EVI PLOMARITOU Institute of Chartered Shipbrokers Greek Branch ABSTRACT

Transcription

1 Paper Presented at the International Conference Shipping in the era of Social Responsibility In Honour Of The Late Professor Basil Metaxas ( ) Argostoli, Cephalonia, Greece, September 2006 THE KEY STAGES OF MARKETING IMPLEMENTATION IN SHIPPING COMPANIES: AN EMPIRICAL RESEARCH OF MARKETING IMPLEMENTATION IN THE LARGEST TANKER AND LINER COMPANIES IN THE WORLD EVI PLOMARITOU Institute of Chartered Shipbrokers Greek Branch ABSTRACT Concerning the implementation of marketing in merchant shipping companies, no extensive research has been made up to now. The articles and books published are few and they stress only in passing the necessity of applying marketing to shipping companies, without analyzing the subject in depth. This article presents the stages of marketing implementation that should be ideally followed by companies, which are activated in merchant shipping. Additionally, the article attempts a comparative analysis of marketing implementation in bulk and liner shipping companies. From bulk shipping, the tanker shipping companies were chosen and from liner shipping, the container shipping companies were chosen for investigation. An empirical research was carried out in 2005 concerning the implementation of marketing in the largest tanker and liner shipping companies organization models in the world. Consequently, this article presents the marketing strategies, as well as the marketing philosophies of the leading shipping companies in the world. Keywords: Marketing of Shipping Companies, Segmentation, Differentiation, Advertising Programs, Marketing Planning, Marketing Strategies.

2 THE KEY STAGES OF MARKETING IMPLEMENTATION IN SHIPPING COMPANIES. AN EMPIRICAL RESEARCH OF MARKETING IMPLEMENTATION IN THE LARGEST TANKER AND LINER COMPANIES IN THE WORLD 1. INTRODUCTION The marketing of shipping companies activating in merchant shipping, is the science of Business to Business Marketing (B2B marketing), which deals with the satisfaction of charterer s shipper s needs for the carriage of goods by sea, with main aim the profit of the enterprise. This satisfaction presupposes on the one hand correct diagnosis of the shipping market to better understand and forecast client s (charterer s shipper s) transport needs and on the other hand appropriate organization, planning and control of the shipping enterprise s means. The more the shipping enterprise tries to discover what its clients need, to adapt the chartering policy to their requirements, to offer appropriate transport services, to negotiate the freight as a function to what it offers, as well as to communicate effectively with the market it targets, the more are the possibilities to achieve the most appropriate, efficient and long-lasting commercial operation of its vessels 1. All shipping enterprises have limited capabilities concerning the means, the resources and the management abilities for their ships. This means that it is impossible to exploit all the chances of the shipping market with equal effectiveness. The matching of the shipping enterprise capabilities with the needs and the desires of its clients is fundamental for the provision of the desired transport services, the satisfaction and retention of charterers and thus the commercial success of the enterprise 2. The shipping company must organize its resources in such a manner as to be able to apply the marketing process stages and to achieve a long-lasting and more effective commercial operation of its ships. The application of marketing presupposes correct diagnosis, planning, organization, implementation and control of marketing effort. This process is continuous and it is presented at figure 1. Figure 1: Stages of Marketing Implementation in Shipping Companies 2

