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Marketing Strategy for Central Petroleum Limited
Posted by Addison on Mar-29-2023
The report primarily focuses on the marketing strategy of Central Petroleum Limited to give a reader an overview of the growth dynamics of the company. Recently, several strategic issues and managerial problems have been identified in marketing strategy of Central Petroleum Limited that have drawn the attention of the entire management to devise new marketing strategies that can help the company to resolve the problems to continue its expansion and future growth to achieve a competitive edge in the marketplace. This report is written to provide Central Petroleum Limited marketing strategy with the required strategic solutions using multiple frameworks and tools.
External Environmental Analysis
PESTLE Analysis is the most popular strategic tool that is used by many organizations when conducting an external environmental analysis. This framework typically focuses on political, economic, social, technological, legal, and environmental factors that can impact the macro environment of the business (Zalengera, E.Blanchard, & C.Eames, 2014).
Central Petroleum Limited operates in a politically stable environment, which means that it provides the company with more friendly and stable business growth opportunities (Christodoulou & Cullinane, 2019). However, since Central Petroleum Limited operates in multiple countries, there are high chances of various political tensions that can cause instability in market growth trends for Central Petroleum Limited. This can limit the company's growth opportunities.
Moreover, it is important for Central Petroleum Limited to analyze and monitor the activities of pressure groups. Central Petroleum Limited can create a close collaboration with these groups to achieve long-term goals.
Corruption and Changing Policies
Central Petroleum Limited must keep a close check on the changes in any government policies because they can directly impact the performance of the business. The operations of Central Petroleum Limited are its different countries can become unpredictable if there is a high level of corruption and weak enforcement of the law (Achinas, Horjus, & Achinas, 2019).
Trade and Taxes
The profitability of a company is directly influenced if there are high taxes in a country. Central Petroleum Limited should look into the taxation policies in each country before further expanding its operations (Eierle, Hartlieb, & C. Hay, 2022). Similarly, if there are high trade restrictions, it can get difficult for Central Petroleum Limited to import and export its products, impacting the relationships with trade partners.
GDP, Employment, and Exchange Rates
The long-term growth strategies of Central Petroleum Limited are majorly determined by the GDP growth of the economy. The purchasing power of consumers significantly increases with a high GDP. High unemployment in an economy shows that Central Petroleum Limited can benefit from surplus labor with low-cost wages. Furthermore, Central Petroleum Limited should monitor interest rates as it can affect the borrowing ability. With that being said, if there is a high fluctuation in currency, the profitability of Central Petroleum Limited can also be influenced (Sadeghi, 2020).
It is important for Central Petroleum Limited to make appropriate predictions regarding the labor market conditions in a specific economy (Sadeghi, 2020). This can help the company to hire a more talented workforce that can improve the performance of the company.
Industry lifecycle stage
Central Petroleum Limited should consider expanding its operations in growing economies to benefit from growth opportunities. It can be challenging for Central Petroleum Limited to enter a mature industry at a growing stage (Villamarín & Pinzon, 2017).
Central Petroleum Limited should study the changing patterns of demographics, such as socio-economic variables, the aging population, and trends in migration (Barbara & Cortis, 2017). This can help the company to identify the right segment to target with a high potential for growth opportunities.
Every country and society has a distinctive culture with different norms and values. It is important for Central Petroleum Limited to study and identify social class stratification.
There has been a significant shift in online shopping. Central Petroleum Limited needs to adopt necessary changes considering the growing use of social media networking sites and mobile phones to increase its revenue and overall profitability (Villamarín & Pinzon, 2017).
On-going technological innovations should be considered carefully by Central Petroleum Limited so that it can stay ahead of the competitive market. Central Petroleum Limited should continue working on introducing major technological transformations to achieve a competitive advantage (Rastogi & TRIVEDI, 2016).
Social Media Marketing
The collaboration with consumers has been growing rapidly because of the development of communication technologies (Rastogi & TRIVEDI, 2016). Central Petroleum Limited can take it as a great opportunity where can use innovative strategies to expand its customer base.
Central Petroleum Limited should implement the latest technological tools to minimize environmental pollution. Waste management is now getting popular and has been considered a major business norm (Igliński, Iglińska, & Cichosz, 2016).
Climatic Conditions and Eco-friendly products
Climatic conditions can influence the efficiency of Central Petroleum Limited. The cost of a company's operations can be increased if there are extreme weather conditions. Similarly, there has been an increasing demand for eco-friendly products. Central Petroleum Limited should work towards adopting more sustainable business practices to gain customer trust (Barkauskas, Barkauskienė, & Jasinskas, 2015).
