DEPARTMENT OF MANAGEMENT POSTGRADUATE PROGRAM IN

BUSINESS ADMINISTRATION
BUSINESS RESEARCH METHODS
INDIVIDUAL ASSIGNMNET ON MARKETING MANAGEMENT
SUBMITTED TO - MR. MELKAMU ADMU
Title of the assignment –Market segmentation Targeting and Position
Group Members
Name ID Number
1. Tsige Mekibib MBA(1)027/15B
Nov/2023
Addis Ababa
 TABLE OF CONTENTS

Table of Contents
Background of the company................................................................................................. 3
A. Define market segmentation, targeting and positioning. Describe the basis of
segmentation, list out the benefits of segmentation and write the criteria for good
segmentation. ......................................................................................................................... 4
Market segmentation ............................................................................................................ 4
Market Targeting .................................................................................................................. 4
Market Positioning ................................................................................................................ 5
Benefits of STP marketing .................................................................................................... 7
Significance of segmentation to the insurance business ..................................................... 9
1. B) Describe how the company’s segmentation, targeting and positioning strategies
and identify the basis of segmentation that the company utilizes. .................................. 10
Nyala insurance Boosted Credibility Within their territory ........................................... 11
Benefits of Nyala Insurance Company Customer Segmentation .................................... 12
1. C. Describe its strength and weakness regarding to segmentation, targeting and
positioning. ........................................................................................................................... 14
Strength of Market Segmentation, Targeting and Positioning of Nyala insurance ...... 14
Weakness of Market Segmentation, Targeting and Positioning of Nyala insurance .... 14
2. A. Define and explain product, price, promotion and distribution strategies. .......... 16
B. Identify the product, price, promotion and distribution strategies of the company of
your choice. .......................................................................................................................... 18
C. Describe the strength and weakness of the company regarding its product, price,
promotion and distribution strategies. .............................................................................. 21
Reference............................................................................................................................... 22

2
 Background of the company
Nyala Insurance S.C. (NISCO) is a leading insurance company in Ethiopia known for its strong
performance, growth, and financial position. Established in 1995 with a subscribed capital of
Birr 25 million and paid-up capital of Birr 7 million, NISCO initially focused on general
insurance business. In 2005, it expanded to include life insurance and increased its paid-up
capital to Birr 35 million. Over the past 10 years, NISCO has experienced rapid growth, with its
paid-up capital reaching Birr 830 million.
Headquartered in Addis Ababa, NISCO operates through a network of 48 service outlets (41
Service Centers and 7 Contact Offices) across Ethiopia. In 2023, the company wrote Birr 1.3
billion of premium income, realized a gross profit of Birr 303.6 million, and had total assets of
Birr 3.8 billion.
Nyala Insurance S.C. has skilled, young, and motivated workforce. The Company’s Human
Resource Policy is to follow ―Grow Own Trees‖ strategy and recruit young and dynamic
graduates mostly direct from higher learning institutions. One amongst such endeavors is Nyala
Insurance Graduates Trainee Program (NISCO GTP) that is directed towards recruiting and
developing exceptional performers in order to ensure the sustainable supply of skilled manpower
needed to execute its strategy.

Registered Office

Protection House, Mickey Leland Street

P.O.Box 12753, Addis Ababa, Ethiopia
Tel. 251-11-6626667
Fax 251-116626706
e-mail nisco@ethionet.et
Website www.nyalainsurancesc.com

3
 A. Define market segmentation, targeting and positioning. Describe the basis
of segmentation, list out the benefits of segmentation and write the criteria for
good segmentation.
The STP marketing model means you segment your market, target select customer segments
with marketing campaigns tailored to their preferences, and adjust your positioning according to
their desires and expectations. STP marketing is an acronym for Segmentation, Targeting, and
Positioning – a three-step model that examines your products or services as well as the way you
communicate their benefits to specific customer segments.
STP marketing focuses on commercial effectiveness, selecting the most valuable segments for a
business and then developing a marketing mix and product positioning strategy for each
segment.

