Bab106 PDF Eng

BAB106
Revised December 9, 2004
t
os
rP
BP Oil International: Brand Image Program (A)
It was a hot and muggy London day in August 1987 as Roy Croft, advertising manager
for BP Oil International (BPOI), prepared for a meeting of the Marketing Strategy Group (MSG)
yo
scheduled for Vienna in October. If all went as planned, Croft would receive final approval to
implement the Brand Image Program (BIP), and a worldwide advertising program would be
initiated. The approval, should it come, would culminate several years of Croft’s efforts to move
the company in the direction of global advertising.
Even as he contemplated the final pieces of the puzzle fitting together - with the
anticipated go-ahead given to the advertising agency to produce finished television executions -
Roy Croft had doubts. He knew that several of the national marketing directors remained
op
skeptical that a standardized, global advertising approach could be effective in their own
particular markets. Few of the directors were enthusiastic about relinquishing control of a
significant portion of their advertising and sales promotion (ASP) budgets to Croft’s headquarters
advertising group. While Croft had support from many of his superiors, he knew that, in the final
analysis, BPOI management would be loath to demand that the individual markets approve BIP.
Thus, at the end of the day, it was up to Croft to sell the new program on its merits.
tC
Company Background
The British Petroleum Company (BP) owed its origins to one man’s gamble. In 1901,
William Knox D’Arcy followed a hunch that commercially useful quantities of oil might be
found in Iran (then known as Persia). D’Arcy was no stranger to speculation. He had made his
fortune from gold mining in Australia.
No
In 1901 he had been granted a concession by the Persian government to explore for oil.
Seven long years of hardship and disappointment followed. Against all geological evidence,
D’Arcy’s engineer, George B. Reynolds, persevered in the search. Finally, on May 26, 1908, oil
in commercial quantities was discovered in the Asmari Mountains of South Persia - the first
commercial discovery in the Middle East.
One year after oil was struck, the Anglo-Persian Oil Company was formed to take over
the D’Arcy Concession. An initial stock offering of 1 million shares, selling at £1 each, formed
Do
Professors Robert J. Kopp and Philip A. Dover, Babson College, prepared this case with the cooperation of British
Petroleum and W.B. Doner as a basis for class discussion rather than to illustrate either effective or ineffective
handling of an administrative situation. Certain names and data have been disguised.
Copyright © by Robert J. Kopp and Philip A. Dover 1995 and licensed for publication to Babson College and Harvard
Business School Publishing. To order copies or request permission to reproduce materials, call (800) 545-7685 or write
Harvard Business School Publishing, Boston, MA 02163. No part of this publication may be reproduced, stored in a retrieval
system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying, recording,
or otherwise – without the permission of copyright holders.
This document is authorized for use only by rahul sharma until September 2011. Copying or posting is an
infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860.
BP Oil International: Brand Image Program (A) BAB106
t
os
the capital base of the company. The company’s first task was to construct a pipeline across the
inhospitable terrain of Persia to Abadan, a barren mud flat along the Shatt-al-Arab River. It was
here that the company’s first refinery, with an annual capacity of 400,000 tons, was
commissioned in 1913.
rP
In 1910, an important event took place that was to set the strategic tone for the company
for many years to come. Sir Charles Greenway, recently appointed managing director of the
Anglo-Persian Oil Company, clearly foresaw the way the oil business would develop.
Specifically, he pressed for the company to become vertically integrated so that it was, in his own
words, “absolutely self-contained.” One aspect of this strategy was the purchase of a UK-based
marketing organization, the British Petroleum Company (BP), until then a subsidiary of the
German-owned Europaische Union. The acquisition of BP provided the stimulus for further
yo
geographical expansion that continued with the purchase of distribution companies in Europe and
around the world.
In 1914, the British Navy became one of Anglo-Persian’s first customers when it saw
fuel oil’s potential as a substitute for coal, a view fully supported by Winston Churchill. As a
result, the British Government invested some £2 million in the company, thereby becoming the
majority shareholder. This holding steadily declined, and by early 1987 it stood at just under 32
op
percent.
Over the years, BP suffered from the same vicissitudes that plagued the oil industry as a
whole. For example, during both world wars, almost all production was geared to the war effort;
Anglo-Iranian (the company had been renamed in 1935) lost nearly half its vessels in World War
II. In 1951 the oil production facilities were nationalized by the Iranian government, a precursor
of the growing assertiveness of the oil producing countries that was to culminate in 1961 in the
tC
formation of the Organization of Petroleum Exporting Countries (OPEC). In 1954 Anglo-Iranian

took the name of its original British distribution company and became British Petroleum.
Through the oil crises of the Middle East - first in the 1950s and then in the 1970s - and the
consequent political and economic upheavals, BP changed dramatically.
Since its foundation, BP’s operations steadily expanded both geographically and by lines
of business. Oil production, refining facilities, and marketing outlets were established in many
No
parts of the world. The company invested heavily in a transportation infrastructure - it

