Imagine that you are appointed as the new Marketing Director of a large business to business company in your country (select a B2B company in an industry of your choice). Your company serves a target market that consists of several small- and medium-sized organisations in your country and abroad. Sensing an increased need to establish long lasting relationship with your customers, your CEO asked you to perform a detailed scan of your company’s industry and market environments and propose a new marketing strategy in which the values of relationship marketing are strongly embedded.
BHP Billiton is an Australian multinational metals, petroleum and mining company. It was established in the year 1860 in the isolated mining town of broken hill, and went on to become the world’s largest mining and Australia’s third largest revenue company in the terms of revenue. BHP is a business to business company. B2B companies are using social media to give details about the company and products (Hutt, and Speh, 2014). Company headquarters in London and Melbourne. The company operates responsibly and enageges in ethical business and also contributes to the communities. Civil society and the institutions work with BHP Billiton to promote governance of wealth of natural resource. The company invests only in those projects which support the economic development and non-government communities. It also supports the programs that develop the capacity of government to improve accountability and transparency. It operates in 25 countries in a wide variety of minings, oil and gas production. First it rebranded itself in Austraila and after that globally. BHP Billiton has separate shareholders, one board of directors and therefore a single management structure. It has 60,000 number of employees with the $ 11.753 billion operating income and $ 6.22 billion net income. It has merged with the two mineral resources companies these are Anglo-Dutch Billiton plc and Australian Broken Hill Proprietary company limited (BHP, 2018).
In this report, analysis is done of the current business environment, competitors of the company, buyers behaviours, or make the marketing strategy and some recommendations have been provided for some changes.
The current business environment of the BHP Billiton is described as follows. Business environment includes customer, employees, management, business regulation, demand and supply of the company. BHP Billiton status changes year by year. BHP has spread over its business in many countries. Employee numbers of the BHP is 6361 people in the South America out of 60,644 total employees in the company. The largest number of employees are in Australia, followed by South America. In 2017, company earned total revenues of $50,928,866,00 including sales and other revenues. The company engages with the stakeholders and seeks their perspectives at the time of decision making. They did not explore the resources within the boundaries of World Heritage- listed properties and they also did not dispose waste into the river or marine environment. The business environment of the company is the total of the internal and external factors of the company (Statista, 2018). BHP Billiton provides resources for a growing world. The company has 38.29 revenue in the year 2017 and Net Operating Cash Flow of the company is $ 17.9 billion. The company committed to the highest level of governance and follows the ethical values or standards (Fonseca, 2010). Company executive leadership team approved the global functions, centre of excellence and marketing. The company operates through the two parent companies that are BHP Billiton Plc and BHP Billiton Limited. To create long-term shareholder values through the discovery and acquisition of natural resources is the main purpose of the company. They provide diversified products on low cost that is why demand for the products of the company has increased. BMA comes into the partnership with the BHP for the common agreement.
BHP Billiton is a leading global resources company. Orocobre and CSR limited is the competitor of the BHP Billiton. RIO Tinto and Vale limited are mining companies in Australia. Competitive analysis is a research of the competitors’ firms in the market. This research is necessary for the success of a business because it identifies the trends, strategies and competitor campaigns (Czepiel, and Kerin, 2012).
Vale is a multinational metals and mining company and is also a largest operator in Brazil. The company is the leader in the production of nickel, pellets and iron ore. It involves the business of energy and steel. It offers nickel refining in Taiwan, South Korea, United Kingdom and China. The company has 85000 employees which are a strength for the company. They also work in 6 continents, that are Europe, North America, Asia, South America, Oceania and Africa. The company has some weaknesses, such as the operations and profits are dependent on the global economy. According to the reports, the company does not have a very good environment.
RIO Tinto is an international Mining and Metal Corporation. The company has made a place for itself in the market in the world leading companies which are specialized in the business of copper, iron ore and aluminum. It is currently working in 6 major countries and its target are Canada and Australia. They use talc, Salt, borates, Zircon, and titanium oxide to manufacture the product including copper, coal, aluminum, and diamonds. Their contribution to their product is different as compared to other companies. The company is not capable to face any risk and also disclosure to expected tragedy (Floris, Grant, and Cutcher, 2013). Although the company operates in 50 nations they have confined their production centers which are Canada and Australia. Rio Tinto comes under the top four mining companies in the World but RIO Tinto has 51000 employees as compared to BHP Billiton.
