Strategic IMC for the British Petroleum Brand - Essay Example

?British Petroleum Introduction British Petroleum is a large-scale international energy providing company. Their focus is on both upstream and downstream energy assets as well as discovering alternative energy solutions (Ulph, 2010). Towards 2010, British Petroleum was only referred to as BP in an extensive PR campaign to launch the company as “beyond petroleum”, this campaign was manoeuvred by the Ogilvy PR with the strategic goal of enhancing the brand perception and establishing the company as the market leader in petroleum industry. Oil Spill Disaster By 2010, BP was the world leader in deep sea drilling but was also at the top of the list in safety violations. So when the explosion occurred, it killed eleven crew members while injuring 17. Within weeks of this incident thousands of sea turtles, sea birds, and fish and sea mammals showed up dead on the shore as direct exposure to the oil or the dispersants that were used to manage it. On the shore on the other hand, were millions of inhabitants who had barely recovered from the rampage of Hurricane Katrina and the like. The Gulf of Mexico was also polluted with 5 million barrels of crude oil and methane gas, surpassing the Exxon disaster within four days (Sachs, 2012). Biggest Corporate Fine in US History British Petroleum has so far put aside $42 billion payable as fines, compensation to the victims and well as restoration costs (the economist, 2013). In other words, the company has paid 14 billion for restoration and clean up of the site, 17.5 billion as compensation to individuals and small businesses, $4 billion in the form of criminal charges to the Department of Justice as well and $3.5 billion as penalties for oil leak under the America’s Clean Water Act (the Economist, 2013, p.66). Integrated Marketing Communications According to Percy (2008) integrated marketing communications is about planning, it aims at delivering a consistent and effective message. IMC applies to all forms of communications, be it consumer, business-to-business or corporate. Furthermore, by consistent message we mean that the message must have the same visual feel throughout media so as to form a distinct image that can be linked to the brand. Ensuring the proper implementation of IMC requires a strategic plan, the process begins by identifying the target audience and understanding their purchase decisions and behaviours. Strategic IMC for the BP Brand In 1997, the then CEO of BP John Browne was determined to make BP the world’s largest oil company through exploration, acquisition and marketing. Browne was of the impression that the consumers could be taught to identify with a brand of gasoline. But making the consumer identify with an oil brand was exceedingly hard as people hated oil companies and perceived them as villains following the 1989 Exxon Valdez disaster. With increasing awareness about climate change, oil companies were the worst performing product category in terms of brand affinity (Sachs, 2012). Browne made significant changes to the approach of the company, including investments in solar energy research and withdrawal from oil- interest group Global Climate Coalition. These efforts were perceived positively by the consumers as British Petroleum was no longer resisting the fight against climate change with was now an active participant. By 2000, the company’s name was changed to BP with the tagline “Beyond Petroleum”, furthermore the company shield was replaced by helios. This new look was received positively by the masses, so the company further invested in advertising to supplement their green stance on the environment. Over the next few years the company built extensive brand equity, and John Browne one of the most popular CEOs in the world was granted knighthood. The truth in fact was very different from the facade created by green advertising because in reality the company was not making any significant progress in alternative energy. In 2010, BP’s operations comprised of drilling the world’s deepest wells on the Gulf of Mexico, extracting gas from rocks in Oman and exploration missions in Arctic- thus activities that had nothing to do with green energy. BP’s Marketing Mistake Over the years BP had played a very powerful role of highlighting the human dependency on oil and coming up with strategies for people to fight it, the brand name of BP was associated with that of the “green-energy” brand. Since the higher they rise the harder they fall- when the 2010 Deep Water Horizon Oil disaster happened, it destroyed the carefully built upon billion dollar worth of green brand equity. According to Sachs (2012) the false green brand was very likely to have been responsible for the oil spill itself- because the executives were blinded to the outrageous liability of this high risk exploration strategy. Sachs (2012) sums up the marketing disaster made by BP as an example all marketers can learn from, he suggests that the company tried to create a story that was based on higher values that were not related to the operational value for the brand. Thus this empowerment marketing strategy put the brand on the razor’s edge. BP Restoration Project However