Deliverables 2400 words. In addition to organizing sections of the marketing plan that you have been working on for your expansion, you do the following this week:
Add the marketing plan section, which should include the following:
• Identify 1 promotional strategy and advertising message that you recommend differentiating your brand.
• Establish where the product will be available, naming at least 3 distribution outlets, with one being an online storefront.
• Develop the pricing strategy.
Develop your client’s international marketing plan. It’s time to polish the international marketing plan from Weeks 1–3. The plan will include the following sections:
• Executive Summary: This summarizes major points of the plan.
• Introduction: Include a brief explanation of the company, product, and the country chosen for global expansion.
• Cultural Analysis: Briefly describe how the product fits your selected country’s culture.
o Include the following information about expansion into your particular country:
? Geographic Research
? Target Market Population and Demographics
? Economic Research
? Legal Research
? Political Research
? Government Considerations
? Language Considerations
• Competitive Analysis: Include information about the brand’s competition.
o The 4 Ps of marketing
o Industry information
• Marketing Plan
o Marketing Objective
o Global Positioning Strategy
o Product Differentiation
o Advertising and Promotional Strategy
o Distribution Strategy
o Pricing Strategy
o Measuring Effectiveness
International Marketing Plans
Exxon Mobil seeks to increase its presence in the UAE region. Since its entry into the area, the company has primarily focused operations in Abu Dhabi, UAE’s capital. The UAE region is attractive for investment owing to a number of factors. First, the region is located in a suitable geographical location with access to the sea. This will make exportation easier. Second, the area has a large population mainly comprising of immigrants. This provides a large workforce for the company. Third, the language spoken is favorable for the company. Although Arabic is the official language, English is the language of business. This makes it easier for foreign companies to operate businesses in the region. Fourth, the UAE region has a stable government in place, with minimal conflicts. Fifth, the UAE government has introduced favorable trade policies in the region. One of the key policies is the free trade zones, which provide special privileges to businesses operating in the free zones. It is worth noting that the UAE region is highly competitive. Nonetheless, the company can be able to beat the competition by applying innovative technologies and through product differentiation.
Exxon Mobil is a large multinational corporation headquartered in Texas, United States. Exxon Mobil commenced operations in the 1870s as Standard Oil Company. Over the years, the company has made acquisitions or entered into partnerships as it continued to expand. The company started as a regional marketer of kerosene in parts of the United States. Over the years, Exxon Mobil has evolved to become the largest petroleum and petrochemical company in the world. The company focuses on oil development and production. Oil development involves the manufacture of lubricants and petrochemicals for industrial use. Exxon Mobil has operations in a limited area of the UAE region. The company has concentrated in oil development and production within Abu Dhabi, Dubai. In the recent past, the company has developed interest in expanding oil production and marketing within the larger UAE region. The paper is a presentation of a marketing plan that Exxon Mobile will apply in expanding operations to the larger UAE region.
The UAE is an area along the eastern cost of the Arabian Peninsula. It borders the states of Oman, Saudi Arabia, and has maritime borders with the state of Iran. UAE has a coastline at the Arab Gulf, which it shares with the Gulf of Oman. The coastline is very important since it allows for oil exportation via sea. The UAE region consists of seven emirates that came together to form one strong state. The seven include Dubai, Abu Dhabi, Ras Al-Khaimah, Fujairah, Umm Al-Qaiwain, Ajman, and Sharjah (Al‐Suwaidi, 2011). The seven states united into a federal state in 1971 by adopting a similar constitution. Abu Dhabi is the largest emirate, comprising of over three-fourths of the total land area under other emirates (Al‐Suwaidi, 2011). Abu Dhabi is the hub of oil and gas production in the region. It also serves as the capital of the UAE region.
Target Market Population and Demographics
UAE demographical trends reveal high immigration status into the country. According to Al-Suwaidi (2011), UAE had a total population of 558,000 citizens in 1975. More than third of this population comprised of UAE nationals. Data collected in 2015 indicates that the demographical trends has significantly changed over the years. Due to immigration, the population has increased almost exponentially to the current 6,072,475 (estimated) (Central Intelligence Agency [CIA], 2017). About 88 percent of the current total population consists of immigrants. The major ethnic groups in the region are South Asians (59.4%), Emirati (11.6%), Egyptians (10.2%), Philippines (6.1%), and other groups (12.8%) (CIA, 2017). The official languages spoken are Arabic, Persian, English, Urdu, and Hindi. Arabic is the country’s official language, while English is the language of commerce. There are also other minor languages representing the minor ethnic groups.
