Marketing Strategy Of Mearsk

Marketing Strategy for Maersk Company

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Maersk Line is the largest global container shipping company operating 639 ships which

sail every major trade lane around the world (Maersk, 2019b). Over the last decade, the shipping

and maritime companies have adopted and pursued diverse strategies to counter the increasing

volatility in global trade, oil prices, consumer demand and other external factors. To attain a

competitive advantage, Maersk has adopted cost leadership strategy which is aimed at

developing an integrated and comprehensive transport and logistics company which will build

the company’s unique market position within container transport and port operations as well as

maintain its leading position in freight forwarding and supply chain management in the shipping

industry. Every aspect of Maersk marketing strategy falls into one of the categories of marketing

mix variables of promotion, place, price, product, process, people, and physical evidence.

Marketing Mix

Product

Maersk Company is ranked among the major transportation and logistics companies

globally. The company has several business dealings in divisions such as transportation and

energy. It is the largest proprietor of container transport and supply vessel. The group also has an

expansive armada and a cutting edge with about five hundred and fifty compartment vessels

(Fremont, 2007). Maersk Company has large and modern vessels enabling it to operate with a

big network of trade routes all over the world since 1996. The company’s market mix products

involve the transportation of containers and other related exercises, seaward, tankers and other

diverse exercises involving the transportation of gas and oil items (Lorange, 2005). Other

product portfolio includes gas and oil activities and APM terminals unit. Oil and gas activities

incorporate the production and exploration of gas and oil in several nations. APM terminals unit

includes a network of the global port, terminal and inland services.

Place

Maesrk started its business activities from Svendborg. However, for the past few years, the

company has increasingly spread its presence to the rest of the world through its subsidiaries and

offices in about 135 countries of the global world. Such countries include the United Kingdom,

Australia, the United States and India. The company’s real courses include Intra-Asia, Oceania,

Latin America, Transpacific, Asia Europe, and TransAtlantic. Currently, the Maersk group has

it's business operations spread all over the world. Terminals unit has its headquarters in Hague

Netherlands; however its min headquarters of the company are found at Copenhagen in

Denmark. The Maersk group has also undertaken its exploration activity, in Qatar, Morocco,

Colombia, Brazil and Angola. Relevantly, the company has established a strong distribution

network which involves a capable and strong workforce of approximately eighty-nine thousand

workers.

Price

Throughout the years, the Maersk Group has been endeavouring to reduce its expenses

while still increasing its effectiveness. Evidently, it has depicted productive development at a fast

and continuous rate signifying the efficiency of its operations. In 2014, the assessed income for

the company was $48 billion with a profit of $5 billion in the same year. The pricing strategy of

the transportation group is depended on elements such as a short goal or whole deal, the course

pursued and armada type. The organisation is client-centred and provides solid transport and co-

effective transport administrations. The group has also received an esteemed-based valuing

strategy that is subjected to the kind of item and the required administration as well as its

customer relations. The firm has faced significant rivalry from other delivery and distribution

companies and hence has kept its estimating arrangement more sensible and adaptable to suit all

the company’s singular demands and needs.

The Group has been anticipating to reduce its costs while increasing its efficiency. It has

been constantly providing profitable growth. Its revenue growth has been evident in the increase

f sales as from the year 2104. The pricing policy of the group is depended on factors like short

destination or long-haul, the route followed and the fleet type. The reduction of the cost is to the

advantage of the customer. Being a focused customer organisation provides affordable, reliable

and co-efficient transport. The organisation also acquired a value-based pricing policy which

relies on the product type and the required services as well as the client.

Promotion

Maersk has constantly understood the benefits of advertising of its business and has even

embraced several special systems. Its fundamental means of notice is the use of several

promoters and the print media. They rely on paper means as a form of promotion. However, the

company has currently discovered web-based social networking as a fantastic means of

advertising and has established a true and direct association with its potential and current clients

(Berkman, 2013). Also, the company educates its clients on the ecological impacts of the

delivery industry through the application of the straightforwardness in their dealings.

