Services Marketing

Final Project
Possession Processing

Presented by:
AsfandAnees
HamzaTayyab
Isa Qamar
RabeetRehman
SaadMushtaq
Presented to:
Ms. Madiha Rashid
Section H
Submission date: 18-December-2016
Group 2
History and Background:

Pakistan State Oil

The creation of Pakistan State Oil (PSO) can be traced back to the year 1974, when on January
1st; the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum
Limited (DPL) as Premiere Oil Company Limited (POCL).
Soon after that, on 3rd June 1974, Petroleum Storage Development Corporation (PSDC) came
into existence. PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd
1976. Following that, the ESSO undertakings were purchased on 15th September 1976 and
control was vested in SOCL. The end of that year (30th December 1976) saw the merger of the
Premier Oil Company Limited and State Oil Company Limited, giving way to Pakistan state Oil
(PSO).
After PSOs inception, the corporate culture underwent a comprehensive renewal program which
was fully implemented in 2004. This program over the years included the revamping of the
organizational architecture, rationalization of staff, employee empowerment and transparency in
decision making through cross functional teams. This new corporate renewal program has
divided the companys major operations into independent activities supported by legal, financial,
informative and other services. Inorder to reinforce and monitor this structural change, related
check and balances have been established by incorporating monitoring and control systems.
Human Resource Development became one of the main priorities on the companys agenda
under this corporate reform.
It is due to this effective implementation of corporate reform and consistent application of the
best industrial practices and business development strategies, that PSO has been able to maintain
its market leadership in a highly competitive business environment.
Q: Which service industry your company belongs to?
PSO is a possession processing company and belongs to the refueling service industry of
Pakistan. PSO caters to POL requirements of a wide spectrum of customers comprising the retail
consumer, various industrial units, government, power projects, aviation and marine sectors of
Pakistan. All the major government entities like OGDC, Pakistan Army, and Pakistan railways,
Navy, NLC, PAF and HIT have entrusted PSO to meet their POL needs.During the third quarter
PSO sales volume recorded 18% growth and was able to enhance its overall market share to
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70.6% compared to 68.8% in the same period last year. The company outperformed its
competitors by recording 29% increase in White Oil sales volume against industry growth of
22%, whereas Black Oil sales increased by 9% versus industry growth of 6%. The company also
improved its market share in Motor Gasoline from 45.7% to 48.6%, while High Speed Diesel
market share increased from 58.1% to 62.9%. In Furnace Oil, the company maintained its
leadership with 83.4% market share

Q: What are different alternatives of your service organization/company in the market?

PSO has a wide range of competitors but since it contains the largest percentage of the market
share it has out powered its competitors. PSO operates 3,600 retail outlets, including more
than 1,785 New Vision Retail Outlets that offer, besides the usual gas-station services, an Internet
kiosk, car wash, and other amenities. The company additionally sells a full range of petroleum
and related products, including fuel oil, industrial oils, and petrochemicals. The Government of
Pakistan controls a majority stake in the publicly traded PSO. Its competitors include:

Shell Pakistan: It is not only the second largest company, enjoying 32% of the market
share, but it also offers superior quality services to its customers. To further improve its
services, it has been developing a network of Company-operated sites. Whilst
contributing to the bottom line, these serve as models of excellence for dealer-operated

outlets and are also used for testing market initiatives.

Caltex Pakistan: It has a smaller market share as compared to other two giants. To
combat the onslaught of the process of deregulation, the Company has formed an alliance
with Shell for import and handling of gasoline and HSD. However, the Company is not
expected to witness any substantial gain in its market share due to a constraint of limited

number of outlets.
Total: Another big name when it comes to big oil supplying companies of Pakistan has
been in the race for quite a while now, caters in fewer cities as compared to the other

companies, also has a lower market share.

