Advertisement Campaign for AAMI's Car Insurance - Case Study Example

Advertisement Campaign for AAMI’s Car Insurance Table of Contents Advertisement Campaign for AAMI’s Car Insurance 1 Table of Contents 1 AAMI Overview 2 What needs to be advertised and to whom? 3 How the campaign should be approached? 6 Look and feel of the campaign 10 Budget breakup 10 References 11 AAMI Overview Four decade old AAMI has, on date, has a mammoth 2.5 million policyholders enrolled with it. Being the leading home, car, small business and compulsory third party (CTP) insurer, AAMI receives millions of telephone calls every year. Known for using exceptional marketing strategies and innovative methodologies, AAMI has the distinction of dealing with its customers directly. That apart, it also has the privilege of introducing in the market such insurance benefits as no penalty, no fault, lifetime repair guarantee, and maximum no claim bonus. Besides this AAMI provides progressive no claim discount on home insurance, valet service and general insurance customer charter (AAMI, nd). Its customers find it at their beck and call particularly when any calamity strikes and ever since its inception AAMI has been considered as the best alternative to motor club-owned and government-owned insurers. AAMI's business has grown manifold over the years and today its CTP and home insurance segments have been the biggest revenue-generating options that the company has developed over the last decade or so. With business as booming as this, the new boss at AAMI is eying the car insurance segment the most since he believes that if tapped rightly among the 18-30 age bracket, the segment stands chances of exceptional growth. For this a budget of $100,000 has been earmarked for the advertising campaign. This figure was reached at on the basis of last year's budget; keeping in view the media inflation costs that have resulted in the last one year. What needs to be advertised and to whom? On boss' recommendations the advertising campaign will be run for the young segment of the society. It is because this is a potential segment and different from the young generation of yesteryears. Young generation today is more informed, well connected, have greater attention spans, and have money and influence. Behaviour of this age bracket is influenced greatly by advertisements, branding and global influences infused by media campaigns. These behaviours are said to transcend from their upbringing rather than acquired traits which they are subjected to in their late teens. Media campaigns are said to change their mindsets on consumption and spending. This age group today has a spirit of volunteerism which advertising can take advantage of. This age group likes fast-paced life and is drawn towards luxury; cars belong to that luxury. The campaign will have to make best possible attempts in not making it synonymous with "push advertising". Instead it has to be developed such that it creates peer-to-peer networks. This will be beneficial because this age group, which has been brought up with advertisements bombarded from all sides, has a propensity to use social references to aid them in purchasing decisions. Los Alamos Chamber of Commerce (2006) and HarrisInteractive, Inc. (2000) have recommended use of social references for this thing. Peer-to-peer networks determine which products are or are not important for this generation. AAMI, thus, will have to stick to its age-old tradition of sticking to innovative use of selling its brands. In this regard the campaign has to keep following important points in consideration: 1. The campaign has to be developed such that it brings this age group together as it has a tendency to spark a change. 2. This age group has contemporary thinking, and the campaign should avert using influences from the past (for example, what was their parents’ attitude towards insurance). The recall value of the campaign must be based more on the current trends rather than trends a decade ago. 3. The campaign must start with respect being shown for these young people. Unusual and small campaigns are better assimilated by this age bracket. 4. There must be some degree of humour in the campaign as it works wonders with this generation which is, more often than not, stressed. In order for the campaign to hit the segment at the right spot, Kotler's (2000) model of consumer behaviour can be used. This model has integrated consumer decision process with stimuli. Kotler has remarked that young generation as this is affected by an integration of marketing stimuli, buyer's cognitive aspects and his or her buyer characteristics. It has to be noted that since Kotler's model does not lay any specific emphasis on culture, it would be good to keep it away as AAMI customer base comes from multiple cultures living in this nation. The marketing stimuli for this campaign will be product, price, place and promotion. Other stimuli will be economic, technological, political and cultural (hence no major emphasis). Buyer's decision factors include product choice, brand choice, purchase timing, and