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Key Topics
- Requirement
- Solution
- Executive Summary
- Overview of the Company
- Marketing Concepts of the Company
- 1.Differentiation
- 2.Competitive Advantage
- 3.Commoditization and Ways to Overcome
- 4.Segmentation
- 5.Marketing Mix
- 6.Solution Approach
- 7. Sustainability
- Marketing Strategies with the Value Chain
- Conclusion
- BIBLOGRAPGY
Requirement
MARKETING MANAGEMENT
Solution
Executive Summary
The major oil and gas company which has been taken in order to describe the marketing strategies and the concept is Statoil. This paper will help in understanding the activities of marketing of Statoil. The company is already well-established, and this is the best company as an example which will help in understanding the marketing strategies and concepts in the sector of oil and gas as it is having a sustainable competitive advantage and power to retain the clients. Further, the marketing concepts of the Statoil is given in order to understand the differentiation of the products and brand, its competitive advantage, the commoditization and the ways to cope up with it. Further, the segmentation is given along with the marketing mix and the approach to the solution. And the how the company has managed to attain the sustainable competitive position. The marketing strategies of the company along with the value chain are also given below in this paper.
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Overview of the Company
Statoil is one of the multination company of oil and gas which is situated in Norway. Headquarter of the company is in Stavanger, Norway. The company is integrated into petroleum, and it operates in around 36 countries. Statoil has major activities in Norway. The company is one of the largest operators on the continental shelf of Norwegian and further, Statoil has a license in various fields of gas and oil. The facilities of onshore are active in various areas like reception of crude oil, treatment of gas, production of methanol and refinement. The company refines oil in a various number of plants which are situated outside and inside Norway. The increasing demand and the change in climate for clean energy are opening up new opportunities for business. The company is in a great position to assimilate the opportunities by using the long-term capabilities from the industry of oil and gas. Further, to address the concerns and questions of the owners, Statoil has developed the website of owner relations (Statoil.com, 2016). The website also has an option of electronic payment. The board of directors of the company has the complete responsibility to manage the group and supervise the day to day activities and the operations of the group.
Marketing Concepts of the Company
Further the concepts of the marketing of Statoil are given in order to understand the functions and operations of the company is the industry of oil and gas.
1.Differentiation
The differentiation of product and brand is the marketing process of strategy, and it is an important aspect in order to build the competitive advantage for the company. The industry of oil and gas is being dominated by the competition of various companies of oil. It is very important for the companies to make the strategies while deciding the aspects of differentiation for the products and brand (Foxall, G., 2014). The product and brand differentiation offers companies in the oil and gas industry with great opportunities in order to make them competitive. Further, Statoil is operating in the oil and gas industry which is being categorized by the tough competition and fewer possibilities for the differentiation of products and brand. The capability of the company is to optimize the processes internally and gain the sustainability. Statoil produces and sells a broad range of the products which are created from the renewable and fossil sources. The motive of the company is to create the products of high quality which meet the requirement of the customers, and as an outcome the impact of environment and the consumption of resource is low. Furthermore, the industry of oil and gas is facing the problem of emissions of greenhouse gas in order to reduce them. Statoil has differentiated the product by keeping the problem of industry in mind. The company is imposing the requirements on the suppliers for the supply of sustainable biofuel, and the suppliers are expected to follow the rules of the nation, management of the soil, depletion, and contamination of sources of water. The suppliers are expected to respect the rights of the land in order to prevent the displacement of the production. At the refinery of Statoil, the supply of energy is central to the collaboration of power and heat. Statoil joined the forces along with Norwegian in order to create and test the various kinds of technology to capture the carbon dioxide from the station of power and gasses. Therefore, these initiatives and actions of Statoil helped it in differentiating the product and brand from the competitors who helped in making a great business value.
