BOC: Promoting Gas & Gear through effective Change Management Solution of case 4

Prepared for: Dr. A H M Ehsanul Huda Chowdhury Course Instructor, Strategic Marketing M411

Prepared by: Farhan Ahmed Roll- ZR 49 Batch 17

Institute of Business Administration University of Dhaka November 27, 2012

1. Explain why BOC in Australia was pursuing the marketing strategy portrayed in the case? 2. ANSWER TO QUESTION NO 1.

Introduction
BOC is a multinational industrial gas company owned by The Linde Group. It has got operation in more than 70 countries with more than 50000 employees. It is the leading provider of packaged gas, chemicals and related products and services in the Pacific region. With revenue of BOC 4.6 billion BOC was the second largest industrial gas company in the world prior to its takeover of The Linde Group. Roughly one-third of its revenue comes from Pacific Region. BOC has a long history of customer service and has built its reputation on providing excellence in the provision of service. BOC has a Retail Division with more than 90 retail outlets known as Gas & Gear centers which operate throughout Australia and New Zealand. Recognizing the need to adapt to the changing trends of market place BOC has undertaken a series of initiatives which the companies felt was imperative for them to retain their market share and growing their business.

Summary of changes implemented by BOC

Changes in Retail Points
Streamlining the retail channel by closing poor performing stores, strategically consolidating stores and developing new stores in emerging markets

Innovative Branding Strategies

Developing a new branding strategy and reinvigorate existing stores by renovating and relaunching them to the community.

Training and Devepopment of Employees Adopt consistent, friendly and efficient customer service standards Creative and Eye-catching Promotion Revamping the organizational Strucutre

Implementing a human resource training and development program to attract and retain a good range of experienced staff in the retail, technical, commercial and leadership areas

Aligning all stores to a cultural fit. This would be demonstrated by the positive way in which staff treated visitors to the store.

Adopting regular, relevant and innovative promotions to increase customer levels and build brand awareness.

Implementing a new organisational structure to support and grow each business division.

Page | 1

The Reasons behind implementation of a comprehensive change management strategy

The shifting facets of business potency

The target market of BOC shifted to a new world with a better view of their product needs and service characteristics. Previously clients were mostly B2B and male population. The stores ignored the growing and potential group of female consumers and the general public. As a result, despite having quality products, it was not appealing to the larger target market.

Realization of the need to be highly responsive to customers

BOC has a long history of customer service and has built its reputation on providing excellence in all scales of customer service. Therefore, it could not just avoid the changing trend and styles that its global competitors were well aware of. BOC had to think about its strategic choices in a new height. Thus, a strategic shift through a change management would help BOC ensure employee satisfaction through providing them better training, transforming them into more skilled employees who can serve the consumers better.

Increased Competition

The overall activity of other competitors in Australia, such as Caltex, Ampoletc, has significantly improved their customer service capacity. Compared to this, BOC Australia significantly lags behind in retail sales. This meant BOC would lose its required share of the market if it did not cater to the market with a changed value proposition. Thus, overall, a change management strategy would enable BOC to deliver a superior Customer Value Proposition for their consumers.

Streamlining the structure with policies of The Linde Group

The merger with Linde Group meant a diversified business approach for BOC for which it had to upgrade the year-long operational approach in a unified way so as to serve the target market better. The lack of coherence and service standards would sends poor brand message to the community about the company itself. It thus would make sense to streamline their stores and work on a better cultural fit between them.

Page | 2

To emphasize more on the need for the change management we need to look into the weaknesses of BOC.

Weak Retail, sales and customer service department

Sub-Standard store designs

Dilution of Conventonal Customer Base

Sub Standard Store Designs

BOC stores could not create a pleasant retail shopping experience. The design and layout was not consistent throughout all the stores, hence it lacked familiarity with its target audience. It lacked coherence, accessibility and customer friendliness Dilution of Conventional Customer Base

The traditional stores were designed for builders merchants, it appealed to trades people. The stores ignored the growing and potential group of female consumers and the general public. This meant that the traditional stores would lose out in the long term and hamper the sales of the company. Despite, having quality products it wasnt appealing to the larger target market. The employees are core source of communicating what the company

Page | 3

Weak Retail, sales and customer service department

The company had a wide array of stores, although of the objective of this was to increase accessibility to consumers; the company failed to maintain a fixed standard across the large number of stores. The lack of coherence and service standards would send a poor brand message to the community about the company itself. Also, higher number of stores would cause the company to incur greater costs. It thus would make sense to streamline their stores and work on a better cultural fit between them

Results of Implementation

Prior to Implementation

Too much focus tradespoeople

Post-Implementation

More spotlight on technical aspects in outlets

Retail outlets now focus on customer service Retail outlets more appealing to a wider range of customers, especially females Emphasis on brand awareness and recognition Ensuring brand consistency through measures such as RDP and Mytery shoppers Stores remodelled to improve the shopping environment Greater emphasis on both employee and customer safety at the stores

Low importance of brand recognition

Little Emphasis on brand consistency

Store designs not considered so important Safety was not the utmost priority

Page | 4

2. Do you think the strategic marketing decisions regarding changes by BOC Australia based on the importance of implementing strategic relationships with stakeholders was appropriate? If so, why? And if not why? Explain.

