Key Word: Marketing Research
Source of Publication: The Economist
Supporting Publications: Business Week; Industry Week
Part 1: Synopsis of the article
This article discusses the export and imports of goods and services in the Gulf of Mexico. The author of this article takes a macro-economic perspective in looking at the trade transaction that take place in the Gulf. The focus of this article is the challenging facing the liquid gas market due to the change in market preferences of regular gas to shale gas. The author explains that initially the existing infrastructure in the Gulf of Mexico was meant to import gas in the country so as to meet the domestic gas demand. However, the author notes that due to the high prices of regular gas there has been increasing inclination to shale gas.
The shift of the market from regular gas to shale has rendered the existing infrastructure redundant because it cannot be used to import this product into the country. This has necessitated the construction of a new infrastructure which according to the author is highly capital intensive. The project that is underway is meant to increase the amount of liquid natural gas (LNG) imported into the country. The project cost about $29.7 billion and is meant to boost the imported capacity to 8.9m tons per annum (Washington, 2012, p.1). Despite the increased exports costs associated with the shift from regular to shale gas, market researchers have criticized shale gas because its extraction leads to water contamination (Foy, 2012, p.1).
Part 2: Analysis of article based on the course topic
This article relates to this course because it talks about the impact of changing consumer preference on the market. This marketing research indicates that the shift in consumer demand from regular to shale gas has created a dire need for a change in the existing infrastructure so as to increase the supply of shale gas into the country. It is therefore worthwhile to realize that when a supplementary good is introduced into an existing market, it creates more competition towards the existing good. However, the need to change the distribution channels is sometimes cost-ineffective because it increases the cost of production before the product reaches the consumer. In relation to this, Jonathan Katz of the Industry Week writes that “studies indicate that shale gas poses significant potential for the manufacturing sector” (Katz, 2011, p.1). This should that there is a dire need to expand the amount of shale gas exported by improving the existing infrastructure.
This article also highly employs the analytical methodology of the marketing field which relates to the content matter studied within this course. The author is keen to analyze the initial businesses at the Gulf and how these businesses are now facing stiff competition from the high demand of shale gas. The author brings out the idea that it is essential to take into considering the cost involved while shifting from one product to the other due to market pressures.
Works Cited
Foy, P. (2002, May 16). Oil- Shale Companies Tout Research Projects. Business
Week, pp. 1-3. Retrieved from http://ww.businessweek.com
Katz, J. (2011, December 8). U.S. Manufacturers Gear Up for Shale Gas Boom.
Industry Week, pp. 1-7. Retrieved from http://www.industryweek.com/
environment/us-manufacturers-gear-shale-gas-boom
Washington, R. A. (2012, July 14). A Liquid Market: Thanks to LNG, spare gas
Can now be sold the world over. The Economist, pp. 1-8. Retrieved from
http://www.economist.com/node/21558456
