INTERNSHIP REPORT

(Marketing)
PAKISTAN STATE OIL

For period: July-August 2016

Submitted by:
Mohammad Shahroz Asif
BBA-023R12-113
Course: B.B.A (Hons.)

DEPARTMENT OF BUSINESS ADMINISTRATION

INSTITUTE OF SOUTHERN PUNJAB MULTAN

DECLARATION
I Mr. Mohammad Shahroz Asif hereby declare that this project report is the record of authentic
work carried out by me during the period from 22 June 2016 to 22 August 2016 & has not been
submitted to any other University or Institute for the award of any degree/diploma etc.

______________________
Mohammad Shahroz Asif
BBA 023R12 -113

______________________
Maam Sonia Hassan
Supervisor

Date: __________________

DEDICATION
I dedicate my efforts to my parents who pray for me every minute, my teachers who guide me at
every step of my life, their enthusiastic interest, in time & useful suggestions & their vivacious
supervision & kind behavior, my sister& my classmates who stand by me whenever I need them
and to all those who help & encourage me whenever I find hurdles in my life.

ACKNOWLEDGEMENT
I offer my humblest thanks to ALMIGHTY ALLAH, The most Beneficent & the Most
Considerate & the entire source of all knowledge & wisdom. I thank ALMIGHTY ALLAH, who
gave me the aptitude to do this project efficiently & successfully. I faced a lot of difficulties
during this period of developing internship report. But Allah gave me a lot of patience & due to
the continuous encouragement of my teachers & other people concerned; I was able to complete
this work. I offer my humblest respect to the Holy PROPHET HAZART MUHAMMAD (Peace
Be upon Him) who is, forever a torch of guidance & knowledge for humankind as a whole.
I am deeply indebted to the management and staff of PAKISTAN STATE OIL, MULTAN and
personnel at Retail Department for their cooperation who helped me as much as possible during
my training period. My special thanks to Mr. Irfan Haider (Deputy Business Manager (Retail). In
COCO Section; Mr Hafiz Mughera.

EXECUTIVE SUMMARY
This report is about the structure & functions of finance department at PFL. In this
comprehensive report, I have discussed about every major aspect of it, which I perceived. In this
repot you will find the detail about the company right from its incorporation to the current
position. Along with it, the functions, the vision & mission statements, products & services of the
company are also discussed in detail.
As the main purpose of this report is to learn & to apply the knowledge acquired during the
studies in order to tackle the problems using the knowledge & the skills learned during the
academic process. As I have done the specialization in finance so I focused & give a great
attention to the finance department
The report starts with a slight introduction to Pakistan State Oil, highlighting its salient features,
facilities, products and management. Afterwards a comprehensive detail of Pakistan State Oil
fixed asset/inventory section, sales section, and pay roll/payable section processes are mentioned.
During the eight weeks internship program at Regional Office, I was able to go through the
systematic procedures taken place at retail department. Retail department is using SAP for
generating daily/monthly reports. However, there are some proceedings are still undertaken
manually but they are under process of the systemization.
I have also spent one day at COCO Site & one day at Plant/Depot too & their details have also
been mentioned in the report. Along with it, the SWOT analysis & the recommendations for the
improvement have been made wherever required.

APPROVAL CERTIFICATE
The Board of Examiner approved internship report and recommends award of
the degree of BBA (Hon's) as the student has successfully defended viva
voce.

External Examiner:

______________________________________

Internal Examiner:

________________________________________

Dean / Chairman:

________________________________________

Date of Viva Voce:

________________________________________

CONTENTS
CHAPTER NO. 1 INTRODUCTION......................................................................1
1.1

History..................................................................................................1

1.2

Nature of Organization.........................................................................2

1.3

Vision....................................................................................................3

1.4

Mission Statement................................................................................3

1.5

Values...................................................................................................3

1.6

Business Volume..................................................................................5

1.7

Main Offices..........................................................................................5

1.8

Products...............................................................................................8

1.9

Competitors..........................................................................................9

1.10 Area Wise Distribution:.........................................................................9

CHAPTER NO. 2 ORGANIZATIONAL STRUCTURE.............................................11
2.1

Organizational Chart (Hierarchy wise)...............................................11

2.2

Departments Name............................................................................11

2.4

Retail Facilities (Construction)............................................................12

2.5

Gaseous Fuels Department................................................................13

2.6

Industrial Consumer Department.......................................................13

2.6.1 IC-Products.........................................................................................14
2.7

Cards Departments............................................................................15

CHAPTER NO. 3 MARKETING DEPARTMENTS OF PSO.....................................17

3.1

Retail..................................................................................................17

3.2

Industrial consumers..........................................................................18

3.3

Aviation Department..........................................................................18

3.4

Compressed Natural Gas (CNG) Department.....................................19

3.5

Liquefied Petroleum Gas Department................................................19

3.6

Chemical Department........................................................................20

3.7

Marine Department............................................................................20

3.8

Lube sales and Agency trade Department.........................................20

3.9............................................................................MARKET SEGMENTATION
21
3.9.1 Diesel.................................................................................................21
3.9.2 Engine Power......................................................................................21
3.9.3 Geography..........................................................................................21
3.9.4 Income...............................................................................................21
3.9.5 Market segmentation for petrol..........................................................21
3.10 Engine Power......................................................................................21
3.11 Income...............................................................................................21
3.12 Lower Middle......................................................................................22
3.13 Middle Middle Class............................................................................22
3.14 Above Middle Class............................................................................22
CHAPTER NO. 4WHAT I LEARNED DURING INTERNSHIP.................................24
4.1

Working with the Departments of PSO:..............................................24

4.1.1 Operational Department:...................................................................24

4.1.2 Retail:.................................................................................................24
4.1.3 My Responsibilities and tasks during Internship:................................25
CHAPTER NO. 5 ANALYSIS..............................................................................27
5.1

SWOT ANALYSIS..................................................................................27

5.2

PEST Analysis.....................................................................................29

5.3

Industry Analysis................................................................................31

CHAPTER NO. 6 CONCLUSION & RECOMMENDATIONS...................................33

6.1

Conclusion..........................................................................................33

6.2

Recommendations..............................................................................33

References:....................................................................................................34

10

CHAPTER NO. 1

INTRODUCTION

The creation of Pakistan State Oil (PSO) can be traced back to the year 1974, when on January
1st; the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum
Limited (DPL) as Premiere Oil Company Limited (POCL). The merger was come into existence
under Zulfiqar Ali Bhuttos government.
Soon after that, on 3rd June 1974, Petroleum Storage Development Corporation (PSDC) came
into existence. PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd
1976. Following that, the ESSO undertakings were purchased on 15th September 1976 and
control was vested in SOCL. The end of that year (30th December 1976) saw the merger of the
Premier Oil Company Limited and State Oil Company Limited, giving way to Pakistan state Oil
(PSO).

1.1 History
Pakistan State Oil (PSO), the largest oil marketing company in Pakistan (with a market share of
80%), was formed in 1976 through the merger of Pakistan National Oil, Premiere Oil, and Esso.
PSO operates 3,600 retail outlets, including more than 1,785 New Vision Retail Outlets that
offer, besides the usual gas-station services, an Internet kiosk, car wash, and other amenities. The
company additionally sells a full range of petroleum and related products, including fuel oil,
industrial oils, and petrochemicals. The Government of Pakistan controls a majority stake in the
publicly traded PSO. The creation of Pakistan State Oil (PSO) can be traced back to the year
1974, when on January 1st; the government took over and merged Pakistan National Oil (PNO)
and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL).

Soon after that, on 3rd June 1974, Petroleum Storage Development Corporation (PSDC) came
into existence. PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd
1976. Following that, the ESSO undertakings were purchased on 15th September 1976 and
control was vested in SOCL. The end of that year (30th December 1976) saw the merger of the
Premier Oil Company Limited and State Oil Company Limited, giving way to Pakistan State Oil
(PSO).
After PSOs inception, the corporate culture underwent a comprehensive renewal program which
was fully implemented in 2004. This program over the years included the revamping of the
organizational architecture, rationalization of staff, employee empowerment and transparency in
decision making through cross functional teams. This new corporate renewal program has
divided the companys major operations into independent activities supported by legal, financial,
informative and other services. In order to reinforce and monitor this structural change, related
check and balances have been established by incorporating monitoring and control systems.
Human Resource Development became one of the main priorities on the companys agenda
under this corporate reform.
It is due to this effective implementation of corporate reform and consistent application of the
best industrial practices and business development strategies, that PSO has been able to maintain
its market leadership in a highly competitive business environment.

1.2 Nature of Organization

Tender Business (WAPDA)

Contractual Business (FSAs signed with 11 IPPs nationwide)

Largest Oil Marketing Company

Engaged in storage, distribution and marketing of various petroleum oil and lubricant
products

1.3 Vision
To excel in delivering value to customers as an innovative and dynamic energy company that
gets to the future first.

1.4 Mission Statement

We are committed to leadership in energy market through competitive advantage in providing the
highest quality petroleum products and services to our customers, based on:

Professionally trained, high quality, motivated workforce, working as a team in an

environment, which recognizes and rewards performance, innovation and creativity, and
provides personal growth and development.

Lowest cost operations and assured access to long-term and cost effective supply sources.

Sustained growth in earnings in real terms.

Highly ethical, safe environment friendly and socially responsible business practices.

1.5 Values
To excel in delivering value to customers as an innovative and dynamic energy company that
gets to the future first.

Excellence

We believe that excellence in our core activities emerges from a passion for satisfying our
customers' needs in terms of total quality management. Our foremost goal is to retain our
corporate leadership.

Cohesiveness
We endeavor to achieve higher collective and individual goals through team. This is
inculcated in the organization through effective communication.

Respect
We are an Equal Opportunity Employer attracting and recruiting the finest people from
around the country. We value contribution of individuals and teams. Individual
contributions are recognized through our reward and recognition program.

Integrity
We uphold our values and Business Ethics principles in every action and decision.
Professional and personal honesty, dedication and commitment are the landmarks of our
success. Open and transparent business practices are based on ethical values and respect
for employees, communities and the environment.

Innovation
We are committed to continuous improvement, both in New Product and Processes as
well as those existing already. We encourage Creative Ideas from all stakeholders.

Corporate Responsibility

We promote Health, Safety and Environment culture both internally and externally. We
emphasize on Community Development and aspire to make society a better place to live
in.

1.6 Business Volume

Figures are In Millions Unless Otherwise Stated

Sales Volume

2015

2014

2013

2012

2011

2010

2009

13.0

13.2

12.6

12.4

12.9

14.2

13.2

(Million Tons)

1.7 Main Offices

Head Office
PSO House
Khayaban-e-Iqbal, Clifton, Karachi 75600, Pakistan
UAN: 021-111 111 PSO (776)
Tel: (92 21) 99203866-85
Fax: (92 21) 99203835
Taaluq Careline: 0800-03000
Email: [email protected]

Division Offices
Islamabad
ZTBL Building, Zero Point G-/1, Islamabad
Tel: (051) 9252651
Fax: (051) 9252652

Lahore
8-Edward Road, Lahore
Tel: (042) 37353984
Fax: (042) 37312484
Multan
2nd Floor Park Lane Tower Office Colony Khanewal Road Multan
Tel: (061) 6510686-7
Fax: (061) 6510694
Sahiwal
63/C, Farid Town
Tel: (040) 99200193-4
Fax: (040) 99200195
Faisalabad
3rd Floor, Statelife Building, Liaqat Road, Faisalabad
Tel: (041) 99201276
Fax: (041) 99201278
Hyderabad
7th Floor, State Life Building Thandi Sarak, Hyderabad
Tel: (022) 9200784
Fax: (022) 9200879
Peshawar
House # 25/III/AB Jamrod Lane University Town Peshawar

Tel: (091) 9216812

Fax: (091) 99216814
Bahawalpur
PSO Divisional Office, 8/2-B Tipu Shahed Road Model Town-A, Bahawalpur
Tel: (062) 99255284
Fax: (062) 99255286
DIK
State Life Building Circular Road, D.I.K
Tel: (0966) 711774
Fax: (0966) 731284
Jehlum
3 A/1. Aziz Bhutti Road Jehlum Cantt Jehlum
Tel: (0544) 9270022
Fax: (0544) 9270359
Sukkur
138 Sindhi Housing Society Airport Road Sukkur
Tel: (071) 5630327
Fax: (071) 5630935
Gujranwala
Super Asia Building No.4 G.T Road Gujranwala
Tel: (055) 4555423
Fax: (055) 4555422

Quetta
House no. 7, Survey 31, Airport Road, Quetta
Tel: (081) 2864223/2864225-6
Fax: (081) 2864224

Total Staff Strength

The sanctioned strength of Pakistan State Oil is 2123 employees.

1.8 Products
Premier Motor Gasoline (PMG)

Motor Gasoline

Kerosene Oil

High Speed Diesel

Light Diesel Oil

Furnace Oil

Lubricants & Chemicals

JP 4 (Aviation)

Hi-Octane(HOBC)

Hi-Sculpture Furnace Oil(HSFO)

Light Sculpture Furnace Oil(LSFO)

10

1.9 Competitors
S. NO

COMPANY

NUMBER
1200

OF

OUTLETS

SHELL

800
TOTAL

370
CALTEX

75

ATTOCK

1.10 Area Wise Distribution:

Multan A:
Area in charge is Mr. Irfan Haider. There are 26 new vision and 27 old vision pumps in this area.
Multan B:
This area consists of 9 new vision and 24 old vision pumps and supervised by Shiekh
Abdurrahman.
Khanewal A:
Out of 35 outlets, 6 are new vision and remainingis old vision.
Khanewal B:
Ch. Shafiq supervises this sales territory. And there are 7 new and 35 old vision outlets.
Dera Ghazi Khan:
Shoaib Ahmed Khan is in charge of =`this area. There are 9 new vision and 27 old vision outlets.

11

Muzaffargarh:
This territory is supervised by Waqar Murtaza, who monitors 48 outlets.
Rajanpur:
This area comes under supervision of Junaid Ur Rehman and comprises of 8 new vision and 35
old vision pumps.
Other than these sales territories, 4 COCO (Company Owned Company Operated) sites are also
operated by retail fuels department people. Among these are Faridiya 54 located at Kalma
Chowk, Bless 26 at Eidgah, Askari 16 and Shehryar 54 located at bypass. Supplies of POL are
provided by Shershah Depot and Mehmoodkot Terminal for Multan. Muzaffargarh and DG Khan
gets its fuel supplies from MehmoodKot Terminal, while Vehari and Shikarpur depot is
supplying fuel to Khanewal and Rajunpur areas respectively.

12

CHAPTER NO. 2 ORGANIZATIONAL STRUCTURE

There are approximately 2000 employees working in PSO at different levels and departments.
As per the business needs and to hold on to a customer focused image, we have an organizational
structure comprising of three (03) main business units that encompass all the major functions of
the company:

2.1 Organizational Chart (Hierarchy wise)

2.2 Departments Name

Business Manager of Retail Fuels Multan is Irfan Haider. Retail fuels department of Multan falls
under central zone and there are seven sales areas in Multan (consisting of 289 outlets), which
are as follows:
13

2.3

MQTU (Mobile Quality Testing Unit)

MQTU is operated by a chemist Mr. Tasawer Hussain. This unit works to monitor and

maintain the quality assurance at different petrol pumps operated by PSO in Multan division. To
check the quality of POL (Petrol, Oil and Lubricant), MQTU vans make surprise visit of
different pumps that are under control of company.
PSO have total 21 vans in all over Pakistan. In Multan division, there are 2 vans. These
vans are equipped with latest equipment for checking the quality of POL.
PSO imports testing equipment from France as well as provide a facility of specialization
courses in France to employees to polish their skills. One driver and two chemists comprise the
team for any surprise visit. The letter for the surprise visit issued from Head Office and no one
knows about the letter. The van mechanism of their operation is like:

One surprise visit of any pump if MQTU van find any quality discrepancy than straight away
unit send a warning letter to that specific pump.

After three consecutive warning letters, if the owners of pump dont take notice and improve
the quality measures, PSO has a right to seal the pump and withdraw contract.

2.4 Retail Facilities (Construction)

Bismillah Khan and Asad Aziz jointly run this department; both of them are engineers by
specialization. Their responsibility is to keep up to date facilities of the retail outlets (Company
Owned and Company Operated) petrol pumps. As the name implies they have responsibility of
construction of new sites and their required facilities as well as renovation of old ones. For
construction of new pump following process is followed:

14

Visit of Site: For the construction of a new pump, the officer of construction department visit
that place and checks whether the land is commercial and safe for construction of pump.

License: Company gives license after the successful visit; PSO takes NOC(No Objection
Certificate) from all government institutions like Electricity Department, Gas Department,
and Roads Departments etc.

Construction: Then explosive department gives License for Safety Issues and now the pump
can be build there.

2.5 Gaseous Fuels Department

Mr Ayaz Anwar supervises the department which is concerned with gaseous fuels (CNG).
As the trends in market was shifting toward the CNG being used as the energy source for
automobiles, so PSO as the market leader was concerned with the threats from alternatives of
petroleum since its inception. As this trend emerged due to scarce and expensive petroleum
source, PSO also jumped into this line, and running hundreds of its CNG stations all over
Pakistan.
In Multan division, this department is working for the:

Operations of stations

Supplies

Installation

Proper management of these CNG stations

15

2.6 Industrial Consumer Department

Industrial Consumer Departments head is Mr. Rao Ahmer. IC Department provides topnotch services to its industrial consumers throughout Pakistan. This department basically ensures
the Quality Product, delivered in the most efficient manner to satisfy industrial customer.
Industrial sector is divided into 7 divisions (Karachi, Hyderabad, Multan, Faisalabad, Lahore and
Peshawar) all over Pakistan and the I.C Department in Multan division is one part of that. IC
Department has the coverage of Sales and Marketing of POL (Petrol, Oil, Lubricants) products to
almost every single industry.
In Multan Division, three areas are covered. Those are Multan area, D.G Khan and Bahawalpur
Area. PSO having the largest storage and handling ability offers hospitality services to other
importers of Fuel Oil. 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.
The Industrial Consumer Department mainly sells POL products to various industries. This
department provides Furnace Oil to HUBCO, KESC, SANDAC, Lucky Cement, etc.

2.6.1

IC-Products

Motor Gasoline

Kerosene Oil

High Speed Diesel

Light Diesel Oil

Furnace Oil

16

Lubricants & Chemicals

JP 4 (Aviation)

Hi-Octane(HOBC)

Hi-Sulfur Furnace Oil(HSFO)

Light Sulfur Furnace Oil(LSFO)

They mainly deal with customers of following types:

General Trade

Independent Power Projects (IPP)

Army

The business is usually won by services and product differentiation as the customer is intelligent
and has technical knowledge. The main objectives are:

On time delivery

To provide complete quality and quantity

To monitor quality and quantity

To establish good customer relations

They deal with three types of customers

Regular (General Industries)

Tender (Company invite tenders and award it on the basis of quantity)

17

Contractual (for specific time period)

Geographic segmentation is as follows:

North Zone

South Zone

2.7 Cards Departments

Cards department is being operated by Mr. Shahid Kareem Mazari. This department
basically deals with the different cards offered by PSO for their customers.
PREPAID CARDS
PSO PREPAID CARDS are used by any person; these cards are available on almost every
fuel retail outlet. Its salient features are:

Substitute of Cash

Offer additional flexibility and convenience

Easy to purchase (no document required)

Eliminates cash handling and the use of Debit/Credit Cards

These cards are available in the following 4 denominations: Rs.1000/- Rs.2500/- Rs.5,000/-

Rs.10,000

18

CHAPTER NO. 3 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.

3.1 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
19

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.

3.2 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 PSOs 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.

20

3.3 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 its bunkering facilities at all the major ports of
country fill up the ocean liners of many nationalities facilitating the nations
international trade.

3.4 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.

3.5 Liquefied Petroleum Gas Department

21

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.

3.6 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.

3.7 Marine Department

22

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.

3.8 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.

3.9. MARKET SEGMENTATION

3.9.1

Diesel

Basis for the market segmentation for hi-speed diesel are:

3.9.2

Engine Power

23

Motor Vehicles above 1300 cc

3.9.3

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.

3.9.4

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.

3.9.5

Market segmentation for petrol

Market for petrol is segmented on the basis of following.

3.10 Engine Power

Vehicles or machinery; having engine power below 1000 cc.

3.11 Income
On income basis, there are basically three groups:
1. Lower Middle
2. Middle Middle
3. Above Middle

24

3.12 Lower Middle

In this social close people who are having vehicles/machinery from (49 cc to
100 cc) which includes. Vespa- motor- cycles.

3.13 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.

3.14 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 Mobile 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
mobile oil from (1 liter to 4 liters) i-e Motorcycle and Rickshaw generators
(Light).

25

2. Mediocre User
Include those users who are having vehicle/machinery that consumes (4 liter
to 12 liter) mobile oil i.e. small ears and light machinery.
3. Heavy User
Includes those users who are having vehicles and machineries, which
consume more than 12 liters, which include heavy transport, truck, buses
loaders, road rollers, tractors and industrial units.

3.15 BCG Matrix

Market Growth

Market Share
Star

Question Mark

Castrol CR

Blaze

PSO

DEO

Cash Cow

Dog

Castrol GTX

Castrol Magnetic

Carient

Castrol XL

Two-Stroke Oil

Castrol RX
Castrol Active

26

CHAPTER NO. 4 WHAT I LEARNED DURING

INTERNSHIP
I have completed my internship my internship at PSO regional office (Officer
Colony, Khanewal Road Multan) from 22ndJune, 2016 to 22nd August, 2016.
During my stay I was attached with departments of Retail sales and
Operations. I have done 8 weeks internship.

4.1 Working with the Departments of PSO:

4.1.1

Operational Department:

Operational department of the PSO is responsible for running the

organization. It has the ultimate accountability for profit and loss, and seeks
to maximize return on investment for the shareholders. It is also responsible
for the profitability of the company, increasing sales, managing assets and
deciding the proper inventory levels.

4.1.2

Retail:

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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, 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

4.1.3

My Responsibilities and tasks during Internship:

My task in PSO was to work within the Divisional Office and involved with the
understanding of the Retails Department. I was assigned main projects
regarding in which make a detailed report on PSO COCO Site and the other
one was to conduct survey visit about two major operating sites; JIMCO and
Shershah Oil Depot. PSO is the largest oil company in Pakistan having the
advantage to conduct large internship activity.

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Mr. Irfan Haider (DBM & Internee coordinator)

My duties were:

Visits on COCO Sites

Conduct In-house survey to know about COCO Site formulation and

installation.

Find out the problems and loops of PSO Pumps by its competitors

Make a short report of pie chart on in-house survey

Make a long report on PSO Oil and Lubes Sales and sales incline
strategies.

I had to conduct in-house survey for checking employs awareness about all
available products and presented it to my supervisor. I also contact staff, find
out the problem or loops, and evaluate the finding.

Visits at two nearest operating sites

Shershah Oil Bulk Depot

JIMCO Mehmoodkot

Collect all operational activities data from both sites

Make a short report, and presented it to Internship coordinator

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An activity assigned to me was to collect all petrol pumps files and make a
soft copy of each document by scanning them.
Some important documents I repeatedly captured were as follows:

SLS-37

AGS-18

AGR-13

Dealership License Agreement

Design a campaign on 13th and 14th August. This campaign was for PSO outlets in which i
recommend some instructions for safety measures. The objective of this campaign is to ensure
the safety of bike riders at the time of fuel filling. Firstly we prepared the slides of this campaign
and those slides were used by our supervisor Mr.Abdur Rehman in his presentations in front of
outlets manager.

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CHAPTER NO. 5

ANALYSIS

5.1 SWOT ANALYSIS

Strengths

Pioneered quick oil change service: Speedy

Sole licensee of Castrol Lubricants
Initiated free lube delivery service
Mobile Quality Testing Unit
Largest retail distribution network: 3800 retail outlets
Integrated Value Chain

Weaknesses

Semi-bureaucratic system

Slow decision making

Bad product positioning
Lower perceived quality
Lack of trust with dealers
Failed promotional scheme (Jeet Hee Jeet, 2004)

Opportunities
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 Privatization prospect
Use of the success of Castrol to reposition consumer perceptions of National Company
offerings
Pioneers of innovation in industry

Threats
Induction of new player: Total
Global Externalities
Global rise in petrol prices
All competitors have strong international backing from worldwide operations

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5.2 PEST Analysis

For the analysis of external environment following are important factors
(PEST):

Political legal forces

Economic forces

Socio cultural forces

Technological forces

Political Forces
In Pakistan there are rapid changes of Government since poison. Each
government that came in power condemned the planning work done by the
precious government. The slow development due to political instability but
now the present government is very stable to grow because govt. is
providing incentives to different industries.

Legal Forces
Legal component consists of legislation that has been passed. This
component prescribes rules or laws that all members of society must follow
e.g. labor policy, employees social security scheme 1965 Partnership Act
1932 company 1984.

Economic Forces

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In Pakistan GNP is 5.41 and inflation rate is very high which is 12.7. The
balance of payment position in Pakistan is -3.5%. The employment rate is
34.94 million.
Economic Overview
Currency: Pakistani Rupee
Average Exchange Rate (20/1/02): U.S. $1 = 60.5 rupees
Gross Domestic Product (GDP, market exchange rates, 2000E): $52.1 billion
Real GDP Growth Rate (2000E): 1.8% (2001E): 2.3%
Inflation Rate (2000E): 15.6% (2000E): 11.1%
Current Account Balance (2000E): -$3.5 billion
Merchandise Trade Balance (2000E): -$3.0 billion
Total External Debt (2000E): $38.5 billion
Major Trading Partners: United States, Japan, Germany, United Kingdom, and
Saudi Arabia
Major Export Products: Raw cotton and textiles; rice; leather manufactures
Major Import Products: Petroleum; machinery and transport

Socio Cultural Forces

In Pakistan population is increasing and social values are also changing so
the demand of fuel consumption is also increasing. People are coming from

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rural areas to cities and their life style and values are also changing. They
are using modern technology like care, motor cycle for traveling.
Pakistan's attempt to raise the living standards of its citizens has meant that
economic development has largely taken precedence over environmental
issues.
Unchecked use of hazardous chemicals, vehicle emissions, and industrial
activity has contributed to a number of environmental and health hazards,
chief among them being water pollution. Much of the country suffers from a
lack of potable water due to industrial waste and agricultural runoff that
contaminates drinking water supplies. Poverty and high population growth
have aggravated, and to a certain extent, caused, these environmental
problems.

Technological Forces
Pakistan environment regarding the technology is not very advance due to
the lack of resources. Natural gas, because of its environmental qualities,
efficiency, and technological advances are going to play an increasingly
important role in meeting demand for clean energy.

5.3 Industry Analysis

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The industry in which Pakistan State Oil (PSO) is doing business is highly competitive. Being a
national oil company has its advantages but the company still has to face pressure from different
sources. The following five key factors highlight this fact.

Threat of New Entrants

The threat of new entrants in the industry is small but it cannot be eliminated. There are
already four players in the market other than PSO itself, namely Shell Pakistan, Caltex, Total
PARCO and Attock Petroleum. New companies will not have a large market segment to capture
therefore starting business in the industry will be far from lucrative. This can be portrayed with
the help of new entrants like Admore and ZIC which have not been able to pose a threat to
already present players.

Threat of Substitute Products

As alternative of fuel, Pakistan State Oil is developing Ethanol which will eventually be
available at reasonably less price. Other than this, CNG is already available at most PSO outlets.

Bargaining Power of Suppliers

It can be assumed that being an oil company, the bargaining power of suppliers would be
fairly high for PSO. However after some research it has been determined that this is not the case.
The transport fleet consist of 6000 Tank Lorries which are equipped with the state of art
technology to keep them monitored, thus there is no real threat from them either.

Bargaining Power of Buyers

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PSO has a wide customer base which includes retail customers various industrial units,
government, power projects, aviation and marine sectors of Pakistan including Pakistan Army,
Pakistan Navy, Pakistan Railway, WAPDA, KESC, NLC and many more. All these buyers
combined form a formidable force which can have power to influence PSO.

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CHAPTER NO. 6 CONCLUSION &

RECOMMENDATIONS
6.1 Conclusion
PSO has been the market leader ever since it started operating with number of products
delivering to its customers and providing satisfaction at all levels.
PSO has keen interest in maintaining its relationship with corporate clients and other stake
holders. PSO is engaged in providing health and safety to its employees and their families
ranging from top management to pump attendants. Making sure each customer is satisfied and
returns to PSO outlets with a smile and keeping positive image in mind.
Being ISO 9001 & 14001 certified PSO is leading from front to prevent and reduce pollution and
wastage. High techs equipments are used to make sure public is not affected and meet legal
requirements in performing its operations.
PSO is always on its toes to make life better and simple and spend heavily on infrastructure and
other retail outlets to attract new customers with the aim to retain customer for a life time.

6.2 Recommendations
I recommend that PSO must have to adopt competitive strategies and
implement innovative ideas in order to maintain it status.
I recommend that PSO must have to:

Make innovations rapidly

Improve their quality.

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Should provide facilities to their customers according to their needs

and requirements.

Keep in mind the nature of consumer while offering services.

Should reduce cost so that lower class can also afford it.

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References:

http://www.psopk.com/en/investors/company-information

http://www.psopk.com/procurement/

http://cards.psopk.com/products_commercial_cards.php

http://cards.psopk.com/products_fleet_corporate.php

http://www.slideshare.net/frqali/pakistan-state-oilpresentation

http://www.psopk.com/en/quality-assurance/quality-assurance-activities-in-different-functions

http://www.pso.com.pk/about-pso/core-values

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