Marketing Marvels

Insurance price war not helping customer

Hiran H. SENEWIRATNE

The world of marketing is challenging and most people think that marketing is only about advertising and or persons selling goods and services, which is just two of the many marketing activities.

But in general, marketing activities are all those associated with identifying the particular wants and needs of a target market who are customers, and the satisfying those customers better than the competitors. The marketing involves doing market research on customers, analysing their needs and then marketing strategic decisions about product design, pricing, promotion and distribution, Head of Marketing Janashakthi Insurance Tilan Wijesekera said. He answers some questions in this regard.

Q:As head of marketing of Janashakthi what is the biggest challenge facing your organisation?

Well let me answer your question in two parts by looking at the challenges in the life and general insurance categories separately.

The main challenge facing the Life Insurance category, industrywide including Janashakthi is to increase the mere 10% market penetration level.

The issue remains that the current economic situation in the country is such, that people lack the comfort and economic ability to purchase a life insurance policy. Especially with increased tightening of people's purchasing power they tend to view a life insurance as a non necessity, not considering the grave risk that they undertake.

However having said that, Janashakthi has managed to turn the tables on the market conditions by developing more focused distribution strategies to aggressively pursue the market with the adoption of need based selling and the launch of environmentally apt or relevant flexible products.

We have also focused on reducing the high sales force attrition rates prevalent in the industry and focused on stabilising the wavering policy continuance or renewals rates and are currently enjoying a significant growth rate which is well above the current industry growth rate.

In General insurance, the key challenge faced by Janashakthi is directly linked to the extreme level of over competition in the industry. In the general insurance arena the main line of offense to gain market share and to capture consumers has been price, even though the market is an oligopoly with five players controlling almost 90% of the market.

Unfortunately those who control the market have not grasped the fact that both the industry as well as the customers are suffering at the end of the day due to overly competitive pricing. Some might argue that price competition is beneficial for consumers but the reality is that leading players would then cease to invest in research and new product developments as well as value enhancements and merely focus on a price war.

This means that the consumers do not necessarily get the opportunity to obtain the best quality solutions to their needs and as a result the industry becomes stagnant over a period of time.

We at Janashakthi have focused on an innovation strategy to give greater value for money to our customers rather than merely focusing on price competition alone.

Q: What is the availability for marketing knowledge for decision making?

Well, if am to understand your question marketing knowledge could mean two things. Firstly the intellectual capacity of marketers to understand an issue and to make decisions based on logical facts rather than resorting to decision making through emotional choice. And secondly the investment in research to gather intelligence to make decisions.

In my experience in both multinational and local organisations, my main concern is sometimes the lack of investment and importance given to research in local organisations. On the contrary certain multinationals may suffer from analysis paralysis scenario where people sometimes are not bold enough on acting on their instincts and harp too much on the number crunching and insight building. My personal belief is that in order to be a good, successful marketer you need to have good instincts and a feel for the market. However when making decisions, you do need to strike a balance by gathering as much information about your market as reasonably possible on your consumers, competition and the environment.

The key is to again strike a balance when taking decisions rather than taking them blindly based on instincts alone.

Q:What do you think about the availability of marketing talent in Sri Lanka?

There does seem to be a certain level of marketing talent in the country. However the degree to which they are committed to develop themselves remains the key question. I believe that the marketing fraternity needs to work much harder to harness our talent and develop them to attain a greater level of professionalism. We need to improve the financial savvy of the marketers and move them to the boardrooms. We need also to work towards changing the perception of marketers from being talkers to deliverers of results. Our marketers definitely need to build more discipline to deliver bottom line results.

Q: How challenging is it to adopt branding and being a marketer in the service industry Vs. in the FMCG category?

Having been an FMCG marketer most of my career and having specialised in that area, I believe that the overlying principles remain the same and holds true in service marketing. However I believe wholistically speaking a marketer in the service marketing sphere has in certain ways a greater challenge since the role of the marketer is much wider. And delivering the brand promise is tougher. In an FMCG through your usual quality assurance measures you can ensure customer satisfaction takes place, however due to the inherent dynamics in the service industry as the 'people' factor it is that much more difficult to control a quality delivery to ensure that the brand's value proposition is met. To that extent I believe that branding and controlling a brand's delivery is wider in service marketing. I do believe after working in a service environment that FMCG's could gain a lot with some of the expertise built up by service marketers.

Q:What do you mean by best marketing practice?

Best practices in marketing in my mind is where marketers and marketing oriented organisations and brands have developed new practices albeit a strategy, a product development, branding, a process, an alternative distribution methodology which has delivered a competitive advantage.

However again for me the true marketing best practices are the ones that don't simply deliver a short term advantage but rather should build a sustainable competitive advantage.

Q:What do you think about the quality of our practicing marketers in the country?

As mentioned in your earlier question, there seems to be potential talent. However the issue in my opinion is that marketers have not worked hard enough to develop themselves to attain a greater degree of professionalism, accountability, becoming financial savvy, delivering bottom line results, commitment and passion, hunger for information and research.

Thus I believe that we still have a long way to go and the entire marketing fraternity needs to take on this burden. Something I keep harping on during my lecturing for the Chartered Institute of Marketing - CIM exams is the need for marketers to stop talking and start delivering, which is something that will take time.

Q:There is a belief that marketing professionals are not financial conscious. What is your opinion on that?

Yes. I tend to agree with you. Having started my career in finance as what you might call an audit clerk at the age of 19, and later switching in to marketing, I've always felt that I've had an edge by knowing finance. The problem I still see in the classroom at CIM stage one level is the marketer's deficiency in numbers.

I call it a marketers 'numbers deficiency syndrome'. I still find quite a few students on their first day in a marketing class answering my question of why they chose marketing to be.... guess.... I started marketing because I'm bad at numbers.... This unfortunately is the attitude of many even when they start moving up the corporate ladder.

This is definitely not a healthy scenario for marketers and is a hindrance to their careers as well as a threat to their organisations and brands. Today's marketers definitely have to improve on their financial acumen to understand the importance of growing an organisation's bottom line rather than simply growing the top line at any cost through compromising strategies.

Q:What is the importance of marketers getting into the boardrooms in organisations?

Very important. I still remember starting my career in finance mainly due to people who were influential in my decision making process, highlighting the point that almost 80% of the people in the boardrooms are people with a finance background and marketers being just a meagre minority limited to a mere handful. You could almost say that young people used to face a certain social stigma when they said they were embarking on a marketing career. Things have come a long way in the last ten years since I started, but we still have a long way to go, and need to get more marketers in to those all important boardrooms, this would no doubt add more confidence to the next generation of marketers arriving on the scene.

Q:What is your advice to budding marketers?

If you want to succeed in this field, you need to have passion for the organisation and brands that you, act as guardians for. You need a lot of commitment and hard work.

There's no substitute, you need to develop yourselves theoretically with a sound education but always be practical in your thinking and in your implementation. You need to develop your financial skills.

Move around whilst your young, get as much diverse exposure as possible and learn when to settle into the field that you may love, be it FMCG, service marketing, durables, international marketing, brand management, research, direct marketing, sales, strategic planning, business development, advertising, training, consultancy.

There are so many choices for today's marketers. And finally you have to have a unyielding desire to succeed and for your brands to succeed!!!.