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Abstract
The study examined marketing of general insurance services in rural area of Rivers State. The main objective of the study is to examine the marketing dimensions adopted by insurance firms in penetrating rural areas in Rivers State, to examine the level of awareness of general insurances in the rural areas in Rivers State, to ascertain the challenges faced by insurance personnel’s in marketing of general insurances in rural areas in Rivers State and to find solution to the challenges of marketing general insurances in rural areas. The population of the study was made of 120 while the sample size of the study was drawn using Taro yemen formula to get a sample size of 96. The primary source was used for data collection. The study made used of SPSS statistical package for social science, the chi-square was used for the test of hypotheses. Based on the finding of the study, it is recommended that recommends that management in insurance agencies need to employ skillful, knowledgeable and qualified marketing workforces who could effectively market the agency general insurances, the insurance agencies need to adopt effective marketing strategies, select efficiency channel of advertisement and improve on delivery of quality of general insurances as well as advertise aggressively to attract more customers, the study recommends that management of insurance agencies need to make effective choice of communication channel, enhance reliability in delivery of insurance, reduce fraudulent claims and manage premium insurance and develop insurance brand to enhance marketing of general insurances by the insurance agencies and the insurance agency premises should be located in an attractive building, attractive landscaping and good interior furnishing of insurance agency offices, accessibility of the insurance policies to enhance marketing of general insurances.
Table of Content
Cover page i
Abstract ii
Declaration iii
Certification iv
Acknowledgment v
Dedication vi
Table of Content vii
CHAPTER 1 1
INTRODUCTION 1
1.1 Background of the Study 1
1.2 Research Problem 3
1.3 Objectives of the Study 4
1.4 Research Questions 5
1.5 Research hypotheses 5
1.6 Significance of the Study 5
1.7 Scope of the study 6
1.8 Limitation of the Study 6
1.9 Definition of Terms 7
CHAPTER 2 8
REVIEW OF RELATED LITERATURE 8
2.1 Conceptual Framework 8
2.1.1 Concept of marketing 8
2.1.2 Concept of Marketing Strategies 10
2.1.3 Dimensions of Marketing Strategies 12
2.1.4 Concept of Insurance 17
2.1.5 Marketing of General insurances in Rural Areas 20
2.1.6 Challenges affecting Insurance Agency Marketing of General insurances 21
2.2 Theoretical Framework 29
2.2.1 Porter’s five Forces of Competitive Position Analysis (Michael E Porter, 1979) 29
2.3 Empirical Review 30
CHAPTER 3 33
RESEARCH METHODOLOGY 33
3.1 Introduction 33
3.2 Research Design 33
3.3 Population of the Study 33
3.4 Sample size and sampling technique 34
3.5 Source and Method of Data Collection 35
3.6 Administration of Instrument 36
3.7 Data Analysis Techniques 36
3.7 Reliability and Validity 37
3.8 Limitation of the Study 38
CHAPTER 4 39
DATA PRESENTATION AND ANALYSIS 39
4.1 Questionnaire Administration and Retrieval 39
Table 4.1: Questionnaire Administration and Retrieval 40
4.2 Hypotheses Testing 44
4.3 Discussion of Findings 47
CHAPTER 5 49
SUMMARY, CONCLUSION AND RECOMMENDATION 49
5.1 Summary 49
5.2 Conclusion 50
5.3 Recommendation 51
Bibliography 52
Appendix I 58
Appendix II 59
CHAPTER 1
INTRODUCTION
1.1 Background of the Study
The development of marketing is influenced by the development of society and its economy. Social and economic conditions largely influence the direction in which marketing evolves. Hence, marketing must continuously make the adaptation necessary for its healthy survival. According to Kotler (2005), marketing management is the analysis, planning, implementation and control of programs designed to create, build and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives such as high profits, sales growth, and market share. The purpose of marketing is to generate customer value at a profit (Jones, P., Vignali, C., 1994) monitors product and service quality through continuous customer surveys and puts great energy into improving marketing methods in order to simplify operations, bring down costs, speed up service and bring greater value to customers. Beyond these efforts each organisation works to become a part of its neighbourhoods through community involvement and service projects. According to Kotler (2005), marketing management is the analysis, planning, implementation and control of programs designed to create, build and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives such as high profits, sales growth, and market share. Marketing in organizations generate customer value at a profit. The truth of the matter is that the relationship with a customer will break when value evaporates, ‘you’ve got to continue to generate more value for the consumer but not give away the house’ it’s a delicate balance indeed. For instance Noble et al (2002) monitors product and service quality through continuous marketing and puts great energy into improving hamburger in service industry in order to simplify operations, bring down costs, speed up service and bring greater