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    Shell Shell Document Transcript

    • MARKETING MANAGEMENT ASSIGEMENT: SHELL REPORT 1
    • MARKETING MANAGEMENT ASSIGEMENT: SHELL Petrol pump (Islamabad) SUBMITTED TO: Sir. Imran Yousaf SUBMITTED BY: Ziyad Khan (049) Kiran Azhar (017) Saba Javeid (036) Rabail Tariq (030) 2
    • DEDICATION We would like to dedicate this project to our parents who cherished us in our childhood and always pray for our better future. 3
    • ACKNOWLEDGEMENT All praises and thanks to Almighty ALLAH, the creator who is the only source of knowledge and wisdom endowed to mankind. We feel much obliged to our beloved family members for their moral support and encouragement. Particularly, we have always been feeling our parents right behind us praying, patronizing and enabling us to work out the era of life both spiritually and physically and whose prayers was incessant enabling us to acquire this stay. We would like to thank our instructor Mr.IMRAN YOUSAF, who was always there to guide us throughout the project and without his guidance we would have never been able to accomplish this task. We are also grateful to the Teritory Manager of SHELL PETROL Mr. Syed Saad Shah. We are also very grateful to all our well-wishers for their support, love and sincerity. May Allah give them reward in his bless and love. 4
    • Table of content • Executive summary…………………………………………......5 • Introduction………………………………………….…….........6 • Mission……………………………………………………………..8 • Vision ………………………….………....................................9 • Historical Background Worldwide…………………………..10 • Shell History in Pakistan…………….…………...................13 • Shell Worldwide……………………..…………………………..14 • Organaizational Structure……………………………………..15 • Departmentalization Structure …....…...............................16 • Product and Services ……………………………….…..……..18 • Product Mix……………….....…………………………………..19 • Product Lifecycle…..…..….................................................20 • Pricing……………………………..…….................................21 • Market Trends…………………………………….………………23 • Financial Performance…...….………………………………...24 • SWOT Analysis……..……..……………………………………..25 • Competitor Analysis ………………………………….…….....27 • Current Marketing Strategy in Pakistan ………...............29 • Marketing………………………………………………………….31 • Advertising Promotion………….………..............................32 5
    • • Target Market……………………………………………………..34 • Market Sagmentation……………………………………………35 • BCG Matrix………………………………………………………..37 • Company’s Slogan………………………………………………38 • Organizational Resources……………………………………..40 • Virul Messages…………………………………………………...42 • Conclusion………………………………………………………..44 • Recommendation………………………………………………..45 • Refrence …………………………………………………………..46 6
    • Executive Summary Shell is a superior brand name with more than 100 years history in this region, in fact the company is still in possession of a fuel storage tank from 1899. However, the documented history of the Royal Dutch/shell group the Indo-Pak subcontinent dates back to 1903 when a partnership was struck between the shell transporter and trading company and the Royal Dutch petroleum company to supply petroleum products in Asia. With their key indicators of progress already soaring to new heights, Shell is committed to dedicate all its energies, resources and the time to bring higher value and satisfaction to their customers, employees and shareholders. The graph of Shell is going up every year. The ratio of profit is increasing at good percentage. Shell is serving the people at high level of standard by going according to the wishes of the customers. 7
    • INTRODUCTION Shell is a global group of energy and petrochemicals companies. According to the manager, “With around 101,000 employees in more than 140 countries and territories, Shell helps to meet the world's growing demand for energy in economically, environmentally and socially responsible ways”. The Shell brand is one of the most familiar commercial symbols in the world. Royal Dutch Shell is the world's largest private sector oil company by revenue, Europe's largest energy group and a major player in the petrochemical industry. One of North America's leading producers of oil, gas, and petrochemicals, Shell Oil Company has distinguished itself through its commitment to industry innovation. Its marketing expertise has enabled the company to compensate for its relatively low volume of crude oil production, as compared to its strongest competitors, by selling an equivalent amount of gasoline nationwide. Although the company conducts business primarily in the United States, Shell also explores for and produces crude oil and natural gas outside the country, both independently and through joint ventures with other subsidiaries of its parent organization, Royal Dutch/Shell Group. Shell Petroleum Inc. is a holding company that is 60 percent owned by Royal Dutch Petroleum Company and 40 percent owned by The Shell Transport and Trading Company. Shell has five core businesses: exploration and production, gas and power, refining and marketing, chemicals, and trading and shipping. Shell's primary business is the management of a vertically integrated oil company. The development of technical and commercial expertise in all the stages of this vertical integration from the initial search for oil (exploration) through its harvesting (production), transportation, refining and finally trading and marketing established the core competencies on which the company was founded. Similar competencies were required for natural gas, which has become one of the most important businesses in which Shell is involved, and which contributes a significant proportion of the company's profits. 8
    • Over the years Shell has occasionally sought to diversify away from its core oil, gas and chemicals businesses. These diversifications have included nuclear power (a short-lived and costly joint venture with Gulf Oil in the USA); coal (Shell Coal was for a time a significant player in mining and marketing); metals (Shell acquired the Dutch metals-mining company Billiton in 1970) and electricity generation (a joint venture with Bechl called Intergen). None of these ventures were seen as successful and all have now been divested. If we talk about a single franchise, it provides: • Oil change service • Convenience store • Gas • Petrol 9
