Techniques For Marketing Insurance Products In Nigeria (A Case Study Of Selected Insurance Companies)

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Techniques For Marketing Insurance Products In Nigeria (A Case Study Of Selected Insurance Companies)


Abstract


This study was carried out to determine the techniques for marketing insurance products in Nigeria a case study of selected insurance companies. The study adopted a cross-sectional research design. The population of the study constitutes all the selected insurance companies that are quoted in Nigerian Stock Exchange in Abia state. 100 employees were adopted as the sample size for this study. The data obtained for this study will be analysed using descriptive statistics of mean, frequencies, percentage, standard deviation and tables. From the findings, majority of the respondents knew the strategies to include Sales promotion (76.8%); Market intelligence (79%); Product development and innovation (76.4%); Customer Education 78.3%; and Creation of Value for information on insurance products (69%).Findings showed the barriers to include Poor awareness of the relevance of insurance (87.7%); Delay in settlement of genuine claim (80.2%); Challenge of too many insurance intermediaries (70.0%); Numerous illegal commission and rebate between and among insurance players (69.1%), and Delay in remitting commission to insurance agents and staff (76.8%).From the findings, the benefits were shown to include Enhanced business image of insurance products and services (82.9%); Effective operational systems (72.4%); Quality customer service and communication (80.9%); Better service delivery (71.0%), and Expanded business opportunities (85.2%). It was recommended that insurance companies should consider engaging more salespersons in their awareness creation campaigns


Table Of Content


Preliminary Page(s)

  • Title Page
  • Declaration
  • Approval
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of Content

Chapter One

1.0 Introduction

  • 1.1 Background To The Study
  • 1.2 Statement Of Problem
  • 1.3 Research Objectives
  • 1.4 Research Questions
  • 1.5 Research Hypothesis
  • 1.6 Significance Of The Study
  • 1.7 Definition Of Terms
  • 1.8 Organization Of Study

Chapter Two

2.0 Literature Review

  • 2.1 Conceptual Review
  • 2.2 Concept Of Competitive Strategy And Service Characteristics
  • 2.3 Theoretical Review
  • 2.3.1 Theory Of Push And Pull Customer Service
  • 2.3.2 Marketing Mix Theory
  • 2.4 Empirical Review
  • 2.4.1 Sales Promotion
  • 2.4.2 Market Intelligence.
  • 2.4.3 Product Innovation And Development

Chapter Three

3.0 Research Methodology

  • 3.1 Research Design
  • 3.2 Target Population
  • 3.3 Sampling And Technique
  • 3.4 Instrument For Data Collection
  • 3.5 Data Analysis

Chapter Four

4.0 Results And Discussion

  • 4.1 Results
  • 4.2 Discussion

Chapter Five

5.0 Conclusion And Recommendation

  • 5.1 Conclusion
  • 5.2 Recommendation
  • References
  • Appendix

Chapter One


1.0 Introduction

1.1 Background to the Study

Every result driven firm must strive to develop appropriate competitive marketing strategies, which will help it to create a dependable position against competitive forces by either defensive or offensive action. The result-oriented firm must also endeavour to develop a distinctive competence greater than its competitors. Distinctive competence is concerned with identifying area(s) of the particular strength, which gives the company an edge over its competitors and those areas of particular weakness, which are to be avoided.

The concept of strategy has been borrowed from the military and adapted for use in business. In business as in the military, strategy bridges the gap between ends and means. Porter (1996) as quoted by in Oghojafor (1998) has this to say on strategic management and business policy: “corporate strategy is the pattern of decisions in a company that determines and reveals the objectives, purpose or goal, produces the principal policies and plans for achieving those goals and defines the range of business the company is to pursue, the kind of economic and non-economic contribution it intends to make to its shareholders, employees, customers and communities”. Porter (1996) a Harvard Business professor argues, “Competitive strategy is about being different”. He added that competitive strategy is a combination of the ends (goals) for which the firm is striving and the means (policies) is seeking to get there. For both army and business, the competitive situation arises from the incompatibility between the objectives of different organizations. For instance, in 1990 – 1991, the Iraq government wanted control of Kuwait and the United Nations wanted the restoration of Kuwait Sovereignty. Also in business, Coca-cola and Pepsi Company each aimed for leadership in the world soft drink market.

For the purpose of this study, marketing can be defined as a process, which identified consumers’, needs and wants through the conception of promotion, mutual exchange and physical distribution of economic goods and services. The Chartered Institute of Marketing, London, (1999) defines marketing as “the management process responsible for identifying, anticipating, and satisfying consumer’s requirements profitably.” In view of the above, marketing is concerned with need identification and need satisfaction, having in mind the 4Ps of marketing which are product, place, price, promotion andnewly introduced 3Ps which are highly useful, relevant and adaptable to the service industry – (the sector under discussion). These additional 3Ps are people, process and physical evidence. Marketing strategy according to Kotler and Armstrong (2001) is the marketing logic by which the business unit hopes to achieve its marketing objectives. Aano (1996) in Ibidunni (2004) defines corporate marketing strategies as the schemes which management hopes to put in place in order to move the organization from its present position, to arrive at its target goal by the end of a specific period, recognizing that, during the intervening period, changes are going to take place in the environment.

