Adaptations and Marketing Strategies Used by Oil Firms in Nigeria

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Table of Contents

Introduction
Problem Statement
Purpose of the Study
Aims and Objective of the Study
Research Questions
Literature review
Methodology
An Overview of the Shell Petroleum Development Company of Nigeria Limited
Discussion and Analysis
List of References

Introduction

Nigeria has plans for increasing the production of oil to about 40 million. Nigeria is the chief oil producing country in Africa and is ranked the seventh internationally (NNPC 2004).The federal government aim at achieving 50% of the constituents in oil by 2010.Oil and other natural recourses are seen as national assets.

However, research indicates that this is not true in case of Nigeria. Birdsall and Subramanian (2004, p.77) explain that many developing countries rich in natural resources and oil have a per capita income that is less than 1 dollar per day. Such countries have poor health indices, high infant mortality rates, low life expectancy and high levels of literacy.

They further explain that the fluctuations in international prices result in dangerous economic cycles that make it difficult for the government to plan for development especially, if they use their money wisely during times of economic boom and run dry when there is a fall in oil prices resulting in an economic bust.

According to Birdsall and Subramanian (2004, p.84), there is a Dutch disease when resources are discovered that makes the economy strong. The currency becomes strong which results in products being expensive in the global market that leads to less revenue and low export.

This makes the economy suffer from economic slump. There are inadequately strong political and economic institutions in countries rich in resources. Researchers further show that countries that have resources like oil should adopt marketing strategies to improve on their performance (Obadina 2003, p.11).

Petroleum is the leading mineral produced in Nigeria. It is largely established in the Niger Delta that is made up of Ondo and Imo states, Akwa Ibom, Bayelsa and Delta states. Oil exploration in Nigeria began in 1938. Today, Nigeria is the chief oil producer and exporter in Africa.

Petroleum provides 70% of Nigeria’s foreign exchange. Nigeria accounts for 25 billion barrels out of the 66 billion barrels reserved by Africa. However, Nigeria has more oil and gas deposits but this has resulted in negative impacts consequently making the exploration of oil a curse rather than a blessing.

This study has an intention of expanding the use of marketing strategies to improve on the performance of oil industry in Nigeria. To achieve objectives and goals that have been set by the organization, an organization should implement and design various marketing strategies.

Various authors view marketing strategies in various perspectives for instance: It is seen as a matrix to plan, promote, produce, and mega market ideas, services, and goods that are applicable to clients and customers. It has been identified that Nigerians oil producing companies were not entrepreneurial and this was attributed to several factors: Inadequate trained manpower, poor development of infrastructure, and inadequate capital to employ marketing strategies in their oil companies.

Problem Statement

Some oil firms in Nigeria have been experiencing low sales from the sale of oil. Nigerians through occupy Nigeria are protesting against the removal of the subsidy claiming that this will affect the people of Nigeria, for instance, there might be a hiking of prices that will result in a commensurate increase in the cost of production of services and goods that will later be transferred to the community, leading to high rates of inflation.

They claim that before the removal of the subsidy, the rise in the cost of production remained the same. The outcomes of this research will enable future research in this area, as well as will identify the strategies of marketing that will be used by oil firms in Nigeria and the impacts of the marketing strategies used to improve on the sale of oil.

Purpose of the Study

The aim of this research is to analyze strategic management as a way to success for oil firms in Nigeria. The majority of research that has been carried out focused on the environmental effects of oil exploration and exploitation. Even though exploitation of oil in Nigeria has resulted in adverse positive impacts on the economy of Nigeria, much has to be researched about marketing strategies used by oil firms in Nigeria to market oil products.

Aims and Objective of the Study

These objectives are formulated for the current study to be carried out:

To evaluate the marketing strategies used by oil firms in Nigeria to Market their products.
To evaluate an oil firm that has benefited from the use of marketing strategies in marketing of oil.
To assess the efficiency of the marketing strategies in marketing of oil in Nigeria

Research Questions

This research will address the following questions:

What are some of the marketing strategies used in marketing of oil products in Nigeria?
What is the effectiveness of the use of these strategies in improving oil performance?
Which oil firm has highly benefited from the use of these strategies?

