Introduction

Pakistan State Oil Company Limited, namely PSO was found in 1976, as a result of
amalgamation of the formal three oil marketing companies i-e Pakistan National Oils
Limited, Premier Oil Company and Esso Undertakings in Pakistan. There is a
chronology of events leading to the formation of Pakistan State Oil Co. Ltd .On January
1st, 1974, Federal Government takes over management of PNO (Pakistan National Oil)
and DPO (Dawood Petroleum Limited) and renamed it into POCL (Premier Oil Company
Limited) under marketing of Petroleum Products (Federal Control) Act, 1974.Then on
June 3rd, 1974 Government incorporated Petroleum Storage Development Corporation,
PSDC. On August 23rd, 1976 name of PSDC was changed to State Oil Company
Limited, SOCL. On September 15.1976 Government purchased ESSO Undertakings,
vested the same in SOCL. And finally on December 30, 1976 Government merged PNO
and POCL into SOCL and named it as PSO.
As the largest oil marketing company of Pakistan, PSO is engaged in the storage,
import, distribution and marketing of Petroleum products, petrochemicals, Aviation and
Bunker fuels, LPG and CNG dominates the country’s fuel and energy needs. Since its
inception in 1976 the company has been meeting more than 70% of the country’s fuel
needs. PSO’s 3805 outlets all across the country markets more than 12 million tons of
fuel products annually. This network is supported by PSO’s 28 storage facilities with a
capacity of more than 800,000 tons .PSO took a major step in improving its distribution
facilities by acquiring 12% equity in the 800km long Karachi-Mehmoodkot White Oil
Pipeline. As part of PSO’s policy of providing better customer services, it has embarked
upon its New Vision retail development program. Equipped with the most modern
facilities like Electronic dispensing units, auto car wash, convenience stores, internet
facilities and business centers, these sate of the art designed stations provide greater
customer confidence and a friendlier environment. As a manifestation of PSO’s greater
customer focus PSO 24hr customer service has been launched where customers can
lodge their queries and suggestions about various PSO products and services.
Being the largest of the three marketing companies in Pakistan, PSO has consistently
maintained an edge over its competitors Shell and Caltex. With an overall market
participation of over 72% in 1997-98, it sold 6.244 million tones of petroleum products
during the half year ended December 31st, 1999 against 5.633 million tones sold during
the corresponding period last year, showing an increase of 10.8%.
Continuous growth
PSO continues to expand its physical, technical and marketing resources to meet the
requirements of the country .To keep pace with growth, PSO has maintained
International Collaborations to import latest technology. These are:
1. Castrol (UK) Blending and marketing of lubricants in Pakistan
2. Air Total (France) Technical and Commercial agreements in Aviation Services
3. Exxon Chemicals (Singapore) Petrochemical Business And Technology.
Mission statement
To ensure availability and security of sustainable supply of oil and gas for economic
development and strategic requirements of pakistan and to coordinate development of
natural resources of energy and minerals.
Strategy to achieve mission
To adopt an integrated approach for promoting exploration and fast track development of
oil, gas and mineral resources. To deregulate and liberalize and privatize oil, gas and
mineral sector through structured reforms. To attract private investment and to establish
credible institutions for facilitating the development of petroleum and mineral sector. To
develop technical professional human resources. To optimize existing energy delivery
infrastructure oil and gas pipelines. To reduce imported fuel oil consumption with
indigenous gas by optimally balancing the gas availability and supplies from local and
imported resources.
Importance of company within industry
It would not be wrong to say that ‘PSO’ is having a brand and loyal image in the industry.
On the basis of this brand image we can have an idea about the ranking and positioning
of “Pakistan State Oil Company” in the industrial sector. ‘PSO’ has been serving the
entire industrial sector in Pakistan since 1971. As positioning of company within market
is a means to target a customer. So we can say that ‘Pakistan State Oil’ is no doubt
having the useful and simplest tool to the marketers in the industrial sector. The
importance of the ‘PSO’ in industry is due to the fact that it always launch a product
according to specific requirements of a particular industry. So in this way ‘Pakistan State
Oil ‘ is having more loyal customers that they never switch to another company. The
important point is that importance of any organization is related to its perception. The
positioning basically is the perception of products and services in the minds of
consumer.
And the perception differs from person to person, what do you think about the quality
and value, I may not favour that. For example you may go in favour of usage of ‘CNG’
because your perception of that product is excellent but I may not favour that, as my
experiences of that particular product are not well and good. The importance of
“Pakistan State Oil “in the industry becomes obvious when we talk about the different
industrial products which they are offering in the market. The most popular products of
“Pakistan State Oil” which are used in bulk amounts by the industrial are: kerosene oil,
furnace oil, lubricants and diesel. ‘PSO’ is the largest lubricants marketing company in
Pakistan. The major consuming industries for ‘PSO’ products are: sugar mills, steel mills,
edible oil mills, independent power plants (IPP’s) and paint industry.
The importance of “Pakistan State Oil” to the sugar mills is due to the fact that they are
offering furnace oil and lubricants for the protection and safety of their machinery and
Plants. “Pakistan State Oil” is now offering Doorstep ‘PSO’ lubricants delivery i.e. free
lube delivery anywhere you want. Whether you are a ‘PSO’ industrial consumer, lube
shop agent, or customer. You can now have ‘PSO’ lubricants delivered at your doorstep,
this service is totally free of cost anywhere. “Pakistan State Oil “ has a complete range of