Attock Oil Refinery: acquired the permission to establish its own outlets some years
ago. It had the plan to establish these outlets in the northern region. It is expected that

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Pakistan State Oil

after the increase in its refining capacity the Company would start establishing its own
outlets.
Q: How service product characteristics affect the ease of evaluation for existing and
potential customers?
Since PSO is the national hub for providing refueling services to all the national grids of
Pakistan, ranging from the Pak army to navy, aviation along with citizens of the Islamic Republic
of Pakistan theres a reason for the greatest market share ranging around 70%. The reason why
PSO has such a high rate of users is because of various reasons discussed below:
-

Supply range: Currently the Company is engaged in the marketing and distribution of
various POL products including Motor Gasoline (Mogas), High Speed Diesel (HSD),
Furnace Oil (FO), Jet Fuel (JP-1), Kerosene, CNG, LPG, Petrochemicals and Lubricants.
PSO has the most wide-spread retail network in the country with over 3,500 retail outlets
and is also the major fuel supplier to aviation, railways, power projects, armed forces,
marine and agriculture sectors. The Company also possesses the countrys largest storage
capacity representing nearly 68% of the nation's total storage capacity.

Latest editions: With its finest quality brands Altron Premium, Altron X and Green XL.
The Retail team at PSO works relentlessly to fulfill the needs of the automotive and
agricultural sector of the country. Along with this it provides CNG and LPG. CNG and
LPG have become The Fuel for the automotive sector due to their price competitiveness
and are slowly and gradually replacing conventional liquid fuels. It also provides
Biodiesel which is a renewable, environment friendly substitute for petro-diesel fuel. It is
derived from JatrophaCurcas plant which is a hardy, wild oilseed perennial plant.
Conditions for cultivation of this plant are favorable in Pakistan, and the biodiesel
derived can reap benefits in the form of economic, environmental, mechanical and
national security.

PSO Smart Cards: The PSO Smart Card is designed to offer another layer of security
for Cardholders while performing transactions. These cards are not only powered by the
security of the chip but also enable an organization to track its fuelling expenditure
contained in the embedded chip.PSO Smart Cards facilitate the convenience and security

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of any transaction. Smart Cards use Secure Chip Technology which is designed with a
host of features that help to ensure that customers experience hassle-free transactions
-

Non Fuel Retail Services: Non-Fuel Retail initiatives are not just revenue generating
propositions; they mobilize PSOs Forecourts in accordance with the market dynamics
and offer strategic services to the population based on their territorial needs, ultimately
creating a "Customer Centric image" of Stations. Outlets included are PSO Quick service,
Pizza Hut, Walls Happiness Center, Subway and ATMs.

Q: What types of perceived risks are involved?

Using Google, there is little perceived risk involved. The major perceived risk can be financial
and physical. Financial risk would be whenever the government increases the oil prices, PSO is
the first station which increases its prices due to being the state oil of Pakistan, along with this
there are sudden fluctuations in the stock price of PSO which could end up in people losing their
money which is invested in the stock market. Physical risks which could occur would be any
hazardous incident caused due to the petrol station.
Q: Discuss the following:

Moments of Truth: The moments of truth regarding the usage of PSO as a service
include the fact that it provides a wide range of services at a very larger scale, ranging

from the northern to the southern part of Pakistan and being easily available at all times.
High contact/low contact service:Its a high contact service since the user has to go to
the service provider in order to avail the service. However if any user has a problem with
service provided to them they can always go to their head office or their divisional offices

or even write to them on their website.

The Servuction system:The servuction system consists of a backstage and a front stage.
The backstage consists of all those numerous workers working in the PSO headquarter,
offices and data centers maintaining the supply of PSO or developing newer initiatives
that the users at the front stage could use. The front stage users adapt to these changes

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and use and spread them and provide feedback on them. This helps in motivating the
employees backstage in order to provide better results upfront.
Q:

What

is

their

competitive

advantage?

Which

service

strategy

(Market/unfocused/Service and fully focused)?

PSO certainly has a competitive advantage over all its competitors because of the
vast network of its outlets all over Pakistan but at the same time a great deal of responsibility is
required by them as they are not only an oil marketing companybut they have some
responsibilities towards the people of Pakistan.Take an example of a PSO outlet in Chitral, while
deciding to undertake thisproject or not the feasibility report rejects the idea of building it but
being a Pakistani socially responsible company if even one public transport bus goes there then
they have to build a petrol station over there.PSO has been very innovative and successful since
it realized the competition has actually started after SHELL came and acquired the market share
from PSO. But after coming up with all those new vision outlets, PSO has proved to be never
far behind. Not only this, as the leading oil marketing company, PSO the first to introduce this
new range of upgraded and environmentally friendly petroleum products with higher RON
ratings in the country.

