Table of Contents
Porters Generic Strategies.
Digital marketing platform..
Selected Value Proportion.
The Oil and Gas Industry of Trinidad and Tobago operates in sells, products, drilling and exploration of variety of products such as bunker fuel, diesel aviation, gasoline and LPG. It is a combined energy based oil production Organization that reports to MEEI (Ministry of Energy and Energy Industries). The organization was incorporated in 1995 to operate and combine the area of marketing, refining and producing petroleum. It produced approx. 175000 barrels of oil per day and has more than 3500 worker (Romero-Márquez and Moreno-Brid 2016). The organization is also involved in Corporate Social responsibility and is committed to sustainable practices, personal accountability and operational excellence throughout its functioning and operations.
The scenario 2 is selected from the 4 scenario available for this assignment which demonstrates the increase in the cost of oil extraction. It considers significant increase in the cost of technology and input for the increase in cost of extraction. The oil and gas industry has set strategies to establish alternative solutions to the impending energy needs and challenges, especially because of the industrialization process requiring sufficient supply of power. There is a general realization of the decreasing nature of oil resources and ever-increasing demand. Today, the world is yet to overcome the complexities geopolitical influencing the production and supply strategies of oil and gas.
The market segmentation for Oil and Gas industry of Trinidad and Tobago as per the scenario should be geographical segmentation. Exploring the change in cost of extraction due to technology, it was found that the organization should segment considering the physical location of their customers. It will be beneficial as geographical segmentation will enable the organization to identify high priority geographical locations (Sirinath 2016). It will also help in increasing the investments and marketing efforts of the organization. Innovation in technology should be taken into consideration to improve its services and energy supply. Focusing on innovation will also reduce the cost of technology to some extent. Relaying on and believing on innovative culture within the organization will help the organization to remain in forefront and will guarantee a better future for the selected segmentation. Moreover, crude oil is one of the largest segment in the world which consist of all most 63 per cent of oil and gas market, whereas the natural gas segment accounts for 37 per cent of the market (Romero-Márquez and Moreno-Brid 2016). Geographical segmentation will help the organization to remain competitive. Customer satisfaction will be more and there will be no such impact of increase in the cost of extraction. Apart from this, the organization is one of the biggest organization in the world. The reputation of the Organization will help it to segment its market efficiently and effectively.
It is one of the important part as this will help the organization to differentiate itself from its competitors. It will leverage the organization’s profitability by differentiating its product and services. It will add value to its supply chain also. The organization has to create unique characteristics of its product and services through innovation. The organization should emphasize on brand image and consistency. Innovation is a key that can help the organization to increase its growth. As per the scenario, it is important for the organization to achieve differentiation. Marketing strategies are needed to be unique and to the point so that the organization can earn more in order to invest in research to improve its product and strategies to deal with various risks and pandemics (Brongers, Weichel, Mohammed and Kissoon 2018). Promotional strategy is to be used especially in this era of high competition. For positioning, the social media networking should be used to carry out promotion. The promotions should be interactive and innovative, drive by technology. Various medium are there which will help the organization to interact its customers like Facebook, Twitter, etc. The organization will require high budget for positioning. Apart from this, building relationship and partnership with corporate advertising organization will also help the organization to position itself in target market. Building a positive brand in the market is also important.
Target market for Oil and Gas industry of Trinidad and Tobago as per the scenario should be those customers which have different needs (Francis, Desai and Balleck 2016). The market having high customer base should be targeted. As the organization deals with variety of products it will be easy for it to target these customers. It will help the organization to increase the number of customers as well as help in improving the relationship with the existing customers. The organization has to approach loyal customers as it always satisfies their target market by launching new products, depending on the market shift. The selected target customers will help in the organization in segmentation too. However, this section of customers will be able to communicate with the organization for their needs and requirements. This will enable the organization to facilitate easier problem solving. Moreover, the organization culture will also play an important role in targeting selected customer section as customer prefer good services (Sirinath 2016). As a result of highly motivated and skills employees, the rate of customer satisfaction will be high.
