MKT00150 Global Marketing Report: BHP Billiton's India Operations

This report provides a comprehensive analysis of BHP Billiton's global marketing strategies, specifically focusing on its operations in India. It begins with a market analysis, examining the political, economic, social, and cultural conditions of India, highlighting both challenges and opportunities for the company. The report then delves into customer segmentation within the mining and resource industry, identifying key target segments. A detailed discussion of market opportunities and threats follows, emphasizing the potential of India's oil and petroleum sector while acknowledging competition. The report also covers market research needs, including the availability of technology and essential resources. Furthermore, it presents an overview of BHP Billiton's product and service profile, brand positioning, and country of origin advantages. The report concludes with a discussion of market entry strategies, proposing the use of partners and agents, as well as geographic diversity, to successfully navigate the Indian market.

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2. Market Analysis
a) Target country
BHP Billiton has targeted India for the oil and petroleum project in India. Connecting and
operating in India has various challenges and opportunities. BHP Billiton believes that the there
are several factors which can help the organization to build long term relationship with the
country. However, there are hurdles like labor issues, overlapping and corruption levels (Block et
al. 2015). The political, social, legal and economic conditions of the country are discussed
below:
Political conditions: India is a democratic country, the elections are held locally and at national
levels. Political culture of India is highly unstable. This is one of the most critical factors for
attracting the foreign investors in the country (De Beule, Elia and Piscitello 2014). Moreover, the
major cause of concern for operating in India is high level of corruption. This is one of the major
challenges that can affect the business operations.
Economic conditions: Despite the political challenges, India is a fast growing economy. The
GDP of the country is $2.4 trillion. The growth rate of the country is 7.0% in 2018 (Rakesh
2014). The growth rate of the country is expected to grow in the near future. This is an
opportunity for the company.
Social and cultural environment: India has a huge population which makes it a great
opportunity for international companies. Further, it has abundant cheap labour. The labour of the
country is affordable and accessible. The communal harmony of the country is also an
opportunity for the company. Therefore, it is one of the most attractive markets (Sui and Baum
2014).

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b) Discussion on customer segments
BHP Billiton must consider the factors sustaining to the growth of the mining and
resource industry. BHP Billiton will be targeting the lucrative customers and segments the
consumers as per the priority list. The mining and resource industry is one of the core industries
in India. It contributes 15% to the GDP of the country (Rakesh 2014). The power and the
fertilizer sector of the country have high demand for gas, coal and petroleum assets. Hence this
sector can be targeted by the company.
c) Market opportunities and threats
As mentioned above, the oil and petroleum industry in India is most vital to the country.
It is the potential hub of refining. The capital cost is low by 25% to 50 % as compared to the
other countries (Agrawal 2015). It is expected to improve the by 45% in the future years to
come. Hence this is an opportunity for the company. Further, there is several government
initiatives in this sector such as 100% FDI is allowed in the private refineries and 26% in the
government owned refineries (Agrawal 2015). Hence there is a growth opportunity. However, it
can face stiff competition from the domestic mining and resource companies such as Indian
Mining Consultancy and Uranium Corporations of India Limited.
d) Market research
Expanding the business operations in India required market research to analyze the
availability of the necessary requirements. Information regarding the availability of advanced
technology for mining and refining must be taken into consideration and the locations of the
major mines (De Beule, Elia and Piscitello 2014). Further the availability of rare earth elements

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essential or the supply projections must be analyzed. Information regarding the rate of
phosphorous being mined, used and the reserves must be analyzed.
3. Product and service profile
Overview of product features and value to customers
BHP Billiton is the largest producer of titanium minerals, copper, aluminum iron ore,
uranium, nickel and silver. It offers various other petroleum and coal assets to the customers. The
works of BHP Billiton is segmented into five business units namely, manganese and nickel, coal
and petroleum, iron ore, copper, petroleum and potash (Floris, Grant and Cutcher 2013). The
company offers low cost and assets assuring longevity. BHP Billiton adds value to the products
by acknowledging the needs and demands of the customers and integrating them with the right
products. The assets f the company helps to maximize the upstream resources; it optimizes the
freight and the cost of distribution. The assets of the company are mainly focused on production,
cost and safety (Gupta 2013). The marketing process of the company optimizes the realized
prices and sales outcomes.
Brand positioning of BHP Billiton
BHP Billiton is considered to be the world’s largest mining company. The brand value of
the company has increased to 29% (Gupta 2013). Moreover, it is considered to be the most
valuable brand of 2017 (Johnson 2016). In the year 2018, the company ranked a top position
among 25 strongest metals and mining brands across the globe. It demonstrates the effectiveness
of the company’s adverting and marketing campaigns.

