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Marketing In Nonregulated Vs. Regulated Market
Posted By: emycollins* on 9/19/2006 12:51 AM (CST) 500 Points
What are the key differences involved in marketing in a regulated market vs a nonregulated environment.

Posted by: Frank Hurtte Member Response
9/19/2006 9:09 AM (CST)
In many ways none at all....
I assist many in the financial industry market to their clients and potential client base. They are very highly regulated. Everything we do must be run by a compliance officer. Ocassionally this results in subtle word changes and elimination of words that may sound like a strong guarantee.

But the marketing is the same. Just think of an additional step.
 
Posted by: Peter (henna gaijin) Member Response
9/19/2006 10:25 AM (CST)
Without more details, Frank has the right answer. Marketing is marketing. The regulations just mean you need to ensure that what you do in marketing doesn't go against what the regulations require (e.g. that you are not trying to advertise cigarettes in the US on TV, which is not allowed).

Perhaps if you can provide more details on the situation you are working with (market, what the regulations are, etc.), we can provide better answers for you.
 
Posted by: emycollins* Author Response
9/19/2006 10:41 AM (CST)
My project involves the gas pipeline. Government is an important part, but since the pipeline is the service and distribution channel (which of course is stationary), and the price is set, the only "P" to work with is promotion. Hence I believe this type of situation is more suited to communications than traditional marketing. Thoughts?
 
Posted by: GKrehbiel Member Response
9/19/2006 12:37 PM (CST)
What is it you're trying to market (what is the product) and to whom (who are your best potential customers)?
 
Posted by: emycollins* Author Response
9/19/2006 12:49 PM (CST)
natural gas is the market, and the customers (gas producers) are in place with long term contracts.
 
Posted by: KathySmithFilms* Accepted Answer
9/19/2006 6:18 PM (CST)
Hello emycollins,

I found this website helpful as a starting off point to gain more knowledge on natural gas producers and the enlightenment given on this site was good enough for marketing concepts to get a foothold and take more responsibility to help control what you are doing.

http://www.naturalgas.org/environment/technology.asp

and this site helped define what it is:

http://encarta.msn.com/encyclopedia_761571617/Natural_Gas.html#461530091

This is a great clip of ROBERT REDFORD speaking on the
price of gas, futures & our wildlife.

http://www.youtube.com/watch?v=ewbHBJkhz6g

Could a marketing plan/strategy be developed that positions and balances dynamically the products with the environmentalists and good
pr for the gas producers? That's where I would put out survey questions in order to get some key issues integrated and marketed.

That's my opening shot. You have a genius team of experts here and I wish you the best.

Biz of the Biz
 
Posted by: Puru Gupta Member Response
9/19/2006 9:23 PM (CST)
Emily,
Let me first admit that I am not very clear about the question. However, I would make certain assumptions and move ahead.

You are working in the natural gas sector, with your customers being the gas producers. You need to market your channels to them, with govt regulations restricting your options. You cannot modify the price and your channels do not have a differentiating factor, so to say.

Taking the risk of assuming that the above is actually the problem, let me give my perspective.

You can look at either developing new channels or providing a value proposition to your customers. If your customers have established long term contracts, it is unlikely that they would move out of their comfort zones and buy your concept.

- In such a scenario, the only option you have is to create discomfort and dismantle their comfort zones.
- Affiliation could be a good manner (focusing on and leveraging biggest players in the market).
- You could also consider identifying bottlenecks in the current system and addressing them, vis-a-vis your competitors in the market.
- Apart from this, can you incorporate an "international" experience in your positioning, if it stands to be a differentiator in your market? I assume most of the players would be SOEs, and a small proportion would be in the hands of private players.

With loads of assumptions, hope this helps! :)
Regards
Puru
 
Posted by: stevea Member Response
9/21/2006 8:43 AM (CST)
I’m sorry but you are going to have to explain what you want to market in more detail if we are going to be of any real use. There are half a dozen people here that I am aware of who have Gas experience – upstream, downstream, transmission, distribution or just plain old sales and service, B2B and B2C.

So far, as I understand it, you have a pipeline and you have producers. Is the pipeline running at capacity? Are the producers the customers and are you seeking more of them in order to fill capacity? Or are you aiming to market their product into a transmission and distribution network? Or is it through a transmission and distribution network to end users. It’s not at all clear from what you have said so far.

If we take a basic model of a pipeline being an asset which need’s its usage maximized within the framework of a regulatory market, then that is a one question for which an answer is available. If on the other hand, you are looking at marketing the producer’s product to new and existing recipients of the gas, then that is a totally different proposition.

What are you marketing – the pipeline, the product, the service or something entirely different?

I look forward to getting some clarification!

Steve Alker
Unimax Solutions
 
Posted by: emycollins* Author Response
9/21/2006 2:53 PM (CST)
Ok, I think I'm making this far too difficult and I apologize to all of you. The company is in the business of gas transmission. It has customers (to capacity) that are signed on for multi-year terms. I'm thinking that because the product/service is the gas delivery (transmission), prices are agreed upon in the contract; its location (place) is permanently fixed (constructed in place), the only "P" in the four "P's that is available to marketing is promotion. I think that in this case, promotion can be more comprehensively covered within the communications field as opposed to "marketing".

