Case Study: Market Segmentation - Personal Auto Insurance Buyers Background: Our client, a national property/casualty insurer, distributes its personal and small commercial products through independent agents. This study was part of a re-evaluation of its strategies, designed to determine: Whether its market share might be increased by direct marketing to some households. Whether doing so would conflict with agent activities. Marketing themes and product features that could be used to differentiate it in different market segments. The potential profitability of different segments. Attitudinal, behavioural, and demographic data were gathered using a mail panel survey of 2000 U.S. households that own auto insurance. Segments Identified: The study identified five segments, each making up 17% to 22% of the market. "Non-Traditionals" were most interested in using the Internet and/or buying insurance at work. Direct Buyers were more interested than others were in buying via direct mail or telephone. "Budget Conscious" consumers were differentiated, primarily, by their interest in minimal coverage and their determination to find the best deal. "Agent Loyals" expressed strong loyalty to their agents and interest in high levels of personal service. "Hassle-Free" consumers were similar to "Agent Loyals," except that they were much less interested in high levels of face to-face service. Thus, attitudes toward distribution and service needs were key factors differentiating the segments. The segments also differed in other attitudes and in their potential profitability, as measured by total auto insurance premiums, other insurance products owned, and loyalty to their insurers. Marketing Outcomes: The study showed which segments the client should target for distribution without agents. It also showed how to define the segments in actual target marketing. The study also provided guidance on which marketing messages to use with each segment. Thus, this research provided a major input into our clients decision about how to proceed with this potential new venture

Question 2 List the marketing stimuli of consumer buying behaviour. Explain the five (5) steps of the consumer decision making process. Refer to the case study and show application of each step for a consumer purchasing insurance. (30 Marks)

BOLD POINT IS VERY IMPORTANT PLEASE SHOW APPLICATION OF EACH STEP FROM CASE STUDY

MUST BE FOR 30 MARKS