RIO Tinto is one of the top competitors of the BHP Billiton. RIO Tinto competes with the BHP Billiton in the precious minerals and metal field. Vale is also coming in the top competitors of BHP Billiton. Like BHP, the vale also operates in the business of Minerals and Metals industry. Vale generates $960.5m revenue more than BHP Billiton. Vale has 85000 employees but BHP Billiton has 60,000 employees which is a strength for the Vale company. RIO Tinto’s copper price has decreased as compared to the BHP Billiton in the market. Company’s downfall may affect the overall financial performance of the company. Vale is less diversified as compared to the BHP Billiton and RIO Tinto.
BHP Billiton is one of the largest commodity producers. BHP Billiton is working in the five business units that are aluminum, coal, manganese, iron core, copper, nickel, petroleum and potash. According to the commodities, it segments the industrial. Stainless steel materials, manganese, coal and aluminum products as set the customer sector group target of the company (Horner, and Swarbrooke, 2016). According to the commodities, customers are different in the different countries like coal customers are mainly in China, Japan, India, and Europe. Aluminum customers are located in Asia and West Europe. 80% of its ore production is sold to external customers like in India, China, and South Korea. In household, packaging and transportation, demand for aluminum has increased (Ramsay, Wagner, and Kelly, 2013).
Buyer behaviour is the systematic way to come in the market for entering the purchase process and making buying decisions. BHP Billiton customer are aware of their needs according to their company manufacturing and functional area of the industry. The customer of BHP Billiton also search the market requirements or demand for the product (French, Maule, and Papamichail, 2009). After realising their needs, they develop the budget and compare the options in the important criteria. BHP Billiton produces products for their customer’s needs and requirements. BHP Billiton targets the leading company for the supply of their products because of the profits (Foxall, Oliveira-Castro, James, and Schrezenmaier, 2011). Customer searches the options according to their needs and requirement, and then check the most appropriate option for them. BHP customers are the leading companies, who are attracted from the BHP’s low cost or their product quality. Customers also check the brand name or positioning of the company. BHP is the world’s number one producer that is why they have a lot of customers for their product (O’Connor, Lawrence, and Lee, 2016). Customer loyalty and retention are the main marketing strategies for the company success or the long-term success alongwith the good quality and low cost, deliveries and istallations (Goi, 2009). After experience the products of the BHP, buyers generally enter into a decision which solves their problems those are brand loyalty, low-cost and quality of the products. The habitual buyers of the company like Barclays purchase only from BHP Billiton which is a particular brand for the Barclays. Barclays only prefers BHP Billiton because of the loyalty, good quality and low cost of the product (East, R., Singh, J., Wright, M. and Vanhuele, M., 2016) . BHP Billiton marketing values are made after understanding customer needs with the right product and to optimising freight or distribution cost. BHP sell their products at low cost as compare to other which attract the customer or it gives the special offers to the old customers (Smith, and Zook, 2011) . Therefore customers of BHP prefer BHP Billiton for buying the product these strategies or qualities make the long-lasting relationship with the customers.
By adopting marking mix strategy, BHP builds the long-lasting relationship with the customers. To set the tactics or actions, the company can promote its product or brand in the market is called market mix strategy. In this, 4Ps include which make the market mix these are price, place, product, and promotion (Ivy, 2008). However, excluding these 4Ps there are several other Ps such as Packaging, People, Positioning and politics (Kalyanam, and McIntyre, 2002).
Price- It refers to the value which is set for a product. Price of the product is set by integarted with the marketing strategy elements. It is the important component in the market strategy. BHP sets the price on the basis of demand of the product and which is affordable for the customers. There are the two product pricing strategies such as skimming and penetration. Skimming is to set high intial price and Penetration is to offer the low price (Hutt, and Speh, 2014). BHP offer the reasonable price on the basis of the product which creates the profit but also the attractive price for the customers. Pricing of the product enhances the image of the product.