automotive lubricants. Some of these are used in the steel industry. These lubricants
makes it possible that the machinery and plants can work more efficiently as they
reduces
The friction prevents all the barrier to the performance .The above statement is no doubt
true “Pakistan State Oil” is totally committed to quality and excellence and its lubricants
department is ISO 9002 certified for testing and processing facilities of all automotive
lubricants.
“Pakistan State oil Company Limited” also supplies imported or local chemicals to
various industries. Among these industries the paint industries and edible oil mills are
important consumers of industrial chemicals. These chemicals are tauline, benzene,
hexane and solvent oil. Edible oil mills which may be called ghee mills are using hexane.
Lubricants and chemical department remains in the activity of launching new products
for the benefits of industries and to attract the new industrial consumers. “Pakistan State
Oil” makes it possible by extending lube testing and advisory services to all customers to
drive maximum benefits from its products. In other words we can say that the importance
of Pakistan State Oil” in the industry is due to the fact that it is a public limited company.
Therefore, it is offering its specially designed products to the “Independent Power plants”
(IPP’s) which includes army, railways and WAPDA. Army uses “PSO” products for the
refueling of tanks. So the ranking of “Pakistan State Oil Company” according to the
Divisional Manager is defined as:
“PSO has top oil market”
(Divisional Manager: Khawar Jilani)
pattern of holdings of the shares held by the shareholders
Pattern of holdings of the Shares held by the Shareholders (%)
Categories of 1996 1997 1998 1999 2000
Shareholders
Individuals 15.58 14.41 13.22 16.17 16.38
Investment 0.62 0.52 0.52 0.37 0.20
Companies
Insurance 4.19 3.67 3.26 3.76 3.63
Companies
Joint Stock 0.93 0.79 0.86 2.13 2.28
Companies
Financial 33.54 31.16 28.37 32.65 43.73
Institutions and
Banks
Modaraba 0.05 0.02 0.02 0.06 0.25
Companies
Federal 25.51 25.51 25.51 25.51 25.51
Government
Securities and 0.00 0.00 0.00 0.00 0.00
Exchange
Commission of
Pakistan
Abandoned 0.48 0.48 0.48 0.48 0.48
Properties
Organization
Charitable 0.26 0.26 0.26 0.27 0.28
Institutions
Foreign Investors 18.84 23.18 27.50 18.60 7.26
organizational structure of PSO
 functional departments of pso
1. Marketing Department.
2. Finance Department
3. Supply & Distribution Department
4. Operations Department
5. Information System Department
6. Human Resources Department
7. Training & Organizational Development Department
Importance of marketing department within Organization
An advanced organization like “Pakistan State Oil “needs some sort of marketing system
to satisfy the efforts of all the people working in the organization which are required to
satisfy the varied needs of all its consumers. Importance of marketing department within
the organization is due to the fact that “it is both a set of activities performed by
organizations and social classes.” Marketing is also important in an organization as it is
directly related to the products and services offered by the company. Divisional Manager
of ‘PSO’ said that:” the marketing department within our organization serves as front line
fighter to their competitors. Without it they can not project and introduce new products.
So it should be proactive and customer focussed. You have product and you are unable
to sell it if you do not market it. Therefore, we can say that marketing department plays a
vital role in the profitability of an organization.”
Marketing plans are vital to the success of an organization because they give direction
that how the particular objectives are to be achieved and how we intend to do
that. Therefore whenever “Pakistan State Oil” is going to introduce a new product or is
going to provide a new facility to its potential customers, the marketing department of
“PSO” always serves as a connection bridge by providing necessary information to its
customers either by print media, electronic media or by internet. So they claim that for
“Pakistan State Oil Company Limited”, the customer comes first, always and every time.
They are committed to providing the best products and services to all their kind patrons.
The main objective and of “PSO” marketing department is to continuously upgrade their
products their presentation to keep the customers fully satisfied. In line with this policy
on Oct 1st, 2000 they introduced PSO/CASTROL industrial and automotive lubricants in
210 litre plastic drums .The new plastic drums are specially designed to withstand tough
handling conditions especially during transportation which is subjected to continuous
vibration and high axial force. Moreover, the single mould design of these drums makes
virtually leak proof. All this is basically PSO’s effort in not only providing efficient service
to you but also in making the environment better and safer.
It is one of the marketing plans of the “Pakistan State Oil “ to promote and market their
product according to laws and regulations of the country. The marketing department of
“PSO” also keeps in mind the current state of technology i.e. they make their strategic
plans according to the latest technology e.g. now they have launched their petrol pumps
on the new vision. In this they are also confronted with the marketing plans campaigns of
the competitors. In early 1990’s “Shell Pakistan” introduced the” retail visual impact “. It
renovated the petrol pumps at the same international standards. So the “Shell”
influenced the “PSO” market. This was very tough time for “PSO” as its most of the loyal
customers were switching towards “Shell Pakistan”. But now “PSO” has improved its
marketing and has introduced a new vision. So now “PSO “ has given time to its
competitors because it has largest infrastructure and is having largest Depo’s. All this is
done through the efforts of its marketing department. The another reason of its success
is due to the fact that it is both profit and service oriented organization.
 Marketing Departments of PSO
Being the largest oil marketing company, PSO has the following marketing departments:
1. Retail.
2. Industrial consumers.
3. Aviation.
4. Compressed Natural Gas.
5. Liquefied Petroleum Gas.
6. Chemicals.
7. Marine.
8. Lube sales and Agency trade.