Every segment promises to be moneymaker but the loyal customers will be more than that. They will help the organization to grow its business and earn higher profits. As per the scenario, the organization has to choose this particular group of customers in order to overcome the loss due to high cost of extraction. The organization should be driven by the motivation to enhance energy efficiency in their operations and to support customers in meeting their needs. The organization is motivated towards leveraging on technology and innovation as their strategy of meeting technically demanding enterprises. The key strategy of organization needs to include and develop technology and to build sound, project and financial management skills (Romero-Márquez and Moreno-Brid 2016). The petroleum market is characterized by market downturn like during the introduction of new products or innovative products that can change the tastes of the consumer.
This matrix will discuss market penetration, market development, product development and diversification of Oil and Gas Industry of Trinidad and Tobago, taking the scenario into the consideration.
Growth of any given industry or sector requires coordination of numerous factors to generate necessary energy for sustainable growth. The ever expanding US and global market have played a significant and motivating role for growth of the oil and gas industry in Canada. Currently, the US is Canada’s largest market for crude oil accounting for more than 95 per cent of its total exports of crude oil (Brongers, Weichel, Mohammed and Kissoon 2018). The consistent growth in the automobile industry in the US has led to incremental demand for oil, and gas products owing to its limited oil and gas resources that remain insufficient to serve its extensive market. However, studies indicate that the future of Canada’s oil and gas market in the US has begun to shrink. The recent completion of shale oil production fields means a lot to the future of the oil market created by Canada. The anticipated increase in US crude oil production shall curtail the future exports from Canada to boost its industry. Thus, the Canadian oil and gas production need to build alternative marketing strategies aimed at sustaining its exports.
Similarly, the industry has continued to refocus on domestic marketing aimed at increasing oil and gas demands within the country. The Canadian government has staged a strategic support for increased growth in production and sale of its domestic crude oil and gas. This has come in the form of new and supportive legislative policies aimed at encouraging foreign investors to invest in Oil sands projects currently under exploration (Francis, Desai and Balleck 2016). The reduction of entry and participation rules has motivated entry of Asian companies to take part in the exploration, production and processing of oil and gas products. Another factor that continues to facilitate continues success of the oil and gas industry is the reduced water requirements because of increased water recycling. In the recent past, Canada has experienced challenges of increased costs of production of crude oil because of insufficient water supplies.
The current water regulation laws established by the Canadian government have spurred increased level of modern technology. Subsequently, increased bitumen recovery because of its production methodology shall account for the industry’s overall growth through increased return on investments. The existing large oil sands have accounted for the increased production and development of oil and gas in Canada. A survey of the Canadian oil industry reveals that about 97 per cent of the country’s recoverable oil reserves lie in oil sands. These significant oil reserves estimated at 176 billion barrels of oil reserves which has provided unlimited supply of crude oil (Brongers, Weichel, Mohammed and Kissoon 2018). Diversifying the market to Canada will be beneficial for the organization. The constant supply and production of oil and gas products has established Canada as one of the leading oil exporters in the world.
The ever-increasing global oil prices has made it possible for Canada to reap lucratively, and develop its oil sands through modern exploration, extraction and processing of crude oil. Today, the world’s oil demand continues to grow at a faster rate because of increased industrial activities and growth of the automobile industry. The debates on introduction and usage of alternative energy aimed at reducing world demand, and conservation of the environment have failed to address the continued increase in demand for oil and its products. The current survey of the oil industry in Canada shows that vast oil reserves consist mainly of oil sands. Industry forecasting indicates that these oil sands shall serve the industry for a considerable length of time. The increased consumption of oil and gas in most of its neighboring countries such as US has provided the impetus for developing oil industry.
This cost leadership strategy can be implemented through effective management of value chain. It will preserve the position of market leader for the organization. Targeting the loyal customer to expand the market share is important as this section of consumers possess great impact on pricing factor (Francis, Desai and Balleck 2016). To cater the needs of this consumer segment, cost leadership is the best strategy. However, the organization has high brand image and reputation; cost leadership will provide a strong competitive advantage basis and high sales growth. Apart from this, maximizing supply chain efficiency, and lowering production cost will result in better revenue for the organization.
Differentiation strategy can help the organization to stand out and differ its products and services from its competitors. By embedding the innovation and address the consumers’ needs and demands the organization can increase its brand image and base of its customers. Improvement in value chain proportion will help the organization to expand the scope of opportunities within the industry. To build a strong and loyal customer base, cost leadership and differentiation strategy are needed to be combined. However, investment in promotional and marketing strategy can help the organization to stand out as a unique brand among its competitors (Altstiel, Grow and Jennings 2018).