3 2. KEY STAGES OF MARKETING IMPLEMENTATION IN SHIPPING COMPANIES The key stages of marketing implementation in shipping companies are the diagnosis, the planning, the organization, the implementation and the control. 2.1 The Stage of Diagnosis The first stage of shipping marketing is the diagnosis, which is consisted of five phases. The phase of the organization of marketing information system, the phase of analysis of marketing environment s threats/opportunities, the phase of shipping market s segmentation, the phase of segments evaluation and finally the phase of the target market s choice. Phase One: Marketing Information System Keegan W. J. (1974) underlines the importance of reliable and updated information at the enterprises, which are activated worldwide 3. The correct, sound and timely provision of information is more imperative to a shipping enterprise than it is to another land enterprise, because the shipping company moves its vessels worldwide, its revenue is realized in foreign currencies (mainly dollars) and the international events significantly affect freight levels and consequently the position of the enterprise in the shipping world. Therefore, much information is necessary to the shipping companies in order to offer appropriate transport services and satisfy their clients needs. More specifically, persons occupied with chartering of ships exchange such a great volume of information, useful for understanding the tendencies of the charter market and necessary for correct decisionmaking and correct planning. The information exchanged between shipowners, agents, charterers and shippers concerns matters such as demand and supply of ships, port dues, canal dues, fuel prices, congestion in certain ports etc 4. With the assistance of information systems, ship administrators would be able to review marketing strategies in time, to meet new challenges and satisfy transportation needs of their clients. MIS is an information system, which is comprised of the following subsystems: 1. The internal file subsystem, which provides information concerning the developments in the internal enterprise s environment, such as ship s operating cost, vessel s chartering policy, voyage estimation etc. 2. The marketing research subsystem, which includes the official primary researches, conducted by external sources and concerns information related to a specific marketing problem the shipping enterprise faces. The main work of marketing staff is to combine the marketing tools in an effective marketing programme, so that the offered transport services satisfy the charterers shippers requirements. This work could be simplified if all factors affecting the clients of the shipping enterprise were under the full control of marketing staff. Usually, the factors affecting the behaviour of the charterers originate from the micro- and macro-environment of the shipping marketing and therefore are beyond the control of administrative staff. Therefore, shipping enterprise must follow up of the charterers needs, as well as forecast future changes in their chartering policy. The answer to this problem lies in the gathering of appropriate information given by the marketing research subsystem. 3. The marketing decision support subsystem, which consists of statistical programs and decision models that provide necessary information for businessmen, so as to help them take the best marketing decisions 5. Although the other subsystems of the MIS aim to the systematic gathering, classification, analysis and distribution of the necessary information towards the staff, the marketing decision support subsystem aims to feed information for the unusual and non-standardized problems the decision makers meet (for example the transfer of ships from one market to another during periods of a shipping crisis). 3

4 4. The marketing information subsystem, which provides daily information relevant to developments in the external enterprise s environment, that is necessary for marketing planning. The external marketing environment of a shipping enterprise is distinguished into the micro and macro environment and consists of the forces that affect the capacity of the enterprise to develop and to maintain successful transactions and relations with its clients. The micro-environment includes all those factors emanating from the shipping market itself and affect the chartering policy of charterers shippers and the demand for sea transport services. Such factors are the regulations instituted by the international maritime organizations, the ports policies, the banks policies, the developments in sea borne trade etc. The macro-environment includes all those factors caused by social forces and physical causes, which do not originate from the shipping market but affect the demand of sea transport services, as well as the buying behaviour of the charterers. The ship owning companies must have the capacity to adapt their policy to the above forces, in order to meet the changing requirements of the charterers and to satisfy their needs. Phase Two: Analysis of Threats and Opportunities in Marketing Environment The shipping marketing environment changes continuously, creating new opportunities and threats. According to Kotler P. (1991), as a marketing opportunity is defined an attractive arena for marketing action of a company, in which the company will have a competitive advantage. On the other hand, environmental threat is a challenge presented by an adverse trend or development in the environment, which can undermine the position of the company if no appropriate marketing action is undertaken 6. Threats in the shipping marketing environment are caused by the institution of new IMO stricter regulations with consequences in ship management as well as the reduction in the supply of able seamen with an increase of wages as a result. Opportunities in the shipping marketing environment are created by new technology, as well as by development of world trade. In order for a shipping enterprise to draw up noteworthy marketing plans, it must firstly gather the appropriate information concerning its internal and external environment and thereafter it has to investigate the environment s opportunities and threats. With the assistance of information systems, shipping companies may review marketing strategies, in order to exploit new opportunities, to avoid threats and satisfy their clients. Phase Three: Shipping Market s Segmentation According to Evans M (1997), main objective of segmentation is to help the company focus its efforts to the most promising opportunities 7. The segmentation of the shipping market is a behavioral one, since it is based on the buying behaviour of the charterers shippers. The market segments are based on the charterers shippers needs for sea transport of cargo with a specific type of vessel to a specific geographical region and with specific chartering terms. The shipping market is constituted by separate segments differentiated as to the type of cargo, the type of ship, the trade routes, the type and duration of charter. In every segment the buying behavior of the charterers shippers presents common characteristics. The segmentation criteria are the following: 1. According to the type of ships, the shipping market may be divided into the Dry Bulk Carrier, Tanker, LNG/LPG, Combined Carrier, Containership, RO/RO and Reefer Market. 2. According to the type of cargo, the shipping market may be broadly divided into the Dry Bulk Cargo, Liquid Bulk Cargo, Specialised Cargo and General Cargo Market. 3. According to the type of trade routes, the shipping market may be divided into many segments such as the market of Mediterranean Sea, the market of Caribbean Sea e.t.c. 4. According to the duration of the charter, the shipping market is divided into the spot market and the time-charter market. According to the type of charter the market is divided 4

