IMC Plan On Geico Insurance Company - Research Paper Example

? IMC PLAN ON GEICO INSURANCE COMPANY Table of Contents Organization Background 4 Review of Marketing Plan 4 c)Competitive Analysis: 5 d)Environmental influences: 5 i)Economic: 5 ii)Technological: 6 iii)Political-Legal: 6 iv)Socio-culture: 6 Analysis of Promotional Program Situation 6 a)Analysis of consumer behavior: 6 b)Segmentation of market & target market: 7 c)Market positioning: 7 Analysis of Communication Process 8 Budget Determination 9 IMC Program 10 a)Advertising: 11 b)Direct Marketing: 11 c)Interactive marketing: 12 d)Promotion of Sales: 12 e)Public relation: 13 f)Personal Selling: 13 Tactics & Integration: 14 Methods of evaluation: 15 References 16 Organization Background Founded by Leo & Lillian Goodwin in the year 1936, GEICO or Government Employees Insurance Company started its journey as car insurance company for government & military employees. Since then it has seen many changes in its structure & quest for growth. The company has grown by leaps & bounds over these years and is adjudged as 3rd largest auto insurer in private section in US. GEICO is standing tall as part of Berkshire Hathaway headed by Warren Buffet with 8 million policyholders & 17 million vehicles insured under its belt. (Insurance directory.org, 2012) Review of Marketing Plan GEICO started as a company which was catering to the needs of federal & military employees only. But later its marketing strategy changed with time which can be reviewed as: a) Marketing plan and objectives: The founders Leo & Lillian Goodwin had different marketing plan for their business and the utmost was to lower the cost. This business plan of theirs was made successful with the induction of federal employees in their marketing strategy as this segment of people would be posing low risk and eventually company’s profit would not be hampered. Even today GEICO sticks to this objective of its and all through these years one thing which has remained intact with the company is creating customer value through its services. b) Advertising & Promotions: Every firm in today’s time needs to promote itself through various advertisements as to reach maximum number of people and build a strong customer base. GEICO is a company which has always believed in reaching out to people directly than through any agents and for this very reason it has relied on internet communication, through phone and heavily investing on advertisements which in return has increased its customer base. c) Competitive Analysis: Competition is one word which can never be forgotten in context of marketing plan. Every company has a competition in its field and a proper analysis is must to emerge as winners. GEICO also have been facing tough competition from other players but what has made it look different is its excellent coverage, always thriving to keep costs low and last but not the least good service quality to its customers. d) Environmental influences: External or the environmental influences can be broadly divided into 4 categories- i) Economic: GEICO has been considerably climbing the steps towards the numero-uno position and this has been possible because of good economic position of US. Though lately due to recession the things turned ugly but now the economy is back on track and so GEICO can expect further growth. ii) Technological: To keep up with the time and competition GEICO not only needs a good service quality but also innovation in the products. With technology being at par GEICO’s service is further going to make customer happy and more interested in the company for getting their vehicles insured. iii) Political-Legal: A company like GEICO should always make sure it follows all the norms and regulations set by the government to prosper smoothly without any hassle. A politically clean company is most sought after company by any customer and in a risky business like insurance sector a company surely needs to legally manage its business. iv) Socio-culture: With power comes great responsibilities and for this GEICO should also be socially attached with its customers so that the bonding increases and so would the trust in the company. (Insurance directory.org, 2012) Analysis of Promotional Program Situation GEICO over the years have been promoting itself through various ways to reach out to the maximum number of customers. There are many factors which are important in order to promote and get recognized and few of these factors which GEICO needs to follow are a) Analysis of consumer behavior: For a company the most important entity is its consumers and to succeed as a company one needs to know the consumer behavior as in what they prefer, are they planning to switch or do they want a better service or do they feel neglected amongst the crowd. GEICO’s child brain in making people think twice before they prefer another company can be seen from the fact that its ads are always innovative and humorous. Their ads shows what the company is doing for its customers and those planning to shift to other firm would be deprived of the benefits GEICO is offering such as great service and insurance at low cost. b) Segmentation of market & target market: A company whenever launches a new product or service it first targets a particular segment of people where it thinks its product can benefit the most and it can be profitable. GEICO has done the same by targeting mainly the vehicles for insurance and also government employees as the segment. But to increase profitability and to grow GEICO should also target different sectors and segment of customers so as to not reach a saturation point. c) Market positioning: Another important factor would be positioning. A company like GEICO would surely want to position itself in a way that it can easily be differentiated from others and in some ways GEICO has different approach as it has positioned itself as the insurance company for government & military employees and also as the company which does business on low costs. (Wayne D. Hoyer, Deborah J. Macinnis, 2009, p.146-147) Analysis of Communication Process What is communication? Why is it important in terms of business? What are its effects on the organization and its stakeholders? All these and many more questions are bound to strike every organization. Communication can be defined as an interaction between the company and its stakeholders in which information are conveyed in a two way direction. Communication is an important aspect of any business to market itself and to reach out to maximum number of customers. Communication needs a proper planning which can be perfectly executed. Also an organization needs to zero on to a way through which they opt to communicate with the customers be it by direct marketing, through internet marketing, sales promotion etc. Communication is also one of the major aspects of marketing as marketing heavily depends on communication