Royal Dutch Shell PLC: Marketing Plan

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For the success of any business enterprise, it is important to implement effective marketing strategies. Accordingly, as marketing plan helps an organisation to explicitly define its products and services, as well as its potential and existing customers. A marketing plan provides the mission statement to which a company subscribes, in addition to providing its marketing strategies in countering competition. A company is also in apposition to forecast its budgetary activities into the future using a marketing plan. More importantly, a marketing plan enhances the marketing efforts of a company. The research paper shall examine the marketing plan for Royal Dutch Shell plc, a multinational company involved in the exploration, production, transportation and marketing of gas and oil products.

Company overview

Royal-Dutch/Shell Plc is a holding that owned jointly by the Royal Dutch Petroleum Company and The Shell Transport and Trading Company PLC, a company based in the United Kingdom, on a 60 to 40 percent basis. Royal Dutch Shell plc lists on both Euronext Amsterdam and the London Stock Exchange. This conglomeration is composed of operating subsidiaries, namely Shell Petroleum Inc., Shell Petroleum NV, and Shell Petroleum (UK) Ltd (Luiten, van Jonker & Howarth, 2007 p. 34).

Shell International is responsible for managing these three companies globally, along with their operating subsidiaries. Exxon Mobil only exceeds the oil and gas reserves under the ownership of Royal Dutch Shell (‘Our history’, n. d. p. 1). The company commands a global reserve for oil and gas estimated at 10.9 billion barrels of oil equivalent. Nigeria, Oman, the UK, and the US are the leading producers of the crude oil that Royal Dutch Oil owns. The company has also diversified its investments. For instance, Royal Dutch Shell plc is currently involved in a project that entails use of oil sands for purposes of bitumen extraction. The bitumen so extracted is

The project, dubbed Athabasca Project finds use in the manufacturing process of what is called synthetic crude oil. With operations in more than 140 countries, Royal Dutch Shell has over 45,000 gas stations worldwide under its management, in essence making it the world’s largest retail fuel network (Royal Dutch Shell plc, 2008 p. 1). Royal Dutch Shell plc is also involved in the production of refined chemicals and products. This is in addition to the processing and transportation of natural gas. Moreover, the company has interest in gas and electricity trading. The latest project that Royal Dutch Shell is involved in is entails renewable energy sources.. Royal Dutch Oil is also committed to the exploration for oil reserves. The company is always on the lookout for oil reserves to help it meet its production strategies.

In 2007, Royal Dutch Oil acquired a 22 percent controlling stake in Shell Canada. The company has already invested $ 2.6 billion in various offshore projects, and is in the process of investing a further $ 12 billion towards offshore projects (Red Orbit, 2009 p. 2). In 2009, Fortune listed Royal Dutch Shell as the largest corporation in the world (Fortune Global 500, 2009 par. 1). On the other hand, Forbes listed this company as the second largest in the world, in the same year (, 2009 p. 1). The Hague, Netherlands, is the headquarters of Royal Dutch Shell, although the company also has its registered office in London, UK, at the Shell Centre (Investor Centre, 2009 p. 1).

Although oil exploration, processing, production as well as marketing of hydrocarbons are the core business activities of Royal Dutch Shell, the company is also significantly involved in the business of petrochemicals. With the global demand for oil projected to increase in the years to come, and as the natural oil reserves diminish, there is a need for Oil Company to source for alternatives to fossil fuels. On its part, Royal Dutch Shell plc has embarked on the development of an embryonic sector that seeks to harness renewable energy.

Mission statement

“The aim of the Shell Group is to meet the energy needs of society, in ways that are economically, socially, and environmentally viable, now and in the future” (Boston College Center for Work and Family, n. d. par. 1).

Financial summary

In 2008, Royal Dutch Shell realized an income of $26.5 billion. Of this amount, $ 20.2 billion was from exploration and production, an increase of 38 percent compared with 2007. There was an 11 percent increase for dividends that the company paid top its shareholders, compared to 2007. Furthermore, the company realized an 18.3 percent rate of return on the amount of capital employed. Moreover, there was a 27 percent increase in net cash due to operating activities, to a value of $ 43.9 billion (Royal Dutch Shell plc, 2008 p. 8).

