Clients’ Loyalty in Australia’s Oil and Gas Industry


Background to the Project

When a firm is operating in a highly competitive business environment, it is critical to create a team of highly loyal customers. According to Srivastavaa and Rai (2018), when making a purchasing decision, customers often prioritize a brand that they trust. In Australia’s oil and gas industry, the competition has been getting increasingly stiff with the entry of new players into the market. BOC Gas is one of the international brands in this industry that has a sizable market share in the country. Founded in 1886, the company has become one of the dominant players in the industry globally (Budur and Poturak 2021). It currently has 30,000 in different countries and its revenues have been growing consistently.

One of the biggest challenges that the company faces in Australia is stiff competition from other major brands. Some of the major players in this industry include Caltex Australia Limited, Woodside Petroleum Limited, and Origin Energy Limited (Energy Information Administration, 2017). It means that the management of BOC Gas has to use unique strategies to attract and retain clients in the market. A unique challenge that the firm faces is the inability to significantly differentiate its products from that of its rivals. Although there is a perception that products from some brands offer better value than others, the Australian government has set standards that all firms have to observe, which means that the quality is almost the same. A firm has to use other strategies to attract and retain a pool of loyal customers.

Purpose and Importance of the Project

The purpose of the study is to discuss customer loyalty in the petroleum industry in Australia and, suggest how firms can create a pool of loyal clients in the oil market through satisfaction, creating customer value, and defections. According to Iglesias et al. (2020), one of the reasons why customers move from one company or brand to the other is dissatisfaction. When their needs are not met effectively, they are more likely to try other brands. This project is important to firms such as BOC Gas, which are operating in highly competitive markets.

It identifies specific factors that tend to create satisfaction among customers. Srivastavaa and Rai (2018) argued that sometimes firms use pricing to attract clients, but it is not the only thing that customers consider when making their purchases. Other factors such as the quality of products offered, the service delivery method, communication, and after-sale services may sometimes be more important to a customer than pricing. The management of BOC Gas will benefit from this report as it seeks alternative ways to enhance the satisfaction of its customers in the Australian market.

Major Sections of the Project Report

This report has been divided into six major sections and an abstract. The first section provides background to the project, the purpose of the research, and its importance. The second section provided a review of the literature. The third section provides a detailed discussion of the research methods used to collect and analyse data from various sources. The study then presents the findings of the analysis and reflections on the findings in the next section. The final sections of the report present implications, recommendations and conclusion.

Literature Review

Understanding the Oil and Gas Industry in Australia

The oil and gas industry in Australia has experienced reduction in revenue during the past few years, partly due to the effects of the COVID-19 pandemic. However, the industry is making an impressive recovery. At the same time, there have been intense campaigns by scientists and environmentalists to switch to renewable energy sources such as solar power and mind mills. The detrimental effects that fossil fuels cause to the environment drive the demand for renewable (Iglesias et al. 2020). Therefore, companies in the industry thus, face the threat of losing customers to organizations involved in the production of clean energy. In addition, the gas industry has witnessed the entry of new firms, further intensifying competition. Against this backdrop, it is incumbent upon an oil and gas firm to ensure that its customers remain loyal.

Australia’s gas industry is primarily dominated by multinational corporations. Consumers have always exhibited indifference when making choices regarding the oil and gas companies to refuel their cars and homes. Sustaining product differentiation in the petroleum industry is a major challenge (Shankar & Jebarajakirthy 2019). Although oil marketing firms in Australia have introduced different octane fuels, sometimes supplementing their products with some additives, studies show that there is a lack of switching costs (Srivastavaa & Rai 2018). Consumers do not find valid reasons to stay with a particular oil and gas brand (Yadav & Rahman 2018). Instead, most Australian consumers can only patronize an oil outlet that is easily accessible to them. However, the consumer’s satisfaction level can be affected dramatically by the customer service received from the staff at the retail station. Thus, the dealer service’s reputation plays a vital role in building consumer staff.

