The influence of social media promotion mix on the car insurance purchasing of residents in Mahikeng
Abstract
Over the past four years, the number of uninsured cars on the South African roads has increased by 65% due to the fact that consumers do not trust the insurance providers, the excessive rate of premiums and they found insurance needless as they have never been involved in accidents. The use of social media would be extremely beneficial to educate consumers, as the use of marketing via social media would be another opportunity of interacting with people, but still in a large extent unexploited by the insurance industry. In the light of the aforementioned, it is important for insurance companies to integrate social media in their marketing, as well as interacting with consumers in order to create awareness. Ethically, the research raises serious questions about the influence of the social media on the car insurance purchasing decisions of residents in Mahikeng. To answer this question, the study was conducted through the utilization of an online questionnaire completed by residents in Mahikeng through email and company platforms. Respondents are car owners, who may have subscribed or not to a short-term car insurance service.
For this study, the presentation of the results starts firstly with a descriptive analysis and a cross-tabulation to describe the demographic and economic variables in relation to car insurance purchase decision. The results showed that most respondents had their cars insured and expressed a strong interest to social media. Secondly the study makes use of the Chi-square to test the significant relationship between each construct and the online purchase decision. The results show that attitude, service quality, perceived trust and social media are significantly associated with online purchase decision. Lastly, logistical regression was employed to investigate the effect of the online purchase decision and social media promotion mix. The results show that the social media significantly influenced the purchase decision of car insurance online.
From a safety perspective, the government should make third party car insurance compulsory and this will emphasize the need for insurance companies to take into account social media to create awareness and educate car owners in Mahikeng. This implies that car insurance companies must focus on social media such as live video, sponsored events, personal selling and advertisement in order to influence residents in Mahikeng to purchase car insurance via social media. The insurance companies should also educate their consumers on the available insurance discounts, claim process while creating experiences for consumers through event and newsletters. By doing so, insurance companies will be able to build trust, reduce complaints and enhance consumer loyalty. In conclusion, insurance companies should invest
more effort on their marketing campaigns, in order to increase the number of insured cars on the South Africans roads. In addition, insurance companies should not consider credit scores when calculating premiums as this unfairly penalizes lower-income car owners.