value to customers. Beyond these efforts each organisation works to become a part of its neighbourhoods through community involvement and service projects (Kotler, 2005). The effective marketing of organization products influence increase market share , improve returns in the companies and generally promote growth of insurance company Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results. According to Keegan, (2003) marketing integrates an organization’s marketing goals, policies, and action sequences (tactics) into a cohesive whole. Insurance companies need to manage and market insurance products and services, since they face rigorous regulation and complex, information-rich value chains. Insurance plays a vital role in the transfer of risk across all spheres of life. The concept of insurance refers to a contract between two parties where one promises to indemnify the other party for the occurrence of any risk covered under the contact in exchange for a monetary consideration called pre-change for a monetary consideration called premium (Ogwo, 2010). The party who makes this promise is ordered to as insurer and its a limited liability company. This company also faces several risks and is not properly recognized or patronized in Nigeria and this necessitates the use of social media in making insurance count in Nigeria. The enlargement of the insurance company depends on the strength of the marking department of the insurance industries and so if the marketing department of the insurance industries has a vast social networking system, then marketing of general insurances will be easy and marketing cost will be low. However, the situation in Nigeria seems different.
Marketing of general insurances by insurance agencies is central to their competitiveness and license to operate, and yet many insurers lack adequate insight to operate as high performers. Today’s Nigeria’s businesses function in a marketing environment. The insurance industry is no exception. However, the changing world situation always requires insurance parties to reassess their strategies in order to stay competitive. Insurance agencies in Nigeria have found their world changing significantly and more difficult to market general insurances and profits. Consumers are less loyal, more informed and more independent about their insurance needs. Traditional ways of marketing to customers and prospects have changed more so recently. Marketing and sales functions at insurance agencies has not been effective to attract and retain their best customers and capture their competitor’s best customers and therefore the need to seeks to examine the problems and prospect of Marketing of general insurances in Rural Areas of Rivers State.
1.2 Research Problem
Markets are changing all the time and business firms need to be proactive or lose customers. Some of the main reasons why markets change rapidly are that customers develop new needs and wants, new competitors enter a market, new technologies developing meaning that new products can be made, a world or countrywide event happening for instance war, and government introducing new legislation e.g. increases in minimum wage. For domestic firms facing global competition, industry position imposes an additional competitive challenge that differs from purely domestic competition (Williams, 1997). Marketing of general insurance is critical and complex. In the present scenario, insurance agencies companies are facing problem of transiting from a perceived selling activity to a structured strategic marketing activity. Insurance companies are adopting all mean of marketing approaches to be in a position of making great sales of general insurances as they faced increased competition which are making them register low profits and even losses. The growth of insurance industry and penetration of general insurance in Nigeria remain low (Njoroge, 2003). The management of insurance agents and insurance personnel is found significant with the viewpoint of marketing and maintaining the norms for offering the services in Rivers State. The transformation of potential policyholders to the actual insurance policyholders is a difficult task that depends upon the marketing professional excellence of the marketing personnel in convincing the customers to buy the insurance product and services. This has been attributed to inefficient marketing of the general insurance by the companies as well as insurance agencies. Various local studies have focused on investigating marketing strategies adopted by companies in different industries.
For instance, Njoroge (2003) carried out a study on Diversification Strategy focusing on a case study of Nation Media Group and asserted that the stiff competition that had become the norm and influenced marketing decisions in the company. Ndungu (2010) carried out a study on the effectiveness of marketing strategies used in destination branding in the promotion of domestic tourism. Masika (2006) undertook a study on retail marketing strategies adopted by Commercial Banks in Nigeria. There is no study that has a clear focus on assessing challenges affecting marketing of general insurances by insurance agencies in Nigeria. This research study seeks to examine the prospect and challenges of marketing of general insurances in rural areas in Rivers State.
