Industry structure can change for the better or for worse for companies. In the oil industry, for instance, deregulation was introduced in the early 1970s to ensure uninterrupted supply of oil for the country, as well as to maintain stable prices. Covered in the regulation were all types of petroleum products—gasoline, diesel, kerosene and fuel oil, among others. Toward this end, the Oil Price Stabilization Fund (now abolished) was created to cushion local oil prices and the economy from wide fluctuations in world oil prices, as well as the foreign-exchange rate. In February 8, 1997, the oil industry had been fully deregulated after similar deregulation in the telecommunications industry and the liberalization of the banking industry a few years earlier. These moves were designed to attract more foreign investments into the country and attain a more competitive economy versus neighboring countries.

Deregulation promoted the eventual entry of other big oil companies and increased competitive pressures to existing players. Existing players must attain efficiency not only to survive but to maximize profitability given a parity product. There are not much substitutes for commodities like petroleum, however, such that the risk is in attracting price-conscious consumers to buy cheaper but inferior products with the entry of unscrupulous traders. Oil companies must then have adequate control of their service outlets to prevent product switching from occurring.

“Existing companies can choose to introduce innovative promotions schemes that can improve their return on investment,” advertising and promotions director Charmaine V. Canillas of Petron Corp. says in an interview with this columnist.

Competition would also be freer to construct more retail outlets, and improved distribution would result as the company with better awareness and availability shall have the immediate edge. They shall no longer be simply place-or availability-driven alone.

“Our products and services are made for the Filipino way of life. What make the market so attractive are its distinctiveness and our ability to anticipate and respond to the market’s needs and desires. Petron’s advantage is its being mainly Filipino. It does not have to follow the dictates and constraints imposed by a foreign principal regardless of their relevance to local market needs. Rather, we have the flexibility to introduce products and services that are relevant to Filipino,” Canillas explains.

Instead of relying on one major differentiation or thrust, a company needs to weave its own unique tapestry of marketing qualities and activities. It is not enough to do most things a little better than the competitors. Canillas sees a business having a robust energy when it has strong points of difference from competitors’ strategies.

“Our positioning is leading through partnerships. This is our creed. It is not a tactic, but a belief. The advantage of Petron is its ability to partner with the best global experts in developing offers that are perfect for local home and motoring needs. We view our customers as partners who have individual needs,” she adds.

Petron sets the tool of the marketing mix that will support and deliver the product’s positioning. Out of the seven “Ps” of marketing, “People” and “Purpose” clearly deliver desired results. People, of course, means the sincere desire of the Petron employee to understand consumer needs, provide relevant products and services and ensure a consistent experience for the brand across all touch points. Petron’s dealer-partners are invaluable to the efficient and effective service delivery of the brand. Purpose means the benefits that the customers can derive from patronizing the company, the added value, even intangible, one can get for every hard-earned peso.

But having a brand name as powerful as Petron is not enough. What degree of preference does it create? What associations, performances and expectations does it evoke?

“Trust,” Canillas says, “the consistency with which you’re viewed by your publics. The confidence and belief in what you are offering them. What you see is what you get. The octane ratings of our fuels are clearly called out at the pumps. We do not hide behind generic claims. When we say that Petron Xtra is truly economical, this is backed by actual runs on local road and driving conditions using everyday motorists.”

Indeed, its fuel economy has been proven four times over in two years, attesting to the consistency of the product. “We do not launch something and then change the formulation after a campaign,” she furthers.

Petron still remains the only publicly listed oil company in the country. The company is the first to put cleaning additives in its fuels in the mid-1980s. Cleaning additives have been table-stake features of Petron’s fuels for over two decades now. Blaze has the highest octane rating in the country for high-performance vehicles. Petron was ahead in putting up mega stations with quick-service restaurants. Petron’s fleet card is the only one with microchips, enabling more flexibility and control for cardholders. Its Petron

Gasul is the pioneer bottled LPG in the country. Petron Xtend AutoLPG is the first autogas product made available at the service stations.

“Even our student art competition, ArtPetron, is an innovation as the works of art produced are used in our much sought-after calendars. We’re the only ones who do that,” Canillas claims.

As the company deepens its knowledge of the target market—what it wants, what it buys, where and when it buys, how it buys, and so on—the company improves its ability to find good leads.