to get in touch with the customers directly via various mediums, creating awareness of the product, building its brand image. Communication process is a vast subject in itself as companies heavily rely on communication process to convey their message to the target market. To execute a brilliant communication process a company needs to strategize and plan the procedure, and then the company needs to decide the medium through it wants to interact with the consumers, it can be through great advertisement or through sales promotion or events etc. All this can be possible with great planning and a superb execution of the plan which will result in a fruitful future for the company as the company will dare to see a humungous growth in its business with umpteen number of customer base. GEICO, in this case, has effectively been communicating with the customers through various medium of advertisement. Since, the day it protruded in the world of business GEICO had always used direct marketing as a source to reach out its large customer base. In recent years it has been heavily investing in advertisements which have become a cult in the advertising field with humor as its prime ingredient to make people laugh, remember the ad and ultimately make them visit the company. Advertisement is always said to be an expensive mode of communication and still GEICO chooses it effectively and generates lots of eagerness amongst the people about the company and its product. Why is GEICO investing in advertisements? How does it manage to do so? These questions are general to be asked as advertising through electronic media is referred to as above the line activity and is expensive as well. Here, the important thing is not why electronic media but how can it afford so. The answer lies in the very fact that GEICO has always positioned itself as the low cost insurance company and has effectively planned a budget so that it can invest in invest in ads with the profit it makes through premiums. GEICO as a company cannot be subjected as above the line activity preferring organization because it primarily has been depending on direct marketing through telephones and still continues to do that. Advertisement medium was chosen to reach every household through television medium and make people aware of the company and its products. To say so GEICO have definitely achieved its target of being known by everyone in every state of USA through its communication process. (Don E. Schultz, Heidi F. Schultz, 2004, p. 7-12) Budget Determination Budget is an important element for any organization as all its IMC activities depends on its budget. A company needs to determine budget for its promotional activities at the beginning of the fiscal year. The budget allotted should be such that it can be spend on various activities according to the organizations way of communicating to the people. A plan is needed as what portion of budget needs to be spent on electronic media, what portion on print media and so on. If a company at any time feels that all these promotional activities would be no good for the company and would just incur an extra spending in organization accounts it should scrap the idea and plan its budget all over again. To be precise it should analyze why a promotional activity is a necessity in current market scenario, what are its advantages? Will it be profitable for the company? GEICO is a company which invests heavily in promotional activities mainly through advertisements in televisions and for this it sets aside a portion of its budget. Budget determination is not an easy thing for any company and the same implies to GEICO, but, what can be an interesting point to be noted down is how GEICO is able to spend so much on advertisements? The answer may not be simple but it isn’t tricky as well. GEICO has always believed in direct marketing since its infant days and still follows the suite. What different it does is that it keeps itself away from the insurance agents and by doing this it saves enough money which it uses for the advertisement purpose. It can be said to be a great move by GEICO because unless a plan is ready as to how the company needs to promote itself it’s difficult to hit the target blindfolded. (Don E. Schultz, Heidi F. Schultz, 2004, p. 7-12) IMC Program Integrated Marketing Communication Program or IMC is the marketing plan which is adopted by organizations seeking promotion of their company and products. IMC involves a series of tools used for promotion purpose. Today’s scenario is completely different, everyone wants to get noticed, everyone wants to reach maximum number of people and build a strong customer base and here comes IMC as the savior, can we say so? IMC is an umbrella which has many parts and each part holds an important place in the IMC program to make a successful promotion for the organization. Before discussing about IMC program what is that everyone wants from IMC program, what is that makes promotion a necessity, are promotions profitable or they are just there for mere entertainment, do they give any returns? Some companies might have the opinion that IMC programs are just a part of the promotion strategy but it does not have much impact on the company’s revenue, while some are of the view that creating awareness, communicating with more and more people would bring more business and the company would see a rise in revenue. Everyone has different opinions and varies person to person and company to company to company. To discuss IMC program, its components are to be discussed which are as follows: a) Advertising: Advertising has become a medium through which everyone has a brief knowledge as what is going around in the corporate world. For a company to invest in advertising the most important aspect would be the advertising objective, the message it wants to convey through advertisements be it through electronic, print or internet media and the utmost important the budget. GEICO has successfully fulfilled all the aspect of advertising as its advertisement always has a message for its target market, a budget is maintained and the objective is to attract more and more customers. b) Direct Marketing: Just like advertisements here also objective has to be set. Budget cost is not as high as in advertisements but still it has to be planned in IMC program adopted by the company. Direct marketing may be of various types such as communicating with people through phone, email, by sending mails or letters for promotional activity, by giving online ads etc. GEICO has lived up to all these norms of direct marketing as it has been direct marketing its products since very beginning and still major part of its promotion is through direct marketing. c) Interactive marketing: Interactive marketing or internet marketing as become the most sought after advertising prospect for the companies. With more and more people using internet and the number is