Chapter 12, Problem 12.16VC

Summary Introduction

Case summary:

Company P is the one of the top I Industry which focuses on innovation. Company P was the 1^st company to offer installment payment of premium, 24/7 customer service and drive-in claim service. However, Company P’s most important move is its way of channel of distribution. Most of the I companies distribute their policies by direct contact with customer or intermediary agents, Company P was the 1^st company to do both.

Later in 1980s, Company P distribution channel included 800 agency number channels. Two years ago, Company P was the 1^st company to start digital media by creating website. Soon after, its 1^st insurance policy was auto insurance policy through online service. Today, customers manage everything through Company P website from managing their account informations to directly reporting the claims.

Characters in the case:

• Company P
• Company I

Introduction:

Channel is a level which includes the middlemen in the business to sell products to the final customer.

Direct marketing channel is the process of selling directly to the consumers “excluding all the intermediaries”.

Indirect marketing channel is the process of “including many intermediaries” to make the product reach to final buyers.

To discuss: The customer and business channels of Company P and in what manner each channel will meet their customer needs.