Topics

• Differences between manufacturing and services.

• Purpose of port marketing planning (Short term plans, Long term
plans).
• Elements of marketing planning.
• Objectives and methods of developing a marketing strategy.
• Planning process and developing the marketing plan.
• Development process.

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• The tangibility of their output

• Production on demand or for inventory

• Customer-specific production

• Labor-intensive or automated operations

• The need for a physical production location

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Goods: The key difference between service firms and manufacturers is the tangibility of their output.
The output of a service firm, such as consultancy, training or maintenance, for example, is intangible.
Manufacturers produce physical goods that customers can see and touch.
Inventory: Service firms, unlike manufacturers, do not hold inventory; they create a service when a
client requires it. Manufacturers produce goods for stock, with inventory levels aligned to forecasts of
market demand. Some manufacturers maintain minimum stock levels, relying on the accuracy of
demand forecasts and their production capacity to meet demand on a just-in-time basis. Inventory also
represents a cost for a manufacturing organization.
Customers: Service firms do not produce a service unless a customer requires it, although they design
and develop the scope and content of services in advance of any orders. Service firms generally
produce a service tailored to customers' needs, such as 12 hours of consultancy, plus 14 hours of
design and 10 hours of installation. Manufacturers can produce goods without a customer order or
forecast of customer demand. However, producing goods that do not meet market needs is a poor
strategy.
Labor: A service firm recruits people with specific knowledge and skills in the service disciplines that it
offers. Service delivery is labor intensive and cannot be easily automated, although knowledge
management systems enable a degree of knowledge capture and sharing. Manufacturers can automate
many of their production processes to reduce their labor requirements, although some manufacturing
organizations are labor intensive, particularly in countries where labor costs are low.
Location: Service firms do not require a physical production site. The people creating and delivering
the service can be located anywhere. For example, global firms such as consultants Deloitte use
communication networks to access the most appropriate service skills and knowledge from offices
around the world. Manufacturers must have a physical location for their production and stock holding
operations. Production does not necessarily take place on the manufacturer's own site; it can take place
at any point in the supply chain.

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Purpose of marketing plan in ports:

Objective 1: Being capable of collecting information in order to position the port in its
S L
commercial and industrial environment

Objective 2: Being capable of defining a port marketing strategy S L

Objective 3: Being capable of choosing the most suitable marketing tools in function of the
S
budgetary restrictions and the required efficiency

Objective 4: Being capable of establishing a more effective operational approach to the clients
L
and introducing the principles of logistical management in the port

Objective 5: Being capable of conducting the evaluations and follow-up of the marketing
S
activities
S Short Term Plan L Long Term Plan

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• Product: being the port, and port services, in order to satisfy the customer's needs;
• Promotion: to inform the market on the possibilities and qualities of the port;
• Prices: which must be reasonable to the customer, challenging to the competitors and return a fair profit to the port.
• Place: distribution of the port services
The commercial strategy of a port is the writing out of a custom made scenario, in which these
elements are brought in the right quantity and frequency.

The parties involved in port marketing

• Liner shipping: liner, agents or forwarding agents
• Chartering: ship owners and ship brokers
• The seaports: The port manager, port authority, pilots/tugboat
• Crews/boatmen: Customs administration and immigration services, Shipping agents, the terminal
operators , surveyors, stevedoring, companies/dock labor and unions, the hinterland transport
operators (rail, road, inland waterways), banks/insurance companies, etc.

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Product
The port product is in fact "service". From a marketing point of view, the port is considered as a
company producing a product, namely a variety of services which are sold, and as a consequence will
bring both profits and costs. The most important of these services are:
• The port passage
• Industrial implantations
• Ship repairs
• Engineering in the port field
• Establishment of services related to the international commerce, to maritime activities and to trade
• Education in the port and maritime field

The seaport is quite a complex product composed of various elements:

• Geographical position
• Nautical approach
• Hinterland connections
• Infrastructure and equipment
• Disposition of quays and land
• Services which can be offered
• Labor force and social climate
• Technical and management know-how
• Port organization,
• Fiscal environment.