Customer Loyalty

When operating in a highly competitive market, the sustainability of a firm is defined by its ability to create a pool of loyal customers. One of the most effective ways of achieving customer loyalty is by investing and building a solid brand. Hichri and Ltifi (2021) defined a brand as a name, symbol, design, logo, terminology, or any feature that a firm uses to identify itself as unique compared to its competitors. It can only be considered valuable if customers value it. As such, to measure brand equity, one needs to understand the customers’ knowledge regarding the brand (Hichri & Ltifi 2021). This will consider the brand’s position in the customer’s mind, and factors such as brand association, brand awareness, and brand loyalty.

Oil and gas loyal customers fall into four categories: convenience, committed, captive, and convenience seekers. According to Sharifkhani, Pool, and Asian (2016), customers differ in mindset and actions in each of these categories. In addition, these customers react differently to switching and prompt. For example, captive customers tend to show a sense of satisfaction as far as the product is concerned. Meanwhile, Lifestyle can affect the loyalty of convenience seekers. Finally, the loyal clients are always optimistic in their attitude and behaviour. Sharifkhani, Pool, and Asian (2016) explained that when a firm consistently satisfies its customers, eventually them will become loyal. It identifies two tactics that can enhance customers’ loyalty, which are offensive and defensive strategies. An offensive strategy is mainly concerned with attracting new customers, whereas a defensive strategy focuses on retaining old customers.

Loyalty has been described as a behavioural response that is prejudiced. However, according to Thompson, Okorie, and Sakty (2019), loyalty is a commitment that is deeply held to consistently re-patronize or rebuy a preferred product from the brand in spite of the marketing efforts and situational influences of competing brands. Every organization will always base its strategic goals on the loyalty of its customers (Myo, Khalifa & Aye 2019). BOC Limited is aware that obtaining new customers is not guaranteed to keep them for its long-term success. It is why Thompson, Okorie, and Sakty (2019) asserted that new customer acquisition needs to be included in both strategies for customer retention.

Impact of Customer Loyalty

Cost savings and referrals are the primary benefits of customer loyalty. Regular customers are often loyal to a particular brand since they understand their experience with it. They, therefore, help save an organization advertisement and marketing-related expenses. According to Ismail and Yunan (2016), it is not unusual for loyal customers to refer their friends and relatives to their preferred brands. Increased customer share leads to a retention improvement and the referrals that loyal customers bring to a brand.

Loyal clients use alternative ways of buying their desired products. For example, in the petroleum industry, there exists various payment methods, with the majority being cashless. In the views of Agu, Benson-Eluwa and Chiom (2017), loyal customers are often quick to migrate to such payment procedures without creating any hurdles. As a result, clients enhance the usage and, in turn, help an organization reduce costs related to advertisements of the same. Moreover, loyal customers are often willing to be stakeholders in their preferred oil or gas retail brands.

It is important to note that although customer loyalty is critical to a firm’s sustainability and success, it also presents specific challenges that the management should learn how to transform into beneficial factors. As customers get embrace to a given brand in the market, sometimes they may develop a habit of complaining as a way of communicating the negative experiences from the employees of the firm. Such clients become concerned and, in some cases, even personal about their experiences, demanding that they be addressed by the firm’s management. They feel a sense of ownership of the brand, thus, their willingness to complain instead of keeping quiet (Ismail & Yunan 2016). These complaints from loyal customers are suitable for the business as they help identify various management and operational loopholes to be investigated and improved. Yadav and Rahman (2018) noted that the loyalty of customers is related to brand equity. Positive beliefs and attitudes towards a given brand led to its attitudinal loyalty.

Research Methods

When conducting research, it is essential to have a clearly defined method of collecting, analysing and presenting data in a way that answers the research question or addresses the aim and objectives of the research. One must identify credible sources that can provide trustworthy information in research. In this section, it was necessary to collect data that can explain how BOC Gas is using various strategies to enable it to achieve customer loyalty in the highly competitive Australian oil and gas industry. As Tan (2018) observed, the methodology that a firm uses helps in defining how well scholars and industry players can trust the information presented in the report. In this section of the report, the researcher discusses the research method used and the approach employed to collect and analyse data.

