M.muneeb Strategic Marketing

8/8/2019 M.muneeb Strategic Marketing

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Pakistan State Oil:-

Introduction:-

The creation of Pakistan State Oil (PSO) can be traced back to the year 1974, when on January1st; the government took over and merged Pakistan National Oil (PNO) and Dawood PetroleumLimited (DPL) as Premiere Oil Company Limited (POCL).

Soon after that, on 3rd June 1974, Petroleum Storage Development Corporation (PSDC) cameinto existence. PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd1976. Following that, the ESSO undertakings were purchased on 15th September 1976 andcontrol was vested in SOCL. The end of that year (30th December 1976) saw the merger of thePremier Oil Company Limited and State Oil Company Limited, giving way to Pakistan state Oil(PSO).

After PSOs inception, the corporate culture underwent a comprehensive renewal program whichwas fully implemented in 2004. This program over the years included the revamping of theorganizational architecture, rationalization of staff, employee empowerment and transparency indecision making through cross functional teams. This new corporate renewal program hasdivided the companys major operations into independent activities supported by legal, financial,informative and other services. In order to reinforce and monitor this structural change, relatedcheck and balances have been established by incorporating monitoring and control systems.Human Resource Development became one of the main priorities on the companys agendaunder this corporate reform.

It is due to this effective implementation of corporate reform and consistent application of the

best industrial practices and business development strategies, that PSO has been able to maintainits market leadership in a highly competitive business environment.


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Strategies of Pakistan State Oil:-

PSO is the market leader in Pakistans energy sector. The company has the largest network of retail outlets to serve the automotive sector and is the major fuel supplier to aviation, railways,

power projects, armed forces and agriculture sector. PSO also provides Jet Fuel to RefuelingFacilities at 9 airports in Pakistan and ship fuel at 3 ports. The company takes pride in continuingthe tradition of excellence and is fully committed to meet the energy needs of today and risingchallenge of tomorrow.

Pakistan State Oil, the largest oil marketing company in the country, is currently engaged instorage, distribution and marketing of various POL products. The companys current marketshare of 82.3% in the black oil market and 59.4% share in the white oil market, alone speak volumes about its success.

Vision:-

To excel in delivering value to customers as an innovative anddynamic energy company that gets to the future first.

Mission:-

We are committed to leadership in energy market through competitive advantage in providingthe highest quality petroleum products and services to our customers, based on:

Professionally trained, high quality, motivated workforce, working as a team in an environment,which recognizes and rewards performance, innovation and creativity, and provides for personalgrowth and development.

Lowest cost operations and assured access to long-term and cost effective supply sources. Sustained growth in earnings in real terms. Highly ethical, safe environment friendly and socially responsible business practices.

Strategic Objectives

1. Maximize profitability in the Lubricants business through segmented marketing and brand promotion.

2. Explore potential markets for the export of fuels and lubricants.3. Expand the PSO Cards Business by enhancing the customer base, efficient distribution and

brand partnership.4. Enhance our reach and add to our network of New Vision Retail Outlets (NVROs).5. Develop bio-fuels and expand the gaseous fuels business.6. Revamp the C-store network, introduce Quick Service Restaurants and develop strategic

alliances with local and international franchises.7. Revamp organizational structure and various functions in line with the best corporate practices.

8. Streamline systems and procedures in accordance with the changing business environment.9. Ensure full HSE compliance in all our operations and try to meet a zero accident objective

through effective system development, training, inspections and audit.10. Reinforce quality assurance by acquiring the ISO 9000 quality management certification of

various departments, and expansion of MQTU network .


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Promotion of Lubricants Business:-

Ever since its existence, Pakistan State Oil Co. Ltd. has been playing a leading role in the oilindustry of the country. Round-the-clock, uninterrupted oil supplies, all the way from Karachi toKhyber, through an integrated network of oil terminals and storage depots has been PSO'shallmark. Besides selling Mogas, Furnace Oil, Diesel, Kerosene, Jet Fuels, etc, PSO is committedto serve the petrochemical needs of the local industry and is positioned among customers as areliable, cost-effective and high-quality chemical supplier. The company markets imported andindigenous chemicals in bulk through tank lorries as well as in drums.

