Positioning strategies in the petroleum industry: the case of Zimbabwe

The study sought to identify the positioning strategies to be adopted in order to push large volumes and survive in the petroleum industry in Zimbabwe.

In this study convenience sampling was used and 19 individual customers, 21 MBA student customers, 10 service station customers and 10 marketing executives were used as the research subjects. Questionnaires and interviews were used as research instruments. The study was delimited to the period 2009-2012 to cover the period after the introduction of multiple currencies and also after the liberalization of the fuel industry.

The data was analyzed using excel spreadsheets and presented on tables, graphs and pie charts. The study showed that petroleum companies are positioned on customer value or price, product availability, product/service quality, brand superiority and location of sites.

The research validated positioning as applicable to the Petroleum industry through empirical study and identified the strategies in use in the industry. The study has revealed that to resolve the product availability challenges, Petroleum companies should enter into forward deals with petroleum fuel refineries and some large commodity brokers so that fuel supply covering 6 months to 1 year is guaranteed. The fuel orders should be based on demand forecasting to ensure that the sites do not get dry resulting in customer inconveniences.

There is also need to have storage facilities for storing strategic stocks in case of a sudden rise in demand or a shock on the supply side. These measures should give petroleum companies who put them into practice some competitive advantage that will enable them to beat the competition and survive in the industry.

The issue of fuel margins according to the research findings may be addressed through smart partnerships with parastatals such as NRZ & NOCZIM whereby the fuel companies make use of these facilities and infrastructure. This leads to reduced depot running costs, improved product availability, spread overheads resulting in lower pricing, and increased sales volumes which makes a company the leading fuel supplier. The lower pricing has an effect of increasing customer value and hence increasing the demand for the company's products.

The margins may also be increased by using specialist distribution companies to distribute the product instead of using company own trucks which are expensive to run. Delta beverages in Zimbabwe use such a system to good effect.