Nonetheless, the company anticipates the current harsh economic conditions to go on as 2010 approaches. The earning for the company in 2008 reduced by 17 percent compared with those realized in 2007, when Royal Dutch Shell realized a 21 percent increase in its earnings, compared with those made in 2006. This decrease in earnings is an indication of the declining oil prices in 2008 (Royal Dutch Shell plc annual review and summary financial statements, 2008 p. 6).royal Dutch Shell plc

Marketing objectives and strategy

Royal Dutch Shell plc ranks the maintenance of sustainable and safe operations as a top priority. Further, the company believes that the fundamentals of supply and demand for gas and oil are long-term; this in essence acts as an enhancement of a positive climate for investment by Shell. Following the position of the organisation to address both downstream as well as upstream heartlands, Royal Dutch Shell Plc intends to enhance shareholder value in the long-term by employing long-term investments.

The ambitious capital-spending programme focuses on upstream heartlands, and this has resulted in the construction of a one million boe/d and 6.5 mtpa of LNG capacity. In addition, Royal Dutch Shell Plc measures its growth in terms of the capital it has employed. Royal Dutch Shell plc has invested in its downstream heartlands. The intention is for the company to realise growth in its petrochemicals Strong capital discipline appears to be the strategy of Shell, along with integration across the company, and industry-leading investment in technology (Royal Dutch Shell plc, 2008 p. 5).

By 2008, Shell had 3.2 million boe/d of oil and gas production upstream in 38 countries. As a result, the company managed to generate some of the highest margins in the industry, notwithstanding the impact of the global economic crisis. Projections are that the global deposits for natural fossil fuels are declining at the rate of 5 percent every year. The entails various technology themes, and these include tight gas, LNG, heavy oil, GTL, and traditional plays. There are new Shell positions under construction now, expected to offset the decline in natural heartlands fields currently being witnessed in the world today (Royal Dutch Shell plc, 2008 p. 6).

The aim is for the company to deliver growth within the oil industry in the next decade. The downstream strategy that Shell ahs adopted is mainly concerned with the oil reserve founds in the Middle East as well as the Asian Pacific regions. The strategy also encompasses other oil reserves in the United States and Europe. The downstream strategy has enabled Shell to enhance its market for oil products.

As the demand for Shell products increase, the company has had to build additional refining capacities to counter the demand for oil. For example, now, the company is building oil refinery plants in Singapore, the United States and Qatar. Because of these investments, the expectation is that the refining capacity for Royal Dutch Shell plc shall increase by 7 percent by 2012, compared with the 3.9 b/d capacity that the company realised at the end of 2008.


  • Royal Dutch Shell will continue to witness increased growth globally.
  • Oil prices will stabilize in coming years.
  • There shall be an increase in demand for oil in the developing countries, especially India and China.
  • Political stability will continue to improve in such war-torn areas as the Niger Delta where Royal Dutch Shell has oil fields.
  • Natural disasters, such as terrorism and the weather, will not affect the supply of crude oil and oil products.

Marketing Audit

SWOT analysis

Strengths Weaknesses Opportunities Threats
Royal Dutch shell has currently heavily invested in oil exploration, and this form an investment is a guarantee of continued activity for the company in the decades to come Royal Dutch Shell has strongly focused on the exploration, processing and marketing of oil and gas, ands this calls for a continued search for possible replacements to the commodity. In addition, oil exploration is an operation that is quite high to sustain.

The fact that new gas and oil reserves are being discovered should be good news to Royal Dutch Shell, as this will mean additional production capacity and business opportunities

In recent months, the prices for oil have been quite volatile in nature. This rise and fall in the prices of oil ahs resulted into a possible reduction in terms of the profits that Royal Dutch Shell makes.