These fuels will:

Give better mileage

Improve engine performance

Provide more engine power

Enhance engine efficiency and reliability

There it can be said that PSO uses a service focused marketing strategy.

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Pakistan State Oil

Q: What is its market segment/target segment?
PSO has a vast target market since its the type of service which has to be used my each and
every individual, it mainly attracts the sector related to the transportation workload, so basically
ranging from the adults to kids, students, working class along with all three socio economic
classes all come under PSOs target segment
Positioning Map

High
Quality

High
Supply

Low
Supply

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Low

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Pakistan State Oil

Service products
The three main service products that PSO offers are single grade petrol, high speed diesel, and
Castrol GTX. These are the main core products of PSO. Core products are a companys products
or services that are related directly to their core competencies. These are the products that an
organization primarily offers and what their organization is recognized for.
Premier Plus is the single grade petrol that is offered by PSO. It has a number of benefits. It
improves the BHP, engine power by 8%. It reduces exhaust emissions, all round friction, and oil
consumption. It improves compression and also saves electrical power. Petrol can be known as
their fast moving product. They also claim it as their profitable product is its consumption is very
high.
High speed diesel is one of the fastest moving products among other products of PSO. It is most
commonly used by heavy engine vehicles. It is used in areas of agriculture, industry, and the
general public. It is also used in large, slow speed marine engines.
PSOs supplementary services include the car wash services at almost every outlet. Along with
that, they also provide tire services such as checking for flats and fixing punctures. They have
made proper arrangements of the location of these services so that people can easily take their
vehicles. They do not have to face any hassle when they desire these services offered by PSO.
Their branding strategy is to pioneer in product and service innovation. They make sure that
when people come to consume their fuel, they will leave knowing that they have used the best
there is. Their petrol and diesel are the two brands that PSO has successfully worked with
throughout its tenure. The branding was done mostly at the distribution house and was also used
at the S&D training session at the Pearl Continental Hotel. Flexes of various sizes were made
along with a number of standees for visibility.

CORE Product:
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Pakistan State Oil

Company website

Managers present at
location

Shop available at location

Petrol or diesel at
location

PSO card service and cash payment

Tires and belongings
at time of car wash

Car wash

Placement,

distribution,

channel,
or intermediary
A channel of distribution comprises a set of institutions, which perform all of the activities utilized to move a
product and its title from production to consumption. Place is also a channel of distribution or intermediary. It is
the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the
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user or consumer. There are many types of intermediaries such as wholesalers, agents, retailers, the Internet,
overseas distributors, direct marketing (from manufacturer to user without an intermediary), and many others.
For Single Grade Petrol (SGP) and High Speed Diesel (HSD), the most viable placement channel is the
Products movement from wholesalers to retailers .For general retail outlets; this facility is
Available in the form of tank Lorries. For industrial needs, railway tank wagons are the most appropriate source.
Previously Government of Pakistan had been paying the freight charges of their placement but now for the
product movement, retailers have to pay themselves the freight charges. As far as the placement of Castrol GTX
is concerned, different lube vans are available which take the lubes from manufacturers to dealers of petrol
pumps to be available on lube shops. Also there are different agencies for lubricants, which take them from
dealers on their own expenses and sell to general public. These days the enhancement of existing facilities and
development of new infrastructure -especially pipelines, which are the safest, efficient & most environment
friendly mode of transportation, is being looked up carefully. Pakistan Railway is also gearing for moving more
products upcountry. This is very important to reduce the pressure on road movement

For product movement network:

PSO all over Pakistan has:

1) 1120 Railway tank wagons
2) 13 pipelines

PSO has storage depots all over Pakistan:

These include,
South Zone Depots:
Hyderabad, Daulatpur, Sukkhur, Sanghi, Quetta C, Khuzdar and Pasni
NORTH ZONE DEPOTS
Chakpiran, Faqirabad, Taru Jabba, Serai Naurang, Kundian, Juglot, Chitral and Kohat.
CENTRAL ZONE DEPOTS
Vehari, Shershah -2 (B&C), Lalpir, Sahiwal, Habibabad,
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Pakistan State Oil

Faisalabad A,
Faisalabad 'B',Badami
Bagh, Kala Shah Kaku, Gujranwala, Sargodha and Kotla Jam.

