Final Marketing Project on Pakistan State Oil
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Introduction
Pakistan State Oil Company Limited, namely PSO was found in 1976, as a result of
amalgamation of the formal three oil marketing companies i-e Pakistan National Oils Limited,
Premier Oil Company and Esso Undertakings in Pakistan. There is a chronology of events
leading to the formation of Pakistan State Oil Co. Ltd .On January 1st, 1974, Federal Government takes over
management of PNO (Pakistan National Oil) and DPO (Dawood Petroleum Limited) and renamed it into POCL (Premier Oil Company Limited)
under marketing of Petroleum Products (Federal Control) Act, 1974.Then on June 3rd, 1974 Government incorporated Petroleum Storage
Development Corporation, PSDC. On August 23rd, 1976 name of PSDC was changed to State Oil Company Limited, SOCL. On September
15.1976 Government purchased ESSO Undertakings, vested the same in SOCL. And finally on December 30, 1976 Government merged PNO
and POCL into SOCL and named it as PSO.
As the largest oil marketing company of Pakistan, PSO is engaged in the storage, import,
distribution and marketing of Petroleum products, petrochemicals, Aviation and Bunker fuels,
LPG and CNG dominates the country’s fuel and energy needs. Since its inception in 1976 the
company has been meeting more than 70% of the country’s fuel needs. PSO’s 3805 outlets all
across the country markets more than 12 million tons of fuel products annually. This network is
supported by PSO’s 28 storage facilities with a capacity of more than 800,000 tons .PSO took a
major step in improving its distribution facilities by acquiring 12% equity in the 800km long
Karachi-Mehmoodkot White Oil Pipeline. As part of PSO’s policy of providing better customer
services, it has embarked upon its New Vision retail development program. Equipped with the
most modern facilities like Electronic dispensing units, auto car wash, convenience stores,
internet facilities and business centers, these sate of the art designed stations provide greater
customer confidence and a friendlier environment. As a manifestation of PSO’s greater customer
focus PSO 24hr customer service has been launched where customers can lodge their queries and
suggestions about various PSO products and services.
Being the largest of the three marketing companies in Pakistan, PSO has consistently maintained
an edge over its competitors Shell and Caltex. With an overall market participation of over 72%
in 1997-98, it sold 6.244 million tones of petroleum products during the half year ended
December 31st, 1999 against 5.633 million tones sold during the corresponding period last year,
showing an increase of 10.8%.
Continuous growth
PSO continues to expand its physical, technical and marketing resources to meet the requirements of the country .To keep pace with growth, PSO
has maintained International Collaborations to import latest technology. These are:
1. Castrol (UK) Blending and marketing of lubricants in Pakistan
2. Air Total (France) Technical and Commercial agreements in Aviation Services
3. Exxon Chemicals (Singapore) Petrochemical Business And Technology.
Mission statement
To ensure availability and security of sustainable supply of oil and gas for economic development and strategic requirements of pakistan and to
coordinate development of natural resources of energy and minerals.
Strategy to achieve mission
To adopt an integrated approach for promoting exploration and fast track development of oil, gas and mineral resources. To deregulate and
liberalize and privatize oil, gas and mineral sector through structured reforms. To attract private investment and to establish credible institutions
for facilitating the development of petroleum and mineral sector. To develop technical professional human resources. To optimize existing energy
delivery infrastructure oil and gas pipelines. To reduce imported fuel oil consumption with indigenous gas by optimally balancing the gas
availability and supplies from local and imported resources.
Importance of company within industry
It would not be wrong to say that ‘PSO’ is having a brand and loyal image in the industry. On the basis of this brand image we can have an idea
about the ranking and positioning of “Pakistan State Oil Company” in the industrial sector. ‘PSO’ has been serving the entire industrial sector in
Pakistan since 1971. As positioning of company within market is a means to target a customer. So we can say that ‘Pakistan State Oil’ is no doubt
having the useful and simplest tool to the marketers in the industrial sector. The importance of the ‘PSO’ in industry is due to the fact that it
always launch a product according to specific requirements of a particular industry. So in this way ‘Pakistan State
Oil ‘ is having more loyal customers that they never switch to another company. The important point is that importance of any organization is
related to its perception. The positioning basically is the perception of products and services in the minds of consumer.
And the perception differs from person to person, what do you think about the quality and value, I may not favour that. For example you may go
in favour of usage of ‘CNG’ because your perception of that product is excellent but I may not favour that, as my experiences of that particular
product are not well and good. The importance of “Pakistan State Oil “in the industry becomes obvious when we talk about the different
industrial products which they are offering in the market. The most popular products of “Pakistan State Oil” which are used in bulk amounts by
the industrial are: kerosene oil, furnace oil, lubricants and diesel. ‘PSO’ is the largest lubricants marketing company in Pakistan. The major
consuming industries for ‘PSO’ products are: sugar mills, steel mills, edible oil mills, independent power plants (IPP’s) and paint industry.
The importance of “Pakistan State Oil” to the sugar mills is due to the fact that they are offering furnace oil and lubricants for the protection and
safety of their machinery and Plants. “Pakistan State Oil” is now offering Doorstep ‘PSO’ lubricants delivery i.e. free lube delivery anywhere you
want. Whether you are a ‘PSO’ industrial consumer, lube shop agent, or customer. You can now have ‘PSO’ lubricants delivered at your
doorstep, this service is totally free of cost anywhere. “Pakistan State Oil “ has a complete range of automotive lubricants. Some of these are used
in the steel industry. These lubricants makes it possible that the machinery and plants can work more efficiently as they reduces
The friction prevents all the barrier to the performance .The above statement is no doubt true “Pakistan State Oil” is totally committed to quality
and excellence and its lubricants department is ISO 9002 certified for testing and processing facilities of all automotive lubricants.