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Price
• Pricing is definitely a key player in the port's commercial strategy to attract traffic.
• It is obvious that the price of the port services has a direct impact on the income level of a port and
consequently on its investment opportunities.
• But although pricing is an important marketing tool, more and more shippers place quality and
efficiency of services before the price of those services.
• Many examples have shown that those ports which are expensive but efficient are more competitive
than the cheaper but inefficient ports. Nevertheless, port prices are still one of the most important
factors in port competitiveness.
• First, different port users do not have the same port service requirements. There still are, and will
always be, some categories of low-value cargo or ships which are more sensitive to port pricing than
to any other service factors.
• Secondly, shippers give preference to the quality rather than to price because quality of service
differs from one port to another. Price will be paramount when little difference is to be found in
quality. This is the case for most industrialized countries and some developing countries.
• Thirdly, the requirements of the two clients - shippers and shipowners - are very different, especially
vis-à-vis port pricing. Many shippers, general cargo shippers in particular, are less sensitive to port
charges, because in their total production costs, cargo transportation occupies only a small part
(approximately 10%) and the proportion of the cost is even smaller; thus shippers tend to insist on
the quality of services
• Several extra complexities are involved in pricing in an international market and this is the case for
seaports which are by definition situated on an international competitive market. So the port will
have to take some pricing decisions into account: estimated costs, competition, currency, payment
terms, market variables i.e. the demand.
• It is obvious that the price should be in proportion to what you can offer to your customers on one
hand and to the economic environment on the other.

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Price
• The pricing of a port is established on different levels, some of these levels are: Harbor dues, Land
leases, Handling costs, Extra services like selling potable water, electricity etc.
• Setting all those prices is preferably a result of the conclusions of the port's internal cost accounting
system in comparison with competitors' prices.

Pricing must be dynamic and encouraging. Traditionally all ports charge harbor dues, partly on the
vessel and partly on the goods. Here several possibilities are open:
1. The vessel: the charges can be linked to the frequency by which the vessel calls at the port. Instead
of the vessel, charges can be linked to the whole fleet or ships belonging to a certain shipowner or
even further, all vessels used for a specific trade, even when they belong to different shipowners.
2. The goods: pricing can be related to the amount of goods brought in, or a different price can be used
for different types of goods, for example general cargo or bulk cargo, liquid or solid, etc.

Fixing the choices and orientations of the marketing strategy

• An example of fixing choices and orientations can be deciding not to attract polluting cargoes
• The stimulation or the discouragement of certain traffics can be seriously influenced by "pricing",
which is a very important marketing tool.

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Price

Selection of the existent and potential markets

As part of the commercial development of the port, one has fundamentally to focus on two main
objectives:
• To consolidate, and if possible, to extend the existing traffics
• To attract new traffics
In this context, there are 5 possibilities:
• A strategy enabling the maintenance or development of new markets with existing resources can be
defined
• One can determine the conditions in order to attract new markets, this means the creation of new
markets related to new resources
• It can be important to create new installations that give an extra value to the product
• New resources can be created in the port or in the vicinity of the port
• Networks can be established between the ports (on the other side of the maritime chain)
Proposal of new commercial strategies to the clients
• This means to combine the distribution and the commercialization of goods.
• The proposal of new commercial strategies to clients has everything to do with the thorough
knowledge of the port's marketing department concerning commercial and technical nautical affairs,
and the ability to sell this knowledge to the potential customer
Anticipation to changes (being pro-active)
• According to the marketing strategy the port has to determine choice and orientations. The markets
in which the port could make profits are selected and commercial strategies are proposed to the
clients.
• All these steps have to be made with a pro-active mentality.
• This means being able to react to a structural, organizational and technical changes.