Pricing:
Pricing Strategy of Petrol and Diesel:
Both petrol and diesel are placed under the head of fuel oil, so the pricing strategy of both of the
products is the same. Fuel oil prices are set by a committee for all oil marketing companies. And
to this fact all oil marketing companies are having same petrol and diesel prices. There is almost
no difference between the prices of PSO and Shell or any of its competitors.
Pricing strategy of Castrol GTX:
There is no hard and fast rule about the pricing strategy of castor GTX. But there is still a defined
strategy of prices. In case of Castrol GTX that is a lubricant, all oil companies set their own
prices which means prices of lubes vary from PSO to Shell and Caltex. These prices are based
upon:
1) Cost
2) Handling Charges
3) Storage Charges
Because some companies have to bear less cost handling charges as well as storage
charges thats why; this product of PSO has greater demand in the market. Being a
government company PSO has to bear less cost and handling and storage charges.
Lubricant prices are revised after every 4-6 months. They have defined their pricing
strategy as competitive prices. They have said that we have competitive prices. Two
factors are considered while setting the prices:

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Pakistan State Oil

In case of Lubricants, they set their prices lower than that of their competitors.
Current prices of those products:

Altron premium: 66.27/ltr

High speed diesel: 75.2

4. PROMOTION:
This includes presenting interesting fuel and lubricants promotion campaigns to indulge customers.

Mega hoardings

Mega hoardings constructed at retail outlets are another classic example, which is not only an extremely costeffective initiative but also provides the company with an ideal location to advertise and also enhances the outlook
of the outlet.

Zoom Signs

Another image-building tool and a one-of-its-kind mode of advertising is Zoom Sign. These are110 feet tall
towers, with PSO logo on the top, built at the stations in major cities of Pakistan. These signs that can be seem
from a distance are providing PSO with tremendous mileage

Encouraging sports

PSO is also keen on encouraging sports in the country and is a major sponsor of SAF Games, various cricket
series, golf tournaments and squash championships
.

PSO Light & Visual Park

PSO has also adopted a park now called PSO Light & Visual Park in Islamabad where new
Plantation and lights have been put up along with other beautification activities.

Directional and safety signs

Activities like putting up of directional and safety signs and overhead gantries in Karachi, Lahore, Islamabad,
Saiwal, Peshawar and Faisalabad is the classic example of PSO as a socially ethical organization.
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PSO Cards

PSO is also offering plastic cards for the retail and industrial consumers according to their requirements.
1. Loyalty Card
2. Prepaid Cards (available in Rs. 500, 1500, 2500 & 5000)
3. Fleet Card for Corporate Vehicles
4. Corporate Card for Corporate employ

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Part B
The service process refers to how a service is delivered to a customer. Processes involve the
procedures, tasks, schedules, mechanisms, activities and routines by which a service is delivered
to the customer.
To start with the service process, service marketers design a service blueprint also known as
service mapping. Service blueprint is a tool that is used by marketers to depict service process,
point of customer interaction and evidence of service from a customers point of view. Service
mapping consist of five major layers physical evidence, user actions, front stage, back stage and
support processes. The figure below shows the service blueprint for PSO.
Figure service blueprint

The physical evidence is the first layer of the service mapping and deals with the tangible
element of the service.

