Modern World Has Shaped Many Business Marketing Essay

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The modern world has shaped many business organisations view of creating, providing and communicating their products or services. Marketers became more dynamic in developing strategies to be able to meet customer's satisfaction without compromising profitability. That is to say, the marketing strategies should be designed to satisfy both consumer and company's needs. Company has to maintain profit to continuously operate the business by providing products or service that a customer will buy; and for the customer to buy that product it has to be produced so as to meet their needs or wants. This process can be achieved through a well-organised marketing strategy which is together known as the 4 P's of marketing - product, price, promotion and place (Solomon…et al 2011). Further details of these marketing mix elements are explained below and how they are applied in a retail petroleum outlet.

A product is anything tangible or intangible that is obtained in a trading transaction. Tangible products are goods which have physical components and can be easily perceived by human senses such as a book. Intangible products such as patent and copyright are those products which are not always perceived by human senses. Marketers usually refer to product as having three layers - the core, the actual and the augmented product. The core product represent its intended use for example a car for transportation; the actual product is the physical good which includes its main characteristics such as the quality and appearance, for example car's the body type; the augmented product is the attribute attached to possessing the products such as parts or service warranty. Products can be also classified as consumer and business-to-business. Consumer products include durable which are products that can be used for long period of time or non-durable which can only be used for a short period of time. Business-to-business products are products that organisations usually used such as equipment (Solomon…et al 2011, pp. 183-185).

A retail petroleum outlet offers a variety of products both fuel such as unleaded petrol and non-fuel such as lubricants which give variety of benefits to consumers. Fuel to power the cars as the core product, the unleaded petrol for example is the actual product and the augmented products are the various fuel cards that serve as credit facility. They are also durable products as they are consumable and they are consumer products as these are purchase by individual for private use. Some of the retail petrol outlets also offer business-to-business products such as fleet services. Product strategy of petroleum companies in general can be seen as addressing the environmental safety so they focused on offering clean and safe fuel products for example a Bio-E10 unleaded petrol (Caltex Australia, Shell Australia).


"Price is the value that customers give up, or exchange, to obtain a desired product" (Solomon…et al 2011 p. 221). Price can be monetary, the amount of money given up by the customer to acquire the product, or non-monetary such as social cost (Solomon…et al 2011).

Pricing involves series of steps which include "developing pricing objective, estimating demand, determining cost, evaluating the pricing environment, choosing a pricing strategy and developing a pricing tactics" (Solomon…et al, p. 223).

An example of pricing objective is to improve profitability. Estimating demand uses an analysis of a demand curve which is the graphical presentation of the relationship between quantities demanded at a given price. Determining cost involve break-even and marginal analysis. Break-even analysis shows the quantity that the company has to sell to cover-up the cost at a given price while marginal analysis shows the quantity and the demand required to meet the optimum profit. Evaluating the pricing environment includes examining the economy, the competitor's reaction to price changes, and the current trend. There are few pricing strategies to choose from, two of these include cost plus pricing which is adding a percentage of mark-up to the total cost and demand-based pricing where the company has to estimate the sales quantity to come up with the selling price. Developing a pricing tactics is the application of the chosen price strategy for example two-part pricing where a product can be obtained via two instalment payments (Solomon…et al 2011, Ch. 7).

Prices in a retail petroleum outlet are influence by Terminal Gate Pricing (TGP) and Import Parity pricing. TGP is based on seaboard prices (Shell Australia) while import parity pricing is based on importation cost plus the transportation expenses (ACCC, Monitoring the Petroleum Industry 2009). These suggest that Petroleum Company adopts almost the same pricing strategy so to be competitive, several pricing tactics are developed. Caltex for example offers a docket discount through the alliance with Woolworths (Caltex Australia).


Promotion refers to the technique of introducing the product, communicating its value and benefits and then convincing a probable customer to purchase the product. Promotion can be carried out in several ways such as "personal selling, advertising, sales promotion, public relations, direct and online marketing, sponsorship and even word-of-mouth" (Solomon…et al 2011, p. 23 and 259).

Personal selling is a one-to-one interface with a customer to communicate a product or a service. The most common form of personal selling is relationship selling which involves "securing, developing, and maintaining a long term relationship with profitable customers" (Solomon et al 2011, p. 309).

Advertising makes use of the media such as TV and radio to promote the product and to influence customer's behaviour. Sales promotion involves all the activities to encourage fast sale of the product such as price reductions.

Public relations aim to maintain an organisation good image for example a press release. Direct and online marketing is an interactive practices of communicating and seeking responses from a customer for example the use of internet. Sponsorships refer to a financial support given to a particular activity in exchange for a publication (Solomon…et al 2011 Ch. 8-9).

A retail petroleum outlet promotion strategy includes a variety of offers in coordination with other companies for example Caltex $50.00 account credit for Starfleet Plus card holder for purchase of 4 Bridgestone Ecopia tyres (Caltex Australia) or Shell Apple Apps which enable drivers to keep track of their journey and find shell service outlets easier (Shell Australia). This kind of promotion technique is a sales promotion which encourages customer's loyalty by way savings or providing other benefits.


Place in the context of marketing refers to distribution strategies. It is where and when the product is made available to the targeted customer (Solomon…et al 2011, p. 56). One objective of this strategy is to deliver value to customer and this can be achieved through a well-managed value chain. A value chain is "a series of activities involved in designing, producing, marketing, delivering, and supporting any product" (Solomon…et al 2011, p. 327). The company also needs to manage the supply chain and the distribution channels. A supply chain refers to all companies involved in converting raw materials into a finished product while a distribution channel is the series of task which organise the flow of the goods from the producer to the ultimate consumer. For the product to reach the customer, a distribution strategy has to be carefully managed. More often than not, most companies develop a network of trade partners who work together to harmonise the movement of the product (Solomon…et al 2011, Ch. 10).

A retail petroleum outlet is the ultimate place where petrol products are made available to customers. As place may provide the opportunity for a business to gain competitive advantage (Solomon…et al 2011, p. 327), petroleum companies have spread their trade networks. For example Caltex has established its retail network through alliance with Woolworths (ASX Announcement, 2009). This alliance is an excellent place strategy to offer the products. When people shop, they need fuel for their cars, travellers need fuel and foods which can be both obtain in petrol outlets and this also provide convenience to customers. To address the supply-chain management, Caltex Marketing presentation 2009 mentioned about terminal expansion. This will enable the transport of product to be more safe and convenient (ASX Announcement, 2009).


Competition is everywhere. As the people are given more choices of what products to buy, the more it is hard for a marketer to introduce a product and persuade a customer to buy it. This is why it is very important to create a correct blend of the 4 marketing mix elements; that is, producing a product that meets customer's satisfaction, setting a right price that a customer would be willing to buy, using a right promotion technique to influence customer behaviour and persuade to buy the product and putting the product at a right place where it is made available to a customer. A retail petrol outlet facing a tight competition has created its own mixture of these 4 P's to stay competitive, however a need for improvement still remains which is necessary to cope up with the current trends.