Marketing Management of Oman Cement Company - Example

Oman Cement Company Marketing Management Plan Name: Course: Instructor: Institution: Date of Submission: TABLE OF CONTENT 1.Executive Summary 3 2.Situation Analysis 4 a.PESTEL ANALYSIS 4 b.SWOT ANALYSIS 5 c.COMPETITOR ANALYSIS 7 3.Marketing Objectives 8 4.Marketing Strategies 9 5.Market segmentation strategy 10 a.7ps 10 b.Designing the marketing communication 12 c.Implementing the pricing strategy 13 6.Budget and Marketing plan Implementation 13 7.Evaluation and Recommendation 15 8.References 16 Oman Cement Company Marketing Management Plan 1. Executive Summary Oman Cement Company is a major cement manufacturing company in Oman. Oman Cement Company roles include the manufacture and sale of cement among other related products. It is second among the two key cement selling and manufacturing companies in Oman. The company is listed publically, which is the second largest cement manufacturing company in the country. The competition the company faces is mainly intense due to the foreign competition they face. However, the marketing plan intends to propose new strategies while improving the existing to ensure the company remains among the top selling cement companies in the country. Oman Cement Company (OCC) was established in 1978 during a year when the country supported Oman projects. The company has grown steadily where in 2005, it reported that it owned about 33 million shares and has since then grown continuously. The mission and vision of the company are to ensure the company fulfils and meets the cement demand in the country while creating jobs for the people of Oman. The company also has a vision to own resources such as water, finance, and gas electricity among other, which shows one of the strategic goals of the company. The marketing plan begins by analyzing the situation of the company internally and externally. The marketing objectives will them be evaluated, where through the marketing strategies the plan will be developed to ensure the company remain among the top selling and profitable cement manufacturing companies in the country. More importantly, the plan will provide a budget and marketing plan implementation process, while evaluating recommendations to guarantee the growth of the company. 2. Situation Analysis The situation analysis is conducted through evaluating the internal and external situation of the business. The PESTEL analysis will be used to provide the external environment of the business and the competitor analysis. The SWOT analysis will be used to provide an internal outlook of the company. a. PESTEL ANALYSIS Political The government of Oman supports the cement industry. That is; the Pease and Trade agreement treaty in the country that ensures the business grows in a stable way, that also increases the healthy and peaceful business climate for the foreigners and local investors in the country. The government is also planned to reduce dependency based on the petroleum, thus supporting businesses such as the cement company. The decisions will help inspire more foreign and local investments, while guaranteeing a safe and fair economical business environment. Economical The country of Oman has always had stable and strong economic positions. The stable economy and currency. The stable economic growth led to the development of the country, which steered to the demand of more of the OCC and its competitor products. Thus, the Oman economic position supports the growth and great performance of the company as they continue to satisfy their customers. Social Trend Oman has a high population, and a higher birth rate. Most of the citizens are married at averagely 25 years while most of the citizens are young. Most of the citizens are young, and beginning the work force. Most of them are literate, which stipulates that the developments in the country will continue to occur. A fast growing population of young, literate and employed individuals stipulates that the need of cement and other products will continue to occur. Thus, the demand for cement among other utilities is expected to grow steadily and will influence the performance of the company economically. More importantly, the economic growth in the country leads to need of changes as advancements and younger generation brings new ideas into being. The new ideas demand changes and reconstruction of buildings among other infrastructures, which increases the demand of cement locally and internationally. Technological Analysis The benefit of using technology in the cement industry is imperative since it helps to optimize their resources. For instance, technology helps cutting costs while increasing the production of the company. Technology helps the company effectively satisfy the demands of the customers through effective strategies that ensure the company does not engage in an environment pollution and emission process. The use of technology in the OCC is beneficial since it improves the communication of the company, management of customers, marketing and meeting other needs of its customers and investors. Environmental Analysis Legal Analysis All the cement industries in Oman must meet the needs and legal regulations of the commerce