5 into the Voyage Charter Market, the Time Charter Market, the Bareboat Charter Market and the Contract of Affreightment Market. Figure 2 presents the shipping market s segmentation and the orientation of charterers behaviour in every segment. Figure 2: Segmentation of Shipping Market The type of ship and the type of cargo could be named as fundamental criteria because ship and cargo are the protagonists in every commercial sea transport. Geographical criterion and type of charter have a determinative meaning and constitute the basis for sub-apportionment for every main segment ensued from the fundamental criteria. It must be noted that the fundamental criteria do not operate cumulatively in forming the segments. What happens in practice is that a group of cargoes is transported by one category of ships. The charterers needs, as well as their buying behaviour are differentiated from segment to segment 8. In each segment, the buying behaviour of the charterers displays common characteristics. A precondition of effective shipping marketing is the understanding of the different needs the charterers shippers have in the above market segments. For each segment of the shipping market appropriate marketing strategies must be designed and appropriate marketing mix must be offered. Phase Four: Evaluation of Shipping Market Segments The shipping enterprise must evaluate the market segments, by studying the: 1. Size of a Segment: The appropriate size of a segment is relative, because large shipping enterprises usually prefer segments with large volume of charters and avoid small segments, whereas small companies avoid large segments because they demand many resources. 2. Development of a Segment: The development of a segment is desirable in the degree the companies wish to increase charters. However, there is a risk that competitors enter quickly into the developing segments and limit the company s profitability. 3. Structured Attractiveness of a Segment: A segment may have the desired size and development, but not be attractive in view of profitability. The company should evaluate 5

6 possible consequences of those forces to the long-term profitability of the segment. Such forces are the possible new shipping enterprises entering the market, the substitutes of sea transport services such as air transport etc. 4. Company Objectives and Resources: Even if a segment has the appropriate size and development and from structural point of view is good, the shipping enterprise must take into account the objectives and resources it possesses in relation to this segment. Phase Five: Choice Of The Target-Market The shipping enterprise should target on the best possible segment or segments of the market and select the target - market. The target - market is the sum of shippers charterers that have the same transportation needs, they express eagerness in buying the transport services and they show a high degree of buying force. A substantial precondition for the recognition of a segment as target - market is its financial viability, in order to justify the drawing up of marketing programmes for attracting it. The shipping enterprise should apply one of the following selection models of the target market which were defined by Abell D. (1980) 9 : 1. Segmental Concentration, where the enterprise offers transport services to one and only one market segment. An example of concentrated marketing is the company Lavinia Corp (Greece), which manages Reefer Vessels and offers transport services exclusively to the Reefer market. Through concentrating marketing, an enterprise achieves a strong position in the market segment due to the better knowledge of the segment s needs and the specific gravity it lends itself. If the enterprise achieves a good position in the segment, it may ensure high performance for its investments. 2. Selective Specialization, where the enterprise selects to offer its transport services to a number of market segments, which are promising and match the enterprise s resources. There might be minimum or no cooperation between the segments. An example of company, which implements selective specialization, is the Bergesen (Norway). The company possesses Gas Carriers, Bulk Carriers, and Tankers, and offers its transport services to the liquid bulk as well as to the dry bulk cargo market. The strategy of this multi-segmental coverage has an advantage over the segmental concentration concerning the differentiation of the business risk. Even if some segments cease to be beneficial, the enterprise can be profitable in the remaining segments. 3. Service Specialization, where the enterprise focuses its attention to the production of a specific type of transport service, which it offers to many segments. An example of company, which implements service specialization, is the Costamare Shipping Company S.A. (Greece), which time charters its container ships to liner operators. Through this strategy, the enterprise achieves a good reputation in the specialized sector. 4. Market Specialization, where the enterprise focuses its attention in servicing many needs of a specific group of charterers. An example of company, which implements market specialization is the Teekay Shipping (Canada), which manages a large fleet comprising all types and sizes of tankers for servicing all transportation needs of charterers in the oil market. The enterprise achieves reputation due to the fact that it is specialized in servicing a specific group of charterers. 5. Full Market Coverage, where the enterprise tries to service all charterers groups through all type of ships possibly needed. Only the large shipping enterprises colossuses, as is Mitsui OSK (Japan) can undertake a strategy for fully covering the entire shipping market through differentiated marketing, by designing various marketing programmes and by offering various transport services in each market segment. In this case, the enterprise cannot offer a non-differentiated marketing. 6