established an extensive tanker fleet - and it became a major supplier of fuels and lubricants to the
marine and aviation industries. BP followed a strategy of diversification, entering new businesses
such as chemicals, plastics, animal nutrition and minerals. Diversification was also pursued into
alternative energy sources including coal, gas, and solar power.
Despite this proliferation of activities, the exploration and production of crude oil -
known as “upstream” activities in the oil industry’s value chain - remained the company’s forte.
For example, BP played a major role in exploration and commercial development of the Alaskan
Do
Pipeline and the North Sea oil fields in the 1960s and 1970s. As a British company, BP could not
legally sell its Alaskan oil in the U.S. In order to overcome this obstacle, BP acquired 25 percent
of Standard Oil Company of Ohio (Sohio) in 1969. In the late 1970s, both Alaska and the North
Sea strikes were each producing over one million barrels of oil per day.
t
os
During the 1970s, BP started to pay more attention to the “downstream” activities of
refining and marketing. In 1980, BP Oil International (BPOI) was formed to create a separate
identity for the downstream business and establish the foundation for a new emphasis on
marketing.
rP
As the 1980s progressed, BPOI became increasingly interested in better managing all
aspects of the downstream marketing mix: i.e., product selection and branding, advertising, sales
promotion, customer service, and retail merchandising. BPOI management developing closer ties
to its counterparts in the U.S helped this effort. BP’s interest in Sohio had increased to 55 percent
ownership in 1978 - and historically, Sohio had been known for its downstream marketing
expertise. In addition, the BPOI personnel in London began to study the successes and failures of
marketing activities carried on by over 30 subsidiary companies that made up the third largest oil
yo
marketer in the world.
Current Situation
In 1986 a breakdown in the OPEC cartel had caused crude oil prices to fall from $26 to
$10 per barrel, rebounding at year-end to $18. This price volatility had a negative effect on the
company as a whole where profit before Extraordinary Items was halved in 1986 (see Exhibits 1
op
and 2 for financial information).
While upstream profits fell, the market price collapse had the opposite effect on
downstream results; retail margins had improved as pump prices of petrol fell more slowly than
cost-of-sales. In 1986, BPOI recorded operating profit of £966 million on turnover of £14,691
million. While sales revenues had declined by 38% over 1985, operating profit had nearly
tC
doubled.
BPOI accounted for 37% and 46% of total company operating profits and turnover,
respectively. Percent of turnover of other businesses included Standard Oil (28%), BP
Exploration (9%), BP Chemicals (6%), and BP Nutrition (4%).
Origins of Global Brand Management

No
I think that, from what I have shown you, it is fair to conclude that advertising
can be extremely effective in building a strong corporate image, and that given
consistency and continuity over time, the image can be exploited to great effect
in marketing activities, even though the benefits are not always easy to identify
and quantify. And that, I hold, could and would be equally true of a campaign
created for an international, as well as a national, stage.
Do
So ended a speech delivered on December 10, 1985 by Roy Croft to the Dutch
Advertisers Association. The speech, titled “Using Advertising to Build and Exploit a Strong
Corporate Image,” was an assessment of a BP corporate advertising program Croft had helped to
t
os
initiate five years earlier in the UK. The campaign, “BP: Britain at Its Best,” had in Croft’s
words, “moved the needle of public opinion in ways favorable to British Petroleum.”1
Following the success of “Britain at Its Best” in the early 1980s, Australia and South
Africa launched corporate image campaigns with a similar look and tone. The Australian
rP
campaign “Quiet Achiever,” was particularly successful because the message captured aspects
that were uniquely Australian: e.g., local celebrities were used and the campaign theme sounded a
chord with Australians whose remote geographic location and small population numbers had
precluded them from being a major player on the international stage. Cleverly, the first Quiet
Achiever execution described the Australian origins of William Knox D’Arcy, BP’s founder.
While reviewing these successful corporate communications programs, Croft’s attention
yo
had shifted to a new but associated topic -- BPOI’s international business. Of specific concern
was the power and vitality of the “BP” brand as it was applied to the wide range of consumer
products - the most important of which was gasoline or petrol - sold in BP-owned and BP-
franchised service stations worldwide. He felt that a brand name was a corporate asset that must
be carefully managed, especially when the name was used in as many as 30 countries in which
BPOI operated. He had been musing for some time about the logic of consolidating the many and
varied BPOI advertising campaigns around the world into a single, unified advertising program.
op
Roy Croft’s arguments for considering a global branding and global communications
approach for BPOI rested on several foundations. For one thing, Croft’s background prior to
BPOI, as an account director with a major international advertising agency, had taught him that
brand image could have a powerful effect on product differentiation. This was certainly true for
brands such as Mercedes Benz that were functionally different from competition. But in Croft’s
view it was also true in categories such as cigarettes and laundry detergents, which were
tC
characterized by functionally equal, or “parity” brands. He felt that a strong brand image might
cause petrol to be bought on attributes other than price and location, which were the criteria
typically mentioned by consumers as the dominant determinants of brand choice.
Second, Croft had evidenced that brand image could significantly influence consumer
brand choice and hence retail sales of petroleum products. For example, the Fina brand was
acquired by BPOI in Scotland and Switzerland in 1980, when all stations were painted green and
No
yellow and rebranded as BP. This resulted in a ten percent increase in sales for the unified
company, a result that was maintained over time.
Finally, the experience of the UK retail petrol market in the 1970s and early 1980s had
shown clearly that petrol was viewed increasingly by the public as a commodity. This trend was
encouraged by a steady industry-wide reallocation of advertising and sales promotion (ASP)
budgets away from advertising and toward sales promotions. In rough numbers, the industry ASP
ratio moved from 50:50 to 40:60 over the 1970-1985 period. This adjustment, plus the fact that
sales promotion activities were often poorly linked to the brand building efforts of advertising,
Do
was felt to contribute to an erosion of brand loyalty. In Croft’s words, “Before the mix shifted,
research regularly demonstrated quite marked differences in consumer perceptions of the various
branded products. This was very much related to the content and style of the product advertising,
1
For further information on this campaign, see British Petroleum Company Limited (ECCH # 587-029-1)
t
os
rather than to any “real product advantages.” Furthermore, in some markets, such as France,
private label petrol brands were growing at the expense of the “majors” like BP.
Croft was impressed by arguments made by Harvard Business School’s Theodore Levitt2
and British Petroleum’s corporate advertising agency, Globalcom, that consumer needs and tastes
rP
across the world were becoming more homogeneous. McDonald’s and Coca-Cola had been
successful in operating on this assumption, and Croft believed that it might also hold true for
retail petroleum markets. “The motorist uses similar vehicles, fuels and lubricants for similar
reasons virtually everywhere: a convergence of technical requirements, product qualities and
lifestyles that does not necessarily apply to all businesses,” he said.
yo
The Global Image Study
In October 1984, Croft presented his thoughts on brand image and global marketing to
BPOI management. He was rewarded with a £300,000 research budget to undertake exploratory
work - in all countries where BP had a retail presence - to measure advertising and brand
awareness and to assess strengths and weaknesses in international perceptions of the BP image.
Image Perceptions
op
The resulting consumer research showed that while BP was generally seen as big, reliable
and professional, its scores on such variables as warmth, dynamism, modernity and innovation
were lower than those of key competitors in most markets. Croft commented, “Indeed, our
consumer image was nearing second division status, rather than first division. This did not tally
with our actual standing in national markets and put us at a disadvantage in terms of customer
tC
perceptions of the quality of our products and services.” While there were some pleasant
surprises - Australian numbers were consistently above average - overall image ratings were
consistently low from market to market. Selected research results from a number of markets are
shown in Figure 1, below, and Exhibit 3.
In Roy Croft’s view, one reason for these disappointing months was the inconsistency in
BP advertising messages around the world. A review of BP television commercials revealed that
there was little commonality in advertising themes across markets. This was to be expected as,
No
historically, BP’s advertising and sales promotions programs had been run on a strictly national
basis: “If you drove across Europe, for instance, you would meet a new BPOI campaign at every
frontier, each quite different from the last,” said Croft.
Do
2
Theodore Levitt, “The Globalization of Markets,” Harvard Business Review (May-June 1983), 92-102.
t
os
Figure 1
Selected Image Study Results
rP
Global
Image Attributes Dynamic
Innovative
Fuel develop. Best comp.

