CASE STUDY
CASE STUDY
XYZ Insurance Corporation
XYZ Insurance Corporation
Contents
Contents
Ana
Analy
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of Ke
Key
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Mark
rket
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g is
issu
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es fa
faci
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the Company
the Company
Marketing strategy and marketing plan for
Marketing strategy and marketing plan for
the next 2 years
the next 2 years
Prepared by Prepared by
::
Noushad Muttippalathingal
Noushad Muttippalathingal
Dubai, UAE
Dubai, UAE
Case : XYZ Insurance Case : XYZ Insurance
From 2000 – 2008 XYZ Insurance's impressive growth was based on a strategy which focused on From 2000 – 2008 XYZ Insurance's impressive growth was based on a strategy which focused on thethe development and maintenance of strong
development and maintenance of strong customer relationships. Rather than spend money speculating aboutcustomer relationships. Rather than spend money speculating about the generation of new
the generation of new customers, XYZ’s policy has been to customers, XYZ’s policy has been to invest and build relationships with currentinvest and build relationships with current customers.
customers.
In order to help
In order to help realize their strategy XYZ removed their middle management and realize their strategy XYZ removed their middle management and delegated responsibility todelegated responsibility to teams of customer service (CS) personnel, who
teams of customer service (CS) personnel, who focus up their client’s total focus up their client’s total requirements. Clients talk directlyrequirements. Clients talk directly to CS agents who are empowered to mange decisions and manage a
to CS agents who are empowered to mange decisions and manage a ll aspects of their client’s requirements.ll aspects of their client’s requirements. There are no appointed managers or secretaries and each CS team manages itself organically and recruits its There are no appointed managers or secretaries and each CS team manages itself organically and recruits its own new staff.
own new staff.
The role of senior management has been to manage time and
The role of senior management has been to manage time and resources through the use of managementresources through the use of management information systems (MIS). They are able to identify
information systems (MIS). They are able to identify areas across and within CS teams areas across and within CS teams where productivitywhere productivity might be improved. This has helped to ensure 85% of the
might be improved. This has helped to ensure 85% of the hours worked in each CS team are used tohours worked in each CS team are used to generate revenues. As a result of this approach revenues has doubled
generate revenues. As a result of this approach revenues has doubled to US$ 2.3m, profits are stable atto US$ 2.3m, profits are stable at 6.5%, sales per worker are double that of the national average and
6.5%, sales per worker are double that of the national average and staff numbers have remained relativelystaff numbers have remained relatively stable. Not surprising, XYZ Insurance has become the
stable. Not surprising, XYZ Insurance has become the centre of attention for its centre of attention for its innovative and seeminglyinnovative and seemingly successful approach to business.
successful approach to business.
The company's success has been built around 42
The company's success has been built around 42 client companies, some of whom are very loyal. Part of theclient companies, some of whom are very loyal. Part of the company’s philosophy has been to ‘meet and beat customer’s expectations’ and the attitude of staff in each company’s philosophy has been to ‘meet and beat customer’s expectations’ and the attitude of staff in each CS team reflects this perspective. Through high levels
CS team reflects this perspective. Through high levels of quality service and of quality service and customer involvement, newcustomer involvement, new orders have been won. However the growth experienced to date has been
orders have been won. However the growth experienced to date has been based on new orders from exitingbased on new orders from exiting clients and very little new business has been acquired. The CS teams regard senior management as being clients and very little new business has been acquired. The CS teams regard senior management as being responsible for generating new customers, yet the senior management team see their role as managing and responsible for generating new customers, yet the senior management team see their role as managing and teaching the, ‘XYZ way’.
teaching the, ‘XYZ way’.
Little effort appears to have been made to attract new customers and there is no
Little effort appears to have been made to attract new customers and there is no marketing department or marketing department or sales force. These are costs which do not fit the current culture and are
sales force. These are costs which do not fit the current culture and are thought to be activities which wouldthought to be activities which would add very little value and create high overheads. The company currently outsources cleaning and payroll, so add very little value and create high overheads. The company currently outsources cleaning and payroll, so outsourcing a sales operation would be a compatible activity.
outsourcing a sales operation would be a compatible activity.