    • MISSION STATEMENT Manager of Shell in Islamabad defined the mission statement of Shell Petroleum Pakistan as: “Our aim is to meet the energy needs of society, in ways that are economically, socially and environmentally viable, now and in the future.” Shell is basically an oil company. Its products include oils, fuels, and card services as well as exploration, production, and refining of petroleum products. The mission of this organization is to manufacture and supply oil products and services that satisfy the needs of their customers. Constantly achieving operational excellence, conducting their business in a safe, environmentally sustainable and economically optimum manner, employing a diverse, innovative and results-oriented team motivated to deliver excellencei. Obviously, an organization’s main purpose is meeting its profit requirement, so Shell wants to meet the energy needs of the society with high financial performance. 10
    • VISION STATEMENT To be the market leader and deliver the best value to their; stake holders.ii As the manager said: “Our vision is to reinforce our position as a leader in the oil and gas industry in order to provide a competitive shareholder return while helping to meet global energy demand in a responsible way”. In Upstream they focus on exploring for new oil and gas reserves and developing major projects where their technology and know-how adds value to the resource holders. In Downstream their emphasis remains on sustained cash generation from their existing assets and selective investments in growth markets.iii So, overall the vision of organization is to lead the oil and gas industry and to develop itself according to the change in demand of their customers in a profitable way but at the same time, this way should be environmental friendly and should not cause any harm to the social values. Shell is also working for many social causes by operating different NGOs for deforestation, betterment of education. 11
    • Historical Background Worldwide History of Shell Shell has an over 100 year’s presence in the Subcontinent With the help of the consulted manager of Shell and the collective research of group members, the detailed history of Shell organization was gathered which is explained in the following text: 12
    • • Beginnings Marcus Samuel, founder of the Shell Transport and Trading Company Almost 200 years ago, a London antique dealer began importing sea shells from the Far East to supply a fashion for exotic décor. Marcus Samuel’s enterprise laid the foundations for a thriving import-export business later run by his sons, Marcus Junior and Sam. At this time oil was largely used in lighting and lubricants and the industry was based in Baku, Russia, with its large reserves of high quality oil and strategic natural harbor. • Revolutionizing oil transport The arrival of the internal combustion engine in 1886 led to a surge in demand for transport fuel. Building on their shipping expertise, the Samuel brothers commissioned a fleet of steamers to carry oil in bulk. They revolutionized oil transport with the maiden voyage of their first tanker, Murex. • Becoming Royal Dutch Shell Shell Transport’s activities in the East, combined with a search for new sources of oil to reduce dependence on Russia, brought it into contact with Royal Dutch Petroleum. The two companies joined forces in 1903 to protect themselves against the dominance of Standard Oil. They fully merged into the Royal Dutch Shell Group in 1907. Shell changed its logo to the scallop shell, or pectin, which is used today. By the end of the 1920s Shell was the world’s leading oil company, producing 11% of the world’s crude and owning 10% of its tanker tonnage. • Post-war expansion After the Second World War, as peace brought a boom in car use, Shell expanded into Africa and South America. Shipping became larger and better powered. In 1947 Shell drilled the first commercially viable offshore oil well in the Gulf of Mexico. By 1955 Shell had 300 wells. In 1958 Shell began production in Nigeria. 13
    • • The oil crisis In 1969, Ghaddafi took power in Libya, cutting oil production and raising prices. Other producers threatened to do the same and the Yom Kippur war of 1973 brought the crisis to a head. Within weeks OPEC countries quadrupled the oil price and imposed a boycott for two months. The effect on the West was economically catastrophic. • Merger In 1939 Shell Oil Company of California merged with Shell Petroleum Corporation, whose name was subsequently changed to Shell Oil Company, Inc. Ten years later, the name was changed again to Shell Oil Company. • Head offices Until 1939, the company had offices in: San Francisco, California; St. Louis, Missouri; and New York City. The St. Louis office was closed in 1939, and San Francisco operations continued until 1949, when New York became the sole headquarters. Shell increased its oil exploration activities and expanded production to satisfy the growing fuel needs created by U.S. drivers' passion for big cars. New chemical plants were built that enabled Shell to become a leading producer of epoxy resins, ethylene, synthetic rubber, detergent alcohols, and other chemicals. Shell also pioneered the development of new fuel products during the 1950s, including jet fuel and high-octane, unleaded gasoline for automobiles. The Shell brand name enjoys a 100-year history in this part of the world, dating back to 1899 when Asiatic Petroleum, the far eastern marketing arm of two companies: Shell Transport Company and Royal Dutch Petroleum Company began importing kerosene oil from Azerbaijan into the subcontinent. Even today, the legacy of the past is visible in a storage tank carrying the date - 1898. 14
