MARKETING

Marketing

Marketing

Introduction

It used to be that managing the life cycle of an insurance product meant getting the policy issued, storing it in a dark closet and processing periodic premium checks until the term expired. Information technology (IT) has made the world a much more interactive and volatile place, though, and insurers are continuing to learn that managing a product for optimum profitability entails a continuous and quick analysis of large amounts of data, as well as the ability to respond in near real time to the messages that data is sending. Traditionally, insurance companies, whether they focus on life, health, or property and casualty, haven't demonstrated a significant degree of creativity or originality in their product offerings, and have been relatively slow to respond to new market opportunities (Beveridge, 1942). To be sure, the industry as a whole has made some good progress in terms of managing existing products via tiering and segmentation, but at the moment it appears to be stuck in a late 20th century mindset that sorely underestimates the full value of both customers and market information.

In fact, many insurance carriers essentially have figured “second place” into their product development strategies, purposely conceding the leading edge to competitors and targeting more traditional product sets. But the market will change; it's inevitable. And over time, the most successful insurers will be the ones that can offer innovative, differentiating products that appeal to increasingly savvy and technologically empowered customers (Connell, 1975).

4 characteristics of services

Intangibility

Intangibility is considered to be a key characteristic of services and the most important difference between goods and services, from which all other differences emerge. In comparison to goods that possess physical properties that can be tasted, touched, felt, and seen prior to the consumer's purchase decision, services lack such properties and so they cannot be sensed prior to the purchase. Services are performances rather than objects or things. Thus, they are intangible.

Inseparability

Inseparability involves the simultaneous production and consumption which characterizes most services. While goods are first produced, then sold and finally consumed, services are often sold, produced and consumed simultaneously (Quadagno, 2005). Thus, production and consumption are inseparable. The customer should be present during the production of many services and play an active role in the service development process (Keh and Pang, 2010). Also, the service provider is involved in the production process and plays a very important role for the satisfaction of ...