Term Paper on “British Petroleum”

Submitted to:

Professor Dr. M. Mahmodul HasanFaculty of MBA Program.

Marketing Management -BUS 620North South University

Submitted by:

Name IDKhaza Mahbub 1421300 060Omaer Ahmed 1411789060Salman Faruque 1430857660Md. Yasin Rubel 143 0855 660

Bangali Vhoot

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Section: 04

Date of Submission22th August, 2015.

Term Paper on “British Petroleum”

Submitted to:

Professor Dr. M. Mahmodul HasanFaculty of MBA Program.

Marketing Management -BUS 620North South University

Submitted by:

Page | 2

Bangali VhootSection: 04

Date of Submission

22th August, 2015.

Letter of Transmittal

22nd August, 2015

Professor Dr. M. Mahmodul Hasan

Bus620, MBA Program

North South University- 1229.

Subject: Prayer for Submission of the Term Paper on ‘British Petroleum’

Dear Sir,

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We all have had immense pleasure to work on this report on

‘British Petroleum (BP)’. This report has been prepared by a

group of 4 people as a part of the course (Marketing Management)

requirement. It is prepared after having extensive overall

analysis of this British Multinational oil and gas company. We

have tried our level best to follow your guidelines in every

aspects of preparing this project.

The report has given us an opportunity to apply theoretical

knowledge in real world. It also has given us a glimpse of our

individual understanding and skills in various situations. We

sincerely hope that you will admire our teamwork.

Sincerely yours,

Name Signature

Khaza Mahbub

Omaer Ahmed

Salman Faruque

Md. Yasin Rubel

Acknowledg

ement

At the beginning of our acknowledgement section of this term

paper report, we must show our gratitude to the almighty Allah

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for giving us enough courage and strength to prepare the

report in due time. Without his continuous blessings it wouldn’t

be possible to finish this term paper. Our humble gratitude is

must for our honourable faculty Professor DR. M. Mahmodul Hasan

who gave us the opportunity to do conduct this report and

providing his continuous support and instruction, which helped us

to carry our work forward. His guidelines were so effective and

obvious that it made our work easier and direct us to the right

way. It’s only his contribution, for which we never got lost

focus while working on this term paper report. Last but not the

least we would like to thank our all group members who worked so

hard to prepare the report by due time and make the report

successful.

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Executive

Summary

BP plc, also referred to by its former name British Petroleum, is

one of the world's six "super major" oil and gas companies. It is

a British multinational company, headquartered

in London, England, whose performance in 2012 made it the world's

sixth-largest oil and gas company, the sixth-largest energy

company by market capitalization and the company with the world's

fifth-largest revenue. The mission statement of BP is about

making "No Harm" or Damage to People or Environments; the

'innovators by tradition' at BP have created a diversified range

of products versatile enough for anyone looking for best quality

fuel material without breaking the bank. PESTLE and SWOT analysis

is done on BP. One of the strength of BP is that they are the

British top notch oil and gas company that has 84,500 employees

across 80 countries with strong presence in more than 160

countries. One of the weaknesses of BP is fluctuating market

share growth due to competition. Their opportunity is high

spending power of people and one of the threats is instability in

rich oil regions like Middle-East, Africa and South America.

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Based on the analysis it is evident that BP brand which

cater to the Up-range market, has a strong support from the

business group especially with its distribution network. But also

it should be highlighted that especially the BP’s crude oil and

gas reserves have declined significantly over the past several

years.

Table of

Contents

1. Definition of marketing management 8

2. Mission 8

3. Vision 8

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4. Business Plan 9

5. Corporate Strategy 9

6. Swot Analysis 10

7. PESTEL Analysis 11

8. Michael Porter's Five Forces 12

9.1 Marketing Strategy 13

9.2 Core Marketing Concept 14

9.3 Market Segmentation 14

10. Marketing Mix(7p+4c) 17-18

11. Value Chain model 19

12. Total Quality management 21

13. Customer Loyalty 22

14. Brand and Branding of BP 22

15. Box analysis of Brand elements 24

16. Brand Dynamic Pyramid 25

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17. Five M’s model 25

18. Mass Communication

18.1 Advertising Budget and Campaign Cost

27

18.2 Sales Promotion and Budget 29

18.3 Events and experiences 29

18.4 Corporate Social Responsibility 30

19. Marketing Budget and Expenditure 30

20. Pricing Strategies 31

21. Break Even Analysis 33

22. Recommendation 34

23. Conclusion 35

24. References 36

1. Definition of Marketing Management

1.1 Definition of Marketing Management (Theory 2000 – 2011):

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Marketing management is the art and science of choosing target

markets and getting, keeping, and growing customers through

creating, delivering, and communicating superior customer value.