To cater to all kinds of lubricants customers, including automotive, hi-street and industrialconsumers by meeting the national demand through products of international standards, PSO hasset up a state-of-the-art Lubricants Manufacturing Terminal (LMT) at Korangi Industrial Area inKarachi.PSO ANNUAL REPORT 2009

Promotion of Gaseous Fuels:-

Pakistan State Oil has been putting great emphasis on the importance of gaseous fuels as primary

determinant of energy spectrum of the country. With its futuristic outlook, the company recentlyrestructured its Gas Business and brought it under one roof with a view to concentrate on thishugely-lucrative and potential energy segment, which comprises LPG, CNG and LNG.

LPG AS THE ALTERNATE FUEL OF THE FUTURE

PSO has been into the LPG business since 1981 and the past 25 years have seen the companyevolve itself as an important player in the LPG domain. From humble beginnings in the early1980s, PSO now generates over 21,000 M-tons of LPG in sales volume, supplying product inall corners of the country through a web of distributors with the brand name PakGas.

The company has upheld the tradition of positive change in the backdrop of ever-transformingmarket dynamics and in its pursuit has adopted a new, very trendy logo for itself that not onlydepicts its vibrant status but also radiates its pioneering influence amongst all LPG marketingcompanies and renews its commitment towards excellence and domination.

The company in order to deliver its promise of supplying fuel efficiently to the populace has in place four LPG storage and bottling plants, one each in Karachi, Lahore, Dhurnal and AkoraKhattak, which collectively supply over 70 metric tons of LPG per day.

LPG's reckoning as an important hydrocarbon is gaining momentum day-by-day as the marketcontinues to expand and vindicated by the fact that the government has now issued itsdirectives to set up LPG Auto Gas Stations in the country. This development is destined totransform the country's Retail Fuel landscape and PSO, being the largest fuel retailer, is all setto tap this potential. Over 100,000 vehicles are already running on LPG fuel and this segmentis expected to proliferate once LPG


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Retail Fuels Marketing and Technological Advancement:-

The transformation from orthodox bureaucratic style of management to a more progressive and professional approach has positively impacted on the Retail marketing of the company.

In the pre-transformation phase, PSO, due to the increased marketing activities of its maincompetitor Shell was struggling to maintain its market share despite a strong distributionnetwork. Similarly, Caltex also started to project its new A star is born image, which further dented PSOs market share in the industry. In order to counter the marketing activities of thecompetitors, a need for a complete revamp of PSO's marketing activities arose, which led tothe inception of the New Vision scheme.

To create a new company image through high quality service and customer care, the old PSOlogo was redesigned along with the retail outlet specifications, which redefined the PSOstations as state-of-the-art New Vision facilities. One of the most important tasks accomplishedduring the initial period of transformation was to inculcate the significance of informationtechnology amongst the employees.

All the division offices and retail outlets across the country are now linked to the head officethrough a number of state-of-the-art technical solutions, which include SAP Launch and OnlineOrder Management System. Others such as the Retail Automation Program, Price ChangingUnits, Automated Tank Gauging System, Vehicle Identification System and Field Automationare in the pipeline.

Since the inception of New Vision scheme, PSO's image and sales trend have been on the rise.Apart from the New Vision, the concept of Company Owned and Company Operated (CoCo)sites was launched in order to provide the best quality service at the PSO retail stations. Theidea was to make these stations the flagship sites under the company's maximum supervisionand intense scrutiny to maintain the highest level of operational efficiency, service andcustomer care.