The UAE region is majorly Islamic in matters religion. Muslims make about 76% of the total population, while Christians are a partly 9% (CIA, 2017). Hindus and Buddhists make about 5% of the population. The UAE government has been able to fight religious intolerance in the country. This means that Christians, Muslims, and other religious groups are free to exercise their right of worship without fear of victimization. The age structure reveals that EAE has a large population of youths. About 61.14% of the population comprise of individuals between 25 and 54 years (CIA, 2017). About 34% of individuals are youths below 24 years. A partly 1.07% of the population is 65 years and above. The elderly dependency ratio is 1.3, which is among the lowest in the world. These data reveals that the largest segment of the population is active. UAE has high literacy levels, with 93.8% of the population above age 15 being able to read and write (CIA, 2017). This indicates the country has skilled labor.
The UAE region has experienced high economic growth and development based on sound economic principles. The government has largely hedged its economy upon market principles that seek to creative a competitive environment for foreign and local businesses (Al‐Suwaidi, 2011). The UAE government has formulated economic principles that seek to attract foreign investors as well as skilled expatriates into the region. This has significantly improved the productivity of the region in all fronts including oil and gas production, banking, insurance, technology, tourism, and other industries (Al‐Suwaidi, 2011). The oil and gas industry was the major source of revenue in the 20th century. Towards the end of this century, the government sought ways of diversifying the economy in various fields.
The economic policy in the UAE region aims at achieving three key objectives. The first objective is to bring about economic stability by ensuring a fixed exchange rate system based on the United States dollar (Al‐Suwaidi, 2011). The second objective is to develop sound fiscal policies that lead to the development of a balanced budget and that encourage foreign investment by eliminating trade barriers such as taxes. As such, UAE has set up tax-free zones where foreigners can start businesses without unnecessary tax burdens. Lastly, the economic policy aims at investing the proceeds from the oil and gas industry in infrastructure development and accumulating financial assets (Al‐Suwaidi, 2011). The proceeds from the oil and gas industry have significantly helped in infrastructure development of the entire region. The national government allocates the proceeds to all emirates irrespective of whether the regions produce oil and gas.
The legal environment has significant impacts in the operations of businesses, more so foreign businesses. One of the key factors in the legal environment is taxes. The UAE government has established exclusive tax-free zones where businesses can set up operations. Businesses in these zones enjoy special tax, import regulations, and customs (PricewaterhouseCoopers (PWC), 2015). In addition, they enjoy a unique regulatory framework. Free zones allow foreign businesses to have up to 100% foreign ownership. However, foreign businesses in free zones face restrictions in terms of the geographical region they can conduct operations. If the foreign business wishes to conduct business outside the free zone, the law requires that it must engage a distributor or agent (Youssef & Moustafa, 2015). The distributor or agent must be a UAE national who earns a commission for the services rendered to the organization.
The political leadership in the region combines the elements of a federal system and the traditional monarchical leadership. Choosing a president involves reaching of a consensus among the various emirate rulers (United Arab Emirates (UAE), 2017). Nonetheless, Abu Dhabi and Dubai emirates have a strong role in influencing critical decisions such as the budget or choosing the president. The choosing of rulers in the emirates follows the traditional monarchical system. In 2006, slight changes affected the electoral process, with the introduction of Federal National Council (FNC). Its role was to increase public participation in the voting process. In 2011, further amendments were enacted allowing the FNC to increase eligible voters to 130,000, an increase from 7,000 in 2006 (“UAE”, 2017). In the future, more citizens will have the right to vote. The increased democratization of the state will strengthen the stability of the region. This will definitely improve business in the UAE region.
