Marketing Management Term Report

BILAL KAMRAN (8628) HUZAIR KAUSAR (10073) JAWAD AMEER ALI (10219) MAAZ ASAD ALI (10586) Marketing Management (D)
Submitted to: Ms Kausar Saeed

5/5/2011

Letter of Transmittal
May 5, 2011 Ms. Kausar Saeed, Institute of Business Management, Korangi Creek, Karachi. Respected Madam, We are submitting to you the report that was required as per course requirement. The company we chose for our report is TOTAL PARCO PAKISTAN LTD (TPPL)l. The purpose of this report is to present the marketing strategies through and for products and services of Total Pakistan and highlighting the reasons for current weak performance of the company. The content of this report concentrates on the products of Total, the marketing strategies they employed and solutions to their weak performance in Pakistan. We are highly obliged that you gave us a chance to write this report and encourage our efforts. We are very thankful to you for your lectures and support which helped write up this report. Hoping that you will appreciate our efforts, Sincerely, Jawad Ameer Ali Maaz Asad Ali Huzair Kausar Bilal Kamran (10219) (10586) (10073) (8628)

Marketing Management (D)

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Table of Contents

Letter of Transmittal ................................................................... 1 Introduction ................................................................................ 3 Marketing Initiatives ................................................................... 4 Marketing of Products and Services ........................................... 5 PROBLEMS FACED BY TOTAL PARCO .......................................... 8 Remedies for Marketing Problems ............................................. 9 Bibliography .............................................................................. 10

Introduction
Petroleum energy plays a pivotal role in the socio economic development of a country, especially for a developing country like Pakistan, where demand for petroleum products is fast increasing. Incorporated in May 1974, Pak Arab Refinery Ltd. (PARCO) has now been in existence for 27 years as a joint venture between the government of Pakistan (GOP) and Abu Dhabi. Its authorized capital is Rs. 5 billion and paid up capital is Rs. 2160 million of which 60% is held by the GOP and 40% by Abu Dhabi petroleum investments of Abu Dhabi.

PARCOs International Affiliations have long grown to a strategy of keeping good relations with its international partners. The oil marketing company, TOTAL PARCO PAKISTAN LTD (TPPL), is a joint venture between TOTAL S.A. - The world's fourth largest Oil Company and Pak Arab Refinery Limited (PARCO), the biggest and the most modern refinery in Pakistan. It started its operations in 2001.

Marketing Initiatives
TOTAL Parco is setting up a modern network of state-of-the-art Retail Stations of International standards all over Pakistan. TOTAL Parco, now with over 200 Retail Stations has plans to add 36 new stations each year till 2015.

TOTAL Parco has been at the forefront of taking new initiatives in the Oil Industry. It has pioneered the concept of Mobile filing stations in order to effectively cater to the need of the far-flung rural customers by providing them with quality diesel at their doorstep. It also became the first Oil Marketing Company to launch 90 RON unleaded petrol in Pakistan under the brand name of Hi-Super without any additional cost to the customer.

Strict adherence to health safety and environment standard is an integral part of TOTAL Parco's corporate culture. This is conveyed to consumers too via socially responsible marketing.

The Total brand is essentially concerned in building a relationship of care and trust with its customers. By focusing on the 'Corporate Social Responsibility' Campaigns the company is trying to associate itself with the attributes of care and trust. As a socially conscious corporate entity TOTAL Parco has been actively involved in community welfare projects. It is the care for the community that drove Totals "Drive Safe" campaign and an HSE/ road awareness campaign for children based on a specially designed character "TOTAL Road Champ."

Marketing of Products and Services

True to its reputation of always being a dynamic organization ready to adapt to the ever-changing environment, PARCO has been successfully marketing Petroleum products for the last nine years. Having developed and extended its cross-country pipeline system and storage facilities and having made a huge investment of US$886 million in the MCR, it was all but logical for PARCO to increase its earnings by marketing its own Petroleum products. The Refinery has placed PARCO in an ideal position to market these products. Therefore, PARCO is delivering accurate quantities of high quality products into the customer's premises in a timely manner and at the lowest cost through the shorter and safe routes.

PARCO through an optimal strategy has been marketing the following products to maintain strong customer relationship and build customer value:-

A. PEARL: Quality & Value PARCO is engaged in its marketing activities through the brand name "PEARL". The Word "PEARL" is associated with the Symbol of Purity and Preciousness, which translates to a message of Quality and Value for petroleum products. Marketing of Fuel & Lubricants is also being done under the Brand Image of "PEARL LUBES". PARCO is also locally producing automotive engine oils under the names of PEARL i.e. Truck Plus, "PEARL Energy", "PEARL Zabardast", "PEARL Speed" and Gear Oil named as "Gearup" etc.

B. Lubricants Total uses the latest technologies in design to offer state-ofthe-art lubricants that are environment-friendly, secure and of the highest quality. The company has been marketing OMV Lubricants imported from Austria which are already available in the local markets.

