Allstate Insurance Marketing Plan: Strategy and Analysis

Introduction and Project Overview

This project develops a marketing plan for Allstate, one of the largest insurance companies in the United States. Allstate competes across most segments of the insurance industry, and in 2007 reported revenues of $36.769 billion and profits of $4.6 billion. Creating a promotional plan for Allstate presents an interesting challenge: the company operates in so many segments and serves such a broad target market that the marketing plan must be both wide-ranging and reasonably well targeted. It must be wide-ranging in order to drive business across all of the company's lines and to market the company itself rather than any single segment. It must be well targeted in order to prevent competitors from exploiting a lack of focus on Allstate's part.

There are several steps to completing the marketing plan. The first is to conduct a literature review — one that is sweeping enough to provide tools for analyzing the insurance industry, its segments, and their target markets. The review should also offer insight into the development of an effective marketing plan. For this project, the marketing plan itself comprises two distinct components: a plan for Allstate as a corporation, and a plan for an individual Allstate agent. Because these represent two distinct plans, the research must supply sufficient information to address both topics equally well.

The literature review is then analyzed and its findings recorded. Those findings ultimately provide the basis for the marketing plan. This process is a formalized version of what every marketer does during the preparation stage. At this point, information from both the literature review and any supplementary research is synthesized into a coherent analytical foundation.

The project also has a reflective dimension. Beyond producing the plan itself, the exercise aims to identify generalizations that can inform future marketing plans. As valuable as creating one plan is, it is equally valuable to develop skills and knowledge that can be applied to future marketing endeavors. The process is as important as the results — while the results are a plan on paper, the process is a repeatable tool.

Ultimately, three distinct outcomes are sought. The first is a marketing plan for Allstate as a multi-billion dollar insurance company with an incredibly broad scope. The second is a marketing plan for an individual Allstate agent, a unique business entity with its own needs and objectives. The third is to develop a research and writing methodology, along with a body of knowledge, that can be applied consistently across different industries and business models. In achieving these three outcomes, the project aims to build a stronger understanding of the fundamentals of marketing planning and the steps involved in creating such a complex document.

Research Methodologies

The amount of knowledge required to complete this task is significant. Writing a marketing report covering what are essentially two distinct businesses — and developing an understanding of the techniques and skills that go into such reports — requires a deep body of knowledge and a strong skills base.

The starting point was to understand the insurance industry. The industry is vast, and two potential entry points presented themselves. The first was to find an outside source of industry research. This led to a common roadblock in the business world: a significant portion of business research is produced on a for-profit basis. The intended audience is business, and that audience uses the information to generate profits — so it stands to reason that such research carries a price. As students, paying hundreds of dollars for proprietary research was not feasible, meaning industry information had to be gathered piecemeal from other sources.

This led to the second potential starting point: internal industry sources. Like many industries, the insurance industry has an association established by member firms as a communications and advocacy tool. In this case, the Insurance Information Institute provided a wealth of free information online, presented in a number of formats — overview, segment-specific, and geographic — that proved extremely useful.

With industry knowledge in hand, the next step was to understand Allstate's operations and how they fit within the insurance industry. Before beginning that process, the relevant learning objectives were identified, starting with the SWOT analysis. Like other standard business analytical tools, the SWOT provides a framework for understanding a company. The first step was therefore to gain a keener understanding of how the SWOT works and what its desired outcomes should be, in order to guide company research by focusing on the areas of greatest relevance.

The next step was to learn about other tools that could complement the SWOT. Reading about the structure and objectives of the SWOT provided significant guidance on what additional information about Allstate would be needed. It became clear that the internal and external environment were critical, but that the SWOT would inevitably leave gaps. A search of management and strategy literature surfaced other tools: ratio analysis, for example, helps understand a company through evaluation of its financial statements, providing a quantifiable view that complements the SWOT's qualitative focus. Other tools examined included gap analysis, measurement plans, and the formulation of success criteria.

The SWOT analysis is fundamentally a tool for analyzing the internal and external environment. It focuses on a company's internal strengths and weaknesses alongside external threats and opportunities. Its value lies in allowing these elements to be weighed against one another — not simply strengths versus weaknesses, but also strengths applied to opportunities and weaknesses considered alongside threats. The most important strategic priority is to ensure that external threats do not exploit areas of internal weakness, since the consequences could be severe. Beyond shoring up weaknesses, a SWOT examination reveals where strengths can be used to exploit market opportunities.

Gap analysis offers another angle of perspective on a business's operations. It examines two dimensions — where the company is and where it wants to be — and then investigates the reasons for any gap and how those reasons can be addressed. The ultimate goal is to narrow the gap and bring the company closer to its objectives.

Measurement plans outline the ways in which a company can assess the outcomes of its strategic initiatives. For the purposes of a marketing plan, this means measuring the outcomes of the marketing program against an ideal derived from the gap analysis. Success criteria flow from the gap analysis and define what success looks like, while measurement plans specify how the company determines whether those criteria are being met. Together, these three tools allow a firm to assess a plan's effectiveness and adjust strategies in real time.

From there, information about Allstate itself was gathered. The company's annual report was the natural starting point, though it cannot be considered an entirely neutral source — securities regulators require conservative statements, but parsing the unique language of annual reports requires experience. The annual report was supplemented with financial news sources, which provide the detailed, accurate, and timely information that money, rather than academic reputation, demands. Academic sources, while occasionally useful for broad industry issues, seldom provide sufficient or timely insight into a company's specific operations.

A similar process was then applied to understanding the role of the individual insurance agent. Because individual agents are not publicly traded, the same body of freely available financial information does not exist for them. Research was therefore conducted via the Internet, drawing on tips and guidance aimed at insurance agents and analogous small-business models such as investment advisors and real estate agents. Finally, sources explaining how to structure a marketing plan were consulted, with multiple "how-to" resources used in order to triangulate the most important common elements.