Marketing assignment essay help online: 4P’s of marketing miX – Petroleum retail outlets-Singapore
Introduction:
The 4Ps of marketing mix are product, price, place and promotion. These 4Ps determine the marketing strategy of a company. The marketing strategy is oriented around these elements. Together they represent the sellers’ view of the tools available for influencing the buyers. The marketing plan elaborates the marketing objectives of the organization and how the 4Ps will be set to achieve the objectives of the organization (Kevin Kotler, 2000).
The utility of these marketing mix elements lies in that they give a very clear idea about the entire marketing process to the seller. Whatever is the nature of industry or sector of the economy, the relevancy of the four marketing mix elements cannot be understated (Culliton, James W, 1948).
The petrol retail outlets in Singapore devise their marketing strategy around the four elements of marketing mix. The petrol retailing sector in Singapore is a highly competitive one. Majority of the retail outlets are owned and managed by the four leading companies: Exxon Mobil, Shell, BP and Caltex. The retail outlets of these companies account for over 95 % of petroleum products sold. The importance of marketing and marketing mix increases in such a scenario.
Marketing Mix of the petroleum retail outlets in Singapore:
Product: The product element of the marketing mix covers factors like nature of the product, product quality, product variety, product features, brand name, packaging, services, warranties and returns (Kevin Kotler, 2000).
The key petroleum products that are sold in retail outlets are petrol, unleaded petrol, diesel, ultra-low sulphur diesel, CNG and engine oils. There is little or no product differentiation between the products sold at various retail outlets. Some differentiation has been induced in the petroleum products by creating categories like premium petrol, superior petrol and good quality petrol. Retail companies have created brands around these slight differences and are marketing them to the customers.
There is a strong service component to the product offering of a petroleum retail outlet. In the absence of significant differentiation in the quality of products sold, service is a significant product differentiator. Retailers provide additional services like manual car wash and other automotive services to customers. The margins on most petroleum products for retailers are quite low. So offering additional services to customers makes good business sense as retailers charge higher margins on many of these services. Some of the services are offered without any charge in order to increase customer satisfaction.
Customers do not show any significant preference for brands because petroleum products are considered to be commodities by majority of customers. The infrastructure of retail outlets is designed attractively so customers are attracted at a subliminal level. Many outlets have facilities like ATM machines installed at the stations for the convenience of customers. Besides this many petrol retail stations now have convenience or grocery stores. For instance almost every Esso service station of Exxon now has a FairPrice Xpress or Cheers store.
Petrol retailers are trying hard to diversify their product offerings so as to improve revenues and margins. Lack of significant product differentiation remains a key problem for the petroleum retailers in Singapore.
Price: The price element of marketing mix involves decisions on the pricing strategy. What will be the price at which products or services be sold? Will discounts be given on the listed prices? Will the organization be a price leader or a price taker? Will it charge a premium price for its products or services? What will be the terms of credit offered to customers? What will be the payment period? Many other such issues are addressed while devising the pricing strategy (Tellis, G. J.,1998).
Retail petrol outlets in Singapore need to match their prices with market prices. They cannot charge higher prices than competitors because of the absence of any significant product differentiation. Premium prices are charged by retailers only for premium segment products like high performance petrol. For standard petroleum products the same price is charged by all the retailers.
Petroleum retail outlets charge very low margins on the petroleum products. Over the years petroleum retailing has become a high volume-low margin business. Competition has increased the pressure on margins further.
Because of the nature of product most of the transactions at petroleum retail outlets in Singapore are settled in cash. Credit is offered only to few large institutional customers. The retailers have long term pricing contracts with these institutional customers. These pricing contracts lay down the credit terms and payment period.
Discounts are offered by certain retailers to customers if they are part of particular credit card program or rewards scheme. For instance Exxon Mobil runs an exclusive loyalty program, Smiles Driver rewards, for customers at its Esso service stations. Customers, as part of this loyalty program, get points on their every purchase at an Esso service station. When they accumulate a certain number of points they qualify for getting a specific discount.