Employee protection laws
It is important for Central Petroleum Limited to follow the health and safety laws for its employees that are issued by the authorities to ensure the safety of its labor.
Central Petroleum Limited should protect its customer data to ensure their security and privacy concerns. Moreover, it should set the right price with the right product quality (Igliński, Iglińska, & Cichosz, 2016).
Porter's Five Forces
Central Petroleum Limited can use Porter's Five Forces to analyze the competitive landscape of the industry. The strategic planners of Central Petroleum Limited can use this framework to make effective decisions.
Threat of New Entrants
Central Petroleum Limited operates in an industry where it is difficult to achieve economies of scale, making it difficult for new entrants to enter the industry (Yunna & Yisheng, 2014). There is a strong product differentiation with high capital requirements. Moreover, it is difficult to establish a distribution network easily in this industry. Thus, Central Petroleum Limited has a weak threat of new entrants.
Bargaining Power of Suppliers
There are more suppliers in the industry of Central Petroleum Limited. This shows that there is less control over prices. Organizations like Central Petroleum Limited can easily switch to other suppliers because of less differentiation in products. This makes the bargaining power of suppliers a weak force in Central Petroleum Limited's industry (H. Th. Bruijl, 2018).
Bargaining Power of Buyers
The industry in which Central Petroleum Limited operates has many suppliers as companies to buyers. This means that buyers have fewer options and do not have control over prices (H. Th. Bruijl, 2018). The high product differentiation shows that there are few alternative products for buyers, and there is a high switching cost. This makes the bargaining power of buyers a weak force in the industry.
Threat of Substitute Products and Services
Central Petroleum Limited operates in an industry that offers very few substitutes to its customers. The substitutes that are available are expensive because of their high quality (Zhao, Zuo, & Wu, 2016). However, companies like Central Petroleum Limited sell their products at a lower prices. This clearly shows that buyers may feel reluctant when switching to other substitutes.
Rivalry Among Existing Firms
Central Petroleum Limited operates in a less competitive industry. The already established companies have a large market share, meaning that any move by the existing companies will be noticed. Moreover, Central Petroleum Limited has to take several competitive actions to become a market leader, as the industry is likely to grow rapidly in the coming years (Aithal, 2020).
Central Petroleum Limited can make use of SWOT analysis to effectively analyze the company's internal strengths, weaknesses, external opportunities, and threats.
Strong distribution network
Central Petroleum Limited operates in various countries and has multiple outlets that help the company to deliver its products quickly to its customers. This shows that Central Petroleum Limited has a strong distribution network (Benzaghta, Elwalda, & Mousa, 2021).
Central Petroleum Limited has established itself as a strong financial company over the past few years. It has generated enough profits that can be used to finance any future expenditure (Basset & Mohamed, 2018).
Central Petroleum Limited has adopted the latest and innovative technology in its business operations, which has allowed the company to reduce its production costs (Benzaghta, Elwalda, & Mousa, 2021).
Social media presence
Central Petroleum Limited has been successful in establishing itself as a strong brand on social media platforms that, includes Facebook, Twitter, and Instagram. This increases customer engagement (Basset & Mohamed, 2018).
High rent costs
Central Petroleum Limited has its manufacturing plants on rented properties. This increases the company's overall costs, and a significant portion of Central Petroleum Limited's profits go into paying the rent (Comino & Ferretti, 2016).
Research and Development
Central Petroleum Limited has not been able to conduct effective and in-depth market research regarding new markets and products (Comino & Ferretti, 2016). Customer trends are always evolving, and it is important for Central Petroleum Limited to take immediate action in conducting its research.
There has been a centralized decision-making process in Central Petroleum Limited. This means that employees have to consult their managers before taking any decision themselves. This slow down the decision-making process. and employees feel demotivated. Thus, impacting the operations of Central Petroleum Limited (Comino & Ferretti, 2016).
Presence of Internet
Central Petroleum Limited has a great opportunity of expanding its business by using the internet. Since there has been a growing trend in online shopping Central Petroleum Limited can boost its sales by expanding its online stores (Yan, Xia, & X.H.Bao, 2015). Additionally, social media platforms can be updated constantly to engage customers with all the new products introduced by Central Petroleum Limited.
Technology is constantly evolving, and Central Petroleum Limited can benefit from it by implementing the technology in its various departments. Manufacturing process can be completed automated, which can eventually help Central Petroleum Limited to reduce its costs (Taghavifard, Mahdiraji, & Alibakhshi, 2018).