“Pakistan State oil Company Limited” also supplies imported or local chemicals to various industries. Among these industries the paint industries
and edible oil mills are important consumers of industrial chemicals. These chemicals are tauline, benzene, hexane and solvent oil. Edible oil
mills which may be called ghee mills are using hexane. Lubricants and chemical department remains in the activity of launching new products for
the benefits of industries and to attract the new industrial consumers. “Pakistan State Oil” makes it possible by extending lube testing and
advisory services to all customers to drive maximum benefits from its products. In other words we can say that the importance of Pakistan State
Oil” in the industry is due to the fact that it is a public limited company.
Therefore, it is offering its specially designed products to the “Independent Power plants” (IPP’s) which includes army, railways and WAPDA.
Army uses “PSO” products for the refueling of tanks. So the ranking of “Pakistan State Oil Company” according to the Divisional Manager is
defined as:
“PSO has top oil market”
(Divisional Manager: Khawar Jilani)
pattern of holdings of the shares held by the shareholders
Pattern of holdings of the Shares held by the Shareholders (%)
Categories of
Shareholders
1996
1997
1998
1999
2000
Individuals
15.58
14.41
13.22
16.17
16.38
Investment
Companies
0.62
0.52
0.52
0.37
0.20
Insurance
Companies
4.19
3.67
3.26
3.76
3.63
Joint Stock
Companies
0.93
0.79
0.86
2.13
2.28
Financial
Institutions and
Banks
33.54
31.16
28.37
32.65
43.73
Modaraba
Companies
0.05
0.02
0.02
0.06
0.25
Federal Government 25.51
25.51
25.51
25.51
25.51
Securities and
Exchange
0.00
0.00
0.00
0.00
0.00
Commission of
Pakistan
Abandoned
Properties
Organization
0.48
0.48
0.48
0.48
0.48
Charitable
Institutions
0.26
0.26
0.26
0.27
0.28
Foreign Investors
18.84
23.18
27.50
18.60
7.26
organizational structure
functional departments of pso
1. Marketing Department.
2. Finance Department
3. Supply & Distribution Department
4. Operations Department
5. Information System Department
6. Human Resources Department
7. Training & Organizational Development Department
Importance of marketing department within Organization
An advanced organization like “Pakistan State Oil “needs some sort of marketing system to satisfy the efforts of all the people working in the
organization which are required to satisfy the varied needs of all its consumers. Importance of marketing department within the organization is
due to the fact that “it is both a set of activities performed by organizations and social classes.” Marketing is also important in an organization as
it is directly related to the products and services offered by the company. Divisional Manager of ‘PSO’ said that:” the marketing department
within our organization serves as front line fighter to their competitors. Without it they can not project and introduce new products. So it should
be proactive and customer focussed. You have product and you are unable to sell it if you do not market it. Therefore, we can say that marketing
department plays a vital role in the profitability of an organization.”
Marketing plans are vital to the success of an organization because they give direction that how the particular objectives are to be achieved and
how we intend to do that. Therefore whenever “Pakistan State Oil” is going to introduce a new product or is going to provide a new facility to its
potential customers, the marketing department of “PSO” always serves as a connection bridge by providing necessary information to its
customers either by print media, electronic media or by internet. So they claim that for “Pakistan State Oil Company Limited”, the customer
comes first, always and every time.
They are committed to providing the best products and services to all their kind patrons. The main objective and of “PSO” marketing department
is to continuously upgrade their products their presentation to keep the customers fully satisfied. In line with this policy on Oct 1st, 2000 they
introduced PSO/CASTROL industrial and automotive lubricants in 210 litre plastic drums .The new plastic drums are specially designed to
withstand tough handling conditions especially during transportation which is subjected to continuous vibration and high axial force. Moreover,
the single mould design of these drums makes virtually leak proof. All this is basically PSO’s effort in not only providing efficient service to you
but also in making the environment better and safer.
It is one of the marketing plans of the “Pakistan State Oil “ to promote and market their product according to laws and regulations of the country.
The marketing department of “PSO” also keeps in mind the current state of technology i.e. they make their strategic plans according to the latest
technology e.g. now they have launched their petrol pumps on the new vision. In this they are also confronted with the marketing plans
campaigns of the competitors. In early 1990’s “Shell Pakistan” introduced the” retail visual impact “. It renovated the petrol pumps at the same
international standards. So the “Shell” influenced the “PSO” market. This was very tough time for “PSO” as its most of the loyal customers were
switching towards “Shell Pakistan”. But now “PSO” has improved its marketing and has introduced a new vision. So now “PSO “ has given time
to its competitors because it has largest infrastructure and is having largest Depo’s. All this is done through the efforts of its marketing
department. The another reason of its success is due to the fact that it is both profit and service oriented organization.
Marketing Departments of PSO
Being the largest oil marketing company, PSO has the following marketing departments:
1. Retail.
2. Industrial consumers.
3. Aviation.
4. Compressed Natural Gas.
5. Liquefied Petroleum Gas.
6. Chemicals.
7. Marine.
8. Lube sales and Agency trade.
Retail
The basic concern of this department is with petrol pumps. To enhance the sales of petroleum products in already existing petrol pumps and to
install new one are its major objectives .It gives certain targets to outlets dealers (owners) which they have to achieve in a certain time period.
