Effects of Marketing Strategies on Performance of Petroleum Companies in Kenya

Abstract

The current study set out to document the strategic responses of oil firms in Kenya to challenges of increased competition by seeking answers to possible effects of marketing strategies on performance of petroleum companies in Kenya. Primary data were collected using questionnaires from a total of 35 firms. The data were analyzed using descriptive statistics including percentages, mean scores, standard deviations and frequencies. Thereafter regression analysis was used to determine the influence of the independent variable on the dependent variable. The study established that i) the petroleum industry has ensured cost leadership strategy by strategic location of storage, filling and loading facilities, and high operational efficiency through reduced wastage of time and resources; ii) the industry has ensured consistent product availability and use of highly efficient equipment and facilities; ii) the industry uses segmented markets as a method of competitive advantage; iv) the industry employs various strategies to remain profitable in a largely competitive market. The study also concluded that cost leadership, corporate growth, market-focus and differentiation strategies are responsible for gaining market share among petroleum companies in Kenya. The study recommended that the industry should embrace cost leadership and differentiation strategies to enhance the profit margin. Finally, the government through the Energy Regulation Commission should ensure that the players in the petroleum marketing business compete on a level ground by fully enforcing the Energy Act and removing the price regulation in the petroleum market to enable petroleum marketers practice price leadership strategy.