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Country of origin benefits and challenges
BHP Billiton originated on Indonesia’s Belitung Island in the year 1860s as a tin miner.
Despite being the most valued company, it has faced various challenges in the past years. The
metal price crisis had dropped the demand for raw materials. (Lahiri-Dutt 2016) However
rebranding strategies of the company enabled it to gain back its position. Further the demand for
high quality iron ore has benefitted the organization (Laufs and Schwens 2014). However, it
needs to define its competitive advantage by capturing position in the international markets.
Extension/adaptation strategy
The strategy of the company is to better utilize the capabilities of the organization to
enable the execution of the business strategy. The strategy of the company is the have a simple
and diverse assets. This will enable the company to extract the most valuable and ensure high
return on their assets (Lahiri-Dutt 2016). The organization will develop more options to ensure
success which majorly depends on the commitment to capital discipline and social value. This
strategy will help the company to contribute positively to the people, society at large and the
environment. The organization will continue to simplify the work procedure and increase the
capability of the workforce while establishing innovative partnership. This will help the
company to increase adaptability, create stable and predictable operations. Further, the
organization will implement value chain Automation which will improve the operational stability
of the company (Holtbrügge and Baron 2013). Moreover, this will help the organization to
increase productivity and establish flexibility in the organization.

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4. Market entry
In order to enter the Indian market, the business organization have information and
research into the Indian market, it needs to determine the target market and must be well
acquainted with the procedural issues. The foreign investors can form subsidiary relationships or
joint ventures along with the Indian-based companies (Ho 2014). The business organization must
have an in-depth understanding of the diverse market of India and formulate strategies to specific
regions for target segmentation. This will enable the business organization to gain early
acceptance in the Indian market (Holtbrügge and Baron 2013). There must be proper
documentation and understanding of the importing procedures which will ensure smooth entry of
products and services in the Indian market.
Market entry strategy 1: Partners and Agents
The first suggested market entry strategy is to use the partners and agency. It is
considered to be a necessity for entering into the Asian Markets (Johnson 2016). Forming
partners or hiring agents can be useful strategy for market entry where there is a huge cultural
difference between the countries. The local partners and agents might help the business
organization to acquire the basic local market knowledge and contacts wisely with the customers.
There are various issues to be addressed during the market entry such as sales channels,
distribution, pricing and labeling, marketing practices and protection of intellectual property
(Lahiri-Dutt 2016). These challenges and issues can be addressed effectively with the help of an
Indian partner or agent. Firming relationships and forming partnerships with the potential agents
can be done through personal meetings. Due diligence is highly suggested to ensure that the
partners or the agents are reliable and credible.
Market entry strategy 2: Geographic diversity

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The geographic diversity can also be considered for entering in the Indian market on a
regional level. It is particularly suitable for small and medium sized enterprises. However, it
requires good localized information as India is a large and highly diverse country (Floris, Grant
and Cutcher 2013). There are commercial service offices in Mumbai, New Delhi, Ahmadabad,
Hyderabad and Kolkata. Valuable information about the local knowledge and advice can be
collected from the commercial service offices as they are well connected with the local business
organizations of the country and economic leaders (Gupta 2013). Furthermore, the company can
hire multiple agents to serve different geographic markets throughout the country.
It is highly recommended to use commercial agents and forming partnership to enter the
Indian market. This is most suitable market entry strategy as they local agents have vast
knowledge about the local markets of the country (Holtbrügge and Baron 2013). They can help
the business organization to gain the basic knowledge of the local market. This is most
recommended strategy as there are huge cultural and social difference between the company’s
origin country and India (Laufs and Schwens 2014). Geographic diversity might not be suitable
for the business organization as it required good localized information about the country and
immediate geographic diversity might not be suitable for the business organization. Moreover,
reaching commercial service offices can be highly expensive and time consuming. Therefore,
forming agents and partnership might be most suitable market entry strategy.

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References
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