STRATEGIES

Insurance is a competitive business, and competitive advantages tend not to linger. Our agency
is currently in it’s Decline Phase as the market is changing and the providers increase, the
popularity of our policy is declining which in turn is causing loss of customers.
As the initial group of customers ages out of the target market, insurance companies may find that
the next group has different needs and expectations that require a new product to serve them. This
serves as a signal for an agency to focus on changing the existing products to meet these needs or
developing new offerings to better serve the market.

Both life and annuity needs change over time. For Example: Life expectancy and our insurance
agency must be conscious of remaining on top of the differing needs of its customers to ensure that
their business relationship doesn’t end when the clients’ need for that particular policy does.

A young couple with two young children, for example, has different life insurance needs than a
couple pondering retirement whose children are grown. The former likely will be more concerned
with the affordability and the amount of coverage, making sure that the family is protected if
something happens to either part of the couple. The latter may instead be focused on tax advantages,
ease of passing the money down to heirs or accessing some of the funds to help maintain their
lifestyle.

SITUATION ANALYSIS
MARKETING STRATEGY

Segmentation

Segmentation helps companies to meet customers’ expectations in an efficient way. Rarely any
company is capable of meeting or fulfilling the needs of the entire market. Therefore, it is essential
to categorize customers into different segmentations, and chooses the best segmentations to reach.

There are four basic segmentation strategies according to the various characteristics of the
segmentations, including:

1) Behavioural segmentation, which includes the variables of usage rate and patterns, price
sensitivity, brand loyalty and benefits sought, etc.
2) Geographic segmentation, which bases on regional variables, such as the region, climate,
population density and population growth rate, etc.

3) Demographic segmentation, which is used for the variables of age, gender, ethnicity, education,
occupation, income and family status, etc.

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4) Psychographic segmentation, which consists of the variables of values, attitudes, and lifestyle,
etc.

Analysing customers in these four aspects, managers will be able to categorize customers into
different segments. Segmentation is conducted base on the common characteristics shared in the
same segment. Segmentation enables managers to satisfy customers better by offering the optimized
products for different segmentations, according to their needs.

Targeting

Targeting comes after segmentation where the market has been broken into several segments.
Targeting is the process of choosing and concentrating companies’ efforts on one or a few key
segments.

The idea of targeting is to make companies focus on target segmentations in order to ensure the
target group to be highly satisfied. However, on the other hand, ignoring other customers who are
not in the chosen segmentations may lead to a loss of companies’ market shares.

Positioning

Positioning means to create a desired image in the minds of their target market for its products,
brand or organization (Product Positioning 2010). Moreover, positioning involves implanting the
brand’s unique benefits and differentiation in the customer’s mind.

STP process, in conclusion, is a process that begins with dividing the existing and potential
customers into different segmentations. And among those segmentations, only a few will be chosen
to satisfy by the company. Positioning, the last step of STP process, is to implement the target
groups by providing the best products and services, in order to distinguish the company from its
competitors and to define the place of the company rightly in the market.

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2.2.2 Marketing mix

In addition to STP process, marketing mix is another business tool that has been long time served as
the principal foundation for a marketing plan. Marketing mix consisted of four parts, the 4Ps,
including product, price, promotion, and place (Vignali 2001). (Figure 6)

Product: the commodity or service that is available to customers.

Place: (also known as distribution channel) activities that make the product available to target
consumers. It refers to the mechanism through which goods or services are delivered from a
manufacturer or a service provider to the user or consumer.
Promotion: the activities a market could utilize to provide information about their products and
service to attract consumption and increase sales.

Price: the cost for consumers to receive the goods or service.

S
The Traditionalists: are the largest segment and desire full coverage at a low cost. They want
coverage from out- of-network providers and easy access throughout the country. Unrealistically,
they are a group most concerned about cost, but also the most interested in premium services and
having a healthcare advocate. Despite concerns about costs, they are NOT willing to participate in
health activities or doctors’ visits for financial incentives.

The Easy-Does-Its: want coverage from out-of-network providers and easy access when traveling.
They are willing to have annual physicals, participate in activities to improve heath to save money,
and are somewhat willing to switch primary care providers. About one-in-three would like a
healthcare advocate to help with reimbursements, scheduling and complexities. They do NOT care
at all about online access or tools.