In order to communicate the idea of New Vision to the customers, specially-designed sales promotional campaigns were launched. These campaigns, covering the electronic and printmedia, not only promoted the new brand image but also played an important role in rebuildingloyalty amongst the consumers.


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Comparative Analysis of PSOs Strategies Vs Shells Strategies:-

Pakistan State Oil:-

Employee Recognition To boost the morale of employees a reward and recognition schemeis in place for the last few years and has been a great source of creating a spirit of healthycompetition amongst employees. Each year employees are nominated for two company-wideceremonies viz

- Shaukat Raza Mirza Management Excellence Award and- PSO Managing Directors Performance Award

It acknowledges exceptional, smart and beyond the call of duty performance.

Motivation Survey Special efforts for continuously enriching our business systems andimplementing relative strategies have always been fruitful which are aimed at augmenting awork culture that enhances employee motivation as well as gaining a better understanding of forces that shapes motivation, attitude, behavior patterns and expectations.

Employee Motivation surveys are conducted that recognize the needs, opinions, concerns and perceptions of our human capital about the organization and what they value in terms of professional and personal interests and incentives. Keeping a human element is mind thesesurveys help identify a meaningful employee relationship with the organizational objectivesand understand their job responsibilities and work expectations.

Communication Open-book & direct approach environment

An assortment of forums/meetings at hand (Executive Committee, Management Committee,

Employee Leadership Team) inspire discipline and accelerate establishment of processes &systems Encourage team work & group dynamics while inculcating a sense of ownership throughempowered Cross Functional Teams (CFTs)

Employ Business Process Reengineering (BPR) to maintain an international workingenvironment by streamlining processes and removing unnecessary layers

Interactive sessions are regularly held by the Managing Director at all levels because clear,coherent and consistent messages ensure that employees are able to integrate the inputs intotheir thinking

All organizational changes are announced

Zero Tolerance We have high ethical standards and a Business Principles and Ethics Policyin place. We value, encourage and inculcate corporate reforms, good governance, best business

practices and an environment of continued adherence to Zero Tolerance, resulting in thedevelopment of our human capital and meeting all business challenges.


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Performance ManagementSystem of authentic performance evaluation and feed back is implemented at PSO and is anintegral part of our appraisal management

Individual performance is aligned with the business goals and company objectives

Performancebased rewards are offered to all employees on a yearly basis

Bell curve covers all management employees annual appraisal through a population spread

Products & Services PSO caters to POL requirements of a wide spectrum of customerscomprising the retail consumer, various industrial units, government, power projects, aviationand marine sectors of Pakistan. We are truly the drivers of economy of this country.

A network of 3612 retail outlets enables us to reach Pakistanis from Nagarparkar to Sost. Weare proud to cater to the fuel and non fuel needs of approximately 2.8 million customers per day.

PSO industrial consumer dominance in the government sector can be judged by the fact that allthe major government entities like OGDC, Pakistan Army, Pakistan railways, Navy, NLC,PAF Wah and HIT have entrusted PSO to meet their POL needs.

Besides supplying fuel to national power utilities like WAPDA and KESC, PSO is the solefurnace oil supplier to all Independent Power Projects (IPPs) in Pakistan with a share of over

80% in furnace oil market. Moreover, PSO is also playing its due role in meeting the growingenergy demand of the country.

PSO also supplies fuel to industrial units like textile, cement, agriculture, transport etc. Our industrial consumer base includes prestigious entities like the Presidency and the PrimeMinister Secretariat, where PSO has developed consumer outlets for timely refueling of their fleets.

Furthermore, PSO also serves the fuel needs of both national & international air carriers. Wealso provide jet fuel into-plane refueling facilities at 9 airports of Pakistan i.e. Karachi, Lahore,Islamabad, Peshawar, Multan, Faisalabad, Turbat, Pasni and Sialkot.

