Submitted By:

Group – 1
Marketing of Consumer Financial Products
 Industry Analysis
• Large no. of participants each with a minute market
share and profitability  commodity market
• Similar product offerings by all companies with not
much differentiation with quality service, marketing and
yearly premium being an determinant of consumer
choice
• Increasing claim costs have forced the companies to
increase prices of products, making consumers look for
better offerings
• Distribution channels included Direct Marketing (20%),
Independent Agents (17.2%), and Multi-brand brokers
(65.3%)
 Meloche Monnex : Background
• Founded in 1949 by Jean Meloche as a traditional
insurance brokerage firm
• Over time, the company turned from an insurance
brokerage firm to a producer and direct marketer of
“P&C” insurance policies
• In 2001, ranked 9th in P&C industry with a market share
of 4.3%
• Over the past 5 years( 1998-2002), it achieved a growth
of 17% compared to average industry growth of 7%
• It was one of the several firms that controlled both the
production and distribution of their products, they
distributed through direct marketing
 Target Market
• Their target market mostly consisted of the affinity
groups like University Alumni etc
• These groups were homogenous and had relatively
more predictable risk profiles
• This allowed for better risk management and reduced
the uncertainty regarding the claims to be paid
• This kind of niche target market and better service
allowed Monnex to charge a premium 10-20% higher
than the industry average
Margins
Outbound Campaign
 Marketing Processes
• Relationships with affinity partners
– Solid reputation with immediate response and
high level of service
– Focus on direct marketing rather than television
and direct mail advertising
– Mostly centered around alumni
associations(40% of affinity groups)
– Potential client base of 3.5 million
– Special efforts to maintain relationship
• VIP unit of mature analysts
• Small percentage of written premiums to universities
• Telemarketing operations in-house
 Key Success Factors

Key Success
Factors
 Proposals
• Email/Direct Mail
• Car Prize
• Advertising Price Competitiveness
 Evaluating Proposals
• Email/ Direct Mail
E-mail Direct Mail
Selected Members 3382 10183
Duplicate 2 57
Wrong Phone Numbers 264 2067
Actual Target 3116 8059
Opt-outs 19 89
Reply cards 0 38
Remaining for TM 3097 7932
%age of actual target called 99.39 98.42
Cost/customer ($) 3.09 3.96
Conversion Rate (%) 25.06 20.37
Cost/persons providing dates ($) 12 19.5
 Evaluating Proposals
• Car Prize
Cost of Car $48450
No. of potential clients (2001) 275000
Conversion Ratio
- With Prize 22% (from exhibits 5 and 6)
- Without prize 18.33%
Increase in number of clients due to car prize 10100

Marginal Cost per client(above the normal cost) $ 4.80

Overall increase in Cost 4.7%
Overall increase in Revenue 20%
*Assuming there is 20% increase even on mentioning the offer on phone
 Evaluating Proposals
• Advertising Price Competitiveness

Cons

Pros
 Recommendations
• Use E-mail
– Cost Effective
– Conversion Rate High
– Cost expected to fall – Margins will increase even further
• Car Prize
– Cost effective Strategy
– Overall increase in cost -> clearly compensated by increase in
Revenues
• Advertising Price Competitiveness
– Stay as Niche player
– Increasing advertising for Alumni Associations – to increase
penetration
– Advertising Price competitiveness – might change the brand
image and affect present customer base
Thank You