Federated Insurance: Targeting Small Businesses

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Federated Insurance: Targeting Small Businesses Federated specializes in providing business insurance for various selected industries, and as such, its strategy focuses heavily on macrosegmentation to reach a large number of customers in these different industries throughout the United States. This has been effective over the past century in increasing the business Federated does through multiple industries, but it still must deal with the problems involving how to efficiently sharpen its usual strategy into meaningful microsegments and how to respond to the growing number of price focused customers. Federated can effectively tune its usual macrosegmentation strategy by accurately classifying the different customers of each industry into more meaningful microsegments through the application of the ABC analysis on the following top three characteristics that define a business owner’s insurance purchase decision: purchasing strategies, key service criteria and importance of purchase. Federated can also respond to price focused customers through the use of customized service packages which can be implemented alongside the use of a specialized market microsegment. Overall, as these options are explained in more detail below, they will help accurately identify the best possible solutions Federated can implement for these problems in order to provide the best tailored service for all customers based on their business needs. I. Macrosegmentation Solutions A. Purchasing Strategies Federated Insurance’s primary focus is to provide multiple lines of business insurance coverage and risk management to employees in different industries, but many of these business have different purchasing strategies and as such should be classified accordingly. Purchasing strategies can vary between customers may choose various suppliers of the same service and seek to negotiate in order

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