BP
Stations
yo
Capable staff
-10 -5 0 5 10 15
% "Positive Association" vs. Five-

Country Average
op
Based on average of: Australia, Germany, Greece, Netherlands, UK. To be read: The zero point represents the
all-company/all-country average rating. Thus - “On the image dimension of ‘Being a global company,’ BP’s
rating was five points below the average; the best competitor was 3 points above average.”
BP advertising themes did vary widely from market to market (see examples in Table A).
Some advertising campaigns were more product oriented, others stressed overall brand/company
tC
image. Still other campaigns simply pushed a sales promotion. In Holland, a “Smurf” figure
give-away - a sales promotion used by BP in several markets - became the advertising theme.
According to Roy Croft: “Consumer promotion gimmicks came to absolutely dominate the UK
retail market, quite different from Germany where the market believed in petrol differences and
was interested in hearing a ‘gas quality’ story.” Advertising executional formats also varied
across markets. For example, UK executions tended to employ humor whereas Germans and
Scandinavians preferred a more serious tone. In Austria, the “Green Man” - an athlete
No
representing a clean-burning engine who bounded around the country’s roads and forests - had
become a brand symbol.
Do
t
os
Table A
Market Situation Overview for
Selected Markets, 1987
Country Market Leader BP Market BP Advertising Theme
Share
rP
Australia Shell 22% BP Gold: Premium Unleaded
Petrol
Austria State Co. (OMV) 15% BP Green Man: High
Performance Petrol
Belgium Shell/FINA 14% BP Engine Oil: Your Protection
Shield
Germany Aral 9% BP Petrol: new formula, double
yo
action -
benefits engine and environment
Holland Shell 8% Promotion: Smurf me-Smurf BP!
U.K. Shell/Esso 14% Promotion (Match & Win): Win
“Dynasty Dollars”
Worse yet, it appeared that competitors were beginning to gain the benefits of
op
coordinated international campaigns. Esso was using its Tiger symbol across a number of
markets while Mobil had achieved some degree of standardization by employing its Mobil One
lubricant as the advertising focus in many countries. Recently, Mobil One had been featured on a
new pan-European satellite television-advertising medium, Sky Channel. According to Croft,
“BPOI’s totally national approach essentially barred us from using pan-European media. With
different messages in each market, country-to-country overspill could potentially lead to
consumer confusion.”
tC
In addition to the lack of advertising standardization, the visual look of BP retail facilities
varied widely across the world. Moreover, in some countries, BP retail products were marketed
under multiple brand names. In its home market, for example, BP service stations carried three
distinct brands and logos. In the USA, no fewer than six separate brand names were part of the
BPOI family.
No
Advertising and Brand Awareness

The image study revealed that BP advertising awareness tended to be lower than key
competitors. For example, for the UK market the research report stated:
Compared with the 50-60% awareness levels for Shell and Esso, BP’s
spontaneous awareness level of 22% looks very low. It must, however, be put
into a true context of a much lower above-the-line spend versus these two rival
Do
companies in recent months, and its position versus the next highest mention
which was for Castrol products at 7%. Texaco, the next highest petrol brand,
received spontaneous ad awareness of just 4%.
Croft had evidence from a study of the French and German markets that brand
“favorability” and brand “familiarity” were highly correlated. While he accepted the fact that the
t
os
leading brands, particularly Shell and Esso, could and did outspend BP in advertising, he
wondered whether part of the “advertising awareness gap,” as revealed by the image study, could
be closed by better advertising. Centralizing the advertising function would, he was certain,
improve the production values of the adverts themselves. Would message development and
strategic direction be enhanced commensurately? If so, could this idea be “sold” to country
rP
managers?
“In all, the research confirmed that in retail petroleum marketing, BP had largely
neglected the impact of its brand name,” stated Croft. Another senior BP executive viewed this as
part of a broader problem: “What the review showed was that our major competitors were
pursuing investment-led strategies, capitalizing on the strength of their real estate, their scale of
operation, marketing skills and financial resources. It showed too that, while BP had the
yo
necessary skills and resources, these were often fragmented - we were not exploiting our
international muscle.”
A Push toward Globalization

