New York Life – Marketing Management Case Analysis

BAB25 Case depth psychology 2 New York vivification and flying Annuities Unlike the old days where a retiree could rest assured that they could cognize out the rest of their life on their pension and tumesce-disposed security checks, the retirees of like a shot own their pensions paid out in a lump pith that takes the rump of the pension check, but encompasses the total derive a retiree has to blistering on until they pass away. This gets un reliablety in the measuring a retiree sack deteriorate per month, and if the total nitty-gritty is sufficient to get them until they pass away. adjacent annuities help to create certainty in the financial lieu of retirees. While retirees can be certain that they exit receive a social security check each month, the amount of income they are able to receive from their pensions can vary depending on their contribution plan. Immediate annuities are a unitary-time acquire that tackles a monthly payment for the remainder of the emptors life. They solve the problem well as they take away the hesitation of where a retiree can receive their income from, they are the ideal vehicle to guarantee retirees a lifetime income (Rotemberg & Gourville, 2010, p. ). principally speaking, neither the buyers (the retirees) nor the betrayers (agents/advisors) of contiguous annuities are genuinely enthusiastic about them. Consumers have some(prenominal) interrelated reasons for non buying contiguous annuities. Firstly people are a lot not familiar with quick annuities, which evidently causes fewer buyers. Then, buying immediate annuities instrument spending a large sum of money as usually immediate annuities cost at least $100. 000 or more.This large sum of money has to be paid at once, while the purchase is irrevokable which causes doubts, most importantly because the retiree does not have a go at it if they will live pine enough to make the purchase profitable. If not, more money will be put in the purcha se than they will get out of it, meaning it is quite a a gamble to buy immediate annuities (Rotemberg & Gourville, 2010). The agents and advisors that are supposed to betray immediate annuities, on the other hand, in any case have their doubts. Investment advisors actively fare their clients money.Immediate annuities do not suspend for this as it is a one-time investiture. This also performer that the advisor/agent gets a one-time commission, which is little profitable compared to collecting multiple fees from one client over time for revocable investments (Rotemberg & Gourville, 2010). Additionally, advisors/agents a lot also do not have enough experience of the mathematical point of intersection, making it very hard to sell. Agents/advisors that do have knowledge of the intersection often state that immediate annuities are a bad retirement product.Only 9% of financial advisors (strongly) prefer the product, against 64% having a (very) weak preference for it (Morg an Stanley Research, 2007, as use in Rotemberg & Gourville, 2010). New York Life (NYL) has set its mind on emergence the Guaranteed Lifetime Income (GLI) melodic line in the future, but faces several possible paths in exhibition to reach this goal. To be as cost-effective as possible, we think that the company should appoint its pool of end-customers wisely. The focus on retirees should be maintained and even enforced, as many a(prenominal) still do not know the products proposed by NYL.Furthermore, the focus should be broadened to a larger target group, to include the veritable(prenominal) customers of the companies, families with children. As noted by Rotemberg and Gourville (2010), NYL tends to design long term relations with its clients, as agents follow them over time and sell multiple contracts to them. We can think that an aging family would present a risk counseling mindset, as their childrens future is not secured yet. We can hence position the product by presen ting it as a unspoiled solution adapted to ones own needs.Differentiating the product from those of NYLs competitors is important potential clients of GLI annuities should understand the hypernym benefits of the product. Building on the companys reputation, GLI annuities should be promoted as a long term investment from a responsible company, concerned with its customers and providing long term relations between agents and customers. In order to reach a great public and change customers mindsets, we need to fortify the core components of the company.For this, we believe that the focus should be put on NYLs agents rather than collaborationism with investors that would force NYL to compromise on its set and products. While the pool of agents is already significant, further 4000 of them sold GLI annuities, as only 40% of the 11,500 agents had received the training specific to the product (Rotemberg & Gourville, 2010, p. 12). Therefore we believe that the GLI business would gr ow if all agents are educate to improve their knowledge of the products and hence their function to customers.We believe that the pool of agents should be increase gradually as number of customers grows in order to sustain the aforementioned value of NYL while the price of GLI annuities should not be changed, considering the customized services NYL provides. Instead, they need to focus on convincing customers that theyre worth their price as their product is unique. i. e. NYL needs to emphasize the smart aspects of its product to differentiate from competitors, while forwarding should be built on NYLs values.