ANSWER TO QUESTION NO 2 The change management strategies have provided positive feedback to the company in terms of favorable responses in terms of business growth and consumer satisfaction as seen by the results from the strategic initiatives. Through this strategy, BOCs relationship with its major stakeholders the employees, suppliers and the consumers, have been enhanced and strengthened. To understand the effectiveness of the strategies undertaken by BOC for building stronger relationship with the customers, it is required to discuss each strategy separately and understand their effectiveness. And for this we need to go through further analysis and assess how each of the strategies had a holistic effect on the overall business structure for the company itself.

The Internal Environment: Employees

The new strategic marketing decisions facilitate the flow of communication with top management and the employees. It also must be pointed out that these employees can be source of better insights about the products and requirements of the consumers. Therefore BOCs strategic initiatives to develop their employee skills can deliver the following benefits to the company. Actions Possible Results

Introducing a Retail Development Program A capable customer service unit will enhance (RDP) to develop staff capacity to implement customer satisfaction and development of a vital changes to the retail business series of company meetings of employees during the change process loyal customer base. company staff rectify their proposed strategies. Communicating the changes to staff through Better acceptance of the changes among Encouraging feedback, questions and opinions Feedbacks from employees can help companies

Page | 5

From the perspective of employees

If we look from the perspective of employees the company can facilitate the growth of employees in the following way which will bring about more positive rewards for the company in the following way

Enhanced morale of employees

If employees see that the company is thinking of their own development, it create a positive feeling towards the company and employs become more loyal and dedicated to achieve success for the organization. Such long term development plans resulted in more motivated employees than in the past.

Ensuring career progression for employees

Training sessions such as the RDP encourages the employees to develop many business skills and use it as a stepping-stone to progress into further study and develop themselves. It also provides the staff with a clear development path from induction through to career progression.

Foster teamwork
The improved infrastructure and communication process due to change management has enabled the employees to perform duties to the best of their abilities, communicate and network with each other with ease, which facilitates them further to work in a team.

Ensuring a safe working environment

Through the change management process, safety at the retail outlets of BOC has been emphasized, which would lead to a more comfortable work environment for the employees and result in higher job satisfaction and a also allow them to serve the consumers better.

The External Environment

Suppliers The modernized state-of-the-art designs backed by rich inventory would help in ensuring better visibility of the products and a much effective and time-saving inventory management procedure. A positive company image, visibility of products in the market and quality management would help attract suppliers. Suppliers would be encouraged to pursue long term profitable business relationships with the company.

Page | 6

Customers To maintain a steady brand image, the staff at the retail outlets of BOC was trained in a way that is customized to BOCs requirements and is relevant to the day to day operation of Gas &Gear outlets. In order to learn about the customer requirements, BOC identified the major areas of consumer need and adapted its strategies accordingly to accommodate those in the process. Thorough market research was also conducted to identify more specific attributes of the stores that needed to be improved, such as: Compelling in design and reinforcing strong brand messages Designed around customer efficiency (time is money for customers) Designed for longevity, flexibility and expansion Designed for staff efficiency, ease of maintenance, access and exit A standardized, consistent design and layout Designed around unique customer profile and requirements Finally, but absolutely critically, the stores were designed to optimize safety standards for staff and customers. The retail outlets of G&G know had full stocks and a well-defined and consistent range of products displayed within chosen product segments in each. Besides this, a consistent, visible and marketrelated pricing policy at every retail outlet ensured transparency throughout all their outlets and assisted the consumer to understand their market based pricing easily.

Page | 7

All these steps to focus on the customer experience helped re-establish BOC Australia as a major player within the industry. In addition, it catered to all the needs of the consumers, rather than sticking to the traditional B2B practices. These steps translated consumers into brand loyalists, and thus resulting in long-term profitability.

Greater employee retention and superior customer service

Long term relationship due to the new positive outlook of the strategies used by firm

Appealing to wider customer base, Possibility of more brand loyalists

Employees

Suppliers

Customers

Strong Sustainable Brand Reputation

Page | 8