Shell Oil Products Company succeeded in building its new brand image to increase retail marketing revenues.In this case analysis, we will use STP to analyze Shell’s sucessful marketing strategy.
Oil station market consists of buyers who differ in one or more ways, so Shell need first segment its potential consumer market. There are several major variables that can be used in segmenting consumer markets, including geographic, demographic, psychographic, and behavioral variables. In this case, SOPC used the latter two variables to segment its market. It chose “personality” and “benefit” as its segmentation criteria, of which the former belongs to psychographic segmentation and the latter belongs to behavioral segmentation. * Why to choose these two criteria?
According to the requirements for effective segmentation, SOPC has to make sure that its market segments are measurable, accessible, substantial, differentiable, and actionable. The requirement of differentiable market segments means that the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. Neither geographic segmentation nor demographic segmentation can be effective, because those criteria do not affect Shell’s customers’ attitude of stopping their automobiles at gasoline stations. That’s why SOPC aimed at customer needs and chose personality and benefit as segmentation criteria. We can find that Figure1.1 gives a very clear market segmentation: 10 market segments are determined according to two criteria – personality and benefits.
Segmentation criteria| | Benefits|
| Transaction| service| Bargain price| others|
| quick| easy| simple| safe | high
relationship| friendly service| | |
Personality| ambitious| PS segment| other segment 2| | | | | | outgoing| | | | | | |
| Detailoriented| | | | | | |
| loyal| | SS segment| | other segment 3| | | | caring| | | | | | |
| sensitive| | | | | othtersegment 4|
| goal-driven| | | | SF segment| |
| Controloriented| | | | | |
| confident| other segment 1| | | |
| orderliness| | | | |
| others| | | | | | | |
Figure 1.1 market segmentation for oil stations
After segmenting its consumer markets, Shell has to evaluate the various segements and decide how many and which segments it can serve best. 1) Evaluating Market Segments
Shell need first find a market segment where the industry wasn’t meeting customer needs and then find a market where the competitor didn’t fit with. a. Potential customer market segment.
To better understand each segment, Shell’s research team conducted focus group sessions and half-day interviews. They find each customer segment prefers benefits such as quick and easy, friendly service, bargain prices, safety and product performance,as Figure 1.2 shows. b. Competitors’ adept market segment.
After evaluation and analysis, Shell find consumers who value low prices fit best with the independent retail companies.That means, independent retail competitors are good at appealing this market segments, just as Segment 4 in Figure 1.2 shows.
Benefits| Market Segments| Niche Market.
Shell could choose!
Shell could choose!
Who Do Well in |
quick| PS segment,etc.| |
easy| PS segment, SS segment,etc.| |
Friendly service| SF segment,etc.| |
safety| SF segment,etc.| |
Bargain prices| other segment 4| independent retail companies| product
performance| other segments| |
Figure 1.1 analysis of market segmentation
2) Select target market segments
After identifying the property of every market segments, Shell must now decide which and how many segments it will target. Since customers have different needs in different market segments,and also...