Roy Croft was convinced by the research findings that BP should further consider
developing greater standardization in its advertising programs. Believing that the concept would
op
be accepted most readily in markets close to BP’s home base, Croft established the European
Downstream Image Project (EDIP). He formed a panel (known as ASP) of experienced
advertising managers from some of BP’s European markets (UK, Germany, Sweden, Holland and
Switzerland) to explore the potential economies of scale and the image benefits of a pan-
European approach. As an initial step, Globalcom was asked to devise an advertising strategy for
BP in Europe, including the creation of a few test commercials. Excerpts from Croft’s Agency
tC
Brief to Globalcom are shown in Appendix A. As the idea of EDIP began to gain momentum
among BPOI headquarters personnel, the potential scope of the marketing effort was expanded to
a worldwide level. Consequently, EDIP gave way to a new title, the Brand Image Program (BIP)
with the ASP panel reconfigured to have full regional representation (Africa, Australasia, Europe,
Southeast Asia, USA).
Globalcom immediately began to work closely with Roy Croft in refining and extending
the strategy for a global advertising campaign. After much discussion, a three-stage program was
No
outlined. Stage 1 would have a “corporate” look, i.e., it would establish the credibility of BP
overall, based on the company’s standing as a major, successful worldwide petroleum producer
and marketer. Stage 2 would be more product-oriented by focusing on specific products and
benefits. Stage 3 would extend Stage 2 by featuring aspects of true differentiation between BP
and its competitors.
It soon became clear that Croft would face significant barriers to selling his ideas. Local
country marketing and advertising managers quickly saw a centralized global approach as
Do
infringing upon their own autonomy, and thereby posing a threat to their own power.
Organizational Changes
In the early 1980s, BPOI had formed Business Development Units (BDUs) headquartered
in London. In 1987 these covered six business areas (retail, commercial/industrial, lubricants,
t
os
aviation, marine, liquid petroleum gas), each with the goal of better coordinating worldwide
activities in its respective area. Additionally, a Marketing Strategy Group (MSG) was created in
London to integrate strategic marketing planning across BDUs. It was chaired by the
international marketing director and included twelve marketing directors from key markets, as
well as representatives of each of the BDUs. The MSG met twice a year and would have the final
rP
say on whether a global advertising campaign would be approved for BPOI. A 1988 organigram
for BPOI is contained in Figure 2.
Figure 2
BPOI Organigram
Exco*
yo General Manager-Marketing
Marketing Strategy Group

op
Business Development Units Marketing Regions
tC
Commercial America Asia

Retail Lubes Europe
Air Marine Africa
Australasia
*Exco = Executive Committee of BPOI Board

No
Do
t
os
Competitive Programs
Although BP’s major retail competitors varied by market, Esso, Shell, Mobil and Texaco
comprised the main overall challengers in 1987. In markets where BP was a major player
rP
(second or third in market share), it was typically outspent by 30-40% by its main competitors;
where it had a weak market share it was outspent by 100% or more. Examples of competitive
message strategies are shown in Table B.
Table B
Messages - Selected Competitors, 1987
Company Symbols/Attributes Tagline
yo
Esso The Tiger. Power, energy, “The security of the big brand”
speed, intelligence.
Shell Diverse. Product quality, “You can be sure of Shell”
reliability, the motorist’s friend.
Mobil Lubricants. Mobil 1 as an “The world’s most advanced
example of high motor oil”
technology/quality.
Texaco No discernible strategy.
op
Source: W. B. Doner records
Creative Development Begins

