Marketing Planning Assignment Hiscox Ltd
Marketing Planning Assignment Hiscox Ltd is a founded in Bermuda that deals with the insurance products. The company is listed in the London Stock Exchange and acts as an underwriter in Lloyd’s of London. The areas of operation and selling are mainly concentrated in the niche markets. The main products of Hiscox Ltd include property and casualty insurance that is given to other companies and individuals with high net worth.It also sells home and contents insurance for luxury homes, cars,personal accident, bloodstock etc. The company covers almost all the risks such as hacking, kidnapping, satellite damage and so on. In the recent period, 2014, Hiscox USA launched a new brand called “Encourage Courage”. In this Unit 2 Marketing Planning Assignment – Hiscox Ltd report, the relevance of a marketing planning in Hiscox is discussed. A more effective marketing plan involves the designing of the marketing objectives according to the business goals and capacity of the business to enable marketing strategy execution in the changing complex business environment. The report highlights on the compiling market audits,barriers to marketing planning, marketing plan for a product or service and Ethical issues in marketing.
Task 1: The internal and external marketing environment for Hiscox Ltd
a) Of the three commonly used portfolio analysis tools, which is the most useful when considering the addition of a new product to Hiscox’s product portfolio, and why?
- Understanding the external environmental factors is an integral part in the organization audit. External environmental factors are subjected to changes on a frequent basis and hence, there is a vital need to know the impact of the external environments, which is the market fluctuations in the company along with the internal factors. The internal environmental factors include the mission and vision of the company including the business goals and objectives. The analysis of which helps in knowing the future business requirements in the marketing. Another internal factor is the existing customers (Hutt, M., & Speh, T, 2012). While conducting the market audit, the needs and preferences of the existing customers should be focused. Resources of the company are another internal factor that involves management structure, finance, information technology used and so on. Employees and their relations are another major internal factor that needs to be considered.
- As the first step in the Hatton’s marketing planning process, the analysis of a company’s current product portfolio and its market position can be done in a better way for Hiscox using the portfolio analysis of BCG matrix. This matrix helps Hiscox toanalyse its portfolio as it provides a graphical representation of the company to evaluate its different business functions. The two key elements considered to evaluate the business position are the market share and the industry growth rates. In BCG matrix, Hiscox will be able to analyse the capacity and potential of its business activities as well as analysis of the market environment.Business classification can be done under BCG matrix using the comparison on industry growth rate and relative market share. There are four cells in the graphical representation of BCG matrix each showing different type of business.
- Stars: Starts shoes that the company has high market share and the cash generation is easy in the growing market. Company may require high investment in this scenario.Figure: BCG Matrix
- Cash Cows: This represents high market share but in a mature and slow growing industry. There is a need for lower investment in this scenario. Stability strategies are followed in Cash Cows
- Question Marks:This represents that the company is having low market share in the high growth industry. More cash requirements is essential to get an increased market share in this business situation. No particular strategies adopted in this scenario and ideal for launch of new products and services.
- Dogs:This shows less or weak market share in the low growth industry. The cash generation is lower here and may not require huge investment also. Lot of cost incurred in this situation and retrenchment strategies are usually adopted by the company so that market share can be achieved at the cost of the competitor firms.
However, external environmental factors are more fluctuating and challenging that the internal factors. The external market factors can be analysed in the organizational audit using PEST analysis, which is the analysis of Political, Economic, Social and Technological factors. By auditing these factors, the impact of them in the organizational activities is known. SWOT analysis (Strengths, Weaknesses, Opportunities and Threats analysis) helps a company to know the organizational culture and the future business prospects along with the assessment of the external business market. External market analysis helps to know the customer needs, competitors’ strategies, awareness of market size, number of competitors, market prices, marketing techniques of other companies, target market effects, better product promotional and distributions methods and so on
(b) Based on what you know of Hiscox Ltd, what do you feel are the company’s strengths and weaknesses in terms of marketing planning capability?
Before conducting the marketing planning, it is essential to know the organizational capability to plan its future market. This includes knowing several elements which are as below:
- Core competencies: Core competencies are the unique and distinctive features of Hiscox offered to the customers. By knowing this, the marketing plan can be formulated in such a way that it highlights Hiscox’s core competencies. This can help the company to grab more customers for its products and services
- Synergic effects: Synergic effects are the brand image of the company among other competitors in the industry. This enables to know the capacity of the company, where it stands among the competitors, its market share etc.
- Resources and behaviour: Company’s capacity can be determined by knowing the resources available to the company and the way in which the resources are allocated in the company. The resources of Hiscox can include the employees, fund management, marketing tools and so on. The impact and behavioural effects of these resources shows the performance capability of the company.