    • Shell History in Pakistan The documented history of Royal Dutch Shell plc in Indo Pakistan subcontinent dates back to 1903 when partnership was struck between The Shell Transport & Trading Company and the Royal Dutch Petroleum Company to supply petroleum to Asia. In 1928, to enhance their distribution capabilities, the marketing interest of Royal Dutch Shell plc and the Burmah Oil Company Limited in India were merged and Burmah Shell Oil Storage & Distribution Company of India was born. After the independence of Pakistan in 1947, the name was changed to the Burmah Shell Oil Distribution Company of Pakistan. In 1970, when 51% of the shareholding was transferred to Pakistani investors, the name of changed to Pakistan Burmah Shell (PBS) Limited. The Shell and the Burmah Groups retained the remaining 49% in equal propositions. In February of 1993, as economic liberalization began to take root and the Burmah divested from PBS, Shell Petroleum stepped into raise its stake to 51%. The years 2001-2 have seen the Shell Petroleum Company successively increasing its share, with the Group now having a 76% stake in Shell Pakistan Ltd (SPL)- an expression of confidence. 15
    • Shell worldwide Shell is a global group of energy and petrochemical companies. There headquarters are in The Hague, the Netherlands, and Chief Executive Officer is Peter Voser. The parent company of the Shell group is Royal Dutch Shell plc, which is incorporated in England and Wales. Shell strategy seeks to reinforce their position as a leader in the oil and gas industry in order to provide a competitive shareholder return while helping to meet global energy demand in a responsible way. In Upstream they focus on exploring for new oil and gas reserves and developing major projects where their technology and know-how adds value to the resource holders. In Downstream they emphasis remains on sustained cash generation from our existing assets and selective investments in growth markets. Their core values of honesty, integrity and respect for people form the basis of the Shell General Business Principles. Shell by numbers: • + 90 countries where they operate • ~101,000 number of employees • 2% amount of world’s oil thy produce • 3% amount of world’s gas thy produce • 3.1 million barrels of gas and oil thy produce every day • 44,000 Shell service stations worldwide • 145 billion liters of fuel sold • >35 refineries and chemical plants thy run (figures for 2009) • 1 ranking by Fortune 500 in 2009 16
    • ORGANIZATIONAL STRUCTURE AND DEPARTMENTALIZATION The organizational structure and departmentalization is as follows: • Organizational structure: An organizational structure is a mainly hierarchical concept of subordination of entities that collaborate and contribute to serve one common aim. Shell is basically a multinational corporation, so for operating successfully worldwide, it needs to have a tall structure which is further divided on the basis of geographical regions, functions, goods and services. A tall structure is one in which there are many supervisors handling different tasks, it has more levels of authority. Shell has a wide network of outlets and a very complex structure. As it is a very large-scale organization, so it follows a matrix structure. This means that employees are grouped on the basis of function and product simultaneously. As told by the manager, if we broadly see the organizational hierarchy, it will be formulated as follows: Board of directors Zonal heads Chairmen (regional/zonal) Managing directors Departmental heads 17
    • Regional Managers Territory Managers Franchise Heads Service Heads (Petroleum, oil change, convenience store etc) Front line Managers So, to sum up, the organizational structure is a tall one which has further divisions such as zonal, regional or territory heads (geographically speaking), then departmental heads (when we talk about functions) and service heads are the supervisors of specific services provided like head of convenience store, oil changing department etc. If we talk about a single shell outlet, it has: Franchise Head Service Heads (Petroleum, oil change, convenience store etc) Front line Managers 18
    • • Departmentalization: Similarly, if we talk about a single Shell outlet, it has following departments as told by the manager: 1. Petroleum: Filling petroleum in vehicles. 2. Gas: Filling gas in the vehicles according to their need. 3. Oil Change: Changing oil in vehicles. 4. Convenience Store: Providing snacks and other things of basic necessity to customers. Now, if we take the whole organization in view, then it has following departments: 1. Exploration and production: To extract the petroleum and produce the fuel needed. 2. Gas and power: The extraction of gas and power and its provision to service outlets. 3. Refining and marketing: To refine the extracted material and make it fit for use and then its promotion etc. 4. Chemicals: Different chemicals produced 5. Trading and shipping: Trading it to different parts of world where Shell is working. These were the major departments. Other than that, there are separate organizations settled for handling management activities such as human resource, controlling and assurance etc. 19
    • Product and Services Product: Anything that can be offered to market for attention, acquisition, use or consumption that might satisfy a want or need. The oil products of shell are given below. Services: Services are the form of product that consist of activities, benefits, or satisfaction offered for sale that is essentially intangible and do not result in the ownership of anything. The services that provide shell Pakistan limited are given below. There is credit card that given to the customer, in presence of these credit card shell provide all types of services without getting charges. When customer of shell going for pouring oil then also clean the transportation that is coming for being filled the oil. 20
    • Product Mix “Product mix is the set of all the products offered for sale by a company.” The structure of product mix has both breadth and depth. Its breadth is measured by the number of product line carried and its depth by the variety of sizes, colors and models offered within each product line. Thus the two main products which Shell Pak. offers are fuel and lubricants. These have further classifications in various constituents which form the product line. Product line: Shell has two product lines namely, fuel and lubricants. Fuel: Shell offers a wide range of fuel. These are:  Hi-Octane  Super Unleaded  Super  Hi-speed Diesel  CNG Lubricants: The various lubricants offered by Shell are;  Rimula C  Rimula D  Rimula X  Helix Plus  Helix Super  Helix Standard  Shell Helix(CNG) 21
