COM 225 Market for Risk Management Questions
Use this resource to choose one of the two provided case studies:
Then, write a short paper analyzing the target audience and the segmentation data used to identify them.
Specifically, you must address the following rubric criteria:
Identify the target audience(s) in your chosen case study.
Explain how the provided segmentation data supports that audience identification.
Qualitative and Quantitative Data:
Identify the qualitative and quantitative data used in your chosen case study.
Explain how both of these types of data create a whole picture of the target audience.
Data Collection Strategies:
Identify the collection methods used to gather the data.
Analyze how effective the data collection methods were and whether they provided enough information to formulate a clear target audience identification.
Explain whether other collection methods or strategies should have been used to gather more effective data.
If other collection methods or strategies should have been used, identify at least one other method or strategy and explain how it would have gathered more effective segmentation data.
Case 2: Large Corporations as a Market for Risk Management Background: Like other commercial insurers, our client for this study faced global consolidation of insurance carriers, a buyer’s market that was keeping prices and profitability down, inefficient distribution that hindered innovation, and wide variations in profitability from customer to customer. In this context, our client wanted to accomplish three goals:
Identify segments interested in buying more value-added services from our client. Identify segments that were interested in modified distribution in which the carrier would play a more active role rather than just waiting for brokers to bring business to them. Identify segments that had the greatest profit potential, because they were likely to be loyal and interested in a broad range of services. For this study, risk managers at about 400 of the 1500 largest U.S. corporations were interviewed. Their answers were supplemented by Dun & Bradstreet data and data on our clients’ relationships with them. (About 40% of the companies were our clients’ customers, to one extent or another.) Segments Identified:
The Self-Organizing Map technique identified four segments:” Innovators,” 37% of the market, were most interested in broader services, displayed high loyalty to their carriers, and had higher than average insurance expenditures.” Rejecters” (26% of the firms) were characterized, mainly, by disliking current distribution arrangements. They displayed higher than average expenditures and medium loyalty to carriers.” Limited Service” (20% of the market) firms had almost no interest in one of the core sets of insurance services, displayed low loyalty, and spent little on insurance and other risk management, relative to their size.”
Traditionalists” (17% of the market) liked traditional roles for carriers and the distribution system. They were very risk averse and displayed medium loyalty to their carriers. Comparing these segment characteristics to our client’s experiences with respondents’ firms that fell into the different segments, we found that “innovators” were most likely to buy a broad range of service and did show strong customer retention. Firms in other segments also tended to act as the segmentation suggested they would. Thus, our client’s actual experience confirmed the segmentation findings.
Marketing Outcomes: These results contributed to new product/service packages our client developed. Targeting these companies was relatively easy, because like other commercial insurers our client was in touch with risk managers at virtually all of these large corporations. Given this situation, our client asked us to develop a series of questions that could be asked to assign firms to the segments. To read the rest of this case study in pdf format, click here. This article was written by Rajan Sambandam of TRC, a full-service market research provider located in Fort Washington, PA.