The Oil and Gas Industry of Trinidad and Tobago adopt both offering the best value and low cost as a focus strategy. By serving the requirements of a niche market segment at the lowest price, the organization can adopt low-cost focus strategy. Whereas by emphasizing on needs and demands of the customers, best value focus strategy can be adopted (Brongers, Weichel, Mohammed and Kissoon 2018). Apart from this, the Oil and Gas Industry of Trinidad and Tobago can revises its branding strategies and brings continuous changes in the product designing and packaging, by focusing on product attributes. It will help in satisfying the psychological expectations of customers and will lead the organization to maximize the value for money for customers.
The two value proportion chosen are digital marketing platforms and technological innovations. This value proportion is discussed below:
Large number of companies is investing in business to business digital marketing platforms. Digital platform is one of the largest platforms which many of the world’s oil and gas industry are now taking into consideration for improved value proportion. In the world, around 74 per cent of business to business buyer prefers to buy online (Key and Czaplewski 2017). For this, they uses self-service websites. When it comes to better decision making, improved efficiency, streamlining of business process and cost reduction, digital platform plays an important role. For long term growth and gaining new customer, it is one of the best platform to invest. From decade, many of the oil and gas industry are using same sale and marketing tactics, which is of no use. Customers are attracted towards innovative approaches and unique styles (Francis, Desai and Balleck 2016). Digital platform involves focusing on gathering leads for sales team resulting in long sales cycles for business to business oil and gas industry. Investing in digital platform brings manufacturers, service providers and buyers together under single digital tent. In the oil and gas directory, providers and manufacturers can create a company’s dedicated page in which they can demonstrate their reputation, brand image, products and services (Chaffey 2019). It will be easy for consumers as they can visit this page any time as well as they can get a comprehensive overview of different companies. Marking will be easier and customer will be able to choose the right things for them.
Technology like smart data, artificial intelligence and IoT (Internet of Things) are in the current trend in every sector. It is very important for oil and gas industry of Trinidad and Tobago to improve its operational strategies (Sirinath 2016). To optimize maintenance, equipment vendors are standing in the forefront to use this technology by implanting artificial intelligence in order to improve supply chain and support service to customers. To reduce costs and boost the operational efficiency, it is important for the company that the data is gathered from installations. Number of technology is contributing to this development. Some 3D printers, robotic drilling, remote sensors and many more. Iot is projected to grow 35 billion by 2021 as it produces massive amount of data daily (Chaffey 2019). Data are easily handled and managed if they are generated by machine. Data is easily stored and can be reviewed at the time of requirement. Companies are enjoying a higher value proposition to potential customers by taking advantage of real-time data analytics and IoT. IoT data system differentiates the company from competition through harnessing this information by investing it in enterprises. As a result of this technology, customer experience will be improved resulting in boost in customer satisfaction.
Value proportion selected from the above two is digital marketing platform. Digital technology benefits marketing by making knowledge more accessible. With the right information, organizations are able to target their customers appropriately, and design products that they demand. The success of digital marketing has particularly been felt in multinational corporations (Altstiel, Grow and Jennings 2018). Traditionally, these organizations success depended on the strategy that they got across oceans and establish plants in countries where resources are available and with equal missionary zeal establish depots and network in countries where the demand exists. These global operations earlier had some in-built handicaps due to the unreliable, difficult, distorting and slow communication. With the rise of digital technology, and particularly the internet, the MNC operations have benefited tremendously. Digital marketing is becoming a major strategy in these companies. One of the key ways in which MNCs are using digital marketing is with web sites (Key and Czaplewski 2017).
Web sites allow consumers to see, consult, and obtain product-related information at anytime, anywhere. Such communications are regarded as a new form of global marketing communications, offering opportunities to strengthen effective relation; marketing in international markets. The benefits of digital marketing of MNCs do not stop at being able to create a web site; it also includes other interactive means such as the use of social networks. Social networks such as Facebook and Twitter have become major marketing tools in the new media era. They help in boosting a brand’s image and reputation. Social networks ensure that the company sends personalized messages to its consumers, who then are able to make decisions among the varied options they have at their disposal.