If you are looking for a simple way to remember and summarize the STP marketing concept, the
acronym STEP is extremely useful:
Segmentation + Targeting Equals Positioning
This formula clearly illustrates that each segment requires tailored positioning and marketing
mix to ensure its success. Let’s take a closer look at each of the three steps in the STP marketing
model.

Market segmentation
Market segmentation divides the market into subgroups of individuals who share similar needs,
wants, and characteristics. STP marketing is effective because it focuses on breaking your
customer base into smaller groups, allowing you to develop very specific marketing strategies to
reach and engage each target audience. STP marketing represents a shift from product-focused
marketing to customer-focused marketing. This shift gives businesses a chance to gain a better
understanding of who their ideal customers are and how to reach them. In short, the more
personalized and targeted your marketing efforts, the more successful you will be.

Market Targeting
Targeting involves deciding which customer segment or market the firm should be aiming at.
Once a firm identifies all market segments, it must determine which ones to target and how
4
many. This strategy aims to identify small, well-defined target groups. Step two of the STP
marketing model is targeting. Your main goal here is to look at the segments you have created
before and determine which of those segments are most likely to generate desired conversions
(depending on your marketing campaign, those can range from product sales to micro
conversions like email signups).
The list below refers to what’s needed to evaluate the potential and commercial attractiveness of
each segment.
 Criteria size: The market must be large enough to justify segmenting. If the market is
small, it may make it smaller.
 Difference: Measurable differences must exist between segments.
 Money: Anticipated profits must exceed the costs of additional marketing plans and other
changes.
 Accessible: Each segment must be accessible to your team and the segment must be able
to receive your marketing messages
 Focus on different benefits: Different segments must need different benefits.

Market Positioning
Positioning involves determining where your brand or product stands affecting others in the
market. Positioning is a vital part of marketing strategy, as it influences how customers perceive
your product offering. It is directly related to your value proposition. The final step in this
framework is positioning, which allows you to set your product or services apart from the
competition in the minds of your target audience. There are a lot of businesses that do something
similar to you, so you need to find what it is that makes you stand out.
All the different factors that you considered in the first two steps should have made it easy for
you to identify your niche. There are three positioning factors that can help you gain a
competitive edge:
Symbolic positioning: Enhance the self-image, belongingness, or even ego of your customers.
The luxury car industry is a great example of this – they serve the same purpose as any other car
but they also boost their customer’s self-esteem and image.
Functional positioning: Solve your customer’s problem and provide them with genuine
benefits.
Experiential positioning: Focus on the emotional connection that your customers have with

5
your product, service, or brand.
Positioning maps are the last element of the STP process. For this to work, you need two
variables to illustrate the market overview. What to watch for in segmentation, positioning, and
targeting marketing strategy
 Make sure the market is large enough to matter and customers can be easily contacted.
 Apply market research to ensure your approach will add value to the existing customer
experience, above and beyond competitors.
 As Martech continues to become more sophisticated, to support digital marketers' wants
and needs, consider the developments in relation to your product/service.

Market Segmentation, Targeting, and Positioning - Key takeaways

a) Segmentation, targeting, and positioning make up the STP marketing model.
b) Segmentation involves dividing the market into subgroups based on demographic,
geographic, psychographic, and/or behavioural characteristics.
c) Targeting involves selecting which customer segment the firm should target, i.e., the
most attractive segment.
d) Positioning influences how customers perceive a product or service. During this stage,
the business needs to decide how it wants customers to view its product compared to
competitors' products.
e) The STP marketing model is a process that links each step.
f) Segmentation, targeting, and positioning are prerequisites for the marketing mix.

6
 Benefits of STP marketing
If you aren’t already convinced that STP marketing is going to revolutionize your business,
we’re breaking down the key benefits that STP marketing has over a traditional marketing
approach. Because STP focuses on creating a precise target audience and positioning your
products/services in a way that is most likely to appeal to that audience, your marketing becomes
hyper-personalized. With personalization:
 Your brand messaging becomes more personal and empathetic because you have your
customer personas and know exactly whom you’re talking to;
 Your marketing mix becomes more crystalized and yields higher return on investment
because you’re no longer wasting budget on channels that your audience simply ignores;
 Your market research and product innovation become more effective because you know
exactly whom to ask for advice and feedback in the development phase.