Research Method

The research method that a researcher chooses is often based on the research aim and objectives. It should enable a researcher to effectively respond to the primary goal of the research. The study used a mixed-method (both quantitative and qualitative) method. The quantitative approach made it possible to gather and analyse numerical data about customer loyalty in the petroleum industry in Australia. Qualitative research entailed researching new theories and writings on how customer loyalty is related to the success of different companies in the industry, with BOC Limited acting as a case study (Allibang 2020). This research method intends to demonstrate a relationship between theory and research and test the efficacy of the theory.

To obtain the most appropriate and valuable information, which can be used to answer the research question, the researcher narrowed the study to the BOC and the gas industry in Australia. The researcher analysed, based on the data collected, how the company has been using various strategies to create a pool of loyal customers and overcome the stiff competition in the market. This industry is chosen because it has multiple major firms in Australia. It was necessary to look at how competitive the industry is, depending on the number of active players in the country.

Data Collection and Analysis

When the research design has been defined, the next step is to determine an appropriate data collection and analysis method. The strategy used in data collection needs to be compatible with the strategy of research. A researcher should have an understanding of the topic and clearly define the data collection technique (Allibang 2020). As for this research, the researcher has mainly collected different information from case studies related to the organization, previous records and online journals on such cases.

Given the fact that this research was based on secondary data analysis, it has gathered information from different journal articles, books, and newspaper approaches. It has also used company annual reports to understand different management, financial and background analysis on the chosen venture. Articles that have been selected for this study are not older more than 5 years. All of them are in the English language and are peer-reviewed. Apart from these sources, the databases from the organisation such as quarterly reports and transcripts helped give relevant information about BOC and the oil and gas manufacturing industry in Australia.

Analysis and Presentation of Findings

In this section of the report, the focus of the researcher is to present findings made from the investigation. The goal was to understand how BOC Gas is using various strategies to create a pool of loyal customers, identify weaknesses in the current strategies, and propose ways of overcoming them.

Analysing the Data

The analysis of data, as explained in the section above, involved both qualitative and quantitative research methods. The approach makes it possible to have a comprehensive analysis of data on the issue under investigation. In this section, the focus will be to assess the growth of the industry over the decades, discuss strategies that BOC Gas is using to create customer loyalty, the effectiveness of those strategies, and challenges associated with them.

The Growth of Natural Gas Consumption in the Industry

The researcher was interested in determining the growth of the natural gas market in Australia. El-Adly (2019) explained that assessing market growth makes it possible for a firm to plan its expansion strategies. It helps in determining the potential of the market within that specific country. Using secondary data, the researcher was able to determine that Australia is producing more natural gas than it consumes. It means that the extra amount of gas that remains after the local consumption is sold to the international market. It is also clear, from figure 1 below, that there has been a consistent growth in production and consumption of dry natural gas in Australia from 1995 to 2015. The increasing consumption rate means that the market is growing. BOC Gas and its competitors in the Australian market should introduce measures meant to expand their capacity.

Growth in Production and Consumption of Natural Gas in Australia
Figure 1. Growth in Production and Consumption of Natural Gas in Australia (Energy Information Administration 2017, p, 9).

Strategies that BOC Gas uses to Create Customer Loyalty

In this study, the researcher also used qualitative analysis to process data. In this case, a thematic analysis made it possible to understand strategies that BOC Gas is using to create customer loyalty in the market. These strategies are presented in the form of themes. One of the main strategies, as was established from the company’s website and annual reports, is innovating for customers. The firm understands that the market is evolving and so are the needs and expectations of customers. As such, it has remained innovative in terms of its service delivery. It has been introducing creative strategies meant to deliver its products conveniently to its customers. As Iglesias et al. (2020) noted, convenience is one of the main factors that clients cherish. Through innovation, the company is making it possible for its clients to access its products without moving long distances.

Integrity is another factor that the firm uses to enhance customer satisfaction and loyalty. Budur and Poturak (2021) explained that one of the issues that often emerge in the gas industry is the sale of products in quantities below what is stated. A gas cylinder that should weigh 13 kilograms is sold at a capacity of 12 or 11 kilograms (Tabrani, Amin & Nizam, 2018). In other cases, there is also the issue of compromising the quality of the products. Such integrity issues may significantly affect customer loyalty when they are revealed. The firm is keen on ensuring that it delivers on its promise to its customers in terms of the quality and quantity of its products.