Retail
The basic concern of this department is with petrol pumps. To enhance the sales of
petroleum products in already existing petrol pumps and to install new one are its major
objectives .It gives certain targets to outlets dealers (owners) which they have to achieve
in a certain time period. The 3805 outlets all across the country are supported by storage
depots which are being facilitated by the product movement through tank lorries, railway
tank wagons and pipelines. The major policy of this departments these days is the new
vision program of outlets .It makes the decision of new vision on the basis of some
factors like location of outlets, potential of sales area, existing sales, competitors strong
hold etc. There are three ways to bring the outlets in new vision. These are:
100% contribution by company
50% contribution by company
100% contribution by dealer
Being the government organization, previously there were restrictions on new visions of
outlets but as Shell International initiated this policy, it became a necessity for PSO to
take this step.
So the retail department is actively participating in distribution, storage and in new vision
programs.
Industrial consumers
PSO is playing an equal important role in industrial sector. This department deals with
marketing of products like furnace oil, kerosene oil, high speed diesel, lubricants, petrol
etc for Independent Power Plants (IPPs), Wapda, Army, Railways, Sugar mills etc. From
the locomotives of Pakistan Railways to the giant turbines of power projects, all are
fueled by PSO. Being fully alive to the responsibilities towards the agricultural sector
PSO’s 700 strong agency network helps keep the farm machinery running. Army needs
of HSD and lubricants are also under its responsibility. Further, its kerosene sales are a
major source of energy for the rural and lacking gas facilities.
Aviation Department
PSO remains equally strong in Aviation and Bunker Sales. PSO has
been constantly upgrading its facilities to serve a wide range of commercial aircraft.
Through a chain of eight Aviation Service Stations scattered all across the country PSO
fuels the aircraft of many local and international airlines. Acquisition of new Lahore
Terminal Complex at the Lahore International Airport has enabled PSO to serve the
busiest corridor of East/West bound flights benefiting the airlines in shape of time saving
and lesser fuel burn off. While it’s bunkering facilities at all the major ports of country fill
up the ocean liners of many nationalities facilitating the nation’s international trade.

