Marketing assignment on: Easy travel insurance

1. Introduction

Easy Travel Insurance (ETI) is the finest travel insurance company which deals in online travel insurance. It markets its product travel insurance to both kinds of travellers that is:

• Inbound Travellers ( visiting Australia)
•  Australians travelling abroad ( outside Australia travellers)

The product portfolio of ETI contains QBE travel insurance policies. It is the member of the QBE Insurance Group which is the largest international general insurer in Australia and covers the reinsurance group too. QBE has been operating in Australia since the year1886. The website that is www.easytravelinsurance.com is the key medium of communication which the company uses to contact its inbound travelling markets.

Mainly the site visitors come through the sources like Email marketing, Google organic listings, Referral Sites (travel related sites or links on travel blogs), Google ePaid advertising and Travel insurance comparison site (www.captaincompare.com.au). ETI makes travelling a trouble free and hassle free experience as you do not have to bother about cancellations, lost baggage’s, emergency assistance , emergency travel expenses , overseas dental and medical expenses etc.

The main motive of ETI is to increase its customer base that too by focussing on the international inbound sales channel and for this purpose I have been appointed as International Marketing Officer for ETI. The product which has to be pitched is Inbound Travel Insurance Product.

 This international business report for ETI will help in future market strategic planning. To understand the inbound travel market the following environmental analysis along with market segmentation and target profiling has been done for the international, market of India. This would help us in analysing that who would be the real customers to purchase the inbound travel insurance product of ETI.

2. Environmental Analysis

The region chosen India for international expansion is because it is the seventh-largest country as per geographical area in South Asia and being second most populous country the potential for the inbound travelers visiting Australia is more from this country. A brief glance about India can be had from the Appendix An attached called ‘India at a Glance’.

2.1Macro –

Political/ Legal

The biggest democracy in the world has federal republic kind of government which is based on English Common Law. The capital market of India is very vulnerable and now at present it boasts of being politically quite stable. The stock prices have been affected in grave manner due to major political events in the past which led to fluctuation of  stock return and  the trading volume too (Nishat & Mustafa,K., 2002). AS per the intensity of the political event the stock market and prices get affected (Malik, Hussain, & Ahmed.Shakil., 2009). FII’s play vital role in Indian future market and they participate in enhanced manner which improves the trading volume and liquidity in the Indian markets. The taxation system of India is three tiered where the Union government, state government and Urban and local bodies levy taxes. In order to do business freely in India there are some deregulatory Acts which have been framed by government and the International trade regulations are very flexible too which facilitated foreign trade (Nuruzzaman, 2011).

 Economic

AS part of economic reforms new Industrial policy was announced in July, 1991. The number of industries under compulsory licensing has been reduced to just six. Liberalisation in the policies for foreign capital has been done. IN many activities 100% FDI has been permitted (AShish). Automatic permission is being granted for doing technology agreements with foreign companies. 8-10% rate of growth which encourages foreign investment. The taxation regimen is very confusing. The rate of inflation which has been reported in October, 2010 was 9.7% and the interest rate which is benchmarked was found to be 5.25%. The Indian currency is showing an improving trend because the USDINR exchange rate averaged from 1973 to 2010 was 29.47. This can be seen from the statistical graph attached in Appendix B.

Socio-cultural

Social diversity is main feature of India with different sub-cultures, customs, castes, religion and languages etc. This second most populous nation in the world has population of approximately 1.1 billion. The following age structure has been used for division:

Age Structure:

0-14 years: 31.5% (2008 estimate)

15-64 years: 63.3%

65 years and over: 5.2%

 Median Age:  Total 24.1 years, Male: 24.1 years, female: 24.2 years (2002)

The population in India shows mobility, attitude towards work as well as leisure and posses good standard of education as well as skills. The healthy savings as well as education of average Indian is improving on continuous basis and this affects the future markets.

 Technological

 With the growth of technology internet has become a revolutionary concept in the Indian markets too. The most fast growing distribution channel which has emerged is the internet trading .Technology plays an important role in any business as it reduces cost, leads to innovation and  enhances the quality. This provides advantage to the organization as well as the customer at the same time.