Digital revolution planning in secure environments calls for carefully developed strategy and optimization, planning in the global digital environment requires flexibility and experimentation. The new realities of the business environment have led marketers to suggest new rules for the new economy (Chaffey 2019). These new rules include targeting segments of one and creation of virtual communities; designing for customer-led positioning; redesigning advertising as interactive and integrated marketing, communication, education, and entertainment; and use of adaptive experimentation. Advances in technology, and in particular the rise of digital marketing, are challenging all aspects of traditional marketing research. Traditional data collection is augmented with internet surveys and automatic capturing of internet-behavioral data. The results are tremendous amounts of data, reduced cost of obtaining some of the data, and much greater speed in getting the required information.
It is clear that marketing strategy has to employ a complex approach. Conventional tools as ads, events, the use of such media as TV, journals and magazines are all important. At the same time, to remain competitive, the company also has to utilize such social media as social networks (for example, Facebook, Twitter, Instagram). In a modern enterprise, the objective of the marketing department is not so much to find customers for goods and services produced by the firm as it is to find ways in which the resources of the firm can be used to meet the needs of the potential consumers and maximize profit (Altstiel, Grow and Jennings 2018). Thus the marketing of existing products of the firm should be innovative and new products should be added to it. Therefore, the marketing department or management plays a key role in determining the strategy of the firm in its quest to maximize profit. On the marketing side, economic variables along with personal tastes underlie the demand or sales forecast for a commodity. These are also the factors that determine price elasticity, income elasticity and cross elasticity of demand. In preparing a marketing strategy, it is important to consider structure of the market.
Remarkably, researchers note that traditional marketing are becoming less effective as social media influence is increasing. Nonetheless, this does not mean these strategies should not be used. It is also noteworthy that while the traditional marketing strategies are well-established, the company may need to make the major focus on social media. From a business point of view advertising is an investment due to the long-term impact it has on the organization through the development and strengthening of a brand (Chaffey 2019). Ideally, this will lead to the creation of brand loyalty with consumers, resulting in continued sales for an extended period of time. Not all companies advertise in the same manner. The creation of a unique promotional mix is an essential tool to reach the target market and fulfill the organization’s overall goals.
These mixes can include but are not limited to the utilization of public relations, personal selling, sales promotion, and social media in tandem with an advertising campaign. Company messages and goals need to be planned carefully for the ads and the support from multiple media outlets will likely generate greater company exposure. The ultimate goal of any advertising campaign is to generate a buying response. The potential consumer should become interested in the product and understand the benefit of the product or service. The creative aspect of a clever and intriguing ad should help elicit interest (Key and Czaplewski 2017). However, while advertising has the potential to be extremely beneficial for a business, a poorly conceived or executed advertising campaign has the capacity to cause irreparable harm. Advertising is an investment and the time and money invested should always add value to the company’s bottom line. Through its use companies seek greater foot traffic and increased sales volume, advertising can help make it happen.
Designing an effective CRM system will have to be done considering customers in mind. This strategy is crucial because customer feedback will be important in developing future product improvement strategies. The provision of customer service through the CRM system will also be done with a keen emphasis on the medium for service offing (Altstiel, Grow and Jennings 2018). Customer development will be achieved if the CRM is designed to have a feedback mechanism where customers can communicate with the company and inform them of any areas where customer development can be improved. The internet can be an effective tool in ensuring the goals of the above strategies are realized
As per the scenario, it is also important for the Organization to achieve differentiation. Marketing strategies are needed to be unique and to the point so that the organization can earn more in order to invest in research to improve its product and strategies to deal with various risks and pandemics. Promotional strategy is to be used especially in this era of high competition. The Oil and Gas Industry of Trinidad and Tobago should make use of the digital technology at their disposal such as web sites, and social networks to reach their consumers who are located in different parts of the globe. By so doing, multinational organizations will ensure that they maintain a competitive edge in the dynamic business world. For digital marketing, companies need to make their websites as simple as possible (Chaffey 2019). Many potential e-customers prefer simple sites to sophisticated ones. The customers tend to distrust the most complicated sites and they even shy away from them. A site that is simply designed contains sections that are clear and easily understandable, is what most prospective customers prefer.
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