1. introduction
“Over the years, marketing has evolved, from being a simple sales function to a complex group of activities, not always well integrated with each other or in relation to the company's non-commercial activities. There are many questions about the relationship between marketing managers at headquarters and vendors in their territories; about the future of trademark administration; about the need for a corporate assistant director of marketing; about the relationship of marketing to manufacturing, research, development and finance, etc. To better understand this process, let's examine how the marketing departments… are organized, and how they interact with other departments of the company »
We have allowed ourselves to quote the previous paragraph of Philip Kotler, because in some way it represents what we want to analyze through this work. In itself, the focus of companies towards marketing is a recent boom in our country, and even more so if we talk about the insurance industry.
It is not common to find Marketing departments in an insurance company, perhaps because it is, within services, the most intangible of all. A basic concept of what insurance is expresses: "the transfer to a third party of the risk that exists on a person or object". In said agreement, the insured pays a third party according to the statistical possibilities that the insured property suffers some mishap, and obtains from the latter the guarantee of a payment in case this happens.
Of course, nobody wants their property to be damaged, so the individual pays hoping never to have to use the insurance.
So how does marketing intervene in the complex insurance market? As in all branches of the economy, marketing aims to increase the effectiveness in marketing a company's products, by bringing the producer closer to the consumer. Similarly, insurance companies seek this approach to the consumer through marketing. Some insurance companies in Venezuela have developed a corporate marketing department, others reflect the marketing functions in the Brand Management of their different products (services).
In this analysis, we will take CA de Seguros American International as an example and analyze its operation from the point of view of "Marketing Management".
2. Analysis
Background
American International Group (AIG) is a multinational conglomerate of insurance and financial services companies founded in 1919 in Shanghai China. Initially, the company's operations focused on international transport and fire insurance in the East, achieving great achievements in this region little explored by other companies. In 1939 the beginning of the political problems in China, caused that the headquarters of the AIG Group was transferred to New York, where it remains today. One of the main reasons for AIG's rapid growth was the internationalization of its businesses in Latin America, Asia and Europe in the '30s and' 40s.
AIG is the largest group of insurance companies in the world, with a presence in 134 countries and more than 400 cities, billing more than US $ 28 billion and gross profit of US $ 2.0 billion in 1996.
In Venezuela the AIG Group has operated since 1940 through CA de Seguros American International, having established a leadership position among multinational insurance companies operating in the country. Its national partner is Banco del Caribe, one of the most solid and traditional banks.
3. Brand Management
Due to the large number of products and their diverse technical specifications, AIG worldwide has specialized in each of its areas, to the point that in some countries each business area is made up of an independent company. This is not the case in Venezuela, however, the organization maintains the same general concept, under the scheme of "Profit Centers" or "Strategic Business Units". Each of these units operates autonomously and independently. Each of them, although on a smaller scale, functions as a company.
Each Profit Center must cover its own expenses and generate its own profits. Although within the same company, you must pay for your direct expenses: salary of employees of the unit, rent of the area (physical space, electricity, water, furniture), telephone, office supplies, etc. As well as indirect expenses: the time that the common units (administration, accounting, human resources, claims, subscription, etc.) dedicate to supporting the unit, salaries of the personnel that support the unit, etc.
In addition, each Profit Center has its own products to develop, working from a marketing point of view as a Brand Management. Let us analyze, for example, the Personal Accident Management.
4. The Management of Personal Accidents within AIG
The Personal Accidents department is made up of: A Personal Accident Manager (Brand Manager), a Personal Accident Supervisor (AP) and two Product Coordinators.
The department has four products: Personal Accidents, AIG Health, AIG School and AIG Assist (travel assistance insurance).
Like all Brand Management in marketing, the AP Manager must develop strategies for their products, coordinate their implementation, analyze the results and take any necessary corrective action. We can list its functions as follows:
• Develop marketing strategies for each product. Cross-marketing using promotional material corresponding to AIG Assist aimed at all clients who already have AP policies.