rising like wild fire so the companies are getting more inclined towards internet marketing through which they can target a healthy number of people. The best way to advertise through internet is to post ads in popular sites which are often visited by people and also companies have their websites to tell more about themselves. GEICO on the other hand is not much into internet marketing and what it needs to do is it should create opportunities for itself in this field of marketing also. Though it has its website giving all the information about the company but it should advertise in popular sites which are more often than not visited by people and surely would help it create more and more awareness about the company amongst the people. d) Promotion of Sales: Promotion of sales or sales promotion like other factors is an important component in context to the IMC program. Various companies follow various methods to promote sales. Some give discounts, some offers free gifts. Sales promotion is used by the companies to attract customers from other firms as well as to woo the present customers. GEICO also follows this component of IMC to woo its customers. It offers discounts on various products and the discount varies with the kind of insurance and in what circumstances it is being done. Secondly GEICO always gives discounts to federal and military employees. e) Public relation: Another important element of integrated marketing communication mix as it decides as how a company is depicted in consumers’ minds through various publicity stunts which can create an image of the company. Public relation has become a necessity as to build a clean image amongst the consumers and be a trustworthy company. Publicity can be in various ways such as by press release of new product being launched or a video which would create an eagerness to know about the product or through campaigns. GEICO ‘s biggest public relation factor in current date is date it is part of Berkshire Hathaway headed by Warren Buffet and also that GEICO has build a great image over all these years in the insurance sector. f) Personal Selling: Personal selling can be said to be a promotion where the interaction with the consumer direct and not through any other medium. Personal selling distinguishes itself from other components of IMC because of the fact that it is the best and most cost effective way of promotion. It not only reduces the cost incurred on the company but also is well manageable as it depends on the man power. It is also the best possible component of IMC where maximum demonstration and awareness can be created amongst the consumers. GEICO’s promotion strategy has been effective all through other IMC elements and it also promotes through direct marketing but as far as personal selling goes GEICO has not ventured much into this category but it surely can gain a lot from this promotion strategy as well. GEICO can interact and get in touch with and more people through personal selling and also can create more awareness about its products and services. (Lamb, Hair & McDaniel, 2008, p. 523,537-546) Tactics & Integration: For promotion companies use tactics and combine lot of things as part of integration so as to promote themselves. These tactics or the strategies can vary from company to company. GEICO’s strategy is been of advertising itself or through direct marketing. GEICO has always been innovative in its way of advertisement and promotion factors. Every now and then it comes out with ads in television, radio and print media as well. The integration of all the components of IMC program is also well strategized by GEICO. GEICO’s ads in television are always humorous and remembered by everyone for a long time. Not only are these ads are funny but also they convey a special message to the people. Also publicity efforts are put into these promotional activities by GEICO. But before we set our focus on examples what needs to be known as how these ads becoming so popular and they spread like a wild fire. To this it may be said that ads of the companies are planned in a way that it is adored by the people and in this age of internet in no time the video will be shared amongst millions of peoples and thus making the ad a huge hit and also a publicity effort by the company. Some of the best examples that can be illustrated are: The tagline “15 minutes could save you 15%” created a steer amongst the people as they came across a unique way of ad being published where a company says that you give us 15 minutes and you can save 15% of your money. This ad was to make people knowledgeable about the services GEICO provides and how it can benefit the customers who want to be a part of the company. The most popular ad being that of the cavemen in which a caveman is shown in current time using GEICO’s website and the slogan follows that using GEICO’s website is so simple that even the people from past age can use it. These ads apart from being innovative, unique, most sought after are also great publicity efforts by the company. GEICO is always trying to find a unique way of promoting itself and its effort does not go in vain with its strategies being right on target. (niemanlab.org, 2011) Methods of evaluation: Evaluation can be defined as the process which is based on research and information collected from various sources and then analyzing it and finally drawing to a conclusion. Every organization evaluates itself so as know where it stands in terms of its credibility to its stakeholders. Evaluation is meant for improvement, meant for meeting new standards. GEICO evaluates itself on various grounds; the methods which are used can be both external and internal. External methods can that of getting information mostly about the objective being fulfilled whereas internal evaluation is working on available data and to seek new program and opportunity for the company. Others methods of evaluation for GEICO can be that of as how its products are processing, whether they need any change over, whether they need more exposure or are they the right product to be sold to the customers. GEICO can also evaluate in a holistic manner so as to have a brief idea of its products, promotion strategies, IMC program, and budget determination. GEICO should also evaluate the performance of the company along with the employees to have a idea as how the company has been functioning. If a company finds that it has been growing steadily then it is a good sign for it otherwise it needs to pull up its socks and plan a better strategy to meet the demands. GEICO has been growing steadily and its amongst the trusted brands in vehicle insurance company, it just have to keep innovating itself with its promotional activities and excellent service quality to be amongst the top companies. (Breakwell, G. M & Millward, L,1995, p. 1-4) References Nair, K.S. C. (No Date). 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