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Promotion: The various means/forms of promotion are:
Advertising
The objectives of advertising are:
• Enlarging the general renown of the port
• Paving the way for sales
• Improving the ports image
• Increasing the port's recognition
• Highlighting the port's quality elements
• Reminding the target audience of our message
Direct mailing
• Whereas with advertising the marketer also aims at reaching the unknown potential port user, the
target of direct mailing is to influence identified potential port users. Direct mailing requires a reliable
address list of the potential port users.
• Direct mailing brings your company closer to the identified potential client.
• The effectiveness of direct mailing is easier to evaluate in comparison with advertising. Though it is
essential that it is directed at the person who is really involved in the decision making process.
• When direct mailing is used as a marketing tool, it is very important to verify the following points in
order to make a good impression:
• The name of the person you write to
• His function
• Male/female
• References mentioned
• Faultless and carefully drawn up letter
• Enclosures are indeed enclosed
• The names of the people who are available for further information

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Promotion: The various means/forms of promotion are:

International shipping exhibitions

• International shipping exhibitions are outstanding places to encounter a large group of professionals
in a very short period of time.
• Participating in international shipping fairs is a marketing tool worthwhile considering.
• It has the advantage that targeted people can be met in one week, whereas on a business trip it
would take more than a month to meet the same people because of the traveling involved.
• Besides the time-saving aspect, exhibitions offer the possibility of presenting your product, that is
the port and its services, in an optimum manner, by means of pictures, movies, models etc.

Organizing port days

• A so-called port day consists in inviting a group of business people (50 to 100) to whom the port
makes a detailed presentation.
• The presentation can be made up of a general introduction on the port, and some other speakers can
highlight the strong points
• of the port in the commercial and nautical, as well as in the nautical field.
• The presentations can be illustrated by showing a movie on the facilities, port area and labor.

Personal selling - direct business trips

• The personal selling or direct business trip has as a goal that contacts are deepened and hopefully
result in signing a contract.
• A solid contract can only be perfect when there is a mutual understanding by both parties. That
understanding starts with going to visit the potential contracting party, and this goes both ways.
• With a few exceptions of mega-ports like Rotterdam, New York and Singapore, the other ports, still
have to explain what possibilities they can offer.

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Promotion: The various means/forms of promotion are:

Representatives
When detailed information is needed on a certain project they can try to get closer through their own
business relations network. It is obvious that the selection of a representative must be done very
carefully. The following criteria should be met:
• Professional knowledge on one's product
• Their activity in that market
• Their business relations network
• Communicative skills
• Presentation

Domestic networking
• Domestic networking includes all efforts to meet local business people who can reveal important
information to attract new businesses. Special attention can be given to:
• Regional development organizations
• Regional and national investment consultants
• Chambers of commerce
• Financial organizations and banks
• Commercial departments of foreign embassies
• National Ministry of Foreign Affairs and of Economic Affairs
• Consultancy offices for international trade and investments
• Employer and economic organizations
• City and provincial administration

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Promotion: The various means/forms of promotion are:

Domestic fairs
• A distinction has to be made between the fairs related to domestic transport (professional fairs) and
the domestic fair in general.
• For the first category it is almost certain that the port would consider participation. the port's
presence is a must for meeting government people, the industry and at last but not least its
competitors.
• The chances of positive results will rely on the size of the port's internal market. For a small market
participating in domestic fairs is intended more for creating a positive image than for really selling
your services.
• It is important to know beforehand what the port expects to gain as a result of its participation

School visits
• Developing a seaport is partly building the infrastructure and superstructure without which a vessel
cannot be accommodated; but it is also manning the seaport with people who realize the
• working in a seaport is different from baking cookies.
• We are talking about tradition and educating people in the maritime industry. Today, the maritime
industry is still built on tradition, reliability, confidence, know-how etc.
• This is why a program has been elaborated to go and visit schools, to talk about the prosperity ports
bring to the region and to show the opportunities a port offers as a possible employer

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Promotion: The various means/forms of promotion are:

Organizing conferences
• Another marketing tool is the organization of a conference in the port.
• This of course requires professional help from a conference organizer, such as Seatrade, etc. Of
course possibilities have to be studied beforehand by the organizers so that it has a good chance of
being a success; otherwise, it would not be a promotional activity.
• The major advantage is again that decision makers come to visit the port

International press day

• An international press day can be organized as follows.
• The port invites all representatives of the specialized maritime papers and magazines and the travel
and overnight expenses are paid.
• First a general speech is given explaining the major changes in the port, the results obtained and the
plans which have been made.
• Afterwards question periods are organized in separate groups according to the language.

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Intermediary objectives to main objectives :
Objective 1: Being capable of collecting information in order to position the port in its commercial and industrial
environment There are 5 intermediary objectives to reach this main objective:
1) Collecting information
2) Carrying out a SWOT-analysis
3) Carrying out a commercial and industrial analysis inside and outside the port
4) Identification of the markets
5) Positioning of the port in relation to the markets

Objective 2: Being capable of defining a port marketing strategy To reach this main objective there are 4 intermediary
objectives:
1) Fixing the choices and orientations of the marketing strategy
2) Selection of the existent and potential markets
3) Proposal of new commercial strategies to the clients
4) Anticipation to changes (being pro-active)

Objective 3: Being capable of choosing the most suitable marketing tools in function of the budgetary restrictions and the
required efficiency. There are 2 intermediary objectives to reach the main objective:
1) Knowledge of the different promotion tools
2) How to use optimally and budget the different tools in function of their efficiency

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Intermediary objectives to main objectives (contd.):

Objective 4: Being capable of establishing a more effective operational approach to the clients and
introducing the principles of logistical management in the port. There are 2 intermediary objectives to
reach this main objective:
1) Making sure that the personnel of the port community follows the "customer first" principle
2) Practicing the principle of partnership with the client

Objective 5: Being capable of conducting the evaluations and follow-up of the marketing activities.
There are 2 intermediary objectives to reach this main objective:
1) Following up on both the economical and technical evolutions of trade and transport and the large
geo-political data.
2) Carrying out follow-up on the marketing activities

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Objective 1: Being capable of collecting information in order to position the port in its
commercial and industrial environment

Collecting information: To be able to position your port in its commercial and industrial environment it is
absolutely necessary to already have a good knowledge of the practice of international commerce and
the development of transport . The collected information has to be judicious, useful in due time and up-
to-date.

To avoid being submerged by a mass of expensive, useless information, it is necessary to make up a list
of useful information, adapted to the needs of the port and corresponding to the following questions:
• What is the nature of the principal decisions that have to be taken or of the argumentation that has
to be developed?
• Which type of information is needed from this point of view?
• What is the availability of actual information and is research necessary?
• What is the desired periodicity of these information?
• What are the general sources of the correct information (studies, magazines, etc.)?
• What is the exact subject of interest?

Objective 2: Being capable of defining a strategic port marketing

• Marketing tools are those elements that will have an influence on the "sales" of your product, in this
case the port. The influence of those elements will differ from one country to another country.
Therefore it is necessary to find the appropriate mix of all those elements for a given market, so that
the result matches the targets aimed at.
• It is clear that various tools will be complementary and interchangeable. The appropriate mix for a
given market will have some degree of individuality

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Collecting information:
• In order to position your port in its commercial and industrial environment is in fact marketing
research.
• The marketing research process is the systematic design, collection, analysis and reporting of data
and findings regarding specific marketing problems and situations facing a company.