The continuous increase in globalization has allowed Central Petroleum Limited to expand its business operations across borders. It has the opportunity of entering new markets (Yan, Xia, & X.H.Bao, 2015).
Recently, many companies are entering the industry in which Central Petroleum Limited operates. This means that there are chances of increased competition. This poses a threat to Central Petroleum Limited as it has to put more effort into gaining market share (Taghavifard, Mahdiraji, & Alibakhshi, 2018).
Fluctuations in exchange rates
The exchange rates are highly subjected to fluctuations that negatively impact the sales of Central Petroleum Limited. Central Petroleum Limited needs to study the changing fluctuations to keep up with its profitability (Vlados & Chatzinikolaou, 2019).
The consumer trends are constantly changing, that causes changes in their demands. This puts pressure on companies like Central Petroleum Limited, who have to continuously meet their consumer demands. Moreover, there is a significant threat from substitute products because consumers tend to switch to these companies (Vlados & Chatzinikolaou, 2019).
Central Petroleum Limited operates in a wider range of products. Each of the products has its further product lines that are sold under the Central Petroleum Limited. This means that customers can benefit from a large variety of products. Central Petroleum Limited sells highly differentiated products with higher quality that, gives it a competitive edge (Khan, 2014).
Central Petroleum Limited follows a competitive pricing strategy. The company also takes into account all its costs before setting its prices (Londhe, 2014). Currently, Central Petroleum Limited is using a product bundle pricing strategy where customers get bundled products at lower prices.
Central Petroleum Limited has adopted various distribution channels to reach its customers. The company sells its products through its website directly (Thabit & Raewf, 2018). Apart from this, it also distributes its products to wholesalers, who then further sell it to small retailers. Central Petroleum Limited has its own retail stores where it sells its products directly to consumers.
Central Petroleum Limited uses traditional and modern promotional techniques. TV ads are used to reach a larger audience. Central Petroleum Limited also advertises on social media sites such as Facebook, Instagram, and Twitter. Events are sponsored by the company. Moreover, Central Petroleum Limited participates in several exhibitions (Londhe, 2014).
Central Petroleum Limited engages in corporate social responsibility activities. This has allowed the company to establish a strong brand image. Since, Central Petroleum Limited has a well-established distribution network, the products are reached to consumers in a timely manner. Central Petroleum Limited has been able to introduce innovation in its various departments, which has lowered its costs (Ariyani & Daryanto, 2018).
Central Petroleum Limited operates in multiple countries. This means that its global presence is a rare factor. It works towards an organizational culture that encourages teamwork, and creativity among employees (Ariyani & Daryanto, 2018). Central Petroleum Limited is also able to adapt to different societies, and cultures due to its exposure to various locations.
The products produced by Central Petroleum Limited are of a high quality. Customers make repetitive purchases, and thus it is an inimitable source. (Miethlich & G. Oldenburg, 2019). Central Petroleum Limited has a significant placement of its stores that gives an easy access to its customers. Additionally, the company has been using a competitive pricing strategy because it has been able to achieve economies of scale, thus lower production costs.
Central Petroleum Limited, over the years, has successfully gained a financial strength. Central Petroleum Limited can make use of these finances to invest in major acquisitions that give it more growth opportunities. The advancements in technology have allowed Central Petroleum Limited to manage its operations more effectively. Distribution channels are another resource for Central Petroleum Limited. The supply chain is very efficient, resulting in more revenue (Miethlich & G. Oldenburg, 2019).
Value Chain Analysis
Central Petroleum Limited is involved in primary activities such as the production of goods and then selling them to the target audience.
Central Petroleum Limited should ensure to have a strong relationship with its suppliers to avoid any inconvenience in receiving, storing, and distributing the product. This will help Central Petroleum Limited to have a more effective transformation of a product (Ariwibowo & Saputro, 2021).
Operations involves manufacturing as well as services. Central Petroleum Limited should conduct an in-depth analysis of its operational activities to remain ahead of its competitors (M.El-Sayed, W.Dickson, & O.El-Naggar, 2015). This will increase the productivity of the company, and more profits can be generated.
It is important for Central Petroleum Limited to analyze, and optimize its outbound logistics so that it is able to achieve the long-term corporate goals. Managing outbound activities properly reduces the chance of late deliveries (M.El-Sayed, W.Dickson, & O.El-Naggar, 2015).
Marketing and Sales
Central Petroleum Limited should use various marketing and sales techniques to differentiate its products from its competitors. Central Petroleum Limited can adopt marketing and sales activities such as promotional activities, advertising, and building strong relationships with suppliers and customers (Ariwibowo & Saputro, 2021).