There has been little planned use of marketing and/or corporate communications and the primary emphasis There has been little planned use of marketing and/or corporate communications and the primary emphasis has been on
has been on strong word-of-mouth communications, supported by some limited public relations (PR)strong word-of-mouth communications, supported by some limited public relations (PR) activities. However, a basic website, some use o
activities. However, a basic website, some use of telemarketing, the unplanned use of f telemarketing, the unplanned use of some out-of-date salessome out-of-date sales literature and attendance at exhibitions have been the only marketing communications carried out so far. literature and attendance at exhibitions have been the only marketing communications carried out so far.
The organization needs to address the balance of its current customer portfolio and attract new clients if it is The organization needs to address the balance of its current customer portfolio and attract new clients if it is to achieve its current customer p
to achieve its current customer portfolio and ambitious five-year growth target.ortfolio and ambitious five-year growth target.
Questions Questions
KEY MARKETING ISSUES FACING THE
KEY MARKETING ISSUES FACING THE
COMPANY
COMPANY
Where the company stands NOW?
Where the company stands NOW?
Current Strategy: Current Strategy:
•
• The current strategy of the company seems The current strategy of the company seems to be ‘Focus or Niche to be ‘Focus or Niche Strategy’Strategy’
where organization focuses effort and resources on a narrow or defined segment where organization focuses effort and resources on a narrow or defined segment of a market.
of a market.
•
• Focusing on Invest and build Focusing on Invest and build relationships with current customers and Targetingrelationships with current customers and Targeting
new market/customers is not a priority new market/customers is not a priority
•
• Avoidance of middle management bottleneck to Avoidance of middle management bottleneck to ensure fast efficient andensure fast efficient and
personalized customer service facilitated by decentralized decision making
personalized customer service facilitated by decentralized decision making of CSof CS team.
team.
In spite the results are good presently, but for a long run, relying on a narrow client-base In spite the results are good presently, but for a long run, relying on a narrow client-base puts the company at risk of loosing its competitive advantage at any point by threat from puts the company at risk of loosing its competitive advantage at any point by threat from
any possible competitor with innovative or differentiated products or services or better any possible competitor with innovative or differentiated products or services or better pricing.
pricing. The current customers, though they The current customers, though they are loyal to are loyal to the company, may the company, may relocate to arelocate to a competitor forced by their specific business objectives at any
competitor forced by their specific business objectives at any time. time. This is a This is a strategy strategy suitable to a Broker rather than an Insurer.
suitable to a Broker rather than an Insurer.
The Company has build up a limited loyal client-base and good reputation supported by The Company has build up a limited loyal client-base and good reputation supported by better results.
better results. An excellent group of CusAn excellent group of Customer Services Teams is tomer Services Teams is already in place andalready in place and their efficient execution of customer service has resulted in loyalty of customers towards their efficient execution of customer service has resulted in loyalty of customers towards the compan
the company. y. While seaWhile searchinrching for the new market, the abovg for the new market, the above factors can fore factors can form vitalm vital investment to the firm in or
A
A SWOT analysisSWOT analysis of the company can bring out the current strengths, weaknesses,of the company can bring out the current strengths, weaknesses, opportu
opportunitienities and threats facs and threats facing the companing the company. y. These wilThese will help to identify the arel help to identify the areasas where the company stands
where the company stands now. now. Then, the Marketing Then, the Marketing issues facing the cissues facing the company wouldompany would easily be recognized.
easily be recognized.
S
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•
• Strong customer relationships leads toStrong customer relationships leads to
loyal customer. loyal customer.
•
• Proper delegation of responsibility toProper delegation of responsibility to
teams of customer service (CS). teams of customer service (CS).
•
• Proper time management.Proper time management. •
• Excellent customer services.Excellent customer services. •
• Deriving better resultsDeriving better results
•
• Limited marketing force and limitedLimited marketing force and limited
channels of marketing. channels of marketing.
•
• Limited client-base and target segmentsLimited client-base and target segments
•
• Lack of innovative productsLack of innovative products •
• Lack of spread of risks (only 42 major Lack of spread of risks (only 42 major
clients) clients)
•
• Growth relying on existing customers.Growth relying on existing customers. •
• Failing to target new customers.Failing to target new customers. •
• Limited Public relation (PR) activities.Limited Public relation (PR) activities.
O
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•
• Joint ventures or strategic alliances withJoint ventures or strategic alliances with
Bancassurance and brokers. Bancassurance and brokers.
•
• Moving into new market segments thatMoving into new market segments that
offer improved profits. offer improved profits.
