Sales Management and Marketing Channels - Case Study Example

Sales Management and Marketing Channels

Table of Contents

Introduction3

Main Target Customer Segment and Justification3

Sales Strategy4

Pull Strategy and Justification4

Implementing Strategy and Application5

Design and Organisation of Sales Force with Justification5

Sales Forecast6

Forecasting technique7

Conclusion7

Reference List9

• Introduction

The concept of sales management is essential for any organisation in order to align their business activities for higher future gain. In this current paper, a sales management report will be prepared considering one particular insurance company. The Co-operative Insurance company has been selected, which deals in general insurance products and falls under the financial services industry. The company is based in Manchester, UK. Currently, the company offers motor, business, home and pet insurance products and services. In 2013, the company has generated revenue of £3.5 billion and it is growing at a sustainable pace (Co-operativeinsurance.co.uk, 2016). The aim of this report is to introduce a new product of medical insurance under the portfolio of company for reaching out to more number of customers in the UK. The main objective of the company is to increase their sales by 20% in the next two years by introducing this product.

• Main Target Customer Segment and Justification

In order to increase the sale of the new product, The Co-operative Insurance would require targeting particular segment for achieving long run success. In context to that, the company can target organisational buyers such as medical institution and large business organisations (private). It has been witnessed in last few years that some business organisations and medical institutions have directly approached to medical insurance service providers for covering the cost of medical expenses of their people (Allin, Masseria and Mossialos, 2011). This in turn has helped the companies to generate more sales and build their brand name among the customers. On the other hand, it can also be pointed that big organisations in the UK like Bowmer & Kirkland has a tie up with the insurance company that provide medical facility which supports the insurance company to boost their sales (Harley et al. 2011). Therefore, it can be justified that targeting these two organisational buyers would be beneficial for the Co-operative Insurance company to meet their sales objective.

Further, the company can also target specific consumer for introducing and promoting their new insurance product. Therefore, they can target upper middle class people of the UK. It has been found from the report of National Readership Survey that upper middle class people are more health centric and these people register more medical insurance account in comparison to middle class and semi or unskilled manual workers in the UK (Payton et al. 2011). Thus, it can be pointed that targeting upper middle class would be beneficial as the percentage of this group has grown to 37.4% in Manchester and also increasing other parts of the UK (Allin, Masseria and Mossialos, 2011). Therefore, this consumer group would be effective for the company to sell medical insurance. On the other hand, the Cooperative Insurance has more than 2 million in the UK and the company is not able to reach to the upper middle customers effectively (Co-operativeinsurance.co.uk, 2016). Therefore, valuable sales strategy needs to be adopted by the company for generating higher value.

• Sales Strategy
  • Pull Strategy and Justification

According to Gast and Zanini (2012), sales strategy is useful for any organisation to create product awareness among the target consumers and gain competitive advantage. In relation to the new product of the Cooperative Insurance, pull sales strategy would be effective. This strategy would allow the company to draw in leads at a lower cost and with less effort in comparison to traditional sales approaches. Moreover, it can motivate the customers on a large scale to be aware about the new medical insurance product offered by the company (Clatworthy, 2012). On the other hand, the rise of the internet, social media and search marketing would provide better opportunity to the company to generate higher value from pull strategy as more number of people are using social or web networking for making product or service purchase decisions (Smith, 2012). Therefore, push strategy would not be effective for promoting medical insurance product as this strategy is majorly concerned with short-term sales and on the contrary, pull strategy supports in gaining long-term sales and create a successful brand loyalty for the company.

• • Implementing Strategy and Application

In the initial stage, the company is required to determine the potential target audience for implementing pull strategy and later relevant content need to be outlined related to medical insurance so that customers can be attracted. Further, mass media promotion and advertising would be valuable as it would allow company to advertise about medical insurance product such as hospitalization services, illness cover, etc on television ads, sponsoring sports team or distributing flyers (Weidlich et al. 2014). Also, social media can be used for communicating with many consumers. It would create product awareness on large scale which would help in pulling target audience. However, it is important for the company to decide budget so that expected outcome can be generated from the planned budget. Apart from that, word of mouth referrals can be adopted by the company. In context to that, the company can contact their loyal existing customers for making people aware about the medical insurance that are seeking for such facility (Cole and McCullough, 2012). The existing customers would inform about the service offered by the company and their behaviour with the customers. It would create a positive impression about the company on the medical insurance seekers which may help them to make purchase decision.