Safety is a major concern in the oil and gas industry because of the flammability of the products. There is always a need to ensure that products meet specific safety standards to ensure that they can easily be transported and used without a major threat. BOC Gas cylinders meet specifications set by the Australian government. There is also a regular inspection done on the cylinders before they are refilled to ensure that they are in good condition. Prioritizing the safety of its customers has earned it loyalty. The firm also encourages its employees to be respectful when handling customers. It believes that its loyal customers have high expectations when they visit its outlets. Any form of disrespect may significantly affect their perception of the brand. As such, workers are regularly trained on how to handle customers, especially when they have a complaint about the product delivered.

The firm has embraced diversity as a way of enhancing customer satisfaction. Allibang (2020) explained that Australia has become one of the most diversified societies in the world in terms of race, religion, language, and many other demographical classifications. The firm has been keen on ensuring that the composition of its employees is a true reflection of Australian society. There is a deliberate balance in terms of age, gender, and race among its workers. The strategy is meant to make its diversified customers comfortable when they visit the firm. Its passion to excel has also seen it explore new ways of delivering high-quality products to its customers. There is a constant effort to ensure that customers are given the best services.

Table 1: Strategies BOC Gas Uses to Create Customer Loyalty

Strategy Supporting Evidence
  1. Innovating for customer
“We relentlessly pursue new ways to add value to external customers” (BOC Gas 2021).
  1. Integrity
“Our actions are honest, fair and ethical” (BOC Gas 2021).
  1. Safety
“The Linde Company will avoid harming people and society” (BOC Gas 2021).
  1. Respect
“Every human being deserves to be treated with respect” (BOC Gas 2021).
  1. Thriving through diversity.
“Diversity results in enriched collaboration and enhanced solutions” (BOC Gas 2021).
  1. Passion to excel
“We commit and drive to pursue ever-higher standards of excellence and we celebrate success” (BOC Gas 2021).

Effectiveness of the Strategies at BOC Gas

BOC Gas strategies meant to create customer loyalty are effective in the Australian market. The company currently is one of the leading firms in the industry. However, it is necessary to note that it is not the market leader. Other firms with larger market shares exist in the country. Given the fact that BOC Gas is one of the oldest oil and gas companies in the world, the management has failed to achieve dominance in this market. The management should find ways of improving the quality of products it delivers to customers. Differentiation may not be an option to attract more customers because products in the industry are largely the same. Using strategies such as convenience may help enhance the level of satisfaction. The management has identified convenience as one of the ways that can enable it to achieve growth.

Challenges Faced by BOC Gas

Annual reports have identified various challenges that the company faces as it seeks to achieve growth in the market. Rivalry among competitors is one of the challenges the firm faces as it seeks to achieve loyalty among customers. All the players in the industry not only offer the same product but also use almost similar strategies to attract and retain customers. Most of the strategies discussed above are also commonly applied by the rivals of this firm in the market. It makes it challenging for the company to distinguish itself from the rest in the market. An emerging trend in the energy sector where environmentalists and scientists are encouraging the use of renewable energy is a major concern that the firm should not ignore. It should overcome the negativity that is associated with renewable energy to maintain its loyal customers.

Reflections on Findings

The findings made show that BOC Gas is making every effort possible to ensure that it wins customer loyalty in the local Australian market. The firm understands and appreciates the existence of stiff competition in the market and the difficulty in differentiating its products. As such, it is focused on the unique delivery of its products. Factors such as convenience and integrity are highly valued by customers (Tan 2018). BOC Gas has made an effort to ensure that it makes its products easily accessible and delivers on its promise. It has trained its workers to always respect customers and to respond to their customers. One of the issues that were missing when collecting data from the company’s website and annual reports is how it values and maintains communications with customers.

The firm needs a system through which it can understand the concerns of customers, emerging trends and practices, and any other issue that customers may want to share with the firm. As competition gets increasingly stiff, the management will need to find unique ways of remaining sustainable and successful in this market. The volatility in the oil and gas industry does not allow the firm to use strategies such as price wars because consequences can be devastating. The section below identifies possible strategies that it can use to achieve success.