all is not lost for the brand as BP now refocuses their approach on activities that may not be directly related to their operations but are truthfully ones that the company has actively participated in and contributed to. BP has been making significant investments along the Gulf shoreline as an effort to support economic and environmental recovery in the areas that had been affected by the oil leak of 2010. The company has made efforts to promote regional tourism and the seafood industry of the Gulf; they have made investments in the local communities through educational programs and enterprise development. According to the company website, BP has founded a $20 billion trust to pay claims, settlements and restore natural resources (www.bp.com). The company has also created job opportunities for more than 2300 people that can provide for their families and contribute to the economy. Integrated Marketing Communications Mix According to Forbes, the new campaigns undertaken by BP will steer clear from environmental initiatives and instead focus on their operational efficiencies and sponsorships. Tsikirayi et al. (2008) writes that the integrated marketing communications comprises of a comprehensive communications plan that incorporates all the strategic communication disciplines of advertising, personal selling, sales promotion, direct marketing, sponsorships and other relevant activities for consistency and maximum impact. The various components of the IMC are the following: Advertising Advertising is the most commonly identified form of marketing. Koekemoer (2004) identifies advertising as all forms of paid non-personal advertising by a known sponsor that reaches a massive audience by means of a media such as print or electronic. Advertising as mentioned has the ability to reach a large number of people at the same time with the same message, it also the most common forms of IMC strategies used. According to Tracy (2010) following the oil spill of 2010, BP has spent more than $93 million on newspaper and television advertising; this is roughly three times more money than the amount of money they spent for the same last year. Furthermore the company has also made efforts to increase the reach of their messages through newspapers by publishing in states like Florida, Louisiana, Alabama and Mississippi of which the Louisiana state has been the most impacted. The company is taking the relief and recovery effort in the spill affected area seriously and are fighting against the negative impression the event has created. BP claims that they have focused their efforts towards informing the public about the clean-up efforts that have been undertaken by the company. The informational advertising is aimed at assuring the people that the company is striving hard to meet their promises and commitments to the region, furthermore through these advertisements people are informed about methods through which they can make claims, thus eh company is being as transparent about their operations in the region as possible. Immediately following the spill, the company was consistently running full page advertisements in newspapers such as the New York Times, Wall Street Journal, USA Today and the Washington Post these ads provided information about the cleanup efforts (Bush, 2010). Sales Promotion Sales promotion is defined as the incentive the manufacturer or retailer provides the consumer to change the brand’s perceived price or value temporarily (Shimp, 2010). Sales promotion is a very popular concept amongst household products, but in the oil and gas sector there is very little use of the sales promotion strategy because the prices are dictated and regulated by the government. However, this has not stopped the company from introducing loyalty programs and introducing a new campaign that is focused on their new gasoline offering “invigorate”, these activities will help the customers to avail log-term savings by keeping their engine clean and avail exclusive benefits through the loyalty program (www.forbes.com). The campaign is expected to cost the company $500 million and is focused on improving the retail sector. Public Relations Koekemoer (2004) defines public relations as management through communication and building strategic alliances between an organization and its internal and external stock holders. Public relations enable organizations to invest in forming positive perceptions and relationships in the environment in which they are functioning. After the oil spill, BP has invested significantly in the clean-up process of the Gulf and in activities geared to foster positive brand image of the company. These public relations activities include the $500 million fund committed to the scientific studies geared to the impact to the spill and more than $200 million has been allocated to wildlife rescue and restoration of habitats (Vidal, 2011). The incident has not been forgotten so the PR campaigns have not shown immediate results but hopefully with the restoration of wildlife and normalcy in the Gulf region these efforts are expected to pay-off in the long run. Sponsorships Sponsorship is a marketing activity in which a sponsor contractually provides financial or other support