2.Competitive Advantage
The competitive advantage is a benefit which is achieved over the competitors by providing greater value to the customers may be at the low prices or sometimes offering them some extra services and benefits if the prices are high to the customers (Hawken et al., 2013). There are various challenges which are faced in the industry of oil and gas, from the reduced access to the reserves of sovereign to the fields of declining, challenges of innovation, maximized regulation and the policies of energy. These challenges are a threat to the structure of oil and gas industry. Further, Statoil has overcome all these challenges by making the strategies of management of portfolio, efficiency of operations, management of finances, and the sustainability as these are the main strategies of operations of Statoil. The company, Statoil has derived the growth, profitability, and the return of shareholders relied on the execution of strategies. Further, sustainability is the imperative of business, and it is no more a factor of differentiation, and it is also not embodied with the main strategies. The other companies of the oil and gas industry are facing challenges in order to embody sustainability, technology management and innovation strategies whereas, Statoil has transformed these challenges into a competitive advantage because of the strategies of operations, portfolio, etc. Further, the company came up with the management of total life cycle in order to cope up with the challenges. The management of total life cycle is being used by the Statoil to get easy access to create and generate the fields of legacy and reserves, efficiencies, expectations of hosts and cost. This helps Statoil to continue the process of innovation, sustainability by focusing on the energy of long term. And the requirements of host and management of finances with the allocation of capital in order to create the synergies and scale in that region. The strategy of management of technology helps Statoil to tap the reserves in the arctic, deep water, hydrocarbons, etc. Further, this helps the company to use the strategy of research and development, fronts of innovation, and maximizes the performance of operations. Therefore, Statoil has a great competitive advantage in order to face the challenges of the industry and also act as a tough competition for the competitors (Yusuf et al., 2014).
3.Commoditization and Ways to Overcome
Commoditization is defined as a procedure in which the services and goods become indistinguishable from the various offerings of the completion. Generally, the products which are commoditized within the particular categories and are very similar to each other and pricing is the only feature which is distinguishable. Commoditization helps in managing the activities of the business and the management of supply chain (Hollensen, S., 2015). Further, commoditization is being defined as the modification of the market to the products which are not differentiated because of the increase in competition and it results to the low prices. For Statoil, a product is a commodity when the clients get no or less difference of value among the brands and other products. And the price acts the feature of differentiation in the industry of oil and gas. Most of the time, the companies sell the same products like the Statoil and the only feature through which the customers differentiate them is price, or the companies provide goods and services at a low price in order to obtain a sustainable competitive advantage and maximizing the profitability. Furthermore, there are various methods in order to cope up with the commoditization and improve the business value which the Statoil is doing. The company has become the supplier of low cost, and it generates profits as compared to the competition in order to remain best in the market of the commodity. And the other way is to minimize the prices of the products. The other way to cope up with commoditization, Statoil is doing innovative things to the products and services which are being offered to the customers as the company added the new segment to the existing one and additional services to the customers. And the actual differentiation for Statoil is the differentiation of value. But this strategy doesn't exist for a longer period of time, and the company has to make changes after a short period of time in order to create differentiation of the products from the goods and services which are being provided by the competitors. The company prefers segmentation the most as the producers of oil and gas gets more advantage and maximizes profitability during the situation of over-supply.
4.Segmentation
Segmentation is the procedure of subdividing and defining the large market of homogenous into the segments which are clearly identified, and they have similar attributes of wants and needs. The segmentation helps in developing the marketing mix that appropriately matches to the customer’s expectations in that particular segment which is being targeted. Statoil’s strategy for market segmentation depends on the demography, behavior, difference in geography and psychographics of the country in which the country operates or want to operate. Statoil has four segments which are being managed and operated (Kotler et al., 2015). The first segment is the operating of production and development; they are organized depending on the model of the region along with the clusters of geography which are mainly responsible for the development of the portfolios of oil and gas within their particular areas of geography. Another segment of MPR is basically responsible for the trading and marketing of the oil and the commodities of gas (liquids of gas, crude, natural and liquefied gas). The rights of emission and electricity, transportation, manufacturing and processing of these commodities, refinery’s operations, terminals, plants of the power and processing, parks of the wind and various other activities in the energy of renewable. The another segment is FR reporting of the profitability is being given in the form of revenue and third party income (Wilson, R.M., and Gilligan, C., 2012). The segment of FR marketed the fuel and various other products which are related to the retail customers. The last segment is the another reporting which contains the activities in the development of business and global strategy, technology, drilling and projects, and the services and the staff of corporate. Further, the reports of the Statoil shows the activities and operations of the business through the segment of reporting that corresponds to the segment of operating, except DPNA and DPI as they are conglomerated into the single segment of reporting, production international and development. This conglomeration has the basis of the same characteristics of the economy, the product's nature, processes of production and services. Therefore, Statoil has a great classification of segmentation which helps in achieving sustainable competitive advantage and also helps in maximizing the profitability by creating an impactful brand image.
