Segmentation and Target Market of State Farm
Over the past 10 to 20 years the personal lines insurance industry has had to increase its spending on marketing substantially with hopes of drawing in on customer loyalty. In 2011 the industry spent almost $6 billion on market, which is nearly three times what was spent a decade earlier. The downside to this is, while marketing spending has increased over 15 percent, the industry premiums growth remains almost unchanged.
State Farm originated in Bloomington, Illinois June 7, 1922 and was founded by retired farmer, George J. Mecheire. Mecheire deemed State Farm insurance company owned by its policy holders, which specialized solely in automobile insurance for farmers. . The company now has a large grouping of insurance and financial services companies throughout the United States and Canada. State Farm is ranked 44th in the Fortune 500, which list companies based on general revenue for the current year.
State Farm continues to lead the insurance market by realizing when it is time to make a change. The company primarily deals in the baby boomer market as this is the majority of their business even today. However, when realizing that its competitors are focusing more on price point and online functionality, the company chose to still keep its “good neighbor” and personal agent branding but offer consumers the ability to still do a bit of the leg work on their if they chose to.
State Farm and Demographic Segmentation
Among the most common market segmentation parameters, demographics play an important role in an organization’s upcoming marketing strate