Strategic Marketing for Oil and Gas Industries

Strategic Marketing for Oil and Gas Industries

Marketing strategies and tactics are concerned with taking decisions on a number of variables to influence mutually-satisfying exchange transactions and relationships. Typically, marketers have a number of tools they can use, these include mega marketing (Kotler,1996)   and   the   so-called   4Ps   of    arketing(McCarthy, 1995), among others. Marketing seems easy to describe, but extremely difficult to practice (Kotler and Connor, 1997). Organizational managers in many firms have applied the so-called marketing concept, which may be simple or complex. The marketing concept and variants like the total quality management concept for example, are essentially concerned with satisfying clients’ needs and wants beneficially. Developing and implementing efficient and effective marketing strategies which incorporate relevant dimensions of the marketing concept, involve the organic tasks of selecting a target market (customers/clients) in which to operate and developing an efficient and effective marketing ingredient combination. Marketing thought, with its practice, has been moving speedily into the service industry (Kotler and Connor, 1997). Literature, partly, centres on the discussion of whether physical product marketing is similar to, or different from, the marketing of service and concludes that the differences between physical product and service might be a matter of emphasis rather than of nature or kind (Creveling, 1995). Marketing is one of the salient and important organic functions which help to service organizations to meet their business challenges and achieve set goals and objectives (Kotler and Connor, 1997). The word “service” is used to describe an organization or industry that “does something” for someone, and does not “make something” for someone (Silvestro and Johnston, 1990). “Service” is used by companies or firms that meet the needs and wants of society, such organizations are essentially bureaucratic   (Johns, 1990). “Service” may also be described as intangible, its outcome being perceived as an activity rather than as a tangible offering. The question of the distinction between services and tangible products is based on the proportion of service components that a particular offering contains (Johns, 1990).

A service may therefore be seen as an activity or benefit which can be offered to an organization or individual by another organization or individual and which is essentially intangible. It is a separately dentifiable but intangible offer which produces want-satisfaction to the client, and which may or may not be necessarily tied to the sale of a physical product or another service (Osuagwu, 1999). Services include a wide range of activities and form some of the growing sectors of the economies of developed and eveloping countries. Services include professional services (legal, accounting, medical, management consulting, etc), general services (insurance, postal, telephone, transportation, internet, tourism, etc), maintenance and repair services, and services from marketing researchers and product manufacturers, among others. Oil and gas service is not a tangible thing like food, clothing and cars. The main factor that affects a person’s demand for oil and gas service is that person’s attitude towards risks. The peculiarities of oil and gas services may create marketing programmes that are different from those found in the marketing of tangible products. The peculiarities may, also, require unique marketing approaches and strategies. However, marketing concepts, principles and strategies are of relevance in the marketing of oil and gas services. Sound and robust marketing strategies are important to the survival and growth of any business, including oil and gas business, considering the increasingly subtle, unstable and seemingly hostile business environments in which contemporary business organizations operate (McDonald, 2004  and Creveling, 2005). Therefore, in order to formulate and implement efficient and effective marketing strategies, business organizations should have a thorough and continuous understanding of the relevant environment that impacts on their marketing strategies. 

According to (Schnars, 1991), marketing strategy has been a salient focus of academic inquiry since the 1980s. There are numerous   definitions of marketing strategy in the literature and such definitions reflect different perspectives ( Li et al.,  2000). However, the consensus is that marketing strategy provides the avenue for utilizing the resources of an organization in order to achieve its set goals and objectives. Generally, marketing strategy deals with the adapting of marketing mix-elements to environmental forces. It evolves from  the  interplay of the marketing mix elements and the environmental factors  (Li et al.,  2000). Therefore, the function of marketing strategy is to determine the nature, strength, direction, and interaction between the marketing mix- elements and the environmental factors in a particular situation (Jain and Punj 1997). According to (McDonald, 1992), the aim of the development of an organization’s marketing strategy is to establish, build, defend and maintain its competitive advantage. Managerial judgment is important in coping with environmental ambiguity and uncertainty in strategic marketing (Brownie and Spender, 1995). Marketing strategy development has the following peculiarities:

1) It  requires managerial experience, intuition  and

2) It carries a high level of uncertainty and ambiguity .

3) It is business sphere knowledge- intensive

4) It entails a broad spectrum of strategic information

5) It is a  process which usually involves subtle decision making by organizational managers based on exhaustive examination of   relevant environments and a synthesis of  essential and useful pieces of information

6) It is specifically concerned with devising an approach by which an organization can effectively differentiate itself from other competitors by emphasizing and capitalizing on its unique strengths in order to offer better customer/client value over a long period of time. 

However, it is difficult for an organization to achieve an efficient and effective marketing strategy.  As a result of the ambiguity and instability of environmental factors, strategic marketing may be a difficult task for organizational strategists. Many factors prevent organizational managers from designing and implementing efficient and effective marketing strategies. The fact is that environmental factors generally interact in an astonishing manner and affect the efficiency and effectiveness of managers in strategic marketing issues. Against this background, the present research attempts to assess the marketing strategies of Nigerian oil and gas marketing companies, the impacts of environmental factors on such strategies and the effectiveness of the marketing strategies. The growth of oil and gas marketing companies and business in Nigeria has been phenomenal, with the attendant competition and other factors. It seems that this growth in the number of product marketing companies in Nigeria has not been matched with an equal growth in the awareness of oil and gas services to clients and other interested publics. In order to be efficient and effective, Nigerian oil and gas marketing companies have to devise good marketing strategies that will enable them to reach out to a wider spectrum of the society for patronage. The interaction of these marketing strategies and the relevant environmental factors determines the performance of product marketing companies in Nigeria.  On the other hand, oil products in the Nigerian business environment include PMS, gasoline, kerosene, diesel, lubricant, among others.