1.2 Definition of Marketing Management (Theory 2012 – 2016 +):

Marketing management depends on the size of the business and the

industry in which the business operates. Effective marketing

management will use a company's resources to increase its

customer base, improve customer opinions of the company's

products and services, and increase the company's perceived

value.

BP surely follows this latest definition where they increase

their target customers by innovating new products for their

values customers. Thus they create value proposition. They

believe in competition and hugely expand money on

promotional activities.

2. Mission

BP doesn’t have an official mission statement, but provides

several different statements called: “What we do”, “What we stand

for” & “What we value”. In this evaluation, we use a combination

of all 3 BP statements, because they resemble a true mission

statement.

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3. Vision

BP wants to be recognised as a great company that is

competitively successful and a force for progress. We have a

fundamental belief that we can make a difference in the world.

4. Business Plan

In 2014 we completed our three-year 10-point plan,

established in 2011, to help stabilize BP and restore trust

and value in response to the tragic Deepwater Horizon

accident in 2010.

New BP leadership could disrupt the old success formula by

taking a significant action such as committing 50% (or more)

of the proceeds from operations to new businesses outside

petroleum. 

5. Corporate Strategy

The emerging strategies of British Petroliam can be summed up

into the following point:

We believe that the best way for BP to achieve

sustainable success is by acting in the long-term

interests of our shareholders, our partners and society.

Our goal is to be a focused oil and gas company that

delivers value over volume

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6. SWOT analysis of BP

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Strength

Creating a high levelloyalty by BP AMOCO as a strong oil brand.

A notable increasing profit due to oil andgas energy prices.

A strong marketing performance more than8o countries, having

Weakness

Oil spill in deep horizon water in Mexican Gulf made a huge financial loss.

Instability in rich oil regions like Middle-East, Africa and South America.

Fluctuating market share growth. SWOT

Analysis

Opportunity

Acquisition in the North Sea area in the Russian region.

High spending power

Threat

Competitors having a broader range of business across different categories

7. PESTEL analysis of BP

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Opportunity

Acquisition in the North Sea area in the Russian region.

High spending power

Threat

Competitors having a broader range of business across different categories

Political

Removal of quantitative restrictions on import crude oil could lead to a threat.

World energy markets are becoming more volatile due to the

Economical

More people are concerned about their jobs and employment prospects.

11% growth for the oil and gas market over the next five years globally (Mintel, 2010).

Rising oil prices

Social

Importance of the gifting market for retailers.

Americans are more open to paying higheramounts for oil.

The rich regions spread their business

Technological

Most of the companiesare taking advantage of new technologies such as robots and hi-tech machines to refine oil & gas.

A notable trend is the use of

Environmental

The environmental codes are strictly maintained in carrying oil throughcargos so that no pollution or harm done.

Legal

Regulations fair pricing and health and safety all are taken care of by the core authority.

New laws from

government.

8. Michael Porter’s five forces

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RIVALRY

DEGREE OF RIVALRY:- Hard to exit due to high sunk costs of infrastructure & technology.- Competitors: Saudi Aramco, Shell, Chevron, Qatar Oil, Exxon etc. - Competitors offer new features &

BUYER POWER:

- High bargaining leverage due tohigh competition.- Low cost/price sensitivity.- Established brand identity.- Same volume of buyer to all thewatch brand.- Other Players are well equipped

THREAT OF SUBSTITUTE:

- Easy to shift for the

customers to other

options as switching cost

is low.

- Substitute product for

example low price watch

or mobile watches

threaten the company.

SUPPLIER POWER:

- Few suppliers available for supplying the ingredients- No suitable substitutes of inputs. - High switching costs to change suppliers. - Difficult to stick with one supplier due to emerging technology.