In terms of services, Central Petroleum Limited must ensure that it provides its customers with the pre-sale and post-sale services (Jaligot, C.Wilson, & R.Cheeseman, 2016). The post-sale service typically falls into the promotional activities of a company. Central Petroleum Limited can thus develop its customer loyalty.
A strong infrastructure of a firm can enable Central Petroleum Limited to optimize the entire value chain of the company. Moreover, by controlling the infrastructure activities, Central Petroleum Limited can be in a better position to get a strong foothold in the competitive marketplace (Darmawan & Wiguna, 2014).
Human Resource Management
Central Petroleum Limited should place its major focus on analyzing the different aspects of HR, such as recruitment, selection, training, and performance evaluation of employees (Darmawan & Wiguna, 2014). Central Petroleum Limited can reduce its costs by identifying and analyzing the costs associated with hiring and training.
Procurement is an important element in the Central Petroleum Limited's value chain. It is important for the company to assess its overall procurement activities so that the inbound, outbound, and operational activities can be optimized (Kumar & P. V., 2016).
Central Petroleum Limited can implement Ansoff's Matrix to make decisions regarding its business growth. This framework includes four different strategic choices that can be selected by Central Petroleum Limited.
Central Petroleum Limited can increase its overall production capacity. This will allow the company to reach more wider audience in an existing market. Central Petroleum Limited can also benefit from the reduced costs by expanding its production capacity. Thus, Central Petroleum Limited can attract more customers using competitive pricing (Madsen, 2017).
Central Petroleum Limited can penetrate the market by investing more in marketing and sales activities. This will help the company to engage with its customer more effectively, leading to more potential customers (Dawes, 2020).
Innovative and unique distribution channels can be explored by Central Petroleum Limited. This will enable the company to reach new segments and groups of customers (Dawes, 2020). In addition to this, Central Petroleum Limited can penetrate the market by improving its supply chain, giving more accessibility to customers.
Central Petroleum Limited can enter into joint ventures or can take over other leading companies of the market. This will give Central Petroleum Limited more market share.
Research & Development
Central Petroleum Limited should keep on investing in its R&D department, so it is able to identify the changing trends of the market. This will help Central Petroleum Limited to target the right market at the right time (Mukangai & Murigi, 2021).
Central Petroleum Limited can enter in a new market by expanding its operations regionally. This includes considering different cities of the country. Central Petroleum Limited must consider any cultural differences when entering a new market (Mukangai & Murigi, 2021).
New segments of the current market can be explored (Mukangai & Murigi, 2021). Central Petroleum Limited can add new features and product uses to its existing products that satisfies the needs of a different customer segment.
Central Petroleum Limited can modify the existing product by improving its features to enhance the product offerings.
Launching additional products
Central Petroleum Limited should invest in its R&D department so it can come up with new and innovative products that attracts and fulfill the needs of the target audience. This will boost the sales of Central Petroleum Limited and will increase profitability (Khajezadeh, Niasar, & Asli, 2019).
Central Petroleum Limited can consider vertical integration. This will allow Central Petroleum Limited to develop and launch new products that are similar to its existing product category (Khajezadeh, Niasar, & Asli, 2019).
Central Petroleum Limited can diversify its business operation using horizontal integration. This means that the new products and services of Central Petroleum Limited will not be related to its current products (Dhir & Dhir, 2015).
A new business diversification
Entering into a completely new business can be considered by Central Petroleum Limited. The organization can work towards starting a new business that can give a company more growth prospects in the future (Dhir & Dhir, 2015). Central Petroleum Limited can conglomerate with the help of mergers and acquisitions.
To conclude, it could be said that Central Petroleum Limited can resolve its current managerial and strategic problems by focusing on its existing products. The company can adopt more attractive marketing strategies that can help Central Petroleum Limited to boost its revenue and profitability. It is recommended to focus on maintaining strong supplier relationships. Moreover, it is also advised to focus on more innovative products so Central Petroleum Limited can remain competitive in the market.
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- PESTEL Analysis of Central Petroleum Limited
- Hofstede Cultural Model of Central Petroleum Limited
- Net Present Value (NPV) Analysis of Central Petroleum Limited
- Marketing Mix (4Ps) Analysis of Central Petroleum Limited
- Corporate Social Responsibility of Central Petroleum Limited
- Central Petroleum Limited Discounted Cash Flow (DCF) Analysis
- VRIO Analysis of Central Petroleum Limited
- Blue Ocean Strategy of Central Petroleum Limited
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