7 2.2 The Stage of Planning The planning of marketing includes the strategy planning and the programme planning of marketing. Worsam M. (1998) defines marketing planning as the planned application of marketing resources aiming to achieve marketing objectives 10. The planning process includes the following phases: 1. During the first phase, the missions of the enterprise as well as the business objectives are determined. Most activity sectors of the enterprise aim at a mix of objectives that includes increase of fleet s effectiveness, improvement of market share, interception of shipping risk, fixture of profitable charters etc. 2. During the second phase, the tracking down of the strengths and weaknesses of the enterprise in relation to opportunities and threats from the external environment is conducted. Therefore, in this phase, the company may understand its relation to the shipping environment in which it is activated. 3. During the third phase the marketing strategies and programmes are determined. 4. The last phase includes the evaluation of expected results and the tracking down of alternative marketing plans. The planning of marketing ends up at a document called marketing plan. McDonald M. adds that success of a marketing plan depends on the quality of information gathered during the previous marketing process stages 11. Marketing strategies are the means by which a company achieves marketing objectives and is related to the tools of marketing mix. Marketing mix is the sum of marketing tools used by the enterprise in order to achieve its objectives in the target - market. The tools of marketing mix for a shipping enterprise which is activated in tramp or liner shipping market are: the Product (Tramp or Liner Service), the Price (Freight or Hire), the Process (Negotiations Procedure & Execution of the Charter), the People (Office Personnel & Ship s Crew), the Place (Ports & Geographical Area of Ship s Employment), the Promotion (advertising programs), and the Physical Evidence (Ship s Characteristics & Seaworthiness of the Vessel). Additionally, a new tool of the shipping marketing mix is the PAPERLESS TRADE and constitutes the eighth tool of the shipping marketing mix. Shipping companies in order to respond fully to the demands of the competitive shipping market, is necessary to use modern electronic communication means by which time, cost and effort are saved and quality improvement in the services offered is achieved 12. Figure 3 presents the shipping marketing mix (the 8 Ps) Figure 3: The Tools of Shipping Marketing Mix 7

8 The action plans must be applied correctly, so that the proper transport service be provided to the appropriate charterer, at the right time and port with the appropriate vessel and at freight levels that satisfy not only the shipping enterprise but also its client. The planning of marketing programmes consists of the basic decisions concerning the distribution of marketing resources, marketing expenses and marketing budget among the various tools of marketing mix. Shipping enterprises have unique capabilities with regard to the means, resources and abilities of managing their ships, which means it is impossible to exploit all the opportunities of the shipping market as efficiently as other companies do. The combination of the shipping enterprise s capabilities together with the needs of the clients is a basic factor for the provision of desired transport services, the satisfaction and retention of the charterers and therefore for the commercial success of the enterprise. The shipping company must organize its resources in such a manner, as to be able to apply the marketing plan. The management of a marketing department should also decide which level of marketing expenses is necessary in order to achieve the marketing objectives. The enterprise already knows from the previous stage the means and resources it possesses for materializing its objectives. Companies entering a market try to learn what is the ratio of marketing budget to the sales of their competitors. A company should analyze the marketing work required in order to achieve a given volume of sales and then to cost this work. The distribution of marketing budget among the tools of marketing mix constitutes a basic stage in the planning procedure of marketing programmes. 2.3 The Stage of Organization The function of organization determines which objectives will be met and by whom. In this stage, all the resources of a shipping enterprise are utilized, depending on the demands and opportunities of the market. Appropriate individuals must staff the marketing and sales departments. Persons employed in marketing departments should be qualified with marketing knowledge, chartering knowledge and knowledge of shipping financial policy. In addition, employers of marketing department should be updated with regard to developments in shipping, economy and politics. According to McDonald M. (1999), the operation of a typical marketing department is not necessary for planning and controlling the marketing process 13. This is the case in small shipping companies that manage two or three ships where the general manager understands the needs of clients in depth. However, as the enterprise s fleet grows, the spectrum of its services increase and the competitive pressures in global environment are broadened, the need for organizing the marketing by a central body becomes more and more imperative. The benefits of a marketing department are: It ensures that every employee of the enterprise understands the marketing philosophy and the policy of the enterprise and executes his duties according to it. It plans the activities of the shipping enterprise concerning the market research, the promotion and publicity of the sea transport services. 8

