A Study of the Nigerian Petroleum Retail Market
CHAPTER ONE
Aim and objectives of the study
The aim of this study is to carry out an in-depth investigation of marketing of petroleum products in Nigeria. The objectives of this study will include:
- To explain what is meant by the term marketing of petroleum products.
- To describe the evolution of petroleum product marketing in Nigeria.
- To examine the application of marketing mix in the petroleum industry.
- To ascertain the relevance of marketing concepts in the marketing of petroleum products.
- To assess the role of marketing strategies in the marketing of petroleum products.
- To identify the products produced and marketed from petroleum
- To highlight and explain the problems encountered in the marketing of petroleum products.
- To make recommendations on how petroleum products can be effectively and efficiently marketed thus contributing to the overall progress of the company and invariably Nigeria’s economic development.
CHAPTER TWO
LITERATURE REVIEW
DEFINITIONS OF MARKETING
Marketing has been variously defined, but no one will object to describing its main thrust as satisfying customers’ needs. Commonly, there are three ways in which people use the term “marketing”.
- As a description for some part of the company’s organisation or in a person’s function or job titsle, such as the ‘marketing department’ or the ‘marketing manager’.
- To describe certain techniques within a company such activities as advertising, market research and sometimes sales or product or service development can be conveniently described by the collective term ‘marketing’ to distinguish them from other activities coming under the heading of ‘operation’, ‘finance’ and similar main sub-divisions of a company.
- To indicate a particular approach to business or a management attitude, in relation to customers and their needs. This ‘business philosophy’ has become known as the ‘marketing concept’.
It is this third way that the term marketing is mainly used in this research work. Usually, when we talk about marketing, what always readily comes to mind is the physical product because it is more tangible and familiar. This is probably due to the fact that marketing as a discipline developed initially in connection with selling of physical products like cars, soaps, clothes, kitchen utensils etc. The focus on tangible products makes people overlook the many other types of product entities like services, ideas and organisation that are also subject to marketing planning, analysis and control.
Marketing embraces all activities of assessing public wants, tailoring and packaging a product to satisfy those wants, pricing and distributing it and encouraging its purchase by informing potential buyers of its availability by use of personal selling, advertising, sales promotion and other marketing communications. The British Institute of Marketing (1999) defines marketing as: “the creature management function which promotes trade and employment by assessing consumer needs and initiating research and developed to meet them. It co-ordinates the resources of production and distribution of goods and services, determines and directs the nature and scale of the total effort required to sell profitably the maximum production to the ultimate users”.
Marketing is the set of activities that facilitates exchange transactions involving economic goods and services for the ultimate purpose of satisfying human needs. It embraces activities that relates to the product itself, pricing, distribution, communication or promotion, post sales matters, marketing research and sales forecasting. (Kotler, 2000). From the above view, though organisations seek to satisfy customers wants and desires, it must not do these to the disadvantage of the other goals of the organisation such as the profit for the investors and staff welfare.
THE EVOLUTION OF PETROLUEM PRODUCTS MARKETING IN NIGERIA
In spite of the fact that oil exploration as we know it began in Nigeria over 50years ago. The NNPC record indicated that less than half of the basinal acreages have been seriously explored. Acreages unexplored include the Dahomey Basin as well as parts of the Chad Basin.
The NNPC records further show that, the Niger Basinal area of Niger Delta, where exploration is most intensive, and efforts have been skewed in favour of onshore acreages. The record indicated that less than 50% of the offshore areas within 200 metre water depths are currently under active exploration while beyond 209 metre water depths, little of any serious explorations is known. Even less exploration has been recorded over the far sand belt stretching along west coast. These clearly indicated the extent the investment opportunities which abounds in the oil gas and petrochemical industries in Nigeria.
CHAPTER THREE
RESEARCH METHODOLOGY
HISTORICAL PROFILE OF TEXACO NIGERIA PLC
Texaco Nigeria Plc was incorporated in 1969 as a private limited company and became a publicly quoted company on December 8, 1978. The company is principally engaged in the marketing and distribution of petroleum products, blending of lubricants, and manufacturing of greases and petroleum jelly. The company has an approved and registered agreement with Texaco overseas. Holding Inc. aimed at ensuring transfer to latest technical know-how to enhance operations, production process and introduce newly developed product lines in the Nigerian market. Under this agreement, Texaco overseas Holding Inc. provides assistance to the company in the following areas: Texaco Nigeria Plc is owned 60% by Texaco Holding Incorporated, Liberia, Chevron Texaco Incorporated in the United States of America shareholders own the remaining 40%.
As a major petroleum marketing company in the country, the company is poised to benefit from the expected gains of deregulation which will unleash a vibrant sector and thus impact positively on profitability. With a 10-man board of directors, the company may do well to abide by the code of corporate governance by splitting the position of chairman and managing director which is currently bestowed on one individual.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
DATA PRESENTATION
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
SUMMARY
Petroleum products are very essential to individuals, industries and therefore to the economy generally. Marketing of petroleum products is an important part of the entire petroleum industry operations. As observed earlier, the Shell International Petroleum Company Limited (1966) noted that marketing of petroleum products earns much of revenue that finances all others phases of the business and provides fund for further development. This study examined the experience of Texaco Plc in marketing petroleum products in Nigeria. It particularly looked at the application of the marketing mix whereby issues that relate to the product, the price, the place and the promotion practices in the organisation are examined. To effectively carry out this, various data collection techniques were used. These include administration of questionnaire, oral interview and observed. The questionnaire contains several questions on the marketing mix tools and the problems in marketing petroleum products.
During participant observation, issues that relate to scarcity, price hike and other practices at filling stations were fully discussed and argued. This gave the researcher first hand information on the malpractice by station managers and fuel attendants. It also gave insight on how artificial scarcity of products is perpetuated by these categories of petroleum products workers. The exercise was laden with problems particularly at the information gathering stage which involved repeated visits to Texaco Plc head offices and other NNPC subsidiary offices in Lagos.
CONCLUSION
This study has examined the experience of Texaco Plc in marketing of petroleum products in Nigeria with particular reference to application of marketing mix the company has indeed had a lot of experience in Nigeria of about thirty seven years having been established in 1969. It has effectively employed the marketing mix tools in doing so. It markets the major petroleum products which include petrol, diesel, kerosene lubricants and a host of other products including insecticide. It has employed product differentiation, consumer specification and package improvement as strategies for marketing. Others are product line extension, consumer deals and network improvement.
RECOMMENDATIONS
Although Texaco Plc seems to be trying as one of the major petroleum product marketers, there is still room for improvement. The organisation needs to diversify to increase the products marketed. This it could do by venturing into agro and industrial chemicals, air freshener, car accessories as well as other petroleum based items. On a general note, Texaco Plc needs to engage in the distribution of other products such as Aviation Gasoline, Jet Fuel, Petroleum Jelly/Waxes, Bitumen and Asphalts. These are all marketable products which if they engage in their marketing will increase their market share and improve their position relative to other marketers.
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