Better World Club Research

Better World Club Auto Insurance and The Increasing Impact and Reach of Sustainability

By Bernard Asagai

SUS 520 B2: Sustainable Marketing Professor Dr. Darrell Burrell Marylhurst University December 4th, 2011

Abstract

AAA has been the front-runner in the automotive insurance industry for decades within United States. This position has given them great dominance in the automobile insurance and auto club industry. However, with global and national moves toward sustainability and measures that are seen as being safer for citizens and the environment, companies are being forced to provide layers of sustainability for consumers and this is being desired within the automobile insurance industry as well. While new companies looking to advance their market shares by providing services that appeal to consumers seeking companies which embrace sustainability, new companies providing such desired services could find themselves in a difficult position should front runners with established names decide to embrace sustainability too!

Introduction:

The push toward sustainability and environmental awareness has been

occurring for some time. Since the 1960s when the American republican president, Lyndon B. Johnson was forced to create the environmental protection agency (EPA), things have been changing dramatically in the minds of not only American citizens, but also in the expectations of the global community as well. In one of the areas where American citizens contribute the most in terms of their carbon footprint, is the automotive sector. American citizens land-use patterns and driving behaviors have a lot to do with why United States is one of the greatest emitters of carbon dioxide. In countering these effects, many government actors, business leaders, and everyday citizens have gone out of their way to embrace new measures new approaches.

One of the areas where such changes have happened the most, is within the automotive sector.

(U.S. Automotive Market and Industry in 2025, n.d.).This

can be witnessed with the county’s move toward

alternative energy vehicles, which can burn not only gasoline, but ethanol as well. This year many car manufacturers are, or will be selling vehicles that run off of stored electricity. Should these measures be successful and millions of vehicles eventually begin to be produced and sold to the U.S. and within global markets, one can logically conclude that there will be a great reduction in carbon footprint production. With regard to the changes in the automobile sector,

these changes are also visible within the services that are necessary for citizens to be able to operate the vehicles too. One of the areas is the automobile insurance sector. In this sector, one of the companies that is generating a lot of attention is Better World Club. (Better World Club, n.d.)

Better World Club’s Competitive Market When it comes to automobiles, the United States is a fierce market! With an average of 254.4 vehicles, the market for insurance coverage is fierce, especially if the citizen is looking to purchase such a insurance from service providers who incorporate sustainable measures into their business practices. (The U.S. Automotive Market and Industry in 2025, 2011) This is where Better World Club has a competitive advantage over many other insurance providers in the industry.

Not only does this company provide automotive insurance, but they also provide a 1% kickback of all annual revenues toward companies would provide cleanup and advocacy for the environment. (Better World Club, n.d.) Furthermore, the company provides its users with a 5% discount on the renting of hybrid vehicles, BWC also provides carbon offsets for it's users, as well as bicycle roadside assistance. (Better World Car Club An Eco Friendly Car Club, Cathy. (n.d.) One of the other conflicting facets of other insurance companies such as AAA is their support of many measures at the lobbying level in the United States. For example, AAA has lobbied against many legislative measures that support issues such as mass transportation. The lobbying arm of this institution has also pushed for the advancement of more roads. From an environmental standpoint, AAA's interests are not for measures, which support the environment. (Better World Club, n.d.)

Green Credentials From a business standpoint, Better World Club still has to sell insurance policies at rates that are equal or lower to their competitors. (Green Roadside Assistance, 2011) What makes this company stand out though, is that not only do they provide those competitive rates for their customers, but they also have environmental incentives such as not having a lobbying arm which lobbies against measures which are anti-environment. The company’s roadside assistance for bikes provides users who are looking to reduce their carbon footprint by the use of alternative transportation modes with an added layer of safety and protection. Providing such incentives is a major way that existing and potential customers can view the company’s green credentials. There are virtually no other automotive clubs that provide such services for its users. The competitive edge and advantage that this provides Better World Cub is immense.

The provision of carbon offsetting, roadside bike assistance, and 1% of gross annual revenues as a kickback to companies that help the environment and sustainability is laudable. The company is demonstrating what it is to be socially responsible, and minimize the negative effects on the environment that have been occurring for generations.

SWOT Analysis Strength:

For the last two years, sustainability has been the buzzword of the day. Many

countries and businesses are incorporating sustainable measures into every aspect of what they do. One of the greatest strengths that BWC club has been in a position to absorb is the fact that few of its competitors have absorbed sustainable business practices into their operations. This has given BWC a position of dominance in the market, but it also means that the company has to

constantly insure that its measures are the best, (or at lease meet or surpass) the expectations of its client base. The fact that it has taken such a strong position with regard to sustainability means that in order for it to keep and grow its market position, BWC will have to continue to advance its services and adapt its business model so that it does not become stagnant and stale in the minds of consumers. Its market-leading position can become a weakness if he does not adapt its model for the needs of its customers.