9 2.4 The Stage of Implementation A correct drawing up of the shipping enterprise strategy is achieved via rationally planned business actions and via the provision of appropriate transport services. Marine transport services are priced, promoted and offered to charterers for a payment of freight. The action plans must be applied correctly, so that the proper transport service is provided to the appropriate charterer, at the right time and port, with the appropriate ship and at freight levels satisfying not only the shipping enterprise, but also its clients. Marketing of shipping companies is the provision of appropriate sea transport services by the right people (personnel and crew), to right people (charterers - shippers), at the proper place (ports) and time, at a fair price (freight or hire), with a suitable promotion The Stage of Control The last step of the process is control, which includes the follow up of above actions and the correction of any deviations. The shipping company needs processes of measuring the marketing plans results and of re-feeding them in order to be ascertained that objectives of the marketing department will be achieved. Control of the yearly plan is the means by which one may be certain that the company achieves its marketing objectives. According to Berkowits, Kerin, Hartley and Rudelius (1997), during the control process the performance achieved is measured, a comparative analysis of exemplary performance of marketing plans against current performance is carried out, causes for possible deviations are sought and business measures are taken for their correction 15. The control may be preventive, if it precedes the marketing plan, parallel, if the marketing plan is currently in progress, or repressive, if it is carried out after the marketing plan s implementation. 3. AN EMPIRICAL RESEARCH OF MARKETING IMPLEMENTATION IN THE LARGEST TANKER AND LINER COMPANIES IN THE WORLD: RESEARCH METHODOLOGY An empirical research was carried out for the ten largest tanker shipping companies and for the ten largest liner operators of container ships, in order to be confirmed that the companies organization models in the world understand the importance of marketing and apply improved marketing strategies 16. According to Hoffman D. and Bateson J. (1997), the study process of the most successful enterprises in the world and the effort for interpreting their strategy is called benchmarking 17. According to benchmarking the best enterprises in a market are determined as organization models and as a comparison measure for the smaller enterprises of the branch. Empirical research was based on advertising material of the above enterprises, as well as on data requested directly from the companies 18. More specifically, information was gathered for their competitive advantages, their business relationships to charterers, their ships performance, their safety system, etc. The data was appropriate and sufficient for drawing significant conclusions from them regarding the marketing philosophies they adopt and the marketing strategies they apply. The accuracy of collected information is not questioned, to the degree that this was drawn out of its initial source of gathering. In addition, the reliability of each source is a basic evaluation criterion of researcher s skills. The companies, from which the data was gathered, maintain separate market research depts, which are manned with appropriate trained analysts. The work of these analysts is the systematic collection of the necessary information and its distribution to the decision makers of the enterprise. After the critical appreciation of sufficiency, accuracy and 9