Insurance on the other hand can be described, in simple term as a risk – transfer mechanism whereby one party called the “insurer” pays a small contribution called “premium” to a common pool for certain specified risk(s) and upon happening of the stated event or events within the policy duration, the insurance company (called the “insurer” indemnifies or compensates the unfortunate party(ies) up to but not exceeding the agreed amount(s) called the “sum insured”, “sum assured” or “benefits”). Olori (2005).

It therefore follows from the above that a common pool of fund exists with the insurer into which premium of each insured organization is pooled and out of this fund, the few who suffer losses are compensated based on the condition of the policy(ies).


1.2 Statement of Problem

There are several insurance marketing strategies that can take any insurance firm from mediocre to success when utilized correctly. Breaking into a new business climate and finding customers is hard work, but when equipped with innovative ideas and proven techniques, financial markets sales personnel can become extremely successful. Key insurance marketing strategies will always include an in-depth review of the value of follow-up. All successful sales intermediaries understand that consumers need to be contacted again and again in order to make a vital connection. Also, great follow-up protocol lets the potential customer know that good, solid customer service will be part of the over-all package. Follow-up says to a consumer that they are important, thought of, and that their business would be greatly appreciated. The consumer today not only wants a product at a great price, they also want a personal relationship, especially when it comes to financial system sales, such as various insurances (Bakos, 2008).
On the statement of research problem, it is worthy to note that the growth of the insurance sub-sector within the Nigerian financial industry has suffered considerable setbacks. This phenomenon has made the sector to experience an infinitesimal growth in the last two decades. The above scenario cannot be compared to what operates in the Nigerian banking sub-sector, a sister unit in the same financial industry. Investigation reveals that appropriate research has not been carried out locally on the effect of competitive marketing strategies in successfully marketing insurance products as the nation continues to experience real global competition in her major sectors of the economy. This proposed research therefore intends to fill that strategic intellectual gap.


1.3 Research Objectives

The main objective of this study is to determine the techniques for marketing insurance products in Nigeria a case study of selected insurance companies.

The specific objectives are as follows;

  1. To identify the strategies for marketing insurance products in Nigeria
  2. To identify barriers of effective promotion and marketing of insurance products in Nigeria
  3. To determine the benefits of adopting strategies for marketing insurance products in Nigeria

1.4 Research Questions

  1. What are the strategies for marketing insurance products in Nigeria?
  2. What are barriers of effective promotion and marketing of insurance products in Nigeria?
  3. What are the benefits of adopting strategies for marketing insurance products in Nigeria?

1.5 Research Hypothesis

  • HO1: There is no significant relationship between techniques for marketing insurance products and insurance companies’ growth and performance in Nigeria
  • HA1: There is a significant relationship between techniques for marketing insurance products and insurance companies’ growth and performance in Nigeria

1.6 Significance of the Study

The government and other institutions involved in the country’s policy formulation cannot overlook the insurance sector as one of the major contributors to the country’s GDP. The findings from this study will therefore be of importance because they will have the capacity of being used to formulate positive fiscal policies which are relevant and sensitive to the forces influencing the efficient marketing and performance of the insurance sector. To insurance company management the realization that insurance business is one of the highly competitive business locally and globally calls for respective marketing department to adopt properly formulated marketing strategies for success of the company. To the insurance companies in the country, this study finding will be of great importance because through them, these institutions will be better positioned to gauge their performance and make improvements where necessary to boost their market performance and overall ranking in the industry.


1.7 Definition of Terms

Insurance:

An arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium

Marketing:

The action or business of promoting and selling products or services, including market research and advertising.

Strategies:

A plan of action designed to achieve a long-term or overall aim.


1.8 Organization Of Study

The study comprises of 5 chapters. In chapter one, the concepts are introduced and the problem of the study is established with the research objectives and questions. Chapter two presents the literature review while chapter three presents the research methodology. The fourth chapter presents the results and discussion, and the last chapter presents the conclusion and recommendation.


Chapter Five


5.0 Conclusion And Recommendation

5.1 Conclusion

In view of the intense competition expected in the growing Nigerian insurance industry, survival depends on the use of appropriate competitive marketing strategies such as focus leadership strategy, cost leadership strategy, strong branding strategy and efficient use of differentiation strategy utilization promoting service position, amongst others. Such companies must effectively blend and integrate the adopted competitive marketing strategies with appropriate marketing mix strategies if the expected results are to be achieved in the light of the set company’s marketing objectives.

A cursory analysis of the findings of the study indicates that the value of information received from insurance sales representatives was excellent, very good, or good. It is thus inferred that salespersons have a significant influence on the promotion decisions of the company. The study also revealed that personal selling is carried out as a competitive strategy to promote the insurer and increase its market share and exposure against competitors. Personal selling has also helped to gain good public image which contributes to strengthening loyalty of clients; it has also contributed to increasing the customer base of the insurer constantly. It is therefore clear that personal selling has significant effect on the sales of the company. It is therefore imperative for the company to focus more on recruiting and training salespersons to help win new clients and stay ahead of competition.


5.2 Recommendation

Based on the findings of the study, the following recommendations are proposed:

  1. Insurers should consider engaging more salespersons in their awareness creation campaigns
  2. Insurers should train recruited salespersons in customer persuasion skills before deploying them to the field for prospecting and selling.
  3. Customer education is vital in the service industry and this requires that insuring organizations equip salespersons with the needful information for persuading prospects and clients. This will help reduce the 3% of sampled clients who were of the view that they were poorly educated in their contacts with salespersons.

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