The 3805 outlets all across the country are supported by storage depots which are being facilitated by the product movement through tank lorries,
railway tank wagons and pipelines. The major policy of this departments these days is the new vision program of outlets .It makes the decision of
new vision on the basis of some factors like location of outlets, potential of sales area, existing sales, competitors strong hold etc. There are three
ways to bring the outlets in new vision. These are:
100% contribution by company
50% contribution by company
100% contribution by dealer
Being the government organization, previously there were restrictions on new visions of outlets but as Shell International initiated this policy, it
became a necessity for PSO to take this step.
So the retail department is actively participating in distribution, storage and in new vision programs.
Industrial consumers
PSO is playing an equal important role in industrial sector. This department deals with marketing of products like furnace oil, kerosene oil, high
speed diesel, lubricants, petrol etc for Independent Power Plants (IPPs), Wapda, Army, Railways, Sugar mills etc. From the locomotives of
Pakistan Railways to the giant turbines of power projects, all are fueled by PSO. Being fully alive to the responsibilities towards the agricultural
sector PSO’s 700 strong agency network helps keep the farm machinery running. Army needs of HSD and lubricants are also under its
responsibility. Further, its kerosene sales are a major source of energy for the rural and lacking gas facilities.
Aviation Department
PSO remains equally strong in Aviation and Bunker Sales. PSO has been constantly upgrading its facilities to serve a wide range of commercial
aircraft. Through a chain of eight Aviation Service Stations scattered all across the country PSO fuels the aircraft of many local and international
airlines. Acquisition of new Lahore Terminal Complex at the Lahore International Airport has enabled PSO to serve the busiest corridor of
East/West bound flights benefiting the airlines in shape of time saving and lesser fuel burn off. While it’s bunkering facilities at all the major
ports of country fill up the ocean liners of many nationalities facilitating the nation’s international trade.
Compressed Natural Gas (CNG) Department
This department is concerned with promoting the use of CNG in vehicles. This use is being encouraged to reduce the pressure on petroleum
imports, to curb pollution to improve the environment. The existing price differential between CNG tariff and motor gasoline will be maintained
as an incentive for CNG use. This department is making efforts to exempt the import of CNG machinery, equipment, conversion kits, CNG
cylinders etc from duties and sales tax for a period of five years. Also efforts have been going to eliminate double taxation in the form of excise
duty on CNG.
Liquefied Petroleum Gas Department
LPG is filled in cylinders at high pressures. PSO started marketing of LPG in 1981 in South area (Karachi). Now all three refineries are producing
LPG.
The Government has taken a bold and far-reaching initiative and liberalized integrated infrastructure projects of LPG, free from government
guarantees and permission. Now all credible LPG companies are free to develop integrated projects of LPG import terminals, storage facilities,
inland transportation, storage depots and retail marketing / distribution without requiring any guarantees or permission from government except
the marketing license which would be issued without any difficulty. In Pakistan there are different marketing companies of LPG like Pak Gas
(PSO), Fon Gas (Fauji Foundation) , Sui Northern Gas , Lube Gas and Sun Gas etc . Now this department of PSO is actively dealing with the
purchase and supply of LPG cylinders for household and commercial purposes.
Chemical Department
This department is engaged in the business of chemicals derived from petroleum called petrochemicals. Most of the chemicals are imported in
bulk and some are manufactured in refineries. these chemicals are imported from Europe , Middle East etc through ships , Local and imported
chemicals are supplied to various industries for their chemical needs. These chemicals include toluene, methyl , benzene, polyol, hexane used in
edible oil mills, solvent oil used in paint industries etc.
Marine Department
The basic purpose of this department is to fulfill the needs of shipping firms. The refueling of ships is done through this department. Supply of
lubricants to shipping corporations is also done through this department. For marine department, the government has fixed the prices and owing
to high prices of oil, share of this department is nominal. Supply is made available through pipelines, tank lorries and barges (ships).
This department sells furnace oil , LDO and HSD to Karachi port .
Lube sales and Agency trade Department
This department is concerned for making agreements of manufacturing and marketing the lubes. PSO has maintained International standards of
its lubricants. It has a technical collaboration with Castrol, England. Lubricants are locally manufactured. PSO has 10 blending plants; 3 in
Karachi, 1 in Lahore and 5 blending plants are affiliated. Marketing of lube oils is done through agencies and petrol pumps. Major products being
marketed are diesel lube, CR 40 and GTX.
Importance of Marketing research
Market research and marketing research are often confused. 'Market' research is simply research into a specific market. It is a very narrow
concept. 'Marketing' research is much broader. It not only includes 'market' research, but also areas such as research into new products, or modes
of distribution such as via the Internet. Here are a couple of definitions:
Marketing research is the function that links the consumer, customer, and public to the marketer through information - information used to
identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and
improve understanding of marketing as a process. Marketing research specifies the information required to address these issues, designs the
methods for collecting information, manages and implements the data collection process, analyzes, and communicates the findings and their
implications.
Obviously, this is a very long and involved definition of marketing research.
“Marketing research is about researching the whole of a company's marketing process “
This explanation is far more straightforward i.e. marketing research into the elements of the marketing mix, competitors, markets, and everything
to do with the customers.
