Insurance for Camels (Alba’Aeer)

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Introduction

There is a need to introduce a camel general insurance policy due to the increased needs to protect camels in the UAE. Such an insurance policy should cover camels against sickness, accidental loss of the camel arising from fire, theft, and legal liability arising out of the camel’s damage to properties belonging to third parties such as crops.

In the UAE, camels are valued, and people take care of the animals to ensure that they are safe and healthy. The camels have values in the society. The people also attach an economic value to the animal. Camels can survive in the harsh desert conditions, and this aspect is suitable for areas which are dry. The camels are used for transport.

They also supply milk and meat. Camels are also used to pay dowry, and they are sources of pride for the people in the UAE (Salem and Staff Reporter, p. 1). Today, they are also used in sports, such as racing (Zacharias, para. 6). In this paper, the author provides a proposal that Dubai Insurance Company will establish an insurance policy called Alba’aeer. The policy will provide cover for the upkeep, racing, and breeding camels in the region.

New product development plan for selected opportunity

Pricing

In all businesses, a product is brought to the market after passing all stages of full new product development process. Pricing is the last stage in the new development process.

The other stages, starting from the first one, are as follows; idea generation, idea screening, concept development and screening, business analysis, beta and market testing, technical implementation, commercialization and lastly the new product pricing. As a marketing manager, developing a strategic plan in setting the price of the Alba’aeer is very recommendable. The pricing strategy will consider the all the costs and the profit margin of the product.

A marketing manager should focus on the current and the future situation of the market of the Alba’aeer and not historical to ensure that the right price is set for the product. A mind that thinks of today and tomorrow will help marketing managers to set a strategy of pricing that will help make profits today and tomorrow. A mind that thinks of the experiences will obviously drag the marketing manager into setting prices to recover the costs that were incurred long time ago (Tailan, and Liu, 695).

The pricing process will consider the fact that the product is new and that customers will not be willing to buy the product because they have not used it before. Marketing managers should take immediate actions in regards to how the buyers respond to the prices that have been set for the Alba’aeer. The prices will be tested to test the response of the customers.

The managers should develop pricing strategies that shift with the shift of the price sensitivities of buyers. The insurance products have a price-elastic demand, and this indicates that the price of Alba’aeer will be determined by the demand in the market. In case the demand for Alba’aeer increases, the price will automatically be increased, and in a situation where the demand of the product decreases, the price will also decrease (Tailan, and Liu, 697).

Once more, while developing a pricing strategy in planning for the new product development, in this case, the Alba’aeer, marketing managers should study the competition of other products or other organizations selling the same product. It is more preferred for one to be on a creative plane while doing business than being on the competitive plane.

When there is no otherwise, the marketing managers in a competitive environment are advised to be alert to the market trend, but not copying what the competing organizations are doing. The marketing managers of the organizations selling Alba’aeer in the UAE have to plan their own pricing strategy and not copying the pricing strategies of their competing counterparts.

The pricing strategy will also consider the taxes that have been imposed by the government. The taxes account for the price of a product and should be incorporated in the price of the product. The government requires all businesses to pay taxes, and the Alba’aeer insurance product should incorporate the tax component.

The pricing of the product will be a cover of 50,000 to 1 million Dirham. It will be tailor made in that one can pay as low as 500 Dirham per month. This is to ensure that those who are in the low end market can afford to pay for the product and provide cover for their camels. This is also because the price is one of the ways that the company will be able to receive revenue from the sales made in theoretical term it is one of the most important determinants of the perception of customers when they are making purchases (Salem and Staff Reporter, 1).

The marketing managers of Alba’aeer organizations too, while planning for the new pricing strategies for the product should think of the product life cycle. As I said earlier, it is wise to set a pricing strategy that has its focus on today or rather the current and the future situation.

The product life cycle clearly elaborates that towards the Decline phase, the prices of products start to go down due to the market saturation with the products and the increase of price sensitivity with the increase of products’ knowledge. The marketing managers of the Alba’aeer organizations should set pricing strategies that are flexible.

Promotion

Promotion refers to the process of creating awareness about the products in the market. This can be done through advertising, television, social media, and other communication media.

Promotion increases the knowledge about the products in the market. Companies also educate customers about the products through promotion. The companies use promotional strategies to encourage potential customers to try the new products in the market. Therefore, promotion is an important tool when a new product is introduced in the market (Tailan, and Liu, 698).

The product promotion will entail advertising the product to ensure that customers are well aware of its existence in the market. The advertisement will be done TV, radio, social media networks such as Facebook, Twitter and MySpace and also on the company’s website through a link that will enable the user to find more information about the product with regard to price, cover provided, extensions of the cover and those things that are not provided in the cover. We also use brochures that will be placed at strategic points on the premises of the business to ensure accessibility by the customers.

