How progressive does or does not accomplish the objective

Assignment Help Microeconomics
Reference no: EM132228689

Question: Progressive Insurance

In the 1980s, Progressive was a small auto insurance company that sold most of its policies to people who had poor driving records and could not qualify for the standard rate policies sold by other insurers. Progressive charged higher premiums for these policies, which the insurance industry calls substandard policies. Often, other insurers who could not write standard polices for customers would refer those customers to Progressive. The combination of high premiums and the lower cost of its smaller sales force enabled Progressive to earn good profits on this business. Eventually, other insurers noticed Progressive's success and began to offer their own substandard policies.

To respond to the increased competition, Progressive improved its claim service and became one of the first insurance companies to offer 24/7 service every day of the year. During the 1990s, Progressive gradually developed a full line of auto insurance products for all types of drivers and focused on offering the lowest prices in both standard and substandard markets. Although Progressive's advertising mentions the quality of its service, it always emphasizes its low prices.

Progressive was the first auto insurance company to launch a Web site (in 1995) and was the first to sell policies online (in 1997). Knowing that most potential insurance buyers shop multiple Web sites to find the best rate, the company began showing its competitors' rates on its Web site in 2002, allowing potential customers to compare prices without leaving Progressive's site. The site displays these rates even when Progressive's rate is higher than a competitor's rate on a particular policy.

Progressive's management has expressed a belief that people prefer to buy insurance from honest companies who offer the best prices. In 2008, Progressive introduced a female character, "Flo," who embodies openness, honesty, and a devotion to low prices. Flo appears in the company's television and radio ads, and is featured prominently on its Web site. In fact, the character often appears in television ad vignettes that tout the price comparison feature of the Web site.

Required: 1. Many managers would be reluctant even to mention competitors, much less provide their competitor's prices to potential customers. In about 200 words, outline Progressive's reasons for showing competitors' prices and analyze the costs and benefits of doing so.

2. In the chapter, you learned that it is important for a company to present an image consistent with its philosophy, principles, and identity on its Web site. In about 100 words, explain how Progressive does or does not accomplish this objective.

3. Visit the Progressive Web site and assume you are a potential customer who needs insurance for a used car you plan to buy. Evaluate the usability of the site and write a report of about 100 words in which you describe your experience. Be sure to mention specific site features that were or were not helpful and conclude with an overall impression of the site's effectiveness.

Reference no: EM132228689

Questions Cloud

Do you think that the government did enough to solve crisis : In 2008, the US economy experienced the worst economic downturn since the Great Depression. This recession was so bad that it was labeled ‘The Great Recession.'
Describe the characteristics of potential customers : Describe the characteristics of potential customers in terms of geographic location, demographics, media habits, consumer behavior patterns.
What potential obstacles could policymakers encounter : Discuss and explain: (1) what types of policies does the federal government have at its disposal to restore aggregate demand?
Difference between corporate and it governance : What is the difference between boards, committees, and workgroups - difference between corporate and IT governance
How progressive does or does not accomplish the objective : In the chapter, you learned that it is important for a company to present an image consistent with its philosophy, principles, and identity on its Web site.
Determine the short-run profit-maximizing price : The manufacturer of high-quality flatbed scanners is trying to decide what price to set for its product. The costs of production and the demand for product.
Describe the circumstances and sequence of events : Describe the circumstances and sequence of events. What went right, and what went wrong. Introduce and identify what rules, policy, or law was (or was not).
Describe any notable microeconomic relationships : Describe any notable microeconomic relationships, market outcomes, and/or trends in this industry. Include a graph, chart, or table containing related data.
Find a current article on leadership and write about it : Find a current article on leadership in the public sector good or bad . Write 2 pages. APA format. Note please put url for the article on the reference.

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd