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                   Table of Contents

    Situation Analysis
            Company              4
            Product/Service      6
           Competition           7
            Audience             9
    Problem                      11
    Objectives                   12
    Message Strategy
             Position            13
            Tone/Manner          14
             Tagline             15
    Citations                    16


           Established in 1922, State Farm achieved market superiority, becoming the
Strength   largest property and casualty (mutual) insurer company in the world1. State
           Farm currently insures more cars and homes than any other insurer in the U.S.
           and is also the leading insurer of watercraft2. Offering consumers a wide
           variety of insurance such as auto, home, life and health, State Farm‟s market
           presence is credited to its brand name recognition, cost effective exclusive
           agents, customer loyalty and a variety of financial service capabilities3.

           Even with the recession, State Farm is still growing. In the 2008 fiscal year,
           State Farm saw 1.7 million new policies and accounts (929,000 auto policies
           and 321,000 homeowners‟ policies) 34. State Farm has more than 17,000
           agents, and 68,000 employees56, and has given more than $5.4 million in 2008
           to United Way7.

           In 2006, State Farm has reached out to the younger generations with the
           unbranded campaign for During the length of the campaign,
           significant gains were tracked for both auto and renters among 18-25 year
           olds. State Farm has expressed its desire “to continue to change young adults‟
           perceptions of State Farm and drive growth, with a campaign that‟s branded,
           [involves] State Farm agents [and maximizes] marketing dollars by working in
           synergy with General Market messages8.”


State Farm‟s marketing campaigns lack cohesion. There
is no single spokesperson, such as its competitors,          Weakness
Allstate and Progressive. It has yet to find its own voice
and its own positioning to carry out throughout its

During recent years, State Farm received negative
coverage from numerous news agencies for pulling out
of many states following catastrophes9, and unfavorable
regulations. State Farm, like several other insurance
companies, has faced harsh consumer reviews posted
online, challenging its „good neighbor‟ image.

The growing trend for insurance companies is a well-
rounded web-based service. State Farm does have a
web presence, but focuses its marketing on its personal
agents. One spokesperson for State Farm said,
“Throughout the years, we've used agents, celebrities
and customers. But we've been consistent with the
agent at the center and the agent as the spokesperson.
The presence of the agent will be absolutely central to
how we communicate with consumers10.”

Although State Farm is number one in auto insurance, many people aren‟t fully aware of its renters insurance. When it
comes to tenants in an apartment or house, if their landlord or the property owner has insurance on the building, it will
not cover what is inside of the home. Renters insurance covers everything in homes or apartments whether it was
stolen, vandalized or completely destroyed.

An average person has about $20,000 worth of personal property in his/her home. State Farm offers two types of
coverage: replacement coverage and high value item coverage. If items such as a laptop or bike has been stolen or
damaged outside of the property, it may be covered. In the event of one‟s home being destroyed to the point of
uninhabitable, State Farm covers the cost of another place for one to live in for the mean time. Renters insurance also
offers liability coverage to cover legal allegations of another person injured or if that person‟s property is damaged.

About 54 percent of renters are college students and 50 percent of renters live in the center of the city where
universities are located, therefore college students will be the main target. Out of 7.7 million college students in
America, about 500,000 are robbed a year. In 2007, there were around 1.5 million residential fires, which results in
one college student out of every 16 will have to deal with a situation compromising his or her home.

In this economy, renters insurance may be a hard sell because people are not as willing to spend their extra money on
renters insurance like they would on auto insurance. The message that needs to be driven home is that the property
people own inside of their rented space is part of their life; therefore, they need the proper insurance to take care of it.
If more people became aware of renters insurance, especially people between 18-25, they would realize how valuable
it is and take advantage.


    For State Farm, a company that is attempting to stabilize its current auto insurance policies
    and grow its renter‟s insurance policies, competition would include insurance providers that
    cater to both markets. Narrowing down the insurance companies by products offered leaves
    the potential competitors as Allstate, Nationwide, Farmers, Geico, and Progressive. Each of
    these companies currently holds a portion of the Auto Insurer Market Share: Allstate 11.9%;
    Nationwide, 4.7%; Farmers, 5.0%; Geico, 8.9%; Progressive, 7.5%.

    To look at numbers alone is not enough to specifically identify direct and indirect
    competition. State Farm prides itself on is its agents. These agents have become the
    spokespeople for State Farm; they are the face of the company the policyholder sees.
    Therefore, another way to break down the potential competitors would be by business
    structure in terms of agent based or non-agent based. Nationwide and Farmers both operate
    in the same way that State Farm does- the traditional agent model. Newer companies such as
    Geico and Progressive operate in a modern method through the Internet without agents.


         Since State Farm is aiming for a young demographic of 18-25 year olds, it
Direct   is important to take the demographic into consideration. This group longs      Indirect
         for instant gratification and the ability to maintain their independence. In
         result, this age group tends to lean towards purchasing insurance online
         where they can feel they are in charge. Although Geico and Progressive
         are mainly non-agent based, consumers are still given the option of
         whether they would prefer to buy a policy online or with a local agent.
         Nationwide and Farmers only offer the option to get a quote online, but
         not to actually go through with the purchase. Allstate, on the other hand,
         gives the consumer the option to buy auto insurance online, but for
         renter‟s insurance an agent must be contacted.

         This key information of Progressive and Geico offering both methods to
         purchase insurance makes them State Farm‟s principle direct competition.
         Other competitors to keep in mind are the small, independent insurance
         agencies that have strong ties to the community in which they serve. In
         many states, these independent agencies dominate the market over larger,
         national agencies. The current economy and the traditional income of
         individuals in this target market of 18-25 must also be considered. This is
         the typical age of a college student and individuals just entering the work
         force. These people are cautious with their money and are more hesitant to
         purchase insurance policies not required by state law. This means that they
         may not consider purchasing renter‟s insurance simply because they are
         unaware of the value and benefits of holding a policy.

                                            MARKET GROUP

Born between the late 70s and early 90s, Generation Y “represents the next generational bulge and are even more
numerous than Baby Boomers were at the same age stage11.” A segment included in what is also known as the Echo
Boomers, Millenials, iGeneration and Google Generation, people aged from 18-25 are the most contradictorily
described age group. They are “cynical idealistic, narcissistic, lazy, innovative, capricious, thick-skinned, thin-skinned,
exacting, connected, diverse, savvy, distracted12.” How can this be? Simply because they are the most diverse
generation to date. Members of Generation Y are characterized as being more racially and culturally tolerant than past
generations. Gay rights and non-traditional gender roles have also become more widely accepted.

Named after the largest search engine, the Google generation has grown up with the Internet and is the first to adopt all
cutting edge technology that comes their way. The Internet has eased the way they gather information with the speed to
appease their „right now‟ attitude. “They adopted technologies not so much as helpful accessories but as a part of a new
hyper-connected way of living. Speed and choice and independence became, for many, not just preferences, but
imperatives12.” Often described as A.D.D., Generation Y can never be satisfied by doing just one thing at a time. Since
attending grade school, they are notorious of having numerous windows and programs pulled up on their computer
while doing homework such as iTunes to listen to music, instant messenger to chat with friends and some website for
fun when they‟re stuck between problems.

Being saturated with advertisements through different outlets of media, Generation Y is just sick and
tired of being sold. It is called the Long Tail Effect12 where young adults will go out of their way to
avoid ads such as channel surf when it cuts to commercial or record programs on DVR to skip through
commercials, screen calls and only answer numbers they know, use spam blockers in email accounts to
sift through unwanted mail, and disable pop-up ads. Word of mouth is very influential among Echo
Boomers, as many choose their primary bank on the basis of a recommendation. Parents are still a very
important source of information about financial matters for Echo Boomers. They rely on the internet
for product information, purchasing, and entertainment.
                                         TARGET AUDIENCE
College students who are members of Generation Y will be the audience targeted. They were surrounded with
unconditional love by their doting parents. Playing in little leagues, kids were congratulated despite winning or losing.
In their parents‟ and coaches‟ eyes they were all winners. They were exposed to such learning figures as Mr. Rogers
who stressed each and every child is special in their own special way. This idea of being special branded into their
heads how the universe revolves around them.” I believe that they actually think of themselves like merchandise on
eBay. 'If you don't want me, I'll go sell myself down the street. I'll probably get more money. I'll definitely get a better
experience. And by the way, they'll adore me. You only like me,'" said Marian Salzman, an ad agency executive who
tracked Millenials13 .
“They are looking for speed and expediency, and as a group that‟s not yet flush with
disposable income, they also want a good deal12.” In research it is said that more than
half of college seniors move back home to live with their parents after they graduate13.
In past generations this was looked down upon, but today they justify it by being
economically smart. Why spend money on rent? Generation Y college students are
more financially conscious since they‟ve witnessed what their parents have gone
through with the roller coaster economy. They‟ve learned from their parents‟ mistake
and are less likely to trust banks; they don't plan to invest in the stock market or even
want to get insurance14. They are very demanding and fickle. If a bank has
disappointed them or charged high fees, Generation Y will switch banks in a
heartbeat. This goes back to the eBay quote earlier as to if a company doesn‟t satisfy
them to the T, they will take their business elsewhere to someone who will appreciate
them more. Since the recession they are interested in a more traditional financial
strategy where saving is preferred over spending. They are not too concerned with
future financial responsibilities but rather the here and now. If one were to sell them
anything, they would much prefer he/she coach them rather than boss them around.


The target audience is not aware that State Farm has the lowest priced deal
        for bundling auto and renters insurance where $10,000 renters
     coverage is about $1 to $2 per month more than just auto coverage


   1. To increase awareness of State Farm‟s discounted auto and renters insurance bundle
   among 85 percent of target audience within six months of campaign launch.

   2. To reinforce a positive perception of State Farm‟s auto insurance policies among 70
   percent of target audience within three months of campaign launch.

Evaluation: Success of the campaign will be determined by conducting pre and post tests.
   An increase of awareness among 85 percent of those surveyed will be considered a
   success. Perceptions will be measured by conducting focus groups among current 18-25
   year old auto insurance policy holders.


State Farm is and has been positioned as “the good neighbor” and this is an image the
company has upheld in the mind of the consumer. The company is seen as always being there for
their customers and having a friendly and wholesome aspect to the insurance that is provided.
However, State Farm has been inconsistent with how their message is conveyed and to whom their
target audience is. The goal in this campaign is to create a strong position message that will be
consistent through all aspects in order to solidify and reinforce State Farm‟s “Good Neighbor” image.

State Farm is known for being number one in auto insurance, but some people may not realize that it
is also number one is renters insurance. In order to increase sales in renters insurance, the company
needs to be positioned as the “Good Neighbor” in both the auto and renters insurance industry.

Position Statement: To establish State Farm‟s “Good Neighbor” image in the renters insurance
industry while upholding their current leading position in the auto insurance industry.


State Farm's current tone and manner is inconsistent and they do not seem to have an overlying
cohesive tone and manner between marketing endeavors, so a tone and manner needs to be created
for this campaign.

For this campaign, we will deliver State Farm‟s message in a serious tone using a comforting
manner. This decision was made because State Farm takes its job to provide beneficial insurance to
the average person very seriously and the company wants its consumers to take their own lives and
possessions seriously as well.

This campaign is being targeted to the younger consumers who rent and they need to know that State
Farm wants them to succeed and not have to worry if something happens to their possessions. Part of
the State Farm mission statement is to help people “realize their dreams” and succeed. State Farm is
there to help protect people‟s dreams and part of that is to be serious with the insurance that is being
offered and be as comforting as a “Good Neighbor” can be at the same time. When college students
are away at school or young adults are renting their first apartment, we want them to know that State
Farm is there for them and they will be protected.


The current tagline/slogan of State Farm is ''Like a Good Neighbor, State Farm is There''
and this slogan needs to be maintained. This is the one consistent message that State
Farm consumers have been presented with over the last several decades. In this
campaign, we will continue to incorporate this message into all future endeavors to
further solidify State Farm's image. This slogan is what State Farm is known for and it
is what has gotten the company to the point of being number one, not only on the charts
but in the mind of the consumer as well.

1.   (2009). DATAMONITOR: State Farm Insurance Companies. State Farm Insurance Companies SWOTAnalysis, 5.
2.   2009). DATAMONITOR: State Farm Insurance Companies. State Farm Insurance Companies SWOT Analysis, 5
3.   (2009). DATAMONITOR: State Farm Insurance Companies. State Farm Insurance Companies SWOT Analysis, 6.
6    Mya Frazier. (2007, July). State Farm looks to update image-but agent spokesman is here to stay. Advertising
     Age, 78(27), 8. Retrieved November 6, 2009, from ABI/INFORM Global. (Document ID: 1303014401).
7    State Farm – Case Study, 2009, page 8
10   (2009). DATAMONITOR: State Farm Insurance Companies. State Farm Insurance Companies SWOT Analysis, 5.
15   State Farm - Case Study, 2009, page 6


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