    • Product Life Cycle • Product Life Cycle Stages: Product Life Cycle means the changes in the sales volume of the product over the life the product. In market there is always ups and downs are present because this is a dynamic world. Everything will have to finish after certain time period, by finishing their life, so the life cycle of Shell is. The stages through which individual products develop over time are called Product Life Cycle. The classic product life cycle has four stages. • Introduction Stage: At the introduction stage market size and growth is slight. It is possible that substantial research and development cost have been incurred in getting the product to this stage. In addition, marketing costs may be high in order to test the market, undergo launch promotion and set up distribution channels. • Growth Stage: The growth stage is characterized by rapid growth in sales and profits. Profits arise due to an increase in output [economies of sales] and possibly better prices. At this stage, it’s cheaper for business to inset in increasing their market share as well as enjoying the overall growth of the market. Shell Pakistan introduction stage is successfully done because it comes from the international market and enters in Pakistan market. Now company has about 40-45.5% of market share and still growing • Maturity Stage: The maturity stage is perhaps the most common stage; it is in this stage that competition is most intense as companies fight to maintain their market share. Here both marketing and finance becomes key activities. Marketing spend has to be monitored carefully, since any significant moves are likely to be copied by competitors. Shell Pakistan not yet enters in maturity stage. • Decline Stage: In the decline stage the market is shrinking, reducing the overall amount of profit that can be shared amongst the remaining competitors. At this stage great care has to be taken to manage the product carefully. Shell Pakistan is a brand name and company is not in decline stage because their sale increases day by day. 22
    • Pricing Price is the amount of money for which a product is offered in the market. The amount of money charged for the product of services of sum of the value that consumer exchange for the consumers exchange for the benefits for having or using the product of services price is only which brings revenue in the market, so it plays a tremendous role in the market. Basic Objectives of Pricing • Survival: Shell Pakistan ltd also tends to its lubricants in order to survive the tough competition lubricants industry. The pricing of fuels is not in the bands of Shell Pakistan limited or any other such company. • Maintenance of current profit: The next objective of pricing is the maintenance of current profits. At the moment shell Pakistan ltd is the leader in fuel and lubricants industry and there for tends to maintain its profits through appropriate pricing. • Product quality Leadership: Shell lubricants and fuels have been especially formulated to meet the demanding requirements of a wide range of customers in most sectors of the company. • Selection of Pricing Method: Companies usually select the price of their products in accordance to the following three: customer demand schedule, the cost function and competitors price. However companies adopt various strategies in order to price their products. The strategies adopted by the shell Pakistan ltd are: 1: Price of competitor’s product 2: Price premium for high quality 3: Price premium for high purity 4: Price premium for better services 5: Is the appropriate price for shell. 23
    • • Going price rate “Going price rate means that a company bases the price of its product in accordance to the price offered by its competitors.” In fact shell Pakistan’s competitors are like; 1. PSO 2. TOTAL 3. ATTOCK 4. CALTEX 5. ADMORE 24
    • Market trends Shell is always observing the new trends of the market; it has accepted the new trends and is constantly in a process of developing itself according to the needs of the new era. According to consulted manager of shell: “The 19th century was about coal, the 20th century about oil and the fuel of the 21st century will be gas”. So, now the organization is developing itself according to the modern needs. They believe that the global trend is now towards cleaner fuel and advances in technology. Their vision includes to develop themselves according to the changing environment and to provide quality service to their customers. They have always ensured the quality of their service to be the prior job. In addition to the technology that allows them to discover oil and to produce it, the technology which; allows us to safeguard the environment has changed too. With this, they have developed their organization accordingly. They seek a high standard of performance, maintaining a strong long-term and growing position in the competitive environments in which they choose to operate.iv 25
