LOMA 291 Module 3 Exam Questions
and Answers All Correct
A comprehensive examination typically examines all nonfinancial aspects of an insurer's
operations.
a. True
b. False - Answer-A. - This statement is true. A target examination, on the other hand, is
a limited-scope market conduct examination of one or more specific areas of an
insurer's nonfinancial operations.
Most market conduct examinations today are target examinations.
a. True
b. False - Answer-a. - This statement is true. Target examinations can be conducted
whenever an insurance department thinks them necessary.
The NAIC prohibits multistate market conduct examinations.
a. True
b. False - Answer-b. - This statement is false. The NAIC encourages multistate
examinations as a way for state insurance departments to share costs
A form of nonpaid communication about a person, place, thing, or cause.
A. Advertising
B. Publicity
C. Personal selling - Answer-B.
Nonpersonal communication or promotion about a company or its products or services
that an identified sponsor generates and transmits through any type of media.
A. Advertising
B. Publicity
C. Personal selling - Answer-A.
Conversation between a financial professional and one or more prospective customers.
A. Advertising
B. Publicity
C. Personal selling - Answer-C.
Institutional advertising is intended to present the details of a specific product.
A. True
B. False - Answer-B. - Institutional advertising promotes an image of the company,
unlike product advertising, which describes the features of a specific product.
,When an insurer ensures that customers can learn about and purchase its products in
the ways that best meet their needs and preferences, which of the Four Cs is the
insurer addressing?
A. Customer
B. Cost
C. Convenience
D. Communication - Answer-C. - Addressing convenience means ensuring that
customers can learn about and purchase products in the ways that best meet their
needs and preferences.
When a company uses the marketing mix to create a unique market identity in the
customer's mind, the company is engaging in
A. Segmentation
B. Positioning
C. Mixing - Answer-B. - Positioning is the process by which a company establishes and
maintains in customers' minds a distinct place, or position, for itself and its products.
Market segmentation - Answer-The process of dividing large, diverse markets into
smaller submarkets that are more alike and need similar products or marketing mixes.
Consumer market - Answer-Individuals who buy products or services for personal or
family use.
Organizational market - Answer-People, groups, or formal organizations that purchase
products and services for business purposes. Also known as the business market.
Segment A: Women between the ages of 35 and 45.
Segment B: Divorced, single mothers between 35 and 45 years old who earn between
$50,000 and $75,000 a year.
Which of these segments includes more potential customers?
Segment A
Segment B - Answer-A. - Segment A includes more potential customers. Using only one
characteristic, such as income, to segment a market—single-variable segmentation—
usually produces fewer segments, with more customers in each segment.
Single-variable segmentation - Answer-A method of segmenting a market using only
one characteristic, such as income level.
Multivariable segmentation - Answer-A method of segmenting a market that uses more
than one characteristic to determine a segment.
Target marketing - Answer-The process of evaluating the attractiveness of each market
segment to the company and selecting one or more of the segments on which to focus
the company's marketing efforts.
different factors
,- size
- growth potential
- distribution and service costs
- current and expected competition
- fit with the company's overall objectives and positions
undifferentiated marketing - Answer-
concentrated marketing - Answer-A strategy by which a company focuses all of its
marketing resources on satisfying the needs of one segment of the total market for a
particular type of product
differentiated marketing - Answer-A strategy by which a company attempts to satisfy the
needs of different segments of the total market by offering a number of products and
marketing mixes designed to appeal to the different segments.
An insurer offers only mortgage protection life insurance policies for new homeowners.
Which approach is this insurer using?
A. Undifferentiated marketing
B. Concentrated marketing
C. Differentiated marketing - Answer-B.
An insurer offers traditional whole life, universal life, and term life products to different
segments, using a different marketing mix for each product.
Which approach is this insurer using?
A. Undifferentiated marketing
B. Concentrated marketing
C. Differentiated marketing - Answer-C.
An insurer markets its small face amount term life insurance product to all potential life
insurance customers, without distinguishing among segments of that market. It uses the
same distribution channels, pricing structures, and promotions for all customers.
Which approach is this insurer using?
A. Undifferentiated marketing
B. Concentrated marketing
C. Differentiated marketing - Answer-A.
Following an undifferentiated marketing strategy allows insurers to (choose all that
apply)
A. Realize cost savings
b. Lower product prices
C. Better satisfy customers - Answer-A & B- Using a single marketing mix results in cost
savings for the company and lower prices for the customer. However, ignoring
differences in customer needs probably does not benefit an insurer; in fact, it can be
risky.
, Following a concentrated marketing strategy allows insurers to (choose all that apply)
A. Compete effectively with limited resources
B. Reduce the company's product risk
C. Develop expertise in a single market segment - Answer-A. & C. - A company that
lacks the resources necessary to develop multiple products can focus on satisfying the
needs of a single segment. In addition, focusing on one segment allows a company to
develop extensive knowledge about the segment. However, tying company profitability
to a single market segment means that a company is more likely to face financial
difficulty if conditions in the segment change and sales suffer.
Following a differentiated marketing strategy allows insurers to
a. Realize substantial cost savings from the creation of multiple products
B. Diversify product risks
C. Better satisfy the needs of customers - Answer-B & C- A differentiated marketing
strategy lessens business risk because a company's profitability does not depend on
the sales of a single product or on the sales in a single market. Offering multiple
products will satisfy more customers' needs. However, the costs of offering multiple
products are higher than offering only a single product or selling to a single market.
EndiFirst Insurance needs to limit marketing costs for its new product, but it believes the
product should appeal to many different types of customers. EndiFirst should consider
using a(n)
A. undifferentiated marketing strategy
B. concentrated marketing strategy
C. differentiated marketing strategy - Answer-A. - Although ignoring differences in
customer needs can be risky, using a single marketing mix does typically result in cost
savings for the company.
Raylite is trying to market its simplified issue product to millennial new parents. At the
same time, Raylite wants to market its long-term care insurance to long-time customers
who have existing life insurance policies. Raylite should use a(n)
A. undifferentiated marketing strategy
B. concentrated marketing strategy
C. differentiated marketing strategy - Answer-C. - To satisfy the needs of different
segments, Raylite should use a differentiated marketing strategy.
Sources of Marketing Information - Answer-- Internal databases: Internal databases
contain internal records and reports from throughout the company. These reports
provide detailed information about a company's sales, expenses, profitability, products,
promotions, distribution, customers, and markets.
- Website and social media analysis: Insurers can gain important insight into customer
needs, interests, and attitudes by analyzing data about customer behavior on the
company's website and on social media. Insurers may collect clickstream data to gain
insight into how to best meet customer product needs or improve the customer