1.3 Objectives of the Study
The main objective of the study is to examine the problems and prospect of marketing general insurances in Nigeria. The specific objectives are as follows;
1. To examine the marketing dimensions adopted by insurance firms in penetrating rural areas in Rivers State.
2. To examine the level of awareness of general insurances in the rural areas in Rivers State.
3. To ascertain the challenges faced by insurance personnel’s in marketing of general insurances in rural areas in Rivers State.
4. To find solution to the challenges of marketing general insurances in rural areas.
1.4 Research Questions
In line with the objectives of the study, the following research question shall be used to guide the research.
1. What are the dimensions of marketing adopted by insurance firms in penetrating rural areas in Rivers State?
2. What is the level of awareness of general insurances in the rural areas in Rivers State?
3. What are the challenges faced by insurance personnel’s in the marketing of general insurances in rural areas in Rivers State?
4. What are the solutions to the challenges of marketing general insurances in rural areas?
1.5 Research hypotheses
The following research hypotheses are formulated in line with the objectives of the study.
H01: There is no significant impact of the marketing dimensions adopted by insurance firms in penetrating rural areas in Rivers State.
H02: There is no significant impact of the level of awareness of insurance policies in the marketing of general insurances in rural areas.
H03: There are no challenges faced by insurance personnel’s in the marketing of general insurances in rural areas in Rivers State.
H04: There is no solution to the challenges of marketing general insurances in rural areas.
1.6 Significance of the Study
The significance of the study cannot be overemphasized. The study shall be of immense benefit to the general public, insurance companies, government agencies, researchers, academics and policies makers.
This study will be beneficial to the society and insurance firms that lack knowledge about the challenge that is faced in the marketing of general insurances and to know the reason why most people had no information for the existences of this product.
This study is also intended to provide yardstick for underwriters, insures, insurance company managers in Nigeria to improve on the level of their marketing to have enough information regarding the marketing strategies to be adopted by insurance firms in the marketing of general insurances.
The study will add to existing literature on the subject matter and provide more information for future research.
1.7 Scope of the study
The study is delimited under the following heading: content scope, geographical scope and unit of analysis.
Content Scope: The content scope of this study is to ascertain marketing of general insurances in rural areas of Rivers State: problems and prospect. Geographical Scope: This study is delimited in Rivers State with references to some selected insurance firms including Mutual Benefits Insurance Plc, Cornerstone Insurance Plc, Nicon Insurance Limited, and Oasis Insurance Group.
Unit of Analysis: The unit of analysis in this research are the staff of the selected insurance firms at the time of the study.
1.8 Limitation of the Study
Although this study has accomplished the purpose which it sets out to achieve, one of the very limitations is that the validity of the result or finding is defending on the honesty of the respondents in providing the needed information.
Due to constraint of time and money, it is difficult to carry out the research extensively. This led to the limiting of the scope cognizance was also taken to the fact that the academic calendar was too short and academic workload was enormous, as a result of this, no time to run around for the work.
1.9 Definition of Terms
Marketing
It is the study and management of exchange relationships. Marketing is the business process of creating relationships with and satisfying customers.
It can be defined as all human activities directed at satisfying all human needs and want through exchanges process.
Insurance
Insurance is defined as an arrangement by which an insured transfers his risk (uncertain tendency to loss) to the insurer at an adequate fee called premium, on the promise that the insured shall be unverified or compensated upon the occurrence of the insured event.
General insurances
A business that provide coverage, in the form of compensation resulting from loss, damages, injuries, treatment and hardship in exchange for premium payments.
Rural Areas
A rural area is a geographic area that is located outside town and cities.
Marketing strategies: It is a long-term, forward-looking approach to planning with the fundamental goal of achieving a sustainable competitive advantage.
General Insurance
It is the insurance contract that does not come under the ambit of life insurance.
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