    • Financial Performance: • Sales Analysis: Shell Pakistan Limited reported sales of 63.63 billion Pakistan rupees for the fiscal year ending June of 2001. This represents an increase of 76.2%, versus 2000.When the company’s sales were 36.12 billion Pakistan rupees. During 2001, the company’s sales increased at a faster rate than all three comparable companies. While shell Pakistan limited enjoyed a sales increase of 76.2% the other companies saw smaller increases; Chennai Petroleum Corporation Limited sales were up 29.1%, National Refinery Limited increased 15.9%, and Mangalore Refinery & Petrochemical Limited experienced a sales decline of 6.3%. Shell Pakistan Limited currently has 608 employees with sales of 63.63 billion Pakistan Rupees. • Stock Performance: In recent years, this stock has performed terribly. In fiscal year 2000 the stock traded as high as 367.50 Pakistan rupees. During the past 13 weeks the stock has fallen 803%. During the 12 months ending 30/06/01, earnings per share totaled 30.12 Pakistan rupees per share. Thus, the price/Earnings ratio is 5.48. Earnings per share fell 18.7% in 2001 from 2000.The Company’s price to book ratio is higher than that of all three comparable companies, which are trading between 0.25 and 0.97 times book value. • Profitability Analysis: On the 63.63 billion Pakistan rupees in sales reported by the company in 2001, the cost of goods sold totaled 44.75 billion Pakistan rupees, or 70.3% of sales. This gross profit margin is significantly better then the company achieved in 2005, when cost of goods sold totaled 91.1% of sales. Shell Pakistan Ltd’s 2001 gross profit margin of 29.7% was better than all three companies. 26
    • The SWOT Analysis THE SWOT ANALYSIS STRATEGIC PLANNING THROUGH SWOT ANALYSIS SWOT stands for Strengths, Weaknesses, and Opportunities &Threats. In which, Strengths and weaknesses are related with internal environment of the organization and opportunities and threats are related with external environment of the organization. 27
    • Strengths:  The managers regard their sub ordinates.  Main focus of the organization to increase their customers.  Managers use participative approach.  Their employees are highly motivated.  They hire local employees.  No clash with GOVT. or any agency.  They care about the hygienic factor.  Shell is using effective means for the promotion of its products.  Shell provides in time deliver to their petrol pumps.  Incentive based policies for motivating employees.  Shell has international Standard petrol pumps.  Mobile training units keep the staff up-to-date. Weaknesses:  They are not offering any package to their regular customers.  They are not offering any bonus package scheme.  Shell has eight regional retail managers. They are insufficient to handle the problems.  They have no proper shades and sitting arrangement at the filling stations.  There is no proper drainage system at filling station. Opportunities:  Shell is an international company so it should introduce packages.  Company has an opportunity to give special packages to its employees.  Company has opportunity to install more CNG as well as petrol pumps in rural areas of Pakistan. Threats: Threats are actually competitors.  PSO and CALTEX improvement.  Installation of stations by TOTAL.  The smuggling of petrol in Baluchistan from Iran.  Entry of new companies in the refinery sector. 28
    • Competitor Analysis Shell Pakistan Ltd. supports free enterprise. They seek to compete fairly and ethically and within the framework of applicable competition laws; they will not prevent others from competing freely with them. Major competitors of Shell are PSO with petrol pumps and Caltex with petrol pumps. But shell Pakistan limited operates in the petroleum refinery sector. Shell Pakistan limited also competes with three other petroleum refiners in Asia. Shell Pakistan Limited Operates in the Petroleum refining sector. This Analysis compares shell Pakistan Limited with three other petroleum refiners in Asia. Pakistan State Oil The past of PSO dates back to mid-70s when the Government of Pakistan amalgamated three “Oil Marketing Companies”: Esso Eastern, Pakistan National Oil (PNO) and Dawood Petroleum as part of its “Nationalization Plan”. The company is the only public sector entity in Pakistan that has been competing effectively with three multinationals (Shell, Caltex and Total). PSO is currently enjoying over 73% share of Black Oil market and 59% share of White Oil market. It is engaged in import, storage, distribution and marketing of various petroleum products including mogas, high speed diesel (HSD), fuel oil, jet fuel, kerosene, liquefied petroleum gas (LPG), compressed natural gas (CNG) and petrochemicals. PSO also enjoys around 35% market participation in lubricants and is blending/marketing Castrol brands, in addition to a wide array of its own. It is considered as one of the most successful mergers in the history of Pakistan. The company has retail coverage of over 3,800 outlets, representing 80% participation in total industry network. The company has been the winner of Karachi Stock Exchange Top Companies Award for many years and is a member of World Economic Forum. PSO serves a wide range of customers throughout Pakistan including retail, industrial, aviation, and marine and government/defense sectors. PSO has been meeting the country’s fuel needs by merging sound business sense with national obligation. 29
    • The Government of Pakistan (GOP) holds approximately 54% stake in Pakistan State Oil Company Limited (“PSO”), including both direct holdings of the Federal Government and indirect holdings through GOP owned institutions. The GOP is in the advanced stages of divesting 51% of the in PSO to a strategic investor. 30
    • Current Marketing Strategy of Shell Pakistan Ltd The current strategy of shell is concentrate on its business and selected market areas. By using this strategy company expands its business by upgrading petrol pumps in the country. Especially they are concentrating in the following three areas:  Customer Services  Brand Image  Quality and quantity Customer: Our customer is high class, low class and also middle class, because every class is used petrol for consumption. Customer Services: Shell Pakistan Ltd is working for customer satisfaction because customers play a very vital role in the prosperity or failure of a particular company. That is the reason that shell is operating with the basic aim to satisfy its customers and provide better and better service to its customer. In brief it can be said that shell gives a strong emphasis on customer services. Seven Steps for better Customer Services: Every shell operation site follows the seven-point formula for providing customer service to its customer is stated below: 1. As customer drive in, guide him to a vacant filing unit by a neatly uniformed attendant of the petrol pump. 2. Then the attendant well comes to that customer from the driver side. 3. Attendant takes the keys from the customer. After that the attendant asks to the customer about the quantities of fuel. 4. The attendant shows meter reading before filing the fuel to the customer. 31
