Download RESEARCH PAPER The influence of advertising in

Interdisplinary Journal of Research and Development
“Aleksander Moisiu“ University, Durrës, Albania
Vol (III), No.1, 2016
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RESEARCH PAPER
The influence of advertising in insurance companies in Albania and consumer decision
making process
1
Violeta NEZA, Ervin MYFTARAJ
University “Aleksander Moisiu” Durres, Rr. e Currilave, lagjia nr.1, Durrës, Albania
e-mail: [email protected]
mail: [email protected]
Abstract
This study aims to study the impact of advertising and their different strategies in the
insurance industry. It also focuses on the role of insurance in general and the role of the FSA
( Financial Supervisory Authority ) as a supervisory authority for the insurance sector. The
study also includes an overview of the different players in the market for this specific sector.
Albanian insurance is a new industry, with several national and international competitive
participants, which is growing rapidly. Thanks to the reforms and and facilitating rules and
policies, it is increased the role of advertising that influences on consumer choice. Nature of
being descriptive and explanatory of this study shows that findings have been made through
theoretical analysis in order to receive an insight perception into relationships “cause –
consequence” of advertising and consumer perception about insurance products, which
ultimately affect in general in the insurance industry. Thus, detailed descriptions of specific
issues relating to purchasing consumer behavior and the effect of advertising in this
particular industry are studied using a detailed questionnaire to interview customers and
observing their behavior after a detailed review that is made.
Key words: Insurance industry, the FSA, consumer behavior, advertising effectiveness.
Introduction
It shows a special effort to popularize a product or
service at a certain cost. This is a way of doing
publicity. It is always deliberately openly sponsored
by the sponsor and includes a fixed cost, for this
reason we pay for it. This is a common form of nonpersonal communication of an organization or
service ideas of its products and that is transmitted
to a targeted audience through mass media.
Advertisements are considered as the nervous
system of the business world. Just as our nervous
system is built to give us all possible facilities
sensitivities, so the advertising, which is
comparable to our nervous system must awaken to
the reader different types of images as the object
itself can raise. Effectiveness advertising means
different perceptions of its different effects on the
groups responsible. Effective advertising must
achieve several goals, such as giving the right
message to the audience, thus creating profitable
sales.
Albanian insurance companies offer a wide range of
insurance plans, which grows to maturity of
economy and increase the income of the middle
class.
Albanians are increasingly recognized by various
insurance products, and this is due to the growth of
inclusion of advertising that is used by various
insurance companies to influence consumers and
make them more aware of recently developments
and insurance benefits.
Objectives of the study
 To understand and measure the impact of
advertising in the insurance market.
 To measure the effectiveness of advertising /
promotional activities for a certain class of product
and corporate advertising.
 To create the awareness for importance of the
advertising for the industry.
 To understand and measure the impact of
advertising on brand building, the need for brand
and finally choosing the plan, while buys it.
Literature Review
The insurance industry thrives on insurance
companies, sales agencies, where agents are those
who sell these products to customers. Wide
advertising typically done in the level of
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The influence of advertising in insurance …
V. Neza, E. Myftaraj
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consumption. However, at the end of the day the
insurance companies need to attract agents to sell
products.
Matin Khan in his book, "Consumer Behavior and
the Advertising Management" 2006, deals with
consumer behavior as long as advertising is a
problem. The book deals with common aspects of
consumer behavior as culture, social class, lifestyle,
psychographic segmentation etc... The author also
discusses the way out, consumerism, consumer
satisfaction, e-consumer behavior and changing
consumer behavior.
Further, ethical and social issues are discussed in
advertising management, advertising agency and an
advertising role in national development with the
help of different examples and case studies.
Flemming Hansen, Sverre Riis Christensen"Emotions, Advertising and consumer choice"
"Emotions, Advertising and consumer choice" focus on the latest knowledge of neurological and
psychological origin in brain scans or neurological
experiments in basic emotional processes in the
brain and their role in controlling human behavior.
These knowledge are translated by the authors to
cover ordinary behavior of individuals in everyday
life. The book looks at these developments in the
light of traditional cognitive theories of consumer
choice and discusses implications for testing
advertising and other communication methods. The
book offers for the first time a comprehensive
review of contemporary thought in the field of
consumer behavior and an amount exhaustive
empirical evidence to support the idea of the authors
of a development paradigm of consumer choice
based on emotion, where the brand mental capital
becomes a central phenomenon.
Research method
Design research - Narrative.
Interviewed segments - clients of various
companies insurance and perspective clients.