By engaging in solar power, biofuels, energy and wind power research, Royal Dutch Shell is in essence making a diversification in a market that s otherwise characterized by increasing concern on ecological issues. Furthermore, by researching into these areas, the company is tackling the longevity issues of the existing reserves of fossil fuels.

Royal Dutch Shell still relies on the method of burning and flaring gas from the sites where oil extraction occurs, as a process of handling the by-products of oil exploration and processing that are unwanted. Many regard this technique as non-environmentally- friendly.

Royal Dutch Shell has reacted in an active way on criticisms made regarding oil exploration activities seen as being environmentally- unfriendly, and this could result in relationship with pro-environment groups that are somewhat less antagonistic.

The operations of the company have been under threats in some of the countries, such as Nigeria. In this case, a court has made the ruling that the company needs to surrender a site located on Niger Delta so that it may be under the operation of local owners.

Royal Dutch Shell has also made a diversification into such products as credit cards and fuel cards, and this enables the company enjoy a wide product portfolio, in essence widely spreading its risks.

The company has made a strong presence in worn-torn and politically unstable areas, such as Nigeria. As a result, the operations for oil exploration and process in such areas have repeatedly experienced security problems, especially for the staff of the company attacked on several occasions during the production processes. Accordingly, the organization may have no choice but to withdraw from such an areas and this will in the end compromises its resource network, thereby threatening Shell’s ability to meet the production obligations that it has committed itself.

Such emerging economies as China and India have already recorded a large demand for the supply of fossils fuels, and this demand appears to grow every year.

Tanker drivers for Hoyer, one of the largest suppliers of Shell, went on strike in the summer of 2008, and this led to a negative publicity on the part of Royal Dutch Shell (Corporate watch, 2009 par. 3). In addition, on several occasions, critics have placed the company on the receiving end about its problems in the supply chain of oil within its forecourt, and that it makes very high profits, compared with other competitors in the oil industry.

Royal Dutch Shell has also made a diversification into such products as credit cards and fuel cards, and this enables the company enjoy a wide product portfolio, in essence widely spreading its risks.

Since the company has made diversification into various novel products, in addition to alternative source of fuels, this could affectively help the company open up additional new market opportunities.

Due to the current economic downturn, there has been a resultant reduction in terms of fossil fuels demand. The need by motorists to change the driving habits as a way of responding to the high prices for field that characterized the past few months of 2008 may have worsened this case scenario.

Weather can potential have a very negative impact on the production of oil. For example, several refineries felt the negative impact of weather, specifically by Hurricane Ike, which took place a few months ago.

Royal Dutch Shell is the pioneer of scenarios application, a tool of planning that allows an organization to explore various possible scenarios into the future, and adopt a strategy that will help an organization to meet its demands into the future.

The company is committed to improving its overall reputation globally, and as a result, the management believes that Royal Dutch Shell is in a more positive picture today than was the case a few years ago, especially following reports of possible underreporting of oil reserves.

Royal Dutch Shell has sized the existing opportunities that have enabled the company to expand strategic partnerships with other organizations. For instance, the company is involved in CO2 supply, a by-product of it is the process of oil refinery. The company then supplies this by-product to tomato farmers within the Netherlands, who initially relied on heaters. Research shows that when greenhouses have higher CO2 concentration, this leads to accelerated rate of growth of tomatoes.

PEST analysis

Political Economic Social Technological
Conflict and wars in the areas that the company has invested in could have a high impact on the expansion strategy for Royal Dutch Shell.
Terrorism threats will also affect the company
General taxation issues may hinder the company from attaining the revenue collection it has projected.
Trends in the economy will also have an impact on the objective and goals of the company
Ethnic and religious factors of the areas that the company has an interest in has an impact. The brand image that the company has created is important too, in addition to the organisational culture. The money set aside for research by the company, information and communication, maturity of the technology in use at the organisation, as well as the issue of transportation of crude oil will all affect the operations of Royal Dutch Shell in a big way. However, there could be hindrances to the advancement in these technologies, possibly due to the laws set by governments in areas that the company has invested.
Government policies, structures and leadership will affect the business operations of Royal Dutch Shell. Rates of unemployment or job growth have a high impact on the operations of a company such as Royal Dutch Shell.
Interest and exchange rates within the economy will impact on Royal Dutch Shell. However, trade cycles and markets may only have a medium impact on the operations of the company, while the internal flow of cash is significant.