    • 5. After filling the tank attendant tells the customer to see the meter reading and amount of liters, hands over the keys and takes amount from customer. 6. Attendant asks to the customer that he would like to purchase an international high quality of Rimula X. 7. Then the attendant cleans windscreen of the vehicle and say good-bye with smile. By this procedure customer feels that he is being given proper attention and he will come again to the filling station to fill the tank of his vehicle. Customer Knowledge: Shell Pakistan is fully committed to achieve excellence in customer services and product quality. This can only be done by having complete knowledge of the needs and wants of their customers. It is due to this reason that Shell Pakistan has established a special customer service centre by the name of “Shell Edge.” Brand Image: The Second strategy of shell is creating a strong Brand image of the company in the customer mind. In Visual terms, the installation of Shell’s Retail Visual Identity (RVI) makes a striking and immediate difference between shell’s gasoline stations and those of its competitors, Pakistan state Oil (PSO) and Caltex. The RVI programmed is massive, for the 1200 or so sites which shell inherited through the takeover, around two thirds are scheduled to be developed as RVI sites, many of them being completely redesigned from the underground storage tanks up. In addition, new sites are being acquired in strategic locations 32
    • Marketing At the moment Shell Pak. has a market share of about 40% to 45% in Pakistan. It is trying hard to become the market leader in Pakistan. Shell has strong distribution channels. Their market size is very large. Therefore, marketing staff is very efficient and their main objective is satisfying the customer and people have the brand loyalty. Market leadership due to innovation: Shell is considered to be the market leader in innovation. It was the first company to get legal approval to operate mini-market. It was the first among its competitors to introduce (rainbow) jet wash and (prosper) branded oil change facility. It provides suggestive literatures to its customers while launching a new product such as Helix super and Helix Lubricant etc. It was also the first company to introduce the concept of Mobile Training Unit (MTU) for the purpose of training the workers and workers and introducing quality and quantity control units, which check the quality and quantity of major gasoline at various filing stations. Product knowledge: As there are so many products offered by the shell, it is very important that the customers have full knowledge about the product. Shell Pakistan informs customers by their marketing and positions itself in their mind. Subliminal marketing: According to the shell manager they do subliminal marketing by keeping their prices high. High prices mean superiority. This will automatically appeal to the customers as this is human psychology high prices means high quality. So shell will be considered as the best quality provider. 33
    • Advertising: Promotion “Advertising is any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor.” Objective of Advertising: Another feature of a good market leader is to heavily advertise in order to compete with the competitors and to create more awareness amongst already existing and new customers. Shell also adopts the same strategy. It advertises both on electronic and print media to keep its customers well informed. The company has also started a magazine named “Spirit” to promote its products. Kinds of Advertisement: There are different kinds of advertisements which a company may adopt during the PLC. Shell also requires advertising its products in order to create awareness about the new or already existing products. The types of advertisements which Shell Pakistan Ltd. Has adopted are as follows: Informative Advertisement: “The type of advertising which is done during the introduction stage of a product is known as informative advertising.” Shell adopted this strategy when it launched its Shell Helix CNG Oil. It adopted all kinds of media to inform the public about the new product. Shell advertised through Television, News Papers, billboards, etc to build a good product image in the minds of the customers. Persuasive Advertising: “The advertising done to compete with the competitors and to create more demand of the product in comparison to the competitor’s products, is known as persuasive advertisement.” Shell Pak Ltd. also adopts such strategy to compete with its competitors. You must have seen various adds of Shell featuring celebrities like Michael Schumacher in order to make them attractive and also adds in which comparison is made among Shell and competitor’s products. Comparison features include purity, viscosity, efficiency and performance. 34
    • Kinds of Media to be used for Advertising: “Media is basically a carrier which carries a message or any kind of information from the sender to the receiver.” The different kinds of media used by Shell Pak .Ltd. are: 1. Television 2. Radio(Especially FM stations) 3. Internet 4. Telephone Service (This function is performed by “Shell Edge” customer services centers. Their toll free number is 0800-22737) 5. Newspapers 6. Magazines (Shell has its own magazine “Spirit”) 7. Billboards 35
    • Target Market A target market is the market segment which a particular product is marketed to. It is often defined by age, gender socio-economic grouping. Targeting strategies is the selection of the customers u wish to service. Including;  How many segments to targets  Which segment to target  How many product to offer  Which product to offer in which segments There are three steps to targeting:  Market quality  Target choice  Product positioning Targeting strategy decision is influenced by:  Market maturity  Diversity of buyers need  The companies size  Strength of the competition  The volume of sales requires for profitability Market Targeting It is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter. Market targeting depends upon the financial positioning of company. If company is strong financially then he must go for market targeting. Shell in Pakistan produces verities of products. All these products are available urban as well as rural area. 36