Compressed Natural Gas (CNG) Department

This department is concerned with promoting the use of CNG in vehicles. This use is
being encouraged to reduce the pressure on petroleum imports, to curb pollution to
improve the environment. The existing price differential between CNG tariff and motor
gasoline will be maintained as an incentive for CNG use. This department is making
efforts to exempt the import of CNG machinery, equipment, conversion kits, CNG
cylinders etc from duties and sales tax for a period of five years. Also efforts have been
going to eliminate double taxation in the form of excise duty on CNG.
Liquefied Petroleum Gas Department
LPG is filled in cylinders at high pressures. PSO started marketing of LPG in 1981 in
South area (Karachi). Now all three refineries are producing LPG.
The Government has taken a bold and far-reaching initiative and liberalized integrated
infrastructure projects of LPG, free from government guarantees and permission. Now
all credible LPG companies are free to develop integrated projects of LPG import
terminals, storage facilities, inland transportation, storage depots and retail marketing /
distribution without requiring any guarantees or permission from government except the
marketing license which would be issued without any difficulty. In Pakistan there are
different marketing companies of LPG like Pak Gas (PSO), Fon Gas (Fauji Foundation) ,
Sui Northern Gas , Lube Gas and Sun Gas etc . Now this department of PSO is actively
dealing with the purchase and supply of LPG cylinders for household and commercial
purposes.
Chemical Department
This department is engaged in the business of chemicals derived from petroleum called
petrochemicals. Most of the chemicals are imported in bulk and some are manufactured
in refineries. these chemicals are imported from Europe , Middle East etc through ships ,
Local and imported chemicals are supplied to various industries for their chemical
needs. These chemicals include toluene, methyl , benzene, polyol, hexane used in
edible oil mills, solvent oil used in paint industries etc.
Marine Department
The basic purpose of this department is to fulfill the needs of shipping firms. The
refueling of ships is done through this department. Supply of lubricants to shipping
corporations is also done through this department. For marine department, the
government has fixed the prices and owing to high prices of oil, share of this department
is nominal. Supply is made available through pipelines, tank lorries and barges (ships).
This department sells furnace oil , LDO and HSD to Karachi port .
Lube sales and Agency trade Department
This department is concerned for making agreements of manufacturing and marketing
the lubes. PSO has maintained International standards of its lubricants. It has a technical
collaboration with Castrol, England. Lubricants are locally manufactured. PSO has 10
blending plants; 3 in Karachi, 1 in Lahore and 5 blending plants are affiliated. Marketing
of lube oils is done through agencies and petrol pumps. Major products being marketed
are diesel lube, CR 40 and GTX.
Importance of Marketing research
Market research and marketing research are often confused. 'Market' research is simply
research into a specific market. It is a very narrow concept. 'Marketing' research is much
broader. It not only includes 'market' research, but also areas such as research into new
products, or modes of distribution such as via the Internet. Here are a couple of
definitions:
Marketing research is the function that links the consumer, customer, and public to the
marketer through information - information used to identify and define marketing
opportunities and problems; generate, refine, and evaluate marketing actions; monitor
marketing performance; and improve understanding of marketing as a process.
Marketing research specifies the information required to address these issues, designs
the methods for collecting information, manages and implements the data collection
process, analyzes, and communicates the findings and their implications.
Obviously, this is a very long and involved definition of marketing research.
“Marketing research is about researching the whole of a company's marketing process “
This explanation is far more straightforward i.e. marketing research into the elements of
the marketing mix, competitors, markets, and everything to do with the customers.
Marketing is no doubt the most important tool for the success of an organization. It helps
to recognize the problems that are confronted to an organization. The basic purpose of
this research is to identify the problems and then find out the solutions for that. In PSO
they are having the research and development in the regional headquarter Karachi. But
this department is not so much efficient. They are not having the research department
any other offices all over the Pakistan except Karachi. The reason for their negligence to
research department is that they believe that “ Pakistan State Oil Company Limited” is
already having strong market position. They are having the top oil market among the
three most leading oil companies in Pakistan, which are PSO, Shell, Caltex. PSO is
having the largest market share among all these three. So the management of PSO is
that as they are already earning up to the mark so there is no need to bear the expenses
of the research and development. As they believe that if they are going to maintain the
research and development department it would be an extra burden on their company.
In order to meet the requirements of the customers and facilitate them in a better way it
is necessary for “Pakistan State Oil Company Limited” to maintain the research
department and to make more active and efficient the existing department in the regional
office. It is also needed to compete in the market. As Shell is having the research
department which is more advanced and equipped with the technological skills and due
to this Shell is able maintain its market image in a better way than PSO.
 segmentation
MARKET SEGMENTATION
Diesel
Basis for the market segmentation for hi-speed diesel are:
Engine Power
Motor Vehicles above 1300 cc
Geography
Market is divided into Roral & Urban areas, where placement and promotion policies
differ. On roral areas selling is through oil agencies and in Urban areas placement is
through petrol pumps.
Income
The other base of market segmentation is income a:
Vehicles and machines which consumes Hi-speed diesel are usually involved in
commercial activities. So, people involved in such kind of business belong to middle-
middle class and above.
Market segmentation for petrol
Market for petrol is segmented on the basis of following.
Engine Power
Vehicles or machinery having engine power below 1000 cc.
Income
On income basis, there are basically three groups:
1. Lower Middle
2. Middle Middle
3. Abore Middle
Lower Middle
In this social close people who are having vehicles/machinery from (49 cc to 100 cc)
which includes. Vespa- motor- cycles.
Middle Middle Class
Includes those people who are having small cares like (Suzuki, Charade, Santro etc)
means, they are used to travel by these vehicles mostly within the city. Those people
have income group which can be classified as middle class.
Above Middle Class
Then those people who are having vehicle that can be classified a luxury vehicle.
(Pajero, Jeeps, Limousine, Mercedes)
Toyota (Latest Models), Honda (etc).
Market segmentation for GTX Mobil oil.
The segmentation of GTX Mobil oil has been done on the basic of consumption level
which is as follows:
1. Light Users
light users include those people who have vehicles/machinery that consume mobil oil
from (1 liter to 4 liters) i-e Motorcycle and Rickshaw – generators (Light).
2. Mediocre User
Includes those user who are having vehicle/machinery that consumes (4 liter to 12 liter)
mobil oil i.e. small ears and light machinery.
3. Heavy User
Includes those user who are heaving vehicles and machinery, that consumes more than
12 liter, which includes heavy transport, truck, buses loaders, road rolers, tractors and
industrial units.
TARGET MARKET
PSO, as a public oil company, which has a Govt. support also. Its target market for
selected three products is as follows:
HI-SPEED DIESEL
Target market for hi-speed diesel can be divided into:
1. Agriculture Sector
Agriculture sector includes. The landlords, who have their own irrigation units and they
use diesel in their operations. Diesel is also used in tractors, cultivating machines and in
harvesters.
2. Govt. Sector
PSO also has a very good market in Govt. sector, which include WAPDA and
3. PAK Forces
Pakistan Army, Air Force, Navy, all these are the target market of PSO-particularly for hi-
speed diesel. Moreover, transports that are involved in loading, cargo activities i.e. public
transport, private transport Co. trucking (Goods transport stations).
Hi-speed diesel is also consumed by the diesel general motors, which include vehicles
that are above 1300 Coca-Cola. (1C – 2C engines to heavy power engines).
PETROL
Target market for the petrol car below 1300 Coca-Cola. Light user like people who have
motorcycles. Taxis and rickshaws and generator.
Castrol GTX MOBIL OIL
Target market for GTX mobil oil is large vehicle, in Govt. sector, highway authority. Who
used their machinery to develop the infrastructure? FWO (Army) services stations and
workshops.
 PRODUCtS OF PSO
 PSO Automotive Oils
 PSO Industrial Oils
 Castrol Automotive Oils
 Castrol Industrial Oils
 Industrial Chemicals
 Fuel Oils
PSO AUTOMOTIVE OILS

 Engine Oils

 Super Engine Oil

 Premier Motor Oil
 PSO CNG Oil
 Turbo Engine Lube X
 Turbo Engine Lube (SAE 15W/40)
 Turbo Engine Lube LD
 Turbo Engine Lube (SAE 10W-30 & 20W-50)
 Diesel UBE LD/MLD
 Diesel Lube D-3
 Diesel lube HD
 Tractor Oil
 Engine Lube
 Gas Engine Oil
 Two-Stroke / Flushing Oil
Gear / Transmission Fluids
 Gear Oil EP (GL-5)
 Gear Oil EP
 ATF
 Brake Fluids
 Hydraulic Break Fluid HD
 Automotive Greases
 MP Grease
PSO Industrial OILS
 Circulating Oils
 Texol/Texol-K
 Spindle Oils
 Spin cot