10 reliability of collected data, and after the careful study of the records, considerable conclusions ensued regarding the manner by which they perceive their clients requirements, the segmentation, differentiation and promotion strategies they apply and the marketing philosophies they adopt. 3.1 Empirical Research in the Largest Tanker Shipping Companies The tanker shipping companies participating in the research were the following: Frontline, Mitsui OSK Lines, Teekay Shipping, Worldwide, Overseas Shipholding, Bergesen, Tanker Pacific Management, A.P.Moller Maersk Group, Nippon Yusen Kaisha and Angelicoussis Shiphld, which manage 73.8 mil. dwt (440 tankers), i.e. the 33% of the total tankers tonnage in the world 19. The above companies are the ten largest shipping companies in the tanker market worldwide and they offer high quality maritime transport services. How do they Perceive the Charterers Requirements? The study showed that the largest tanker companies in the world have a very clear picture of their clients requirements. All companies classify the charterers requirements in the same manner with the one the charterers rank their needs. The tanker companies believe that their selection criteria from a charterer is the provision of safe carriage of goods by sea and the compliance of the company with international safety standards, regarding the construction, operation and management of ship. The image of the shipowning company in the market and the history of losses and damages, play a decisive role in the selection of a tanker company by the charterer. The freight, though it is taken seriously into consideration by the charterers, does not constitute the decisive factor for selecting a ship owner. The largest tanker companies in the world have perceived that the decisions of the charterers are oriented towards safety and not towards freight. This deep knowledge for their clients transportation needs is due to two reasons. Firstly, the companies maintain market research department, manned with experienced analysts, who provide to the management the appropriate information concerning the charterers and secondly, the companies apply a policy of maintaining good business relations with their clients. Which Marketing Philosophy do they Adopt? The largest tanker companies know that the charterers requirements are orientated towards safety and so they have adopted the philosophy of social marketing. According to Kotler P. (1994), the philosophy of social marketing presupposes that the duty of the enterprise is to determine the clients needs and to provide the desirable satisfaction more effectively and efficiently than their competitors, in a manner that promotes the protection of environment 20. Based on the above philosophy the tanker companies have set the following objectives: Primary aim of the companies is their compliance to the international standards of ship safety and management. The companies are specially sensitized in environmental matters resulting in paying large amount of money for research and development of environment protection programs. Another objective is to provide an appropriate chartering negotiation procedure, which is based on the rules of honest negotiation, as defined by BIMCO. The companies aim to provide high quality transport services. This includes appropriate voyage planning, trade and itinerary flexibility, rapid voyage execution, rapid and correct loading and unloading process and reduction of the turn around time to the minimum. The companies seek to maintain good business relationships with charterers. 10

11 Which Marketing Strategy do they Apply? The largest tanker companies apply a high degree differentiated marketing strategy, according to which they address to selected market segments by adapting their policy to each one of them. Thus, the segmentation of the tanker market is based on: The type of cargo: they distinguish the market into two basic categories. The oil market and the oil product market. The latter includes as many categories as the products are. The geographical field of tankers employment: various market segments ensue. The type and duration of charters: every charter market has a segment that includes shortterm charters (spot market) and a corresponding one, which includes long-term charters. The needs of charterers are differentiated from market segment to market segment. The appropriate marketing mix is offered in every market segment. The tanker companies use differentiation strategies of transport service, in order to gain the preference of the charterers. The tanker companies use geographical, quality, personnel and image differentiation. Their competitive advantages that differentiate them from their competitors are the following: Frontline possesses a large and modern fleet of tankers, which can meet the strict legislation of the extremely sensitized environmentally regions. Frontline achieves geographical and quality differentiation through its capacity to possess a high technology fleet employed in any sea, without trading and geographical restrictions. Mitsui O.S.K. Lines has created a strict management system called the MOL Environmental Management System. According to this system, the crews are trained at the simulation centers of the company. In addition, the ships are constructed in such a manner (PBCF system) so that risk of the marine environmental pollution is reduced, fuels are saved and speed is increased by 2%. Mitsui obtained in 2003 the Certificate of Environment Management International Standards - ISO Mitsui achieves personnel differentiation through the application of continuous training programs, as well as quality differentiation through the application of a strict environmental protection policy. Teekay Shipping has created a marine management system, called the Marine Operations Management System, which imparts the philosophy of safety management to the entire organization. The system includes efficiency indicators for constant monitoring and improvement of all enterprise s operations. Teekay obtained in 2003 the Certificate of Environment Management International Standards - ISO Teekay achieves quality differentiation through the application of a strict safety management policy. Worldwide spends large amounts of money for research and development of marine environment protection programs. Its fleet includes high technology ecological tankers. Worldwide won in 2003 the Green Award. Worldwide achieves quality differentiation through the application of an environmental protection policy, as well as image differentiation through the public acknowledgement of its active role in the environmental protection efforts. Overseas Shipholding Group applies a technologically advanced system for the unification of management, of chartering department and of fleet, called the OSG s Networking System. The system coordinates the orders and actions at company and onboard the vessel. The company obtained in 2003 the Certificate of Environment Management International Standards - ISO Overseas achieves quality differentiation through the application of technologically advanced intracommunication systems. Bergesen gives high priority in maintaining a safe work environment for seamen. This is achieved through maintaining a safety committee for each ship (Protection and Environment Committee). The committees annual reports help the company in 11