Using the (segmentation targeting and positioning) STP model, businesses can identify their
most valuable customer segments and create products and marketing communications that target
those customers. This helps you create engaging, personalized marketing campaigns that convert
visitors to customers at a high rate.
Criteria for good segmentation
1. Demographics

Breakdown by any combination: age, gender, income, education, ethnicity, marital status,
education, household (or business), size, length of residence, type of residence, or even
profession/occupation. This is one of the most widely used segmentation methods. Demographic
segmentation divides consumers into groups based on characteristics such as:
 Age.
 Sex.
 Income.
 Family size.
 Occupation, etc.

7
 2. Geographic segmentation

This divides the market based on geographical aspects. Geographic segmentation can be a
helpful tool for marketers, as certain customers from different parts of a country could have
different wants and needs. Geographic segments include:
 Country.
 City.
 Neighbourhood.
 Climate
3. Psychographic segmentation

This refers to 'personality and emotions' based on behavior, linked to purchase choices, including
attitudes, lifestyle, hobbies, risk aversion, personality, and leadership traits. magazines read and
TV. While demographics explain 'who' your buyer is, psychographics inform you 'why' your
customer buys. There are a few different ways you can gather data to help form psychographic
profiles for your typical customers.
This looks at the intrinsic traits of the target consumer.
 Style.
 Values.
 Personality traits.
4. Behavioural segmentation

This breaks down the market into subgroups based on consumers' behaviour when making
purchase decisions. It can be based on:
 Occasions.
 User status.
 Usage rate.
 Loyalty.

8
 Significance of segmentation to the insurance business
i. Market segmentation is very important to an insurance organization. In insurance
business, the prime focus is on the policyholder. Insurance marketing aims at transforming the
prospects into policyholders. Market segmentation enables the insurance marketer to identify the
level of expectations of the policyholders.
ii. Insurance organizations capitalize on the available opportunities in market. They need to
increase their market share constantly. Market segmentation in insurance business helps in
informing, sensing and persuading the different segments where the potential users are available.
iii. The insurance professionals can do business in all segments, such as rural and urban, men
and women, agricultural or industrial and so on. Segmentation makes it possible to spread the
insurance business even to the agricultural sector of the economy which is predominantly rural-
based.
iv. With market segmentation, the insurance organizations become aware the changing needs
and requirements of the rural sector and shape their services accordingly.
v. Knowing and understanding the market is considered significant to the insurance
professionals since the segmentation process helps them in scanning the changing needs and
requirements of the rural sector.
vi. A study of segmentation would help insurance professionals in formulating a sound
marketing strategy. The product mix based on market segmentation would be competitive. All
the prospects would have additional attraction in using the services.
vii. The segmentation would help insurance professionals in making the promotional
measures creative. It would be instrumental in sensitizing the prospects. The advertisement
professionals would make advertisement appeals, messages and campaigns proactive to the
receiving capacity of the target audience.

9
1. B) Describe how the company’s segmentation, targeting and positioning
strategies and identify the basis of segmentation that the company utilizes.
Nyala Insurance Company Customer Segmentation, Targeting and
Positioning Strategies
In Nyala insurance Company customer segmentation, targeting and positioning refers to dividing
your target audience based on different matrices. This allows them to create a more targeted
marketing strategy for each group. Nyala Insurance company customer segmentation helps reach
out to potential clients and relate to their needs accordingly.
i. Segmentation Based on Demographic Data

Nyala Insurance the first method of Customer segmentation can be conducted on the metric of
demographic data, splitting their target audience based on age, sex, race, family size, education,
income, religion, and more. Demographic-based segmentation is one of the most common types
of Nyala insurance company customer segmentation and allows the company to obtain the
necessary data quickly. They can collect data through different methods, including customer
surveys, analysing social media profiles, using third-party data providers, or using data
management tools.
ii. Segmentation Based on Geographical Data

