PRWEEK: MDK bags PR at Shell in brand-led initiative

This is the first time Shell has outsourced its PR on a retainer basis, although it has worked with several agencies, including MDK on specific projects. The appointment comes as the oil giant also beefs up its year-old in-house branding department.

"There's not much differentiation in the marketplace for a product like gasoline, so a lot of the value for customers must come from brand-building exercises," said Danai Chanchaochai, MDK's chief executive officer.

The agency's task will, in addition to providing marketing support for new products and services, include convenience retailing at service stations, sponsorship and loyalty programmes.

"We are trying to come up with a customer relationship management (CRM) programme," Danai said, adding that plans for a loyalty card were in development.

"The market is very competitive because product differentiation is minimal," he said. "Also, Thai customers are very price sensitive - they will look at the price-per-litre for the day. We have to work hard on building brand loyalty."

Sponsorship programmes, which in the past focused on sports and the environment, may be extended to include philanthropic initiatives, he said.

Shell's key position in the market embodies combining the best in fuel technology with an environmentally-friendly approach. "The other thing is catering to customers' modern lifestyle with convenience retailing," Danai said.

The oil company is currently in the process of renovating its existing Select convenience stores, as well as investing in branded fast food outlets Chester's Grill and A&W. It recently launched its own-brand restaurant chain Kao Oon Gaeng Hom (warm rice, fragrant curry) at Shell stations.

Industry sources say that non-oil operations have become an increasingly important component to oil companies, contributing to direct sales and boosting core fuel sales by attracting motorists. Launched four years ago, non-oil add-ons represent a competitive advantage. State-owned PTT, which competes head-on with Shell, last year inked an agreement with the CP group to open 7-Eleven stores at its service stations nationwide.

Shell, which has been in Thailand for over a century, competes with Caltex, Bangchak, Jet and Esso.