Marketing Communication Plan for LV= in the UK Car Insurance Sector

This report provides a comprehensive analysis of the marketing communication strategies employed by Liverpool Victoria (LV=), a UK-based car insurance provider. It begins with an introduction to marketing communication and its importance, followed by an analysis of LV='s external environment using PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors. The report then delves into the internal environment of LV=, utilizing SWOT analysis to assess the company's strengths, weaknesses, opportunities, and threats. The core of the report is a detailed marketing communication plan for LV= for the year 2016-17, outlining objectives, budget considerations, the identification of unique and emotional selling propositions, target customer selection, brand enhancement strategies, and the design of effective promotional messages. The report concludes by emphasizing the importance of a well-defined marketing mix to achieve the company's objectives and maintain a competitive edge in the UK car insurance market.

Marketing Communication

TABLE OF CONTENTS
Introduction .....................................................................................................................................4
1........................................................................................................................................................4
Analysis of External Environment of LV=..................................................................................4
Analysis of Internal Environment of LV=...................................................................................5
2........................................................................................................................................................6
Marketing Communication Plan for the year 2016-17 for LV=..................................................6
Conclusion.....................................................................................................................................10
REFERENCE.................................................................................................................................11
2

Illustration Index
Index of Tables
Table 1: SWOT Analysis of Liverpool Victoria..............................................................................6
3

INTRODUCTION
Marketing Communication is an integral and fundamental part of an organizations
marketing strategies. Often shortened as MarCom can be elaborated as all the messages and
media employed by business firms to communicate with the market (Green, 2016). Marketing
Communication plays vital role in creating brand awareness among target markets by using
effective promotional tools. The present report features the analysis of external as well as
internal environment of the given organization named Liverpool Victoria (LV=), a UK based
insurer. Further the report presents comprehensive Marketing Communication Plan for LV= to
create a successful brand image in the car insurance industry in UK.
1
Analysis of External Environment of LV=
Due to the lack of sound and clear strategic direction durind the decades, Liverpool
Victoria was loosing its business as well as its customers at a horrific rate. As a result, it had lost
its brand value in the year 2006. The sharp decline in Liverpool Victoria's car insurance policies
sales alarmed the company to formulate an effective marketing strategies to rebuild its brand
value in the target market. The analysis of external environment of LV= can be done with the
help of PESTLE Analysis. PESTLE is an abbreviation that stands for Political, Economic,
Social, Technological, Legal factors and Environmental determinants that together build up the
external environment of the car insurer company. Political Factors : These determinants include government's interventions in the
economy of UK (Kokemuller, 2016). Liverpool business practices are significantly
influenced by the UK government motor insurance policy, trade restrictions, tariffs and
employment laws. These policies regulates the car insurance industry of UK. Thus
Liverpool need to line up its business strategies according to motor insurance policy for
the smooth running of its operations. In addition to this, political stability of UK
government is also vital for the growth of the company in the car insurance sector. Economic Factors : These factors include economic growth growth, monetary and fiscal
policies, interest rates, inflation rates and exchange rates prevailing in UK economy.
These policies greatly impact the business decisions of Liverpool Victoria. The rate of
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interest on car insurance policies may affect the consumer's decisions related to the
purchase of insurance policies on their cars. If the rate of interest is higher for insurance
products customers may refuse to buy these products. Social Factors: These determinants include socio-cultural facets such as population
growth, age distribution, values, beliefs, preferences, behavior and attitudes of customers
which greatly impact the demand of Liverpool's car insurance products. From the given
case it can be said that customers of car insurance markets have become more price
sensitive and make decisions after comparing the best prices of insurance products. Due
to this buying behavior of consumers have resulted into decreased loyalty for Liverpool
Victoria. Technological Factors: The rate of technological advance in the car insurance industry
largely affected the business of Liverpool Victoria. Due to advancement of information
technology, consumers have the opportunity to choose the best insurance product from a
wide range of given insurance plans after comparing their prices on internet (Luxton,
Reid and Mavondo, 2015). Environmental Factors: These factors include climate change, environment and
ecological aspects that greatly affect the insurance sector. With the growing awareness
related to environmental issues, the insurance company was looked forward to formulate
strategies for conducting organizational practices without creating pressure on
environmental resources.
