Digital and Interactive Marketing - Essay Example

? Digital and Interactive Marketing Inserts His/Her Inserts Grade Inserts Table of Contents Tableof Contents 2 Introduction 3 Environmental analysis 5 Aims and objectives 9 Company strategy 11 Recommendations 17 Implementation 19 Conclusion 20 Bibliography 21 Introduction Internet marketing Internet marketing is basically online marketing of a company’s products or services. It includes in it the tactics and strategies to market by means of using e commerce technology like website designing strategy for marketing or email promotions to generate more sales. (Mail) Common areas of interest within online marketing are affiliate marketing, display advertising, interactive advertising, search engine marketing and viral marketing. Company profile and concept Aviva plc is one of the world’s largest insurance companies. It has about 46000 employees and 28 countries. In UK the company’s strategy is to establish itself as a single global organization that is relatively quicker at fulfilling customer needs. And to support this strategy of theirs they needed a modern human capital management system. Later in 2010 Aviva introduced workday as a global solution to this concern. (Stobbart) Aviva has been a market leader in UK and was best known with its older name which was Norwich union. The company’s main spheres of operations are in Europe and although it offers general insurance and other financial services, it generates most of its revenues from pensions and life insurance. The marketing team of aviva takes care of its marketing and retention strategies, member benefit development for the health insurance business and product strategy. Aviva’s sales team looks after the development and delivery of sales of aviva in its markets Issues with online presence When Aviva started to venture online it met different degrees of success. However some issues faced by the company with its online presence was because of the conservative nature of the insurance industry. There are quite a lot of technical issues that are becoming a problem. Also the complexity of all the technology involved in internet marketing has been very challenging for the company. Much of the technology used by Aviva is used to automate instead of changing already existing business processes. (Ward) The basic problem with the use of websites in internet marketing is that most of the times websites don’t appear in internet results for search words related to your business as a result of which your customers end up never having an access to your website. (Ashmore) In Aviva’s case Aviva has found online solutions for increasing its efficiency and to cut down on some paper work. These online solutions mainly focus on the needs of financial advisers. This was launched by Aviva in the UK. (Staff) Developing online strategy using new tools understanding and definitions This solution is for advisors e-commerce platform that was launched in June 2009 and now provides to around 40 000 investors tax, product and technical support related information. (Mail) One of the new features added to the company now make the advisors capable of monitoring and switching funds online on more than about 1.6 million investment bonds, group, stakeholder and individual personal pensions New feature is e-documents which provide the advisors an access to electronic version of client correspondence. (Stobbart) The online funds switch solution also has some other features like now customer signatures are not required as the online services get hold of the entire customer’s information and removes the need for their signature every time a switch is needed. Moreover, the policy fund research tool lets the advisors know which funds are available to switch and an online compliance record of each switch is available. Lastly, a client confirmation letter is automatically issued for each client after every fund switch is done. (Publications) (Berthon) Now talking about the e- documents system, it gives to the advisors access to policy documents and benefit statements spread across Aviva’s range of individual and group pension contracts.. (Ward) In 2010 there were new features added to Aviva and these two new online solutions clearly complete the new features added. These features are of pensions apply which will allow stakeholder and personal pensions business to be working online also including in it multiple transfers. (Ashmore) Environmental analysis Market analysis The modern insurance market has evolved into an extremely complex industry as it involves various kinds of products and services. The insurance industry has been a little slow at adapting to e-commerce techniques in its business. In spite of that it has done quite well at picking pace. Now the idea of an enabled insurance has been adopted by many businesses in the industry and the resulting benefits re numerous. These include the improvement in investment strategies leading to a growth in investment, the increasing speed producing more than ever competitive products, more interaction with potential customer and more opportunities for intermediaries. (Ward) The European insurance sector to be specific has very actively made its transition to e-commerce.in Asia, India and china have been at a good pace. (Louis) Insurance market in the UK is split into two sectors. One is of long term insurance which includes in it pensions, life insurance, annuities and health insurance (Bezjian-Avery) The second one is general insurance which includes in it motor, property, accident and health and general liability. Most of the insurance market is captured by UK based companies but some of it is in the hands of foreign insurers.UK through its London market plays a big role in the insurance business which is an international business. The association of British insurers have described the London market to be the world’s most successful market for internationally traded insurance. (Staff) Distribution Distribution channels in the insurance market are an important feature. a number of different channels include direct sales force, intermediaries, independent financial advisors and agents. Trends and prospects in this market The clear patterns that are emerging in this market are that of having a relatively more focused approach by the insurers and a tightening of the premium rates. This tightening of premium rates is extremely welcome both in the UK and internationally. (Stern) Macro environment Political Countries with political instability cannot raise healthy businesses. This could cause trouble for the insurance business