“Our petroleum products not only conform to environmental standards, but have been made for efficiency so that the optimum performance of the vehicles can be achieved. The more efficient the petroleum product is, the less you need to step on gas, the less emissions your car has, the less contribution to global warming. All our fuels have been using organic additives, as well,” Canillas points out.

According to her, Petron has been focused on going beyond the extra mile in everything it does. The company’s “Fuel Drive” campaign, an advocacy for responsible driving, is now on its second year. “Enertripid,” an energy-conservation campaign, was embarked on by the company last year. For the past 22 years, Petron espoused preventive maintenance through its annual Lakbay Alalay, the longest- running roadside-assistance program in the country. With the rising costs of fuel products globally, Petron has been actively calling out the octane ratings of its gasoline brands so consumers need not pay more for a 93 or 95 octane fuel. “Once again, using the right octane-rating fuel for your car is key to its efficient performance.”

Apart from product and service quality, Petron has also been leveraging on its refinery assets and on caring for the community and the environment. The Petron Fluidized Catalytic Cracking Unit and the Propylene Recovery Unit—additional processes in the refinery—were recently inaugurated. These produce higher-value petroleum products and petrochem feedstocks, potentially eliminating the need to import these. On social responsibility, Petron continues to fuel the hope of children from marginalized sectors through the Tulong Aral ng Petron program. The company has likewise partnered with World Wide Fund for Nature for the protection and preservation of Tubbataha Reef, which is critical to our ecosystem.

Petron, therefore, calls for more than just brand-image building. It calls for managing every brand contact the consumer might have with the brand. Since all company employees, distributors and dealers can affect the brand experience, the brand challenge is to manage the quality of all brand contacts.

“Petron is a trusted partner [that’s the image we wanted to sustain and build]—transparent in its dealings; one who listens and anticipates your needs; one who will treat you fairly; one who is committed to fueling your success,” Canillas concludes.

OMD tops world’s creatives

The flexibility that characterizes your advertising will be demonstrated by your ability to adapt your campaign and identity to all media—the advertising media and the direct marketing weapons. Any strong advertising idea can be adapted to fit well into any medium. Some of the fast-paced, music-dominated TV spots might be tough to transform into print ads, but if they have a core idea—which they often do not because they’re too wrapped up in showbiz—they can leap off the page as adeptly as they leap from the TV screen.

If you can’t turn your radio commercial into a newspaper ad, there’s a problem somewhere. You don’t even have to search to find it; I’ll tell you now. It’s because you’ve put so much emphasis into the style that the substance is lost. Blame yourself. You’ve got to shine more light on that substance. You’ve got to get clear on the basic selling offer yourself, then be sure it is communicated in your advertising. When it is, you’ll find that the idea can be expressed with aplomb in any medium you select.

By utilizing a mixture of media to bolster your ad campaign, you’ll not only have the benefit of synergy, but you’ll also learn of the media doing the best for you. This is crucial information. That’s why an agency tries to explore how to get the most of your (hopefully) adaptable advertising campaign and how to best use the media by capitalizing upon the agency’s inherent strengths.

Media creativity has always been a crucial part of an agency’s offering, and again, OMD or Omnicom Media Group has proven its strengths in delivering insightful, creative and innovative solutions.

In a statement furnished this columnist, the Gunn Report for Media, which evaluates global media creativity, ranks the most-awarded campaigns agencies and advertisers in media competitions across the world. Since the report began in 2004, OMD has maintained top ranking, this time outscoring its nearest competitor by more than twice as many points in the latest round of competitions. OMD captured 234 points, with the second- ranked media agency scoring 110.

The report rates agencies on a point system based on awards won in annual award competitions worldwide. More important, it recognizes the role that innovative, creative and effective media make in building brand engagement and demand with consumers. Editor of the Gunn Report for Media Isabelle Musnik described media creativity “as an effective universal tool for brands for talking with consumers, meeting objectives and standing out in a crowded field of competitors.”

Musnik says the report’s aim is “to send a strong signal to the marketing industry, to put a global spotlight on media innovation, and to inspire a higher-quality media product around the world. The future of the industry lies in the innovative strength of its media creativity. All the contests that I have reported on this year are witness to this.”

