A national property/casualty insurer distributes its personal and small commercial products through independent agents. A study was conducted as a part of reevaluation of its strategies, designed to determine: • Whether its market share might be increased by direct marketing to some households. • Whether doing so would conflict with agent activities. • Marketing themes and product features that could be used to differentiate it in different market segments. • The potential profitability of different segments. Attitudinal, behavioral, and demographic data were gathered using a mail panel survey of 2000 U.S. households that own auto insurance. Geodemographic and credit information supplemented the survey responses. Segments Identified: The study identified five segments, each making up 17% to 22% of the market. • "Non-Traditionals" were most interested in using the Internet and/or buying insurance at work. • Direct Buyers were more interested than others were in buying via direct mail or telephone. • "Budget Conscious" consumers were differentiated, primarily, by their interest in minimal coverage and their determination to find the best deal. • "Agent Loyals" expressed strong loyalty to their agents and interest in high levels of personal service. • "Hassle-Free" consumers were similar to "Agent Loyals," except that they were much less interested in high levels of face to-face service. Thus, attitudes toward distribution and service needs were key factors differentiating the segments. The segments also differed in other attitudes and in their potential profitability, as measured by total auto insurance premiums, other insurance products owned, and loyalty to their insurers. Q.1 Which segments are best suited to be targeted by agents and why? Q.2 What factors should be considered while targeting customers in this scenario? Q.3 Can there be any other segments? Discuss in detail.
Consider the Scenario below:
A national property/casualty insurer distributes its personal and small commercial products
through independent agents. A study was conducted as a part of reevaluation of its strategies,
designed to determine:
• Whether its market share might be increased by direct marketing to some households.
• Whether doing so would conflict with agent activities.
• Marketing themes and product features that could be used to differentiate it in
different market segments.
• The potential profitability of different segments.
Attitudinal, behavioral, and demographic data were gathered using a mail panel survey of
2000 U.S. households that own auto insurance. Geodemographic and credit information
supplemented the survey responses.
Segments Identified: The study identified five segments, each making up 17% to 22% of the
market.
• "Non-Traditionals" were most interested in using the Internet and/or buying insurance
at work.
• Direct Buyers were more interested than others were in buying via direct mail or
telephone.
• "Budget Conscious" consumers were differentiated, primarily, by their interest in
minimal coverage and their determination to find the best deal.
• "Agent Loyals" expressed strong loyalty to their agents and interest in high levels of
personal service.
• "Hassle-Free" consumers were similar to "Agent Loyals," except that they were much
less interested in high levels of face to-face service.
Thus, attitudes toward distribution and service needs were key factors differentiating the
segments. The segments also differed in other attitudes and in their potential profitability, as
measured by total auto insurance premiums, other insurance products owned, and loyalty to
their insurers.
Q.1 Which segments are best suited to be targeted by agents and why?
Q.2 What factors should be considered while targeting customers in this scenario?
Q.3 Can there be any other segments? Discuss in detail.
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