2.2Micro- Competitors and Consumers

Competitors

Travel insurance is the sector which is fast catching up in Australia and there are many travel insurance companies which stand as tough competition for ETI. Even a research from Finaccord, a market research consultancy which specialises in financial services showed that the travel insurance has highly diverse nature and the travel insurance is showing a growth trend in the ten countries which are considered to be emerging armlets and global leaders too that are: Australia, Canada, China, Japan, Russia, India, Brazil, South Africa, US and South Korea.

 The most significant finding of the research was the dramatic disparity which existed between the rates of growth of travel insurance in these ten countries. The gross written premiums from the China’s market for stand-alone international travel insurance as well as assistance grew with an average rate of 16.3% every year between 2006 and 2010. In Brazil too the growth rate was 12.1% while in India it was 10.6% (Travel Insurance markets Worldwide: surging or stagnating?, 2011).

Some of the tough competitors which ETI might have to deal with are:

• Good 2 Go! : It is New Zealand’s premium travel insurance provider, which provides competitive quotes for the inbound travellers (Home Page: good 2Go, 2011).
• Columbus Direct: Whether travelling on working Visa holiday or Australian ETA it offers all the visitors to Australia as well as New Zealand full insurance cover and that too at very competitive pricing. It also offers 10% discount to Visa bureau clients and makes buying travel insurance easy and inexpensive due to their very fast online service (Travel to Australia with complete peace of mind, 2003).
• Southern Cross Travel Insurance:  This is best travel insurance company in Australia because it offers competitive rates, unbeatable policies, fast online services and also provides single trip as well as multi trip policies for travellers (Best Travel Insurance: Home Page, 2012).

Consumers

 Easy Travel insurance has wide range of inbound travellers who can be tapped for the Inbound Travel Insurance product and this covers:

• Holiday travellers
• Business Trips
• Working Holiday Visa Visitors
• Family vacationers
•  Young couples for honeymoon
• Young college goers on vacation trip
• Parents on short visit to meet the kids studying
• Short-term study programmes
• Sports teams
•  Families attending the sports events

3. Segmentation and Target Profile

The action of dividing the whole market of travel insurance into same kinds of segments of people who have same kind of needs so that ETI can satisfy the needs of diverse customer segments in better manner is called market segmentation. However for easy travel insurance purpose-of-trip variable would be the best suited criterion for segmentation of the consumers. The specific consumer user segment which has been identified for the inbound online travel insurance product is the:

• Regular business travelers
• Incentive travelers
•  Business travel which is related to conferences and meetings
•  Visiting the friends and relatives
• Vacations which includes  resort,  touring, outdoor
•  Visits to the events, exhibitions or theme parks in Australia.

However for travel insurance segmentation it is seen that demographic and socio-economic statistics help a lot for segmenting the travel and tourism market inbound to Australia.

 Once the segment to be targeted is identified the travel insurance company should develop a marketing plan which should be targeted through marketing efforts to the selected segment and this is called market targeting. The market segments to which the business efforts of travel insurance are being focused are called the business’s target markets. Direct marketing strategies would be of no use in travel insurance because the needs of the segments differ business traveler’s travel for business purpose while the vacationers travel for leisure.

 It has been seen that multichannel experiences for their customers is what insurance companies focus on because the travel insurance shoppers use  more than one channel to  research or to buy a travel insurance policy. In all the sections online channel has become the most dominant resource. Therefore the target profile should consist of both business based inbound travelers as well as leisure based inbound travelers.

4. Challenges

The major challenges which the ETI Company will face as per the inbound customer trends are listed below. But before that let us check what are the trends which inbound travelers follow which can be seen from diagram below:

Figure:  Inbound Consumer Trends

The challenges which ETI might face are:

• Presence of travel agents or intermediaries who act as risk mitigators in the inbound traveler’s life.
• The changing expectations of consumers who are becoming more exposed to the world and demand more value for money.
• Consumers do not want to be packaged because of customized travel requirements and increased access to travel related information’s.
• Shorter booking lead times for inbound travelers.
•  Slowdown in travel education travelers due to Global Financial crisis

5. Recommendations

The best method of communication with the international inbound insurance consumer is though Internet or online which will help in achieving the two main goals of ETI which are:

Increase of product revenue

The product revenue can be enhanced by creating partnerships with online travel agencies and travel agents which solely operate in online environment. Working with Inbound Tour Operators (ITOs) which have entered the whole inbound distribution system is the best way because these ITOs are an effectual link between the Australian travel and tourism products like travel insurance , accommodations etc. and  the overseas travel distributors which why them. Thus ETI can have tie-ups or join hands with ITO’s which will cover all the travel agents, travel wholesalers, meeting planners, event planners and direct sellers too. Thus none of the section of the target segment would be left untargeted and this will certainly help in increasing the product revenue too.

