at the same time not being annoying.1 Due to low customer loyalty that exists in the sector, any marketing communications tend to raise consumer’s awareness not only on the advertised product, but on competitive products as well. As the product itself is intangible, it lacks overall understanding by the general public. Consequently, the customer’s decision making process is of high importance. The AIDA model is therefore used to illustrate the four stages (Awareness, Interest, Desire and Action), that marketing communications should move through a potential customer.2 Furthermore there are two types of marketing, known as tactical marketing (short‐term) and strategic marketing (long‐term). The former focuses mainly on awareness, price and promotional activity, thus creating brand awareness and increase in sales, whereas the latter focuses on changing attitudes/feelings and establish perceptions of quality and brand, resulting in adding value to the company.3 As insurance market develops and competition becomes fierce, marketing of insurance products and services has changed creating its own rules, targets
Marketing of Financial Services 31/06/2011 Anne‐Sophie de Zuttere‐ George Koussis‐070007618 Kyriakos Tyllis‐100039290 Neophytos Stylianides‐100059219
1.0 Introduction Due to the high level of regulation that exists in the insurance industry differentiation is limited as products and services need to be compliant. In regards to car insurance, where competition is intense, insurance premiums and policies are similar. Marketing of insurance products should be carefully designed so that the main message about various insurance services would be easily understandable to the potential customer, appealing with interest and trust but at the same time not being annoying.1 Due to low customer loyalty that exists in the sector, any marketing communications tend to raise consumer’s awareness not only on the advertised product, but on competitive products as well. As the product itself is intangible, it lacks overall understanding by the general public. Consequently, the customer’s decision making process is of high importance. The AIDA model is therefore used to illustrate the four stages (Awareness, Interest, Desire and Action), that marketing communications should move through a potential customer.2 Furthermore there are two types of marketing, known as tactical marketing (short‐term) and strategic marketing (long‐term). The former focuses mainly on awareness, price and promotional activity, thus creating brand awareness and increase in sales, whereas the latter focuses on changing attitudes/feelings and establish perceptions of quality and brand, resulting in adding value to the company.3 As insurance market develops and competition becomes fierce, marketing of insurance products and services has changed creating its own rules, targets
References: A (20011)Churchill (2009). Datamonitor (2004) (2009) Motor A (2002)