THREAT OF NEW ENTRANTS:

- High barriers to entrydue to huge capital investments.- Strict Government Policies for security purposes.- Access to distribution/ resources by the existing market players. - Require economies of

9. Core Marketing concept, Market Segmentation & Marketing

strategy

9.1. Marketing Strategy

British petroleum once again raised as one of the oil industry

leaders. In consideration of the marketing strategy of the

company, British Petroleum accepted the offer of the Market

Biosciences Corporation to produce biodiesels made from sugar.

This striking new idea of finding other usage of oils is another

opportunity for both companies to expand their respective

business overseas. The offer started when the Martek Corporation

receives a downturn in their infant formula products.

Under the agreement made by the two giant companies, the British

Petroleum will contribute up to $10 million in the initial phase

of their collaboration and the Martek Corporation, which is based

in Columbia shall perform he biotechnological research,

assessment, and development as they contribute their scientific

expertise in microbial oil production. Both companies anticipated

that their partnership will be a success and contribute in the

global economy as well as environmental wellness.

In addition, British Petroleum’s acceptance and acknowledging

their contribution to greenhouse gas emissions. An action to

reduce the said emissions from the use of the renewable resources

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has been promoted with the organization around the globe

to reduce the human impact on climate.

British Petroleum campaigns and promotes the use of natural

resources or renewable, like solar and hydrogen energy to be used

their oil and gas products. In a broader sense, British Petroleum

is looking forward to create a marketing strategy where they can

be known as the company that uses the power of the environment

and returning the favour by not destroying the nature.

9.2. Core Marketing Concept

BP specifies four core marketing concept to express the way the

organization does business and help translate the mission into

practical action:

Progressive: BP is always looking for new and better ways to

conduct business. It has developed a relationship with

Ford to build hydrogen vehicles and fuelling stations in

California, Michigan, and elsewhere. BP also has

reformulated its BP Amoco Ultimate fuel to reduce air

pollutants.

Innovative: Through the creative approaches of employees,

and the development and application of cutting-edge

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drilling technology, BP seeks breakthrough

solutions for its customers.

Green: BP is committed to environmental leadership—the

proactive and responsible treatment of the planet’s

natural resources and developing lower carbon emission

energy sources. As a result, BP now stores its gasoline

in double-skinned tanks to prevent spills and leaks.

Performance-driven: BP sets the global standards of

performance on financial and environmental dimensions, as

well as safety, growth, and customer and employee

satisfaction.

9.3. Market Segmentation

This consists of a group of customers who share a common need or

want. The task was to identity the different segments in the

target market in order to target them. With segment marketing,

the company offers a better design, price, delivers the product

better and is able to fine-tune the marketing program. The

segment marketing was divided into geographic segmentation and

demographic segmentation.

Geographic segmentation

Population Density

Territory

Weather

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Demographics segmentation

Income

Occupation

Age

Behavioral and Psychographic Segmentation

Green Revolution and environment consciousness

Luxury of Travel

Market segmentation- This consists of a group of customers who

share a common need or want. The task was to identity the

different segments in the target market in order to target them.

With segment marketing, the company offers a better design,

price, delivers the product better and is able to fine-tune the

marketing program. The segment marketing was divided into

geographic segmentation and demographic segmentation.

Geographic:

Segmentation is done on the basis of

Countries/regions/occupation and market density (highly

populated). Country- BP is available in more than 160 countries.

Weather affect also plays a significant role for BP’s

business.

Demographic:

Bases are- Based on different income level (Mid range to

abvove) mainly, ethnic background (all), life cycle, Page | 18

occupation (all), social class (mid to upper class),

generation. Occupation wise, different brands of BP for different age &

income groups: different needs for different vehicles and

machines. Age factor is more of a cliché effect in case of consuming

lubricants.

Behavioral and Psychographic Segmentation:

Green Revolution and environment consciousness.

Luxury of Travel to be considered.

Positive attitude groups are found in the market.

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10. Marketing Mix (7P + 4C)

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Promotion:

TV commercials,

Place:

The Brand is

Product/Service:

Fuel is a commodity

product offered by all

the oil companies in all

over the world. It is

difficult to offer

customers a point of

difference with fuels.