ministry and other finance regulations. The cement companies in man must register at the Muscat Security Market, which ensures they set fair prices of the cement in accordance with the commerce and finance ministries. The environmental law also affects the OCC through stipulating the factors the company must meet to ensure its operations are environmental friendly. The regulations that govern the industry ensure the operations are safer, healthier and smooth. b. SWOT ANALYSIS Strengths A high domestic market: The demand in the market is expected to grow highly. Thus, the demand for their products will be high. Both RCC and OCC market prices are controlled by the government, therefore, the main advantage of the OCC is competing on its brand name. Though RCC is the market leader, its strength derives from the high productions it makes in the market. Thus, if the OCC increased its production it could satisfy a higher number of consumers and increase its customer base, which is a strategy that would lead it to competing to dominate the market. The following table presents the production levels of RCC and OCC in 2007 and 2008. (Al-Badi) Existing distribution and sale networks: OCC shows that it has the potential for growing over the long term based on its expansion strategies and the anticipated cement growth demand. In addition to the brand name, and provision of quality products, the company could dominate the market. Weaknesses Small Business units: Small businesses are also an important part of the cement industry and increase competition, though minor but still possess as a weakness. RCC, the cement leader in the market of Oman has a 3 MTPA clinker aptitude of whereas the OCC capacity of its clinker is 1.20 MTPA. The weakness is perceived in that; RCC constantly increases its MTPA, while OCC maintains a stable capacity. The growth of the MTPA improves the effectiveness and competitive advantage of RCC, where the lack of OCC MTPA occurs as a weakness to its performances. Opportunities Growing demand: the country has been experiencing a growth advantage on the availability of numerous housing projects. The OCC is positioned well in the market, which ensures it has a clear advantage of meeting the demand of the cement and other related projects. The Oman cement industry requires equipment’s such as plant installations, building plants and other product needs for about 18 months operation. The government controls the raw material area where the cement is manufactured in; but OCC like RCC has a long agreement that gives it rights to exploit the cement in different locations. Thus, entry of new competitors will be challenging. Thus, OCC has the opportunity of exploiting its contracts and openings to gain a higher market share in the market. New products and services: The OCC offers a range of products in the local and foreign markets such as Portland. Thus, the company has a high potential of improving the existing products to increase the market share of the company both in foreign and local markets. For instance, the company can use products such as land, raw materials and the plants to meet the demand of the market. The growing economy also supports that the Growth rates and profitability: The growth rate and profitability of the company is steady. Thus, the financial position of the company is strong, which makes it a perfect company to meet the cement growing demand in the country. Despite intense competition, there is a higher chance that the company among others in the industry will experience a stability of profits. Threats Cash flow: The cash flow profitability of the company is expected to be negatively affected in the long-term owning to the anticipated high expenses and costs that are linked to the costs of clinker OCC imports, taxes, gas prices and others. Another key threat is the rising transportation costs of cement, and a short expiry rate, where the Oman climate also affects the expiry and suitability of the cement. Thus, unless the company develops a Just-in-Time process of delivering products it may experience some challenges linked to expenses or losses. Such costs may be a threat to the growth of companies such as OCC. c. COMPETITOR ANALYSIS The cement industry in Oman comprises of two key players; the Raysut Cement Company (RCC) and the Oman Cement Company. The RCC is the market leader, though it has a clinker of about three MTPA while OCC has a clinker of 1.20 MTPA. Thus, the clinker capacity in the industry is 4.20 MTPA where RCC has more than half of the clinker capacity, which makes it a strong competitive advantage for the company. However, in the industry, the consumption of cement is growing, including the import of cement. The RCC increases its capacity constantly, while that of OCC has remained steady for a long while. Thus, it weakens the competitive advantage of the company to be ever the market leader in the country. RCC and OCC operations are in different locations, though the same regulation affects the companies. They both sell their products to the same market, and customers with similar needs that demand more cement every now and then. OCC is located in Muscat, where about 80 percent of the total Oman constructions