• Prepare the annual department planning and sales forecast. A) Increase total turnover by 2000 by 20% compared to 1999. A.1) Seek a strategic association for the mass commercialization of AIG Assist within the national tourism market.
• Develop the corporate image and positioning of each product. Produce an AP Mailing Kit to be sent to parents and representatives of the Database of the AIG School project in Maracaibo.
• Stimulate support for each product among distributors and the sales force. Sales contest of the department "All in the Hammock". All those Brokerage Companies, Brokers and Producers who manage to enter and collect $ 16,200 between October 15, 1999 and March 30, 2000, for all Personal Accident products, will have an "All Inclusive" package at the Hotel la Hammock from the Dominican Republic.-
• Constantly obtain information on what is happening in the product market, the competition, customer and distributor opinions, detect problems and opportunities. Carry out an analysis of AIG Assist's competition: assessment of rates and coverage, as well as marketing channels and strategies in order to restructure the marketing guidelines.
• Determine the possible improvements and adjustments of the existing products as well as the development of new products according to the requirements and needs of the market. Examine the possibility of introducing a cheaper AIG Assist variant for mass marketing through travel wholesalers and airlines, included within your packages and tickets.
In order to carry out its functions, Brand Management must interact with various organizations or individuals that are an active part of its environment, both within and outside the company:
Internal:
o Systems Department: Support of marketing information systems to monitor the activities of the Profit Center.
o Administration and Finance: support of all the administrative functions of the unit.
o Human resources: support in the development and training of the personnel assigned to the unit.
o Customer service: management of daily operations and low profile.
o Claims: analysis and control of claims.
o Subscription: processing and issuance of all policies.
External:
o Actuaries. They are in charge of giving legal support by serving as intermediaries between the Brand Management and the Superintendency of Insurance in the Ministry of Finance, the regulatory body, by the government.
o Distribution channels. All those entities that massively distribute and market the products of the Brand Management: such as the agreement with the company of administrative systems for schools and high schools Servec, which offers AIG Escolar to more than 120 schools and 65,000 students in the state of Zulia.
o Branches. They are the ones who represent the regional sales force in order to achieve more successful strategies according to the characteristics of each locality.
o Advertising Agency. It serves as support to the Management for the development of strategies and promotional pieces that are used as instruments to obtain a clear positioning and a greater rate of response to the sales forces.
Direct Marketing Agency. Important Outsource for the effective implementation of strategies that allow interacting with clients and prospects
o Suppliers. Necessary for the development of the instruments as well as the actions in each marketing activity.
5. Brand Management within AIG's global structure
Now, how does Personal Accident Management fit into the global structure of the company?
Like most companies that have evolved in the development of their structures, AIG has a marketing organization chart geared towards the specialized development of each Brand.
Each line of business, such as Personal Accident, has a worldwide Vice President located in the main offices in New York City. A regional brand manager reports to this, for each region of the world: Latin America, Europe, Asia, etc. In the first case, in the offices located in Miami. Then we have to report to each Regional Brand Manager Regional Product Managers who will ensure the development of each product in the region.
Each country has a Brand Manager for each line of business who interacts with both the Regional Brand Manager and the Regional Product Managers. He is responsible for all brands in his country.
In the down line, the Branch Managers continue (equivalent to Regional managers, within the country) who are responsible in the city where they are located (and their areas of influence), for all the products that the company markets. Finally, we have a sales force made up of: Brokerage Companies, specialized companies that work with various insurers; Brokers, who work in the same way as Brokerage Firms but are independent individuals; finally the producers, who work only for an insurance company.
In the following organization chart we will see how the Personal Accident Brand Management is integrated into the organizational structure of the company.
6. The Organization in Matrix or Mixed Management
In today's globalized, competitive and changing world, Brand Management is beginning to be ineffective in responding to market needs. AIG's experience is that due to the Profit Center culture that has been developed for many years, the company is not very competitive and not very agile to be able to respond effectively. Each Brand Manager sees in a negotiation only the specific interests of their brand and not those of the company, and is also limited to making marketing decisions involving the products of another Manager.