However, BP does so by

selling petrol and diesel

that is better for the

environment. BP is the

only oil company in world

to sell superior fuels

Process:

The upper level of management makes strategies and rules and regulations abouthow to deliver the services. The customer who needs BP’s services to his/her nearby British Petroleum, the full of effect and dedicated staff provide them servicesas per policy set by Price:

With common products

in the oil industry,

prices between

competitors are

People:

In Marketing Mix one of the most important “P” is People. The employees of BP are many who are working in all over the world.They are assets of thecompany and they are the responsible for the good will of the company. Company also focuses on the status

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Price:

Reasonable rates; Customerbased pricing strategies (vary from young to business executives); Customer shouldbe able to purchase a

Promotion:

TV commercials,

Place:

The Brand is

Physical evidence:

Friendly environment atShop centres. No defect material, Always providebest quality product due tostrong Brand

Price:

With common products

in the oil industry,

prices between

competitors are

Promotion:

Research shows

that customers

respond well to

our promotion

campaigns, such as

the AA Rewards

programme. Our

loyalty programmes

are a valuable

point of

differentiation;

we use them to

drive sales

volumes and

Place:

BP’s network of

service stations is

a vital strength in

marketing strategy

– we have some of

the best locations

for the service

they provide. They

have a significant

investment in

ensuring right

number and quality

of locations for

Physical evidence:

Physical evidenceis the material part of a service. Strictlyspeaking there are no physical attributes to a service, so a consumer tends torely on material cues. British petroleum built

4C:

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Clients:

BP must shift focus

Change in perspective forced firms toconduct business

Costs:

Looking at the ‘cost to consumer’ rather than ‘price of product’ brings transparency in themarket, thereby benefitting the

Convenience:

Consumers now havemany ways of learning about a product, comparingsimilar products and purchasing them.

Communications:

Gather feedback

Provide support

Simply reaches out to its target

Target Market

11. Value Chain Model

Supporting Activities

Multi- stakeholders infrastructure

Customers’ networkmanagement and HR

Improving technological infrastructure

Development and procurement

Primary Activities

Sourcing and Input Materials Suppliers

Process and Operations

Output Distribution

Sales &Marketing

After Sales Service and customer insight

Value Chain Analysis is a way of identifying which activities are

best undertaken by a business and which are best provided by

others. Linking Value Chain Analysis to Competitive Advantage it

points out what activities of the business directly linked to

achieving competitive advantage amongst various competitors.

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M

A

R

G

I

N

Fig: Petroleum Value chain Model

An organization can outperform its various competitors

through differentiating itself by trying to produce products with

higher quality and will also have to perform its value chain

activities better than the opposition. BP has the potential of

adding value via marketing and sale of its products which is the

way the company handles it marketing and sales of products to the

diverse consumers or market through the company’s various brands

where it markets diversified alternative energy sources as well

as oil and gas.

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Fig: Value Chain of BP

12. Total Quality Management

Total Quality Management (TQM) philosophy constitutes a new

paradigm of management. It is a way to continuously improve

performance at every level of operation, in every functional area

of organization through integration of people and systems. This

embodies provision of supporting environment based on senior

management explicit commitment, developing employees’ competency,

collaboration with stakeholders and change of organizational

culture. The ultimate objective is customer satisfaction. (Brocka

& Brocka, 1992; Mohanty & Lakhe,2002). Implementation of

fundamentals of total quality management has been introduced and

practiced in individual firms in India for quite some time.

Wilkinson and Witcher (1993) summarized TQM as having three major

requirements as follow:

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1. Total: Functional integration and teamwork at all

levels in the organization through institutional management.

2. Quality: Strict adherence to the requirements specified by

customers ensuring use of appropriate tools, techniques and

processes.

3. Management: Creation of enabling environment, commitment of

senior management and provisioning of adequate support

facilities.

In view of the above, BP, as a leading Oil and Gas company all

over the globe, asserts customer focus, innovations and

excellence in smarter and faster products and services,

empowerment and development of employees, partnership with

suppliers and other stakeholders as its strategic priorities to

achieve excellence through Total Quality Management. The main

focus of these quality management practices is to develop a

knowledge base and long term partnership for sustained

excellence. This petroleum company put customer’s focus as its

strategic priority. The customer focus at the company is guided

by performance excellence, respect, accountability, and integrity

at all levels. Regular customer feedback is sought with a view to

align the company’s quality objectives to customers’ needs.

