Gi Ch. 2 And Kong Ch. 41 Sales, Marketing, And Dist

Front 1

What is Marketing?

Back 1

 identifying:
 current position
 future opportunities
 market research
 statistical analysis
 Product Development
 Advertising
 customer service

Front 2

Key Areas in Marketing (from Kong 41)

Back 2

 Market Research
 Field Marketing
 Communication
 Advertising

Front 3

Key Steps in Sales (from Kong 41)

Back 3

 identify opportunities
 contact
 identify audience’s needs
 underwrite the risk
 sell the solution.

Front 4

Keys to Successful Advertising and Promotion (from Kong 41)

Back 4

 TV / Radio / Print
 The media depends on the:
 desired goal (e.g. brand awareness)
 target audience (location / demographics)
 cost

Front 5

Challenges to MCO’s in Sales, Mktg, and Distribution (from Kong 41)

Back 5

 Choice-based Competition
 Achieving sales goals
 E-commerce
 Meeting User expectations / demands
 Users = employers, employees, agents, providers, staff, Board, rating agencies.

Front 6

HOW THE MARKETING PROCESS HAS CHANGED: THE PRODUCT DEVELOPMENT PROCESS
Product-Driven Approach – used by traditional group insurers

Back 6

1. Generate ideas
2. Screen the ideas
3. Concept development
4. Business analysis
5. Product development
6. Test-marketing
7. Commercialization
8. Advertising

Front 7

Market-Driven Approach – used by MCO's

Back 7

1. Choose target market
2. Assess needs
3. Identify differential advantage
4. Strategize
5. Test marketing
6. Implementation
7. Advertising

Front 8

Managed Care’s Impact on Marketing Methods

Back 8

 MCO’s can charge less than Traditional ins cpys.
 MCO’s focus on Er & Ee choices
 MCO’s have caused a change from the Product-Driven approach to the Market-Driven approach

Front 9

SALES AND INTERMEDIARIES
Group insurance has two levels of sale:

Back 9

1. Sale of an insurance plan to the Plan Sponsor
2. Sale by the sponsor to the employees.

Front 10

The intermediaries (brokers, agents, consultants):

Back 10

 help the er purchase a plan
 help the er communicate / market it to the ees
 give advice on plan design and pricing
 help the employer in claim disputes
 suggest plan design alternatives upon renewal.

Front 11

SALES DISTRIBUTION MODELS
Independent Brokers

Back 11

 independent
 self-employed
Advantages
 require less capital and staff
Disadv:
 not committed to your company
 high commissions
 your product must be competitive
Used by:
 small ins cpys, selling to small er groups.

Front 12

Captive Agents

Back 12

 Same, but only represent one company’s products.

Front 13

Group Field Force

Back 13

 sell “wholesale” to Er group.
 captive
 full-time; paid a fee for services rendered
Adv:
 loyal
 wider distribution channel
Disadv:
 more overhead
Used by:
 large ins cpys selling to large er groups.

Front 14

Direct Sales

Back 14

 mass mailing, telemarketing, website marketing.
 good if brand name is recognized

Front 15

Multiple Level Distribution Model

Back 15

 Uses variety of brokers, retailers, wholesalers, agents, and telemarketers.

Adv:
 exploits whichever channel works best

Disadv:
 requires sophisticated sales mgmt and marketing support
 expensive

Used by:
 national-class MCO’s and ins cpys.

Front 16

Sales to Individual Participants

Back 16

 Needed when an employer offers multiple health plans
 Enrollment specialists conduct worksite meetings.

Front 17

Additional Distribution Methods

Back 17

 TV, newspaper, Internet, worksite marketing

Front 18

 TV, newspaper, Internet, worksite marketingMARKET SEGMENTATION: HOW TO MARKET TO DIFFERENT MARKET SEGMENTS
 Market Segmentation means dividing the target markets by size or by industry.

Advantages of Market Segmentation:
 TV, newspaper, Internet, worksite marketingMARKET SEGMENTATION: HOW TO MARKET TO DIFFERENT MARKET SEGMENTS
 Market Segmentation means dividing the target markets by size or by industry.

Advantages of Market Segmentation:

Back 18

Advantages of Market Segmentation:
 understand potential customers
 choose a product to develop
 choose a distribution channel

Front 19

Marketing to Small Group ph’s:

Back 19

 Small group marketing is heavily regulated:
 pricing
 underwriting
 guaranteed issue
 statutory plan designs
 In order to stay profitable in this environment, an Ins Cpy must keep distribution expenses to a minimum.
 Typical distribution method: Brokers/Agents; mass-marketing

Front 20

Marketing to Large Group ph’s

Back 20

 Not as heavily regulated.
 Flexibility in plan design is needed.
 The ins cpy’s group sales reps work with the group’s ee benefit representatives.
 sales / product expertise is needed

Front 21

Marketing to the Decision Makers (from Kong 41)

Back 21

 to Brokers/Agents/Consultants
 build strong relationships
 give them incentives to bring in good business
 to Ers
Ers want:
 financial stability of the plan
 compatibility with HR objectives
 a choice of plans
 to Ees
Ees want:
 a choice of plans,
 low cost,
 easy access to providers
 prompt claims adjudication

Done.