Marketing is no doubt the most important tool for the success of an organization. It helps to recognize the problems that are confronted to an
organization. The basic purpose of this research is to identify the problems and then find out the solutions for that. In PSO they are having the
research and development in the regional headquarter Karachi. But this department is not so much efficient. They are not having the research
department any other offices all over the Pakistan except Karachi. The reason for their negligence to research department is that they believe that
“ Pakistan State Oil Company Limited” is already having strong market position. They are having the top oil market among the three most
leading oil companies in Pakistan, which are PSO, Shell, Caltex. PSO is having the largest market share among all these three. So the
management of PSO is that as they are already earning up to the mark so there is no need to bear the expenses of the research and development.
As they believe that if they are going to maintain the research and development department it would be an extra burden on their company.
In order to meet the requirements of the customers and facilitate them in a better way it is necessary for “Pakistan State Oil Company Limited” to
maintain the research department and to make more active and efficient the existing department in the regional office. It is also needed to
compete in the market. As Shell is having the research department which is more advanced and equipped with the technological skills and due to
this Shell is able maintain its market image in a better way than PSO.
segmentation
MARKET SEGMENTATION
Diesel
Basis for the market segmentation for hi-speed diesel are:
Engine Power
Motor Vehicles above 1300 cc
Geography
Market is divided into Roral & Urban areas, where placement and promotion policies differ. On roral areas selling is through oil agencies and in
Urban areas placement is through petrol pumps.
Income
The other base of market segmentation is income a:
Vehicles and machines which consumes Hi-speed diesel are usually involved in commercial activities. So, people involved in such kind of
business belong to middle-middle class and above.
Market segmentation for petrol
Market for petrol is segmented on the basis of following.
Engine Power
Vehicles or machinery having engine power below 1000 cc.
Income
On income basis, there are basically three groups:
Lower Middle
Middle Middle
Abore Middle
Lower Middle
In this social close people who are having vehicles/machinery from (49 cc to 100 cc) which includes. Vespa- motor- cycles.
Middle Middle Class
Includes those people who are having small cares like (Suzuki, Charade, Santro etc) means, they are used to travel by these vehicles mostly
within the city. Those people have income group which can be classified as middle class.
Above Middle Class
Then those people who are having vehicle that can be classified a luxury vehicle.
(Pajero, Jeeps, Limousine, Mercedes)
Toyota (Latest Models), Honda (etc).
Market segmentation for GTX Mobil oil.
The segmentation of GTX Mobil oil has been done on the basic of consumption level which is as follows:
1. Light Users
light users include those people who have vehicles/machinery that consume mobil oil from (1 liter to 4 liters) i-e Motorcycle and Rickshaw –
generators (Light).
2. Mediocre User
Includes those user who are having vehicle/machinery that consumes (4 liter to 12 liter) mobil oil i.e. small ears and light machinery.
3. Heavy User
Includes those user who are heaving vehicles and machinery, that consumes more than 12 liter, which includes heavy transport, truck, buses
loaders, road rolers, tractors and industrial units.
TARGET MARKET
PSO, as a public oil company, which has a Govt. support also. Its target market for selected three products is as follows:
HI-SPEED DIESEL
Target market for hi-speed diesel can be divided into:
1. Agriculture Sector
Agriculture sector includes. The landlords, who have their own irrigation units and they use diesel in their operations. Diesel is also used in
tractors, cultivating machines and in harvesters.
2. Govt. Sector
PSO also has a very good market in Govt. sector, which include WAPDA and
3. PAK Forces
Pakistan Army, Air Force, Navy, all these are the target market of PSO-particularly for hi-speed diesel. Moreover, transports that are involved in
loading, cargo activities i.e. public transport, private transport Co. trucking (Goods transport stations).
Hi-speed diesel is also consumed by the diesel general motors, which include vehicles that are above 1300 Coca-Cola. (1C – 2C engines to heavy
power engines).
PETROL
Target market for the petrol car below 1300 Coca-Cola. Light user like people who have motorcycles. Taxis and rickshaws and generator.
Castrol GTX MOBIL OIL
Target market for GTX mobil oil is large vehicle, in Govt. sector, highway authority. Who used their machinery to develop the infrastructure?
FWO (Army) services stations and workshops.