The market research starts with an in-depth study on the incoming and outgoing commodity flows of a
country and its neighboring countries.
In practice this means that the existing traffic flows must be analyzed as to:
• Which ports are used
• Which types of vessels are used (liner or tramping/container, bulk, tanker, etc.)
• Which type of handling is required
• What are the quantities per shipment
• What are the storage facilities needed
• Type of transport contract
• Which parties are involved
• What are the import restrictions/duties
• What is the final destination

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In addition to collecting information about incoming and outgoing commodities some other
information is important too:
• Information about the access of the port, about the port itself and its hinterland;
• Information about the technical aspects of the organization of the port authority and the port
community (private organizations and public service);
• Information about the performance and the level of service of the enterprises of the port community;
• A distinction between the operational and structural organizations;
• Analysis of the external environment (other ports, alternative means of transport),
• Information about the technical aspects in the maritime transport (evolutions concerning ships,
cargo handling, etc.)

Carrying out a SWOT-analysis

• Carrying out a SWOT-analysis is part of the marketing research.
• The SWOT-analysis allows the port manager to identify the Strong and Weak points and the Threats
and Opportunities of his port.
• The strengths and the weaknesses refer to the internal present factors of the port. These factors can
easily be compared with other competing ports.
• The threats and opportunities are external factors which will affect the future of the port.
• The SWOT-analysis will be carried out on the product, this means on the port. The port is a
composed product, consisting of various elements:
• Geographical position, nautical approach, hinterland connections, infrastructure and equipment,
disposition of quays and land, services which can be offered, labor force and social climate, technical
and management know-how, port organization, fiscal environment.

Every port related project will be analyzed in function of the SWOT of each of above criteria.

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Carrying out a commercial and industrial analysis inside and outside the port
• Now we have analyzed the services, we have to ask ourselves which performances we can give with
them.
• An analysis of the hinterland, from a commercial point of view will also be necessary, this means we
have to identify the commodity flows.
• An inventory concerning the commercial and industrial activities in the port and in the region which
can be served by the port will have to be made.

Positioning of the port in relation with the markets

• A port may have the most up-to-date equipment and infrastructure, the most efficient organization,
the perfect location, quality services and an excellent know-how, in short everything that can make it
an excellent, competitive port, all these assets are of little value if there are no good connections
with the hinterland.
• Especially nowadays, since ports have evolved to distribution centers, it is of the utmost importance
that the goods can easily and efficiently be distributed towards the various consumer markets.
• As already mentioned, ports are subjected to constant changes in the environmental variables:
economical factors, government interference (for example free railway competition, the abolition of
the turn system in the inland shipping trade, etc.), infrastructural elements (for example
accessibility, the building of terminals, connection roads, etc.) and market developments (for
example the merger of shipping companies, choices in ports of call, etc.).
• Only one factor will never change: the geographical position of the port in relation to the market
demand.

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Objective 3 : Being capable of choosing the most suitable marketing tools in function of the budgetary
restrictions and the required efficiency
• Knowledge of the different promotion tools. Of the company's marketing functions, promotion is the most visible as
well as the most culture related one.
• With an excellent product, namely a well equipped port with a safe and deep nautical access, modern handling gear
and a highly productive labor force, clients need to be aware of the port's existence.
• Action is needed to raise this awareness. Clients and potential clients have to be told that circumstances have
changed in the port. This requires communication.
• Therefore promotion can be defined as communication between the port and various target groups, in order to
inform them and influence their attitudes and behavior towards the port.
• The promotional task will not be exactly the same in every market. Moreover, variations will occur from country to
country, in three dimensions:

Means of communication

Audience

Company goods

Objective 4 : Being capable of establishing a more effective operational approach to the clients and introduce
the principles of logistical management in the port
• Making sure that the personnel of the port community follows the "customer first" principle
• "We exist to provide value to our customers, which means that in addition to quality and service, we have to save
them money."

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 Objective 5 : Being capable of conducting the evaluations and follow-up of the marketing activities
• Following up of both the economical and technical evolutions of trade and transport as well as the large geo-political
data
• Reacting to market changes in terms of installation and organization
• Follow-up of the technical evolutions concerning ships
• Follow-up of the political developments (for example boycott in a certain country);
• Being able to take immediate decisions

MARKETING DEVELOPMENT PLAN

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THANK YOU

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