Early in 1987, Globalcom began to develop creative executions based on the agency brief
and the three-stage strategy outlined above. It was at this time that a key personnel change
occurred within BPOI. Hugh Hanna, who had been VP, Retail Marketing at BP America in
tC
Cleveland, was reassigned to the London headquarters as general manager of the retail business
development unit. Hanna was very enthusiastic about the idea of brand asset management and he
strongly championed BIP.
In May 1987, Hanna and Croft traveled to Belgium where a meeting of the ASP
managers convened in Bruges. At this meeting, Globalcom presented rough story boards of a
proposed BIP campaign. Upon their return to London, Hanna and Croft informed Globalcom that
No
they were not satisfied that program goals had been met and that the creative campaign would
require further development. At the same time, Hanna suggested that strategic and creative input
be sought from additional agencies. He proposed that W.B. Doner, BP America’s advertising
agency, be invited to provide creative concepts. Roy Croft agreed, although he was doubtful
about the wisdom of using a relatively unknown agency. After all, Doner had no offices outside
of the United States and virtually no standing in the international advertising community.
Nevertheless, Doner was provided with a copy of the Agency Brief and, along with Globalcom,
began to work on preparing a creative presentation for the BIP campaign.
Do
In the early summer of 1987, Doner submitted some initial ideas that both Hanna and
Croft found strong enough to present to the ASP panel in July. At this meeting Globalcom also
made a further presentation. However, Doner’s ideas were felt to be much closer to the spirit of
the Agency Brief. They provided treatments that showed clear progression through the three-
stage program. They concentrated on a universal benefit - movement - as a means of presenting
BP’s tangible attributes: a strong, resourceful company; continuous product development from a
10
t
os
reliable source; high and guaranteed levels of consumer service through increased investment in
products and facilities.
In the rough creative presented by Doner, movement was evoked by the smooth operation
of cars, trucks, trains, and airplanes powered by BP fuels. At the same time, movement had the
rP
double meaning of connoting a company, BP, which was itself growing, changing, and
improving. At the end of the ASP meeting, Doner was selected for recommendation to the MSG
as the BIP agency. A target date of spring 1988 was set for screening of Stage 1 finished
commercials, dependent upon final approval being granted for program commencement by the
Marketing Strategy Group. As the bush telephone disseminated this unofficial news, a ripple of
surprise ran through the marketing community, as an agency with very limited international
experience had been preferred over a well-known global agency like Globalcom.
yo
W. B. Doner & Company
In 1986 W.B. Doner & Co. was ranked by Advertising Age as the thirty-seventh largest
advertising agency in terms of worldwide gross income. Doner’s gross income was $36.3 million
on billings of $288.2 million. These figures were 29% and 25% higher, respectively, than in
1985. Doner’s largest clients - all targeting the U.S. market - included BP America, N.A. Philips,
op
McCormick & Klondike and Eckerd Drug. In addition to its Detroit headquarters, Doner
maintained offices in St. Petersburg (Florida), Los Angeles, Baltimore, Chicago and Cleveland.
Doner had been BP America’s advertising agency for several years. BP America
marketed retail petroleum products under several brand names in various regions of the U.S.
(Sohio, Gulf, Boron) For example, Doner was considered to have done a good job in launching
tC
Sohio’s after-care division, Procare, and in reviving the Sohio brand (marketed only in Ohio).
Another creative success had been when Doner hired the television personality Gary Burghoff -
better known as “Radar” on M.A.S.H. - to give warmth and sincerity to BP America’s range of
brands.
Croft realized that BPOI was taking a risk in making this appointment but was suitably
impressed by the fresh, creative approach assumed by Doner. Nevertheless, the relationship with
the agency would have to be very different than was traditionally the case. Croft would have to
No
shoulder much more responsibility than normal, providing strategy guidance to Doner’s creative
efforts and carefully educating them as they gained international experience. In addition, because
Doner would initially have no European offices outside of London, Croft would have to
undertake a larger role in effecting intermarket coordination for the various aspects of BIP’s
implementation.
The Brand Image Program Broadens

Do
Croft’s work on brand image triggered the initiation of two further programs to
strengthen BP’s global marketing presence. An audit of BP’s retail image/identity - extracted
mainly from the recently completed Global Image study - was conducted by the Retail BDU. The
research revealed that the style and appearance of BPOI service stations was a significant
weakness. Further catalysts for action were the retail re-imaging (i.e., renovation and redesign of
service stations) programs recently embarked upon by Texaco and Esso.
11
t
os
Thus Addison, a London-based retail design firm, was retained in 1987 to standardize
and re-image the 20,000 service stations affiliated with BPOI worldwide. This effort, which
became known as Horizon, stimulated a reexamination of all aspects of the BP corporate image.
Shortly thereafter a second London consulting firm, Siegel & Gale, was hired to design a new BP
corporate logo and to establish new graphic standards for letterheads, business cards, signage, and
rP
the like.
Clearly, development of the BIP now needed to incorporate the broad communication
goals of the re-imaging task. For example, any advertising program would have to include the
new corporate logo when it was completed. Similarly, the re-imaging of the company’s retail
service stations - a process which once begun would take two to three years to complete - would
have to be considered in planning future BPOI advertising campaigns.
yo
BIP Strategy Development
Shortly after W. B. Doner was invited to vie for the BIP business, the agency’s account
management submitted its own interpretation of the three stage global advertising strategy. The
following is excerpted from a Doner presentation.
op
Stage 1
Objective: to establish consumer perception of BP as a dynamic and professional world-class
marketer of petroleum.
In this stage, global advertising would be unified in order to improve the consistency of
tC
message and advertising quality and to achieve economies of scale. Advertising copy would
establish a broad, corporate image for BP; the message would concentrate on overall company
achievements rather than specific product benefits. This campaign would attempt to overcome
the current staid image and would establish a level of customer excitement and dynamism toward
BP that would, in effect, pre-sell future offers of a more specific nature. Stage 1 advertising was
designed to get the consumer to say: “Boy, these guys are a big deal - I’m impressed.”
No
Stage 2
Objective: building on Stage 1, begin to establish differentiating benefits through quality
products.
Stage 2 would shift the focus from corporate achievements to specific customer benefits
from individual products. The advertising would feature both global strategic elements, such as
the universal attractiveness of BP’s convenience stores, as well as country-specific benefits
available within given markets. In order to accomplish the latter, the message would allow for
“drop-ins” (customized message elements) tailored to individual countries. Building on the broad
Do
image platform of Stage 1, Stage 2 would be less general in tone and would convey the
impression that “BP is the one that has X.” The desired consumer response: “These guys are
really doing things I need - I’m impressed.”
12
t
os
Stage 3
Objective: establish real differentiation from competition in terms of product range, quality, and
customer service.
rP
Stage 3 advertising would emphasize unique, relevant, and defendable consumer benefits
along the lines of a superior, integrated customer service package. This stage would embrace the
re-imaging concept where the “new” BP is reflected in the “new look” service station. The
desired consumer response: “These guys are really different - I’m going to BP.”
Preparing for the Marketing Strategy Group
yo
Having selected an advertising agency, the next steps were to gain approval for BIP (and
acceptance of Doner) from the Marketing Strategy Group in October 1987 and then from the
BPOI board of directors.
Although he was excited by Doner’s creative concepts, the reality of hiring an