PRODUCtS OF PSO
PSO Automotive Oils
PSO Industrial Oils
Castrol Automotive Oils
Castrol Industrial Oils
Industrial Chemicals
Fuel Oils
PSO AUTOMOTIVE OILS
Engine Oils
Super Engine Oil
Premier Motor Oil
PSO CNG Oil
Turbo Engine Lube X
Turbo Engine Lube (SAE 15W/40)
Turbo Engine Lube LD
Turbo Engine Lube (SAE 10W-30 & 20W-50)
Diesel UBE LD/MLD
Diesel Lube D-3
Diesel lube HD
Tractor Oil
Engine Lube
Gas Engine Oil
Two-Stroke / Flushing Oil
Gear / Transmission Fluids
Gear Oil EP (GL-5)
Gear Oil EP
ATF
Brake Fluids
Hydraulic Break Fluid HD
Automotive Greases
MP Grease
PSO Industrial OILS
Circulating Oils
Texol/Texol-K
Spindle Oils
Spin cot
Hydraulic Oils
Hydro
Hygrolaw
Turbine Oils
Turbine Oil
Gear Oils
Gear Oil MEP
Gearled EP
Refrigeration Oils
Low Pour Oil
Cylinder Oils
Cylinder Oil M
Asphaltic Oils
Sugar Mill Oil
Bearing Compound
Gear & Wire Rope Compound
Heat Transfer Oils
Heat Transfer Oil
Metal Working Fluids
Solcut Oil
Super Solcut Oil
Neat Metal Cutting Oil
Quenching Oil No:10
Slide Way Oils
Slide Way Oil
Process Oils
Process Oil-R
Jbo/Rpo/Wbo
Transformer Oils
Transformer Oil
Industrial Greases
Alpha & Alpha EP Greases
Moly Grease EP
Castrol Automotive OILS
Engine Oils
GTX Magnatec
GTX
GTX-XL
RX Super Max
Turbo Max
CR40
CR40 Plus
RX Super
CRD
DD 40
CRI
CR
Agri Castrol MP
TLX
MXD 400
MXD
Marine MLC
Gear/Transmition Fluids
Hypoy B
Hypoy EP
Dexron III Mercon
TFP
TQ
Brake Fluids
Brake Fluid HD
Automotive Greases
LM Grease
Castrol Industrial Oils
Circulating Oils
Magna
Hydraulic Oils
Hyspin
Hyspin AWS
Hyspin AWH-M
Turbine Oils
Turpak
Perfecto_T
Gears Oils
Alpha ZN
Alpha SP
Refrigeration Oils
Ice Matic
Compressor Oils
Aircol PD & SN
Cylinder Oils
Cresta V
Asphaltic Oils
Grippa
Heat Transfer Oils
Perfecto HT
Metal Working Fluids
Cool Edge BI
Ilocut
Iloquenc 9
Slide Way Oils
Magna GC/BD/CF
Industrial Greases
Spheerol AP & EPL Greases
Industrial Chemicals
Industrial Chemicals
Solvent Oil
Mineral Turpentine (MTT)
Hexane
Toluene (Nitration Grade)
Mixed Xylene (Nitration Grade)
Isopropyl Alcohol
Methyl Ethyl Ketone (MEK)
Vinyl Acetate Monomer (VAM)
Normal Butyl Acetate
Fuel Oils
High Octane Blending Component
Premium Plus (SGP)
High Speed Diesel
Kerosene
Light Diesel Diesel Oil
Furnace Oil
Since there is a variety of products offered by PSO and all are in great demand. But even then we have selected three products which PSO is
believed to have the highest market.
Single Grade Petrol (SGP)
High Speed Diesel (HSD)
Castrol GTX
marketing mix
The 'marketing mix' is probably the most famous phrase in marketing. The elements are the marketing 'tactics', also known as the 'four Ps'. The
marketing mix elements are product, price, placement and promotion.
Some commentators will increase the mix to the 'five Ps', to include people. Others will increase the mix to 'Seven Ps', to include physical
evidence (such as uniforms, facilities, or livery) and process (i.e. the whole customer experience e.g. a visit the Disney World). Neil H. Borden
coined the term in his article 'The Concept of the Marketing Mix' in 1965. The concept is simple. Think about another common mix - a cake mix.
All cakes contain eggs, milk, flour, and sugar. However, you can alter the final cake by altering the amounts of mix elements contained in it. So
for a sweet cake add more sugar! It is the same with the marketing mix. Varying the mix elements can alter the offer you make to your customer.
So for a high profile brand increase the focus on promotion and desensitize the weight given to price.
Products
Single Grade Petrol (Premier Plus)
High Speed Diesel (HSD)
Castrol GTX
Single Grade petrol:
Compatible with mineral and synthetic oils and most hydraulic oils. Blends with most greases, pastes, 2-stroke fuel oil, cutting oil, chain oil,
compressor oil, axle oil, drilling lubrication, tapping fluids, hydraulic oil, mining fluids, petrol, diesel, marine fuel oil, scour able oils, coolants,
anti freeze, soluble cutting fluids, penetrating oils, flushing oils, general purpose lube oils.
SGP does not:
Flake, Melt, Crack, Expand, Creep, Scuff, Drag out, Contract, Migrate, Wash off
SGP helps to prevent:
Seizure, Galling, Vibration, Noise, Frictional heat, Weight Loss.
SGP improves:
Loading on bearings, cutting tool versatility, product finishing
PRODUCTION
Productivity and production may now improve using existing staff and equipment. Wastage is reducing on finished goods.
Single Grade Petrol products benefits..
Saves
petrol/diesel fuel up to 20%
Improves
engine power (BHP) 8%
Reduces
exhaust emissions 46%
Reduces
all round friction 90%
Reduces
oil consumption 20%
Improves
Saves
compression 16%
electrical power 14%
Improves
Nm rating on gears 12%
Improves
cutting life 200%
Reduces
vibration 50%
Reduces
operating temperature 20%
Improve
torque values 12%
Improves
Extends
the life of filters 20%
Improves
Extends
frictional flow rates 15%
production output 20%
the battery life on tools 12%
Increases
operating speeds 10%
Reduces
weight loss on bearings 50%
Extends
machine life 30%
Reduces
operating noise 10%
Improves
the life of oils 100%
So they say that SGP, which is commonly known as petrol, is their fast moving product. They also claimed that it is profitable product as its
consumption is very high.
2. Castrol GTX…
Multigrade super high performance oil for use viscosity range of SAE 20W-50, gives the rapid circulation and adds protection during start up
from cold, where 80% engine wear may occur, with extra protection for engines operating in hot and dusty climates.
Benefits
Longer engine life and power retention.
Improves oil pressure and consumption.
Protects against soot, varnish, black sludge formation, acid and corrosion
Performance
SAE 20W-50
MIL-L-46152D
API SG/CD
MIL-L-2104E
Because of all these description it is also considered as one of the fast moving product. Independent power plants, Wapda and etc mostly demand
it. It is used as lubricant in the petrol consumption cars.