 Hydraulic Oils

 Hydro
 Hygrolaw
 Turbine Oils
 Turbine Oil
 Gear Oils
 Gear Oil MEP
 Gearled EP
 Refrigeration Oils
 Low Pour Oil
 Cylinder Oils
 Cylinder Oil M
 Asphaltic Oils
 Sugar Mill Oil
 Bearing Compound
 Gear & Wire Rope Compound
 Heat Transfer Oils
 Heat Transfer Oil
 Metal Working Fluids
 Solcut Oil
 Super Solcut Oil
 Neat Metal Cutting Oil
 Quenching Oil No:10
 Slide Way Oils
 Slide Way Oil

 Process Oils

 Process Oil-R
 Jbo/Rpo/Wbo
 Transformer Oils
 Transformer Oil
 Industrial Greases
 Alpha & Alpha EP Greases
 Moly Grease EP
Castrol Automotive OILS
 Engine Oils
 GTX Magnatec
 GTX
 GTX-XL
 RX Super Max
 Turbo Max
 CR40
 CR40 Plus
 RX Super
 CRD
 DD 40
 CRI
 CR
 Agri Castrol MP
 TLX
 MXD 400
 MXD
 Marine MLC

 Gear/Transmition Fluids

 Hypoy B
 Hypoy EP
 Dexron III Mercon
 TFP
 TQ
 Brake Fluids
 Brake Fluid HD
 Automotive Greases
 LM Grease
Castrol Industrial Oils
 Circulating Oils
 Magna
 Hydraulic Oils
 Hyspin
 Hyspin AWS
 Hyspin AWH-M
 Turbine Oils
 Turpak
 Perfecto_T
 Gears Oils
 Alpha ZN
 Alpha SP

 Refrigeration Oils

 Ice Matic
 Compressor Oils
 Aircol PD & SN

 Cylinder Oils

 Cresta V
  Asphaltic Oils

 Grippa
 Heat Transfer Oils
 Perfecto HT
 Metal Working Fluids
 Cool Edge BI
 Ilocut
 Iloquenc 9
 Slide Way Oils
 Magna GC/BD/CF

 Industrial Greases

 Spheerol AP & EPL Greases

Industrial Chemicals

 Industrial Chemicals

 Solvent Oil
 Mineral Turpentine (MTT)
 Hexane
 Toluene (Nitration Grade)
 Mixed Xylene (Nitration Grade)
 Isopropyl Alcohol
 Methyl Ethyl Ketone (MEK)
 Vinyl Acetate Monomer (VAM)
 Normal Butyl Acetate
Fuel Oils
 High Octane Blending Component
 Premium Plus (SGP)
 High Speed Diesel
 Kerosene
 Light Diesel Diesel Oil
 Furnace Oil
Since there is a variety of products offered by PSO and all are in great demand. But
even then we have selected three products which PSO is believed to have the highest
market.
 Single Grade Petrol (SGP)
 High Speed Diesel (HSD)
 Castrol GTX
 marketing mix

The 'marketing mix' is probably the most famous phrase in marketing. The elements
are the marketing 'tactics', also known as the 'four Ps'. The marketing mix elements are
product, price, placement and promotion.
Some commentators will increase the mix to the 'five Ps', to include people. Others will
increase the mix to 'Seven Ps', to include physical evidence (such as uniforms,
facilities, or livery) and process (i.e. the whole customer experience e.g. a visit the
Disney World). Neil H. Borden coined the term in his article 'The Concept of the
Marketing Mix' in 1965. The concept is simple. Think about another common mix - a
cake mix. All cakes contain eggs, milk, flour, and sugar. However, you can alter the final
cake by altering the amounts of mix elements contained in it. So for a sweet cake add
more sugar! It is the same with the marketing mix. Varying the mix elements can alter
the offer you make to your customer. So for a high profile brand increase the focus on
promotion and desensitize the weight given to price.
Products
 Single Grade Petrol (Premier Plus)
 High Speed Diesel (HSD)
 Castrol GTX
Single Grade petrol:
Compatible with mineral and synthetic oils and most hydraulic oils. Blends with most
greases, pastes, 2-stroke fuel oil, cutting oil, chain oil, compressor oil, axle oil, drilling
lubrication, tapping fluids, hydraulic oil, mining fluids, petrol, diesel, marine fuel oil, scour
able oils, coolants, anti freeze, soluble cutting fluids, penetrating oils, flushing oils,
general purpose lube oils.

SGP does not:

Flake, Melt, Crack, Expand, Creep, Scuff, Drag out, Contract, Migrate, Wash off
SGP helps to prevent:
Seizure, Galling, Vibration, Noise, Frictional heat, Weight Loss.
SGP improves:
Loading on bearings, cutting tool versatility, product finishing
PRODUCTION
Productivity and production may now improve using existing staff and equipment.
Wastage is reducing on finished goods.

Single Grade Petrol products benefits..

 Saves petrol/diesel fuel up to 20%
 Improves engine power (BHP) 8%

 Reduces exhaust emissions 46%
 Reduces all round friction 90%
 Reduces oil consumption 20%
 Improves compression 16%
 Saves electrical power 14%
 Improves Nm rating on gears 12%
 Improves cutting life 200%
 Reduces operating noise 10%
 Improves the life of oils 100%
 Reduces vibration 50%
 Reduces operating temperature 20%
 Improve torque values 12%
Improves frictional flow rates 15%
Extends the life of filters 20%
 Improves production output 20%
 Extends the battery life on tools 12%
 Increases operating speeds 10%
 Reduces weight loss on bearings
50%
 Extends machine life 30%