•
• A new market in new geographicalA new market in new geographical
areas areas
•
• Reputation as a successful firm willReputation as a successful firm will
attract new customers. attract new customers.
•
• Any possible market vacated by anAny possible market vacated by an
ineffective competitor. ineffective competitor.
•
• Internet as a powerful marketing tool.Internet as a powerful marketing tool.
•
• Needs by a market segment where theNeeds by a market segment where the
•
• A possible new competitor in your currentA possible new competitor in your current
market. market.
•
• Price wars with competitors.Price wars with competitors. •
• A competitor has a new, innovativeA competitor has a new, innovative
product or service. product or service.
•
• Competitors have superior access toCompetitors have superior access to
channels of distribution. channels of distribution.
•
• Repositioning or wind-up of existingRepositioning or wind-up of existing
client-base client-base
•
• Deterioration quality in service by CSDeterioration quality in service by CS
teams teams
•
Based on above analysis, the XYZ Corporation needs to address the following Based on above analysis, the XYZ Corporation needs to address the following Marketing issues.
Marketing issues.
•
• Planned use of marketing techniquesPlanned use of marketing techniques
o
o Set up Marketing DepartmentSet up Marketing Department o
o Allocate funds and resourcesAllocate funds and resources
•
• Identifying new market segments and their Identifying new market segments and their needsneeds
o
o Do extensive market research and other Do extensive market research and other analytical processesanalytical processes o
o Competitor analysis to foresee the possible market Competitor analysis to foresee the possible market rivalsrivals o
o Diversified Market segmentation and identifying specific needsDiversified Market segmentation and identifying specific needs
•
• Developing products serving the needs of target segmentsDeveloping products serving the needs of target segments
o
o Product developmentProduct development o
o Comparison with alternativesComparison with alternatives o
o Decide a suitable Pricing strategyDecide a suitable Pricing strategy
•
• Do promotional and advertising campaigns, market launch, media briefing etc toDo promotional and advertising campaigns, market launch, media briefing etc to
communicate to the consumer communities communicate to the consumer communities
o
o Plan promotional schemesPlan promotional schemes o
o Public relations (PR) activitiesPublic relations (PR) activities o
o Advertisement policies and techniquesAdvertisement policies and techniques
•
• Building new channels of distribution to ensure the reach to customer Building new channels of distribution to ensure the reach to customer
o
o In Personal Lines Insurance this is very important factor comparing to theIn Personal Lines Insurance this is very important factor comparing to the
Commercial lines. Commercial lines.
o
o Direct marketing tools, Intermediaries, branches etc.Direct marketing tools, Intermediaries, branches etc. o
o Consider making use of the CS team to generate new business as wellConsider making use of the CS team to generate new business as well
for which they may earn
for which they may earn extra commission.extra commission.
•
• Translate the current capabilities of CS Translate the current capabilities of CS team into complete CRM solution servingteam into complete CRM solution serving
both existing and new customer. both existing and new customer.
MARKETING STRATEGY
MARKETING STRATEGY
FOR THE UPCOMING 2 YEARS
FOR THE UPCOMING 2 YEARS
Where
Where the the company company wants wants to to be be IN IN TWO TWO YEARS YEARS TIME? TIME? HOW?HOW?
It is advised to have a
It is advised to have a Growth StrategyGrowth Strategy in place for XYZ Corporation with a ‘in place for XYZ Corporation with a ‘New New Market Strategy’
Market Strategy’ , concentrating on growth in organization’s market presence, attracting, concentrating on growth in organization’s market presence, attracting new customer, by
new customer, by placing themselves in newplacing themselves in newer markets. er markets. This will include geographicThis will include geographicalal expansion as well as market penetration.
expansion as well as market penetration.
The suggested
The suggested Marketing planMarketing plan for the same can be as narrated below.for the same can be as narrated below.
TITLE:
TITLE: NEW NEW MARKET MARKET STRATEGYSTRATEGY
Executive Summary : Executive Summary :
XYZ
XYZ CorporCorporationation looks forward to have growth in their business by identifyinglooks forward to have growth in their business by identifying new market segments, attracting new customers, developing suitable products to new market segments, attracting new customers, developing suitable products to meet the needs for identified customer segments and maximize the sales with meet the needs for identified customer segments and maximize the sales with new distribution tools and channels with the paramount concern of optimizing new distribution tools and channels with the paramount concern of optimizing profit of the organization, but without compromising the standards of customer profit of the organization, but without compromising the standards of customer service.
service.
