Advertising Strategy of Insurance Sector in Turkey

[pic 1]

FACULTY OF MANAGEMENT

MANAGEMENT ENGINEERING

ISL353E MARKETING

Literature Review

Advertising Strategy of Insurance Sector in Turkey

070130317 Damla DEMIRLER

1. Introduction

The theme of most articles is that companies should use advertising media as soon as possible in all their forms, not to sell their products and services openly, but to build consumer relationships based on trust and information exchange. The aim of these relationships is to create market presence and product branding, which should generate new clients.

1. History of Insurance Sector

Before the foundation of the Turkish Republic in 1923, insurance business in Turkey was conducted by foreigners. From the foundation of the new republic until the 1980s there was a stable and long period, but only after the emergence of the 1980s did the insurance products grow and the insurance business change considerably. The number of insurance companies reached 69 in 1998, but then declined.(Senec,2008)

1. Insurance Sector in Turkey

The fundamental issue in the Turkish insurance sector is the small size compared with other countries. Only 25 percent of all apartments and 60 percent of all motor vehicles are insured due to legal obligations. The coverage rates in the healthcare and life insurance sectors are even lower. The main reasons for this instability are cited as insufficient income distribution and public awareness of insurance.(Senec 2008)

There are a number of threats and problems in the insurance industry in Turkey. Among them are errors and shortcomings in the application of the marketing concept, and probably major ones. An empirical study carried out by the Istanbul Chamber of Commerce in 2001 revealed reasons for people not wanting to be insured: the lack of confidence in insurance companies ranks first (19%) and the second reason is that they do not believe in their benefit (18%). Other reasons given by people are " no need, " " low income " and " no information. "(Senec 2008)

1. Definition of Insurance

Insurance is a service sector and key service characteristics inevitably affect the insurance industry. It is intangible, inseparable, heterogeneous and perishable. Like all other services, intangibility is the cause of many insurance problems. The insurance company usually gives a customer a piece of paper, but sells a promise on it. The customer doesn't have the opportunity to try or experience. Nor does he find the skills, talents and know-how hidden in it. Many of us have no time or time to read all the provisions of an insurance contract. The customer is therefore left with his or her perceptions of the seller and the seller before deciding whether or not to buy it. Inseparability is another problem. A uniform contract cannot be drawn up and signed with all customers. Each customer is contacted individually and the policy is prepared according to his or her requirements.(Senec,2008)

1. Marketing of Insurance Sector

In the changing market scenario, insurance companies have recognized and regarded the inherent value of brands as ' value assets. ' An advertisement is the value building of a brand because of the positive perception of its customers. The value of this is that insurance companies seek to protect their brand equity. And publicity is a multidimensional structure that combines functional and emotional values to meet consumer, performance and consumption requirements. The company's objective is essentially to improve and manage the relationship between the insurer and its customers and the public at large.

1. Product (one of the 4Ps)

Insurance products are products for sale, ever since such products are not produced, and therefore has no warehouse stocks of these products. An application for such products bear based on information available to the insured on the risks that can be posed

1. Promotion (one of the 4Ps)

Promotion is to communicate with persons and groups to inform and persuade them to purchase or use the product of a company. The term Integrated Marketing Communications (IMC) is increasingly used in marketing books and by professionals instead of being promoted. The promotion mix contains four promotional tools: advertising, personal sales, sales promotion and publicity. Although it is not comparable to the budgets of banks, insurance companies rely heavily on advertising. Unfair advertising is an important issue in insurance advertising. Companies that try to disappoint people by advertising are subject to serious sanctions and fines. On the other hand, generic ads given by a group of insurance companies or their association are preferable to other forms of promotion in a country like Turkey, where insurance awareness is too low. In addition to advertising, personal sales in which face - to - face contact is often required in the sale of insurance. The high cost of personal sales per client is an important disadvantage of this tool. Finally, both the qualification and the number of sales people must be adequate, as insurance is an exceptional service.(Senec,2008)

1. Advertising

Advertising is an efficient way of promoting your products and services. When you advertise potential customers, they know who they are, where they are and what they can do. A successful field of advertising is spreading around your products and services, attracting customers and generating sales. If you are trying to encourage new customers to purchase an existing product or a new service, many options are available.

Advertising is an important part of any business, which in reality is the tip of the iceberg in the sales process. It can only bring temporary success for a lower product, but a very positive result for product sales. We should note ad buyers or customers why they should purchase their products for insurance companies (insurance products) respectively. Advertising should be carried out regularly in electronic, print and media forms.

1. Categories Advertising

Institutional Advertising: This is any kind of advertising that is not intended to solicit an insurance business directly or indirectly, but only promotes the brand image of insurance companies and their intermediaries and may contain their registered name, address, toll - free number, logo or trademark. Announcements made in any mode, including those sponsorships in the dial highlight, fall within this category. Any inclusion of product names or product information, the performance of companies or their funds or product launch information constitute insurance advertising.