5.Marketing Mix
The marketing mix is referred to the set of tactics or actions which the company uses in order to promote its product or brand in the market. There are 4Ps in the marketing mix which are explained below (Pels, J., and Saren, M., 2013):
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Price- The strategy of Statoil is to strengthen the position and become the only leader of oil and gas across the globe. The policies of the company focus on various services which it offers for better returns the cash's free flow. The company aims to cut down the cost of the products but not on the expenses of the base of customers. The company has divided their products as high quality, superior and premium petrol, etc. and the prices of the products depend on the sub-classification of products.
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Product- Statoil almost contains every area of oil and gas industry which includes generation of power, petrochemicals, distribution, marketing, exploration, refining, and production. The company is mainly occupied with the operations of upstream and downstream. Further, the company also includes the activities such as renewable energy with respect to wind and biofuels and the projects of hydrogen.
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Place- Statoil has its network and operations in around 36 countries. The company has the production of 4.1 billion of barrels of oil per day. The company has the great value because of its productive and effective policy of distribution, and it has a numerous number of service stations across the world. The outlets of petrol are very competitive, and the Statoil has its personal outlet and it also sell products in those outlets and the company has the agreement with it.
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Promotion- Statoil participates in the various matters which are related to the safety, environment and social responsibility. The company wants to project as the best brand of oil and gas industry and further the company uses positive marketing in order to promote the goods and services to achieve the sustainable competitive advantage.
6.Solution Approach
The company is said to have the best solution approach when it focuses on the satisfiability and the optimization. These two domains are very important for every kind of company when the strategies are being planned and implemented. There are various solutions to solve the problem, but the only difference is cost. As each solution has the different price for the implementation. Statoil uses the best solution approach for its operations and activities in order to generate more revenues and retain the existing customers. The company makes the plan of a solution by keeping the domains in mind and this analyze the quality and cost of the plan in order to implement it effectively to give productive results. Further, the company again writes the solution plan after making changes and improvising it in order to implement it effectively which further helps in generating more revenues. Moreover, the Statoil uses the industrial internet as it is an application which is connected to the machines to achieve a value as it generates offering's array for the customers. This helps the company to have the ramifications in the industry of oil and gas. As the prices of the oil are depressed, and the technology’s cost is low, the return on investment for the technology of digitalization and analytics is fascinating. The company adopted this technology within the value chain in order to maximize profitability and gaining business value.
7. Sustainability
Marketing sustainability is a key marketing practice which is being predicted on the commitment to avoid the degradation and depletion of the environment. Further, Statoil received the following benefits from this practice (Melikoglu, M., 2014):
Reducing the level of waste associated with the marketing.
Employing partnership and network opportunities that minimize energy consumption through cross-promotional or shared marketing activities.
Protecting the merchandise brand by measuring different needs based on and arising from expectations of longevity in a market.
With the help of marketing sustainability practices, Statoil has significantly reduced its burden on the capital of ecological and urban environmental systems while minimizing the demand and waste exerted on such environments. The final outcome of reduced demand and burden is the sustainability of the organization for a long time without degradation and depletion of available resources. This improved the relationship of Statoil with its customers which ultimately helped in gaining competitive advantage in the existing market. Further, the transparency of the company shows the responsibility for its operations and actions. The company has the capability to transform its weaknesses into strengths. The company takes the opinion from the clients through the website in order to make them engaged in the operations and the activities of the company, and this helps the Statoil to improve the functioning and try much harder to satisfy the needs of the customers according to their expectations. The company uses advanced technology with the minimum cost. Therefore, this helps the Statoil to achieve the sustainability for a longer period of time in the industry of oil and gas.