13. Customer Loyalty

"Customer loyalty is when an organization receives the ultimate

reward for the way it interacts with its customers. Loyal

customers buy more, buy longer and tell more people - that's true

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customer loyalty." Competitive advantage can be achieved

through customer loyalty. This is the way to gain the best kind

of customers, repeat customers. Repeat customers tend to spend

more money and provide the best word-of-mouth advertising.

All parts of BP’s are involved in creating loyal customers: those

who produce and deliver your products or services, reliably day

in and day out, as well as those who create and bring to market

new offerings that delight the customer. Treat them all as

members of the same team...the Customer Loyalty Team...and you

will reap the benefits well into the future.

In a study some statement has been made regarding the customer

loyalty:

The overall satisfaction level of customers of BP is good.

The billing system of BP has some problem at times but not

always.

The employee service is excellent.

Passion for excellence and employee’s ability provide

quality service to employee is key for customer retention.

14. Brand and Branding of BP:

BP’s brand communication has been on different personalities but

one purpose. Each of our brands has its own heritage and

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personality, but they all have one thing in common - they

all symbolize, embody or provide tremendous energy.

Branding is all about creating alignment of your company’s

business processes with its corporate culture. British Petroleum

(BP) provides a case in point of a brand that got way out front

of its business process and culture to produce tremendous

exposure to risk.

The answer begins with a simpler question: Why create a global

brand at all? 

Kevin Lane Keller, respected professor and author of Strategic

Brand Management, outlines the rationale succinctly regarding

BP’s branding. Global brands give companies competitive

advantages, such as:

Economies of scale in production and distribution

Lower marketing costs

Power and scope

Consistency in brand image

Ability to leverage ideas quickly and efficiently

Uniformity of marketing practices.

Australian cricket captain Michael Clarke said; “I am a brand new

member of the BP team and it’s great to be on board. As someone

who loves cars and loves driving, BP Ultimate is a brand very

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close to my heart. I have been a customer of BP for years

which is why I am very excited to be the new BP Ambassador.”

15. Box analysis of Brand Elements (6 Categories)

Memorable

Meaningful

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Likable Transferable

Adaptable

Protectable

Brand elements are devices, which can be trademarked, that

identify and differentiate the brand. In our case with RCOM the

company uses is parents’ trade name (BP) with individual product

name. The former legitimizes the company with its vast reputation

while the latter individualize the product and gives it a sense

of identity.

British Petroleum (BP) can be categorized under Memorable,

Meaningful and Adaptable brand elements. The reason for such

classification is elaborated below:

1. Memorable: As British Petroleum (BP) has been in the

business for a very long time, so they fall in the category

of memorable entity of brand element.

2. Meaningful: The name BP itself suggest a sense of trust,

dedication sincerity: a brand that you can rely on. The

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entire phrase BP products give an appropriate

identity on what the customers are expected to relate their

services.

3. Adaptable: BP’s oil and gas has a very diversified use.

And thus it has been thoroughly adaptable in so many

countries of the world used for various purposes.

16. Brand Dynamic Pyramid

Strong Relationship

Weak Relationship

After establishing in 1954, BP has gained an integrated

reputation and convergent capacity of high digital network as

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it has successfully crossed 61 years across the globe.

It has a customer base and subscribers of over 131 million

where corporate clients include over 41,000.

17. Five M’s of Advertising:

The Five M’s of Advertising are-

1. Mission2. Money3. Message 4. Media5. Measurement.

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Media

ElectronicMedia

Celebrity endorsement

TV Commercial

Outdoor

Measurement

- Maximized sells in theUnited States.

- Increased new zonal and regional

Mission

Increase Sales & Brand Building

Money

The total campaign costwas million including 5 million for Celebrity endorsement.

Message

Best in Quality

Eco Friendly

Impeccable Compatibility

Range of

18. Mass Communication

18.1 Advertising Budget and Campaign CostA typical advertising budget will take into account all

advertising costs. These are:

Advertising agency commissions cost

Purchasing all advertising and promotion media, including

internet, newspaper, radio, TV, and direct mail (postage)

cost.

Outdoor advertising cost

Collateral material cost (Brochures, mailing pieces,

catalogues, etc.)