Product- It refers to the item which is actually sold by the company. BHP sells the product such as copper, iron, and aluminum. BHP has to maintain the quality of the product and deliver the minimum level of performance from which customer will satisfy. Innovation is an important for the company. By establishing the new products company have to explore the market for sources of new product ideas, cross barriers at the time of successful innovation.According to hutt, new product ideas is important because the ideas takes from the salesperson who are close with the customer needs. Those salesperson who are close to the new technology, ans also know about the company weakness and strength give the ideas of the new product development. The coimpany new product success is measured by strategic factors and development process factors which shows the advantages of the product, and predevelopment proficiency(Hutt, and Speh, 2014).
Place- It refers to the point where the product is sold. BHP has to identify the place where the demand of customer is rise or increase. After identifying the place BHP supply the product to their customer. It is important to satisfy the customer needs and demands by the channel of distribution. Right Distribution channel for the supply of products is essential. According to the Hutt, Distributon of channel is the relationship between the customers and the manufacturers. Selecting of the distributor is depend upon the requirements of the manufacturer and the needs of the customer which is set by the company as target. If the demand of the customer is higher then the specialist disributor is required for the distribution (Hutt, and Speh, 2014). BHP has to use the right way for the distribution to extend the business or supply the distribution on time (Tapp, and Spotswood, 2013). They direct communicate and deal with the customer. They also distribute indirectly through the wholesaler, and retailer.
Promotion- It refers to give information or tell the quality of the product or services which is provided by the company. The role of advertising of business to bussiness marketing is different from the consumer market sphere. Promotion strategy is beneficial for the BHP because it makes the long lasting relationships with the customer (Liao, Shen, and Chu, 2009). But company have to choose the correct advertising media for businees markets like business publication, print advertising, direct mail and email.
Quality strategy changes the company which is beneficial for the company in future. If the quality of the product is good then the customer will be satisfied from the product and BHP expand the businees. Supply chain strategy sould follow by the company properly. According to Hutt, B2B company adopt the integrated mutichannel strategy. An integrated multichannel strategy to serve the different customer through various channels depending upon the buyer behaviours (Hutt, and Speh, 2014). Product development strategy expands the company by developing the technology in the production of the commodities (Kiss, and Barr, 2017). New technology is given by the disruptive innovation model which describe the cost of the product and customer preferences. By developing technology, the cost of the company is decreasing but the selling price of the product is increased which increases the revenue of the company. Total cost of the product is depend o the two variables which are total distribution costs and the level of logistictical service which is provided by the company to the customers.By increasing the revenue BHP can expand the business in the world (Krasnikov, and Jayachandran, 2008). Innovation of the new product is a good plan for the future. Innovation management have two approaches such as Induced strategic behavioure and autonomous strategic behabviour. To make the better product BHP sell the product in high price to the more demanding customer of the organisation. Personal selling is the key function for the business seller to selling the goods. This is the main strategies of the businees to make the links with the firm’s product and services and provide the product to the organisational customer(Hutt, and Speh, 2014). With the help of advertising, BHP gives the information related to the product or services of the company. By these strategies company expand the business as well as maintain the relationship between the customer (Hultman, Katsikeas, and Robson, 2011)
Conclusion
BHP Billiton is Australia’s leading mining company. It was established in the year 1860. It is a business for a business company which operates in 25 countries in the field of mining, oil, and gas. The company has 60000 employees. The company has $6.22 billion as net income and $11.753 billion as the operating income. In 2017, the company had $50,928,866,00 revenue by sale and other revenue. BHP follows the ethical values or standards, while creating long-term shareholder is the main purpose of the company. On low-cost, the company provides the diversified products which increases the demand for the company. BHP Billiton has two competitors in the mining market namely RIO Tinto and Vale. From the competitors analysis, BHP has less revenue as compared to the Vale. The employees are the strength of the Vale company which is around 85000 in numbers but BHP has 60000 employees, which is less than the Vale. But the company BHP is more diversified as compared to the Vale. RIO Tinto has managed to beat the company BHP in metal and minerals field. BHP’s buyer behaviour is analysed with the help of buyer behaviour analysis. Barclays prefers BHP because of the quality of the products as well as low cost. The company has to adopt some strategies by which they can expand the business and make the long-lasting relationships. By applying the market mix strategy BHP can expand the business easily and also increase the demand. The company has to adopt some recommendations from which the company satisfies the customer needs or requirements by providing them good quality products or services.
References
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han, M.T. (2014) The concept of’marketing mix and its elements (a conceptual review paper). International journal of information, business, and management, 6(2), p. 95.
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