The UAE government has been active in promoting foreign investment and attracting skilled expatriates into the region. Over the last few decades, the government has made significant efforts to increase foreign direct investment inflows into the region. The current target is to achieve foreign direct investment inflows equivalent to 5 percent of the country’s gross national product (GNP) (“UAE Country Commercial”, 2017). The government has been able to establish peace and relative stability in the region. With increasing democratization, expectations are that peace will continue to prevail in the region. The government’s foreign policy aims at enhancing the peaceful resolution of conflicts with the neighboring states. It also aims at ensuring the sovereignty of the emirates and bringing peace in the Arabian Gulf region. The relative peace has been critical in encouraging investors to consider the region as attractive in doing business.
Language is critical in determining the ease of doing business. The official language in UAE is Arabic. Nonetheless, most people know how to speak or write in English (PWC, 2015). There is no legal regulation guiding businesses on the language to apply. Majority of businesses use English as their business language, including in bookkeeping. This has opened up the UAE region to foreign investors from different parts of the world. This is because the English language is widely used in many parts of the world. As earlier mentioned, other languages include Persian, Urdu, Hindi, and others.
The Four P’s of Marketing
Product. Exxon Mobil deals in oil and gas production and manufacture of various petrochemicals. The company produces a variety of oils and lubricants. The company markets its products under four brands. These include Esso, Exxon, Mobil, and ExxonMobil Chemical brands (Exxon Mobil, 2017). Esso and Mobil brands are marketed around the world, while Exxon is common in the United States. ExxonMobil Chemical is common in various parts of the world and including the United States.
Price. The company has a diverse portfolio of products. The price varies depending on the processes through which the products go through, and the target customers. For instance, high-speed oils are costly because they have to pass through many refining processes. In addition, such oils call for higher technology.
Place. Exxon Mobil has predominantly operated in the United States. In the recent past, the company has made efforts to become a global brand. As such, it has increased its presence in various parts of the world (Exxon Mobil, 2017).
Promotion. Exxon Mobil sponsors sporting events as a way of conducting promotions. In 2016, the company signed a deal to promote NBA. In addition, Exxon Mobil has engaged in numerous corporate social responsibility activities (Exxon Mobil, 2017).
The oil and gas industry is highly competitive especially in the UAE region. Various companies have entered in agreements with the UAE government to develop oil and gas in the region. Various international companies share the available oil fields. Some of the companies include Royal Dutch Shell, BP, Total, and Abu Dhabi National Oil Company (Daya, 2014). All these companies are competing for a share of the country’s oil resources. Exxon Mobil will aim at introducing an attractive revenue sharing ratio with the national government. The company will also apply advanced oil and gas production technologies in order to minimize wastage. This will increase production efficiencies.
The main objective is to expand operations in the entire UAE region through continued investment in oil and gas production. The company’s focus will be oil development across the entire UAE region (Exxon Mobil, 2017). Oil exploration, production, and marketing will thus involve all UAE states including Dubai, Ras Al-Khaimah, Fujairah, Umm Al-Qaiwain, Ajman, and Sharjah. Currently, oil development has been mainly concentrated in the capital, Abu Dhabi.
Global Positioning Strategy
Four core elements describe the company’s global positioning strategy. The first element is operational excellence (Exxon Mobil Corporation, 2013). The company seeks to ensure there is effective execution of strategy. This will ensure it increases production and improves the quality of products. The second element is technology leadership. The company seeks to become a leader in new product development through innovation. The third element is to develop a capacity for integrating resources and opportunities (Exxon Mobil Corporation, 2013). Lastly, the company seeks to conduct due diligence when it comes to investing.
It is quite difficult to include a product differentiation strategy in the oil and gas industry. Nonetheless, the company has successfully differentiated its products from the rest of the competition by introducing highly refined products targeting customers who are willing and able to pay additional premiums. For instance, the company has introduced highly refined lubricants or high-speed oils targeting the premium market.
Advertising and Promotional Strategy
The advertising method will involve the mass media. This will reach the largest number of consumers in the shortest period. Mass media advertisements will be critical in building awareness among consumers of the company’s products within the UAE region. The company will use both radio and television advertisements to create awareness of its products and increased presence in the region. The promotional strategy will involve press releases and writing articles on environment. This will help in promoting a positive image of the company as one that cares for the environment.