12 planning strategies for improving the work conditions and for increasing the ship efficiency. Thus, Bergesen achieves quality and personnel differentiation. Tanker Pacific Management has made a good image in the tanker market and has built the reputation of the most reliable and responsible company. This has as a result, the maintenance of long-term relations with charterers. The company achieves image differentiation through the application of good business relations policy. The A.P.Moller Maersk Group achieves quality differentiation through the implementation of auxiliary marine activities policy (such as, oil processing industries) and through the application of an environmental protection policy. The company achieves also personnel differentiation through constant training programs. Nippon Yusen Kaisha achieves quality differentiation through maintaining new, modern and specialized fleet, which can provide safe, rapid, and reliable itineraries. Angelicoussis Shiphld also achieves quality differentiation through maintaining new, modern and specialized fleet, which can provide safe, rapid, and reliable itineraries. In addition, the largest tanker companies use advertising as a basic competition tool. The companies provide high quality transport services, and have as a motive to reveal this quality through advertisements. In this way, they place their competitors in an inferior position, if the last provides lower quality services. The tanker companies have developed various advertising programs. These programs include design of web page on the internet, creation of brochures, donations in researches, advertisements in shipping press etc. 3.2 Empirical Research at the Largest Liner Operators The liner companies participated in the research were the following: A.P.Moller Maersk Group, Evergreen, Cosco, P&O Nedloyd, NOL/APL, MSC, NYK, KLine, YangMing, and Hapag Lloyd which manage 1,988,980 mil. TEU (703 containerships), i.e. 47.6% of the total number of containerships in the world and the 35% of total TEU 21. The above companies are the ten largest liner operators and they provide high quality transport services. Empirical research showed similar results to those showed for the tanker companies. It should be noted that the liner operators were the first companies in the world, which understood the importance of marketing and were the first, which applied improved marketing strategies. How do they Perceive the Shippers Requirements? The study showed that the largest liner companies in the world have a very clear picture of their clients requirements. All companies classify the shippers requirements in the same manner the shippers rank their needs. More specifically, the liner companies believe that their selection criteria from a shipper are the voyage duration, the frequency and the flexibility of the itineraries, the reliable execution of the transport and the immediacy of the itineraries. The provision of a safe carriage of goods and the compliance of company with the international safety standards are important selection criteria of the carrier by shipper. The carrier s image in the market and the history of losses and damages, play decisive role in selecting the liner company by the shipper. The freight, although it is taken seriously under consideration by the shippers, is not the decisive carriers selection criteria. This deep knowledge of their clients desires are owed to the fact that the companies maintain good business relationships as well as market research departments, manned by experienced analysts, who collect the necessary information regarding the shippers. 12