So they say that SGP, which is commonly known as petrol, is their fast moving product.
They also claimed that it is profitable product as its consumption is very high.
2. Castrol GTX…
Multigrade super high performance oil for use viscosity range of SAE 20W-50, gives
the rapid circulation and adds protection during start up from cold, where 80% engine
wear may occur, with extra protection for engines operating in hot and dusty climates.
Benefits
 Longer engine life and power retention.
 Improves oil pressure and consumption.
 Protects against soot, varnish, black sludge formation, acid and corrosion
Performance
 SAE 20W-50
 MIL-L-46152D
 API SG/CD
 MIL-L-2104E
Because of all these description it is also considered as one of the fast moving product.
Independent power plants, Wapda and etc mostly demand it. It is used as lubricant in
the petrol consumption cars.
3. High Speed Diesel

High speed diesel is one of the fastest moving product among other products of PSO. It
is most commonly used by heavy engine vehicles and automobiles. It is used in these
areas:
 Agriculture
 Industry
 General Public
It is used in large, slow speed marine engines and automotive engines as well.
 Pricing Strategy of Petrol & Diesel
Both petrol and diesel are placed under the head of fuel oil, so that the pricing strategy
of both of these products is same. And well discuss it in the context of pricing strategy of
full oil.
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 fuel oil prices of PSO and Shell, or any other competitor.
Fuel oil pricing strategy its standard. Set by OCAC (Oil Companies advisory committee).
Up to every fortnight the fuel oil prices are revised.
Pricing strategy of Castrol GTX
There is no hard and fast rule for the pricing strategy of castor GTX. But still there is 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, Shell and Caltex.
These prices are based upon.
 Cost
 Handling charges
 Storage charges
Because some companies have to bear less cost handling charges as well as storage
charges that’s 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 ever 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
i Profit
ii Services
In case of lubricants, they set their prices lower than their competitors.
Current prices of these products
Single grade petrol Rs. 32.26
High speed diesel Rs. 15.70
Castrol GTX Rs. 590.00 (1 Tin/ 4 litres pack)
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 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 retailer’s .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 product upcountry. This is very important to reduce the pressure on road
movement
For product movement network, PSO all over the Pakistan has,
Tank Lorries 13400
Railway Tank wagons 1120
Pipelines 13
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, Faisalabad ‘A’, Faisalabad 'B',
Badami Bagh, Kala Shah Kaku, Gujranwala, Sargodha and Kotla Jam.
 Swot Analysis
SWOT analysis is a tool for auditing an organization and its environment. It is the first
stage of planning and helps marketers to focus on key issues.
Once key issues have been identified, they feed into marketing objectives. It can be
used in conjunction with other tools for audit and analysis, such as PEST analysis and
Porter's Five-Forces analysis. It is a very popular tool with marketing students because it
is quick and easy to learn.
SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and
weaknesses are internal factors. For example, strength could be your specialist
marketing expertise. A weakness could be the lack of a new product. Opportunities and
threats are external factors. For example, an opportunity could be a developing market
such as the Internet. A threat could be a new competitor in your home market.
STRENGTHS
 PSO is having good competitive skills.
 It has adequate financial resources as it is a public sector organization and is having support
of the government.
 It is a well-recognized market leader as it has top oil market in Pakistan.
 PSO petrol pumps are computerized
 PSO is having product innovation as it frequently introduces new products according to the
requirements of its consumer.
 It has well conceived functional area strategies.
WEAKNESSES
 The organization is falling behind in research and development.
 Sometimes the organization is unable to implement strategies in front of its competitors.
 Although the services of PSO are quite well but it has weak market image as compared to
Shell.
OPPORTUNITIES
 Diversity into the related products i.e. creating some unique features in the products to
attract their consumer.
 Add some complementary products in the future.
 It is likely in the future that the organization is going to expand the business and enter into
the new market.
 Ability to move with the better strategies i.e. applying some new ways to cover the losses,
increase the financial resources or increase the market share.
 Introducing the new product having the features that are very first in the market i.e. not in
any other product offered by any competitor.
THREATS
 Likely entry of the new competitors that are having new technology and are going to provide
better services.
 Rising sales of the substitute products offered by the competitors.
 Adverse government policies i.e. government may increase the taxation rate on the products
offered to the customers.
 Growing competitor pressures can be proved as threat to the survival of the organization.
 Buyer’s needs and tendencies may change and they are not fully satisfied by the existing
products and may switch to the other products offered by the competitors.
 Adverse demographic changes.
 SUGGESTIONS
 This is needed for the organization to improve the services.
 PSO is lagging behind in the field of marketing research. So they should pay attention to
make the research and development department efficient and active.
 Management should work in depth to know that which petrol pumps are more profitable and
which are generating low sales so they can adopt new policies in order to increase
sales.
Conclusion
Term report on marketing enabled me to have practical experience. Since it was my first
experience to make a report on marketing. This provided me the opportunity to have
close might into the business activities. The main source of data collection was
interviewing the employees of “Pakistan State Oil Company Limited”. So it becomes a
source of sharpening my communicator and interpersonal skills. By face to face
interviews with Divisional Manager (Industrial consumer) and Divisional Manager (Retail)
I come to know that how to communicate with personnel’s. It gave me confidence to
move in professional field.

