In Europe alone, the petrochemical industry directly employs more than 3,00,000 people.
In the recent years, the petrochemical industry has been witnessing various developments owing to changes in the feedstock slates, process technology, and fluctuating market dynamics. With an increase in demand for products from the manufacturing and consuming sectors, petrochemical products including paint, plastic, rubber, detergents, and fertilizers are gaining a greater adoption among these segments. In the petrochemicals sector, China is expected to contribute over 25% of volume of the overall global production. In addition, favorable government regulations coupled with the increase in shale gas production are likely to further contribute to the total market share.
Although the petrochemical industry is witnessing a considerable growth as chemicals and plastics remain the key building blocks in the manufacturing space, the market is hampered by certain factors including:
- Environmental concerns: With the increasing concerns on the impact of the petrochemical products on health and environment, legislations across the globe are forcing companies to curtail their production lines and look for alternative options to reduce health-related concerns.
- Technology: With the latest innovations in the petrochemicals manufacturing space, manufacturers are facing relentless pressures to rely on complex technologies to balance the supply/demand concerns and enhance their production capabilities.
To address these challenges and enhance their product offerings, organizations are shifting toward a market segmentation strategy. A simple and reliable market segmentation strategy is all about sub-dividing the market based on commonalities to gain a competitive advantage in the segment. This also helps organizations concentrate their marketing resource through effective distribution channels. The strategy also focuses on responding differently to different marketing mixes and minimizing their product costs.
The Business Challenge
- The Client: A leading petrochemicals manufacturer
- Area of Engagement: Market segmentation
A prominent petrochemicals manufacturer with a considerable number of product offerings spread across the globe wanted to profile the customers and segment the market based on the customer preferences. The client wanted to understand the market attractiveness and devise appropriate marketing strategies to meet the target requirements efficiently. With the help of a market segmentation study, the petrochemicals manufacturer wanted to seek ways to identify the most profitable target segments and promote their products effectively.
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The Journey
To understand the preferences of the customers, the market segmentation experts at Infiniti carried out extensive interviews and discussions with leading stakeholders in the petrochemical space. To adequately allocate the resources to the desired segments, Infiniti’s market segmentation experts further compiled information across a wide array of proprietary sources such as trade promotions, industry forums, and company presentations in the chemical industry.
The Solution Benefit and the Business Impact
The market segmentation solution offered by Infiniti helped the petrochemicals manufacturer tap potential market opportunities and streamline their product offerings across niche market segments. The engagement also offered actionable insights on the most profitable segments and accordingly allocated their resources to meet the target requirements. Additionally, the engagement sought ways for the client to segment the market based on products and the geography and preferences of the customers over specific products. The client was able to recognize the diversity of the customers and identify different market segments and needs.
The Future
The future of the petrochemicals industry is determined by the high demand for petrochemical derivatives from industries such as the automotive, textile, construction, industrial, medical, and pharmaceuticals. With latest innovations and application technologies, the petrochemical space will witness relatively higher demand to deliver products that meet the requirements of the society at large.
A must-read case study for strategy specialists and decision makers looking to develop an understanding of the chemical industry