Literature review

The expansion of oil producing companies in Nigeria is in relation with factors affecting competition. The expansion in companies for oil products in Nigeria is not in relation with the increase in awareness of gas and oil services to the interested clients in the public.

The oil industry in Nigeria ids believed to have a type of corporate performance for the past years to attain a significant market share (Okwor 1992, p.8). There re various definitions of marketing strategies reflecting various aspects (Li et al 2000, p.6). Marketing strategy enable a company to utilize resources of an organization so as to achieve its aims and objectives.

This will involve the use of environmental factors and marketing mix (Li et al 2000 p.20). The purpose of marketing strategy is to find the strength, nature, and the relationship between the environmental factors and marketing mix in a certain circumstances (Jain and Punj 1997, p.37). According to McDonald (1992, p.37), the aim of the marketing strategy in an organization is to defend, build, maintain, and establish its competitive advantage.

The development of a marketing strategy requires the following:

It needs one to have intensive knowledge of the business.
It requires managers to have judgment, intuition and experience (Brownlie & Spender 1990, p.42).
One should have wide information about strategic management (Berry, 1997).

This research will determine strategic management used by the oil industries in Nigeria, the effect of ecological factors on the marketing strategies and the efficiency of these marketing strategies. There are several marketing tools that can be used by marketers in marketing their products for instance: megamarketing (Kortler 1996, p.11), and the 4Ps of marketing. Many managers use the marketing concept to perform various services of a firm (Kotler & Connor 1997, p.15).

Marketing is a very important aspect that helps many organizations to achieve their goals and deal with challenges facing the business organization (Kotler & Connor 1997, p.15). According to Brownlie and Spender (2005, p.38) strategic marketing involves making preferences. The method is used to help managers to in achieving their methods and goals. Woodward (2004) states that strategic management is a process of forecasting the future and coming up with appropriate procedures to enable one achieve his goals.

Methodology

The research method that will be used for this research is a cross sectional survey. I chose this method because it can handle a large population. This survey method will be used to assess the function of strategic marketing in the survival and expansion of oil firms in Nigeria in order to attain the desired outcomes. I will choose 350 respondents from the target population of 2500 people through random sampling.

We will also use questionnaires to collect information from employees of oil companies in Nigeria. The stakeholders to be interviewed include: employees of oil firms in Nigeria, leaders and residents of other oil companies in the country (Nigerian Environmental Study/Action Team 1999, p.288).

I will present data that I will analyze by use of frequency tables, descriptive statistics, correlation coefficients, and analysis of variance. Descriptive statistics will help me to analyze the features of the population as shown by the sample. It will also indicate if the marketing strategies used were effective in the oil industries in Nigeria. The target population for my research is employees of oil producing companies in Nigeria.

An Overview of the Shell Petroleum Development Company of Nigeria Limited

Shell Company started its business in Nigeria in the year 1937 and acquired a license of operation in 1938. It discovered its first oil field in 1958 at Oloibiri in Niger Delta and started to export oil in 1958 (Oshineye 2000, p.23). It is the largest fossil fuel company in Nigeria. Its major activity is exploration of oil and physical production. The exploration of gas and crude oil by the shell company in Nigeria has various activities that include the use of explosives and dynamites.

Explosives are usually exploded from the earth through dry land and water bodies. This directly affects fauna and aquatic life (Prince 1993, p.230). It is claimed that the exploitation of oil by this company has negative effects like negative influence on the capability of mammals and sea birds to procreate.

According to Sandberg (1996, p.12), the transportation process of the exploded natural gas and crude oil leads to gas leakages and oil spillage. It has also been claimed that oil production and exploration by Shell Oil Company has resulted in the abuse and violation of cultural, social and economic rights. Studies carried out indicated that this company uses marketing strategies like the market mix to improve on its performance.