Distribution of petroleum products may involve the adoption of complex distribution systems that includes trucks, railways, pipelines, and ships (Youssef & Moustafa, 2015). Distribution in the UAE region will involve trucks and pipelines. The trucks will help in carrying the oil to refineries, where the products will be transported via pipelines to various parts of the country. Transportation using pipelines is the cheapest and most convenient for liquefied petroleum. Use of trucks is time consuming and contributes to wearing down of roads, increased traffic congestion, and accidents. However, trucks may provide key links to areas not covered by the pipelines.
The company seeks to employ two pricing strategies for its diverse range of products: economy pricing and premium pricing. Economy pricing will involve keeping the production costs minimum such that the final product (petroleum) reaches the consumer at a reduced price compared with the competition. Premium pricing will involve the high-speed lubricants targeting the premium market.
A number of indicators are applicable in measuring the effectiveness of the company. The first indicator is achievement of business goals and objectives within a specific timeframe. The company should be able to transform goals and objectives into tangible results within a particular period (PWC, 2015). Another indicator is the brand image. This will be useful in measuring the effectiveness of the advertising and promotional strategies. Customer satisfaction levels will also be useful in measuring effectiveness. Customer satisfaction refers to how customers view the company’s products as solving their problems. Lastly, effectiveness will be measured by analyzing the product penetration in the UAE region. The company aims to have over 50% product penetration within a year in the UAE region.
Exxon Mobil must continue pushing for new concessions with UAE’s national government. The oil and gas concessions will ensure that the company’s presence in the UAE region and across the world remains relevant. It is worth noting that the UAE is one of the largest oil and gas producers in the world. By seeking for new concessions, the company will be able to expand its production significantly (Al-Suwaidi, 2011). It is recommended that the government diversify its operations to include the production of renewable energy. If the face of global warming due to increased pollution, there is need for a concerted effort to reduce the dependence on non-renewable sources of energy. Exxon Mobil should look into renewable sources of energy such as electricity production using solar.
The United Arab Emirates is an attractive region for oil and gas investments. The region is endowed with large volumes of crude oil and natural gas. The government has developed favorable trade policies aimed at attracting foreign investment and skilled expatriates in the region. In particular, the government has been keen to develop mutually benefiting partnerships with multinational corporations involved in oil and gas development. The UAE region has mainly relied on expertise and technology from the United States to develop its oil production. Exxon Mobil has been a major player in the oil and gas industry in Abu Dhabi. The company plans to increase its presence across all seven emirates through developing mutual partnerships with the government. Through its marketing plan, the company seeks to differentiate its products by introducing high-speed lubricants for the premium market. Advertising through the mass media and product promotions will help in creating awareness of the company’s products and developing a positive image among consumers.
Al‐Suwaidi, A. (2011). The United Arab Emirates at 40: A balance sheet. Middle East Policy, 18(4), 44-58. doi:10.1111/j.1475-4967.2011.00509.x
Central Intelligence Agency (CIA). (2017). Middle East: United Arab Emirates. The World Fact Book. Retrieved from https://www.cia.gov/library/publications/the-world- factbook/geos/ae.html
Daya, A. (2014, Oct. 29). As Abu Dhabi sizes up oil partners, Western firms risk being left out. The New York Times.
Exxon Mobil. (2017). About. Retrieved from http://corporate.exxonmobil.com/en
Exxon Mobil Corporation. (2013). Exxon Mobil Corporation analyst meeting.
PricewaterhouseCoopers (PWC). (2015). Doing business in the UAE: a tax and legal guide. Retrieved from https://www.pwc.com/m1/en/tax/documents/doing-business- guides/doing-business-guide-uae.pdf
United Arab Emirates (UAE) Country Commercial. (2017). United Arab Emirates – openness to and restriction on foreign investment. Retrieved from https://www.export.gov/article?id=United-Arab-Emirates-openness-to-foreign- investment
United Arab Emirates (UAE). (2017). Governance. Retrieved from https://chronicle.fanack.com/united-arab-emirates/governance/
Youssef, M. A. E., & Moustafa, E. (2015). Societal institutions and control system characteristics: Empirical evidence from the UAE. Journal of Islamic Accounting and Business Research, 6(2), 268-291. doi:10.1108/JIABR-04-2014-0013