The Maersk Group has always understood the importance of marketing on any

organisation and has therefore acquired multiple promotional mechanisms. This includes

advertisement and social media to interact with its customers. The company has also established

a website which explains on its product line, seascapes through photos and videos and its rich

history. The company as well responds to controversial and emergency news immediately

through its social media handle (Katona and Sarvary 2014). The company also shares stories via

Instagram, Facebook and Twitter. The stories incorporate business updates and industry news.

The Maersk Group has undertaken multiple sponsorship deals like World Robotic

Olympiad in order to achieve positive visibility. It also aims at achieving positivity Maersk

group acts as an industry leader and understands its responsibility towards its clients. It teaches

its clients on the effects of the shipping industry through the application of the transparency

concepts in its operations. Throughout the years, the Maersk organization has been a recipient of

several awards and accolades in recognition of its work. Such awards include; the transport

safety administration award, maritime excellence lifetime achievement award and the customs

trade partnerships against Terrorist validation award.

People:

Maersk pays more attention to selecting their workforce. The company enlists

hardworking, customer-oriented and dedicated individuals in its workforce. The company’s

reputation of Maersk brand is client-centric which often is evident in staff execution. Maersk

Company guarantees legitimate preparation of the staff to handle customer needs effectively and

efficiently. In this regard, the company focuses on people in terms of its clients as well as its

employees. Additionally, the company consists of ‘designated person ashore’ which comprises

of operators who are responsible for the safety of its ships and cargo. The Maersk crew and

operators are effective and capable in providing worthy work and display high professionalism

which allows the smooth operation of the vessels and more effective customer service.

Maersk operators and ship crew are subjected to regulations and codes, instructions and

standards published by an International maritime organisation of UN, Port state controls, and

state authorities of the United States. This insinuates that the security and safety are imposed by

third parties in which Maersk is liable to incase its employees do not adhere to outlined

standards. Additionally, the company has security personnel which ensures safety and security of

the ships and cargo and is not paid by the customer. Lastly, Maersk ensures that its workforce

has the necessary skills which are evidenced by relevant official certificates and also subjected to

continuous training as seamen.

Process

The Maersk Group emphasises on the significance of presenting the framework of a cost-

effective and compelling deal. The managers work closely with the task supervisors in designing

an environment which is customer friendly. There exist other business processes which follow

issues related to inventory management, order management, logistics and quantity ordered which

assist the Maersk Group to ensure smooth operations for the customer’s goods transportation at

high efficiency.

In the group operations, one can identify that the shipping marketing mix is that of the

stage of negotiations and then the execution of the set agreement. The process can be explained

as follows. Firstly, a cargo is sold by the producer to the importer for resale. Secondly, the

charterers’ broker looks for the effective vessel for the transportation of the cargo. Thirdly, the

one's broker then negotiates the terms of transport contract providing the most efficient ship for

transportation. The whole process transforms into the signing of the final charter party. This

implies that the cargo marketing holder acts first for the selling of a product to a merchant. The

agreement charter party is moved from the department of Sales to the operations department. It is

then executed to the satisfaction of the customer.

Physical Evidence:

Maersk ships, ports, branded containers and offices represent the biggest physical

evidence of Maersk. Maersk Line consists of state of the art container ships with most of them

sailing under the flag of Denmark. All Maersk ships are customised with the Maersk Line brand

name and logo. Also, the company owns the largest supply vessel and container ship; the Munich

Maersk with a gross tonnage of 214286. Maersk ships are classified and categorised in terms of

name, number and type of holds, cargo handling equipment, manufacturing year, cargo capacity,

width and length, draught, speed, flag and fuel consumption (Goulielmos, and Plomaritou, 2014).

The company is confident on its suitability and seaworthiness as it owns a vast number of ships

which can supplement its transportation network. Also, the company provides a suitable ship

which is equipped, supplied, and manned which can carry specific cargo and which can

guarantee a safe destination of the cargo. The company offices and official website are key

elements of Maersk physical evidence. The company boasts 374 offices in 116 countries which

give the company substantial physical evidence as a global shipping company. Also, Maersk

official website contains key details of the company in which customers can acquire essential

information about the company and its operation.