as well .this also leads long term planning problems. At times government’s lack of supervision leads insurance companies to involve in some unethical business as a result of which reputation of insurance companies could be put at stake. Economic Some poor economic conditions could be a bit problematic for insurance companies because at places where people can hardly afford their livelihood they are less likely to think about their future needs. Also higher cost of insurance companies could result in a poor financial condition for them which will make them unable to invest in latest technology. (Publications) Social One big issue with the social factor for insurance is that of lack of public awareness. Mainly in the rural areas. Also most of the insurance companies are located in the urban areas and hardly any in the rural ones. This is because these companies believe they will reap more economic benefits from urban areas. Thus this policy becomes a problem in the growth f the insurance industry. (Gwey) Micro environment Threat of new market entrants Competition One of the major competitors to Aviva is Lloyd’s. The importance of relation building with its customers is strength of Lloyds. Lloyd’s has moved with a good pace and has itself invested in e-commerce and has embraced very fast to the IT initiatives. (Stobbart) Lloyds, over the past five years has made a great deal of progress in implementing competitive IT systems and processes in the market. Bargaining power of buyers Consumer research A survey of public attitudes to the experience of insurance companies helped us understand that that a lot of people have very little understanding of what their insurance policy is actually giving them. It has also been observed that a lot of people are more than satisfied with the claims process after they have made a claim. (Ashmore) 1. Consumers usually do not prefer changing their insurer which just tells us that this market faces an inelastic demand curve and demand is usually not price sensitive. However in motor and property insurance people are likely o to change their insurers. 2. For a consumer, these policies very rarely give them their value for money however utility with the value of motor and property insurance is much higher than any other kinds of insurance. (Stobbart) 3. When the public was questioned about whether they really cared about the financial health of the insurers, most of them answered that there were not. Internal analysis Strengths of Aviva Aviva had 365 billion pounds of assets under management in 2006, which made it amongst the world’s top five insurers being the greatest in UK. (Mail) The personnel management is strength of Aviva.the Company has managed its staff very well as a result all their efforts worthwhile. This helped in improving quality and making the policy reach its end users. (Gwey) Good marketing techniques which also include e-marketing to provoke impulse buying have been used. These were very effective. Weakness Aviva has not been able to manage the place of its branches and that has been a major setback. Lack of place management has made the workplace less attractive and proactive in generation of employee efficiency. (Mail) The branch manager lack professional expertise to make these place decisions productive. Aims and objectives Aviva’s company strategy has three basic elements in it: 1) Focusing on geographically segmenting themselves 2) Offering a combination of life and general insurance 3) Strengthening their core competencies Focusing on geographic segmentation: Aviva is planning to focus on at least 12 markets where they have established themselves and their strength already. The opportunities that they have in Europe are their focus on eight markets over there. (Ward) Europe and especially UK makes one of the largest pension markets in the world while at the same time having the potential of the greatest growth also over the coming five years. (Gwey) Therefore the eight markets in Europe that are under Aviva’s focus are UK, Spain, Turkey, France, Russia, Italy, Ireland and Poland. (Staff) Secondly, their focus is about growing profit levels in North America: More specifically their focus will be Canada and the US. In Canada they are trying to be great underwriting company. Whereas in the US they have diversified their business mix by moving up the ladder in the life protection business to reach the top 10th positing while at the same time continuing to strengthening on their core annuity business. (Ashmore) Thirdly, the Asia pacific: the focus here is on growing franchise value, Here they are trying to pursue franchise growth by means of organic investment. The focus is on high priority markets that are of India and china. And low priority market of Taiwan. (Stern) Aviva’s corporate strategy of summer 2010 was about the company’s intention to operate only on markets and countries which would provide them a high rate of return on their investments. (Louis) Future plans and targets The Company is coming up with strategies to focus its business activity on markets with optimal results. Also some cost cutting measures are to be in practice. This includes a plan to reduce staff members especially in Canada and other general productivity increments are also a part of the plan. All these ideas are designed to accomplish savings of about 400 million pounds per year. (Staff) Aviva is planning to withdraw from Taiwanese insurance market. In the first 9 months of 2010 Aviva experienced a breakdown of revenue generated. This shows that general and health insurance premiums increased by 4 percent. (Gwey) Penetrating into the Asian insurance market will the most important focus point for aviva in order to maintain their competitive edge and market share in the region.asia has already become an important focal point for international insurers and aviva is planning to look opportunities in the Asian regions which would suit their business criteria. Currently aviva is operating in Sri Lanka, Singapore, India, china, Malaysia and Hong Kong. (Mail) Part of the company’s network is Singapore which has in the past managed to be a core market for the British insurer in the Asian region.aviva’s higher sales in the south east Asian market were a result of their success in he Singapore operations. (Stobbart) Aviva’s joint ventures in India, china and south Korea have also resulted in profitable returns. The efficiency measures are continually being implemented and as a result the future of the company seems extremely positive. (Ward) Company strategy Segmentation The personal insurance market