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Marketing case study (1)


The Royal Sun Alliance has, like many of its competitors, passed through a very difficult time. A pensions' scandal, fall in share values and other problems saw a once famous brand suffer a dramatic fall in its popularity. New, low cost pension and insurance schemes, which used technology to cut costs, saw their customer base decline and potential purchasers started to ask more and more difficult questions. Royal's products began to look dated.

Management decided that the best way to guarantee the survival of an old and trusted company was to move into different sections of their core markets and offer some new products as well. They moved up market and looked for business amongst the professional classes. Products were sold in new ways, with technology being a major influence on how customers received their services. The 'direct' approach was introduced to a wide range of the services they offered. Customer care and convenience were stressed in all the advertising literature. New products such as car insurance were introduced and a range of 'financial services' were added to the product range.

At the same time cultural changes were made within the business with 'customer care' being the largest single factor in staff training. Costs were reduced by both redundancies and the increased application of technology.

So, as the century closed a business of many years standing felt confident that it would survive whatever the future held. Alas, the early years of the new century have seen little improvement in the market standing of this once proud enterprise.


Question 1

Define (a) core business and (b) corporate culture.

Question 2

Explain how Royal felt it would build business in the new era of direct selling.

Question 3

In what ways might Royal increase its use of technology and why might this not always meet with positive customer reaction?

Question 4

How might the company expand its business horizons?