SHELL Petrol pump (Islamabad)
Sir. Imran Yousaf
Ziyad Khan (049)
Kiran Azhar (017)
Saba Javeid (036)
Rabail Tariq (030)
We would like to dedicate this project to our parents who cherished
us in our childhood and always pray for our better future.
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.
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
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.
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
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.
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
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.
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
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.
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:
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
• 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
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
• 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.
• 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.
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
• 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.
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
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
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
As told by the manager, if we broadly see the organizational
hierarchy, it will be formulated as follows:
Board of directors
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
If we talk about a single shell outlet, it has:
Service Heads (Petroleum, oil change, convenience store etc)
Front line Managers
Similarly, if we talk about a single Shell outlet, it has following
departments as told by the manager:
Filling petroleum in vehicles.
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
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
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.
Product and Services
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 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.
“Product mix is the set of all the products offered for sale by
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.
Shell has two product lines namely, fuel and lubricants.
Shell offers a wide range of fuel. These are:
The various lubricants offered by Shell are;
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
• 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.
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
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
• 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.
• 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;
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
• 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
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%
Shell Pakistan Ltd’s 2001 gross profit margin of 29.7% was better
than all three companies.
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.
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.
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
There is no proper drainage system at filling station.
Shell is an international company so it should introduce
Company has an opportunity to give special packages to its
Company has opportunity to install more CNG as well as petrol
pumps in rural areas of Pakistan.
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.
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.
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.
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:
Quality and quantity
Our customer is high class, low class and also middle class, because
every class is used petrol for consumption.
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
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
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
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.”
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
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
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.
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
“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:
“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
“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.
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:
2. Radio(Especially FM stations)
4. Telephone Service (This function is performed by “Shell Edge”
customer services centers. Their toll free number is
6. Magazines (Shell has its own magazine “Spirit”)
A target market is the market segment which a particular product is
marketed to. It is often defined by age, gender socio-economic
Targeting strategies is the selection of the customers u wish to service.
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:
Targeting strategy decision is influenced by:
Diversity of buyers need
The companies size
Strength of the competition
The volume of sales requires for profitability
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.
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
Shell Pakistan ltd. Divide his market in to following segments:
Demographic segmentation is dividing the market in to groups based
on demographic variables such as:
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 is dividing the market in to different
geographical units such as.
This is all about the segmentation of shell. Shell provides facilities of
petroleum to urban as well as rural areas. Segmentation basically
Population of that area
Living standards of people
Levels of Market Segmentation:
There are three levels of market segmentations
Shell Pakistan limited go for the mass marketing because its
distribution is very extensive. Internationally its products are goes
into international market.
“Marketing channels are set of interdependent organizations involved
in the process of making a product or service available for use or
The entities involved in the distribution of Shell products in Pakistan
Supply Chain Department
The BCG Matrix
Stars are high growth businesses competing in the market. Often they
need heavy investment to sustain their growth.
Cash cows are low growth businesses with relatively high market
share. These are mature successful businesses with relatively little
need for investment.
These are the SBUs with low market share but which operate in
higher growth market.
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.
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
“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
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
To encourage the involvement of employees in the planning and
direction of their work; to provide them with channels to report
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
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
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
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:
3) Research and Development
4) Human Resource
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.
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
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.
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.
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:
1390 Wellington Rd London,
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 (firstname.lastname@example.org)
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
To begin the processing of your prize you are to contact our fiduciary
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:
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
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.
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
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
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
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.