A three-year budget forecast for Royal Dutch Shell

(Income) $ Million
2010 2011 2012
Revenue 504,197 539,491 582,650
Income 25,442 26311 31,296
Minority interest 180 210 205
Assets 296,960 304,581 312,536
Share capital 519 511 498
Shareholders equity 132,804 138,246 143,811
Minority interest 1480 1300 1250
(Additional data) $ million
Cash due to operating expenses (net) 50,204 56,532 61,842
Capital expenditure 52,450 64,240 71,635
Cash investments 38,819 44,960 36,476
Payment of dividends 10,240 9,413 9,349
Cash financing activities 12,532 14,614 10,340


In the oil industry, Royal Dutch Shell plc faces stiff competition from a number of other companies with a global reach. They include Exxon Mobil, B. P. plc, and Chevron (Corporate watch, 2009 par. 4).

BP plc

As a global energy company, BP plc is ranked as the largest corporation in the UK and fourth largest in the world. The company has interests in the exploration of oil and natural gas, in addition to the marketing of petroleum products. Also, BP plc lists on the LSE (London Stock Exchange), thereby ranking it amongst the countries that make the FTSE 100 Index (Meyer & Brysac, 2008 p. 33).

Chevron Corporation

The California-based energy company has operations in over 180 countries. Its activities are in the gas and oil sector, and they include exploration, processing, refining, transpiration and marketing of petroleum-based products and gas. The company has been listed of the NYSE (New York Stock Exchange). Moreover, Chevron is also involved the manufacturing and sales of chemicals, in addition to power generation (Chevron, 2009 par. 1). The marketing network for Texaco involves 84 countries, with a total of 24,000 retail sites for its petroleum products. The company is one of the recognized ‘oil supermajors’.


ExxonMobil is as a result of the merger between Exxon and Mobil, in 1999. Today, the American gas and oil corporation ranks as the leading publicly traded company globally, based on the market capitalisation index. ExxonMobil owns 38 oil refineries location in 21 nations. The refining capacity of these 21 oil refineries is estimated at 6.3 million barrels, on a daily basis. Out of the six recognised oil supermajors, ExxonMobil is the largest (ExxonMobil, 2009 par. 8). In 2008, the company realised a production capacity of 3.921 million ‘barrels of oil equivalent’ (BOE), a figure that represents only 3 % the total world oil production.

Competitive profile matrix

Below is a table that illustrates the rating of these other oil companies relative to Royal Dutch Shell plc.

Critical success factor Royal Dutch Shell plc Exxon Mobil Chevron B.P. plc
Low price 4 4 3 5
High quality 5 5 3 4
Product customization 4 3 2 3
Financial base 5 4 4 3
Management and human resource 5 5 4 4
Geographical scale of operation 5 4 3 5
Total 28 25 19 24

The role of Ofgem

Ofgem (The Office of Gas and Electricity Markets) is a subsidiary of GEMA (the Gas and Electricity Markets Authority) in Great Britain. The organization is mandated by the government to regulate the markets for downstream natural gas and electricity in Great Britain. Since Royal Dutch Shell is also involved in these markets, the company falls under the jurisdiction of Ofgem. There is a need therefore for Royal Dutch Shell plc to comply with the regulations by OFGEM. The principle objective of OFGEM is to ensure that the interests of consumers are protected. This is despite the fact that the organisation has no direct contact with consumers (Ofgem, 2009 par. 5).

OFGEM makes use of the GDPCR (Gas distribution price control review) to enable it regulate the distribution networks for gas. GDPCR refers to a review usually undertaken periodically by OFGEM. In this case, OFGEM specifies and sets the highest amount of revenue that a given network may recover, by providing its products to customers for a given period of time. Royal Dutch Shell plc has over the years enjoyed a cordial relationship with OFGEM, because the company is committed to adhering to the set standards and rules regarding distributing networks for products.