SWOT Analysis:
SWOT analysis is a tool for auditing an organization and its environment. It is the first
stage of planning and helps marketers to focus on key issues.
Once key issues have been identified, they feed into marketing objectives. It can be
used in conjunction with other tools for audit and analysis, such as PEST analysis and
Porter's Five-Forces analysis. It is a very popular tool with marketing students because it
is quick and easy to learn.
SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and
weaknesses are internal factors. For example, strength could be your specialist
marketing expertise. A weakness could be the lack of a new product. Opportunities and
threats are external factors. For example, an opportunity could be a developing market
such as the Internet. A threat could be a new competitor in your home market.
 When we went to PSO regional
office situated at the mall road
of Multan Cantt, we noticed
some similar strength there and
some of our observations were
not analogous with each other.
This difference might be
because of our observation
criteria or because of our
personality differences.
So that according to me the
SWOT analysis is like that:
STRENGTHS
 A distinctive competitive
advantage.
 Adequate financial
resources.
 An acknowledged market leader as it is having largest market shares of 72%
 Competitive advantage as it is considered as governmental Company.
 The whole company is fully computerized.
 Being a government company it has big contracts with other governmental organizations like
Pakistan Railways, PIA etc.
 Pakistan State Oil is the only Oil Marketing Company of Pakistan that has received top 25
Companies Award.
WEAKNESSES
 Falling behind in Research and Development.
 Below average marketing skills
 Less developed website.
Opportunities
 There is lot diversity in their products.
 They are having faster market growth.
 Complacency among rival firms.
 They are having opportunity to create better strategic group.
Threats
 They have a threat to face adverse governmental policies.
 They have a threat of growing competitive pressure.
 The biggest competitive threat which they are facing now is “Shell”
 Findings:
According to our study
 The system of the whole company is computerized
 In the whole organization is using modern technology process and techniques.
 All of its officers are very co-operative.
 They are sincere enough to their company.
 All of them were having the strong attachment with PSO.
 The employees are committed with their duties.
 It is one of the biggest oil marketing company in Asia
 It has the biggest market share in Karachi Stock Exchange.
 PSO has less developed Research and Development department.
 PSO is having the support of government.

Suggestions:
Nothing is perfect in this life so that PSO should also have to improve itself.

 Its should improve its research and development.

 They should improve their services at their retail outlets.

 They should focus more on their marketing activities.
 They should promote themselves during national events like cricket tournaments.
Conclusion
In this way, it was a good chance to get practical experience and close look of official
working. During our project we got a prestigious exposure of business field. We got a
chance to sharp our interpersonal skills and communication skills. We came to know
how to communicate in the business world and attitudes of personnel. We got
confidence to move in the practical field.
Swot analysis
SWOT ANALYSIS

THREATS

• Competitive threats
• Loss due to similar products
• More inclination towards CNG

OPPORTUNITIES

• Can enter new markets

• Diversity into related products
expansion of shop stops
• More contracts with PARCO

STRENGTHS

• Acknowledged market leader

• Corporate responsibility to
community and environment
• Distinctive core competencies
• Well conceived functional area
• Awarded company

WEAKNESSES

• Weak R&D abilities

• Plagued with internal problems
• Interference by govt.
• Weak conceived image
• Vulnerable to competitive pressures
 SWOT Analysis, which is key step in planning, helps marketers to focus on key issues.
Once these key issues have been identified they feed into marketing objectives.
Pakistan State Oil Company Ltd. Have also some strength, weaknesses, opportunities
and threats as being in the oil marketing company.
Strengths
 The most dominant strength of PSO is that it is the largest Oil Marketing Company (OMC) in
Pakistan with a market share of 72%.
 PSO utilizes sophisticated equipment and sound industry standards to prevent any form of
pollution and preserve natural habitat.
 PSO was the first oil marketing company (OMC) to introduce Premier Plus in Pakistan. It is a
low lead gasoline with a special additive to reduce Carbon Monoxide levels in vehicle
emissions. CNG, a much cleaner fuel in place of gasoline, is also being introduced in
Pakistan by PSO.
 PSO has a distinctive core competence of strong supply chain as well as strong value chain.
Starting from their supplier to their end consumers, they are well thought off.
 Being a government organization, PSO is the leader in distribution of petroleum products to
all business buyers.
 PSO has been ranked as No.1 performing company in Pakistan by Karachi Stock Exchange
and received award for the 16th consecutive year in 1999-2000.
 PSO is the only company in Pakistan which is listed in top 1000 companies of Asia and has
received TOP 25 Companies Award every year, for the last 13 consecutive years.
Weaknesses
 At present, the greatest weakness of PSO is its poop research and development capabilities
as compared to its biggest competitor, Shell. The R and D department of PSO which is
centered only in Karachi is quite inactive in research field.
 Being a government sector, PSO is confronted with many internal problems due to
excessive staff and unnecessary political interference.
 The managing Director (MD) of company is changed every time when the government is
changed which creates in stability in the company.
 As PSO is a public sector, so people poorly conceive it and there is a conception of lack of
managerial skills and talents about it.
 As Shell is the biggest competitor of PSO with a market share of 20% and innovator in new
vision program, it has created competitive pressure for PSO.