 Onboarding strategy can also be adopted by ETI which helps in achieving two overarching benefits like overboarding the ITO’s will help in:

        i.            Enhancing the  right type of  inbound traveler into consumer thus leading to increased profits

      ii.             Decrease the overall cost per customer acquisition through improved acquisition strategy and enhanced targeting.

Drive brand awareness

Internet has really created great change in the way now inbound travelers purchase insurance and presents high amount of growth opportunities too for the travel insurance’s brand image if leveraged properly. Some of the methods which ETI can use for driving brand awareness are:

(1)   Lead Generation: an effectual lead management program which should be able to handle the two very critical aspects of lead management that are real-time scoring and verification should be there.

(2)   Display Ads: Huge amount of data is available for the online marketers to reach the highly qualified audience and this will help in improving ETI’s targeted marketing. Now the companies can easily gain access to the households groups which have same product interests, demographics and lifestyles. This customer segmentation will be helpful in identification of the audiences which are more interested in travel insurance.

(3)   Site Optimization: The offline customer can be fully leveraged by bringing the insights online for site optimization. Appropriate ad can be created targeting the online consumer which acts as direct mail for Internet (Target and Acquire the Multichannel Insurance Consumer).

(4)   Direct mailers: These are best for targeting tentative had raisers.

(5)   Phone Call-centers (Inbound / Outbound):  Call centers are the major keys for buid.ing brand for ETI. By knowing that how is calling and they degree of interest in the product along with purchasing the travel insurance enhances the level of customer satisfaction and enhances brand loyalty too.

(6)   Social Media: The best way is to create a page on Facebook and Twitter the most famous and well accessed sites by the target segment. Since the most highly growing demographic of Facebook is 35 years and older who the real decision makers and fall are within pour targets segment too. You can also upload a video on YouTube or use Flicker for social media marketing (Planning for Inboudn Success).

(7)   Viral marketing: Mailers and newsletters online can be sent to the prospects through the company.

(8)   Online Public Relations: Generating publicity is the best way to promote travel insurance in the most cost-effective manner. Media ready materials should be used for doing this and the best way to do so is to publish online stories about ETI on the travel sites like Makemytrip.com, or airline sites of Kingfisher etc.

Digital Marketing

 It is the type of marketing through internet which is electronically driven and focused on:

• Online advertising
•  Search Engine Optimization
• Use of mobile phones to search internet
• Podcasting, videos etc.
• Email and viral campaigns
•  Social networking and user generated contents.

Effective marketing of ETI website

 The website of ETI should clearly display the unique selling point (USP) of ETI along with the experience  will help in marketing the travel insurance inbound effectively. The website should be quick to load, use SEO to help the customers to find your website,  use blogs to develop a two-way communication link with consumer and use simple and clear language understating the language barrier.

 6. Conclusion

Thus from the above International Market opportunity assessment for Easy Travel Insurance for the new market of India it is quite evident that since the target segment mostly belongs to business and leisure travellers so the target market is definitely the business traveller , leisure or vacationers and even the short trip educational tours and students. From the environmental analysis it is clear that the Indian market would be definitely a profitable market for ETI to tab for its inbound travel insurance and the best way would be to follow marketing and promotion through Indian travel sites like makemytrip and even Thomas cook etc which are used frequently by Indian travellers to Australia.

 The main challenge which ETI will have to face are the presence of travel agents and tour operators on which Indians rely more before doing online travel insurance so ETI can go in for tie-ups with them to handle this challenges and regarding handling the pricing and the best way to cater to the Inbound travellers is to go in for Digital Marketing which is also known as internet or online marketing.

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