 Legal Factors: These determinants include laws related to consumers, employment,
discrimination and health and safety. The business practices of Liverpool Victoria need to
be in line with these laws to avoid any legal implications which can significantly affect
the company's insurance business.
Analysis of Internal Environment of LV=
The internal environment of LV= is consist of elements, entities, events and determinants
within the organization which affect its practices and choices especially the behavior of its
workforce. These factors include the organizational direction, leadership styles and firm's
culture. It can be interpreted from the given case study, that Liverpool Victoria lacked clear
directions for decades that resulted into loss of customers and business for many years. The
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company realized the need to craft a five years strategy to build a strong brand over the period of
2007 to 2011. In order to analyze the internal factors of Liverpool Victoria SWOT Analysis need
to be done. SWOT Analysis is a beneficial tool to understand the strengths and weaknesses as
well as opportunities and threats involved in the company's decisions related to re-branding.
Table 1: SWOT Analysis of Liverpool Victoria
Strengths Weaknesses
 Products of Liverpool Victoria offered
quality products.
 Level of customer satisfaction was
higher
 Offer value for consumer's money
 Decisions related to re-branding
positively impacted its sales growth
(Dahl, Eagle and Low, 2015).
 Company's low marketing budget as
compared to its rival firms.
 Could not offer lowest prices for
insurance products.
 Lack of effective promotional message
that failed to inspired audiences.
 TV advertising were dull and
directionless.
Opportunities Threats
 Increasing number of cars in UK
provide ample of opportunity to grow
its profitability.
 Growth of online businesses provides
excellent scope for growth of insurance
market.
 Sound trade policies related to
insurance sector creates great
possibilities of development of
insurance business.
 Improved insurance products and
services pose great threat to LV=
 Political instability of UK government
may negatively impact on the insurer
business operations.
 Economic crisis can significantly affect
sales of LV= products and services
(Kumar, 2015).
2
Marketing Communication Plan for the year 2016-17 for LV=
An effective Marketing Communication plan play a very crucial role in the creation of
better brand awareness of an organization in the target market. Marketing Communication are
referred to certain tools which an organization employs to deliver a broad range of promotional
messages to gain competitive advantage and capture larger market share. After the terrific
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decline in the number of customers and sales of insurance products, the company formulated
strategy for relaunching Liverpool Victoria as LV=. In order to design a comprehensive MarCom
strategy for the year 2016-17 for LV= following steps can be elaborated: Setting objectives: Since insurance market is a boring and highly competitive, LV= need
to formulate strategies for the sustainable growth of its business in the car insurance
market. Before 2007, the company was loosing its customers due to the lack of clear
direction. The company also failed to increase the marketing budget which was only £2.6
million, very less as compared to their rival firms. In addition to this, it need to grow its
customer base without spending pounds over generation of market share (LV=, 2016).
Thus to survive in the car insurance market in the coming years, the company need to
make strategic decisions related to MarCom plan to achieve organizational objectives.
