Republic of the Philippines

BATANGAS STATE UNIVERSITY ROSARIO

Brgy. Namunga, Rosario,Batangas

COLLEGE OF ACCOUNTANCY, BUSINESS, ECONOMICS AND

INTERNATIONAL HOSPITALITY MANAGEMENT
Bachelor of Science in Business Administration

MKT 102- CONSUMER BEHAVIOR

CASE ANALYSIS

Chapter 5 – Attitude Based on High Effort

GEICO MAKES ITS CASE FOR SAVINGS AND SERVICE

GEICO is the number-four U.S. car insurance firm, behind State Farm, Allstate, and Progressive,
yet its $500 million annual budget for marketing communications is by far the industry’s largest.
GEICO uses this budget to great advantage with a wide variety of messages in a variety of media
to influence consumers’ attitudes toward its insurance offerings, which include coverage for cars,
motorcycles, homes, and recreational vehicles. In a product category in which consumers do not
switch from one brand to another without considerable thought, GEICO’s communications give
drivers something to think about and steer them toward positive brand attitudes.

The company’s messages use strong arguments focusing on savings and service to get consumers
thinking about the cost of car insurance. Some of its comparative messages show exactly how
much money a particular consumer saved by switching from a competing insurance company to
GEICO, information that enhances the product’s believability. In a variation on this theme, many
of its comparative ads say that “fifteen minutes could save you fifteen percent.” This message
encourages consumers to calculate how much less they could be paying for car insurance if they
were GEICO customers. It also reassures consumers by telling them that making the switch to
GEICO will be quick and easy.

Every ad not only mentions the brand name but also gives GEICO’s toll-free phone number or its
website (or both)—a call to action for consumers to take the next step and get a free quote, read
more about specific types of policies, or contact customer service with just a click or a call, day
or night. Messages about GEICO’s high levels of customer satisfaction and brand loyalty have
more credibility because they are based on expert sources named on the website: The University
of Michigan’s American Customer Satisfaction Index and the Brand Keys Customer Loyalty
Engagement Index.

To support its aggressive expansion into motorcycle insurance, GEICO recently set up
MyGreatRides.com as a social networking website for motorcycle enthusiasts. The idea is to
provide an online forum for motorcycle owners to post upcoming events, exchange views about
favorite bike brands, and show off their tricked-out rides. Although the GEICO brand is nowhere
to be found on the website, the company sees it as an investment in learning how consumers
think and feel about everything related to their bikes, including insurance. “If we can learn more
about the needs of motorcycle riders and what kind of service they expect, we think it will help
us with our current customers and potential ones,” says GEICO’s director of motorcycle
products.

GEICO’s Corporate Community Citizens program fosters positive consumer attitudes through
the company’s involvement with local causes and organizations. Not only does GEICO donate
money to nonprofit groups all around the United States; its employees also volunteer their time
for causes such as Habitat for Humanity home-building projects, Bikers for Tykes motorcycle
rally fundraisers, and Big Brothers/Big Sisters activities. One of GEICO’s many auto safety
initiatives is the Safety Belt Poster Contest, in which school-age children submit artwork for
posters that remind drivers about the importance of buckling up for safety. Local efforts such as
these link the GEICO name with worthwhile causes that touch an emotional chord with
consumers.

Despite increased competition from its larger rivals, GEICO’s approach to marketing car and
motorcycle insurance has been extremely effective. The company currently serves more than 7
million customers and, according to J.D. Power & Associates studies, enjoys high brand
awareness as well as the highest new-customer acquisition rate among the major insurers. Watch
for GEICO to keep driving toward higher market share by reaching out to car and motorcycle
drivers all over the United States.

Case Questions
1. Does GEICO appear to be using marketing communications to change consumers’
beliefs, change their evaluations, add a new belief, encourage attitude formation based on
imagined experience, or target normative beliefs? Explain your answer.

2. What role does source credibility play in GEICO’s marketing communications?

3. Do you agree with GEICO’s decision not to show its brand on the MyGreatRides.com
website? How do you think this decision is likely to affect the website’s visitors’ attitudes
toward GEICO?