Weakness: For many, the fact that BWC virtually has no competitors places the company in a position of great strength. This can be seen as a position of dominance, but it can also be seen as a position of weakness too. One of the great attributes that competitors provide is that they force market entities to stay on their game! Promotions and discounts in the minds of consumers remain fresh, and competitors seeking to gain additional market share, continue to provide enhanced customer savings and promotions. This does not occur at the same rate or pace when fierce competitors are not in the game. Sometimes not having a competitor can mean that a business will not become as strong as it can, because the competition that it needs does not exist.

Opportunities:

One of BWC 's greatest competitors is AAA. Better World Club while

seeking to advance its market share in the area of auto insurance, is also using the platform of its position to promote sustainability, different modes of transportation, and alert consumers and the general public of the fact that AAA lobbies the federal government for unsustainable practices which promote the construction of more roads, and act as a barrier to needed amenities such as mass transportation. Differentiating the full services that BWC provides in contrast to that which AAA provides "including the lobbying element" can act as an extreme opportunity to grow the

company's market share. Continuing to alert the general public as well as those that are interested in embracing sustainability to the FULL practices of AAA will eventually eat away at its dominance in the American market. Over the years, there has been a continued to move toward sustainability. Consumers want options that not only save them more money, but also help them to live healthier and more productive lives, as well as provide the greatest level of environmental sustainability within the environment for future generations too! As customers within the market for an insurance provider continue to be aware that there is an insurance company that shares their ideals, the opportunity for BWC to continue its market share will only increase. (User Feedback and Experiences, 2011)

Threats:

One of the greatest threats for Better World Club is that at the heart of things, it is

just another automotive insurance competitor. While not having facets within their business model which support lobbying measures that are anti-sustainability, providing insurance coverage for automobiles so that consumers can continue the unsustainable actions of performing daily trips in automobiles versus the use of mass transportation infrastructures is a problem!

While taking a negative stance against legislation that would continue such bad behaviors, BWC is profiting off of the countries addiction to the car.

This reality could be a serious threat to the business model of BWC. If companies such as AAA decide to end their lobbying efforts and provide services for other modes of transportation such as bicycles just as BWC, they in affect, level the playing field. If they seek to provide the same amenities that Better World Club is providing, competitors may decide to continue their business with (the known name) AAA. Better world club while taking a very laudable position in this

field, is not the front runner for those seeking automotive coverage. The fact that most Americans have never even heard BWC is a serious threat to its business model. If AAA decides to embrace sustainable behaviors, Better World Club could find itself in a very dangerous position.

Conclusion:

While Better World Club offers tremendous amenity to individuals and

companies seeking options that are sustainable in the automotive insurance sector, the company does not have a broad enough name as of yet that has reached most American citizens. However, it's front-runner stance toward business actions for consumers in the automobile sector provides it with a place in the pole position of sustainable consumers. Should AAA continue its lobbying efforts against sustainable actions such as mass transportation and continue to be for legislation that would seek to put more cars on the road and less mass transportation options on the

ground, Better World Club will continue to have a competitive advantage. (Stop Unlimited Corporate Campaign Donations, 2011)

References Better World Club [Green Auto Club]. (n.d.). Retrieved December 4, 2011, from http://www.betterworldclub .com/ Better World Club [User Feedback and Experiences ]. (n.d.). Retrieved December 4, 2011, from sustainlane.com website: http://www.sustainlane.com/reviews/better-worldclub/D4LUOLY2SI4BC8QUYYTYOTHPR9JZ Better World Club joins Ben & Jerry's, Seventh Generation, Calvert Investments, and other Companies to Speak Out Against Citizens United [Stop Unlimited Corporate Campaign Donations]. (2011, January 31). Retrieved from http://blog.betterworldclub.com/2011/01/stop-unlimited-corporate-campaign_31.html Cathy. (n.d.). Better World Car Club An Eco Friendly Car Club. Retrieved October 5, 2009, from greenecoservices.com website: http://www.greenecoservices.com/better-world-car-club-an-eco-friendly-car-club/ Green Roadside Assistance: Better World Club [Better World Club]. (n.d.). Retrieved June 11, 2010, from EcoBold-YouTube website: http://www.youtube.com/watch?v=X2Vtq5NFEMA Move Over, AAA: The Better World Auto Club Supports Sustainable Travel [Auto Insurance Going Green]. (n.d.). Retrieved December 6, 2010, from justmeans.com website: http://www.justmeans.com/Move-Over-AAA-Better-WorldAuto-Club-Supports-Sustainable-Travel/39468.html NIJHUIS, M. (n.d.). A travel club provides a greener alternative to AAA [ROAD WARRIORS]. Retrieved February 11, 2003, from grist.org website: http://www.grist.org/article/warriors The U.S. Automotive Market and Industry in 2025 [Car Market]. (n.d.). Retrieved 2011, from Center for Automotive Research website: http://www.cargroup.org/pdfs/ami.pdf