are occurring. Thus, if positioned carefully and wins over the local market of Muscat, it could beat the RCC as the cement market leader in Oman. Cement has no substitute products in the market. Thus, the competition from other small business units is not challenging since the product is irreplaceable. The OCC must learn to position and brand the product in a way that increases loyalty from the consumers mainly in Muscat where all major constructions take place. Demand for cement in Oman is higher, and both RCC and OCC face challenges in meeting the productions. Though the government controls pricing, the companies if well marketed could supply the consumer demand effectively. The government controlling the price stipulates that the buyers do not have a bargaining power and so does the suppliers. This information stipulates that only the best strategy for the company to win the market be by gaining a high loyal customer base. OCC has a key advantage in that it produces the cement to satisfy the market demand of building, stone tiles factories, construction, and block factories. The company has top quality products such as the sulphate resistant cement. Thus, it is a competitive advantage since the product is unique as it is used during times when there is a high chloride permeability resistance. It is effective in its uses, water proofing, less heat hydration, high resistance, and corrosion prevention. OCC has unique and top quality products at affordable prices, compared to RCC. 3. Marketing Objectives The section will develop the goals that the business will intend to attain when promoting the product and the company to its potential consumers. That is; it presents the marketing strategies that will be implemented to achieve the objectives of the organizations. More importantly, the goals of these marketing plan, which are to ensure constant growth and profitability to the company will be attained (Philip & Kevin, 2006). The objectives of OCC include manufacturing, producing, preparing, exporting/ importing and refining the cement they sell. They also have a key objective of carrying on all dealers and manufactures of cement in the country. The objective of OCC is to develop a strategy that increases its chances of competing with RCC and gaining a higher market share. OCC has to evaluate and develop a competitive strategy. Prior to improving the strategy, we analyze the existing strategy. OCC competitive strategy implements the focused differentiation strategy. That is; it produces a unique cement product, that is mainly beneficial for oil wells. Given that the petroleum industry is a thriving business in the country, it is normal that the OCC focused on such consumers. It is a profitable business, given only OCC can and still produces this cement. However, I propose that OCC should focus more on other consumers that make up the higher market by using the hybrid strategy. The strategy will be added to the focused differentiation process. That is; despite focusing on its 4. Marketing Strategies In market planning, strategy plays a key part, as the research will show the importance of strategy in the Oman Cement Company. Through evaluating the current strategy of the company, a better way of using it for the success of the company will be presented. It shows the need of clear organizational goals, competitor analysis in search of competitive advantages, expectations/ values and vision and mission of the company. The company will use the differentiated marketing strategy to market its products. Thus, with orientation to the OCC products will be accomplished through the concentrated marketing progression that necessitates the marketing to its consumers and targets markets (Philip & Kevin, 2006). Differentiated strategy for the market will be used since marketing communication messages will be sent to different target markets for improved growth and success of the company. More importantly, mass marketing will be used for the promotion of the company products (Gupta & Lehmann, 2005). The market will be targeted in terms of demographics, to ensure that the different target groups are communicated to effectively. Differentiation will market to the different target markets, which will also ensure that the OCC product is differentiated from competitor products (Levi, 2007). The policy will openly state the profits of consuming their products. 5. Market segmentation strategy It includes an analysis of determining the target market of the company, which will allow the development of different marketing messages to the different target groups. More importantly, it provides the primary target group the Oman Cement Company will focus on. The segmentation of the market is reliant on the demand of cement and its products that will be expected in the year to come. (Global Investment House) Based on the above information, it is clear that the demand for cement and other related projects will continue to grow. Thus, it is important the company positions itself in the market in a different manner to compete intensely with RCC, and ensure its performances financially and socially improve. Thus, using the 7ps of marketing, communicaion and pricing strategies of the OCC will