internationally inexperienced advertising agency as a global partner caused Roy Croft to have
some serious second thoughts. He recalled:
op
I was worried - I didn’t see how it would work. Doner didn’t have any network
agencies at all with which to interface BPOI’s national offices. They had never
run a campaign outside of the U.S. - very few campaigns outside of the Midwest,
actually. At the outset I knew I would have to do a hell of a lot of handholding
during the first year or so.
tC
In order to facilitate BIP’s approval by the MSG three months hence, Croft felt it
necessary for Doner officials to meet personally with as many national managers as possible prior
to the meeting. The goal was to try to put local personnel at ease with the global advertising
concept and to show off the creative talent of this “new and innovative agency.” Croft
commented: “The setting up and having all of these meetings in the national markets became a
real circus. I would fly in from London, Doner would fly in from Detroit - we’d try to coordinate
meeting at the airport and then go to the local BPOI office. My arms grew longer carrying bags.”
No
As Croft prepared to make the formal presentation to the MSG and the BPOI Board,
Doner continued to refine the advertising message for the BIP campaign. Specifically, Doner
proposed a global advertising campaign, based primarily on television,3 in which the three-stage
program (see above), plus the creative theme of “movement,” would be tied together with a
unifying slogan or tag line. Doner initially suggested “BP: A Company in Motion,” which was
quickly rejected by Croft. However, their second suggestion of “BP: On the Move” was accepted
enthusiastically. Appendix B contains excerpts from Doner’s proposed presentation to the
Do
Marketing Strategy Group. To support the presentation, Doner had prepared finished copy, in
storyboard/animatic form, of three commercials: two from Stage 1 (“Starting the World” and
“Mission”), and one from Stage 2 (“Airplane Dive”).
3
At the time of the case, not all markets (e.g., Belgium) had national commercial TV. In these situations, print and
outdoor vehicles would be used.
13
t
os
Initial meetings at the local market level were less than encouraging. Croft noted: “Quite
simply, we encountered considerable resistance at the local level. Although we had what we
thought was an air-tight rationale backed with excellent creative, some just didn’t want to know.”
Needing to act quickly, Hanna and Croft took some urgent steps to turn around the
rP
situation. First, they gave approval for Doner to produce a finished execution of the “Airplane
Dive” commercial, a dramatic yet humorous 60-second piece that clearly revealed the reliability
and quality of BP fuel products. This, they thought, would be the best way to demonstrate the
quantum improvement in production quality available through centrally planned, global
advertising while revealing the imaginative sweep of the creative approach. A Stage 2
commercial was chosen for the “demonstration ad” because it was easier to produce and
significantly less expensive (£200,000) than the Stage 1 executions, “Starting the World” and
yo
“Mission.”4
As an additional incentive to local offices, BPOI headquarters agreed to pay for all
production costs for BIP advertising and to provide a subsidy to each market for 50% of BIP
media costs during the first year, with a 20% subsidy in years two and three. “Believe it or not,
even with these powerful inducements, some national directors were not interested,” Croft
reflected.
op
Putting It All Together
The final presentation to the MSG represented the culmination of three years of effort to
move BP toward greater concern for its brand image and toward a global communications
approach. As he contemplated his endgame strategy, Croft had on his desk a file brimming with
tC
position papers, agency briefs, and prior presentations. He believed all of these provided strong
rationale for the BIP proposal. At the very least, a global brand advertising approach would
improve the consistency and continuity of the advertising message and would achieve significant
economies in advertising production. These economies would include elimination of duplication
in management time, production costs and agency fees. Beyond these apparent advantages, Croft
felt that Doner’s initial efforts had shown clearly that centrally produced advertising could be
superior to locally produced advertisements in terms of creativity and production quality. In
some small markets the advertising spend was not adequate to afford any television production at
No
all - this could now be changed with centrally produced and funded advertising and subsidized
media spending. These benefits, he reasoned, would translate directly into improved
persuasiveness and overall advertising effectiveness - and higher bottom-line sales. Of course, he
would be able to use the country-by-country image research to show the need for such a
concerted, coordinated approach.
Despite his optimism, Croft knew that he would face continuing objections from the
national marketing directors who would be represented on the MSG. First, some would question
Do
the global concept with the rationale that they themselves know their local markets best. And,
although Croft remained convinced of the similarity of consumer buying motives toward
petroleum products, no global campaign could possibly capture the nuances of local tastes and
idioms. For example, if the new campaign featured a British or American sense of humor, how
would it play in countries such as Germany, Turkey and Thailand?
4
Hanna sanctioned all expenditures in a sizeable development budget on the recommendation of Croft.
14
t
os
Croft knew also that the development of cross-border media such as satellite TV had not
progressed as quickly as had been projected in the early 1980s. This meant that the bulk of media
for the BIP would have to be bought at the local level; most commercials would not be run
simultaneously in a number of different countries. Furthermore there were differences in
advertising regulation across markets. In moving to a global approach, advertising would have to
rP
accommodate the requirements of the most stringently regulated markets. Would this mean that,
on the average, global claims would be weaker than those made at a local level?
Typically, tactical programs such as sales promotions were planned to dovetail with
advertising. Since a good deal of advertising decision-making would now take place in London,
would this interfere with the communication and coordination required between strategic
advertising and tactical programs at the local level?
yo
How much of an individual country’s advertising weight should go into supporting BIP,
and how much to locally produced copy? Although Croft realized that this must be left to the
discretion of the local market, he believed that country marketing directors needed to be willing
to give sufficient support to the BIP. He mused over what should comprise a “sufficient” level
and wondered whether this level should vary by size of market. He felt he should establish
coverage and frequency targets that should be met if the center were to pick up 50% of initial
op
media costs.
Croft was sensitive to the potential objections of hiring a U.S. advertising agency with no
offices outside of that country. He anticipated that MSG members might ask: “How can you
follow through on your pledge to receive local input on advertising development and production
if the central agency is thousands of miles away?” He would also be queried about the role of the
local advertising agencies. A total of 13 different agencies were currently used just in the
tC
European countries. Would they and agencies elsewhere in the world be consolidated and, if not,
how would they interact with Doner? He was aware of one final irony. In 1987 BPOI was
enjoying a rather healthy year in terms of sales and profits. Would MSG members invoke this as
evidence that the current advertising structure was working well enough?
As Roy Croft looked out of his London office onto rush-hour traffic crowding Moorgate,
he wondered what he could do to strengthen his presentation before the Marketing Strategy
No
Group.
Do
15
t
os
Exhibit 1
British Petroleum Company: Income Statement
SUMMARIZED GROUP INCOME STATEMENTS
rP
£ Million
1982 1983 1984 1985 1986
Turnover 29,314 32,381 37,933 40,986 27,171

