Strategic Marketing Management (Essay Sample)

Strategic Marketing Management
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Competitively dominant and customer-centered marketing strategies are the core for the success of any business. It is through the exploration of the main concepts and tools for contemporary marketing management that marketing becomes successful. Market segmentation, product positioning, distribution channels, and communication equip a business in having a customer-centered marketing approach (Alex 2015). In a world of internet and connected devices, marketers have unlimited access to customer’s data. Having access to information on customers from a variety of sources brings about the opportunity to break past the norms and bring all the necessary elements required by customers.
Globalization has given marketers an opportunity to create personalized relationships with customers. Its’ no longer about the traditional marketing involving content but marketers should know when, how, when, and where to deliver a product. Context marketing is the new approach to business marketing. Businesses that have taken advantage of information technology have a wide access of customer data. Customers are no longer a mystery but are constantly sending signals of who they are and how they want to be engaged with an organization (Jennifer 2012). Having great listening skills enables marketers to know the specific needs of a customer and provide the products in the required context rather than the conventional content marketing.
The purpose of this paper is to analyze Shell Company context marketing and critically evaluate its marketing strategies. Shell is ranked as one of the major petroleum companies in the world. With its foundation in Britain and Dutch, the company has been categorized as one of the largest corporations by Forbes (John 2010). With over 140 outlets globally, Shell has been able to emerge successfully not only in Britain but all its branches worldwide. It has maintained its core values in all its subsidiaries and other countries. Its marketing team is always occupied trying to devise a competitive strategy, increase its product profile, and enter new markets. The company has not been left out in diversifying through context marketing with the addition to content marketing as the industry is more quality and quantity dominated.
The marketing function is a business function that identifies the wants of customers to satisfy them in a way that will give maximum satisfaction. Globally, the marketing function is used to penetrate new markets and increase the need of the product to customers. As a result of new markets and need for the products, sales volume increases, and profitability improves for the company (Murray 2015). Traditionally, companies had to go through some stages to become global as well as be the leader in product content provision. Shell uses the globalization as a marketing context to sustain its profitability.
A product first enters the domestic market before it starts getting demanded by foreigners. International marketing only starts when a company is sufficient enough to satisfy the domestic market as well as the global market (George 2010). Profits have to be realized for an organization to continue its international marketing. It is through international marketing that Shell has become an acclaimed player in the petroleum industry. It uses globalization as a strategic tool to increase its competitive edge. For success in international marketing, cultural barriers, time barriers as well as trade barriers must be overcome. Having a global perspective increases an organization’s economies of scale. Shell is a multinational corporation and uses globalization as a marketing strategy to gain a competitive edge (Murray 2015).
Shell has been performing exceptionally well in its and has been strategically trying to improve all its business functions such as human resources, accounting, financing, and other relevant business functions. The company has historically been at the forefront in the petroleum industry and through diverse marketing strategies, globalization included, is still a leading company. Though the company has standard performance levels, it has had its share of challenges like other firms in the industry.
Petroleum is a volatile product that shifts in price every other day. With the increase in petroleum production companies, other firms have entered the petroleum industry making the supply of the product be in excess. In economic demand and supply theory, increase in demand results to increase in supply and increase in supply leads to corresponding increase decrease in prices. Low price changes for petroleum have hit Shell industry, and it is a challenge that is still being dealt with. Managers are faced with the challenge of production capacity and how to improve sales in such competitive environment. Having a marketing global approach is challenging when there are many global firms in the same product line. Competition lowers prices and even though sales increase, profit margin reduces.
To overcome the challenge of competition and over-supply, Shell management team resolved to increase its awareness in the countries that it had the highest market share, especially in British. By emphasizing on individualized relationships with its customers, the marketing team involved the customers in designing of the product packages, production capacity, and increase in access to distribution channels where customers would receive their products where they were based (Graeme and John 2010). Also, the regional offices were involved in the distribution of the Shell products in the different countries by producing and distributing specific line products that a certain region specialized in instead of distributing all its petroleum products. Some countries use diesel more than other Shell products, and it was up to the Shell management and marketing team to specialize regions regarding their most preferred product.
Another challenge faced by Shell in its globalization strategy is currency deviations. To operate in other countries, there must be some form of foreign exchange since each country uses a different foreign currency. The management team has to be familiar with currency exchange rates in all its operating countries to be able to know how to price its products. Pricing of products for export is hard and time-consuming since currency rates keep on changing. The management overcomes the challenge by having staff monitor prices in each country and change the prices as per the current currency rates. Also, the management of Shell uses a specific currency rate to ensure that the products have a constant price rate in all its operating regions. Euro currency and dollar the main currency exchange rates used by Shell while pricing its products.
A challenge experienced by Shell in its globalization strategies is fluctuations in demand and supply in its different markets. When there is a global change in oil prices, individual countries are affected differently. Also, demand for specific Shell products becomes individualized per region. It, therefore, becomes an essential thing for the management to liaise different marketing strategies and forces in the different countries to cater for the specific needs of its customers. The management of Shell has localized marketers and staff in each region it carries operations.
Having localized representation ensures that each region is covered for specifically since not all regions are affected the same when there are changes in the market (John 2010). Some regions require specialized products regarding design of packaging and color. There are also the loyal Shell customers who are used to having a certain package for its products and if changes are made the customers might doubt its originality. In case there are to change in product packaging or design, global advertising in the form of media advertising and also direct marketing is done before launching the changes.
An emerging challenge for Shell Corporation is changes in technology that have rendered oil production cheap and, therefore, making oil prices sink lower to an extent of no profits are being made by petroleum countries. Technology innovation is a trend that is being used to reduce the cost of producing products (Michael 2013). As a result, entry into the petroleum industry becomes easy and instead of prices remaining constant or going up, they are going down at a very high rate. Currently, most petroleum industries are facing liquidity issues due to the low prices.
As a global firm, it is, even more, difficult to continue its marketing strategy since the market has been dominated. Before, few companies would produce oil due to the high cost of infrastructure and equipment required for production. But as technology continued to advance, cheap methods of producing oil were invented leading to high market penetration (Eric and Alexander 2013). Shell takes pride of having loyal clients, and since petroleum is a universal product, the management resolved the challenge by pricing as per market demands with more distribution in the less affected countries.
Even in the 1960s, Shell had a significant market share. The management was proactive in the anticipation of new industry trends that would lead to changes in demand (David and Nigel 2013). The company wanted to keep up with new market strategies to ensure they remain competitive, and their globalization strategy was maximized. A strategy that the company employed as early as 1970 was to start the production and supply of gas when the prices for oil were on the rise. The management decided to explore their production capacity in the North Sea and were able to produce gas at sustainable levels. After getting more of half of Britain’s market share in gas supply, the company ventured into other forms...