Discussion and Analysis

The following are the techniques that I will use in analyzing information I have collected and the questions that will be answered:

Data Editing

This technique will be used to make sure that all information collected is monitored to avoid questionable and missing information. This will be maintained by monitoring technique to help detect any irregularity. Visual and manual will be utilized in editing before we computerize the collected information (Garrity & Levings 1990, p. 140). This technique will also help us to code the questions.

Data Cleaning

We will use a computer to check the collected information. We will also use range checks that will help us to notice and correct any unacceptable values, to note and find any unusual values. Additionally, consistency checks will be used to determine every pair of interlinked information. They will be used to identify and rectify impermissible combinations, to note, and find strange combinations, and to determine the reasonableness of joint distributions.

Anticipated Problems

While carrying out this research, problems may arise when collecting information. For instance, one method that will be used for collecting information is questionnaire and the respondents may not be willing to answer my questions. Some of them may be illiterate so they may have problems in understanding the questions on the questionnaire.

The possible solution to this problem is to approach individuals to read, understand, and request them to answer the questions. This may affect my entire research because the researcher may not be able to collect adequate information for my research.

Anticipated Timetable

Time	Activity
April	Initial research
	Literature review
May	Completion of methodology
June	Completion of primary research
July	Analysis
	Final writing

Company Liaison and Project Management

In addition to my dissertation, I have been asked to find the possible solutions to the problems resulting from oil exploration. We have also agreed that I will visit the company twice a week. I will review the progress of my research with my company supervisor by frequently visiting the company.

List of References

Birdsall, N & Subramanian, A 2004, Saving Iraq from it oil. Web.

Brownlie, D. & Spender, J.C 1995, ‘Managerial judgment in strategic marketing: Some preliminary thoughts’, Managerial Decision, vol.33, no.6, pp.39-50.

Garrity, S & Levings, S 1990, ‘Effects of an oil spill on the gastropods of a tropical intertidal reef flat’, Marine Environmental Research, vol.30, no.2, pp.119-153.

Jain, S.C & Punj, G 1997, ‘Developing marketing Practices: A framework Approach’, Marketing Intelligence and Planning, vol.7, no.3, pp.34-42.

Kotler, P. & Connor, R.A 1997, ‘Marketing of professional services’, Journal of Marketing, vol.5, no.4, pp.12-18.84.

Li, S, Kinman, R, Duan, Y & Edwards, J 2000, ‘Computer-based support for marketing strategy development’, European Journal of Marketing, vol.34, no.5/6.

Mba, C 1995, ‘Mineral resources exploitation in Nigeria: the need for effective physical and environmental planning’, Paper presented at the 26th Annual Conference of Nigerian Institute of Town of Planners, Held at Hill-Station Hotel, Nigeria.

Mc Donald, M, 1992, Marketing plans: How to prepare them, how to use them, Butter worth- Heinemann, Oxford.

Nigerian Environmental Study/Action Team, 1999, Nigeria’s threatened environment: a national profile. Web.

Obadina, T 2003, Oil wealth as a curse for Africa’s poor. Web.

Okwor, K 1992, ‘Oil industry and the Nigeria economy’, The Bullion, vol.9, no.3.

Prince, R 1993, ‘Petroleum spill bioremediation in marine environments’, Critical Rev. Micobiol, vol. 19, no. 4, pp. 217-242.

Salu, A 1999a, ‘Securing environmental protection in the Nigerian oil industry’, Modern Practice Journal of Finance & Investment Law, vol.3, no.2, pp.222-260.

Sandberg, EC 1996, ‘Development of remote sensing for coast guard applications’, Remote Sensing, vol.7, no.28, pp.12.

Woodward, R 2004, ‘Technological expansion: The interaction between diversification strategy and organizational capacity’, Journal of Management Studies, vol.33, no.3, pp.701-712.

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