The physical product promotion will entail the use of bright and attractive displays on TV with appealing colors. We have chosen green to be our theme color as it communicates trust, nature and calmness and more so because it is a product covering animals- camel (Alba’aeer). The cover of the policy with regard to the sum insured premiums to be paid per month, and the benefits that will accrue to the policyholder will also be provided.

On realizing that people like free things, the marketing manager of the organizations dealing with Alba’aeer and Alba’aeer products can organize an event to give away products with an aim of drawing and attracting customers who could at first been disinterested. Organizing promotional events helped our organization to send a press release about our products. We also got a chance to let the public know, through the use of the local newspapers.

The use of business cards as a way of promoting Alba’aeer products can greatly influence the buyers in the UAE in a wide range. Handing out of printed promotional items can help an organization to venture into the interiors in marketing its products. Another way of using promotions in new product development is by offering samples to people with great influence whom after using or reviewing the products offer back a positive response which in turn help to convince customers to try the products.

The other tool for product promotion for new product development is the use of testimonials. In the the UAE, Alba’aeer organizations can collect testimonial from customers who have used and got satisfied with the products, that is, the camel itself, its milk or meat. The testimonials from customers can greatly help to retain and influence other potential customers who trust their opinions into trying the product (Jaffer, 4).

All the factors that will influence the consumer behavior towards the newly developed product

There are several factors that will influence consumer behavior towards Alba’aeer insurance policy. Consumers purchasing decisions are influenced by cultural, social, personal and psychological factors. Clients who will opt to buy the product and those who will not buy it are influenced by different factors.

Many of these factors are beyond the control of the marketers, and they are unique in term of the environment from which one was born and grown. First, cultural factors are influenced by what one was taught from a young age up to maturity. These teachings range from family, school, religious institutions and society at a large. The basic values that shape individuals’ tastes, preferences and perceptions teach in these institutions.

For some, they have been taught that insurance is not important especially for animals like camels. For others, due to their religious beliefs insurance is not crucial especially among the Muslims. For others because they do not keep camels due to their own personal reasons, they might not just find it necessary to purchase camel insurance policies (Al-Mutawa, 345).

Social factors that influence the consumer behavior are reference group, family, social roles and status. The reference group is the group of people whose opinions are considered by a member when making purchasing decisions.

The group can also affect one’s personal life or profession. These groups are can further be divided into family, friends, neighbors, and coworkers who interact with the individual on most occasions. For those clients who belong in a social group that believe in camel insurance or those who keep these animals are most likely to purchase the product compared to those who are not (Strazzieri, et al. 435).

Other groups like religious groups and professional associations affect also one’s buying behavior depending on the beliefs of the group concerning insurance. Family members also have a strong influence on one’s purchasing decisions. People from different families tend to be different in terms of their tastes and preferences that they value since childhood regarding insurance.

Parents also provide the first orientation for their kids and in most cases for these kids whatever their parents used to like will be their likes and vice versa. Consumers also will be influenced to buy or not depending on their roles and status in the family either as: a husband, wife and first male son. The status that one has defined roles and ultimately the buying decisions (Strazzieri, et al. 436).

There are also personal factors that influence consumer behavior such as life cycle, occupation, economic circumstances, lifestyle, personality and self concept. People undergo various life cycles in life that influence their purchasing decisions for the product. For those who are single, they most unlikely to own a camel compared to those who are married because they have less needs compared to their counterparts. Due to these variances, their needs for camel insurance policies also vary (Foxall, 63).

Consumers’ aspirations to purchase a camel insurance change according to the prevailing economic condition changes. As the economic conditions undergo various cycles with time so do their financial ability to purchase this product change. Their occupation also influences their lifestyle, which eventually influences they need to purchase camel insurance. For those in an occupation that has a high pay, they are most likely to purchase camel insurance compared to those who are in those occupations that do not pay well.

Lastly, consumer behavior is also influenced by a person’s psychological factors which include motivation, perception, learning, beliefs and attitudes. Different people tend to have different inner motives and a perception that satisfies certain needs in life. People will buy camel insurance because of that inner motivation to do so and satisfy the need of averting the financial loss that comes with not insuring.

For those consumers who perceive camel insurance to be an important means of avoiding loses, they are likely to purchase the product compared to those who do not. Learning about human behavior, which comes from experience, also influences consumer behavior of this product.

For those people that have a good experience with camel insurance, they are most likely to purchase compared to those who lack the same experience. Beliefs and attitudes that consumers have will also influence their buying decisions. Those that believe that camel insurance is important and have an optimistic attitude towards the same are most likely to purchase compared to those who do not (Miniard, and Cohen, 171).

Three possible problem situations the consumers might encounter in the delivery of service and how I plan to fix each problem

Problem by adopting a new product in the market

The company will encounter the problem of adoption of the new product. The adoption of new products varies with customers. There are customers who are early adopters.

