Effects of Strategic Marketing On Market Penetration of General Insurance Companies in Kenya

Abstract

The insurance industry is faced with a number of challenges the world over, among them being the problem of internationalization and globalization, and this has therefore increased competition. In Africa the nature of competition in the Insurance industry has generated various levels of marketing strategies and applications. All players in the insurance industry are competing for the limited insured population. There is much distrust of the insurance sector among the population mostly out of ignorance, thus there is need for a comprehensive awareness programme in order to tap the vastly un-served market. The purpose of this study was to determine the effects of strategic marketing on market penetration of the general insurance companies in Kenya. The study was guided by the following objectives; to examine whether direct response marketing strategy has a significant effect on market penetration of general insurance companies in Kenya, to find out the effects of electronic marketing strategy on market penetration of general insurance companies in Kenya, and to establish whether participation in strategic alliances have a significant effect on the market penetration of general insurance companies in Kenya. The scope of the study was the general insurance companies in Nyeri County. The study was guided by the resource dependence theory, commitment trust theory, resource based view theory. Descriptive research design was used and the target population was 160 employees working in the general insurance companies in Nyeri County, and the sample was 64 respondents. The study used primary data that was collected using the questionnaires. Descriptive data analysis was done using frequencies, percentages, means and standard deviation. Multiple regression analysis was done to establish the relationship between the dependent variables and the independent variables. The results indicated that direct response marketing had a positive and significant influence on market penetration as shown by (Coeff/beta =0.131, P-value= 0.001), effect of electronic marketing was positive but insignificant (Coeff/beta =0.162, P-value=0.250), while those of participation in strategic alliances were positive and significant (coeff/beta was 0.196, P-value = 031). This implied that if the general insurance companies were to increase market penetration, direct marketing and strategic alliances would be the most appropriate strategies. Findings revealed a positive and significant relationship between direct response marketing and market penetration of general insurance companies in Kenya. Findings also revealed a positive and significant relationship between electronic marketing and market penetration. Findings also revealed that participation in strategic alliances had appositive and significant relationship on market penetration of general insurance companies in Kenya. From the analysis of findings, the study concluded that direct response marketing is an important factor that contributes immensely to market penetration of general insurance companies in Kenya. The study also concluded that electronic marketing also contributed greatly towards insurance market penetration of general insurance companies in Kenya. The study also concluded that strategic alliances also were key ingredient in increasing market penetration. The study recommended that insurance companies should venture into new markets by establishing solid partnerships with other institutions such as banks, small and micro enterprises, and agribusinesses so as to enlarge their market share opportunities into the future and find it easy to penetrate such markets.