Marketing Plan Assignment: Marketing Analysis of AGL (Research Paper Sample)

Marketing Plan: Marketing Analysis of AGL
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Executive summary
This report aims to present the marketing analysis of AGL, an Australian leading integrated energy company, an operator and developer of the renewable energy generation in Australia. The importance of marketing cannot be underestimated as it promotes the creation of value for the customer through a set of activities that educate, communicate and motivate the targeted consumer about the available firm’s services or the products of the company. Marketing is also a social and managerial process, by which a firm can obtain profitability through creating, offering and exchanging its products and services. However, for an appropriate marketing strategy to be developed, a company should understand the business environment in which it operates. This paper presents the analysis of external and internal environment that surrounds AGL and displays competitor and customer analysis as vital for marketing plan of the firm.
Introduction
AGL Energy provides energy products and services to the economy of Australia involving in both the generation and retailing of electricity for residential and commercial use. Just as any other firm company in the modern business environment, AGL operates in the dynamic surrounding where changes are rapid and unpredictable and economic conditions constitute complex influence on the practice of energy business. Thus, analyzing different factors that affect firm is essential. It can be done through PEST analysis, which is an approach for considering the external business environment that affects company’s performance. This paper also seeks to present the external environment that influences AGL paying particular attention to the discussion how political, economic, socio-cultural trends, technological and natural environments are associated with the company’s market environments. It is also essential to understand how customer preferences impact the operation of AGL, thus the paper will include the concept of target market segmentation. Within the modern business environment, knowing about competitors enables the firm to obtain its competitive advantage. This paper is going to present the competitor analysis for AGL identifying its local, direct and indirect competition and determining the market share of the main competitors.
Internal environmental analysis
Contributing to the economy of Australia, AGL Energy Company has 175 years of experience in the provision of gas, electricity, solar PV and related products to more than 3.7 million people in Queensland, New South Wales, Victoria and South Australia (Our history, 2016). The mission of the company is associated with the fact that through harnessing insights to enrich the customers’ energy experience’ , the company puts customers at the heart of everything it does.
One of the main corporate objectives includes taking action toward the creation of a sustainable energy future for the investors, communities and customer. In addition, the company strives to keep promises to its customer being aware of the responsibility to the community and the environment. It seeks to deliver quality service, value for money, understand the needs and meet them and be ready to respond when needed. AGL has the diverse power generation portfolio, which includes base, peaking and intermediate generation plants, spread across the traditional thermal and renewable generation. The company actively invests in and operates natural gas exploration, development and the production of tenements, operating natural gas storage facilities (Our company, 2016).
To support its objectives and mission, the company follows such five values, as it human force, which is acting in the best interest of the entire company, breaks down silos and applies constant standards and expectations across the business. The company follows the goals for all employees to deliver a work environment where people would have an opportunity to contribute to further company’s achievements. The other value refers to such operational capability as delivery, which is making things happen, keeping it simple and setting new goals and their achievement (Our values, 2016), which is made through the support of the executive team of AGL and the board of directors. The accumulated efforts of the company can be seen in its Financial results. Thus, the underlying profit of the firm for 2016 constituted 11% up to $701 m, which reflect AGL confidence as the company executes its strategy to invest in transformation (Full-year results, 2016).
Currently, AGL’s products are spread across the traditional thermal generation and renewable sources that include hydro, wind, landfill gas, biomass and solar. Price is commensurate with the capabilities of the customers (Pour et al, 2013), the evidence of which can be seen through the results in the Annual report (2016). Thus, there are about 2.0m dual fuel customer accounts with the overall number of customer in 3.7m. That enabled the company to earn 103.9m in 2016. Promotion as one of the elements of marketing mix constitutes campaigns and advertising of AGL, which is estimated in the 94m year ended. It is also the well-established distribution, that enables the company to optimize the connection with the channels of product distribution. Thus, AGL recognized distribution costs as gas and electricity to be delivered to the customer. For that reason, AGL management estimated energy consumption between the date of the last invoice from the distributor to AGL and the end of the reporting period when the distribution costs are determined for the financial year.
External environment analysis
According to Gupta (2013), the external environment of the firm is comprised from economic, social, demographic, management and ecological factors that influence the activity and evolution of the company. When analyzing the external environment, it becomes possible to identify the future trends for the firm and use the strategic opportunity to increase income. PEST analysis if the most common tool when considering these external factors. Thus, in terms of a political factor that influences operations of AGL, being a member of Labor and Liberal political networking forums makes the company adjust to the certain rules in its operations. These rules are for price regulation and monitoring of compliance with national energy regulations (Sustainability performance report, 2013).
What also impedes a company from seizing opportunities of providing its services is the political deadlock over the review of the Renewable Energy Target in 2014, which has put its impact on the sector in the short term (Clean energy Australia report, 2014). If to consider economic factor as an element of PEST analysis, it impacts AGL Energy Company through challenges in delays, cost overruns and tumbling gas prices in Asia, where the prices have historically been linked to oil prices (Smyth, 2016). At the same time, climate change policies impact the economic drivers for the new investment and impact on the operation of the existing plants (State of the energy market, 2015). Social factor of PEST approach refers to changes in the demography, preferences of the customers and concerns over sustainability. AGL has managed to respond to the changing needs of people through its strategy and growth oriented on the constant exploring of the opportunities for sustainable earning growth. Thus, it is among the AGL’s business risks and mitigations to explore the risk exposure using the wide risk program based on the international standard to minimize consequences of operations. Here, AGL developed a comprehensive maintenance plan that monitors assets, which are operated safely and sustainably (AGL Annual Report, 2016). In terms of technological factors influencing companies such as AGL Energy, it is necessary to mention that energy market is facing challenges here. Thus, technological innovations allowed the consumer to become more active participants in the market. Here, the regulatory framework should keep pace with the competitive markets in order to drive choice and innovation and maintain consumer protections. In meeting the technological changes, AGL has prepared some insights into how to prepare for solar and storage for Australian utilities to cope with these sources of energy. Thus, it is possible to limit the size of solar systems on rooftops as it will not expect battery storage to compete for the upcoming decade (Parkinson, 2014).
A detailed customer analysis
It is critical to the strategic marketing approach to select some segment to target. Here, a firm can differentiate its customers on the basis of demographic and geographic variables. Here, however, a company should select the clustering variable measures that would better describe the reasons a customer would choose these particular services or goods (Lynn, 2011). For AGL, it is the primary target to focus on delivering new, innovative and integrated offerings to the customer to better meet their needs. Thus, according to the Annual report (2016), in the current year, the number of the customer using electricity provided by the company estimated 2,262m and gas- 1,419 m customers.
A detailed competitor analysis
To obtain a competitive advantage, a firm should think the same way that its main competitors in order to further understand the situation, analyze the main trends and formulate the best strategy. In particular, it is essential to estimate the nature of the potential strategy changes, which are available to the competitor, predict competitor’s response to the important strategic moves on the part of other competitors and understand the potential reaction to changes in the industry (Fleisher & Bensoussan, 2015). For AGL, the main competitor...