This class of customers has the characteristic that new products are easily adopted. However, there are laggards who do not accept new products easily. They wait until a product is well established in the market. Alba’aeer is at the introduction stage of the product life cycle. At this stage, The product is new in the market, and most of the customers are not aware about the presence of the product.

At this stage, the company sells the product to early adopters. These are the customers who are ready to use the product without prior knowledge. The product at this stage requires to be promoted intensively so that people can know the existence of the product. At the introduction stage, the laggards are not willing to test the products because they do not know anything about the product (Sääksvuori and Immonen, 166).

Therefore, the company will encounter the problem of laggards because such customers will not be ready to accept the Alba’aeer. To deal with this problem, the management should develop intensive promotion campaigns to educate all the potential customers about the new products. This will be done through online channels, televisions, radio stations and newspapers among other media.

Most people in the UAE are not aware about insurance and customers view insurance products as a scam to con them money

Insurance in the UAE has not penetrated to a large extend because most people are not aware about the existence of insurance policies. However, people in the country have accepted life-insurance products, but they are not ready to take retirement insurance products. “The low rate of penetration could also be because of very few global insurance companies operate in the UAE and there only a limited number of tailored products” (Chaudhuri, para. 6).

Most insurance companies in the region offer products in motor insurance because it is mandatory. The other products have not been properly marketed. Most of the products have not been offered to the customers.

People have bad perceptions about the insurance products. The bad perception was created by former insurance companies which stole money from customers. The companies could fail to pay the customers their dues when risks, which are issued, occurred.

This created apathy among customers because genuine cases were not compensated. “Although insurance penetration in the UAE is the highest in the Middle East, experts say it still is relatively low compared to mature markets” (Chaudhuri, para. 1). The company should educate people about the importance of insuring camels. Intensive promotion should be conducted to ensure that people are aware that the company does not aim at conning their money.

Cultural problems

Customer perception differs from one community, society or nation to another due to the cultural differences that exist between them. If not properly strategized, starting an organization in an environment with cultural difference has very high chances of failing. A situation may arise where lets say, the customers are so into the existing product and may not need another that is so satisfying. The UAE is a combination of many Arab countries, showing that there are many different cultures with different desires.

In such a case, marketing managers should do research deep down the roots to know everything about the market and to forecast. It is wise for the foreign marketers to invest in places where there are cultural exchanges to avoid cultural conflicts. The cultural systems in the UAE have restricted the penetration of insurance companies. The young people are not ready to take insurance policies. In addition, the people have the perception that insurance is an extra expense rather that a protective cover.

This aspect hinders insurance companies from selling their products in the UAE market (Chaudhuri, para. 10). The company should promote a culture of ensuring all assets among the people in the UAE. This can be achieved by encouraging and educating people about the importance of having insurance cover. The company can liaise with the government to educate people on the importance of having insurance policies.

Conclusion

In the process of new product development, marketing managers should do thorough research before they bring products to the market. They should be very innovative in all the eight stages of new product development and keen to the customers’ responses towards all the actions they may undertake in order to satisfy them.

Many businesses fail due to poor strategic planning in product development. Camel insurance is an important product that has a high potential of acceptance from customers in the UAE. The introduction of such product should be done in a strategic manner because the people in the UAE have not accepted all insurance products in the market.

People in the region have taken motor insurance because it is compulsory, but other insurance policies have not been readily accepted. Therefore, introducing the Alba’aeer will face some challenges. The company should provide attractive prices because the product has an elastic demand. In addition, intensive promotion should be conducted to ensure that all customers are aware about the existence of the product.

Works Cited

Al-Mutawa, Mohammed A. J. “Factors Influencing The Consumer Process In the UAE Society.” International Sociology 11.3 (1996): 337-357. Web.

Chaudhuri, Ritwika. Insurance penetration. the UAE Digest. Web.

Foxall, Gordon R. “Social Factors In Consumer Choice: Replication And Extension.” Journal Of Consumer Research 2.1 (1975): 60-64. Web.

Jaffer, Sohail. Islamic Insurance: Trends, Opportunities and the Future of Takaful. London: Euromoney, 2007. Web.

Miniard, Paul W., and Joel B. Cohen. “Modeling Personal And Normative Influences On Behavior.” Journal Of Consumer Research 10.2 (1983): 169-180. Web.

Sääksvuori, Antti, and Anselmi Immonen. Product Lifecycle Management. Berlin: Springer, 2008. Web.

Salem, Fatma and Staff Reporter. Camels a key part of THE UAE’s rich heritage. Gulf News. 2012. Web.

Strazzieri, Alain et al. “Societal Development And Family Purchasing Roles: A Cross-National Study.” Journal Of Consumer Research 9.4 (1983): 436-442. Web.

Tailan, Chi, and John Liu. “Product Life Cycle, And Market Entry And Exit Decisions Under Uncertainty.” IIE Transactions 33.9 (2001): 695. Web.

Zacharias, Anne. The rich history of camel racing. The National. Web.

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