Case Background

Name : Mount Rushmore Insurance Company Specialized in : Automobile Insurance Policy under consideration
Pay

expenses incurred in the event of a car breakdown after driving more than 150 miles away from home. Payment cap - $500 Insurance covers towing, repair costs, transportation, room & meals Payments are subject to $50 deductible amount Cost of policy - $15 a year

Management Decision Problem

The company wants to come out with a new lucrative policy to insure consumers against a car breakdown on a trip.

Marketing Research Problem

Determine customer interest in an insurance policy that will not only insure them against a car breakdown but also provide them a good value or money and evaluate it across various parameters.

Sub problem
Gauge the interest levels in the customers of

Rushmore & those of other companies with respect to various parameters Research question : How strong is the association between interest in the policy & current insurance supplier? How does age, marital status, number of cars & trips play a role in this association?

Research Methodology
Part 1: Sources of data (primary or

secondary) Mount Rushmore Insurance collected all primary data from 60 correspondents out of which 30 are current consumers and another 30 taken from randomly dialed numbers

Part 2: Identification of research design

Mount Rushmore insurance went for a single phase

descriptive research In order to determine the consumer interest in a new auto insurance concept under consideration Mount Rushmore insurance chose to build insights through questionnaires answered by its customers and other set of random customers. The new concept was to provide up to $500 towards expenses incurred when the car has travelled more than 150 miles and breaks down. The respondents were asked to quantify their ratings for their interest in the new feature in insurance policy on a 5 point scale(1- Least to 5-most interested). They were also told to give their background regarding Age, Marital Status, Number of cars owned, Average age of the cars and Number of trips taken by the automobile over the past year that exceeded 300 miles.

Data collection methods/Research methods for descriptive phase

Survey method of data collection was used. Half the

sample was drawn from current consumer list and another half was random digit dialing over phone.

Part 3: Sampling design for descriptive phase

Target population: Database of current customers

and random set of potential customers. Sampling framework: List of customers collected from company internal database and the list got by random phone dialing. Sampling method: Simple random sampling Sample size: 60 respondents

QUESTIONNAIRE How many cars do you own? What is the total age of all your cars?

SCALES Ratio Ratio

How many trips did you take over the last 1 year that exceeded 300 miles on a round trip basis?

Ratio

Who is your current insurance supplier? 1) Mount Rushmore 2) Others Are you excited about the policy? Select on a scale of 5 with 1 to express least interest and 5 for the highest interest Marital status? 1) Single 2) Married How old are you?

Nominal

Interval

Nominal Ratio