1. Discuss how the new toll-free telephone number created a new marketing channel at Progressive. Was this new marketing channel effective? What channel service output increased as a result of the toll-free number? Be specific.
The business was hunger to grow and could not resist the market condition that would provide even more opportunities. Therefore, the company decided to sell direct. It was really consumers’ demand as Progressive looked at the market where other companies not insurance companies that were selling directly to consumers, and customers were starting to buy in that manner in other industries. It became a natural progression of what people were doing elsewhere. As a ...view middle of the document...
Consumers could buy insurance policy online in real time. Progressive was known for their creative innovation and raising the bar relatively to clients’ expectation even with its internet the company was facing challenges. In 1937 customers could get a basic liability insurance policy for about $36 a year. A Progressive’s agent would come to consumers’ house and sell them a simple plan, and that is how insurance was purchased until in 1945 when Marvin Shipman became the first independent Progressive’s agent to sell a plan. In the early 90s Market Research showed that less than 1% of consumers thought of Progressive when asked to name insurance companies.
3. Explain how Progressive managed to remain competitive in its environment. How did it manage to appeal to a large consumer base?
After marketing to only individual agents for over 40 years, Progressive had to come up with a strategy for connecting directly with consumers. What they developed would soon make the company a household’s name. It was the ability to do an online rate comparison. A service that puts Progressive on the map. This service allowed customers to see how Progressive’s rates stack up against competition. Progressive wanted to appeal to as many customers as possible and knew they could achieve a competitive advantage and grow their company faster if they modified their distribution plan. . In addition, even if Progressive did not win, it helped the business gain trust with consumers, raising awareness about the need to shop for insurance to save money.
4. Provide an overview of the different marketing channels that Progressive currently utilizes. How do these channels impact their ability to reach different market segments?
While the dual-channel approach offers its share of advantages, there are some drawbacks. The company has to be carefully about how they positions themselves both on the internet and when they place ads on the TV. They are tying this in on how they build their web site, making sure that consumers understand that Progressive sells through both online business, over the phone as well as through local independent agents.
Progressive mentioned that more they advertise is better for their local agents. The company make sure customers know the different ways they can reach the business. What Progressive needs to be in the agents’ channel is extremely price competitive. The agents are comparing Progressive with many other companies that they have the ability to sell. Therefore, what the customers are looking for from Progressive is a good price and knowing the company is going to service the policy well.
In addition to the innovation Progressive has achieved in developing its channels, it is just as innovative in its products it develops to serve customers through those channels. The company has also increased its online capabilities with online claims service where customers can record and manage their online claims, talk to me feature, where the...