Factors affecting the brand equity of insurance companies from the perspective of customers

Thesis of Master of Business Administration

Trend of Insurance Management

Abstract

The success of an organization is determined only in the set of clear goals that the organization sets for itself. For many service organizations, profit is an important goal and can be a combination of short-term financial results (increased resources or cash flow) and increased brand equity. Factors such as perceived quality, brand loyalty, brand awareness, and brand association are the dimensions of brand equity. Aker is one of the most prominent scientists who has presented the factors affecting brand equity in the form of a model. This study evaluates the factors affecting the brand equity of insurance companies. The current research method is descriptive and the method of data collection is survey. For this purpose, a questionnaire with 26 questions has been designed.

To answer the questions asked by 200 people who bought car body insurance policies from 4 private insurance companies of Asia, Alborz, Mellat and Parsian insurance companies, which have the largest share of the car body insurance market, they were chosen as the statistical sample of this research. A simple random sampling method was chosen.

The research results show that the perceived quality, brand loyalty and associations directly affect the brand equity of insurance companies, and brand awareness does not directly affect the brand equity.

Key words: brand equity, brand loyalty, perceived quality, brand awareness, brand association

Introduction

As you know, in the 21st century, technological developments And transportation and communication has been carried out with surprising speed and scope, which has also developed insurances from different angles and at an accelerated pace.                                 Currently, 20 insurance brands are active in the country as 1 government company and 15 private companies and 3 non-government insurance companies in free economic zones and 1 reinsurance company that provide insurance services in more than 15,200 agencies and 270 brokers. Currently, the insurance penetration rate in Iran is equal to 1.5% of the GDP, which will be equal to 4.6% if social security premiums, pension funds and protective insurances are included. while in developed countries it is about 17%. Therefore, it can be seen that receiving high insurance premiums, lack of public awareness about the functions of insurance, insufficient provisions provided by insurance companies, imposing unilateral conditions and providing traditional insurance to people, the existence of cumbersome bylaws and regulations requiring compliance with fixed rates and avoiding discounts based on the approvals of the Supreme Council of Insurance, are among the challenges that have led to a decrease in insurance sales. Although the insurance industry in Iran has grown appreciably over the past decade, it has not yet looked deeply into the basic needs of its customers. In recent years, with the increase in the number of private insurance companies, the competition between them has increased dramatically. As a result, one of the key points in the success of marketing strategies is to understand the consumer's behavior in opposition to the brand. Therefore, it seems important to identify the needs of consumers and the influencing factors in their choice among different brands. Therefore, the current research aims to investigate the factors affecting the brand value of insurance companies. It is hoped that the results of this research will be useful for promoting insurance services in accordance with the value preferences of consumers, providing information to managers of insurance companies, preparing a suitable strategy for providing information needed by companies, as well as for the support programs of the Central Insurance of Iran for insurance companies in order to free competition and remove cumbersome regulations. Privatization of insurance companies, without a doubt, despite the competitive environment prevailing in the insurance industry in the coming years, in order to gain a suitable position in the minds of customers so that they remain loyal to the insurance company, one of the factors that are effective in reaching such a position in the minds of the customers of insurance companies is "special brand value". Brand equity is the ultimate utility or added value that a product, good or service creates through the brand. The special value of the brand is considered as an asset for the company, which increases the circulation of business funds. Brand equity is a multidimensional concept that can be increased by strengthening its dimensions.. These dimensions include: brand awareness, brand association, brand loyalty, and perceived quality (Aker, 1996, p. 20). One of the reasons for the importance of the concept of brand equity is that marketers can gain a competitive advantage with the help of brands with high equity value. The competitive advantage of insurance companies that have a valuable brand includes opportunities to develop a successful brand and create success and create barriers for competitors to enter the insurance industry. Despite the growing importance of the concept of brand equity, there are few customer-based brand measurement tools. Considering that brand equity is derived from customer perception, it is very important for managers to be able to measure and evaluate brand equity at the customer level. Therefore, due to the entry of the private sector into the insurance industry and the creation of a competitive environment between insurance companies, not paying attention to the resources that affect the special value of the brand can have destructive effects on the market share of insurance companies. 2-1 Importance and necessity of research

Nowadays, the economies of advanced countries are moving more and more towards becoming service oriented, so that the percentage of service organizations has increased. In Iran, the number of service institutions has also increased compared to the past several years.  Therefore, insurance companies as one of the service institutions have grown a lot in recent years in Iran. Therefore, according to the competitive environment governing the insurance industry, one of the profitable ways for insurance companies is to differentiate. On the other hand, this distinction should be in such a way that it cannot be copied by other competitors. For this reason, a branding strategy is necessary. Therefore, according to the competitive atmosphere governing the insurance industry in the coming years, without a doubt, the brand of insurance companies can play an essential role in selling the services of insurance companies. In recent years, there has been research about the brand in the academic field, but little attention has been paid to the role of the brand and its importance in insurance companies. Therefore, considering that more than 45% of the country's insurance market share is in the hands of a state insurance company (Iran) and many people are only familiar with the name of this insurance company, and considering the developments in the insurance industry in the coming years, it is possible to increase the probability of choosing a strong insurance company brand from the customers' point of view by increasing the brand equity. In addition, increasing the value of a brand will increase loyalty, increase customers' willingness to pay more, and increase customers' resistance to price fluctuations. Therefore, by evaluating the factors affecting brand equity from the customers' point of view, more attention can be paid to the importance and role of marketing management in service companies such as insurance, so that after evaluating the factors affecting brand equity, marketing managers consider their actions based on the importance of each of these factors.

1-3-1 The main objective: to evaluate the factors affecting brand equity from the perspective of customers in an insurance service company

2-3-1 Practical objective: to know the factors influencing the dimensions of brand equity in the insurance industry and to provide solutions in order to improve and pay more attention to the brand of insurance companies

4-1 Research questions

What are the main factors affecting brand equity from the perspective of insurance service company customers?

How important is the importance of each of the influencing factors in the customers' evaluation of brand equity in an insurance service company?

1-5 Theoretical model of research

The first person who has presented a model based on both behavioral and perceptual dimensions in order to conceptualize brand equity is Aker. Perceived quality, brand association and other assets such as royalties, patents, etc. The advantage of Acker's method is the combination of two behavioral and perceptual dimensions in an index to measure brand equity, because the evidence shows that attitude alone is a weak indicator for market behavior, and using an index that includes both perceptual and behavioral dimensions increases the power of evaluation in this field, although consumer perception is a prerequisite for revealing the behavioral dimension of brand equity. Another advantage of this model is its convenience and the small number of dimensions of this model, and many theorists have tested it experimentally.