Operating Expenses 27,096 29,618 34,657 37,347 25,326
2,218 2,763 3,276 3,639 1,845
Other income 712 526 625 799 786
yo
Replacement cost
operating profit 2,930 3,289 3,901 4438 2,631
Realized stock holding
gain (loss) 69 (143) 121 (249) (1,173)
Historical cost
op
operating profit 2,999 3,146 4,022 4,189 1,458
Interest expense 694 553 567 476 500
Profit before taxation 2,305 2,593 3,455 3,613 958

Taxation 1,103 1,214 1,426 1,382 42
tC
Profit after taxation 1,202 1,379 2,029 2,231 916

Minority shareholders’
interest 486 513 627 633 99
Profit before
extraordinary items 716 866 1,402 1,598 817
Extraordinary items (4) 165 (298) (929) (318)
No
Profit for the year 712 1,031 1,104 669 499

Distribution
to shareholders 370 438 548 622 642
Retained profit (deficit) 342 593 556 47 (143)
Earnings per ordinary

share 39.4p 47.5p 76.8p 87.4p 44.6p
Do
Dividends per
ordinary share 20.25p 24.0p 30.0p 34.0p 35.0p
Source: Annual Report & Accounts 1986
16
t
os
Exhibit 2
British Petroleum Company: Balance Sheet
SUMMARIZED GROUP BALANCE SHEETS
£ Million
rP
1982 1983 1984 1985 1986
Fixed assets 15,500 17,143 21,238 18,236 17,881

Stocks and debtors 9,184 9,116 10,661 9,780 7,965
Liquid resources 1,580 915 2,315 2,205 2,529
Total assets 26,264 27,174 34,214 30,221 28,375
yo
Creditors and provisions
excluding finance debt 8,122 8,547 11,248 11,807 9,875
Capital employed 18,142 18,627 22,966 18,414 18,500
Financed by:
Finance debt 6,536 5,468 7,058 5,130 5,072
Minority shareholders’
op
interest 2,960 3,521 4,365 3,376 3,456
BP shareholders’
interest 8,646 9,638 11,543 9,908 9,972
18,142 18,627 22,966 18,414 18,500
tC
RATIOS
Balance sheet elements in £ million shown above are used in the following ratios:
1982 1983 1984 1985 1986
Return on average
capital employed
-historical cost 11.10% 10.50% 12.50% 13.60% 7.70%
-replacement cost 10.70% 11.30% 11.90% 14.80% 14.00%
No
(Based on profit after tax,

before deducting interest)
Return on average BP
shareholders’ interest 8.70% 9.50% 13.20% 14.90% 8.20%
(Based on historical cost profit
before extraordinary items)
Debt-equity ratio 36.00% 29.40% 30.70% 27.80% 27.40%
(Finance debt: finance debt
Do
plus BP and minority

shareholders’ interest)
Adjusted debt-equity ratio 29.90% 25.70% 23.00% 18.00% 15.90%
(As above with finance debt
reduced by liquid resources)
Source: Annual Report & Accounts 1986
17
t
os
Exhibit 3
Pre-BIP: Image Study Results:
Selected Markets
rP
Australia Spain
Advertising Advertising
Environment Environment
Image Attributes
Image Attributes
Lubricants Lubricants
yo
Gasoline Gasoline
Stations Stations
Respected Respected
Modern Modern
Global Global
-16 -14 -12 -10 -8 -6 -4 -2 0

0 5 10 15 20 25
% Positive Associations: BP Difference vs.
% Positive Associations: BP Difference vs. Market
Market Average
Average
op
Germany South Africa
Advertising Advertising
Environment Environment
tC
Image Attributes
Image Attributes
Lubricants Lubricants
Gasoline Gasoline
Stations Stations
Respected Respected
Modern Modern
Global Global
-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 -10 -8 -6 -4 -2 0 2 4
% Positive Associations: BP Difference vs. Market % Positive Associations: BP Difference vs. Market
No
Average Average
Note: The zero point represents the all-company average.