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Pakistan State Oil

User action refers to the steps that customer perform in the process of the purchasing. As shown
above user action includes all the steps that the individual will take while refueling at the gas
station.
Front stage refers to all those activities that include employee interaction with the customers and
are visible to customers.
Backstage refer to all those activities that occur behind the scene and support the frontage
activities. For PSO back stage involves maintenance and training of staff.
Support process is another layer that internal service steps and interaction.
A tangible cue is a concrete symbol of the service offering. A personal information source is
someone consumers are familiar with (such as a celebrity) or someone they admire or can relate
to personally. For PSO it is the name Pakistan, and people trust it on this cue. As it is the main
importer of fuel in Pakistan.
All the steps mentioned above in the service blueprint are important as it provide a simple
service and do not have any other way to fulfill its task.
Service blueprint is a tool that can figure out problems in a process. Through this company opt to
effective solution that results in better distribution and delivery.
Level of customer participation
In a country like Pakistan gas station are not fully automated so there is a medium participation
required in this process this means that customer inputs are required to assist the service
provider. Customer need to provide information on which fuel is needed and about the amount of
the product.
Gas stations in Pakistan in particular do not consider customers as partial employees. Customers
are just there to provide information or order the employees to provide a certain service.

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Physical Environment
PSO has built attractive buildings of its outlets in order to attract their customers. Their design
can be seen as the normal look of a gas station, along with that it is also spacious, ensuring
customers will not be clustered at the location. Moreover, the supplementary services are all
offered at the same location as the core services. They have been conveniently placed at the
corners of the station, again ensuring that there be no clustering while people avail these
services. Customers can easily get their oil changed, tires repaired, and car washed all at one
location. If there are too many customers already waiting to be served, PSO has ensured that it
will not cause a problem for the rest of the customers. Their efficiency and effectiveness has
proved to their customers that they will have no problem of waiting or lacking quality, as they
keep everything up to the mark. Their workers are always present and they keep the pace as
people come and go the entire day. They make sure the customer gets treated fairly and that there
will be no hassle faced when acquiring any service.

The signs and symbols that PSO have are only their logo placed on several spots in their outlets.
They also have indicators for cars who need petrol and those that need diesel.
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5. People:
In Marketing Mix one of the most important Pis People. The employees of PSO nearly equal to 2000
who are working all over Pakistan they are the assets of the company and they are responsible for the good will of
the company , it also focuses on the status of their employees and give them performance appraisal program and
give them incentives and also give them medical treatment to further motivate them to work more productively
and efficiently.

Best suited candidates

Pakistan State Oil Co. Ltd. the oil market leader and largest company in Pakistan in terms of
turnover, seeks to hire dynamic and career oriented professionals on training assignment who are
willing to meet challenges and make a difference in the organization.
PSO solicits applications on one-year training assignment as per the following:
1. 4-year Bachelor Degree in Marketing, Supply Chain, Law, Management Sciences,
Accounting / Finance, Computer Sciences
2. 4-year Bachelor (Engineering) Degree in Mechanical, Electrical, Chemical, Industrial
Electronics, Mechatronics & Computer Sciences
General Instructions & Required Qualification:
Candidates must possess at least 16 years of education from HEC recognized institute
Maximum 24 years of age on the date of advertisement
Incomplete applications shall not be considered
PSO reserves the right to set the test cut-off based on number of trainee requirements and test
result Use of any mean to influence the recruitment process will lead to disqualification of the
candidate
Final selection will be subject to clearing the test and interview, degree verification and
medical clearance
Foreign degree holders need to furnish equivalency certificate from HEC prior to selection.
Only shortlisted candidates will be contacted

Employee Recognition
To boost the morale of employees a reward and recognition scheme is in place for the last few
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years and has been a great source of creating a spirit of healthy competition amongst
employees. Each year employees are nominated for two company-wide ceremonies viz
- Shaukat

Raza

- PSO

Managing

Mirza

Management
Director's

Excellence

Award and

Performance

Award

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

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

attitude,

behavior

patterns

and

expectations.

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

The corporate culture underwent a comprehensive renewal program which was fully
implemented in 2004. This program over the years included the revamping of the organizational
architecture, rationalization of staff, employee empowerment and transparency in decision
making through cross functional teams. This new corporate renewal program has divided the
companys major operations into independent activities supported by legal, financial, informative
and other services. In order to reinforce and monitor this structural change, related check and
balances have been established by incorporating monitoring and control systems. Due to this
effective implementation of corporate reform and consistent application of the best industrial
practices and business development strategies, PSO has been able to maintain its market
leadership in a highly competitive business environment.

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