Type of data - primary and secondary
The number of cases - 200 cases
Research Methodology
The methodology includes findings from surveys
and interviews conducted in the age group 25-50
years old, who are or may be clients of insurance
companies.
Methods of data collection
Data collection includes primary and secondary
data .The primary data are collected from a well
structured questionnaire .The secondary data were
collected from the website, various publications and
statistics published by the FSA.Instumentat e
kërkimit :
The questionnaire was structured, carefully
designed and organized with a standardized set of
questions that summarizes the information needed
for the study, such as those associated with the
effect of insurance companies advertising and
customer’s behavior towards them.
Interviews
The next step involves collecting information that
requires discussions with various people. Valuable
information was collected through informal
discussions or between the social discussion.
Determining the technique of choice of
respondents:
Customer selection techniques was chosen for this
study .The respondents were selected randomly in
the age group 25-50 years in two different cities
(Durres, Tirana).
Studying the promotional strategy of various
insurance companies shows that they cover us in
every step of life, from birth to death. Recently, the
insurance companies are giving priority to
advertising in television, print, radio or leaflets.
Image building and creating different identities in
creative and compelling way is what advertising is
doing as much as insurance industry is concerned.
Creative thinking has increased emotional
connection with the brand.
For the same purpose, different insurance
companies are using different advertising strategy
which makes their products and services to reach
the customers in different ways.
TV advertising
The TV commercial is generally considered the
most effective mass market advertising format, as is
reflected by the high prices TV networks charge for
commercial airtime during popular TV events. A
piece of television advertising contain songs, music
that affect listeners interested for the product as
soon as possible. Virtual advertising may be
inserted into regular television programs through
computer graphics.
Infomercials
An infomercial is a long-format television
commercial, typically five minutes or longer. The
word "infomercial" combining the words
"information" & "commercial". The main objective
in an infomercial is to create an impulse purchase,
so that the consumer sees the presentation and then
immediately buys the product through the
advertised toll-free telephone number or website.
Infomercials describe, display, and often
demonstrate products and their features, and
commonly have testimonials from consumers and
industry professionals.
Radio advertising
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Interdisplinary Journal of Research and Development
“Aleksander Moisiu“ University, Durrës, Albania
Vol (III), No.1, 2016
________________________________________________________________________________________________
Radio advertising is a form of advertising via the
medium of radio. Radio advertisements are
broadcast as radio waves to the air from a
transmitter to an antenna and a thus to a receiving
device. Even advertising on radio heard from their
audience especially in summer, in public places
such as beach, etc. or even while driving. It is a
widespread form of advertising various products.
Online advertising
Online advertising is a form of promotion that uses
the Internet and World Wide Web for the expressed
purpose of delivering marketing messages to attract
customers. Online ads are delivered by an ad server.
Examples of online advertising include contextual
ads that appear on search, banner ads, in text ads,
Rich Media Ads, Social network advertising, online
classified advertising, advertising networks and email marketing, including e-mail spam.
Press advertising
Press advertising describes advertising in a printed
medium such as a newspaper, magazine, or trade
journal. This encompasses everything from media
with a very broad readership base, such as a major
national newspaper or magazine, to more narrowly
targeted media such as local newspapers and trade
journals on very specialized topics. A form of press
advertising is classified advertising, which allows
private individuals or companies to purchase a
small, narrowly targeted ad for a low fee advertising
a product or service.
Print media
Mobile billboard advertising
Mobile billboards are generally vehicle mounted
billboards or digital screens. These can be on
dedicated vehicles built solely for carrying
advertisements along routes preselected by clients,
they can also be specially equipped cargo trucks or,
in some cases, large banners strewn from planes.
The billboards are often lighted; some being backlit,
and others employing spotlights. Some billboard
displays are static, while others change; for
example, continuously or periodically rotating
among a set of advertisements. Mobile displays are
used for various situations in metropolitan areas
throughout the world, including: Target advertising,
One-day, and long-term campaigns, Conventions,
Sporting events, Store openings and similar
promotional events, and Big advertisements from
smaller companies
In-store advertising
In-store advertising is any advertisement placed in a
retail store. It includes placement of a product in
visible locations in a store, such as at eye level, at
the ends of aisles and near checkout counters, eyecatching displays promoting a specific product, and
advertisements in such places as shopping carts and
in-store video displays.
Coffee cup advertising
Coffee cup advertising is any advertisement placed
upon a coffee cup that is distributed out of an office,
café, or drive-through coffee shop. This form of
advertising was first popularized in Australia, and
has begun growing in popularity in the United
States, India, and parts of the Middle East.