be analyzed to understand how it will compete in the market to meet the anticipated demand of cement. a. 7ps It refers to the 7PS of a product that affect the success of the company. Thus, each p will be evaluated to understand its role in ensuring improved success of the company plans. The seven ps include promotion, product, place, price, people, physique, and process. Product The product development of the cement from the Oman is developed to satisfy the customers’ needs and demands. The quality of the products is high, which meets the expectations of the company. Thus given that the product is tangible, it provides the value of the customer. However, the majority of the customers do not need the unique cements but the cement that other companies are selling. Therefore, it is important that the development of the product is attained to meet the needs of different target markets, which will also increase the profitability of the company. Pricing The pricing of the product is important, but the government controls the Oman Cement Company pricing. Thus, pricing is provided at a fair price that the customers are willing to compensate. The price is effective and provides profits for the company (Kurtz, 2010). Place The product is provided in the right place, since it is developed in the place where there is so much construction taking place. More importantly, the company delivers its products to its customers at the right time, influenced by the strategic position the company is placed at. To increase success, the marketing plan proposes that the product be placed in the internet and mobile places where all consumers can easily access the products (Gupta & Lehmann, 2005). The marketing plan proposes the optimization of the internet t increase its customer base and profitability. Promotion The promotion strategy of the company is effective, though not so vibrant to increase the profitability of the company. The marketing plan proposes the use of the internet where the company can communicate with the customers directly. Providing them with a platform to communicate directly with the company, where the staff takes the advantage of promoting the company. That is; as customers inquire about some services and products, the staff will use other means to directly promote other services and products they offer. The promotion process will include an analysis of the benefits the customers will gain by using the products. People People stipulates the staff of the company, they make the first impression to the customers regarding the company. Thus, the company will evaluate the relationship strategies and behaviors the staff members possess. The staff members must show positive relationships to the customers and lead to customer satisfaction. Thus, the marketing plan must ensure that the staff increases the satisfaction of the customers through customer relationships. The company will train the staff to ensure they meet the needs of the customers while increasing their loyalty to the company. Process The customers invest in the experience that the product offers. Thus, the products of the OCC are sufficient in that they increase the loyalty of the customers based on the satisfaction the customers gain from using the product. The after effects of using the product are satisfying to the customers, including the process of delivering the products and services. The waiting times, the experiences of using the products among others including value increase efficiency in the business. Physical Evidence The physical evidence is to be provided through a platform where customers can review the experiences of other customers including a platform where they can communicate with other customers for evidence while purchasing their products. b. Designing the marketing communication The section will evaluate the processes used to develop communication messages for the target groups. If the process is okay, it will be used in this process, however, on the stipulation the process does not meet the needs of the plan it will be improved or changed. The communication plan begins by engaging in an evaluation where the company analyzes the market to understand the audience so they can appeal to the interests of the company. The communication plan will help understand the needs of their customers such as the reasons they choose the products they do, including patterns of purchasing and other demographics that affect the buying process. In communicating, the company will develop a selling proposition showing the main benefit they offer the market (Ulrich & Eppinger, 2004). Thus, the marketing message is the unique benefits it products offer to the market and its customers. The marketing message will be the competitive advantages of their products among other user benefits. For instance, the marketing plan will include an analysis of the 7Ps of the product. The message will present an analysis of the effective position of the product in terms of the product placement, price, processes, physical evidences, and promotion will ensure the benefits of the products are presented. The goals of the marketing plan will be developed to ensure the success of the plan is effectively measured. c. Implementing