According to Omnicom Media Group’s CEO for Asia-Pacific, Barry Cupples, the agency aims to ensure that all their strategic propositions are driven by great ideas, and that stories deliver on brand relevancy to the consumer.

“The evidence of getting that right is plain to see. I am proud that the Asia-Pacific as a region has shown a significant contribution in the number of awards received,” he said.

The most awarded global networks worldwide for 2007 reveals OMD on top, scoring 461 points, followed by GroupM (WPP) with 350 points. Publicis Groupe Media placed third with 253 points. Interpublic Media Council garnered fourth with 189 points, and Aegis came fifth with 56 points. Havas came sixth with 29 points.

OMD has kept its position since the launch of the Gunn Report in 2004, scoring 234 points. MindShare came second with 110 points. In third place with 101 points came BBDO, which jumped from 14th place in 2006, and in fourth Universal McCann (87 points) up from fifth place.

OPPORTUNITIES IN BEAR MARKETS

There is no denying that the financial marketplace looks like a yo-yo game. Over the past few months the market has been shifting up and down, with a lot of forces pulling it in either direction. The crisis in the US financial industry and the plunge in the US dollar led investors to speculate that the world market is on a free fall.  With the stocks plunging and the stock market reeling, people are concerned about one thing: Has the world market started to hit rock bottom?

People think the market already hit bottom with the weakening on stocks and the sharp drop on prices. Investors’ confidence declined as they continue to feel the crunch in the shares they hold. Throughout this market drama, a lot of investors are looking for ways on how to cope with the current stressed financial market.

Coping with a bear market is challenging; yet, while the market is in the grip of a bear, it provides buying opportunities, as well. The Insular Life Wealth Series is an investment plan that provides insurance protection on top of returns and allows you to buy more units that translate to higher earnings when unit prices pick up. You have the option to place your money in four separate funds: Peso Fixed Income and Dollar Fixed Income Fund—for those with a low appetite for risk; Peso Balanced Fund—for investors with a moderate appetite for risk; and Peso Equity Fund—for those who will take the risk in favor of returns.

Invest in various funds so you reap the benefits when one or two funds are doing well, while maintaining your confidence when the other fund becomes sluggish. Or, you may just want to perform a Fund Switch, which allows you to re-allocate your funds from one type to the other, as you take full advantage of the market’s performance.

The Wealth Series is an ideal investment for the long haul; you can start with what you have and build on your initial investment through regular top-ups (additional premiums by purchasing added units).

With the complexities and swings in the market, people may feel discouraged in achieving their financial goal. Some would end up selling their shares or, worse, realize paper losses by withdrawing investments fully. It is important to understand that the investment world moves in cycles. As history repeats itself, after the bear a bullish market will follow, and the shares you have bought at a lower price will likely generate the sweetest returns.

Art coffeetable book launch

A coffee-table book on National Artist J. Elizalde Navarro, written by award-winning art critic Cid Reyes, will be launched on June 5 at 6 pm at the Ayala Museum ground floor lobby. The book features an appreciation essay by esteemed art critic Dr. Rod Paras-Perez, while the foreword was written by National Artist for Literature F. Sionil Jose. Both are personal friends of Navarro.

The book is a biographical and critical assessment of Navarro’s life and art, culminating in his massive retrospective exhibition at the Metropolitan Museum. The publisher of the book is the National Museum of the Philippines.

Guests of honor are Joselito Campos Jr., Olive Campos and Ester Gabaldon. The occasion highlights a selling exhibition of some of Navarro’s choice canvases. Moreover, five works on paper will be raffled off to invited guests.

Project director for the book is Corazon S. Alvina, executive director of the National Museum. Book designer is Jose Badelles. Photographers are Romeo Ballada, Ed Bayani, Noel Cabañero, Mario Co, Joey Ibay and Djaya Tjandra Kirana. Book editor is Ricardo de Ungria. Organizers of the event are Art Exchange and Art Verite.

AdMix: Changing industry structure

Industry structure can change for the better or for worse for companies. In the oil industry, for instance, deregulation was introduced in the early 1970s to ensure uninterrupted supply of oil for the country, as well as to maintain stable prices.

Bubuwit Squeaks: The mistaken views on marketing

BM In The News