Royal Automobile Association of South Australia is a club providing a range of membership services including road assistance, auto, house, and travel insurance, travel and tour planning, security, and financial services like loans and mortgages. It was established in 1903 and has grown to be the largest automobile insurance and service provider in South Australia with almost 1/4 of the South Australian population as members (RAA Group, 2018). The RAA president, in the 2016-2017 Annual Report, outlined their core business to be the offering of a valuable, affordable, and reliable service to their members (RAA Group, 2018).
The marketing campaign that RAA has approached focuses on advertising their services and mission to the local community of South Australia. It was composed by recent commercials on television, radio, and billboards, as well as social marketing by demanding better roads and safe driving campaigns.
The commercial broadcasted on television called “The Local” showed a RAA employee and a client walking out of a RAA van and around a small South Australian municipality, explaining why their services are the most efficient and reliable. During their conversation she salutes multiple people from the little town: a young sportswoman, a middle age worker, and older ladies on a walk. This was to show how their employees are more efficient and trustworthy for South Australians as they are local themselves (The Local, 2017)
The other television commercial worth mentioning is called “We do more”. This shows again a RAA employee and a South Australian woman walking out of a RAA service van and into the park in front of the Adelaide Oval. There are lots of RAA employees in the park and he explains how most of them are locals, statement which is proven when the woman sees a member of her dance class in the crowd. It concludes with the RAA employee explaining how they know South Australia and that's why they can do more for her (We Do More, 2017).
Both commercials links are available in Appendix A.
The radio commercial fell along the same message of the tv transmission whether the billboards were focused on letting the customers know that they are providing proven quality service. There are three style of billboards with the common phrase “We put them to the test, so you don't have to” showing three different employees going though inspections and challenges (KWP!, 2013).
The other method used by RAA can be considered a social marketing campaign as it uses their capabilities to influence a behaviour that benefit individuals and communities for the greater social good (Lamb et al., 2009). The campaign is called the Risky Roads project and it allows South Australian to report on dangerous roads and intersections which are subsequently signalled to the authorities by the RAA (RAA, 2018).
To fully analyse the marketing campaign and the business RAA conducts we use the marketing mix composed by the 4 Ps method: Product, Price, Promotion, and Place.
RAA provides services and therefore mostly intangible products. From the television commercial, billboard theme, and social marketing campaign, it is clear that the main intangible product marketed by RAA is their ability to provide excellent customer service. Through their campaign they promote their information processing ability as they highlight the brainpower and technology which is directed to the customers' assets (Lamb et al., 2009).
The television ad clearly shows how the service provided by RAA is focused on the protection of your assets through their advance knowledge and understanding of the field. The billboards highlight their selectiveness on providing a certified quality of service. The Risky Roads project allows RAA to join the locals on the quest to improve the community.
In the marketing campaign conducted by RAA their price strategy is not directly mentioned or exposed, however, according to their ‘local' approach of the tv campaign, we can understand how their pricing would be customer friendly. The claim that they can do more for South Australians also hints on their superiority over competitors' quality, pricing or both. At the end of the television advertisements RAA's weblink is shown, allowing the customers to access all pricing information.
By looking at their different services, the pricing strategy tends to be both operations-oriented and patronage-oriented. Operation-oriented as their membership has various levels of road services at different prices in order to meet supply and demand (Lamb et al., 2009). Patronage-oriented as the insurance and financial services have a flexible repayment plan (from 2 to 5 years as well as collateral selection), allowing customers to access their services depending on their individual financial capabilities (Lamb et al., 2009).
RAA television commercials uses the promotional strategy which involves “Using personal information sources” (Lamb et al., 2009). It clearly shows how the company's goal is to relate personally with clients. This strategy uses mouth-to-mouth communication as a way for the company to increase their customer base. RAA also uses the promotional strategy called “Creating a strong organisational image”, by building a local, caring, and reliable picture to the audience, by placing customers' interests above all. By using both techniques, RAA aims to increase their brand recognition and value via their present and prospective customers. By relating personally to people and creating a strong organisational image they hope that in addition to their marketing campaign, their own customers would take the initiative to increase their popularity.
Both commercials show the actors existing a RAA service vehicle which hints on the service capabilities of the company. At the end of the ad, their call-centre number, website, and the presence of physical shops are shown. This allows the customer to verify the convenience and availability of their services. All road service packages include a 24-hour emergency breakdown, while the range of service (10km to 200km), taxi, rentals, and accommodation benefits depend on the membership levels (Standard, Plus, or Platinum). The convenience and availability increase with the type of membership; however, the operations-oriented pricing strategy allows for a differentiation of service levels.
RAA's other services are delivered online from their website and through the call centre which, according to the most recent annual report, has answered all calls at the average time of 30 seconds.
They also have multiple offices in the metropolitan area of Adelaide and in most populated towns of South Australia. Furthermore, their services also apply outside the state of SA through their partners in all other Australian states.
The product, pricing, promotion, and place analysis of the marketing campaign and the company itself are marketing elements which are aimed at a particular segment of the market. For this particular marketing campaign, RAA, has segmented the market using two criteria. The first method of segmentation focuses on the geographic region of South Australia. The Risky Roads campaign is a project aimed at improving the lifestyle of citizens in that geographical area, while both television commercials emphasised the importance of being “local”. The second segmentation technique is benefit based. The marketing campaign groups potential customers from South Australia that seek a more local and personal customer service. Being local is emphasised on the television commercials, while the quality of the customer service is shown by the themes of the billboards.
The analysis of the marketing mix elements and the segmentation strategies applied by RAA clearly show their main targets. Through focusing on this specific geographic region, they target on further penetrating the local market, gaining market share over industries like the insurance, financial services, security, and travel agencies. Patronage-oriented pricing is a characteristic particular of a sales-oriented pricing objective. Such objective is achieved by setting a market share goal and adjusting the pricing relatively to that aim. Since RAA is the market leader in car insurance and road services, their price should not have to decrease excessively to reach their market share target.
The marketing campaign undertaken by RAA is well-structure and accurate for its objectives, however, there are few improvements that could increase its efficiency in gaining market share. The patronage-oriented pricing strategy already in place could be improved to maximise the number of customers using their services. Third degree or non-anonymous price discrimination, which in this case could involve selling the same product at different prices depending on the annual income of customers, would be the most profitable and efficient way to gain market share. On the other hand, the company's reputation could be damaged if alleged abuse consists in “selective price cuts” or “geographic price discrimination”. The alternative option is first-degree price discrimination, where each customer is charged the amount equal to their willingness-to-pay (Armstrong, 2006). This technique would probably decrease the overall profits of RAA, as most customers would pay a lower amount, however, by setting a minimum price for their services, they could mitigate this negative effect and increase greatly their market share by gaining a crucial competitive advantage.
The other recommendation focuses on the promotional and places elements of the marketing mix. In the billboards, as well as the tv commercial, other than the website and call centre, RAA's social media presence should be displayed. The Facebook and/or Instagram logo would be enough to show the audience and allow for a larger amount of potential customer to view their content and therefore the effectiveness of their marketing campaign distribution (Tiago and Veríssimo, 2014).
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