Marketing Strategies with the Value Chain
Implementation of marketing strategies is highly dependent on the efficiency of the link established between different activities of a business organization. Effective implementation requires the Statoil to deliver value fulfillment to its existing customers. The generic value chain is proven as an important marketing tool that helps the Statoil in isolating its value-creating activities within a marketing strategy, then link them, track them and map them with time (Peñaloza et al., 2013). The following are the important marketing strategies with the value chain that enables the Statoil in delivering greater value to its customers:
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Market Characteristics: It requires the understanding of different motives and needs that exist within the potential and actual customer base, and then targeting the different benefits of product accordingly. All necessary information required to do this well can collect through conducting market analysis.
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Distribution channels: A distribution channel is considered the primary and most required path from the provider to the customer. There can be different types of distribution channels. Selection of distribution channel is highly dependent on the characteristic of products. Every dissimilar pathway from the provider to the customer represents the presence of a unique and different channel.
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Communication: These are the activities associated with conveying information, creating dialogue, and managing expectations and understanding. It comes with external and internal responsibilities such as the internal know-how for efficiently handling customer care, versus the external responsibility of sharing the benefits of product over suitable channels or media.
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Operations and Transactions: These are the activities that support different business aspects of the marketing function. These measured by the cost, efficiency, and productivity. It includes the internal design, inputs, and core competencies that the Statoil require to carry out its marketing mission from a business perspective. The most important design aspect of an organization is customer interface for completing or initiating the business transaction.
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Service/Product Attributes: These are the characteristics required by Statoil to uniquely meet demand or deliver optimum value.
Conclusion
This paper helps in understanding the important concepts and strategies of marketing with the example of a company in the oil and gas industry. The paper helps in understanding the company Statoil, Norway and how the company managed to achieve the sustainable competitive advantage. It helps in understanding that how the company did the product and brand differentiation, the competitive advantage of the company, commoditization for the company and the measures to cope up with it. Further, the segmentation and marketing mix of the company is given in order to understand the 4Ps of the marketing, the solution approach, and the sustainability is also given. And the marketing strategy along with the value chain is given for the better understanding of the concepts of marketing.
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Place Your OrderBIBLOGRAPGY
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Foxall, G., 2014. Strategic Marketing Management (RLE Marketing) (Vol. 3). Routledge.
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Hawken, P., Lovins, A.B. and Lovins, L.H., 2013. Natural capitalism: The next industrial revolution. Routledge.
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Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.
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Kotler, P., Keller, K.L., Manceau, D. and Hémonnet-Goujot, A., 2015. Marketing management (Vol. 14). Englewood Cliffs, NJ: Prentice Hall.
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Melikoglu, M., 2014. Shale gas: analysis of its role in the global energy market. Renewable and Sustainable Energy Reviews, 37, pp.460-468.
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Pels, J. and Saren, M., 2013. The 4Ps of Relational Marketing, Perspectives, Perceptions. The Future of Relationship Marketing, p.59.
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Peñaloza, L., Toulouse, N. and Visconti, L.M. eds., 2013. Marketing management: A cultural perspective. Routledge.
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Statoil.com. (2016). Statoil – a leading energy company in oil and gas production. [online] Available at: http://www.statoil.com/ [Accessed 16 Nov. 2016].
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Wilson, R.M., and Gilligan, C., 2012. Strategic marketing management. Routledge.
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Yusuf, Y.Y., Gunasekaran, A., Musa, A., Dauda, M., El-Berishy, N.M. and Cang, S., 2014. A relational study of supply chain agility, competitiveness and business performance in the oil and gas industry. International Journal of Production Economics, 147, pp.531-543.
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