Opportunities
 PSO can enter new markets by clarifying their image through efficient and effective
marketing skills
 It can create diversity in its products by complementary products introduction.
 It can expand the shop stops into proper restaurants to provide better service to travelers
and to create a more attractive vision of retail outlets.
 It can sign more reliable and strengthening term product off-take agreement with Pak Arab
Refining Company (PARCO).
Threats
 The biggest threat for PSO is the emerging company of France, the Total. It has started its
services in Pakistan and is gaining wide popularity.
 PSO can lose its potential customers due to similarity of products offered by Oil Marketing
Companies in Pakistan
 Due to more inclination towards CNG, the demand for petrol and HSD is in danger .As is the
law of Canadian government for built in CNG kits in cars, it will be a threat for fuel oils if
imposed in Pakistan
Findings and Recommendations
Pakistan State Oil Company Ltd is the finest Oil Marketing Company in Pakistan.
Although it faces constant competitive threats from its competitor Shell, yet it is moving
fastly to gain even larger proportion of market share. The Company is maintaining the
tempo of achievements through wholehearted commitment & hard work of its Human
Resources and full support of its dealers / agents and customers. It has remained in the
forefront to protect the health and safety of its employee, customers and the
environment in which it conducts its daily operations and shares with the community.
The introduction of Internet facility at 150 outlets indicates PSO concern for providing
modern means of communication to PSO dealers and also opens a world of information
to communities across the country. PSO is now in position to serve the requirements of
a broader base of customers. Expanding the range of services at its outlets, PSO has
set up easy payment centers, in collaboration with Citibank, at selective retail outlets of
Karachi, where customers can pay their utility bills at any time of the day, avoiding the
hassles of long Queues.
PSO has also to make its position stronger in this growing environment. It should appoint
checking staff apart from sales men on retail outlets who can check the quality and
quantity of oil products and can listen to the claims of people. Similarly, the R and D
department should conduct research for promotion of its products and for exploring new
ways of fascinating customers towards PSO products .For distributing its products in
Northern Areas; PSO has to incur some losses due to higher transportation charges. So
arrangements should be made to make PSO sell on at least breakeven.
Privatization of PSO is underway whereby JP Morgan’s financial advisory consortium is
assisting the Government of Pakistan in the privatization process. The basic purpose of
privatization is to more effectively develop the hydrocarbon resource potential of
Pakistan and reducing the growing dependence on imported petroleum.
All these attributes endorse one thing, grow with grace and sound earnings, along with
all those associated with PSO, i.e. its customers, business partners, manpower and
share holders. This has been the greatest asset of the Company's Management, able
guidance from its Board of Management (Oil) and Ministry of Petroleum & Natural
Resources.
Conclusion
Making a term report of marketing on Pakistan State Oil Company Ltd. was a first
experience of my academic career. I visited the regional office two times along with my
colleagues for gathering information. Generally there is a strong believe in public that
officers in there regional offices give a cold response when asked anything. But it is a
false notion. As for as our experience is concerned we were informed of everything we
required. What I believe is that this type of practical study enhances interpersonal and
communication skills. So there should be assigned more assignments and projects to
enhance our capabilities.

TABLE OF CONTENTS
Introduction..........................................................................................................................
1
Mission
Statement............................................................................................................... 2
Importance Of Company Within
Industry........................................................................... 3
Pattern Of Holdings Of The Shares Held By The
Shareholders........................................ 5
Organizational
Structure...................................................................................................... 6
Functional Departments Of
PSO........................................................................................ 7
Importance Of Marketing Department Within
Organization............................................... 8
Marketing Departments Of
PSO...................................................................................... 10
Retail..................................................................................................................................
10
Industrial
Consumers......................................................................................................... 11
Aviation
Department.......................................................................................................... 11
Compressed Natural Gas (CNG)
Department................................................................. 11
Liquefied Petroleum Gas
Department.............................................................................. 12
Chemical
Department....................................................................................................... 12
Marine
Department........................................................................................................... 12
Lube Sales And Agency Trade
Department..................................................................... 13
Importance Of Marketing
Research................................................................................. 14
Segmentation.................................................................................................................... 1
6
Market
Segmentation........................................................................................................ 16
Target
Market.................................................................................................................... 18
Hi-Speed
Diesel................................................................................................................. 18
Petrol.................................................................................................................................
18
Castrol GTX Mobil
Oil....................................................................................................... 18
Products Of
PSO.............................................................................................................. 19
PSO Automotive
Oils........................................................................................................ 19
Gear / Transmission
Fluids................................................................................................ 19
PSO Industrial
OILS.......................................................................................................... 20
Castrol Automotive
OILS.................................................................................................. 21
Castrol Industrial
Oils......................................................................................................... 22
Industrial
Chemicals.......................................................................................................... 23
Fuel
Oils............................................................................................................................. 23
Marketing
Mix.................................................................................................................... 25
Products............................................................................................................................ 2
5
PRODUCTION................................................................................................................. 2
6
Castrol
GTX…................................................................................................................... 27
High Speed
Diesel............................................................................................................. 28
Pricing Strategy Of Petrol &
Diesel................................................................................... 29
Pricing Strategy Of Castrol
GTX...................................................................................... 29
Current Prices Of These
Products.................................................................................... 30
Placement, Distribution, Channel, Or
Intermediary.......................................................... 31
South Zone
Depots............................................................................................................ 32
North Zone
Depots............................................................................................................ 32
Central Zone
Depots......................................................................................................... 32
Swot Analysis (Maria
Rehman)........................................................................................ 33
Strengths...........................................................................................................................
33
Weaknesses......................................................................................................................
34
Opportunities.....................................................................................................................
34
Threats...............................................................................................................................
34
Suggestions.......................................................................................................................
35
Conclusion.........................................................................................................................
35
SWOT Analysis (Maria
Mushtaq)..................................................................................... 36
Strengths...........................................................................................................................
37
Weaknesses......................................................................................................................
37
Opportunities.....................................................................................................................
37
Threats...............................................................................................................................
38
Findings:............................................................................................................................
39
Suggestions:......................................................................................................................
39
Conclusion.........................................................................................................................
39
Swot Analysis (Misbah
Shafi)........................................................................................... 40
Strengths...........................................................................................................................
40
Weaknesses......................................................................................................................
41
Opportunities.....................................................................................................................
42
Threats...............................................................................................................................
42
Findings And
Recommendations...................................................................................... 42
Conclusion.........................................................................................................................
43