Promotions:
Sales promotion, advertising, sales force strategy, public relations strategy, direct marketing or indirect marketing strategies are part of the promotion component of the marketing mix. Promotional campaigns are done with the objective of retaining or increasing the marketing share of the organization. Promotional campaigns are also carried for penetrating new markets (Clarke, D. G,1976).
Petroleum retail outlets in Singapore rely on the promotional campaigns of their parent companies. ExxonMobil, Shell, BP and Caltex operate the large majority of petroleum retail outlets in Singapore.
Promotion’s significance in the petroleum retail sector is high because of absence of product differentiation. Retailers try to win loyalties of customers by running effective promotional campaigns. A few years ago ExxonMobil ran the, “Put a tiger in your tank,” promotional campaign. This promotional campaign was highly successful. Exxon used the same promotional campaign with minor variations of language and color in all the countries including Singapore. Other petroleum retailers too run similar national level promotional campaigns.
Loyalty programs are an important part of the promotional strategy of petroleum retail outlets in Singapore. Retailers run loyalty programs like Smiles Driver rewards of Exxon to gain customer loyalty. These programs usually offer points to customers on their every purchase. Customers are rewarded when they gain a certain number of points.
Retail outlets also have tie-up with banks. Credit cards offered by banks usually make customers eligible for discounts if they buy petroleum product from the outlet of the specified company. Credit card tie-ups have been effective in making customers purchase repeatedly from the outlets of a particular retailer. Gaining customer loyalty is the biggest challenge for promotional campaigns in petroleum retail industry. Retail outlets carry a lot of outdoor advertising for gaining drivers’ attention and loyalty.
Place:
The place aspect of marketing mix focuses on distribution channels, distribution coverage, locations of the stores or outlets and logistics issues. A flawed Place strategy can frustrate the whole marketing campaign (Tellis, G. J.,1986).
A petroleum retail outlet in Singapore can get the biggest differentiation advantage from its location or place. The place aspect is most important for a petroleum retailer. It can give the retailer the most sustainable advantage over its competitors. The ideal location for a petroleum retail outlet is one which enjoys good traffic of motor vehicles and has few petroleum outlets in the vicinity. Nowadays it is extremely difficult to identify such a location in Singapore. There are more than 250 retail outlets in Singapore. High market saturation is one of the challenges of operating in this sector.
A retail outlet should be located at a place which is convenient to be served from the wholesale petroleum depots. The costs of logistics increase substantially for companies whose outlets are located far from the depots of the retailing companies. The retailing companies follow the hub-and-spoke model in distribution. In this model a depot serves all the retail outlets located in a particular region.
Coverage of distribution is important. A company having a more extensive coverage of retail outlets enjoys significant advantage over customers. Distribution is very important aspect of the marketing strategy of a petroleum retailer. Right distribution can result in a substantial competitive advantage. The macro economic scenario affects the distribution decision of retailers. For instance if retailers expect that consumption of petroleum products will rise in the medium term then they are likely to pursue an aggressive distribution and expansion strategy.
Conclusion:
The marketing strategy of petroleum retailers in Singapore is oriented around the four elements of marketing mix. Product, Price, Promotion and Place are as important for a petroleum retailer as for any other company.
The product quality should not be inferior to that sold by competing retail outlets. The price should be almost same as competitors. Promotions should succeed in gaining customers’ attention and loyalty. And place or location should be such where vehicle traffic is good and competitors in vicinity are few. Only then can a retailer survive and prosper in the highly competitive and saturated petroleum retail sector in Singapore.
No wonder then that only the very big players have managed to survive. And they have managed so by leveraging the 4Ps of marketing mix effectively. There is no need for repeating that the four elements are of critical importance here.
If you want Marketing Assignment Help study samples to help you write professional custom essay’s and essay writing help.
Receive assured help from our talented and expert writers! Did you buy assignment and assignment writing services from our experts in a very affordable price.
To get more information, please contact us or visit www.myassignmenthelp.Com