3. High Speed Diesel
High speed diesel is one of the fastest moving product among other products of PSO. It is most commonly used by heavy engine vehicles and
automobiles. It is used in these areas:
Agriculture
Industry
General Public
It is used in large, slow speed marine engines and automotive engines as well.
Pricing Strategy of Petrol & Diesel
Both petrol and diesel are placed under the head of fuel oil, so that the pricing strategy of both of these products is same. And well discuss it in
the context of pricing strategy of full oil.
Fuel oil prices are set by a committee for all oil marketing companies. And to this fact all oil-marketing companies are having same. Petrol and
diesel prices. There is almost no difference between the fuel oil prices of PSO and Shell, or any other competitor.
Fuel oil pricing strategy its standard. Set by OCAC (Oil Companies advisory committee). Up to every fortnight the fuel oil prices are revised.
Pricing strategy of Castrol GTX
There is no hard and fast rule for the pricing strategy of castor GTX. But still there is a defined strategy of prices. In case of Castrol GTX, that is
a lubricant, all oil companies set their own prices which means prices of lubes vary from PSO, Shell and Caltex. These prices are based upon.
Cost
Handling charges
Storage charges
Because some companies have to bear less cost handling charges as well as storage charges that’s why; this product of PSO has greater demand
in the market. Being a government company PSO has to bear less cost and handling and storage charges. Lubricant prices are revised after ever 46 months. They have defined their pricing strategy as competitive prices. They have said that we have competitive prices. Two factors are
considered while setting the prices
i Profit
ii Services
In case of lubricants, they set their prices lower than their competitors.
Current prices of these products
Single grade petrol Rs. 32.26
High speed diesel Rs. 15.70
Castrol GTX Rs. 590.00 (1 Tin/ 4 litres pack)
Placement, distribution, channel, or intermediary
A channel of distribution comprises a set of institutions, which perform all of the activities utilized to move a product and its title from
production to consumption.
Place is also a channel of distribution or intermediary. It is the mechanism through which goods and/or services are moved from the
manufacturer/ service provider to the user or consumer. There are many types of intermediaries such as wholesalers, agents, retailers, the Internet,
overseas distributors, direct marketing (from manufacturer to user without an intermediary), and many others.
For Single Grade Petrol (SGP) and High Speed Diesel (HSD), the most viable placement channel is the products movement from wholesalers to
retailer’s .For general retail outlets; this facility is available in the form of tank lorries. For industrial needs, railway tank wagons are the most
appropriate source. Previously Government of Pakistan had been paying the freight charges of their placement but now for the product
movement, retailers have to pay themselves the freight charges. As far as the placement of Castrol GTX is concerned, different lube vans are
available which take the lubes from manufacturers to dealers of petrol pumps to be available on lube shops. Also there are different agencies for
lubricants, which take them from dealers on their own expenses and sell to general public.
These days the enhancement of existing facilities and development of new infrastructure - especially pipelines, which are the safest, efficient &
most environment friendly mode of transportation, is being looked up carefully. Pakistan Railway is also gearing for moving more product
upcountry. This is very important to reduce the pressure on road movement
For product movement network, PSO all over the Pakistan has,
Tank Lorries 13400
Railway Tank wagons 1120
Pipelines 13
PSO has storage depots all over Pakistan. These include,
South Zone Depots
Hyderabad, Daulatpur, Sukkhur, Sanghi, Quetta ‘C,’ Khuzdar and Pasni.
NORTH ZONE DEPOTS
Chakpiran, Faqirabad, Taru Jabba, Serai Naurang, Kundian, Juglot, Chitral and Kohat.
CENTRAL ZONE DEPOTS
Vehari, Shershah -2 (B&C), Lalpir, Sahiwal, Habibabad, Faisalabad ‘A’, Faisalabad 'B',
Badami Bagh, Kala Shah Kaku, Gujranwala, Sargodha and Kotla Jam.
Swot Analysis
SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key
issues.
Once key issues have been identified, they feed into marketing objectives. It can be used in conjunction with other tools for audit and analysis,
such as PEST analysis and Porter's Five-Forces analysis. It is a very popular tool with marketing students because it is quick and easy to learn.
SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. For example, strength could be
your specialist marketing expertise. A weakness could be the lack of a new product. Opportunities and threats are external factors. For example,
an opportunity could be a developing market such as the Internet. A threat could be a new competitor in your home market.
STRENGTHS
PSO is having good competitive skills.
It has adequate financial resources as it is a public sector organization and is having support of the government.
It is a well-recognized market leader as it has top oil market in Pakistan.
PSO petrol pumps are computerized
PSO is having product innovation as it frequently introduces new products according to the requirements of its consumer.
It has well conceived functional area strategies.
WEAKNESSES
The organization is falling behind in research and development.
Sometimes the organization is unable to implement strategies in front of its competitors.
Although the services of PSO are quite well but it has weak market image as compared to Shell.
OPPORTUNITIES
Diversity into the related products i.e. creating some unique features in the products to attract their consumer.
Add some complementary products in the future.
It is likely in the future that the organization is going to expand the business and enter into the new market.
Ability to move with the better strategies i.e. applying some new ways to cover the losses, increase the financial resources
or increase the market share.
Introducing the new product having the features that are very first in the market i.e. not in any other product offered by any
competitor.
THREATS
Likely entry of the new competitors that are having new technology and are going to provide better services.