- Strengths: It is also essential to know the strengths of the company. This helps to know the organizational capacity. Some of the company’s strengths include the customer base for its insurance products, the percentage of loyal customers, the quality of products and services, brand image and so on.
(c) Based on what you know of Hiscox Ltd, which of McDonald’s ten barriers to marketing planning might be most relevant to the company, and why?
Marketing planning is a challenging aspect and there can be many barriers to the market plan to develop and execute. Some of the barriers in the market plan may include the following:
- Lack of motivation of change: The motivation of the stakeholders of the company is low, then they might not grab the new opportunities and overcome the threats. This can bring negative impacts to the company and becomes a barrier to create an effective marketing planning.
- Overconfident with problems solution: If the company does to look in to the existing issues in a proper manner, it can lead to more treats of the company. Thereby an effective marketing plan cannot be made which covers the problems and issues of the company in both internal and external market.
- Failure of co-operation between management:If there is no proper communication and coordinated efforts between the different departments of the company, this will hamper the resource allocation of Hiscox and thereby the company may not be able to achieve its business goals.
- Lack of knowledge and skills: There is a vital need for the specific knowledge and skills for framing a good market plan. In the absence of the same, an effective plan cannot be formulated including all the analysis of internal and external market environment and the future business goals.
(d) What specific steps might the company take to overcome the barriers identified when bringing the new specialist flood insurance product to market?
It is essential is for Hiscox to overcome the barriers in the marketing planning so that the company can increase its profitability and market share in bringing the new specialist flood insurance product to market. According to the professor McDonald, there are ten rules to overcome the barriers in the marketing planning (O’Mahoney, J., & Markham, C, 2013). Hiscox has to follow these rules in the company so that there can be a better marketing planning possibility. These rules are as below:
- Strategy formulation before tactics
- Operations has to include suiting marketing
- Marketing shared value
- Structure around marketing
- Environmental analysis in the best possible manner
- Collect the information on the basis of SWOT analysis
- Knowledge and skills
- Systematic way of conducting process
- Sequence objectives
- Organizational culture and management style
(e) Carry out a PESTEL analysis, identifying opportunities and threats within the marketing macro-environment for the new flood insurance product for high-value domestic properties
SWOT analysis is one of the main organizational audits that helps the company to know the Strengths, Weaknesses, Opportunities and Threats of the company and its impact in the external market. The main aim of the SWOT analysis is to increase the benefits of strengths and opportunities and to reduce weaknesses and to avoid threats faced by Hiscox. Some of the strengths of the company is the market share in the insurance industry, The skills and expertise of the company among the competitors, the location of the business, whether it is located in the prime area, The quality process of the company and so on. Weakness of the company is the issues and problems in the company in the external market. These include bad reputation, lack of fund, improper supply chain management, low market share and reduced customer base, less competitive edge etc. Opportunities of the company are the possibilities of growth to the company offered from the external market. These include less competition of their weakness, increased market share, globalised market, innovations etc. Threats to the company are the issues that make the existence of the company difficult in the external market. This include new competitors, changes in the government tax law, competitors increased market share and customer base and so on.
Marketing Planning Assignment Hiscox Ltd
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(a) Explain why the planning of the marketing function is fundamental to the strategic planning process in commercial organizations
Marketing is one of the main functions of a business that helps the company to increase its sales volume, revenue, profitability through its products and services. A successful marketing planning and its implementation enable the company to survive in the competitive business world in a long run. Hence, in the Business Strategy, there is a vital need to include the marketing plan. Marketing planning helps Hiscox to focus on its target market and the customers who may be interested to buy its insurance products. It also helps to know the needs and preferences of the customer with related to the different insurance products of the company. Marketing planning helps Hiscox to know the potential customers in the niche markets in UK, US etc. Through the conduct of marketing planning, the demand of its products among the market is identified. Marketing plan helps to know the strength and weakness of the competitors and there by a better competitive edge can be gained. Marketing plan included in the business strategy enable the company to know the cash operational activities and the ways to make good profit (Gummesson, E., & Grönroos, C, 2012).
(b) In what ways do you think the increasing use of the internet as a distribution channel has changed perspectives on marketing planning in the UK insurance industry?
- Marketing planning is an integral aspect of the company that helps the management to know the flaws in the current marketing strategies and activities, how to develop a more focused business goals, how to achieve more competitive edge and market share and soon (Kotler, P, 2011). The changing market fluctuations and its future market prospects are included in a proper marketing planning so that the company will be able to withstand even in the market crisis. Considering Hiscox Ltd., the insurance provider, it offers variety of insurance products like personal and commercial insurance, home and content insurance etc. in the niche market. Hence, it is essential for Hiscox to know the changing market trends in the niche market and the performance of the other competitors in the insurance industry are compared and analysed to eventually do a better and successful marketing plan for Hiscox. The company acquired DirectAsia to start the direct-to-consumer businesses in many markets like US and Europe. DirectAsia brand is a challenging and one the marketing planning of Hiscox has to incorporate the strategies to successful sell the products direct to consumer.
