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GEICO Case Study

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by

Emily Dalrymple

on 14 December 2014

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Transcript of GEICO Case Study

Pricing Strategy
Customer Environment
The majority of GEICO’s business derives from its auto insurance sector
According to Marketing Edge (2014) “the primary target audience for GEICO is adults 25-49 with HHI $30,000+.”
Case Study
Strengths
Weaknesses
14 offices across nation causes price advantage
Strong Brand Equity
Popular advertising campaign with clear message
Strong Financial Record
Offers affordable insurance rates
Fast and friendly customer service
14 offices across nation limits face to face interaction between customers and company representatives.
Internet based--excludes older demographics
Lower price can be perceived as lesser quality
Potential Customers:
Defectors
External Environment
Company Revenue (2013)

Top Competitors
IMC Strategy:
According to Marketing Edge (2014) “the target skews younger, is tech-savvy and comfortable with the way technology can simplify their lives; therefore, they are more likely to accept the direct approach to auto insurance.”
Psychographics
Capitalize on defectors from other insurance companies
Strong foothold in teen demographic (ages 12-17)
Expand services
Increases market share
Competitors compete on price
Esurance “7 minutes or less” claim
Legal action against GEICO as insurance provider
Recession negatively impacts automobile sales
Trends in purchasing safer cars and cheaper insurance
Opportunities
Threats

According to Mintel’s (2012) research on American teens, measuring their receptiveness to advertising “surveyed teens recall Doritos, M&M, McDonalds, Burger King, Apple, Nike, Coca Cola, and GEICO as their favorite commercials and advertisements.”
Potential Customers:
The Next Generation
Recommendation #1
Recommendation #3
Recommendation #2
Economy
Opinion Research Corporation (ORC) conducted a telephone survey from April 14-17, 2011 with a sample size of 1,000 adults.
Over 53% of the people surveyed made financial choices that saves on car insurance.
20% of the drivers have either reduced or canceled their car insurance coverage for immediate financial relief.
Demographics
Goal:
Increase market share among auto insurance

Solution:

Offer incentives for referral of new customers
Offer a one time discount to customer who switch to GEICO from other company
Goal:
Increase market share among auto insurance
Goal:
Increase customer satisfaction towards GEICO
Product Strategy

Goal:
Improve GEICO’s brand image among
policyholders and non policyholders.

Solution:
Continue current policy with CSR


Generate positive word of mouth among GEICO policyholders and non policyholders

Recommendation: 4
Goal:
Increase market share among auto insurance
Solution:
Form a strategic partnership with Ford Motors
"At those unique moments customers are 'vulnerable to intervention by marketers.'"
CHARLES DUHIGG
"How Companies Learn Your Secrets"
IMC Strategy: target consumers at 'life events'
Measuring the Effectiveness
Website traffic
Search engine traffic
Bounce rate
Conversion rate

Distribution Strategy:
Questions?

Input Controls:
Employee recruitment and training
Capital to fund recommendations
Process Controls :
Employee evaluation systems
Management commitment to marketing plan

Implementation Considerations
By: Emily Dalrymple, Uei Chen, Yan Qing Cai, & Alan Tseng
Project Objective

$41.41B
$68.29B
$32.65B
$17B

What is our perception (image) as an employer and a corporate citizen among policyholders and non-policyholders?

Expand services by adding pop-up chat feature
Add value to brand by increase the quality of customer service
Total respondents: 147
Total respondents: 147
Goal:
Increase customer satisfaction
Solution:

Increase trained customer service representatives
Shorten response time
An online chat support
Total Respondents: 147
Total Response: 147
Total respondents: 57
Recommendation #5
Goal:

Improve the Distribution Efficiency of GEICO's Internet Marketing Efforts
Solution:
Internet is most accessible in major cities
Focus on internet marketing efforts on consumers in major United States cities to reach out to as many consumers as possible
Goal:
Improve the Distribution Efficiency of GEICO's Internet Marketing Efforts
Objective:
Determine where in United States internet is most accessible
Objective:
Form a strategic partnership with Ford Motors

Total respondents: 147
Goal:
Increase market share among auto insurance
List of the Most Internet-Accessible Cities
1. Washington
2. Chicago
3. Dallas
4. New York
5. Atlanta
6. San Jose, Calif.
7. Los Angeles
8. Houston
9. San Francisco
10. Phoenix
11. Boston
12. Seattle
13. Philadelphia
14. St. Louis
15. Denver
16. Baltimore
17. Minneapolis
18. Palo Alto, Calif.
19. Detroit
20. Santa Clara, Calif.

Source: Ohio State University
Objective:
Objective:
most preferred
least preferred
GEICO Customers are more likely to care about price than other insurance policyholders.
90% of GEICO customers care about price while only 72% of other surveyed consumers feel this way.
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