Furthermore, customer relationship management would be effective to pull in customers. In this regard, the existing customers can largely help the company. On the basis of their previous interaction and service experience with the company, they would be willing to undertake medical insurance and can also stimulate other to join the Cooperative Insurance for effective medical insurance service and better return on investment (Shao, Chen and Hu, 2012). It is studied that the companies that maintain high standard of customer relations are on the verge of gaining higher future success in terms of sales and income. Also, sales promotion can be effective as pull strategy implementation (Ahmed and Bates, 2016). Therefore, consumer-oriented promotion can be undertaken as it would provide facilities like provision of accidental benefits, tax benefits and payment of bonus to people which can help in boosting sales (Teck, and Cyril de Run, 2013).

• Design and Organisation of Sales Force with Justification

As per Günther et al. (2014), sales force are those that are employed and managed by the organisations for generating sales and helping company to grow. In context to the Cooperative Insurance, the company needs to develop a potential sales force structure in order to boost up the sales of their medical insurance product. Therefore, Product-based sales structure would be effective for the company in the long run. It would help the company to engage only the sales forces that have deeper knowledge about the medical insurance product (Samuel and Mittal, 2011). As the company deals in various insurance; thus, it would be valuable in organising the product and it would allow the sales force to make operation decision. Also, the sales force in various functional areas within the product group would focus largely on the particular products and the target customers (Klumpes and Schuermann, 2011). On the other hand, specialist sales force can be recruited as they would be possessing required information about the insurance product and services. They would be able to pursue and can explain benefits of each medical insurance products to people in most effective manner (Kumar et al. 2013).

The Cooperative Insurance can also use sales agents as they would support the company in promoting their new product among the target segment (Kesari, 2014). Hiring sales agent would reduce the administrative overhead and cost of training sales employees can be eliminated or reduced (Shameem and Gupta, 2012). It is known that sales agent posses market experience which can help the company by informing people about new product and services. Therefore, it can assist in increasing the sales and attracting the customers.

On the other hand, for implementing the product sales structure, the activities need to be grouped based on the product that is offered. The company have to analyse their existing sales force and their knowledge related to medical insurance products. Also, training can be provided to sales employee for generating higher productivity and efficiency (Leonardi and Treem, 2012).

• Sales Forecast

The management of the Cooperative Insurance need to analyse the factors that can affect the demand of the new product. One major factor is competition in the field of offering medical insurance service. The company can face stiff competition from major players like Aviva, AXA and others as these companies have high brand value and customer rated good points on the basis of service they received (Lam, 2012). Therefore, competition can affect the company to accumulate expected demand from the target audience. Apart from that, if the Health Insurance Policy of the company is against the State Health Laws and Actions, then it would become difficult for the company to attract the people and also the company may not be allowed to introduce new product in the market (Sade, 2015).

Demographic trends can be other factor. The growing health issues can stimulate the people to undertake medical insurance for them and their family (Outreville, 2012). It is reported in earlier research that health issues among the people highly encourage them for taking insurance. Therefore, it can be pointed that if the people become more health concern then it would ensure more sale of medical insurance thereby leading to more sales and earnings.

• • Forecasting technique

Out of the two forecasting techniques, the quantitative method can be more effective over the qualitative method of forecast. The quantitative technique would be useful in comparing the past sales and current sales that would be generated from sale of medical insurance (McNeil, Frey and Embrechts, 2015). Moreover, through this technique, future sales can be forecasted more comfortably based on the past sales of the Cooperative Insurance (Singh, 2011). It is known that business environment does not have a sudden change; therefore, figures of last quarter can be helpful for the managers of Cooperative Insurance to determine the level of sales they can be anticipating in the coming months (Bihani and Patil, 2014). Also, the components of quantitative approach such as Seasonal Analysis and Trend Analysis can be used. It would be effective in forecasting the sales that the company would generate in comparison to their competitors (Finlay, 2012).

• Conclusion

From the study, it can be concluded that as Cooperative Insurance has been successful with their insurance products and service, it is also predicted that the company would generate expected sale from their new medical insurance product. However, the company is required to measure the success of their plan. Therefore, the amount of sales generated in next two years would be an effective measure technique. Also, the increase in customer base and brand value for the medical insurance would be another measurable point for evaluating success. The objectives have been met based on the selected target customers, sales strategy and sales force adopted by the company. The company has better chance to grow in offering medical insurance service, as it is already well-established in the insurance field.

• Reference List

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Allin, S., Masseria, C. and Mossialos, E., 2011. Equity in health care use among older people in the UK: an analysis of panel data. Applied Economics, 43(18), pp.2229-2239.