13 Which Marketing Philosophy do they Adopt? The largest liner companies know that the clients requirements are orientated towards quality. Therefore, the companies have adopted the marketing philosophy with the market as a focal point, which according to Kotler P. (1994) presupposes that the duty of the enterprise is to determine the needs of its clients and offer the desired satisfaction more effectively and efficiently than its competitors 22. Based on the above philosophy the liner companies have set the following objectives: Primary aim of the companies is the provision of high quality shipping services. The liner companies give special emphasis to the provision of logistic services. The next objective of the companies is their compliance with the international standards of ship s safety management. The companies seek to maintain a good reputation and image among banks, insurers, suppliers, agents and shippers. The liner companies maintain advanced systems of transport monitoring and of constant updating of shippers. Which Marketing Strategy do they Apply? The container is a means of cargoes transport, which is based on the system of unitization. According to this philosophy, cargo is transported in identical units of standard dimensions that are loaded and unloaded in the same manner, constraining the cost of transport, packaging and handling to the minimum. The above mentioned system leads to uniformity of the transport service provided. However, in order to cover the different transportation needs of shippers and to serve the specialized cargoes, special containers were created. Thus, the largest liner companies of containerships apply a low degree of differentiated marketing strategy. They address to selected market segments by adapting their policy to each one of these. The segmentation of the liner market is based on: The type and volume of the cargo: the market is distinguished into two basic categories. The market of standard containers and the market of special containers. The latter includes as many subcategories, as the special containers are. The geographical field of containerships employment: a series of individual markets ensue. The shippers needs are differentiated from market segment to market segment. In every individual segment the buying behavior of the freighters displays common characteristics. The liner companies understand the different needs the shippers have in the above market segments and plan the appropriate marketing programs, so that they provide the desired transport services. The appropriate marketing mix is provided in each segment. The liner companies use differentiation strategies for the transport service, in order to win the shippers preference. The liner companies use geographical, quality, personnel and image differentiation. The competitive advantages of the largest liner companies that differentiate them from their competitors are the following: The A.P.Moller Maersk Group possesses a large and modern fleet of containerships, and manages a large network of routes servicing the needs of trade throughout the world. In this way, the company achieves geographical differentiation. In addition, the company achieves quality differentiation through the application of Safety and Risk Management System. The company has won the awards ISP, Customs-Trade Partnerships Against Terrorist Validation Award, Maritime Excellence Lifetime Achievements Awards, and the Transportation Safety Administration Award. 13

14 Evergreen achieves quality differentiation for the service provided through the application of a technologically advanced EDI System between the company and the shippers. The system provides fast and valid information, while time and effort are saved. The company won the E-Commerce Excellence Award Cosco has built the best image in the market of containerships and has the reputation of the most reliable company. As a result, the company maintains long-term business relationships and achieves image differentiation. Cosco won the Sailing Schedule Reliability Reward on Australia East Asia Trade as well as the International Quality Management Platina Medal. P&O Nedloyd, (like Evergreen), achieves quality differentiation through the application of a technologically advanced EDI system between company and shippers. NOL / APL achieves quality differentiation through maintaining a new and modern fleet of specialized containerships, such as reefer containerships, with ventilation, of pressurized gas, with movable sides, of liquid bulk cargoes etc. MSC gives high priority to the development of its fleet. During the last six years, the company showed a remarkable doubling of its fleet (from 120 ships in 1997, to 240 ships in 2003). In this manner, MSC achieves quality differentiation. NYK in comparison with the other liner companies possesses the most advanced and organized logistics services system, i.e. a complete cargo transport from the storage area to the point of destination. In this way, NYK achieves quality differentiation. K Line has created a strict management system, called the K Line Environmental Management Program, which transpires the safety management philosophy throughout the organization. In this way, the company achieves quality differentiation. Yang Ming has built a very good image in the liner market and has the reputation of a company, which is based on teamwork, innovation, honesty and pragmatism. In this manner the company achieves image differentiation. Hapag Lloyd Group achieves quality differentiation through the policy of constructing, hiring and selling containers to other liner companies. The Hapag Lloyd Group is the largest manufacturer and leasing company of containerships. In addition, the largest liner companies use advertising as a basic competition tool. The companies provide high quality transport services, and have as a motive to reveal this quality through advertisement. The liner companies have developed similar advertising programs to those developed by tanker companies. Figure 4 presents the basic results of empirical research. CONCLUSIONS This article presents the stages of marketing implementation in shipping companies. Marketing of shipping companies is the provision from the right people (the personnel of shipping enterprise), the appropriate maritime transport services, to the appropriate clients (charterers shippers), at the right place (port or geographical area), at the right moment of time, at the appropriate freight, with the appropriate promotion. Additionally, the article attempts a comparative analysis of marketing implementation in the largest tanker and liner shipping companies in the world. The empirical research proved that the tanker and liner shipping companies - organization models in the world - understand the importance of marketing implementation and apply improved marketing strategies (differentiation, segmentation, promotional strategies). The marketing 14

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