The e-Patients: are all about technology. They want to manage healthcare online and are open to e-
visits. Out- of-network coverage, knowing and trusting the insurer and low costs are also important.
They have weak loyalty as they are completely willing to switch primary care providers for these
other benefits. Not surprisingly, this segment is younger, with a large portion under 40 years old.

The Unswayable: want to manage healthcare online but will NOT switch primary care providers.
Despite proclivity to online healthcare management, they are not interested in e-visits. This group is
least concerned about costs and also least inclined to want an advocate.

The Disconnected: only a small portion of the population, and is completely unengaged with
healthcare insurance and related decisions. They are more likely to be uninsured, skew male, are the
least educated, and have the lowest income.

https://www.cmbinfo.com/cmb-cms/wp-content/uploads/2012/03/HealthDoc_FINAL.pdf

T Ensure has sold insurance to the customers in general for a long time. Therefore, it is possible for
us to target at all of the segmentations.

the middle age populations consider mostly about their children, and investment. They have the
highest purchase powers in the society. Therefore, Ensure should present them the high functional
products for children, with participating policy, which allows them benefit from the dividends as
part of its investment.

The elder group considers mostly about their retirement lives, and prefers products that provide
them with financial support after their retirement. Since they are going to quit from their job soon,
they would prefer low investment with a relatively middle return. In conclusion, elder people search
for products with health insurance function and policy in a relative middle price.

The younger generation are the low-income group among the target groups

https://www.theseus.fi/bitstream/handle/10024/43405/Duan_Miao.pdf?
sequence=2&isAllowed=y

Marketing Mix
Pricing- The customers are especially sensitive to value. Ensure must ensure that our price and
service are perceived to be good value to the client.

Advertising and Promotion-

1. Ensure Insurance must improve and increase contacts with the clients. All clients should be
contacted before renewal to ensure covers are current and adequate

Customer Service- The reality of the insurance brokerage industry is that the service is the product.
Insurance is a commodity-like purchase and it is the service of the broker that distinguishes
providers. With this important fact recognized, Ensure strives to provide the highest level of
customer service.

Decline stage – Product Life Cycle Strategies

The decline stage is the stage in which the product’s sales decline.
Sales may plummet to zero, or they may drop to a low level where they continue for many years.
Reasons for the decline in sales can be of various natures. For instance, technological advances,
shifts in consumer tastes and increased competition can play a key role. As sales and profits decline,
some competitors will withdraw from the market.
The company needs to pay more attention to its aging packages to identify products in the decline
stage early. Then, the firm must take a decision: maintain, harvest or drop the declining product.
The main objective in the decline stage should be to reduce expenditure. General strategies for the
decline stage include cutting prices, choosing a selective distribution by phasing out unprofitable
outlets and reduce advertising as well as sales promotion to the level needed to retain only the most
loyal customers.
If management decides to maintain the product or brand, repositioning or reinvigorating it may be
an option. The purpose behind these options is to move the product back into the growth stage of
the PLC.
Understanding Consumer Buying Strategies
The product model for health insurance, like any product model, demands detailed understanding of
the customer and of customer segments.

The active health value manager wants the greatest access to quality healthcare for the lowest price.
This consumer will select the appropriate benefit plan.
Depending on specific product designs, these choices might virtually eliminate out-of-pocket costs,
guarantee a low renewal price.

The price shopper is looking for the best in-year deal and may be willing to buy down benefits
through higher deductibles.
Health insurance deductibles are the amount of money you have to pay toward your health care
before your insurance starts covering costs.

The partner for life wants a stable, trust-based relationship with a health plan that meets consumer
needs and offers one-stop shopping for a benefits portfolio that extends beyond health—life,
STD/LTD, long-term care, etc. This consumer may be interested in a “frequent flyer” program with
multi-year pricing and an incentive-accumulation system with a lifetime focused service model.
https://www.oliverwyman.com/content/dam/oliver-
wyman/global/en/files/archive/2011/The_Four_Ps_of_Post_Reform_Product_Strategy.pdf