- It is also essential for Hiscox to do a proper market analysis in the internal and external market environment before conducting a marketing planning. The factors that act as the strengths, weakness, opportunities and threats in these marketing environments have to be analysed effectively so that the company will be able to face any difficult scenario in the market as well as its marketing strategies will be unique and better from its competitors in insurance industry.
(c) In terms of the development of the proposed new flood insurance product for high-value domestic property, why might traditional product development techniques such as SWOT analysis be of limited use?
Developing a new product like new flood insurance product for high value domestic property, is a critical aspect as it decides the sales volume, profit margin and the overall development and growth of the company. Hence, there requires a more focused evaluation of market conditions as well as the business goals (Simms, C., & Trott, P, 2014). New product development is a process which involves the designing and planning to develop a product that also has to include the analysis of the feasibility and viability of the product in the market. The new product development process include the below factors:
- Idea generation: Ideas about how and when a flood insurance product has to be developed can be attained using the SWOT analysis and market research.
- Idea Screening: Once an idea of the flood insurance product is generated, the next stage is the idea screening in which the most suitable product idea is selected avoiding the unsuitable ones.
- Concept development and testing: Customers feedback about the insurance product concept is attained and a test is conducted to know the feasibility of the product.
- Market strategy development: Once the idea is screened, the next stage is the development of the market strategy. The type of the marketing strategy is determined based on the product development, test marketing, commercialization etc.
- Implementation of market plan: In this final stage, the market plan is implemented and thereby the marketing strategy will be executed by the employees which will later bring the outcomes.
(d) How might the TCF outcomes be incorporated in the design of the proposed new flood insurance product for high-value domestic property?
- The marketing planning will have more impact on the customer ethics. The ethical customers are the customers that are conscious about the environmental issues such as issues related to social and other issues. While considering the marketing plan, the company has to ensure the customer right is taken in to account. If the company is immortal in the product sales and pricing, it will create a bad reputation to the company affecting the sales volume and profit margin of the company. If an ethical consumer buys the products of the company that are developed and marketed in an unethical manner, it will have a direct consequence on the customers cause to customer annoyance and dissatisfaction. Thereby, the goodwill of the company will be hampered and it will make the survival of the company difficult in the market (Papadopoulos, N., & Heslop, L. A, 2014).
(e) Write a set of objectives and a short strategy statement for a marketing plan for the flood insurance product for high-value domestic property
Marketing plan is a vital document that includes the market analysis goals and objectives, the guidelines and methods to conduct marketing etc. This is a critical element in the company so that Hiscox can ensure a better sales volume of its insurance products in the niche markets all over the world. According to McDonald (1995), there is a four step marketing approach which is as below:
- Goal Setting: It is essential for the company to set its marketing goals which gives more customer base, market share and an increased competitive edge. There are many insurance providers in UK which are competing with Hiscox. Hence, the Hiscox has to set its goals in such a way that it offers unique and distinctive features for its products and services. By this, the brand image of the company will be increased.
- Situational Review: In the changing Business Environment in the insurance industry with high competition level in globalised market, there is a vital essentiality for doing a situational review that include the marketing audit of PEST analysis or SWOT analysis. Based on these analysis, Hiscox has to review its insurance products and bring necessary changes to it.
- Strategy Formulation: The marketing plan include the next step of formulation of marketing strategy. The marketing strategy involves the marketing objectives that company wants to achieve in the future. With the help of marketing strategy, the company will be able to achieve the business goals with the limited resources available (Bejou, D., & Palmer, A, 2013).
- Monitoring and Control: After the formulation of the marketing strategy and its implementation, the whole process is to be monitored so as to know if the marketing activities are conducted on the basis of the marketing plan. This monitoring helps Hiscox to know where it has to improve so as to ensure an effective marketing activity.
(f) Write a tactical plan for the pricing policy, communication policy and ‘6Ps’.
- In order to make a product successful in the market and attractive to the customers, there has to be an effective pricing policy, distribution and communication mix. Distribution mix is to the place in which the product is sold out. The niche market selection is to be done by Hiscox to sell its insurance products. The target market selection should be based on the product features and customer preferences in the target market. This includeschoosing the methods of transportation, controlling the inventory level in each target market. All these factors increase the sales volume of Hiscox products
- Also, it is essential to ensure a correct pricing strategy is implemented in the respective target market so that more customers will be attracted. The prices of the products will be determined on the basis of the customer buying behaviour and customer perception. Hence, while making a marketing plan, the exact buying pattern of the customers in each target market is to be analysed (Jobber, D., & Ellis-Chadwick, F, 2012).