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35%

5%

20%

20%

20%

Advertising Budget and Campaign Cost

Media AdvertisngCollateria MaterialPublic RelationEvents and sponsor Campaign Cost

Media Advertising cost 35%

Collateral Material

cost

5%

Public Relation 20%

Event & Sponsorship 20%

Campaign cost 20%

Page | 34

5%

15%

10%

5%

Media Advertising Budget

Print MediaElectronic MediaOutdoor MediaInternet

Print Media 5%

Electronic Media 15%

Outdoor Media 10%

Internet 5%

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18.2 Sales Promotion and Budget

Sales promotion:

BP establishes diversified brand for promoting its sales.

Many people gave a very productive response to BP’s product

line.

They arrange autograph signing event with the captain of

Australian cricket team Michael Clarke and other noted

celebrities to flourish sales.

The big promotion took place when they became the co-sponsor

of Moto GP and official time keeper for other various sports

events.

18.3 Events & Experiences/Sponsors

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Over the last 40 years, BP has demonstrated a commitment

to communities in the UK through our support of arts and

culture, sport, community organizations and charities and we're

also developing talent in our communities, through our support

of STEM.

BP initiated oil sponsorship of the arts movement by

sponsoring this meaningful event emphasizing some positions

on ethics, business sponsorship and making art that you can read.

BP’s massive campaign in 2014, Target Neutral: Reducing

Carbon Together in association with WFES and MASDAR got huge

response.

18.4 Corporate Social Responsibility

BP has been successfully maintaining the following major

Corporate Social Responsibility over the years:

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The conservation of the natural environment and its

resources;

The production of ecologically sound refinery by the most

efficient means;

The use of raw materials, energy resources and water in

moderation;

The use of auxiliary materials that respect the environment.

Complying with environmental laws and industry best

practices, and so on.

19. Marketing Budget & Expenditure

After that incident of Mexico gulf, BP was opt to spending

$500 million to fix its brand and get everybody to forget

about Deepwater horizon.

BP PLC plans an organic capital expenditure of $20 billion

in 2015, down from the previous guidance $24-26 billion.

Total organic capital expenditure in 2014 was $22.9 billion,

lower than its initial guidance of $24-25 billion.

Four projects are expected to come into production during

2015, two in Angola and one each in Australia and Algeria.

Underlying replacement cost profit for the fourth quarter

was $2.2 billion, down from $2.8 billion for the same period

in 2013. Full-year underlying replacement cost profit was

$12.1 billion compared with $13.4 billion reported for 2013.

BP took a $3.6-billion post tax net charge for no operating

items in the quarter, mainly relating to impairments of

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Select the price Objective

upstream assets reflecting the impact of the near-

term lower oil price environment, revisions to reserves, and

other factors. As a result, including this charge and other

effects, BP reported a replacement cost loss of $969 million

for the fourth quarter.

BP’s total group operating cash flow in the fourth quarter

was $7.2 billion. For the full year, it was $32.8 billion.

BP since 2013 has made divestments with a cumulative value

of $4.7 billion, and says it expects its divestment total to

reach $10 billion by yearend.

20. Pricing Strategy

Steps in Setting Price

Page | 39

Estimate Cost

Analyse Competitor price Mix

Select Pricing Method

Select Final Price

Determine demand

Steps 1: Selecting the Pricing Objectives:

While selecting the price objective t follow the market –

penetration pricing. They set the call rate low to increase the

sales volume for maximize the market share. Pricing objective is

to offer attractive price than any other oil & gas brands can

give with large volumes.

Step 2: Determine Demand:

Customers select those companies which emphasizes on tradition,

precision, performance and high standards and affordable price

range. Today, BP is the number one British oil & gas brand in

the traditional petroleum business segment in terms of units.

Step3: Estimate Cost:

While estimate the cost BP considers the Production cost,

distribution cost and selling cost plus a decent return of

efforts and risks.

Step4: Analyse Competitor Price Mix:

BP has the strong competitors like Exxon, Chevron, and Conoco

Phillips etc. BP considers competitor costs, prices, offers and

possible reactions.