to n organization, event or individual in exchange for the rights to use the sponsor’s company name or logo for promotional purposes during the sponsored event or activity (Koekemoer, 2004). Corporate sponsorships have become a very important and common trend in all major events these days, because aside from sponsorships of the events, the consumers come in direct contact with the brand name as well as coverage is also received through other forms of media. The BP oil spill on the Gulf of Mexico has had a very negative impact on the company’s image as well as profitability. For this reason BP refocused their marketing efforts towards above-the-line campaigns that depicted the positive role that the company has played as a member of the society. The following March the company decided to promote their cultural sponsorship activities such as their long-term association with the Royal Opera house, the British Museum as well as their sponsorship of the summer Olympics (Reynolds, 2012). The campaign made use of the television, print and online media to create awareness and “to make people feel more positive” about the brand name three years after the oil spill disaster (Reynolds, 2012). Following the spill, the company cut-back on their marketing perhaps due to budget constraints as it was the biggest fine a company had paid in US history or just to focus more on goodwill efforts. However, the company made a comeback with their sponsorships of the London 2012 Olympics. Direct Response Advertising- The New Media The new media includes websites, social networks, emails and mobile technology. This emerging form of media is also very flexible and integrates various other forms of media such as text, video, audio and graphics. The key advantage this media has over electronic media is the low wastage, low cost and the option of obtaining feedback. Nearly all major companies and newspapers of today have a strong web presence. Mobile technology has also enabled the companies to reach their customers conveniently while they are on the go and the smart-phone technology of today incorporates all the elements of web surfing too. Role of Agents in Marketing Communications The crises situation following the oil spill led for immediate marketing efforts that included full-page print ads in all major newspapers, the effort was so spontaneous and immediate that even the spokesperson for the company was not immediately sure how long the campaign would go. This also included that BP’s creative lead agency WPP’s Ogilvy which was not even responsible for creating the print ads (Bush, 2010). While the company was attempting to control the leak, they had restricted access to journalists in the region. On the other hand the damage control attempts at the image management did not stop at the print campaign only as the company contacted the communications firm Brunswick and assigned the role of public affairs to Anne Womack-former spokesperson for Dick Cheney. The company pulled of a bold and strong advertising and media campaign, it could not compensate for the video footage of oil leaking from the site instantly but in the long-run the efforts paid-off. The company is bouncing back on its brand equity and have put a whole new meaning to communicating in crises situation. References 'BP agrees deal for Deepwater Horizon failings' 2012, Rospa Occupational Safety & Health Journal, 42, 12, p. 3 William R. Freudenburg, W.R. Gramling, R. 2011. Blowout in the Gulf: The BP Oil Spill Disaster and the Future of Energy in America. Sabon: MIT Press Spills and bills; The Deepwater Horizon disaster. The Economist. 406.8822 (Feb. 9, 2013) p66(US). Reynolds, J. 2012. BP plots return to advertising with push on sponsorship. Marketing. (Nov. 21, 2012) p05. Sachs, J. 2012, 'The Marketing Monster', Conference Board Review, 49, 4, pp. 36-42 Precy, L. 2012. Strategic Integrated Marketing Communications. Jordon Hill Oxford: Routledge Koekemoer, L. 2004. Marketing Communications. Lansdowne South Africa: Juta and Company Ltd Mc Connaughey, J. 2013. BP's Settlement In Louisiana Will Include $340 Million For Gulf Restoration. Huffington Post 2013. [Online]Available at [Accessed May 2, 2013] Tsikirayi, C.M.. Muchenje, B. And Katsidzira, Z. Impact of integrated marketing communications mix (IMCM) in small to medium enterprises (SMEs) in Zimbabwe as a marketing tool. Research in Business and Economics Journal. [Online]Available at [Accessed May 2, 2013] Tracy, T. BP Tripled Its Ad Budget After Oil Spill. The Wallstreet Journal 2013. [Online]Available at < http://online.wsj.com/article/SB10001424052748703882304575465683723697708.html> [Accessed May 2, 2013] Shimp, T.A. 2010. Advertising, Promotion, and Other Aspects of Integrated Marketing Communications Deca Series. Mason: Cengage Learning “BP Goes For Public Relations Makeover To Get Beyond Gulf Spill”. Forbes. Com 2012. [Online]Available at [Accessed May 2, 2013] Vidal, J. 2011. BP's PR campaign fails to clean up reputation after Gulf oil spill. [Online]Available at [Accessed May 2, 2013] Bush, M. 2010. BP Print Ads Promise to 'Make This Right- Message, However, Is Undercut by Ongoing Spill. Advertising Age. [Online]Available at [Accessed May 2, 2013] Read More