Linking marketing mix to overall Maersk strategy

The overall Maersk strategy is based on cost leadership. According to Maersk Investor

Relations publication, the strategy is applied to all of Maersk business operations by focusing on

“Lowest cost, lower every year” culture (Maersk, 2019b). Marketing mix provides a long-term

insight which enables Maersk to gain a competitive advantage over its competitors based on

marketing mix strategies which differentiate the company from other shipping companies. The

integration of the marketing mix into the overall Maersk marketing strategy has enabled the

company to strengthen its competitiveness level and increase its market share. Starting with

product strategies, the Maersk Company has been separated into two division; the Transport &

Logistics and Energy. This product strategy is aimed at driving synergies and developing new

services and product in the Transport & Logistics division and as well focus on developing

structured solutions for its oil and oil-related enterprise (Maersk Group, 2019a). The company

long-term product strategy is to continually develop new product offerings, individualised

customers solutions and digitalised services based on a low-cost model to have a sustainable

competitive advantage in the shipping industry.

The company has established a pricing strategy culture of “Lowest cost, lower every

year.” This has boosted the company’s competitive edge due to its low pricing model. The price

aspect of the marketing mix allows the company to value its product price from a customer’s

perspective. Maersk overall pricing strategy is based on making gross profits based on high

volume sales of low margin items. The price aspect is a core element in the Cost leadership

strategy of Maersk as the company focuses on offering services with lower costs. The value-

based pricing model is among the Maersk strength which has enabled the company to price its

services proportionately with their value. Maersk cost leadership strategy is based on the

company having the lowest operating costs in the shipping industry. In this regards, the process

and people aspect of the marketing mix ensures the company’s operations are effective and

efficient to reduce costs incurred due to role overlapping and miscommunication within the

workforce. The company has merged different operations to cut cost and to be able to offer low

prices than its competitors. As a result, the process aspect of the business combines with the

appropriate price and value of services to establish low prices which are favourable to the clients.

The promotional slogan of the business ensures that the customers are aware of the lower prices

the company offers and hence making the company the best alternative. Lastly, the promotional

platforms of the company are cost effective and have granted the company the ability to establish

a cost leadership strategy.

Conclusion

In overall, the marketing mix highlights that Maersk Company has a cutting edge

competitive advantage over its competitors. The company has developed various services in the

industry based on its value-based pricing strategy which makes the company the best alternative

shipping company. In response to the increasing volatility in global trade, oil prices, consumer

demand and other external factors the company has adopted a cost leadership strategy in which it

aims to incur the lowest operations costs in the shipping industry. Through this strategy, the

company has developed low priced products to its consumers. Also, Maersk has initiated cost-

effective promotional strategies to boost consumer awareness. Generally, the marketing mix of

the company suits the company’s cost leadership strategy.

Bibliography

Berkman, R., 2013. Turning a No Comment Company into a Social Media Advocate. MIT Sloan

Management Review, 55(1), p.1.

Fremont, A., 2007. Global maritime networks: the case of Maersk. Journal of Transport

Geography, 15(6), pp.431-442.

Goulielmos, A.M. and Plomaritou, E., 2014. The Shipping Marketing Strategies within the

Framework of Complexity Theory. Journal of Economics, Management and Trade,

pp.1128-1142.

Katona, Z. and Sarvary, M., 2014. Maersk Line: B2B Social Media—“It's Communication, Not

Marketing”. California management review, 56(3), pp.142-156.

Lorange, P., 2005. Shipping company strategies: Global management under turbulent conditions.

Maersk Group., 2019a. Maersk becomes the first container shipping company to offer digital

Ocean Customs Clearance. Retrieved from

https://www.maersk.com/news/articles/2019/04/29/maersk-becomes-the-first-container-

shipping-company-to-offer-digital-ocean-customs-clearance

Maersk., 2019b. Investor Relations; Strategy and performance. Retrieved from

https://investor.maersk.com/static-files/93f633a3-8235-4ed9-bac5-c1cfc6fcc2ae

Reinhardt, F.L., Casadesus-Masanell, R. and Nellemann, F., 2012. Maersk Line and the Future

of Container Shipping. Harvard Business School Case Study, pp.9-712.

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