Implications and Recommendations

The findings made in this study can help the management of BOC Gas, and firms in the same industry, to create a pool of loyal customers. As shown in the discussion above, when firms in an industry offer products that cannot be easily differentiated, as is the case in the oil and gas industry, it becomes necessary to use other possible strategies to win customer loyalty. The firm should try to differentiate itself from its rivals through how it delivers its products. Through this study, such strategies are discussed. The following are some of the implications that the study may have on different stakeholders.

Implication for the Literature and Recommendations

The findings made in this study are based on evidence obtained from scholarly sources, the company’s website, and its annual reports. It has identified knowledge gaps, through a review of the literature, and collected data from the company to address these gaps. As such, future scholars can find the information presented in this document useful. It can form the basis of the literature review of such scholars. It can be particularly important to scholars who may be interested in conducting further studies specifically about this company. In this study, data were obtained from reports published by the firm. An interview conducted with the company’s employees may shed more light on issues such as the communication strategies that BOC Gas uses in the market.

Implication for Managers in the Organisation and Recommendations

The study has primarily focused on discussing customer loyalty in the petroleum industry in Australia and recommends how firms such as BOC can successfully attract and retain a pool of loyal clients in a highly competitive market. It has identified the strengths and weaknesses of this company as it seeks to attract and retain a pool of loyal customers. The company should use its strengths, as identified in its strategies in table 1 above, to overcome the challenges in the market. However, it also needs to redefine its strategies to ensure that it can expand its market share. The current strategies have enabled it to reach its current level of success. The following are the recommendations that managers of BOC Gas should embrace based on the findings of the research conducted:

  • The firm should introduce effective communication systems that allow its clients to share their experience and views about products that they offer.
  • The management should empower its employees to ensure that they can respond to concerns and issues of customers promptly. A standard procedure should be developed and followed when addressing specific complaints that customers raise.
  • The company should focus on strengthening its brand because the study reveals that in this industry, customers tend to remain loyal to specific companies. The brand can be strengthened through corporate social responsibilities, besides promotional campaigns through mass and social media.
  • The firm should consider mergers and takeovers as a way of reducing market rivalry and expanding its market share. Such a strategy should enable the firm to offer improved services to customers as a way of enhancing customer loyalty. An acquisition may make enhance convenience by making products easily accessible to customers.

Implication for Managers in Other Organisations and Recommendations

The report has explored challenges and the current trends in the oil and gas industry. As such the report can be useful to managers of firms such as Air Liquide Australia, Coregas, Supagas. The differentiation remains a challenge to all the players in this market, despite their size or market coverage. Another major looming threat is the growing popularity of renewable energy and concerns raised about petroleum products, as discussed above. Many people will likely switch to renewable energy that is largely considered cheap and friendly to the environment. One of the recommendations is that firms in this industry should invest in research to find solutions to challenges associated with the use of petroleum products as a way of protecting their image. They can also consider investing in this sector as a way of convincing customers that they are keen on protecting the environment.


Achieving customer loyalty is critical for a company to achieve sustainable growth in a market. Findings made in the study show that the report has achieved its purpose of understanding customer loyalty in the petroleum industry Australia and propose how companies in the sector can attract and effectively retain clients in the market by satisfaction, maintaining customer value, and defections. The company operates in a highly competitive market, and the ability to achieve success depends on its product delivery strategies. Differentiation, which is a common strategy used in many industries, cannot be used in the oil and gas sector because of the standardization of these products. As such, BOC Gas is embracing unique strategies to serve its customers.

The study has outlined various recommendations that the management of this firm, and others within the same industry, can use to protect their market share and maintain customer loyalty. It is important to note that some challenges remain unresolved. One of them is the current trend where consumers are switching to renewable energy sources. Firms in this industry, such as BOC Gas, needs to develop a strategy of responding to the change. It is also likely that the government may introduce regulations in the industry to reduce emissions of greenhouse gases. The firm should be ready to respond to such new measures to ensure that it remains sustainable.

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