purchase amount. Buyer's characteristics are social, personal or psychological. Buyer's decision process that has to be deliberated upon before must be problem recognition, information search, and evaluation of alternatives, purchase decision and post-purchase behaviour. A great deal of research ahs gone into studying the consumer behaviour of young adults because they have been recognised as a market segment which is specialised. They do not get influenced only themselves but also influence others in the process. According to Spero and Stone (2004) the 16+ age group has been categorised as young adults; it is the same group which AAMI wants to target for its car insurance. Grant and Waite (2003) have remarked that this group forms an important segment for market research and development. AAMI will be selling car insurance to this group. Having been named by Australia's Money Magazine as the Insurer of the year for two consecutive years of 2011 and 2012, AAMI can leverage this title during the campaign. The company will be selling comprehensive car insurance, third party car insurance and CTP and Green Slip. The experience of selling the latter in New South Wales and Queensland can be used to target the age group of 18-30. The previous data on the same can be statically shown such that these consumers can take the same as a cue for their purchasing decisions. Green Slip, which is another name for CTP, is required to be bought in New South Wales. The New South Wales is a potential market for car insurance. In 2012 NSW topped the list of most sold out vehicles in Australia; followed by Victoria, Queensland, South Australia, Western Australia, Tasmania, Northern Territory, and Australian Capital Territory. Of the total number of 16741644 motor vehicles sold in Australia in 2012, 4869996 sold alone in New South Wales (Abs.gov.au, 2012). How the campaign should be approached? How a customer makes a choice depends on his mental orientation vis-à-vis his choice-making approach. Sproles and Kendall (1986) have termed this as “a basic consumer personality, analogous to the concept of personality in psychology”. This is characterised both by affective and cognitive behaviour. In order for a campaign to be successful, basic understanding of consumer decision-making characteristics is essential. These characteristics help make a consumer profile on his choices, styles and behaviours. Well-knit campaigns first inform consumers of these traits, in case they are hidden, and then hit them with an offer of what they perceive is their need. Based on this theory, a CSI or Consumer Style Inventory was developed by Sproles and Kendall (1986), in which they showed that 8 major characteristics are required to explain consumer decision-making behaviour. These characteristics, as supported by Bakewell and Mitchell (2003) are essential for the campaign to be a success. These characteristics are: Customer who thinks price must equal quality: This customer is brand conscious and thinks that if the price of a product is high, so should be the quality. Most advertised and best selling brands are always on top of their mind. Since brand is valued by these customers, it is likely they will value AAMI's car insurance as well because AAMI insurance is already well-known in the market and has brand equity of its own. Quality conscious, perfectionist customer: They always look for the best product, be it any consumer durables or insurance. These customers normally make comparisons before making a choice. This campaign must provide comparisons so that customers do not try to reach out the same on their own. Fashion-novelty conscious customer: They do not mind trying new products and new brands, since they get excited by anything new. They have a variety seeking behaviour. AAMI campaign can identify and tap this segment. Hedonistic, recreational conscious customer: For such customers the motivation to buy anything comes from their recreational and hedonistic bent of mind. They buy something for the fun of it and are not that difficult to tap. Approached with the right pitch, they are easy to handle. Many young adults come from this trait either because of lack of buying experiences or abundance of money. Customer looking for value for money: This customer is price conscious. Lower the price better is the motivation to buy. So AAMI campaign has to be such that it offers comparative rates that fit into this segment's mindset. Its previous track record can hit such customer softly. Careless and impulsive customer: This group is normally called as "regretting group". They buy first and introspect later. But since AAMI's insurance offers are irresistible, they will feel reassured with the choice that they will make. If satisfied, then can be a vital word-of-mouth tool for further sales. Customers confused by over choice: Since there are a number of insurers working in the territory, these types of customers can be shown a way out of the confusion. This can be done by projecting 2.5 million people who have shown trust in the company. Brand loyal and habitual customer: These are the