Energy forecast

By 2030, the demand for energy is anticipated to have increased by 35 percent, compared to the 2005 figures. This is attributable to the global improvements on the living standards, in addition to economic growth (ExxonMobil, 2009 par. 2). If at all such players in the oil industry as Royal Dutch Shell are to meet this rise in demand, it is important that these companies make additional investments, in addition to being more committed to innovation. The supply for natural gas is also anticipated to expand, meaning that there is a need to explore for alternative sources to meet the increasing demand.

Since January 2009, OPEC (Organization of the Petroleum Exporting Countries) has been involved in a massive oil production cuts. As a result, the inventories on global oil standards are at a historic high rate. Since the global economic is also expected to experience a turnaround moving on into 2010, this will further reinforce oil markets, with the expectation that the oil consumption rate shall increase by 2.6 as of 2010, compared with the 0.7 % decline witnessed in 2009 (UK Energy Research Centre, 2009 p. 3). Furthermore, the crude oil output by OPEC is projected to reach a daily capacity of approximately 30 million barrels. On the other hand, the consumption rates for oil are projected to increase by1.1million bbl/d (barrels per day), to reach the 85.2 million bbl/d mark.

In November 2009, the average price of a barrel of crude oil was $ 78, an increase of $ 2 per barrel, compared with the crude oil prices in October (UK Energy Research Centre, 2009 p. 4). As a result of this increase, this is a sing that the global economy is on its way to recovery. In addition, it is also an indication that the consumption patterns of oil offsets the existing concerns regarding the existing high level of oil inventories. Moreover, crude oil prices were not as volatile in November as they were a month earlier.

For example, in November 2009, the trading range of a barrel of oil was within the $ 5 range per barrel of crude oil, compared with an $ 11 per barrel range in October. The expectations are that by February 2010, the price of a barrel of crude oil shall have average at $ 78.43. This will be an increase of $ 18.43 per barrel, compared with a similar period in 2009.


In order for Royal Dutch Shell plc to maintain a competitive position in the oil and gas industry, it is important for the company to effectively implement its marketing plan. Furthermore, there is a need for the company to emphasize more on the issue of energy forecast, so that it is best paced to undertake its exploration, production and marketing efforts for gas and petroleum-based products in lien with the demand in the market. Moreover, emphasizing of energy forecast will also help Royal Dutch Shell to explore other avenues, such as alternative sources of energy, in the face of declining reserves for fossil fuels.

Reference List

Boston College Center for Work and Family (n. d.). Company profiles. Web.

Chevron (2009). The power of human energy: finding newer, cleaner ways to power the world. Web.

Corporate watch. (2009). Royal-Dutch/Shell Group. Web.

ExxonMobil (2009). Investment in All Energy Sources is Required, ExxonMobil Says in New Outlook for Energy: A View to 2030. Web.

Forbes. (2009). The global 2000.

Fortune Global 500 (2009). The World’s biggest companies- Royal Dutch Shell. Web.

Investor Centre (2009). Shell Worldwide. Web.

Luiten, J., van, Z., Jonker, J., & Howarth, S., 2007. A History of Royal Dutch Shell. Oxford: Oxford University Press.

Meyer, K. E, & Brysac, Shareen., 2008. Kingmakers: the Invention of the Modern Middle East. New York: W.W. Norton

Ofgem (2009). Promoting choice and value for all gas and electricity customers. Web.

Red Orbit (2009). Royal Dutch Shell plc Half-yearly Financial Report 2009.

Royal Dutch Shell plc (2008). Royal Dutch Shell plc Annual Review and Summary Financial Statements 2008. Web.

The history of Shell-about shell. ‘Our history’. Web.

Shell in Indonesia. (n. d.). History of Shell in Indonesia. Web.

UK Energy Research Centre (2009). The Global Oil Depletion: an assessment of the evidence for a near-term peak in global oil production. Web.

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