INTRODUCTION:Shell is a global group of energy and petrochemicals companies. With around 93,000 employees in more than 90 countries and territories, Shell helps to meet the world's growing demand for energy in economically, environmentally and socially responsible ways. Shell Pakistan is divided into 8 functional areas i.e. Retail, Lubricants, Aviation, Operations, Finance, Corporate, Human Resource and Commercial Fuels. It has played a leading role in abridging the growing energy demand gap in Pakistan. Currently Shell in Pakistan is headed by Mr. Zaiviji Ismail bin Abdullah, Chairman and Managing Director of Shell Pakistan Limited (SPL) and Chairman of Shell Companies in Pakistan. Shell has over 100 years of experience in developing the technology and services that make us a leading provider of innovative and new fuels today. We were the first to introduce retail visual identity on its forecourts. We strive to meet and exceed customer expectations by delivering the best fuels and service to our customers at every site, every visit, everyday. With a dynamic portfolio and a fast-growing retail network, the Shell Brand is the most preferred brand amongst motorists across Pakistan. Shell has always placed great importance on the health, safety and environment aspect of the society it does business in. Safety is one of our top priorities, and we base our policies on the belief that all accidents are preventable. Over the last decade, SPL has developed a robust programme of social investment, which supports organizations and initiatives in the areas of health, education, welfare, community development, heritage and environment. In an increasingly competitive business environment, we at Shell Pakistan strive ever harder to maintain operational excellence. We strengthen standardized and simplified business processes and systems, and ensure top quality, right quantity and superior service to all customers across the country.

Sh e l l G l ob a l S iz e Shell operate in over 140 countries, World wide, Shell has 109,000 employees Gross sales proceed $379 billion Net income $25 billion Capital Investment $17 billion Cash generation $35 billion Hydrocarbon production 35 million boe/day

Worlds largest fuel retail network, with 45,000 fuel stations Listed on the stock exchanges of Amsterdam, London and New York

Shell Global Businesses

Exploration & Production Gas & Power Downstream Trading Renewable & Hydrogen Global Solutions

Shell Rimula R3 X

Triple Action Resists: Wear, Deposits, Heat SAE 15W40, API CH4 Shell Rimula R3 X Energised Protection oils feature modern high-performance lubricant chemistry specifically designed to protect against the changing needs of your driving conditions. This unique adaptive technology features multi-component systems to provide triple action protection; low wear for long engine life, low deposit formation to maintain engine performance and resists breakdown by heat for continuous protection. With a wide array of engine maker approvals, it is suitable for virtually all heavy-duty engines, non-turbocharged and turbocharged alike, in on and off-highway service.

MARKET SHARE OF CALTEX

Karachi- Branded Total Mkt Size Shell Total Caltex PSO Castrol Total 5,250,120 1,821,600 5,629,560 69,840 1,750,800 36.2% 12.5% 38.8% 0.5% 12.1% 14,521,920

C al te x h a s h i gh e r m ar ke t s h a re t h en sh e l l

Shell

1,735,750.80 Share

Caltex

2,386,657.35 Share

Rim C Rim D Rim X

520,725.24 30% 1,128,238.02 65% 86,787.54 5%

Delo 300 Delo 400 Delo 500 Gold

238,665.74 10% 1,312,661.54 55% 835,330.07 35%

Th e S h ar e o f D e lo 50 0 i s mu ch h ig h e r t he n R i m X

Sh e l l L ub r ic a nt M a rk et S h a re 20 1 0 a nd 20 09 YT D Shell Pakistan is the Market Leader in the branded oil industry in Pakistan followed by PSO and Caltex. Lubricants Fig in '000 SPL Same period LY

Month

PSO

SPL

COPL

PARCO

TPPL APL

SPL Monthly Admore Total OMC Share

Jan 10 Feb 10 Mar'10 April'10 May'10 June'10 July'10 Aug'10 Jan 09 - Dec 09 2010 YTD 2009 YTD

3,564 3,289 2,520 2,191 3,238 3,592 2,409 2,113 42,864 22,916 28,110 -18%

5,480 4,477 5,641 6,325 5,945 6,232 5,197 4,224

3,447 4,532 1,791 3,419 3,179 2,843 3,304 2,315

51 68 79 110 95 23 80 43

159 150 127 194 207 246 228 107

79 76 82 71 80 76 71 76

31 30 38 35 16 49 29 11 459 239 362

12,811 43% 12,622 35% 10,278 55% 12,345 51% 12,760 47% 13,061 48% 11,318 46% 8,889 48% 145,587 43% 94,084 46% 95,915 43% -2% 3%

42% 47% 40% 44% 41% 40% 47% 43% 42%

62,851 35,616 43,521 24,830 41,044 23,806 6% 4% 13%

780 2,292 725.0 549 1,418 487 1,640 611 466

-14% 31% -34%

Share in lubes in 000 Figures

70,000 60,000 50,000 40,000Share in lubes in 000 Figures

30,000 20,000 10,000 PSO SPL COPL PARCO TPPL APL Admore

Respondent Profile In order to get to the root of the problem, we not only had to reach the end consumers, but also had to analyze the Route-To-Market. Following will be the respondents and their respective profiles:

1. En d Co n su m e r He is the person who eventually buys the lubricant for his vehicle. He is the most important stakeholder as his decision solely makes or breaks Shells market share. Thus his behavior carries most value and need to be studied in depth. a. Owner Driver He is the type of consumer who drives his own vehicle and tends to be more caring toward his asset. He would go for a product, which will give him the best value for money. He will not easily compromise on quality for money. b. Hired Driver He is a type of consumer who receives salary from the owner and would tend to be more relaxed than the owner when it comes to vehicle maintenance. Thus not entirely true at all times, this consumer is also critical and need to be studied.

2. Wh ol e S el l er / R etai l er This is a customer who cannot buy the product directly from the company and can only buy from the dealers and agents. They are mostly the one who sells their product to the end consumer. They operate from shops and are situated

mostly at areas where we have heavy transport stands in Karachi. E.g. Al-Asif Square (Super highway), Shireen Jinnah Colony (Oil Tanker Terminal in Clifton), Hawks Bay Truck Stand, National Highway etc.

(p.s. there are few whole sellers who are also dealer / agents of different oil companies)

3. D eal e r / Ag en t This is a customer who buys lubes from the company directly. He is appointed by the company and owns a shop where he can sell his product to anyone coming to him. Although he runs a shop but he can charge his customer for delivery of his products.

4. Di st ri bu to r They buy products directly from the company, and take the responsibility of delivering them to the whole-sellers and retailers. They do not have a shop and they never sell to consumers directly.

At the time of our physical research we found out that the dealer, agents and distributors were biased in their response therefore they were excluded from the study.

Analysis and FindingsForm-A Q1: Customer Category: 1. 2. 3. 4. 5. 6. 7. Dealer Agent Retailer Oil Changer IWS Distributor Wholesaler

Q 2a- Profit margin:

Profit margin for traders is higher in D500 as compared to Rim -X.

Q2b- Buying Frequency

Q2c Payment terms

Traders purchase Rim-X mostly on credit terms and average credit days is 4.5 days.

Q3: Which brand do you prefer to buy?

1. 2.

Shell Caltex

3.

Others

4: Why do you prefer the brand? 1. 2. 3. 4. Profit Margin Availability Consumer demand Awareness about the product

Q5: Product life of Rimula X is better than Caltex Delo 500:

1. 2.

Agree Disagree Dont Know

3.

Product life of Delo500 is better because of shrink-wrap.

Q6: Shelf life of Rimula X is lower than Caltex Delo 500:

1. 2.

Agree Disagree Dont Know

3.

Q7: Delivery time of Rimula X is better than Caltex Delo 500:

1. 2.

Agree Disagree Dont Know

3.

Q8: Driver Type: 1. Owner Driver Hired Driver

2.

Q9: Vehicle makes:

Q10: Oil Change Behaviour: Timely Kilometers

If Timely: Weekly Fortnightly Monthly Others______ If KMS: 1500-2000 2001-3000 3001-4000 4001+++

Q11: Sump size in Ltrs: 24

7 26

9 28

12 32

14 36

16

18 20 Others______

22

Mostly drivers of vehicle whose sump size is between 16-28 liters use this grade of oil.

Q12: Purchase From: 1. 2. 3. Petrol Pump Whole sellers / Retailers Others

Q7: Payment Time:

1. 2. 3. 4.

After Trip Before Trip Next Oil Change Others

Q13: Oil Preferences

a) Brand Conscious1. Yes No

2.

b) Quality Conscious1. 2. Yes No

c) Price Conscious1. Yes No

2.

Q14: Shell Rimula X is the best product for your vehicle:

1. 2.

Agree Disagree Dont Know

3.

Q15: Price of Rimula X is lower than Caltex Delo 500:

1. 2. 3.

Agree Disagree Dont Know

Q16: Rimula X gives more mileage than Caltex Delo 500:

Agree Disagree Dont Know

ConclusionsSummary and Conclusion

Is Rimula X has lower awareness amongst the traders and consumers: we found that the retailers and consumer endorsement is much higher in Delo500 than in Rimula-X due to older brand and heavy marketing from the past 20 years.

The trust and dependability factor on Caltex Delo is a consumers belief.

The awareness of Rimula-X is highly challenged.

Is Rimula X traders and consumers are satisfied with the pricing and margins: the perception of high profit margins is much higher in Caltex Delo500 against Rimula-X.

It was found that the price of Caltex is higher, but consumers showed their inclination towards being brand & quality conscious rather than price conscious.

Recommendations

Following are the recommendations of our research:

1) The company has a huge opportunity to create focused product awareness through BTL & ATL marketing campaigns. 2) Higher rebate & schemes compared to other SKUs should be given to the traders intermittently. 3) Consumer and loyalty promotion should also be introduced for end consumers.