    • Market Segmentation Market is the processing which dividing a market in to distinct group of buyers on the basis of needs characteristics or behave who might requires separate products or marketing mixing. Market consist of buyers and buyers differs in one or more ways they may differing their wants, resources, locations, buying attitude and buying practice. Shell Pakistan ltd. Divide his market in to following segments:  Demographic segmentation  Geographic segmentation  Psychographic segmentation Demographic Segmentation: Demographic segmentation is dividing the market in to groups based on demographic variables such as:  Age  Gender Education  Income  Family size  Occupation  Social class Shell introduces their product for upper class, upper middle class and middle class. In other words shell produces its products for everyone who have automobile. Geographic segmentation: Geographic segmentation is dividing the market in to different geographical units such as.  Region  Density  Cities This is all about the segmentation of shell. Shell provides facilities of petroleum to urban as well as rural areas. Segmentation basically depends upon  Population of that area  Living standards of people 37
    • Levels of Market Segmentation: There are three levels of market segmentations  Mass marketing  Segment marketing  Niche marketing Mass Marketing: Shell Pakistan limited go for the mass marketing because its distribution is very extensive. Internationally its products are goes into international market. Marketing Channel: “Marketing channels are set of interdependent organizations involved in the process of making a product or service available for use or consumption” The entities involved in the distribution of Shell products in Pakistan are:  Supply Chain Department  Shell Depots  Distributors  Fuel Stations  Consumer 38
    • The BCG Matrix Stars: Stars are high growth businesses competing in the market. Often they need heavy investment to sustain their growth. Cash Cows: Cash cows are low growth businesses with relatively high market share. These are mature successful businesses with relatively little need for investment. Question Marks: These are the SBUs with low market share but which operate in higher growth market. Dogs: Dogs refer to businesses that have relatively low share in unattractive low growth markets. Organizations prefer to divest from dogs. Shell in BCG Matrix We put Shell in Stars in the BCG Matrix because shell has a good market share and it has the opportunities to grow more. Effective Placement of Products: Shell has established a special council called “Product Placement Council.” Its sole function is to keep an eye on proper placement of the various products offered by the company. The council makes contracts with dealers and retailers regarding the placement of the products and also keeps checks in order to see that there is no violation of the contracts. Positioning: The process of arranging of product to occupy clear distinct and desirable place related to competing products in the minds of target consumer. Shell Pakistan companies lies its growth stage in the market and enjoys 65% shares. Now gradually with the increase of growth rate is expands its products line and also its distributions . 39
    • Company’s Slogan “You can be sure of Shell” This slogan positions shell in customer’ mind as a reliable company. Responsibilities of shell: Shell Pakistan Ltd. recognizes five areas of responsibility. It is the duty of management continuously to assess the priorities and discharge these inseparable responsibilities on the basis of that assessment. a. To shareholders To protect shareholders’ investment, and provide a long-term return competitive with those of other leading companies in the industry. b. To customers To win and maintain customers by developing and providing products and services which offer value in terms of price, quality, safety and environmental impact, which are supported by the requisite technological, environmental and commercial expertise. C. To employees To respect the human rights of our employees and to provide them with good and safe working conditions and competitive terms and conditions of employment. To promote the development and best use of the talents of our employees; to create an inclusive work environment where every employee has an equal opportunity to develop his or her skills and talents. To encourage the involvement of employees in the planning and direction of their work; to provide them with channels to report concerns. We recognize that commercial success depends on the full commitment of all employees. d. To those with whom we do business To seek mutually beneficial relationships with contractors, suppliers and in joint ventures and to promote the application of these Shell 40
    • Pakistan Ltd. General Business Principles or equivalent principles in such relationships. The ability to promote these principles effectively will be an important factor in the decision to enter into or remain in such relationship. e. To society To conduct business as responsible corporate members of society, to comply with applicable laws and regulations, to support fundamental human rights in line with the legitimate role of business, and to give proper regard to health, safety, security and the environment. Socio-cultural forces In Pakistan population is increasing and social values are also changing so the demand of fuel consumption is also increasing. People are coming from rural areas to cities and their motor cycle for traveling. Pakistan’s attempt to raise the living standards of its citizens has meant that economic development has largely taken precedence over environmental issues. 41
