Marketing 13th Edition by Gary Armstrong, Philip Kotler

Exercise 2

USAA is a financial services company formed in 1922 by 25 Army officers who came together to insure each other's automobiles because they were deerned too high-risk to insure. USAA now has almost 25,000 employees and more than 9 million member customers. It consistently ranks in the top 10 automobile insurance companies and offers other types of insurance as well as banking, investment, retirement, and financial planning services. USAA practices a niche marketing strategy-it targets only active and former military personnel and their immediate families. Members earn the right to be customers by serving in the military and can pass that on to their spouses and children. The company was originally even more restrictive, targeting only military officers. However, in 1996, eligibility was extended to enlisted personnel and is now extended to anyone who served and was honorably discharged from the military and their immediate family members. The potential market represents all active duty military members, all veterans, and their families. According to the U.S. Department of Defense, as of December 31, 2014, there were 1,361,755 active duty personnel in all armed services. The veteran population totaled 21 million at the end of 2014.
Discuss the factors used to evaluate the usefulness of the military segment. (AACSB: Communication; Reflective Thinking)