In this situation, AIG has decided to develop a new business model to be more agile and effective, the pilot program of which is being carried out in Venezuela. The model consists of what Kotler (1996) called "Matrix Organization".
Apart from the organizational system for Brand Management that we have already analyzed, there is also the Market Management system. This works in a very similar way to the previous one but oriented towards different groups of consumers or markets, instead of being oriented towards brands.
For those companies that have multiple products and markets, it is possible to have a mixed structure that allows the best use to be made of each part of the structure. In order to make the transitional process easier towards the new model and to be able to continue responding to the international requirements of the corporation (by brands), AIG in Venezuela is proposing the development of a mixed Management, as we will see in the following organization chart. Brand Managers will be able to go to specific markets with authority to close businesses that compete with different business units.
We see, for example, how the Personal Accident Brand Management is also in charge of the Middle Market. In other words, the Brand Manager of this line will continue to be responsible for his line, but at the same time he will be responsible for negotiations aimed at attracting medium-sized companies and medium-sized businesses. It will have the authority to close negotiations involving other lines of work, no longer focused only on the particular interests of a line, but the global interests of the company. Previously, under the Brand Management approach, if in a negotiation involving several business lines, and one of them was harmed, you decided to withdraw from the negotiation, possibly affecting the rest of the lines.
This new organizational model is supported by the use of new techniques. For example, an integrated strategy development plan called "War Room Meeting" has been implemented. In this meeting, 1) each business unit, as Brand Management, presents its planning to the others, in order to identify possible common interests with other lines that allow the implementation of strategies of global interest for the company. 2) In addition, they are selected project leaders, who lead working groups in conjunction with other business lines, to attack selected specific objectives such as: important accounts to be captured (Polar, for example), potential markets (Universities), etc. 3) Finally, executives are assigned to each brokerage company whoever is before the intermediaries, the face of the company.When you want to attack or increase participation with respect to a particular account, it will be done through the executive assigned by the Brokerage Company.
7. Conclusion
Marketing is a science that evolves seeking to adapt more and more to the requirements of consumers in order to make companies more competitive and profitable.
In the national market, there are almost 60 companies in the insurance area, competing for a depressed and complicated national market. Therefore, companies will need to be more flexible and efficient in order to survive. It is possible that in the short term, many of them implement innovative marketing strategies that allow them to get closer to the consumer.
There has been talk of "One-to-One" marketing: treating different customers differently. In addition, there has been talk of participation by clients, instead of market participation, which is nothing other than determining the percentage of their insurance that the client has with our company. American International has all the necessary elements to implement more consumer-oriented marketing strategies: a computerized system that allows to store in a Database all the information related to transactions with consumers. Some Profit Centers are already carrying out Direct Marketing strategies aimed at smaller and more homogeneous segments in their characteristics and needs. However, there are still bureaucratic obstacles to overcome,but changes such as the new organizational structure are signs that the culture is changing, and is changing to increasingly target and adapt to the consumer.
It is nothing but One-to-One Marketing or Marketing Maximization.
8. Biography
DA COSTA, Joao.
"Dictionary of Marketing and Advertising". Panapo Publishing House. Caracas Venezuela. 1992. 274 p.
KOTLER, Philip.
"Marketing Department". 8th edition. Prentice Hall. 1996. 800 p.
KOTLER, Philip.
"Marketing". 6th edition. Prentice Hall. 1996. 826 p.
LEVITT, Theodore.
Innovation in Marketing. McGraw Hill. 203 p.
MARTIN, E. T
"Marketing". Core Business Program. 1983. 127 p.
PRIDE, William.
Marketing: Concept and strategies. 9th edition. McGraw Hill. 1997. 877 p.
WILSON, Bud.
"Planning and Commercial Development of the Product". Herrero Hermanos, Mexico. 217 p.
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