Nyala Insurance another way of customer segmentation is based on geographic data includes
dividing their target audience into groups based on location. This can help the company
understand the kind of insurance a potential client requires. While the most common method of
segmentation based on geography includes division based on region or city, the company can go
one step ahead and divide their target audience based on the characteristics of their location. This
includes climate, population density, traffic, accidents, and more.
iii. Segmentation Based on Personality Traits

One of the most effective Nyala insurance customer segmentation is based on personality traits.
Such data includes customer interest, lifestyle, values, and other information on their personality.
This segmentation helps the company create a targeted ad campaign and service package tailored
to a particular customer. This increases lead generation and customer retention.

10
Here are a few Nyala insurance Company marketing strategies you can use to grow their
insurance business in 2013 and beyond.
a) Boost Credibility Within their Community
b) Develop a Referral Network
c) Invest in Content Marketing
d) Try PPC Advertising
e) Manage (and Encourage) Online Reviews

Nyala insurance Boosted Credibility Within their territory

Growing their client base starts with their branch areas. After all, it’s much easier to develop
relationships with prospects and customers when you can meet them in person. As Nyala
insurance company, there are a lot of opportunities for making a positive impression within their
local community.
Broad marketing strategies such as billboards and public transport advertising can be an effective
way to get their name out there when they’re just starting and need to build brand awareness. But
they take a more active approach, too. Consider sponsoring a local sports team or media race,
volunteering for local organizations, and buying booths at events, such as arts festivals. These
can all help them get the word out while boosting their company credibility.
Nyala insurance developed a Referral Network
Developing a referral network is one of the best ways to grow the Nyala insurance company
business. Yes, today, most of the contact may happen online, but they can still find unique ways
to demonstrate their value as a referral partner. The company collaborate with other agencies
specializing in different types of insurance or even consider seeking out real estate agents and
mortgage lenders, as their clients will likely need their products and services.
Once the Nyala insurance company made the introduction, be consistent with their follow-ups.
Find unique ways to add value to their strategic partners’ businesses, and they’ll start generating
referrals in no time.

Invest in Content Marketing

Content marketing for Nyala insurance company is an integral part of any marketing strategy.
Want to drive traffic to their website while also driving qualified leads? Content marketing can

11
help them achieve this and more if you stay consistent.
Content marketing gives the company a unique opportunity to share the company services with
their audience. It can be difficult to navigate the industry language and available policy options.
By creating content that helps prospects and clients understand their options for coverage, such
as blogs, guides, and tip sheets, you can deliver lasting value. This makes content marketing one
of the best Nyala insurance company marketing ideas out there. And over time, if you stick with
it, you can become a trusted authority on all things insurance.
Try PPC Advertising
Competition is fierce in the insurance industry. And most people seeking to purchase insurance
are looking for a good deal. While they’re scouring Google for the best options, they don’t want
their website to appear on the last possible results page. Nyala insurance uses pay-per-click
(PPC) advertising a try to counteract this. By bidding on specific keywords, you can get their
insurance company in front of more people than you can in the search results alone.
Because it’s so competitive, you’ll likely need some professional help creating your PPC
campaigns. Forget trying to figure out geo-targeting, device targeting, and keyword bidding
strategies on them own. They’ll be the most successful to help them launch PPC advertising
campaigns for the company.
Manage (and Encourage) Online Reviews
Managing their company online reviews is one of the most critical for Nyala insurance company
marketing strategies for winning new clients. With 89% of customers making an effort to read
reviews online before buying a new product, it’s evident how important reviews are to their
company’s reputation. Reviews help prospects and customers make better decisions, and online
feedback is generally trusted as much as feedback from a personal friend or family member
would be. Reviews also help set expectations for new customers. They can determine if the
company provides adequate customers service and support, which can make or break their
decision to work with you.