Thus negative numbers indicate that BP’s rating is below average in a given market;
positive numbers (no sign) indicate above average ratings.
Do
18
t
os
Appendix A
Agency Brief: European Downstream Image Project
BACKGROUND
rP
The purpose of the project is to arrive at an agreed advertising strategy to support the
long-term marketing objectives of BPOI in Europe (and elsewhere). This strategy should provide
the basis for the advertising activities of all Associates in all markets so as to ensure the
continuity and consistency of BPOI’s advertising effort over time. In order to simplify the
development, the initial program has been limited to the Retail Marketing in Europe.
ADVERTISING OBJECTIVES
yo
To increase motorists’ preference for BP products and services by raising expectations
that BP Service Stations
- Are pleasing, efficient and convenient

- Provide products and services that motorists require
- Offer quality at least equal to the best of the competition
op
To differentiate BP from its competitors.
TARGET AUDIENCE/MEDIA
The target audience is all motorists in those Western European markets in which BP has a
significant retail network. The strategy must be applicable to all media.
tC
No
Do
19
t
os
Appendix A (Continued)
Agency Brief: European Downstream Image Project
RESEARCH DATA
rP
The research findings from Stage I of the project for France, Germany and the UK are
available in detailed form and in summary. However, the key conclusions both negative and
positive were as follows:
The advertising should not:
1. Focus “upstream,” i.e., finding oil (this did not seem relevant to the motorist)
2. Be altruistic (environment at present was not important to many; crusading for
yo
better motoring was “preaching”)
3. Over emphasize technology, cold efficiency (denies human values)
4. Talk about BP characteristics that don’t imply consumer benefits (e.g., pride,
European, working hard)
The advertising should:
1. Feature the service station itself

op
2. Offer or strongly imply benefits to the consumer
3. Be seen to adopt the motorist’s point of view
4. Exploit the sense of honesty that we know motorists get largely the same things
everywhere
5. Go for emotional benefits over and above functional ones
6. Make the BP brand a brand that is “liked” as a personality
tC
7. Exploit humor as a vehicle for attention, involvement, and “liking” for the brand
personality
AGREED POSITIONING FOR BP

Arising from the key conclusions, the BP positioning to be tested is:
•
No
Because we know you can buy your petrol/oil/services anywhere, we try to give
you a better product/service
This positioning should be substantiated by demonstrating a dedicated, responsive, more

friendly attitude to the consumer which results in a better service and (when feasible) better
products. Background material on product quality, facilities and services has been supplied
separately.
Source: Company documents

Do
20
t
os
Appendix B
Excerpts from W.B. Doner Presentation to Marketing Strategy Group
BIP - POSITIONING STATEMENT
BP is a company whose business is making things move. We sell the fuel that powers a
rP
major portion of the world’s ships, plane and trucks and over 100,000,000 cars.
BP, the company, is also moving. It’s growing, changing and improving its network of
stations and the products it sells to meet the needs of the public.
ADVERTISING OBJECTIVES
yo
• Increase motorists’ preference for BP products and services by enhancing BP’s retail
image resulting in improved marketing profitability.
• Motivate BP employees/retailers by instilling a sense of pride in the company.
• Position BP as: “A dynamic and professional world class marketer of petroleum,
which offers the convenience of a variety of quality products, services and service to
satisfy the needs and wants of customers.”
op
THE BP SYMBOL
• Use BP Shield
• Visually Communicate Motion
• Be Simple and Universal
• Work in All Media; TV, Print and P.O.S.
tC
CURRENT CONSTRAINTS ON ADVERTISING

• Credibility: Advertising most not promise benefits which cannot be consistently
delivered
• Strategic fit: Advertising must be an integral part of the overall marketing strategy
• Parity: At present in most markets BP in reality is not significantly better than its
main competitors
No
RECOMMENDED MEDIA PLAN

• Target audience - “all motorists”
• Reach at 16 o.t.s. across 6 months
• TV to be used to maximum availability
• Supporting media - Press, Radio (Drivetime) and Outdoor
• Regionality to match network/marketing strengths
• Satellite TV to give “umbrella” coverage
Do
Source: Company documents
21

Bab106 PDF Eng

Diunggah oleh

Informasi Dokumen

Deskripsi Asli:

Judul Asli

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Bab106 PDF Eng

Diunggah oleh

Hak Cipta:

Format Tersedia

BAB106

Revised December 9, 2004

formation of the Organization of Petroleum Exporting Countries (OPEC). In 1954 Anglo-Iranian

parts of the world. The company invested heavily in a transportation infrastructure - it

Origins of Global Brand Management

While reviewing these successful corporate communications programs, Croft’s attention

Image Attributes Dynamic

Fuel develop. Best comp.

% "Positive Association" vs. Five-

Advertising and Brand Awareness

A Push toward Globalization

Marketing Strategy Group

Commercial America Asia

*Exco = Executive Committee of BPOI Board

Creative Development Begins

The Brand Image Program Broadens

Preparing for the Marketing Strategy Group

Although he was excited by Doner’s creative concepts, the reality of hiring an

Turnover 29,314 32,381 37,933 40,986 27,171

Profit before taxation 2,305 2,593 3,455 3,613 958

Profit after taxation 1,202 1,379 2,029 2,231 916

Profit for the year 712 1,031 1,104 669 499

Retained profit (deficit) 342 593 556 47 (143)

Earnings per ordinary

Source: Annual Report & Accounts 1986

Fixed assets 15,500 17,143 21,238 18,236 17,881

(Based on profit after tax,

plus BP and minority

-16 -14 -12 -10 -8 -6 -4 -2 0

Note: The zero point represents the all-company average.

- Are pleasing, efficient and convenient

The advertising should not:

The advertising should:

1. Feature the service station itself

AGREED POSITIONING FOR BP

This positioning should be substantiated by demonstrating a dedicated, responsive, more

Source: Company documents

CURRENT CONSTRAINTS ON ADVERTISING

RECOMMENDED MEDIA PLAN

Source: Company documents

Anda mungkin juga menyukai