- The communication strategy has to be effective in the marketing plan as the product sales and brand image of the company is determined on the basis of how well the product is communicated to the customers. The different communication techniques include promotional and marketing activities. This has to be unique and grab more customers so as to increase the market share of the Hiscox.
(g) Based on your tactical plan, set out controls for ensuring that the plan stays on track over its intended life.
A suitable marketing plan helps in the easy achievement of the business goals by reducing the risks in the business and increasing the profit margin. The marketing plan can be executed with the help of the marketing tools and gathering information that helps in the business growth and expansion in the competitive market. Some of the factors that help in the marketing plan implementation are as below:
- Support from the management: In order to implement a market plan, it is necessary to get the support of the management so that the marketing goals along with the business goals can be achieved.
- Budget: Implementation of the marketing plan is also possible with proper financial support. The marketing activities involve extensive use of marketing plan in different target markets. Hence, this requires sufficient fund to do the marketing activities in an efficient manner. If there is a lack of fund, a proper implementation of marketing plan is impossible.
- Legal aspects: It is also essential to be aware of the legal aspects of the state and government to do a market plan and its implementation. If any of the legal rules or policies are violated in the market plan, it will not be able to implement in the company.
There is a vital requirement that the control plan has to be in align with the strategic objectives. This will ensure a proper execution of the marketing plan and thereby a smooth marketing activity is possible. Hence, while monitoring and controlling the marketing activities, it will help the company to know whether the conduct of the activities is in accordance with the strategic goals. If not, necessary actions can be taken through an effective control system.
Task 3: Marketing ethics
(a) What might specific ethical issues arise in Hiscox’s Wi-Fi campaign for B2B customers?
Ethics is a set of principles that consists of right of conduct that enables the organization to make the appropriate decisions. Ethics in marketing covers address the issues of standards of fairness, principles etc. The main aim of the ethics in marketing is to ensure that no one violates the ethical principles in marketing, especially in the process of marketing planning. If there is a violation of the marketing ethics, it will lead to many further complications in the marketing implementation and thereby the company may have to incur losses. If ethical standards are met by the organization, it helps the company to ensure q positive attitude towards its products and services. This will increase the brand image of the company leading to an increased goodwill. The ethical issues that have happen for Hiscox in its Wi-Fi campaign for B2B customers include the following:
- Providing wrong prices
- Invasion of privacy and issues related to data security.
- Unsolicited delivery channels like telemarketing, emails etc.
- Misleading claims in advertisement about quality of Wi-Fiproducts
- anti-competitive pricing, price fixing, price discrimination
- collusive tendering
By the practice of any unethical steps, the company will lose its image in the market. This will lead to loss of customers and bad reputation. Thereby, the customers will be dissatisfied and the trust factor on the company will be faded on the part of the customers. Hence, complying the ethical standards and principles in the marketing plan and its implementation is an essential aspect for company survival (De Mooij, M, 2013).
(b) If any of these issues were to be realized, how might Hiscox respond in order to defend its brand image?
There are a few strategies that help in following ethical behavior in the company and this eliminates unethical practices in the company. One of the main thing is that management has to ensure that the ethical principles are communicated to all employees in the company so that all are aware of the ethical behaviour aspects and this will be followed effectively (Terpstra, V., Foley, J., & Sarathy, R, 2012). Secondly, there is a vital need on the part of the company to provide ethical training to all the employees so that the self-discipline will be followed by employees. Some of the ethical issues that organization should avoid include:
- Product: The Company should avoid the misleading information about the product features, lack of quality control, production of poor quality products deliberately,
- Price: Quoting high price for poor quality products.
- Place: If the product price in different place is different locations
- Distribution: The product supply will be controlled and selling the products at a higher price when there is out of stock issues.
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- While concluding, it is noted that there is a vital need for an effective marketing plan developed and implemented in the company so that the company can benefit in many ways and improve its business success. The marketing plan off Hiscox Ltd, a UK based insurance company is discussed in this Unit 2 Marketing Planning Assignment – Hiscox Ltd. There is a vital need to conduct proper and timely market audit involving the analysis of the external and internal environmental factors through PEST and SWOT analysis. This helps the company to know what areas in marketing needs to be improved in future and what are its strengths and opportunities, threats and weaknesses. The barriers to the Marketing Planning have to be eliminated so that a smooth formulation of the marketing strategies and its effective marketing implementation can be ensured. The Marketing Planning steps involve situational review, goal setting, strategic formulation and its implementation and monitoring marketing activities. A god marketing plan has to consider the ethical standards and principles. This will ensure a good reputation, more customer base and profit margin to the company. However, violation of ethics by the company makes it difficult for the company to survive in the market (Doole, I., & Lowe, R, 2012).
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