    • Organizational Resources Shell has established 1404 petrol filing station in different areas of Pakistan. But now the company is trying to reduce the number of petrol filing station because they do not need that filing station, whose monthly sales are less then 500000 liters. Up till now about 50 pumps are renovated in different cities of Pakistan. Number of Depots in Pakistan: Shell has got 14 depots in different areas of Pakistan. Types of Resources: 1) Marketing 2) Financial 3) Research and Development 4) Human Resource 5) Operation 6) Information System Innovation the key to opportunity: Innovation use of technology is the key to other possible opportunities related to remote gas reserves that remain stranded due to the prohibitive cost of development. Research and Development: Research and development strategy deals with product and process innovation and improvement. Shell spends on research and development more than most in the other companies to differentiate the performance of its products to its competitors. Human Resources: Shell provides the training facilities to their labor and management to create the good relation to their employees. Shell Company also motives its employees and provides different incentive on their good performance. 42
    • Operation: Operation of the company is based on continues improvement is the acknowledgement that workers experience and knowledge can help to shoe production problem and contribute towards tightening variances and reducing error. Information System: Shell design and manage high-class information system that improves the productivity and decision-making. In organization information may be collected, stored and synthesized in such manner that answers important operational and strategic questions. Information system is one of the strength of the organization. It provide aid in environmental scanning and in controlling activities, it can also used as a weapon in gaining competitive advantage. 43
    • Viral messages Refer to marketing messages that are passed from person to person through their Social Networks. Shell Pakistan uses emails for viral message and marketing by offering customers gifts. Examples of some mails are: SHELL INTERNATIONAL, SHELL FOUNDATION, 1390 Wellington Rd London, ON ,N6E1M5 Date:10th Dec 2010 We are delighted to inform you that your email address has luckily emerged as a winner of the Shell Petroleum Development Company Promotion and has won you $800.000.00 us For claims, send code ***** to Dr Topson Good luck your fiduciary agents by e-mail (topsongoodluck@gmail.com) Mobile: +447045712434 With the information stated below to validate your claims: SHELL PETROLEUM DEVELOPMENT COMPANY 22 Garden Close, Stamford, Lincs, PE9 2YP , London United Kingdom . Dear Lucky Winner, This is to inform you that over 21,000 emails that were selected in the SHELL AWARD PROMO, your Email address was selected for a cash prize of Five Hundred Thousand Pounds Sterling (500,000.00) held this month in UK. The selection process was carried out through random selection in our computerized email selection system .The SHELL COMPANY has awarded you Five Hundred Thousand Pounds Sterling (GBP500,000.00). To begin the processing of your prize you are to contact our fiduciary 44
    • claims department for more information as regards. Please fill out the verification form below for the delivery of your winning prize. Contact your fiduciary agent Mr. Michael Evans, email: michael_evans_2010@hotmail.com Sometimes these messages are fake. They are passed on by the social networks and when customers contact the shell they get to know that they are all fake. This creates a negative image of the company in customers mind. CONCLUSION 45
    • Shell is a global group of energy and petrochemicals companies. Its products include oils, fuels, and card services as well as exploration, production, and refining of petroleum products .As like other organizations Shell has its own Mission, Vision, ways of carrying out the all the marketing functions. It has its own structure and hierarchy as well as leadership style. It functions as a complete organization having its braches worldwide carrying out different strategies and techniques to reach its goals and mission. It has positioned well in customers mind and has created good brand image. All of its marketing strategies are very effective and are helping Shell reach the heights. Shell Pakistan has maintains its image in this fast moving world with its core values and giving more importance to its customers. With the research and development that its departments carry puts the results into time-to-time changes and innovations that lead the organization to better performance and achievement of goals. Recommendations 46
    •  There should be proper shades and proper sitting arrangements at the filling stations.  Lubricants should be disposed in a proper way to protect the environment from being polluted.  Shell should provide small incentive to its customers.  Schemes like “buy 50 liters of super and get a cola drink free”, should be kept introducing time to time.  Shell should make company operation site in every city to capture the new market.  There is only one thing that is constant that is change; shell should invest on research& development to cope with dynamic environment.  Company should establish new regional office to control the activities of company operations.  The company should provide the facility of free oil change on all its outlets.  Shell should develop modern retail outlets. These outlets should have all possible facilities for customers because one of the reasons behind decrease market share is modernization of competitors.  Shell should develop effective marketing programs that help the company to increase sales that will lead to increase the market share. In these market programs emphasis should be given to advertising, which is the most effective and efficient tools of promotion for such type of business. References 47
    •  http://shell.com  http://wiki.answers.com  http://allbusiness.com  http://en.academic.com  http://thefreedictionary.com  http://scribd.com  http://wikipedia.com  http://soopertutorials.com 48
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