C. Fuel Products Total Parco offers a variety of top quality fuels on its service stations to suit the needs of every customer and is at the forefront of taking new initiatives in the oil industry. PARCO under the brand name of PEARL is also marketing Furnace Oil (FO) to Captive Power, Cement Plants, and other industries particularly in Punjab.

D. Shop Facilities and Services

Total Parco has revolutionized the concept of shops on petrol stations in Pakistan, by integrating products and services according to the needs of the average customer. The shop name "Bonjour" derived from our French roots welcomes each customer to an enhanced shopping experience. Along with regular shop offerings such as snacks, personal and car care items etc bonjour shops offer PCO and ATM facilities for the customer's convenience. To add additional value, Total Parco joins hands with several of Pakistan's leading product manufacturers and service providers to bring special promotional offers

especially for its customers. E. Car Wash

In line with its corporate mission statement of "Total Care, Total Trust", Total Parco is committed to providing its customers with the best in products and services. Not only do they have an extensive network of carwash facilities available on their retails stations, but in keeping with their commitment to uses of alternative energy and environmental conservation they have taken the initiative to develop and install the first solar powered car wash in Pakistan at selected retail stations.

F. Oil Change

Total continues to enhance its market image with top of the order services. Oil change facilities are present on a large number of our sites offering premium lubricants and oil change services along with comprehensive equivalent information made available for the ease of our customers. Total Parco is a trendsetter in initiating a dedicated oil change and maintenance facility for motorcycle drivers on selected retail stations called Biker's Zone.

PROBLEMS FACED BY TOTAL PARCO

PACRO markets its product through off take agreements with oil marketing companies and also through its own brand PEARL. It also has a 40% stake in Total Parco Pakistan limited (TPPL), a joint venture with Total Fina ELF, a French conglomerate, to market up to 25% of the MCRs production through a rapidly expanding network of TPPL outlets. The managements goal to successfully accomplish its business and financial objectives remains fully demonstrated.

However the company faces certain problems leading to poor performance:-

Parco is developing its own lubricants under different brand names like Zabardast-50, Zabardast Plus, Zabardast 30 and Truck plus. Each one of them is specified to meet the various needs. The biggest challenge that Total is facing in its lubricants market is the lack of awareness. Their target audience is not clearly defined which makes it difficult of consumers to choose which variant is suitable for their vehicles. Moreover, there is intense competition from the competing brands like SHELL HELIX and CALTEX HAVOLINE. These companies are spending a large amount of money on advertisements. According to the marketing people of Parco, the company has still not allocated advertisement budget so its hampering the performance of the product which has well established competitors. The distribution network is also very small. It has fewer outlets compared to rivals and the lubricants are available at very limited retail stores. Their fuel pumps which are marketed as Total are also smaller in number and most of them are located in main cities like Karachi and Lahore.

 There is no clear positioning of the product in the minds of target audience. Though Petroleum products do not have significant difference either in pricing or in production, rivals have yet maintained a product position. Caltex says that its Tecron petrol cleans the engines as we go further. Shell convinces its target market by claiming that they can be sure of Shell. Bharat Petroleum of India claims that they are energizing lives. Total lags behind in successfully marketing its tagline.

One of the biggest challenges that the marketers face in positioning it is that there is no point of Point of Difference in the competitors product and your product. Positioning is very important for petroleum products.

Remedies for Marketing Problems

Total needs to apply the following strategies to counter the daily increasing business threat from rivals:-

Total needs to create awareness for its products. Its various lubricants satisfy needs of consumer using different vehicles. Hence few different target markets are present and they need to target the clustered preference audience, each individually. They must create awareness by highlighting various benefits of their products over rival products. Since there are no points of difference in petroleum products, Total maintains an edge by providing many different types of lubricants. By capturing market through selective sampling and marketing, they can build a customer base. From there they can mass market to take advantage of lack of product variety of rivals. They need to identify the market gap and
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position their product according to that. If they claim to have high performance fuel then they should stick to the same promise in their campaigns and reinforce it in the minds if consumers. Total must strengthen its brand image through quality service. As Ron Kaufman stated that unbelievable service helps gain customer loyalty, Total can capture market share by providing high quality customer value through its already efficient services. A healthy PR and a decent advertising campaign can help convey the good level of service provided to attract customers. Total needs to enlarge its distribution network and make it available to the actual consumers at their nearest location. At present their retail outlets and pump stations are outnumbered by rival companies. There exist many non-serviceable roads in many major cities, including Karachi, and hence there is a significant need by consumers for service outlets at these places. Total must take advantage of this market potential and enter the market at these non-serviceable areas to capture the consumer share before any rival can do so.

Competitors have effectively marketed their products to strengthen and deliver their positioning statement promises. So Total also needs to enhance and market its tagline "Total Care, Total Trust" by better product/ service deliverance which can attract the consumers. Increasing the level of service and providing free periodic vehicle check ups can help build image with the customers.

Bibliography
www.totalparco.com.pk www.ronkaufman.com
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