CONTEXT: CONTEXT:
•
• Vision: Vision: To To be be the the market market leader leader in in terms terms of of volume volume and and quality quality of of service within five years time
service within five years time Introduction, Aim and Objectives :
Introduction, Aim and Objectives :
Chosen to have a New Chosen to have a New Market strategy to enter new markets and Market strategy to enter new markets and attract newattract new customers.
customers.
Identify the potential market segmentsIdentify the potential market segments
Tailor products those meets the customer needsTailor products those meets the customer needs
Gain superior competitive advantage over Gain superior competitive advantage over the competitors within the chosenthe competitors within the chosen market
market
Ensure the proper communication about the new offeringsEnsure the proper communication about the new offerings
Implement adequate distribution channelsImplement adequate distribution channels
Corporate Objectives (SMART): Corporate Objectives (SMART):
•
• Maximize the reach of organizationMaximize the reach of organization
•
• Risk spreading by large number of clientsRisk spreading by large number of clients
•
• Optimize the profitability and revenueOptimize the profitability and revenue •
• Satisfaction of customer’s needsSatisfaction of customer’s needs
ANALYSIS ANALYSIS
Background Analysis & Overview : Background Analysis & Overview :
EXTERNAL ENVIRONMENT ANALYSIS – Conduct a Market Research &
EXTERNAL ENVIRONMENT ANALYSIS – Conduct a Market Research & PESTLEPESTLE (Macro environment) analysis to identify the
(Macro environment) analysis to identify the company’s position in relation to the company’s position in relation to the MarketMarket and possible potential for growth.
and possible potential for growth.
INTERNAL ANALYSIS - Identifies the company’s strengths, weaknesses, opportunities INTERNAL ANALYSIS - Identifies the company’s strengths, weaknesses, opportunities and threats by SWOT analysis (given above) to see the current position.
APPRAISAL OF COMPANY’S RESOURCES – Manpower, financial
APPRAISAL OF COMPANY’S RESOURCES – Manpower, financial strength etc.strength etc.
SEGMENTATION - Identification of target market – Demographical
SEGMENTATION - Identification of target market – Demographical segmentation,segmentation, segmentation by risks and hazards, geographical factors
segmentation by risks and hazards, geographical factors
FORMING STRATEGY – APPLICATION OF MARKETING MIX FORMING STRATEGY – APPLICATION OF MARKETING MIX
Marketing Activities, Implementation and Ownership Marketing Activities, Implementation and Ownership
P
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Implementation of the above elements has to be assigned to specified teams who Implementation of the above elements has to be assigned to specified teams who assume the ownership of
assume the ownership of their role. their role. Their duty includes setting up Their duty includes setting up SMART & SMART & short-termshort-term objective appropriate for implementation the corporate objectives.
objective appropriate for implementation the corporate objectives.
The company’s current strategy for outsourcing their
The company’s current strategy for outsourcing their few services can be extended tofew services can be extended to the following areas as well:
the following areas as well:
•
• Sales forceSales force •
• Call centers or telesales agentsCall centers or telesales agents •
• Advertising campaignsAdvertising campaigns •
• Promotional activitiesPromotional activities •
• Web PortalWeb Portal •
• Value added services attached to the productsValue added services attached to the products
FINANCE FINANCE
Allocate budget for whole plans to implement strategy Allocate budget for whole plans to implement strategy Consider affordability and feasibility
Consider affordability and feasibility
ALTERNATIVES ALTERNATIVES
Plan for alternatives in case the plan fails due to unexpected circumstances Plan for alternatives in case the plan fails due to unexpected circumstances
REVIEW AND REPORTING REVIEW AND REPORTING
Periodic review of the progress and results Periodic review of the progress and results Return on investment
Return on investment
Customer analysis – retention and
Customer analysis – retention and profitability analysisprofitability analysis Revisions in plan and objectives
Revisions in plan and objectives
---References:
References: Books Books - - Insurance Insurance Marketing Marketing by by Arthur Arthur MeidanMeidan -
- A A framework framework for for Marketing Marketing Management Management by by Philip Philip Kottler Kottler -
- Marketing Marketing and and Public Public relations relations – – Ins. Ins. Inst. Inst. of of IndiaIndia -- GGIII MI MDDMMM cM coouurrsse me maatteerriiaallss
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