Benefits of Nyala Insurance Company Customer Segmentation

Customer segmentation is a crucial marketing strategy for Nyala insurance Company. Some of
the major benefits of company customer segmentation include the following:
 Targeted Marketing Campaigns:

Dividing customers into groups allows Nyala insurance Company to create and launch targeted

12
marketing campaigns to engage an audience and improve customer satisfaction.
 Improved Product Development:

Customer segmentation helps Nyala Insurance Company develop services and packages based
on customer needs, appealing to the customer base and improving the company's reputation.
 Improves Customer Retention:

By dividing their customers based on specifics and creating a targeted approach to customer
satisfaction, Nyala insurance Company can provide value and improve customer experience.
This helps improve customer retention and even gives you chances to upsell.

13
 1. C. Describe its strength and weakness regarding to segmentation,
targeting and positioning.
Strength of Market Segmentation, Targeting and Positioning of Nyala
insurance

a) The Nyala insurance company marketer can spot and compare marketing opportunities.
He can examine the needs of each segment and determine to what extent the current
offering satisfies these needs. Segments which have low level of satisfaction from current
offerings represent excellent opportunities for the marketer.
b) With the help of knowledge about different segments, the Nyala insurance marketer can
better allocate the total marketing budget. Differences in customer response to different
Nyala insurance marketing tools serve as the basis for deciding on the allocation of
market funds to different customer groups.
c) The Nyala insurance marketer can modify his product/service and marketing appeals to
suit the target segment.
d) Segmentation facilitates setting up of realistic selling targets and priorities.
e) Management can identify new profitable segments which deserve special attention.
f) It is possible to deal with competition more effectively by using resources more
effectively.
g) Nyala insurance Appropriate service packages can be developed for each market
segment.

Weakness of Market Segmentation, Targeting and Positioning of

Nyala insurance
a) Nyala insurance Segmentation increases costs. When a firm attempts to serve several
market segments, there is a proliferation of products. Cost of production rises due to
shorter production runs and product variations.
b) Larger inventory has to be maintained by both the manufacturer and the distributors.
c) Nyala insurance Promotion and distribution expenditures increase when separate
programme are used for different market segments.

14
 d) When characteristics of a Nyala insurance market segment change, investment made
already might become useless.

Segmentation, targeting and positioning Errors

Segmentation, targeting and positioning is the act of designing the company’s offering and image
so that they occupy a meaningful and district competitive positions in the target customers mind.
As companies increase the number of claims for this brand, they risk disbelief and a loss of clear
positioning. In general, a company must avoid four major positioning errors: -

 Over Positioning
 Under Positioning
 Confused Positioning.
 Doubtful Positioning

The advantages of solving the position problem is that enables the company to solve the
marketing mix problems. The marketing mix-product, price, place and promotion- is essentially
the working out of the tactical details of the positioning strategy.

Thus, a firm that seizes upon the ―high quality‖ position‖ knows that it must produce high
quality products, change a high price, distribute through high-class dealers, and advertise in high
quality magazines. This is the primary way to protect a consistent and believable high quality
image.

15
 2. A. Define and explain product, price, promotion and distribution
strategies.
The four Ps of marketing: product, price, place and promotion
The marketing mix is the set of controllable, tactical marketing tools that a company uses to
produce a desired response from its target market. It consists of everything that a company can
do to influence demand for its product. It is also a tool to help marketing planning and execution.
The marketing mix can be divided into four groups of variables commonly known as the 4Ps:
Product: The goods and/or services offered by a company to its customers.
Price: The amount of money paid by customers to purchase the product.
Place (or distribution): The activities that make the product available to consumers.
Promotion: The activities that communicate the product’s features and benefits and persuade
customers to purchase the product.
Each of the four Ps has its own tools (Marketing tools) to contribute to the marketing mix:
Product: variety, quality, design, features, brand name, packaging, services
Price: list price, discounts, allowance, payment period, credit terms
Place: channels, coverage, assortments, locations, inventory, transportation, logistics
Promotion: advertising, personal selling, sales promotion, public relations
These Are the 4 Ps of Marketing
i. Product