These objectives can include increasing number of customers by using appropriate
marketing mix in the set marketing budget. In addition to this, another objective of
Liverpool Victoria was to craft sound marketing tactics to increase market share from 5
percent to an ambitious percentage figure after the year 2011. Setting budget: In the given case study, LV= had set the marketing budget of £43
million for five years that is from 2007-2012. The budget set by the company was less
than 50 percent of competitors MarCom budget. So it can be analyzed from the given
case that LV= sets lower MarCom budget (Petersen, Kushwaha and Kumar, 2015). It
becomes a challenging task to create effective marketing strategy to create brand
awareness in the limited budget. LV= can save millions of pounds by running a campaign
test on small group of customers to check the efficacy of the new strategy. Uncovering USP and ESP: Car insurance market is highly competitive in UK. Thus
LV= need to create Unique Selling Proportion for insurance products to cater the unmet
needs of customers. As stated in the case study car insurance market is boring and less
profitable, therefore it poses bigger challenge for the company to secure the interest of
customers in the target market and encourage them to purchase car insurance products of
LV=. It can be analyzed that the implementation of re-branding strategies has positively
impacted the growth of sales of LV= products. This was due to the creation of Emotional
Selling Proportions (ESP). It has been observed in studies that emotional communications
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are more effective and can prove beneficial to ignite the interest of customers and inspire
them to make purchases (Provost, 2014). In the coming years, ESP strategy is quite
relevant to capture larger customer base and influence their buying behavior to increase
the sales of LV= Selecting target customers: It can be analyzed from the given scenario that Liverpool
Victoria was a established insurer of UK and had customer base. However the lack of
clear direction took a toll on company's business few decades before 2007. Since then,
Liverpool Victoria had crafted a new plan to communicate target audiences which
included customers of 35+ age from ABC1 social grades. The company need to
understand the needs of targeted audiences in order to reach, engage and build strong
relationship with them through effective MarCom Plan (Chernev, 2015). Since car
insurance market is highly competitive and unpredictable, the coming years may continue
to pose unseen challenges to one of the top five insurer of UK's car insurance industry.
Thus there is need to respond promptly to the changing demands of target audiences for
creating sustainable business decisions in the year 2016-17. Enhancing brand look and feel: It can be analyzed from the given case study that
company made efforts to enhance the look and feel of Liverpool Victoria brand in the UK
market. The insurer changed its brand logo which depicts a lime green colored heart and
shortened company's name to LV= that represented the word “Love”. The sign of equal
was added to represent the mutual status. It was observed that though customers failed to
relate the relevance of mutual status from the changed brand icon but did notice the
representation of the word “Love”.In addition to this, the insurer had also developed
sonic branding by consistently using love song by Blue Brothers with an aim to make
customers fall in love with the brand without being irritable unlike rivals. The move of
LV= from Liverpool Victoria became hit in the target market after 2007. For the coming
year, if the company feels to enhance the look and feel of the brand then it need to
consider the internal as well as external environment determinants before taking steps in
this direction (ur Rehman and et.al., 2015). From the analysis of the given case study, it
can be explained that LV= has been doing good in the target market since the
implementation of marketing strategies after the year 2007.
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 Designing effective promotional messages: From the given case study, it can be
analyzed that customers needs for insurance products differ from each other. Therefore
the communication strategies need to be formulated to address the demands of target
market. Thus it is very cardinal to tailor the promotional messages as per clients needs to
ignite their interests. Since the company has limited MarCom budget, there can be
different ways to design effective promotional messages in a very cost effective manner.
Marketing tools that can be employed by LV= are brochures, internet websites, sales
promotion, insurance trade exhibitions, company owned monthly newsletters and
personal selling (Shen and et.al., 2015). Clarity of promotional messages is very
important to meet the set marketing objectives of LV= in the coming years. Selecting marketing mix: With the advancement in information technology, LV= has
better and improved techniques to communicate with target audiences in the coming
years. The UK based insurer need to choose marketing mix to attract larger number of
customers and retain them for longer duration. LV= need to develop a smart and sound
product and service portfolio to cater related needs of target customers. The pricing of
insurance products should be set in such a manner that it appeals to price sensitive
consumers (Hollensen, 2015). It is explored from the given case study that LV= had lost
its customers and business due against rival firms product offerings. Customers switched
brand to purchase best deals on the price comparison lists available across internet.
Therefore there is a need to provide quality insurance products and services at reasonable
prices as a part of selection of sound product and pricing components of marketing mix.
Another important element of marketing mix is Packaging. For LV= it is very
important to design separate packages for ABC1 consumers based on their requirements.
This will enable the firm to gain competitive advantage over rival insurance firms of UK.