Step 5: Select Pricing Method

According to competitors price BP set price compatible than the

other competitors. It uses Value-pricing method. Value pricing

method is a method where one charges a fairly low price for a

high quality offering. Using value pricing, BP re-engineer its

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business operations to become a low cost producer without

sacrificing quality and then lower pricing to attract a large

number of value conscious customers.

Step 6: Select Final Price:

While selecting the final price, BP considers the following: 1)

Impact of other marketing activities like brand quality and

advertising in relation to competition, 2) Companies pricing

policy, 3) Impact of the price on other parties like the

distributors and dealers. The low price offering is not the only

way to grab the market.

21. Break Even Analysis

An analysis to determine the point at which revenue received

equals the costs associated with receiving the revenue. For a

simple breakeven analysis for service companies, the formula is

given below:

Breakeven Sales = Fixed Costs / (1 – Variable Cost % of Sales)

2013( Million

Usd)

2012( Million

Usd)

2011( Million

Usd)

Fixed Cost 9536 8652 10,753

Variable Cost 2658 5614 5911

Sales 12,820 11,863 13,282

Break even sales = 28,941/1-(14183/37,965)

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= 46,200 Million dollar

22. Recommendation

BP should review its Group safety assurance process as a keypart of corporate governance. In particular BP should:

Develop performance measures for major accident hazards;

Review the targeting of audits to major hazards;

On 20th April 2010, a gas release and subsequent explosion

occurred on the Deepwater Horizon oil rig working on the

Macondo exploration well for BP in the Gulf of Mexico. So BP

has to be more cautious to avoid these types of incidents.

Even if they encounter such occurrences, BP should have

effective back up strategy to tackle them.

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usd

46,200 salesvolume

TR=37,965 Millon

=14,183 Million

=28,941 Million

The accident involved a well integrity failure,

followed by a loss of hydrostatic control of the well. This

was followed by a failure to control the flow from the well

with the blowout preventer (BOP) equipment, so BP has to be

better equipped for further.

Most importantly, although it has been successful in theseyears from 2011 to 2014 but BP should maintain their 10point plan in even more smoother way in the upcoming time toensure their continuous growth;

Review regulators letters and enforcement notices so thatregulatory concerns and trends can be identified;

Introduce a review system for plant reliability so that thesafety implications of unreliable plant can be identified atcorporate level;

Analyze reports of process safety review findings at grouplevel;

Review procedures for initiating "before the event" taskforce type audits where evidence exists of deterioratingperformance which could lead to a major accident.

They have to check on their low levels of accountability and

transparency for social and environmental performance.

23. Conclusion

British Petroleum (BP) has evolved as a separate business

discipline because of increasing amount of attention towards it

from media and general public. Business can benefit from BP’s CSR

by engaging in it actively and thus improving the image of the

company, or they can choose to ignore it which can result in

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negative consequences for the company. The company has

many aspects and environmental issues in a host country caused by

the activities of the business are considered to be one of the

important aspects of environmental factors, as this type of

business is collaterally related with the nature and environment

from the very core.

The report has formulated a range of measures to be implemented

by BP in order to deal with environmental issues in host

countries in a more efficient manner. The strategies include

adopting a pro-active approach, introducing relevant health and

safety standards, close co-operation with stakeholders and

initiating knowledge sharing among the major players in industry.

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24. Reference

i. Marketing Management – A South Asian Perspective – 14the edition

by Philip Kotler, Kevin Lane Keller, Abraham Koshy and

Mithileshwar Jha; Pearson Prentice Hall.

ii. https://www.bp.com

iii. British Petroleum Annual report 2012/2013.

iv. https://en.wikipedia.org/wiki/BP

v. http://www.bp.com/en/global/corporate/about-bp/our-

strategy/10-point-plan.html

vi. http://research-methodology.net/british-petroleum-bp-and-

csr/

vii. http://www.hse.gov.uk/Comah/bpgrange/overall/index.htm

viii. http://www.academia.edu/466110/

BP_Market_Analysis_and_Strategic_Marketing_Recommendations_I

n_the_USA_after_the_Gulf_of_Mexico_Oil_spill

ix. https://www.crunchbase.com/organization/british-petroleum

x. http://www.slideshare.net/FaysalAlam1/global-business-

strategy-29270246

xi. http://www.ogj.com/articles/2015/02/bp-trims-capital-budget-

by-4-6-billion.html

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