Creating a marketing campaign starts with an understanding of the product itself. Who needs it,
and why? What does it do that no competitor's product can do? Perhaps it's a new thing
altogether and is so compelling in its design or function that consumers will have to have it when
they see it. The job of the marketer is to define the product and its qualities and introduce it to
the consumer. Defining the product also is key to its distribution. Marketers need to understand
the life cycle of a product, and business executives need to have a plan for dealing with products
at every stage of the life cycle.
ii. Price

Price is the amount that consumers will be willing to pay for a product. Marketers must link the
price to the product's real and perceived value, while also considering supply costs, seasonal
discounts, competitors' prices, and retail mark up. In some cases, business decision-makers may

16
raise the price of a product to give it the appearance of luxury or exclusivity. Or, they may lower
the price so more consumers will try it. Marketers also need to determine when and if
discounting is appropriate. A discount can draw in more customers, but it can also give the
impression that the product is less desirable than it was.
iii. Place

Place is the consideration of where the product should be available—in brick-and-mortar stores
and online—and how it will be displayed. The decision is key: The makers of a luxury cosmetic
product would want to be displayed in Sephora and Neiman Marcus, not in Walmart or Family
Dollar. The goal of business executives is always to get their products in front of the consumers
who are the most likely to buy them. That means placing a product only in certain stores and
getting it displayed to the best advantage. The term placement also refers to advertising the
product in the right media to get the attention of target consumers.
iv. Promotion

The goal of promotion is to communicate to consumers that they need this product and that it is
priced appropriately. Promotion encompasses advertising, public relations, and the overall media
strategy for introducing a product. Marketers tend to tie together promotion and placement
elements to reach their core audiences. For example, In the digital age, the "place" and
"promotion" factors are as much online as offline. Specifically, where a product appears on a
company's web page or social media, as well as which types of search functions will trigger
targeted ads for the product.

17
 B. Identify the product, price, promotion and distribution strategies of
the company of your choice.
Nyala Insurance company Product Strategy:
Nyala insurance company is one of the largest financial institutions in the Ethiopia. Nyala is an
insurance company that offers a cover in return of multiple regular premiums. Insurance is
simply a contract between two parties where one is willing to pay small premium amounts,
instead of incurring a huge loss all at once, to the other party which will cover the loss on the
basis of a few conditions.
Nyala offers many products in its marketing mix such as Life insurances, Medical Protection,
which cover your medical expense, critical Illness protection for specific medical conditions, and
accidental cover for road accidents, insurance for travel and lifestyle to protect belongings and
oneself on a trip. These are some of the areas where Nyala offers insurance and allows the
customers to avail these services once proper background check and approval is taken from
them.
Nyala Insurance Price/Pricing Strategy:
Nyala insurance uses a price which helps it compete with the challenging competitors in the
sector. Prices in the insurance sector are predatorily. The same life insurance can be offered by
three different parties at the three different prices. Prices completely depend upon the kind of
cover that is offered, the kind of client an insurance company deals with, how often they meet
with accidents, and the conditions that are applied on the basis of which an insurance cover will
be provided. There are a number of players in this market and that can be the reason why prices
need to be affordable at the same time need to be profitable for the insurance provider. Complete
break even analysis needs to be done through data regarding the number of customers that
actually had to be provided the coverage in the year.
Nyala Insurance Place & Distribution Strategy:
Nyala Insurance enjoys a strong presence in some of the upcoming economies federal city And
this is the region where need for a proper insurance system is immense. Lately, most of the
insurance activating and availing is carried out through online mediums. A service can be
booked online and an Nyala insurance can visit the party with all the valid information regarding
a particular insurance scheme.
Nyala Insurance Promotion & Advertising Strategy:

18
The brand which is now famously known as the Real Life Company advertises and promotes the
brand on multiple mediums under the same name. They have made a conscious effort to improve
social media presence and since then have managed to garner huge attention from potential
customers. The brand advertises on vanilla mediums like TV, radio, print and outdoors as well,
depending on the country, city, location and the kind of traction it enjoys in that region. Since
this is a service marketing brand, here are the other three Ps to make it the 7Ps marketing mix of
Nyala Insurance.
People:
People involved in the working of Nyala Insurance are insurance Company, people that create
policies, people that maintain data and customers that at the end of the day need insurance.
Further, there are people involved that acts as motivators to a customer that pushes other
potential customers to buy insurance.
Process:
The process here is quite simple. There are set policies designed that a customer can opt for.
Whenever insurance is needed, the customer can reach out to Nyala insurance. Nyala Insurance
will arrange for an insurance agent that will visit the person or business in need for insurance. A
plan is selected and a premium amount is selected. On the basis of the same a cover is provided
to the customer. Once the customer starts paying a premium, he is insured.
Physical Evidence:
The physical evidence provided in this case is the insurance documents or in today’s time the e-
document that Nyala insurance will provide once a customer has availed for the insurance.
Advertisements, brochures and plans can be treated as physical evidence as well. This concludes
the marketing mix of Nyala Insurance.
Threat of New Entrants:
Nyala Insurance is one the most recognized brands in the insurance industry. The threat of new
entrants can be diagnosed through factors such as the existing number of players in the industry,
barriers to entry, switching costs, brand equity, differentiability, etc. The barriers of entry are low
in case of the insurance industry. Similar is the case with customer switching costs. There is less
scope for differentiability in the insurance industry for a company like AIA as every insurance
has more or less similar offerings. The difference that can be showcased is minimal. Brand
equity plays a major role in customers taking a decision to switch from one insurance to another.

19
Threat of Substitutes:
A substitute can be any product or service, or offering that can pose as a significant alternative to
Nyala Insurance's offerings for the customers. There are not many substitutes per se for the same
value proposition for the insurance industry, but there is always a risk lurking for the company
for the potential alternatives the customers can invest in instead of insurance such as stocks, land,
gold, etc.
However, we can safely say that there isn't an exact alternative to health insurance. However, it
must be noted that the switching costs for the customers are less. But at the same time, as the
value proposition is different for the alternate short-term investments or long-term investments,
the purpose and functionality are very different, and they cannot completely replace medical and
health insurance. Due to the above-mentioned factors, we can infer that the threat of substitutes
is less moderate.

20
 C. Describe the strength and weakness of the company regarding its
product, price, promotion and distribution strategies.
The Nyala insurance company four Ps of the marketing mix have a number of weaknesses in that
they omit or underemphasize some important marketing activities. For example, services are not
explicitly mentioned, although they can be categorized as products (that is, service products). As
well, other important marketing activities (such as packaging) are not specifically addressed but
are placed within one of the four P groups.
Another key problem of the Nyala insurance company is that the four Ps focus on the seller’s
view of the market. The buyer’s view should be marketing’s main concern. The four Ps of the
marketing mix can be reinterpreted as the four Cs. They put the customer’s interests (the buyer)
ahead of the marketer’s interests (the seller).
 Customer solutions, not products: Customers want to buy value or a solution to their
problems.
 Customer cost, not price: Customers want to know the total cost of acquiring, using and
disposing of a product.
 Convenience, not place: Customers want products and services to be as convenient to
purchase as possible.
 Communication, not promotion: Customers want two-way communication with the
companies that make the product.

An effective marketing strategy combines the 4 Ps of the marketing mix. It is designed to meet
the company’s marketing objectives by providing its customers with value. The 4 Ps of the
marketing mix are related, and combine to establish the product’s position within its target
markets.

21
 Reference
1. Smith, W.R.: ’Product differentiation and market segmentation as alternative marketing
strategies’, Journal of Marketing (21 July 1957).
2. Zikmund, William G. and D’Amico, Michael: Effective Marketing: Creating and
Keeping Customers (St Paul, MN, West, 1995), p. 232
3. Kotler, P.: Marketing Management, 7th edn (Englewood Cliffs, NJ, Prentice Hall, 1991)
4. https://www.nyalainsurancesc.com/

22