is very huge and insurers therefore select a particular strategic market segment to target. Aviva tries to focus on specific groups of customers, niche markets or geographic regions depending on the type of customers and products. (Louis) Aviva limits its scope of market based on their expertise, the specific needs of customer, the regulatory climate of countries in a specific geographical region and the competition The different market segments for Aviva are the national markets, regional markets, customer group markets and niche markets. (Gwey) Target market. Aviva targets different segments of the insurance market.aviva targets its selected market segment by setting rate tiers and the gives discounts within different categories to offer lower rates to preferred customers. (Stern) In the year 2010, Aviva planned to target the US retirement market and did so by combining river road’s equity offering with the company’s own fixed income potential. Aviva has also been trying to target long term care insurance to some customers only for a long time now. One of the target markets for Aviva is the older person himself who is worried that he will have to sell of his assets and go to a hospital (Ashmore) Another target market could be any family member of that older person who would think of that old person to be getting old and feel responsible to take time out for his care. So in order to not put him in a nursing home, this family member may want to buy some insurance for the older person. (Ward) Lastly the target market could be young people since the possibility of anything going wrong when a person is young is very less, the product is price is lower for them and longer the time money is put into it, the more the return on investment. (Staff) Positioning Aviva’s investors have worked out how to position their service in the best manner for their highly specialized customer base. This was a very critical business issue for Aviva. Therefore it became even more critical to develop a sort of brand positioning that would be appealing, credible and clear to a very demanding and knowledgeable customer base. So the company investors wanted to get themselves focused in the process of developing their core competencies from the beginning. (Mail) So in order to rightly position their brand they brought together a team which included in it a creative agency and a specialist marketing consultancy. This team was required to participate with the customers in the process. The project was divided into two parts. In the first part they structured a couple of online communities that would enable them to have a detailed talk with the core channel customers about what they expected from Aviva investors and what was most important for them. All the ideas and knowledge gained from the answers was then used to develop a new core value proposition for the company. The second part of the project was about presenting these ideas and the core proposition for a campaign in a series of online focus groups to collect more feedback before the launch. (Ashmore) Tactics MARKETING –MIX Marketing mix is a mixture of marketing related activities that an organization conducts in order to meet the needs of its target market in the best possible manner. Aviva deals in selling of services therefore a lot importance is given to the formation of its marketing mix. The extended marketing mix includes in it the 7 P’s of marketing. These are called as product, place, price, promotion, physical attraction, people and process. Aviva uses these 7 P’s to market its product in the following way: 1. PRODUCT: Since Aviva sells a service, this service is its product. When a customer buys an insurance policy from Aviva, he does not buy only that policy but also the advice and assistance of the agents, the facility of compensation and claims and the prestige of the company’s name along with it. In this kind f a situation it is natural that Aviva’s customers expect a fair enough return for their insurance and investment. (Stobbart) Aviva aims to maximize its profits, therefore when they are deciding the product portfolio of their product mix, they make sure that the services they are offering or the schemes are motivational for their customers (Gwey) It is natural that the users expect a reasonable return for their investment and the insurance companies want to maximize their profitability. Hence, while deciding the product portfolio or the product-mix, the services or the schemes should be motivational. 2. PRICING: Aviva’s pricing decisions are concerned with firstly the premium that they charge against their policies. Secondly with the commission that they keep for consultancy and underwriting services. The formulation of Aviva’s pricing strategy is highly important under the view of being able to influence the target market and their prospects. In developing countries since the disposable incomes of Aviva’s prospects is low, their pricing decision also transforms the capable policy holders into actual policy holders. (Mail) Their pricing is in he form of premium rate, high or low keeping into consideration the standards of their customers. The three main factors that Aviva uses in determining its premium rates under a life insurance policy are expense, mortality and interest. So this means that if there are any considerable changes in any one of these three, their premium rates are revised. (Ashmore) Mortality: the average mortality rate in a particular country is an important consideration when deciding the pricing strategy. Expenses: these include the commission gone out to agents, the processing cost, registration and reinsurance are an integral part of their pricing strategy. (Mail) Interest: the interest rate is one significant factor that influences the willingness of the customers to invest in insurance. People usually do not invest their money in insurance if they are expecting a higher return of their money from the banks or other financial institutions depending on the interest rate. (Ashmore) 3. PLACE: For Aviva, this component of its marketing mix is based on two important things: 1) On managing their insurance staff 2) Locating their branches. When it comes to managing their insurance personnel or agents, their aim is to maintain their rules of offering services. Which means they want to process their services to the final consumer in a way that the gap between what they promise and what they actually offer lessens. (Mail) The management of agents and insurance personnel is found significant with the viewpoint of maintaining the norms for offering the services. This is