We can't overlook the fact that in several years the contracts will be up for renewal and some customers may come and go, but overall, I don't see this situation as "traditional marketing" because too many of the marketing mix elements are fixed or regulated. I see the task of "promoting" under the communications function (which is funny coming from me, because I'm all about "marketing").

So I began with the question what is the difference between marketing in a regulated environment and non-regulated, because I believe that given the restrictions on a pipeline, it really isn't "traditional marketing" that is called for unless I'm missing something specific to the industry that I'm not aware of.

I hope that helps clarify the issue for some. Thanks for all your comments.
 
Posted by: plain ole me* Accepted Answer
9/22/2006 8:05 AM (CST)
Emy:

This may be somewhat of a Simple Simon Approach but from what I've been reading I believe you've hit the nail on the head with your last post.

In most cases there is no real need to "market or sell" Natural Gas - the demand for it is so great that quite often you have buyers and potential clients signing (as you indicated) contracts and MOU's which lasts a number of years - thus securing a market. Many of your variables are already fixed so given that that you're left with the promotion side of it, I agree - It becomes more of a Communications issue.

Ideas here - post ads or advertorials in major magazines and publications that target the energy sector and other end users of natural gas ( eg) ammonia plants. The ads shouldn't focus on "selling" natural gas but more along the lines of what your company does, how it has assisted key clients, a social responsibility approach couldn't hurt either.

Identify a social/environment concern and sponsor a segment on either television or in printed press on ways your company is prepared to assist with this issues....

It would help if I knew where you were operating from

Hope this helps somewhat and I haven't veered to far of topic!!!

 
Posted by: stevea Accepted Answer
9/22/2006 10:54 AM (CST)
Dear Emily

Thanks for the clarification; it certainly makes your position much more understandable regarding the four P’s of marketing. Let’s have a look at them and challenge the assumptions that you can’t use marketing. From what you’ve said marketing would not be a straightforward matter of letting potential customers know that you exist and what the benefits of using your pipeline are. It’s more to do with communicating with your users and the regulator (Which is still marketing by the way!) and a large chunk of strategic selling. If you go back to those who won the contract for constructing the pipeline or those who sold the pipeline’s capacity to the producers in the first place, you’ve got an idea of the magnitude of the task you are taking on.

Product
Well there’s not a lot you can do about a pipeline which already exists to an existing engineering spec. You can’t increase the volume, the flow or the pressure without re-building the thing, so that’s probably out of the question. However the pipeline offers a service and has associated maintenance overheads, switching, monitoring, condition forecasting, volume forecasting and other associated reporting. Whilst pipeline failure or non forecast-shut down is rarer in gas pipelines than for oil pipelines, it is still a significant and disruptive event. I was originally thinking of the Prudhoe Bay oil pipeline for BP but there are dozens of Gas pipeline incidents such as the Corrib gas pipeline for Shell. It is a long term piece of marketing, but you should be preparing to let both your customers, the regulator the trade press and the national press know what steps your engineers have taken to ensure the smooth operation of your pipeline over the next 10 or 15 years.

Price
Are regulators beyond influence? Of course they are not! Depending on where you are located, they are not likely to respond well to gifts or to other traditional marketing incentives. In the West they are pretty well incorruptible and aim to remain that way, so even a hint at securing influence through material inducement would blow your credibility out of the water.

But you must remember that they are being lobbied by consumer groups, called to account by government and being challenged by the producers and other transmission companies. You will need to “Market” your company to the regulator by regularly finding out what concerns him or her. The difference here between lobbying (Which is often counter productive) and what I’d propose is that you seek an ongoing dialogue with the regulator in order to sound them out on ideas which would benefit your company, the customers and whichever bunch of interfering politico’s set up the regulatory framework in the first place.

Place
You are self evidently correct in saying that there isn’t much chance of moving the pipeline to a better high street, but place can also refer to your position in the market.
And the route you choose to market. See: http://www.quickmba.com/marketing/mix/ By the way, they don’t permit copying from their website, so don’t try it without permission or you’ll get yourself excluded.

Viewing place as route to market, you will also benefit from a SWOT analysis which might possible indicate that there is a threat in the future to your current position from new operators in the business or even a change in the business model for selling gas. It’s unlikely, but having a plan B is always useful for companies which operate over strategically long term timescales. Let’s face it, if for any reason your company or your pipeline were to be wiped from the map, the producers would find another way of getting their gas to market. The fact that they could do it in an emergency means that they might be tempted to do likewise for commercial reasons.

Promotion
This is where you are currently centered. You can promote and you can sell, taking the long term. It is quite a challenge to maintain a consistent marketing message over several years and even harder to maintain a sales effort, when no one is going to see an order worth real hard cash come in until later in the decade. But selling is what you need to do. Split the sales and marketing process up into a series of shorter term objectives and measure your progress against these goals as you are going along.

Doing this kind of marketing plan will also ensure that you can meet the contingencies raise in the other 3 P’s should they arise in a timely fashion and “On the front foot” in respect of your state of communications with the producers, the regulator and possibly with the relevant department in Government.

Quite a task though!

Regards


Steve Alker
Unimax Solutions
 


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