Role of advertising in insurance industry
It is an informative or persuasive message carried
by a non personal medium & paid for by an
identified sponsor whose organization or product is
identified in some way. It is an impersonal and one
way communication about a product or organization
that is paid by a marketer
Advertising is a form of communication used to
persuade an audience (viewers, readers or listeners)
to take some action with respect to products, ideas,
or services.
Corporate advertising can tell a story about a
company as a whole, large organizations may need
to use corporate ads to simplify their image in the
minds of key constituents and to show what unifies
the company, despite the geographical spread and
variety of its businesses.To establish the brand,
build awareness and give the brand a larger-thanlife image.
Advertising effectiveness means different things to
the groups responsible for its different effects. To
the writer or artist, effective advertising is that
which communicates the desired message. To the
media buyer, effective advertising is that which
reaches prospective buyers a sufficient number of
times. To the advertising or marketing manager,
effective advertising is that which, together with
other marketing forces, sells his brand or product.
To the general manager, effective advertising
produces a return on his firm’s expenditure
Throughout the range of modern businesses,
advertising can play an essential role in the success
or failure of a given enterprise. The ability to reach
audiences, convey messages, and create an overall
image for an individual or business are powerful
tools, and some companies may even spend most of
their budgets on advertising efforts in an attempt to
use these tools to their fullest advantage. In the
insurance industry, a great deal of an agent or firm's
success depends on the skill with which prospects
are approached and handled, and the very best
insurance agents in operation know that the creation
of positive impressions and the establishment of
credibility are essential ingredients for success. On
their own time, agents must use various methods to
achieve these goals of making the right impression
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and maintaining trust throughout the sales and
consultation process. But this requires personal
attention, and can only be delivered to a limited
number of prospects at any given time. Insurance
industry advertising, then, addresses the need for
creating positive impressions and establishing
credibility in the absence of the actual agent.
If this seems like a challenging feat, that's because it
by all measures, it is. Trust and credibility are
privileges typically won through a great deal of face
time and the consistent demonstration of
dependability and good intentions, and such traits
can be especially difficult to portray from a
distance. Thankfully, there are many ways that
advertising can accomplish this task through
creating various impressions and ideas that either
overtly or discreetly suggest the good qualities of an
agent or firm, without the need for personal
attention.
Insurance industry advertising accomplishes the
task of reaching out to those prospective clients who
would otherwise be left to approach insurance
agents and brokers on their own, unprompted. Able
to present solutions to those who may have no other
method of arriving at a sound answer for their
insurance questions, such advertising serves as the
broad public face of a given agent or firm, and is the
first point of contact that will be established
between a client and the agency from which a
policy or package is purchased. Far from being a
simple gimmick to increase sales, thought such an
objective can certainly be present in some
campaigns, insurance industry advertising has its
roots in the establishment of a relationship between
clients and companies, setting the stage for future
interactions and aiding the course of contract
development
This function isn't only an essential one; it's also
able, in many cases, to help catalyze the process of
selling insurance. While agents and firms without
extensive advertising –or any advertising at all-must often rely on performing each step of the trust-
building process manually, truly excellent insurance
advertising campaigns can make this process move
much more quickly, allowing for a higher volume of
more successful sales. Great insurance industry
advertising has a great deal to do with establishing
an image and distributing it to prospective clients,
but it is also a way to streamline insurance sales
itself, providing a compounded benefit that makes
working in the modern market without considerable
advertising efforts somewhat difficult.
Embracing the necessity of advertising, and
following through with the creation of quality,
carefully-prepared campaigns, is a great way for
modern insurance agents and companies to expand
their business and take advantage of the powerful
possibilities in forming and conveying targeted
messages about the benefits and wisdom of
retaining insurance.
FSA ( Financial Supervisior Authority )
Created in 2006, the Financial Supervisior
Authority (FSA) is a public independent institution
of the executive, responsible for the regulation and
supervision of non-bank financial system and
operators that operate in this sector. .
The main areas of activity of the FSA is regulation
and supervision of:
• the activity of the insurance market and its
operators, market activity of the securities and its
operators;
• the activity of supplementary private pension
market and its operators;
• Other nonbank financial activities
Its primary function is to protect consumers by
legal, administrative and information devices, and
to maintain the stability and transparency in the
field of insurance, securities and private
supplementary pension. It’s activity is characterized
by professionalism, transparency and high standard
of service to all interest groups
Below we present graphics division of the insurance
market by items "compulsory insurance" and gross
written premiums in Travel Health Insurance.