Rising sales of the substitute products offered by the competitors.
Adverse government policies i.e. government may increase the taxation rate on the products offered to the customers.
Growing competitor pressures can be proved as threat to the survival of the organization.
Buyer’s needs and tendencies may change and they are not fully satisfied by the existing products and may switch to the
other products offered by the competitors.
Adverse demographic changes.
SUGGESTIONS
This is needed for the organization to improve the services.
PSO is lagging behind in the field of marketing research. So they should pay attention to make the research and
development department efficient and active.
Management should work in depth to know that which petrol pumps are more profitable and which are generating low
sales so they can adopt new policies in order to increase sales.
Conclusion
Term report on marketing enabled me to have practical experience. Since it was my first experience to make a report on marketing. This provided
me the opportunity to have close might into the business activities. The main source of data collection was interviewing the employees of
“Pakistan State Oil Company Limited”. So it becomes a source of sharpening my communicator and interpersonal skills. By face to face
interviews with Divisional Manager (Industrial consumer) and Divisional Manager (Retail) I come to know that how to communicate with
personnel’s. It gave me confidence to move in professional field.
SWOT Analysis:
SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key
issues.
Once key issues have been identified, they feed into marketing objectives. It can be used in conjunction with other tools for audit and analysis,
such as PEST analysis and Porter's Five-Forces analysis. It is a very popular tool with marketing students because it is quick and easy to learn.
SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. For example, strength could be
your specialist marketing expertise. A weakness could be the lack of a new product. Opportunities and threats are external factors. For example,
an opportunity could be a developing market such as the Internet. A threat could be a new competitor in your home market.
When we went to PSO regional office situated at the mall road of Multan Cantt, we noticed some similar strength there and some of our
observations were not analogous with each other. This difference might be because of our observation criteria or because of our personality
differences.
So that according to me the SWOT analysis is like that:
STRENGTHS
A distinctive competitive advantage.
Adequate financial resources.
An acknowledged market leader as it is having largest market shares of 72%
Competitive advantage as it is considered as governmental Company.
The whole company is fully computerized.
Being a government company it has big contracts with other governmental organizations like Pakistan Railways, PIA etc.
Pakistan State Oil is the only Oil Marketing Company of Pakistan that has received top 25 Companies Award.
WEAKNESSES
Falling behind in Research and Development.
Below average marketing skills
Less developed website.
Opportunities
There is lot diversity in their products.
They are having faster market growth.
Complacency among rival firms.
They are having opportunity to create better strategic group.
Threats
They have a threat to face adverse governmental policies.
They have a threat of growing competitive pressure.
The biggest competitive threat which they are facing now is “Shell”
Findings:
According to our study
The system of the whole company is computerized
In the whole organization is using modern technology process and techniques.
All of its officers are very co-operative.
They are sincere enough to their company.
All of them were having the strong attachment with PSO.
The employees are committed with their duties.
It is one of the biggest oil marketing company in Asia
It has the biggest market share in Karachi Stock Exchange.
PSO has less developed Research and Development department.
PSO is having the support of government.
Suggestions:
Nothing is perfect in this life so that PSO should also have to improve itself.
Its should improve its research and development.
They should improve their services at their retail outlets.
They should focus more on their marketing activities.
They should promote themselves during national events like cricket tournaments.
Conclusion
In this way, it was a good chance to get practical experience and close look of official working. During our project we got a prestigious exposure
of business field. We got a chance to sharp our interpersonal skills and communication skills. We came to know how to communicate in the
business world and attitudes of personnel. We got confidence to move in the practical field.
Swot analysis
SWOT ANALYSIS
THREATS
Competitive threats
Loss due to similar products
More inclination towards CNG
OPPORTUNITIES
Can enter new markets
Diversity into related products expansion of shop stops
More contracts with PARCO
STRENGTHS
Acknowledged market leader
Corporate responsibility to community and environment
Distinctive core competencies
Well conceived functional area
Awarded company
WEAKNESSES
Weak R&D abilities
Plagued with internal problems
Interference by govt.
Weak conceived image
Vulnerable to competitive pressures
SWOT Analysis, which is key step in planning, helps marketers to focus on key issues. Once these key issues have been identified they feed into
marketing objectives.
Pakistan State Oil Company Ltd. Have also some strength, weaknesses, opportunities and threats as being in the oil marketing company.
Strengths
The most dominant strength of PSO is that it is the largest Oil Marketing Company (OMC) in Pakistan with a market share
of 72%.
PSO utilizes sophisticated equipment and sound industry standards to prevent any form of pollution and preserve natural
habitat.
PSO was the first oil marketing company (OMC) to introduce Premier Plus in Pakistan. It is a low lead gasoline with a
special additive to reduce Carbon Monoxide levels in vehicle emissions. CNG, a much cleaner fuel in place of gasoline, is
also being introduced in Pakistan by PSO.
PSO has a distinctive core competence of strong supply chain as well as strong value chain. Starting from their supplier to
their end consumers, they are well thought off.
Being a government organization, PSO is the leader in distribution of petroleum products to all business buyers.
PSO has been ranked as No.1 performing company in Pakistan by Karachi Stock Exchange and received award for the 16th
consecutive year in 1999-2000.
PSO is the only company in Pakistan which is listed in top 1000 companies of Asia and has received TOP 25 Companies
Award every year, for the last 13 consecutive years.
Weaknesses
At present, the greatest weakness of PSO is its poop research and development capabilities as compared to its biggest
competitor, Shell. The R and D department of PSO which is centered only in Karachi is quite inactive in research field.
