Principles of Marketing

Case Study Approach

Sheila’s WheelsBackground• e-sure was founded in 1999, to offer insurance cover for drivers and

homeowners using the internet as the primary sales channel. Initially, esure undertook underwriting and management of Halifax Car Insurance for HBOS (Halifax and Bank of Scotland) but launched to the general public in July 2001 - e-sure is part of the HBOS group.

• e-sure has seen significant growth, claiming 1m customers within 5 years and expanding into other insurance products. Growth has been aided by new products:– Home insurance was launched in March 2002 and is sold on a combination of

lower price and “market-leading benefits”. – In July 2002, e-sure joined with Sainsbury's Bank to offer car insurance which

again offers “unique benefits”, such as the RoSPA-endorsed policy of replacing child car seats when a car is involved in an accident (even if the seat appears undamaged).

– Subsequently e-sure launched travel insurance in January 2003.

Sheila’s Wheels• Strong advertising campaigns have been used to support the

growth of e-sure with the use of a celebrity Michael Winner and a catchphrase 'Calm down, Dear. it's a commercial'. The adverts and catchphrase seems to both irritate and be memorable, entering media and everyday speech.

Sheilas Wheels product• In 2005 e-sure decided to launch a new car insurance product

targeted at women. The product was called ‘Sheilas’ Wheels’ and offered special features targeted at women.

• its aggressive approach has led to criticism from other insurers (Sunday Telegraph 16 October 2005), who argue that their standard policies already provide the ‘added extras’ that Sheilas’ Wheels offers..

Sheila’s Wheels

E-sure make a number of claims in the Sheilas’ Wheels website: 

• esure has always recognised the importance of ensuring that women get a great deal when buying insurance. In 2004, esure strongly opposed an EU directive that would have seen women forced to subsidise men through their car insurance premiums. The idea for Sheilas' Wheels grew from research we carried out at that time.

• We found that women claim less, are responsible for far fewer driving convictions and have attitudes towards cars, driving and other road users that are often more considered than those of their male counterparts. We wanted to reward these differences and decided that we needed a new brand and a whole new look at car insurance for women to make it happen.

• An all-female management team helped to provide insights to create a brand and a product that would give more back to women buying car insurance - in price, benefits and service.

• Price was relatively easy. By focusing on women, we know that our customers are likely to make less costly claims and we have reflected this in our premiums. A Sheilas' Wheels quote should be competitive through and through.

Sheila’s Wheels• Special features

– We recognised that women are far more likely than men to carry a bag containing their purses and valuables with them when driving. Yet with most insurers there's limited cover to reflect this. Stolen, lost or damaged handbags often have to be replaced by very low "personal belongings" limits (often just £100). Sheilas' Wheels was designed with special handbag cover as standard and our limit goes up to £300.

– Repairers were another bone of contention. Many women hate the idea of the stereotypical teeth-sucking, tyre-kicking garage mechanic, so we set all of our repairers standards that guard against patronising attitudes.

 Marketing•  Advertising and the home page of the website uses a 1960s theme

showing a pink American car with three women dressed in pink 1960s style clothes.

• Advertising features a singing trio of women and pursues the Australian theme that underpins the brand name, even though it is a UK market

Sheila’s Wheels1. e-sure has offered a new car insurance product for a specific segment based on gender.

(a) Why would e-sure adopt a segmentation strategy?

30%

 

(b)What would they have considered before entering the market?

40%

 

(c) e-sure used a communications strategy that involved TV and a celebrity. The plans for Sheilas’ Wheels are equally high profile – what are the key considerations in deciding a communications strategy and the media to be used?

30%

Sheila’s Wheels1 (a) Why would e-sure adopt a segmentation strategy?

1. Market segmentation allows e-sure to:– identify segments that have not yet been adequately served– develop a tailored marketing mix to stimulate response– develop a differentiated offering with differential customer value– identify prospects based on customers currently served– spend marketing resources more efficiently

 

Car insurance had tended to be based on age, experience, location, type of car – but policies were offered to both genders. Features and costs would be affected by gender but e-sure were making this explicit and building in added features that recognised the needs of the female gender.

Sheila’s Wheels(b)What would they have considered before entering the market?

40%

e-sure are arguing that current car insurance products do not meet the needs of women adequately. They have based this on market research and also the fact that they will almost certainly already have women customers for their standard car insurance products – their own and also the ones they administer.

e-sure will have analysed the segment on the basis of • Attractiveness eg. size, growth, potential, need, competitive situation

(intensity, vulnerability, profitability, will they defend?)• market size and growth – Market Size, Growth Rate & Market Potential.

Car ownership is strong in women for its practicality. Many are carers and the car is invaluable for ferrying children, partners, shopping and themselves around within a tight timescale. Women enjoy longer life than men and hence market growth prospects are good.

Sheila’s Wheels

• e-sure will have analysed the segment on the basis of – market access – Customer Familiarity, Channel

Access & Company Fit - e-sure already have access to this market and gender is a relatively easy segmentation variable to identify and prove. Information on preferred communication channels is already widely available and so a marketing communications strategy will be straightforward to plan. Sheila’s Wheels assumes on-line purchases and this does not pose problems for the target segment.

Sheila’s Wheelse-sure will have analysed the segment on the basis of • competitive intensity – Number of Companies, Ease of Entry &

Substitutes – most insurance companies – including e-sure - offer car insurance to

all genders. Very few target women drivers, arguing that they give everyone a good deal. The direct competition is therefore Diamond in terms of companies expressly targeting women but all companies in terms of availability of car insurance. New entry is difficult requiring regulatory clearance, adequate funds, specialist knowledge and systems but a number of large companies – such as Tesco, Sainsbury and M&S have entered the market in recent years Competition is high, particularly for better risk drivers and a number of internet tools have become established that allows customers to quickly and easily check alternative offers. Much of the competition is on price.

Sheila’s Wheels• e-sure will have analysed the segment on the basis of

– Synergy or fit - keys to success in this segment match e-sure strengths

This fits the current strategy, portfolio, systems and competences of e-sure.– Differential advantage eg. ability to leverage our

resources/strengths to advantage, will customers respond?, can we gain a differential advantage vs competition here?

Prior experience has shown that the e-sure model of internet operations is effective and efficient, permitting high rates of customer growth– Profitability eg. costs of a tailored program for that segment vs

expected revenues, contributions.

The e–sure business model has been shown to be profitable .

Sheila’s Wheels

(c) e-sure used a communications strategy that involved TV and a celebrity. The plans for Sheilas’ Wheels are equally high profile – what are the key considerations in deciding a communications strategy and the media to be used?

30%

 What are the key considerations in deciding a communications strategy and the media to be used?

1. Strategy issues:• Who is our target audience?• What do we need to communicate and achieve (objectives)?• How much shall we spend?

Sheila’s Wheels2. Media issues:• How should we communicate this? (i.e. the message)• Where should we communicate this? (promotion mix)• When do communications need to take place? (promotion schedule)

 

3. Selection of Media• Characteristics of target audience

– Media usage behaviour, exposure• Budget• Creative constraints

– Best presentation of the message eg visuals, colour• Timing

– Seasonality of offering; cost of media at different times• Reach and frequency

– How wide message needs to be spread, & how often

Sheila’s Wheels

E-sure have decided that• Medium – multimedia using TV, press and the internet.

– TV and internet allows colour, music and movement. Press allows more detailed message content – necessary for a high involvement product.

– Characteristics of target audience – e-sure’s research must have identified propensity to watch TV , read press and use the internet

– Reach – the multimedia approach using national media gives good reach

• Message – clearly targeted at women and how they can get better car insurance