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Interdisplinary Journal of Research and Development
“Aleksander Moisiu“ University, Durrës, Albania
Vol (III), No.1, 2016
________________________________________________________________________________________________
Market Share on the Mandatory and Voluntary
Non-Life Insurance
Gross written premiums in Travel Health Insurance
by Non-Life Insurance Enterprises
Source: FSA- Statistical Report September 2015
Data analysis and interpretation
Question No. 1
Which is the media that you mainly use to be
informed about insurance products?
Question No 2
Have you ever seen insurance product
advertisements ?
4%
8%
14%
Television
Newspaper
53%
Yes
Internet
No
Radio
25%
96%
Question No 3
Which is the TV channel you follow more insurance
advertising ?
Question No 4
Do you remember the content of any insurance
advertisement?
6%
4%
16%
41%
Klan TV
Top Channel
Yes
Vision
No
Other
39%
94%
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The influence of advertising in insurance …
V. Neza, E. Myftaraj
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Question No 5
Which insurance company do you prefer
more?
5%
13%
25%
Question No 6
Has any advertising products left impact which
lasted on your mind as brand ?
21%
Sigal
Sigma Interalbania
Po
Eurosig
17%
Jo
Intersig Vienna
22%
18%
Albsig
79%
Te tjera
Question No 7
Has any advertising influenced your decision making in purchasing insurance products?
17%
Yes
No
83%
are many other ways as social networks, public
education, etc., to do this.
In the market it is easy to note that these
advertisements have had a major impact on the TV
audience. Although the most popular areas of
information collection are displayed in the arena of
war in visual mediathe old advertising players
through newspapers and radio are still on the top,
trying to dominate the market. Even the
advertisements through internet is rapidly increased
as already 62% of the Albanian population are
internet users. The survey clearly specifies that
people are aware of the advertising of insurance
products as most of them have seen advertisements
of these products so that they can provide them with
enough knowledge about the products offered by
insurance companies.
TV channels like Klan TV, Top Channel, Vision
Plus have higher visibility and higher impact to
potential clients. The great number of people can
Conclusions
Insurance ads have undergone major changes over
the years. Insurance can help customers against
disasters. People are understanding more and more
this and they have started buying insurance
products. If we notice that the recent advertising of
Sigal for example, explain how Private Pension
funds or different Insurance products can help to
alleviate your life in old age through providing
these funds, benefiting in old age additional income
etc. ..
The study shows that advertising is very important
in any business. Many of the companies paid in
advertising. There are many ways to advertise
where them are most highly paid TV, newspapers,
radio. In the initial phase of a company it is
important to put the emphasis on corporate
advertising because it helps in brand memory.
Advertising in the media is not the only tool, there
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Interdisplinary Journal of Research and Development
“Aleksander Moisiu“ University, Durrës, Albania
Vol (III), No.1, 2016
________________________________________________________________________________________________
recall the advertising content of the insurance
company (94% of respondents) shows that the
content of each ad can have a lasting impact in the
minds of consumers who can determine the
behavior of its purchasing relsted with advertising
policy of Insurance Companies. So the content must
be realistic and authentic. Insurance are considered
sold only by push strategy. We are witnesses of
alternative financial instruments available on the
market, making competition tougher. The first thing
that comes to their mind, before consumers buy an
insurance product in a competitive market, is the
brand. It really plays a huge role for purchasing a
product. This is evident in this survey.
According to the survey the most preferred
company is Sigal Uniqa insurance, followed by
Sigma Interalbanian, Eurosig etc.
From the survey can be interpreted that effective
advertising have a major impact in the purchase
decision making process of the customer, to whom
advertising should be effective in order to leave a
lasting impact in their minds and making correct
decisions in purchasing insurance products.
The study shows the
importance of brand
awareness. Most of the public runs behind the
name of the brand.
References
1.Tyagi, C.L, Kumar, Arun(2004): “Advertising
Management”
2.Cathrine, Jansson-Boyd 2010: Consumer
Psychology”
3.Malani,Anup and Freeman, Lee & Brena:
”Advertisements Impact the Physiological Efficacy
of a Branded Drug”
4.Baker ,Stephen 1983: “Systematic Approach to
Advertising Creativity”
5.Arens, William. 2007 F,-The Mc Graw-hill/Irwin
series in marketing: “Contemporary advertising”
6.Ronald,LaneW. 2008:“Kleppner’s Advertising
Procedures,Tata Mc Graw Hill Education”
7.North, Douglass C., 1993 “The New Institutional
Economics and Development”, Essay
8.Khan, Matin A. 2006 :“Consumer Behaviour and
Advertising Management”
9.Kumar, S., Ramesh, E. 2011 -:“Consumer
Behaviour and Branding: Concepts, Readings and
Cases-The Indian Context”,Pearson Education
Websites
www.amf.gov.al
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