The promotion component of marketing of LV= plays extremely important role in
reaching out to target end users and igniting their interest towards company's insurance
products. The kind of promotional tools may depend on their effectiveness of reaching
out to large audiences with a limited marketing budget in the year 2016-17. Other than
these components, the extended marketing mix also play significant role in meeting
objectives of LV=. These are Processes, Physical evidence and People. The company
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need to maintain transparency during communication processes in order to deliver correct
promotional messages through multimedia channels (Azizan, Wahid and Abustan,
2015). Since the LV= represent the word “Love”, The employees of the company need to
trained to deliver high quality of services to improve the satisfaction levels of customers.
This will enable LV= to build strong bond with consumers which positively impact the
growth of sales and profits of the insurer in the long run. Establishing Success Metrics for MarCom Strategy: After implementation of AmrCom
strategy it is also important to measure its effectiveness in the target market. For this, the
company can be recommended to install efficient success metrics to check the responses
of clients regarding new marketing campaign (Puzakova and et.al., 2015). This would
enable LV= to reduce the wastage of money over unproductive marketing activities and
saving pounds to invest in an ameliorated MarCom Strategy for the growth of business in
the target insurance market. In addition to this, LV= need to establish key communication
objectives and put system in place to track progress through sales metrics.
 Managing relationship with customers: It is the most important step to be taken by LV=
to remain successful in the car insurance market in the coming years. This can be done by
building strong relationships with existing customers and managing good rapport with
new clients. Once the interest is generated among customers, there is a need to craft an
effective Customer Relationship Strategy or CRM to organize the sensitive consumer and
prospects information in the form of records, files, emails, etc (Carroll, 2015). This will
help LV= to understand customers buying behavior which in turn generate more leads for
the insurer. Further will also provide benefits in terms of price as CRM is cost effective
than developing a new MarCom plan to attract large customers.
CONCLUSION
In a nutshell, the present report gives a clear picture of significance of effective
Marketing Communication Strategy for Liverpool Victoria. It has been observed that car
insurance is quite boring and non profitable and therefore LV= identified that there is a need to
develop Emotional Selling Proportion of its insurance products to connect to its customers. Thus
the insurer formulated new marketing communication plan to reach out to target customers
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through effective MarCom plan. In addition to this the report presents MarCom plan for the
sustainable growth of its business in the long run.
REFERENCE
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Azizan, M.H., Wahid, N.A. and Abustan, I., 2015. Integrated Marketing Communication:
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Carroll, C.E., 2015. The handbook of communication and corporate reputation. John Wiley &
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Chernev, A., 2015. The marketing plan handbook. Cerebellum Press.
Dahl, S., Eagle, L. and Low, D., 2015. Integrated marketing communications and social
marketing: Together for the common good?.Journal of Social Marketing. 5(3). pp.226-240.
Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.
Kumar, V., 2015. Evolution of Marketing as a Discipline: What has happened and what to look
out for. Journal of Marketing. 79(1). pp.1-9.
Luxton, S., Reid, M. and Mavondo, F., 2015. Integrated marketing communication capability
and brand performance. Journal of Advertising. 44(1). pp.37-46.
Petersen, J.A., Kushwaha, T. and Kumar, V., 2015. Marketing Communication Strategies and
Consumer Financial Decision Making: The Role of National Culture. Journal of Marketing.
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Puzakova, M. and et.al., 2015. The Role of Mass Media and Marketing Communication in
Consumer Ethnocentrism: A Study from the Russian Market. In Proceedings of the 2009
Academy of Marketing Science (AMS) Annual Conference (pp. 180-180). Springer
International Publishing.
Shen, G.C.C. And et.al., 2015. Effective marketing communication via social networking site:
The moderating role of the social tie. Journal of Business Research.
ur Rehman, F. and et.al., 2015. A Qualitative Approach to Analyze Marketing Communication
Based on AIDA Model. Information Management and Business Review. 7(5). p.44.
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<http://www.telegraph.co.uk/finance/personalfinance/insurance/motorinsurance/>.[Accessed
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