Introduction

In this report, the market strategy option, strategies of QBE Insurance Group in Turkey is discussed. QBE is a leading insurance company of Australia which has expanded its branches all over the world. QBE does not have presence in Turkey as of now. Insurance is a promising sector in Turkey which is growing at decent year after year. Insurance industry is one of the largest growing industries in Turkey. There has been a growth of around 30.5 per cent in total premium size (Jarvis, 2010). QBE has its presence in Australia, London, United Kingdom, Philippines, Malaysia etc. QBE is one of the fastest growing multinational brands in terms of Insurance

Market Entry options for QBE to Turkey

A market entry strategy can be defined as a planned way of delivering, distributing and marketing the goods or services of the firm to the new target market (Raff, Ryan & Stähler, 2012).  In case of import or export business, market entry strategy can be establishment and management of contract in the new market. There are many companies which only operate in their niche market without even trying to expand in New market. There businesses grow to a certain level but their growth is restricted to a single market/segment. There are many companies which achieve the awareness, funding, and stability so that they can consider entering new market (Masiero, Ogasavara & Risso, 2017). QBE is a stable company in terms of its sales, brand awareness and other critical factors. The factors which QBE has to consider while entering into Turkey are its political, economic, legal factors, trade barriers if any, competition in market, price localization, cultural factors of turkey etc.  

There are many market entry strategies which can help a company to enter into new markets:

• Licensing
• Joint ventures
• Business alliance
• Ownership
• Turnkey project
• Greenfield project
• Outsourcing
• Franchising
• Exporting

Franchising

Franchising is a business entry strategy where the right of using a brand name, its business model etc is given to other company for a defined period of time. By franchising, a chain of stores of the business can be opened into new market with minimal investment and liabilities. 

Franchising is basically the act to copy and apply the business strategy to a new market. It is preferable when there is less need for product innovation, adaptation etc. (Pehrsson, 2004) It is a very common method adopted by food chains for entering into new markets. Franchising is helpful in case the parent company is a well established brand and is well known throughout the world. The franchisor’s accomplishment is dependent on the accomplishment of the franchisees. The franchisees have a higher motivation as compared with a direct employee since they possess direct stake in the business (Agrawal S, Ramaswami S, Sridhar N, 2002).

Franchise as a market entry option is not feasible for QBE. Franchise is suitable for food chains while in case of insurance industry, knowhow of product and risk is very important. QBE has to be physically present in Turkey for its operation. Hence Franchising is not a feasible market entry option for QBE. 

Ownership

 Ownership is one of the commonly used method of market entry where a foreign company enter a new market with its 100% ownership. It requires huge capital. Very high risk is associated with such market entry option. In this type of market entry strategy, the risk like conflict of interest, theft of copyright, business model, infringements etc associated with other options like franchising and licensing etc can be avoided. This type of market entry option is very capital intensive and very risky. There are various disadvantages associated with this strategy like less information about local market, culture, high risk, high requirement of capital, low  credibility in the mind  of customer etc.  (Jackson, 2009)

In case of QBE, since they are new to Turkey market, it will be difficult for them to do the business alone without the help of local people. Also, insurance industry is very capital intensive in itself. The capital required is very high for the payment of claims. Although, the insurance companies have reinsurance partners, still the capital requirement is high. In a country like Turkey, where the chances of claim/risk is very high, complete ownership cannot be a preferred option and hence QBE should not enter Turkey by this strategy. 

Business Alliance

A business alliance is the most common and preferred method of market entry. It is an alliance between different companies/businesses for providing goods and services to customers (Weinstein, 1997). It is mostly driven by the motive of reducing the cost and providing better services to the client. Businesses have equitable risk and opportunities in alliance. Alliance can be of various types. Some of them are:

• Sales: When companies enter into alliance to sell complimentary products or services in the new market. 
• Solution-specific: A solution-specific alliance happens in case companies agree to create and market a specific marketplace solution.
• Geographic-specific: When product and services of 2 or more companies are marketed together in a specific geography, though a geographic-specific business alliance. 
• Investment: when mutual investment is done jointly by 2 companies by entering into an investment alliance 
• Joint venture: A joint venture is a type of business alliance which happens when two or more companies agree to pursue an economic activity together.

There are many cases where 2 or more of these alliances are involved between companies. 

By analyzing the above mentioned type of alliances, we recommend QBE to  enter into Turkey market by the means of a joint venture with some Turkish company. 

A joint venture (JV) can be defined as a business entity which is formed by two or more companies usually by means of shared ownership, risk, return and governance (Weinstein, 1997). 