Being a government sector, PSO is confronted with many internal problems due to excessive staff and unnecessary
political interference.
The managing Director (MD) of company is changed every time when the government is changed which creates in stability
in the company.
As PSO is a public sector, so people poorly conceive it and there is a conception of lack of managerial skills and talents
about it.
As Shell is the biggest competitor of PSO with a market share of 20% and innovator in new vision program, it has created
competitive pressure for PSO.
Opportunities
PSO can enter new markets by clarifying their image through efficient and effective marketing skills
It can create diversity in its products by complementary products introduction.
It can expand the shop stops into proper restaurants to provide better service to travelers and to create a more attractive
vision of retail outlets.
It can sign more reliable and strengthening term product off-take agreement with Pak Arab Refining Company (PARCO).
Threats
The biggest threat for PSO is the emerging company of France, the Total. It has started its services in Pakistan and is
gaining wide popularity.
PSO can lose its potential customers due to similarity of products offered by Oil Marketing Companies in Pakistan
Due to more inclination towards CNG, the demand for petrol and HSD is in danger .As is the law of Canadian government
for built in CNG kits in cars, it will be a threat for fuel oils if imposed in Pakistan
Findings and Recommendations
Pakistan State Oil Company Ltd is the finest Oil Marketing Company in Pakistan. Although it faces constant competitive threats from its
competitor Shell, yet it is moving fastly to gain even larger proportion of market share. The Company is maintaining the tempo of achievements
through wholehearted commitment & hard work of its Human Resources and full support of its dealers / agents and customers. It has remained in
the forefront to protect the health and safety of its employee, customers and the environment in which it conducts its daily operations and shares
with the community. The introduction of Internet facility at 150 outlets indicates PSO concern for providing modern means of communication to
PSO dealers and also opens a world of information to communities across the country. PSO is now in position to serve the requirements of a
broader base of customers. Expanding the range of services at its outlets, PSO has set up easy payment centers, in collaboration with Citibank, at
selective retail outlets of Karachi, where customers can pay their utility bills at any time of the day, avoiding the hassles of long Queues.
PSO has also to make its position stronger in this growing environment. It should appoint checking staff apart from sales men on retail outlets
who can check the quality and quantity of oil products and can listen to the claims of people. Similarly, the R and D department should conduct
research for promotion of its products and for exploring new ways of fascinating customers towards PSO products .For distributing its products in
Northern Areas; PSO has to incur some losses due to higher transportation charges. So arrangements should be made to make PSO sell on at least
breakeven.
Privatization of PSO is underway whereby JP Morgan’s financial advisory consortium is assisting the Government of Pakistan in the privatization
process. The basic purpose of privatization is to more effectively develop the hydrocarbon resource potential of Pakistan and reducing the
growing dependence on imported petroleum.
All these attributes endorse one thing, grow with grace and sound earnings, along with all those associated with PSO, i.e. its customers, business
partners, manpower and share holders. This has been the greatest asset of the Company's Management, able guidance from its Board of
Management (Oil) and Ministry of Petroleum & Natural Resources.
Conclusion
Making a term report of marketing on Pakistan State Oil Company Ltd. was a first experience of my academic career. I visited the regional office
two times along with my colleagues for gathering information. Generally there is a strong believe in public that officers in there regional offices
give a cold response when asked anything. But it is a false notion. As for as our experience is concerned we were informed of everything we
required. What I believe is that this type of practical study enhances interpersonal and communication skills. So there should be assigned more
assignments and projects to enhance our capabilities.
TABLE OF CONTENTS
Introduction 1
Mission Statement 2
Importance Of Company Within Industry 3
Pattern Of Holdings Of The Shares Held By The Shareholders 5
Organizational Structure 6
Functional Departments Of PSO 7
Importance Of Marketing Department Within Organization 8
Marketing Departments Of PSO 10
Retail 10
Industrial Consumers 11
Aviation Department 11
Compressed Natural Gas (CNG) Department 11
Liquefied Petroleum Gas Department 12
Chemical Department 12
Marine Department 12
Lube Sales And Agency Trade Department 13
Importance Of Marketing Research 14
Segmentation 16
Market Segmentation 16
Target Market 18
Hi-Speed Diesel 18
Petrol 18
Castrol GTX Mobil Oil 18
Products Of PSO 19
PSO Automotive Oils 19
Gear / Transmission Fluids 19
PSO Industrial OILS 20
Castrol Automotive OILS 21
Castrol Industrial Oils 22
Industrial Chemicals 23
Fuel Oils 23
Marketing Mix 25
Products 25
PRODUCTION 26
Castrol GTX… 27
High Speed Diesel 28
Pricing Strategy Of Petrol & Diesel 29
Pricing Strategy Of Castrol GTX 29
Current Prices Of These Products 30
Placement, Distribution, Channel, Or Intermediary 31
South Zone Depots 32
North Zone Depots 32
Central Zone Depots 32
Swot Analysis (Maria Rehman) 33
Strengths 33
Weaknesses 34
Opportunities 34
Threats 34
Suggestions 35
Conclusion 35
SWOT Analysis (Maria Mushtaq) 36
Strengths 37
Weaknesses 37
Opportunities 37
Threats 38
Findings: 39
Suggestions: 39
Conclusion 39
Swot Analysis (Misbah Shafi) 40
Strengths 40
Weaknesses 41
Opportunities 42
Threats 42
Findings And Recommendations 42
Conclusion 43