customers who are already on AAMI database; those who have previously bought insurance from AAMI. Care must also be taken that the retrieval of database entries also includes the customers who have bought other insurances, and not necessarily car insurance. It is because they are more likely to buy car insurance from AAMI should they be planning to change cars or buy new ones than any other insurance company. An email campaign would be the most cost-effective and direct way of reaching them. Calling them on their registered phone numbers can be another option. "Reliance on mass media", as suggested by Tai (2005), can prove of immense benefit once the campaign is kick started. Furthermore, Bakewell and Mitchell (2003) and Hafstorm, Chae and Chung (1992) have suggested that CSI, as described above, cuts across barriers of communities and culture and its elements are such that they create "construct validity". Leo, et al (2005) have suggested that firms, which have identified their target market, should lay special emphasis on customers' decision-making styles because these play an important role in guiding the strategies developed to run media campaigns for selling a product. While talking of 18-30 age group, the campaign should not be run in a random manner. Instead it should focus on certain niche elements that are uniform across all clusters in this age group. It is important because the cluster, for example, falling between 18-22 years would not go by the same buying behaviour as the cluster falling between 28-30 age group. Cluster identification, thus, is important. Look and feel of the campaign It has been observed that best insurance commercials are those that use humour to a great extent. Crowe (2012) has remarked that a in an insurance ad a successful pitchman includes a dancing duck, a talking gecko, a perky salesperson, a quarrelsome caveman, or some fictitious, funnily-named malicious guy having a weird name and causing trouble wherever he goes. Humour, in other words, has been a raging central theme of most insurance ads nearly everywhere. It is because nothing grabs a customer's attention as quickly as humour. However, the integration of the company's name with the humour in the ad is a difficult task and has to be done subtly. Besides this ads that show disasters of some other activity like texting and driving and the ultimate need for a suitable insurance cover score well with the customers since the social messages of these ads help them remember the company that spread the same. Budget breakup The boss has earmarked $100,000 for this campaign and it must be a participatory decision on how and where to spend the money. The best way is to hire a well-know advertising agency, who can be guided on the breakup. Television ads are supposed to develop greater recall value than any other ads because of the endless scope of using animation technology. So around 80 percent of the total money available for the campaign can be channeled into TV ads and the rest can go into internet, newspaper and other media. References Aami.com.au. (nd). Company Profile. Available at http://www.aami.com.au/company-information/profile. Accessed on May 29, 2013. Abs.gov.au. (2013). 9309.0 - Motor Vehicle Census, Australia, 31 Jan 2012. Available at http://www.abs.gov.au/ausstats/abs@.nsf/mf/9309.0. Accessed on May 29, 2013. Bakewell C., Mitchell V.-W. (2003), Generation Y Female Consumer Decision-Making Styles, International Journal of Retailing and Distribution Management, 31,2, 95-106. Crowe, A. (2012). What makes a good insurance commercial? Available at http://webcache.googleusercontent.com/search?q=cache:http://www.insure.com/car-insurance/good-insurance-commercials.html. Accessed on May 29, 2013. Grant I.C., Waite K. (2003), Following The Yellow Brick Road- Young Adults’ Experiences of The Information Super-Highway, Qualitative Market Research: An International Journal, 6,1, 48-57. Hafstrom J. L., Chae J. S. (1992), Consumer Decision-Making Styles: Comparison Between United States and Korean Young Consumers, The Journal of Consumer Affairs, 26, 1, 146-157. Harris Interactive (2000). Understanding Youth: What Works and Doesn't Work When Researching and Marketing to Young Audiences. Available at www.harrisinteractive.com/partner/whitepapers/HI_UnderstandYouth_WP.pdf. Accessed on May 29, 2013. Kotler, P. (2000). Marketing management, Millennium edition, U.S.A.: Prentice-Hall Leo, C., Benneth R., Hartel C.E.J. (2005), Cross- Cultural Differences in Consumer Decision-Making Styles, Dergi Adı, 17,3, 32-33. Los Alamos Chamber of Commerce (2006). Business Intelligence Report: 10 Cravings of a New Generation of Consumers. Available at www.losalamoschamber.com/lachamber/downloads/uploaded_files/Documents/LosAlamos-Nov2006BIR.pdf. Accessed on May 29, 2013. Spero I, Stone M. (2004), Agents of Change: How Young Consumers Are Changing The World of Marketing, Qualitative Market Research: An International Journal, 7, 2, 153-159. Tai, S.H.C. (2005) Shopping Styles of Working Chinese Females, Journal of Retailing and Consumer Services, 12, 191-203. Read More