Marketing in a Liberalized Petroleum Industry: a Study on Changes in Marketing Mix of Oil Companies in Kenya

Abstract

The study sought to investigate and document changes made in the marketing mix by Petroleum (oil) firms as they operate in a liberalized environment. It was based on six oil companies, which have operated in both pre-liberalized and liberalized periods. The specific objectives of the study were; to determine whether oil firms have adjusted their marketing mix to cope with the new environmental changes, to determine the nature of these adjustments and to establish whether these firms are facing any new changes/problems in their marketing activities as they operate in a liberalized market. The study used primary data, which was collected by use of a questionnaire and the mode of collection was by personal interviews. The data was obtained from all the six firms forming the population of interest. It was then analyzed using descriptive statistics. Findings of this study reveal that liberalization has led to a revolutionary change in the way things used to be done in marketing petroleum products. All the petroleum firms studied had to make changes in nearly all the elements of marketing mix in order to remain competitive. They have become more market oriented and have come out of the narrow sales or production focus. Consequently they became innovative and sought new ways of approaching the changed environment, as the market is no longer the predictable one they were used to before liberalization. In view of the study's findings, a few recommendations have been made. Firstly, companies should be more agile and continue adjusting their marketing mix to fully exploit any existing opportunities - which may add more value to their operations and at the same time be of benefit to the consumer/customer. Secondly, due to the existing stiff competition in the industry, and the fact that petrol is a commodity which is not easy to differentiate, companies should use quality of service to establish a competitive edge in the market. Thirdly, since all the firms in the study are members of the newly formed Petroleum Institute of East Africa, they should actively use this body to lobby to the government to- ensure there exists an even playing field. Specifically, the government should create a safe, healthy and environmentally acceptable petroleum industry, that is based on professional standards, and the principles of a fair, level playing ground. It is only when the market is like this that oil firms can derive maximum benefits from the changes they make in the marketing mix.