TV comercials are expensive on prime time television. I probably see Geico ads at least 20 times every evening that I watch television. They have to be tacking this cost onto the price of their existing policies.
2007-07-11 10:13:20 · 13 answers · asked by don n 6 in Business & Finance ➔ Insurance
MBRCATZ is the only one of you that is remotely correct in your answers. Working for an auto-only insurer, we're acutely aware of the rates charged by our competitors. We are constantly reviewing loss history, trends in the industry and coverage issues. But more importantly we study and make decisions based on WHAT OUR COMPETITION IS DOING! They drop rates, we drop rates.
GEICO has choosen their method of marketing and they feel it works. Their rates are set based on what they need in order to be competative with their peers. The only thing that will effect their rates is if their competition starts dropping rates and they feel they have to, in order to stay competative.
2007-07-12 04:04:43 · answer #1 · answered by Anonymous · 0⤊ 1⤋
Do they really? My older brother is signed up with Geico, and he's paying like 2000 dollars every 4 months, which is a lot more than my dad is spending on his insurance.
2016-04-01 09:42:56 · answer #2 · answered by Anonymous · 0⤊ 0⤋
It doesn't work that way. You don't tack business expenses on to the product, you factor them in to your cost of doing business.
Geico isn't going to lower rates under "market value". Whenever anyone has done that, it's created an insurance nightmare for them in the long run.
2007-07-11 16:00:44 · answer #3 · answered by Anonymous 7 · 0⤊ 0⤋
The world doesn't work that simply. Higher volume allows them to offer it at slimmer margins. The marketing drives the volume. It is all related, you just need to dig down deeper.
That would be like saying you could buy a Budweiser for less if they didn't advertise all over the place. No you couldn't because their perceived quality would go down, resulting in less business, which would cause the need for higher margins to operate profitably, and eventually they would go out of business. Eventually, there would be no more 50 cent Bud because they stopped making it.
2007-07-12 03:31:37 · answer #4 · answered by aaron p 5 · 0⤊ 1⤋
It would be MORE expensive because they'd have much less business and the fixed expenses would have to be spread across fewer policies.
Assuming your logic the car companies could see their cars for less money if they didn't advertise? How many cars do you think they would actually sell?
Business people are logical. If they could forgo advertising and just lower their prices they would, but that doesn't work.
2007-07-11 10:22:02 · answer #5 · answered by Box815 3 · 0⤊ 0⤋
If they didn't bring in more customers their costs would be higher per customer. The more customers, the less it costs to manage an account. Fewer customers means each individual customer sharing more of the "expense" burden.
Strange but true.
2007-07-11 17:07:42 · answer #6 · answered by Common Sense 7 · 0⤊ 0⤋
They sure are. But is it any worse than giving the money out to top execs as a bonus plan? Companies never pass savings down to the consumer, they only pass costs on to us!
2007-07-11 10:19:51 · answer #7 · answered by modernneanderthal 3 · 2⤊ 0⤋
Advertising=exposure
Exposure=prospective clients
More clients=more demand
More demand is related to lower prices
I suppose it's hard to find the Marketing happy medium. :)
2007-07-11 10:23:13 · answer #8 · answered by Chelsea P 3 · 0⤊ 0⤋
GEICO doesn't have agents. They depend on advertising to attract customers.
2007-07-11 11:34:49 · answer #9 · answered by fcas80 7 · 0⤊ 0⤋
Probably competitive just like the other guys
2007-07-11 10:24:32 · answer #10 · answered by Jennifer 6 · 0⤊ 0⤋