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PSO SUMMER INTERNSHIP REPORT JUNE-JULY 2012
Internship Report on PSO
Author 1: Sunny Rawlani Contact number: 03337569226Email address: [email protected]
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PSO SUMMER INTERNSHIP REPORT JUNE-JULY 2012
EXCUTIVE SUMMARY
This report highlights my internship
of Retail Business
in PSO house Karachi. The internship was
begun from 18th of June and came to end
at 27th of July of August. I did my
internship practice in marketing
department under the primary supervision
of Madam Sarah. I was assigned main
projects regarding in which make a
detailed report on PSO High Speed Diesel
(HSD) market and the other one was to
conduct survey about the HSD awareness.
Moreover it was also assigned in which I
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PSO SUMMER INTERNSHIP REPORT JUNE-JULY 2012
organized a market activity, named as
Lube Hanagama at different petrol pumps.
PSO is the largest oil company in Pakistan
having the advantage to conduct large
internship activity
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Table of Contents
Introduction............................................................................................................04
Background............................................................................................................05
Continuous Growth At PSO...................................................................................05
Company Overview...............................................................................................06
Mission Statement..................................................................................................07
Organizational Structure........................................................................................08
Functional Department at PSO..............................................................................09
Target Market.........................................................................................................11
Marketing Mix (4p’s).............................................................................................12
SWOT Analysis.....................................................................................................17
Suggestion and Recommendation..........................................................................20
Experience At PSO................................................................................................21
Conclusion.............................................................................................................22
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PSO SUMMER INTERNSHIP REPORT JUNE-JULY 2012
Introduction:
The PSO (Pakistan State Oil is alienated into two segments one is marketing and
other is supply of automotive products including lubricants. The PSO sector has been
topped, this sector has been topped because of highest sale and exceptionally visible
because of the competition and marketing activities among the oil companies in the
Pakistan. The second one, the industrial sector and this is primitive for consumers and
power plants, construction projects, sugar and cement industries etc.
Marketing objectives could be achieved with the help of marketing strategies.
Different combinations of the element of marketing mix are used for the formulation of
different marketing strategies to meet the marketing objectives. PSO captured more
marketing share as compare to its competitor so it had one of leading Energy Company,
its networks spread all over the Pakistan.
In the oil industry lubricants are the most important product because of high
profitability, so their sale generates high revenue for the company. All cars need
lubricants for their engine. There is an increase in the consumption of lubricants because
of the growing number of vehicles both for light vehicles, heavy trucks and buses.
Furthermore, there is an increase in lubricant demand for old cars and trucks.
Lubricants are very important for smooth and problem free movement of any vehicles
and for this purpose there is a requirement of different variety of lubricating oils. For car
engines some factors are very important such as performance, low fuel consumption,
engine life, and low maintenance requirements.
To meet these requirements, better quality of fuels and lubricants are needed.
There is an increase in development in the automotive industry, increase in power of
engines and more computerized functions have changed the lubricants requirements.
The PSO tag line “PSO Apna Hai” is all about maintaining client satisfaction in
long term brand loyalty towards PSO.
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PSO SUMMER INTERNSHIP REPORT JUNE-JULY 2012
BACKGROUND
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 1 st, 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 3 rd,
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.
CONTINUOUS GROWTH AT PSO
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.
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COMPANY OVERVIEWPakistan state oil is the market leader in Pakistan’s energy sector. The
company has the largest network of retail outlets to serve the automotive. PSO takes pride in continuing the tradition of excellence and is fully committed to meet the energy needs of today and rising challenges of tomorrow. Pak i s t an S t a t e O i l , t he l a rge s t o i l ma rke t i ng company i n t he coun t ry , i s cu r r en t l y engaged i n s t o r age , distribution and marketing of various POL products.Major stakeholder:Government of Pakistan: 51% sharesCURRENT VALUERs. 75 billion,MARKET SHARE:In Black oil: 82.1%In white oil: 61.2%
Distribution outlets:About 3700Out of which1,610Outlets have been upgraded as per as new visionSTORAGE DEPOT:29TOTAL STORAGE:81% of National storageTANK LORRIES6000PER DAY CUSTOMERS:PSO serves 2.8 million retail customers on daily basis Serve 2000 industrial unitsPROVISIOON OF FEUL AT PORTAir ports: 9Ship fuel: 3 portsNew Vision Retail ProgramWith most modern facilities likeElectronic dispensing unitsConvenience storesBusiness centersEasy Payment CentersHONOUR:
First Pakistani Public Sector Company to become a member of the World Economic Forum (WEF) and including in Fortune 500 companiesWinning the “Karachi Stock Exchange (KSE) Top Companies Award” has made PSO a notable company world over. Received AAA rating by Pakistan Credit Rating Agency (PACRA)
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MISSION STATEMENT
To ensure availability and security of sustainable supply of oil and gas for
economic development and strategic requirements of Pakistan
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 and 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
MARKETING STRATEGY IMPLEMENTED BY PSO
The strategy of PSO is to promote the exploration in oil, gas and mineral
resources. They reform the structure of natural resources. Not only reformed the mineral
resources, but also the petroleum resources. The main object of this strategy is to focus
on enhance of resources, attract the private investment and establish credible institution
of petroleum.
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ORGANIZATIONAL STRUCTURE
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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
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. 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. 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.
MARKETING DEPARTMENT SUBSECTIONS
PSO has the following marketing departments:
1. Retail. (Further Defined)
2. Industrial consumers.
3. Aviation.
4. Compressed Natural Gas.
5. Liquefied Petroleum Gas.
6. Chemicals.
7. Marine.
8. Lube sales and Agency trade.
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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 these 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, competitor’s
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
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TARGET MARKET
Target market for selected three products is as follows:
HI-SPEED DIESEL
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 1300cc. (1C – 2C engines to heavy power engines).
PETROL
Target market for the petrol car below 1300 cc. Light user like people who have:
1. Motorcycle
2. Taxi
3. Rickshaw
4. Generator
MOBIL OIL LUBRICANT
Target market for Mobil oil is Diesel engine and Petrol engine; large vehicle, in
Govt. sector, highway authority. Who used their machinery to develop the infrastructure;
FWO (Army) services stations and workshops.
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MARKETING MIX
PRODUCTS
Single Grade Petrol (Premier Plus)
High Speed Diesel (HSD)
Castrol GTX
SINGLE GRADE PETROL:
Compatible with mineral, synthetic and most hydraulic oil, 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
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%
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
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50%
2. CASTROL GTX…
Multi grade super high performance oil for use viscosity range of SAE 20W-
50W, 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-50w
MIL-L-46152D
API SG/CD
MIL-L-2104E
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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.
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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.
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PLACEMENT AND DISTRIBUTION CHANNEL
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 products upcountry. This is very important to reduce the
pressure on road movement
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SWOT ANALYSIS
STRENGTHS:
PSO is having product innovation as it frequently introduces new products
according to the requirements of its consumer.
A distinctive competitive advantage, with an acknowledged market leader as it is
having largest market shares of 67%
Being a government company it has big contracts with other governmental
organizations like Pakistan Railways, PIA etc.
PSO utilizes sophisticated equipment and sound industry standards to prevent any
form of pollution and preserve natural habitat.
Large Number of outlets in Pakistan.
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 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.
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WEAKNESS:
The managing Director (MD) of company is changed every time when the
government is changed which creates in stability in the company.
Old retail outlets are major weakness for PSO as they are not enough capable to
compete the Shell, Caltex or Total outlets.
Untrained staff at outlets is causing inefficient services.
Word of Mouth is not much effective
Lack in Advertisements or promotional strategy in lubricants and petroleum
products
Quality assurance is not so effective to build the image of “Quality & Quantity.
Falling down retail network with low throughput per outlet; lack of assured
supply sources; obsolescence, improper controls and lack of professionals
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OPPORTUNITY:
Diversity into the related products i.e. creating some unique features in the
products to attract their consumer
Privatization may be subjected to positive outcomes
Afghanistan's Market is the biggest opportunity for OMC’s in Pakistan
Industrial & Trade growth in Pakistan is also the opportunity for PSO as they are
adding revenues in Power sector that is the major customer of PSO.
Deregulation, globalization, upstream/downstream integration and diversification
THREATS
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
Availability of Alternative
Availability of alternative at low price is a threat for the organization. It
may be possible that the competitors facilitating the customers with low price and
better quality then it will decline the sales example .TOTAL is offering low prices
of lubricants as compared to PSO and SHELL. It may be possible that it will shift
the demand of price conscious customers towards itself
If the staff servers are untrained, unethical and don’t know about the products
they are selling then they are unable to satisfy the customers, unable to providing
proper customer feedback to company and cant explain to the company that what is
the demand of customers so it will be a threat for the PSO of low sales
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SUGGESTIONS AND RECOMMENDATION
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.
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.
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My experience at PSOWe have to agree in that; internship plays practical role in building the personal skills and support to give knowledge of environment and enables internee to think and analyze; what are different between book and practicality, and what are the similarities. Being an internee I have found my internship very much knowledgeable.I began my internship program on 18th June, 2012 with PSO. The internship was to last for 6 weeks and as a result my internship came to an end on 27 th July .In somewhat more concrete terms, PSO provides the responsibilities with timely ,scientifically credible, policy-relevant environmental data and information for decision-making and action planning for sustainable internee personal development.
My Duties at PSO House
Visits on HSD survey
Conduct In-house survey to know about employee’s awareness about HSD
Find out the problems and loops of PSO HSD by its competitors
Make a short report of pie chart on in-house survey
Make a long report on PSO HSD Sales and sales incline strategies.
Organize marketing activity, LUBE HANAGAMA on different PSO COCO sites
I had to visit different PSO terminals for getting information for my HSD report. This
information helped me a lot to make my short and long reports. I had to conduct in-house
survey for checking employs awareness about HSD and presented it to my supervisor. I
also contact staff, find out the problem or loops, and evaluate the finding.
Accomplishments
I tried my best to accomplish all the responsibilities or targets which assigned to me
during my internship. The supervisor assigned me duties and I fulfill the requirements on
time and they admire my capabilities of work. I accomplished following the tasks during
my internship.
Daily report to supervisor in detail of last day work
Completion of pie charts of survey
Completion of detailed report on HSD
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CONCLUSION
Pakistan State Oil is playing an important role in the economic development of
the country. PSO is not only a national marketing company but also serves as vehicle of
government energy policy.
PSO not only shoulders the responsibility of meeting the petroleum needs in all
sectors of economy and defense but also undertakes all measures for the conservation of
energy by reducing stocks, trans-shipment in handling losses. PSO is supplying oil in
even those areas where other companies have refused due to security reasons.
My perception about the company have totally changed during my six weeks
internship, I met to the point that this is a professionally focused and full organized and
developed company. Even it is totally a government sector but it has successfully
managed its corporate culture.
PSO has an edge all over the government sectors. I observed the positive points in
PSO that was its strengths and near to be its opportunities in future but as I observed
weakness it will be a harmful threat for this organization. After the SWOT analysis I have
come with these recommendations that I would like to explain. PSO should redesign its
old retail outlets. The old outlets are the reason of sales decline up to some extend. New
and fresh presenting of products always attracts the customers.
It is very important for PSO because it is already facing its competitors in the same
market. PSO should also hire trained staff or give training to existing staff. Through this
way PSO can win customers satisfaction. Every organization in the market want to get
customers satisfaction but there is no need for PSO to adopt different way to do so
because PSO already satisfy its customers but to increase the loyalty and make strong
customer relationship it is compulsory for PSO to give incompatible service to its
customers.
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