Companies usually practice joint ventures for following reasons:

• to enter into a new market, usually an emerging markets; 
• to increase scale / scope, efficiencies by merging the assets and operations of both the companies
• to share risk for main investments or projects
• to access the skills and capabilities.

There are many benefit of joint venture. The risk is shared between two companies and so are the capital requirements, investment. The local partner will have the knowledge of the community, local market, legal system etc while QBE will have the technical know how of the insurance product and industry. The brand name of QBE and the local partner can be combined to make a new brand in the insurance industry of Turkey. 

Some of the risks which are associated with the entry to new market are:

• Weather risk
• Cultural risk
• Foreign exchange risk
• Sovereign risk
• Systematic risk, 
• Liquidity risk

These risk can be overcome by means of joint venture of a local company with QBE. Hence, QBE should enter the Turkish market by means of joint venture.
Market Segmentation

Market segmentation can be defined as the procedure of dividing the market into group of potential customer on the basis of factors like age, demography, shared interest, etc. (Siu & Woo, 2000). The segmentation is done considering the consumers which have shared interest and will respond similarly to a particular marketing strategy on the basis of their personality trait location, need, or interest. 

Insurance is a product which is widely used by both businesses and individual customers. Corporate use insurance to cover their huge risks like product liability, professional indemnity, general liability, employee compensation, property risk, risk of act of god, terrorism, Riots, strike, malicious damage etc. while individual uses insurance to cover their personal risk like health insurance, personal accident insurance, life insurance, vehicle insurance, third party liability etc. Hence, QBE can target both of these categories together. They should enter both B2B market and B2C market. Accordingly, the market can be  segmented on the basis of these target customers. 

Segmentation for QBE in insurance industry of Turkey can be done on the basis of 

• Household-Retired employees, salaried class, self employed etc
• Institutional sector; Private and public sector companies
• Industrial sector: Private and public sector
• Rural Sector: On the basis of their occupancy, gender, age (For example, crop insurance, cattle insurance, livestock insurance)
• Trade Sector: Big, large, medium, small businesses
• Institutional sector: School, Universities, Institutes, colleges etc. 

Market Positioning

Market segmentation is very crucial for any industry and particularly for an insurance provider. The prime focus in insurance industry is customer i.e. the policy holders. Marketing of Insurance should focus on transforming the prospective clients into policyholders. Market segmentation helps the insurance marketer to categorize the expectation level of the policyholders. The organizations, here in this case QBE, should try to capitalize the opportunities available in market. The segmentation here will help QBE to identify the prospective customer and to inform them and persuade them regarding the product offering (Chen & Wang, 2015). 

The market positioning of QBE should be as such that the awareness in all the segments of QBE  like various gender, industry, companies, businesses, institutions etc should be very high. It should help in spreading the business in all the segments and  expanding it into the agricultural sector and rural sector where currently the penetration is less. QBE can position  itself an a multinational brand with provide best service to the customers and which is widely penetrated. 

QBE should position themselves as an insurance provider for all. They should focus on B2B insurance by increasing their visibility in corporate and institutes. They can leverage their expertise in liability insurance to enter this segment and position themselves as number 1 provider of liability insurance in Turkey with best risk management service provider. 

In B2C market, QBE should position themselves as a high quality, insurance provider with wider network of empanelled hospitals for health insurance and huge network garages and workshops for motor insurance. They should emphasise of their quality and their international brand image. Turkish customers are brand conscious and they prefer foreign brand over local brand (JLT, (2017). QBE can take advantage of the same and  try to penetrate in Turkish market. 

Conclusion

In this study, we have analysed the market entry strategy of an insurance company, QBE group in Turkey. Insurance industry is one of the largest growing industries in Turkey. There has been a growth of around 30.5 per cent in total premium size. QBE Insurance Group is among the world’s top 20 general insurance & reinsurance companies. It is operating in all the important insurance markets. 

There are many market entry strategy by which a company can enter into  a new market. We recommend QBE to enter Turkey by means of a business alliance in the form of Joint Venture. QBE should partner will a local company  to start its operations in Turkey. The local partner will have the knowledge of the local market, legal system, regulatory framework, culture etc which will help QBE to  set its business in Turkey. The local knowhow of the local partner when combined with the technical knowhow of QBE about the insurance product, risk assessment and insurance industry will give better results. 

The QBE should focus on both B2B and B2C customers in Turkey. This should include all the demography, salaried, self employed individuals on B2C segment. In B2B segment, it should focus on all the institute, companies, business etc  for corporate insurances. QBE should leverage on its expertise in liability insurance to enter into these segment. 

QBE can position  itself an a multinational brand with provide best service to the customers and which is widely penetrated. They should emphasise of their quality and their international brand image.