We also supply fuel to ships at Karachi Port, Korangi Fish Harbour & Port Qasim. Moreover,we cater to the fuel requirements of Pakistan Navy, Maritime Security Agency, Karachi PortTrust, PNSC, Faisal Marine Oil Services (Pvt) Ltd


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Royal Dutch Shell:-

Sustainable development

We are convinced that contributing to sustainable development helps create business value andreduce operational and financial risk, making us a more competitive and profitable company.

Technology and innovation

Our commitment to technology and innovation continues to be at the core of our strategy. We believe our technologies and technical expertise will be telling factors in the growth of our business.

Our major projects

Athabasca Oil Sands Project

Sakhalin II

Shell Eastern Petrochemicals Complex

Port Arthur Refinery

Pearl GTL

Qatargas 4

Perdido - worlds deepest offshore drilling and production facilityParque das Conchas (BC-10)

Gumusut

We see no trade-off between being economically responsible (profitable) and socially andenvironmentally responsible. Instead, being a socially and environmentally responsible companycontributes to our being a profitable company by helping us:

Earn our licence to operate and grow

By listening to the communities in which we work and addressing their expectations wesignificantly reduce the chance of project delays, approval failures or disruption to existingoperations. These are significant risks to our business. Contributing to sustainable developmentalso helps us attract and retain staff, customers and business partners who are central to our

business success and future growth.

Develop the right products
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By being aware of emerging changes to our customers values and changes in regulatoryrequirements, we can develop products and services before competitors that meet our customersneeds for clean, convenient and affordable energy.

Maximise opportunities

By adopting new or cleaner technologies we can improve the efficiency of our operations, reduce

costs, avoid current and future costs of emissions, and even create new income streams (likecarbon credits).In short, we have learned sometimes the hard way that applying a sustainable developmentmindset is not only the right thing to do, but it is also the smart thing to do.

Producing cleaner fuels

Transport uses over half the worlds crude oil production and accounts for around a quarter of greenhouse gas emissions. The need to secure fuel supplies and reduce the environmental impactrequires a wider range of cleaner fuels. Shell recognises this need - we have one of the broadestfuel portfolios in the industry.

Petrol (gasoline) and diesel

Petrol and diesel are the most widespread and convenient fuels. Good progress has been made in

many countriesin reducing their local emissions.

Biofuels

Produced from plants and organic waste, biofuels can help to reduce CO2 production and

improve energy security.

Hydrogen

Hydrogen could become a commercial viable transport fuel in the future offering the potential to

significantly reduce emissions.

Compressed natural gas

Compressed natural gas (CNG) can help to tackle air pollution by reducing local emissions and

cut overall CO2 production.
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Recommendations:-

Pakistan State Oils lubricants business is not much successful. In order to make it a successfulone PSO should adopt different marketing strategies. It should improve its brand image. It shouldfocus more on the advertisements of its lubricant products. Promotional campaigns should belaunched in order to increase the sales of its lubricant products and to increase the market sharein lubricant business.

Pakistan State Oil should also focus on the development of bio-fuels. It should also runcampaigns regarding its products.

Pakistan State Oil should also focus on offshore drilling in order to expand its business. It shouldalso launch different schemes like its competitors.

PSO should also focus on green environment and in the development of environment friendlyfuels. It should also focus on CSR and creating awareness of green environment and emission of green house gases among the people.

Conclusion:-

PSO is the market leader in Pakistans energy sector. The company has the largest network of retail outlets to serve the automotive sector and is the major fuel supplier to aviation, railways,

power projects, armed forces and agriculture sector. PSO also provides Jet Fuel to RefuelingFacilities at 9 airports in Pakistan and ship fuel at 3 ports. The company takes pride in continuingthe tradition of excellence and is fully committed to meet the energy needs of today and risingchallenge of tomorrow.


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Name:- Muhammad Muneeb

Roll No:- 37

Class:- BSPA 4 th Year (Morning)

Department of Public Administration

University of Karachi

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M.muneeb Strategic Marketing