the pricing strategy The pricing strategy of the organization will be evaluated, and improved to contain the new changes and goals of the business. The pricing strategy to be used will be explained and implemented to show how the organization will sell their products in the market. The pricing strategy is not challenging to implement since the government controls the prices of almost all their products. Therefore, the pricing strategy is linked to the development of their products. The company should develop numerous products that meet the needs of different target groups (De paz, et al., 2009). The process will provide their customer with a variety of products and prices to choose. The development of different products and services will lead to the development of the pricing strategy. 6. Budget and Marketing plan Implementation Once the marketing plan has been attained and developed a plan for the budget of implementing the plan will be provided to ensure the company can fund the process for success in the business. The budget plan will include diagrammatical process showing the timeline of attaining the set objectives. Timeline of Marketing Plan Implementation Budget Activity Cost for 2 two Months ($) Market Evaluation 500 Market targeting and Segmentation 200 Communication and Pricing strategies development for market targets 200 Communication strategy implementation 300 Pricing Strategy Implementation 300 Marketing Objectives Measurements 200 Marketing Goals development/ measurements 200 Marketing plan implementation evaluation 400 The implementation of the marketing plan will begin through the market evaluation procedure to understand the needs of the market followed by the product segmentation process. The first segmentation will be through using the demographic segmentation approach, which includes dividing the target groups with reference to demographics (Kurtz, 2010. The product will also be divided through behavioral segmentation process. This approach requires the target groups to be divided using the usage rate of the product expected and attitude towards the product (Cohen, 2005). Therefore, concerning this method the products will also be manufactured using the product usage rate. With reference to the behavioral method, the OCC products will be manufactured in numerous types and tastes to appeal to the target groups that purchase the product (Aaker, et al., 2000). By the end of the first trimester, the company should be the market and position their products during a marketing plan introduction stage with numerous profits and all employees should clearly have the capacity to follow the defined guidelines for marketing to evaluate the perception of the OCC cement while progressing the products in the market to compete with RCC. 7. Evaluation and Recommendation The section shows how the marketing plan attainment will be measured including the contingencies that will be used on the stipulation the goals are not met. It will also provide some recommendations that the company should embrace in the future or during the implementation of the marketing plan. The following strategies should be considered for future success and growth of the OCC. The strategies involve the future of the firm and how it will reach the goals it has set (Porter, 2004). Based on the information provided here, OCC has the capability and resources to dominate the market. Therefore, it is recommendable that the company starts marketing its products through evaluating the different target markets, and promoting/developing different products for different markets. The company should stop focusing on concentrated markets, but market and promote their products in the mass market through engaging in the hybrid marketing process. The company should focus on been a cost leadership company through product differentiation and catering for the entire market. 8. References Aaker, J., Brumbaugh, A., Grier, S. & Dick, T., 2000. Nontarget Markets and Viewer Distinctiveness: The Impact of Target Marketing on Advertising.. Journal of Consumer Psychology, pp. 9-12. Al-Badi, S. K., 2015. Marketing Strategy Module. A Case Study of Oman Cement Company. International Journal of Economics, Commerce and Management, pp. 1-14. Cohen, A. W., 2005. The Marketing Plan. New York: John Wiley & Sons, Inc.. De paz, C. M., Eric, R. & Nisheeth, G., 2009. The Path to Developing Successful New Products. New York: MIT Sloan Management Review Press. Global Investment House, 2016. Oman Cement Sector. [Online] [Accessed 24 11 2016]. Gupta, S. & Lehmann, D. R., 2005. Customer Retention section . In S. Gupta, & D. R. Lehmann,. In: Managing Customers as Investments: The Strategic Value of Customers in the Long Run. Upper Saddle, NJ: Pearson Education/Wharton School Publishing, pp. 70-77. Kurtz, D., 2010. Contemporary Marketing Mason. OH:South-Western: Cengage Learning. Philip, K. & Kevin, L. K., 2006. Marketing Management. In: What is geographic segmentation. New York: Prentice Hall. Porter, M. E., 2004. Competitive Strategy: Techniques for Analyzing Industries and Competitors.. New York: Free Press. Ulrich, K. T. & Eppinger, S. D., 2004. Product Design and Development. 3rd ed. New York: MgGraw Hill. Read More