also to process the services to the end user in such a way that a gap between the services- promised and services – offered is bridged over. (Staff) 4. PROMOTION: Aviva invests in effective promotional measures. The key is that in countries where the target customer has a relatively low disposable income level, they make sure to provide both personal and impersonal promotion strategies. Aviva’s agents and rural career agents ply a significant role in promoting their business. lot of attention is given to the selection of promotional tools that the agents will be using and also the branch manager or front line staff will be using. They also give proper training to their agents so they are able to create impulse buying. (Gwey) the techniques that they use in order to create this kind of impulse buying are advertising and publicity, some benefits to policy holders, seminars and conferences etc. Recommendations In today’s digitalized world traditional marketing techniques fail to work as effectively because the buying behaviour of the buyers has also changed and with increasing competition in the insurance market product choice and complexity has also greatly increased. Also that customer not longer relies on what the sales representatives tell them about their policies or services. therefore, I believe that insurance companies need to provide their customers with good enough product related information and also some expertise to meet their needs and help them in decision making since insurance agents or sales representative are usually pushed back the need for e-marketing plays an important role in making this information available for Aviva’s customers. (Gwey) Further talking about customer buying behaviour in Aviva’s market, the economic conditions of the country has a major influence on their buying decisions. That is because now customers conduct a lot more research before making any purchase than they ever did in he past. As a result of all those the selling cycle becomes lengthier. Again , the need for the information that your customer is looking for to be available over the internet is more than ever now. (Stern) Everything is changing at a quicker pace which means companies launch newer and better services more quickly now and with the competition increasing day by day its hard for insurance companies to keep up with the product differentiation and innovation and are barely left with any time to rightly market their products. This is where technology plays a role in marketing. (Ward) Moving away from the selling process, technology also has a huge role play in the buying process of the customers. Internet has made it easier for companies like Aviva to launch heir products in the market, and make all the important content and information available quicker. For buyers access to this information is helpful in building valuable insights. This has a great influence on the buying process. (Publications) According to my understanding of e-marketing I believe having a website is extremely important but that is not just where it all ends. There are some e marketing strategies that Aviva should adopt to make sure that they are cable of effectively marketing to their potential customers. These strategies are : Investing in marketing automation software would be a god idea. The reasons being: This way they can track the visitor behavior on their website and will be able to learn about their interests. It will also give the company an insight into how the potential customers will interact with the information available on the website and will provide them visibility of the slightest of changes. (Stern) This way they can integrate this marketing automation software also with their customer relationship management software to provide the sales representatives with a scoring through which they would know which customers need to be focused on more immediately and which of them are highest potential customers. (Stobbart) Also they will be able to now have much more meaningful and informed conversations with the potential customers with intelligence behind their buying behavior. Even customers expect the sales people to know their needs. (Ward) 2) Secondly, the information or content could be made available in different formats because today the customers expect to see the content in different formats like face book, twitter, blogs and LinkedIn’s a result the marketers also need to make content available on all these networks. (Ashmore) 3) Social media is a very important force whether marketers use it t promote their products or not. The reason behind its importance is that it is highly important to get to know of the good or bad word of mouth by your customers. The sort of feedback you can get through this can be immensely valuable. (Mail) To sum up all, the marketing team of Aviva should realize that its roles have now changed and the use of technology and content is of high value, the web to be more specific. Also to make use of e-commerce effectively so that lead prospecting can be ensured and sales cycle be supported. (Ashmore) Implementation Budget Budget influences Aviva’s internet marketing strategies also. To make a company website only, it’s required that a domain name is chosen and the address is registered and web hosting services purchased. (Ashmore) The objective f the company is to increase the sum of existing customers’ documentation that will be available online to about more than 3 million (Gwey) Moreover, about more than 600,000 annuity and more than about one million existing policies were added because of which the aggregate policies to which advisors had an online access increased to about 6 million. (Louis) In accordance to the data taken from the association of British insurers in august 2010, Aviva had a 10.5% market share in the UK life and pensions market. (Mail) They want to make sure that they are generating a $100 million profit and a 12 % return on capital employed from these focused markets. As they want to maintain at least $1 billion franchise value for not very well developed businesses. (Staff) The chief executive of the company said that in the third quarter of 2010, the company experiences profitability and also a sales growth from the both the life and general insurance business. As a result new business profitability had improved and they took capital of 1.5 billion pounds in 2010. (Stern) Conclusion In present times, insurance has become very important to the business sector and competition between insurance companies is increasing day by day. 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