Bihani, P. and Patil, S.T., 2014. A comparative study of data analysis techniques. International Journal of Emerging Trends & Technology in Computer Science, 3(2), pp.95-101.

Clatworthy, S., 2012. Bridging the gap between brand strategy and customer experience. Managing Service Quality: An International Journal, 22(2), pp.108-127.

Cole, C.R. and McCullough, K.A., 2012. The use of social media by insurers and potential legal and regulatory concerns. Journal of Insurance Regulation, Forthcoming, 37(3), pp. 153-177.

Co-operativeinsurance.co.uk., 2016. Co-op Insurance | Here For You For Life. [online] Available at: <http://www.co-operativeinsurance.co.uk/> [Accessed 11 May 2016].

Finlay, S., 2012. Credit scoring, response modeling, and insurance rating: a practical guide to forecasting consumer behavior. UK: Palgrave Macmillan.

Gast, A. and Zanini, M., 2012. The social side of strategy. McKinsey Quarterly, 2(4), pp.82-93.

Günther, C.C., Tvete, I.F., Aas, K., Sandnes, G.I. and Borgan, O., 2014. Modelling and predicting customer churn from an insurance company. Scandinavian Actuarial Journal, 2014(1), pp.58-71.

Harley, K., Willis, K., Gabe, J., Short, S.D., Collyer, F., Natalier, K. and Calnan, M., 2011. Constructing health consumers: Private health insurance discourses in Australia and the United Kingdom. Health Sociology Review, 20(3), pp.306-320.

Kesari, B., 2014. Salesperson performance evaluation: A systematic approach to refining the sales force. EXCEL International Journal of Multidisciplinary Management Studies, 4(6), pp.49-66.

Klumpes, P.J. and Schuermann, S., 2011. Corporate, product and distribution strategies in the European life insurance industry. The Geneva Papers on Risk and Insurance-Issues and Practice, 36(1), pp.50-75.

Kumar, V., Sharma, A., Shah, R. and Rajan, B., 2013. Establishing profitable customer loyalty for multinational companies in the emerging economies: a conceptual framework. Journal of International Marketing, 21(1), pp.57-80.

Lam, L.W., 2012. Impact of competitiveness on salespeople's commitment and performance. Journal of Business Research, 65(9), pp.1328-1334.

Leonardi, P.M. and Treem, J.W., 2012. Knowledge management technology as a stage for strategic self-presentation: Implications for knowledge sharing in organizations. Information and Organization, 22(1), pp.37-59.

McNeil, A.J., Frey, R. and Embrechts, P., 2015. Quantitative risk management: Concepts, techniques and tools. UK: Princeton university press.

Outreville, J.F., 2012. Theory and practice of insurance. London: Springer Science & Business Media.

Payton, F.C., Pare, G., Le Rouge, C.M. and Reddy, M., 2011. Health care IT: Process, people, patients and interdisciplinary considerations. Journal of the Association for Information Systems, 12(2), p.3.

Sade, R.M., 2015. Deceiving Insurance Companies. The Ethics of Surgery: Conflicts and Controversies, 7(2), p.37.

Samuel, M.S. and Mittal, P., 2011. CRM Strategies: An Underlying Market Based Strategy for Insurers: A Qualitative Study. Synergy (0973-8819), 9(1), pp. 233-317.

Shameem, B. and Gupta, S., 2012. Marketing strategies in life insurance services. International Journal of Marketing, Financial Services & Management Research, 1(11), pp.132-142.

Shao, J.B., Chen, K.K. and Hu, M.Y., 2012. Measurement and Promotion of Customer Equity of Enterprise under Contractual Relationship: Application in Insurance Industry [J]. Scientific Decision Making, 9(2), p.3.

Singh, D., 2011. Factors affecting customers' preferences for Life Insurers: An Empirical Study. IUP Journal of Risk & Insurance, 8(2), p.34.

Smith, B.G., 2012. Communication integration: An analysis of context and conditions. Public Relations Review, 38(4), pp.600-608.

Teck W. J. and Cyril de Run, E., 2013. Consumers' personal values and sales promotion preferences effect on behavioural intention and purchase satisfaction for consumer product. Asia Pacific Journal of Marketing and Logistics, 25(1), pp.70-101.

Weidlich, M., Ziekow, H., Gal, A., Mendling, J. and Weske, M., 2014. Optimizing event pattern matching using business process models. Knowledge and Data Engineering, IEEE Transactions on, 26(11), pp.2759-2773.