MIS group presentation On

Royal Dutch Shell

Mis group members:

Samiul Haq Mohammad abbas Inayat ur Rahman Shah Khalid Irfan Ullah

Introduction:
Royal Dutch Shell: commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office at the Shell Centre in London, United Kingdom. It is the largest energy company and the second-largest company in the world measured by revenues and is one of the six oil and gas "super majors .It is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading. It also has major renewable energy activities, including in biofuels, hydrogen, solar and wind power.

 It has operations in over 90 countries, produces around 3.1 million barrels of oil equivalent per day and has 44,000 service stations worldwide. Shell Oil Company, its subsidiary in the United States, is one of its largest businesses. The Shell brand name enjoys a 100-year history in this part of the world, dating back to 1899 when Asiatic Petroleum, the far eastern marketing arm of two companies: Shell Transport Company and Royal Dutch Petroleum Company began importing kerosene oil from Azerbaijan into the subcontinent. Even today, the legacy of the past is visible in a storage tank carrying the date - 1898. The documented history of Royal Dutch Shell plc in Indo_Pakistan subcontinent dates back to 1903 when partnership was struck between The Shell Transport & Trading Company and the Royal Dutch Petroleum Company to supply petroleum to Asia.

 In 1928, to enhance their distribution capabilities, the marketing interest of Royal Dutch Shell plc and the Burmah Oil Company Limited in India were merged and Burmah Shell Oil Storage & Distribution Company of India was born. After the independence of Pakistan in 1947, the name was changed to the Burmah Shell Oil Distribution Company of Pakistan. In 1970, when 51% of the shareholding was transferred to Pakistani investors, the name of changed to Pakistan Burmah Shell (PBS) Limited. The Shell and the Burmah Groups retained the remaining 49% in equal propositions. In February of 1993, as economic liberalization began to take root and the Burmah divested from PBS, Shell Petroleum stepped into raise its stake to 51%.

Mission statement:
"We shall continue to deliver best value to our stakeholders by providing superior offerings to our customers, maintaining our high financial performance and improving our standing as a good corporate citizen of Oman by aligning our direction in longterm sustainable fashion."

Vision statement:
Our Vision To be the Top Performing and Most Admired Refinery in Asia.

Company s Slogan:
You can be sure of Shell

Goal of Shell:
The goal of the company is to position itself as the preferred oil company in Pakistan, leading the field in its commitment to safety, customer service, quality and environmental protection.

Company Objective:
The objectives of Shell Pakistan Ltd. are to engage efficiently, responsibly and profitably in oil, gas, chemicals and other selected businesses and to participate in the search for and development of other sources of energy to meet evolving customer needs and the world s growing demand for energy. We believe that oil and gas will be integral to the global energy needs for economic development for many decades to come. Our role is to ensure that we extract and deliver them profitably and in environmentally and socially responsible ways.

Product and Services:

Product: Anything that can be offered to market for attention, acquisition, use or consumption that might satisfy a want or need. The oil products of shell are given below. Services: Services are the form of product that consist of activities, benefits, or satisfaction offered for sale that is essentially intangible and do not result in the ownership of anything. The services that provide shell Pakistan limited are given below. There is credit card that given to the customer, in presence of these credit card shell provide all types of services without getting charges. When customer of shell going for pouring oil then also clean the transportation that is coming for being filled the oil.

Product Mix:
Product mix is the set of all the products offered for sale by a company. The structure of product mix has both breadth and depth. Its breadth is measured by the number of product line carried and its depth by the variety of sizes, colors and models offered within each product line. Thus the two main products which Shell Pak. offers are fuel and lubricants. These have further classifications in various constituentswhich form the product line. Product line: Shell has two product lines namely, fuel and lubricants.

 Fuel: Shell offers a wide range of fuel. These are: Hi-Octane Super Unleaded Super Hi-speed Diesel CNG Lubricants: The various lubricants offered by Shell are; Rimula C Rimula D Rimula X Helix Plus Helix Super Helix Standard Shell Helix(CNG)

Product Life Cycle:

Product Life Cycle Stages:
Product Life Cycle means the changes in the sales volume of the product over the life the product. In market there is always ups and downs are present because this is a dynamic world. Every thing will have to finish after certain time period, by finishing their life. Business

should manage their products carefully over time to ensure that they deliver products that continue to meet customer wants. The classic product life cycle has four stages.

 Introduction Stage: At the introduction stage market size and growth is slight. It is possible that substantial research and development cost have been incurred in getting the product to this stage. In addition, marketing costs may be high in order to test the market, undergo launch promotion and set up distribution channels. Growth Stage: The growth stage is characterized by rapid growth in sales and profits. Profits arise due to an increase in output and possibly better prices. At this stage, it s cheaper for business to inset in increasing their market share as well as enjoying the overall growth of the market. Shell Pakistan introduction stage is successfully done because it comes from the international market and enters in Pakistan market. Now company has about 40-45.5% of market share and still growing .

 Maturity Stage: The maturity stage is perhaps the most common stage; it is in this stage that competition is most intense as companies fight to maintain their market share. Here both marketing and finance becomes key activities. Marketing spend has to be monitored carefully, since any significant moves are likely to be copied by competitors. The maturity stage is the time when most profit is earned by the market as a whole. Shell Pakistan not yet enters in maturity stage. Decline Stage: In the decline stage the market is shrinking, reducing the overall amount of profit that can be shared amongst the remaining competitors. At thus stage great care has to be taken to manage the product carefully. It may be possible to take out some production cost, to transfer production to cheaper facility, sell the product into other cheaper market. Shell Pakistan is a brand name and company is not in decline stage because their sale increases day by day.

Pricing:
Price is the amount of money for which a product is offered in the market. The amount of money charged for the product of services of sum of the value that consumer exchange for the consumers exchange for the benefits for having or using the product of services price is only which brings revenue in the market, so it plays a tremendous role in the market.

Strategies of Pricing:
There is to types of strategies present in marketing. Market skimming price Market penetration price

 Market skimming price: This is high price settings for a new product to skim maximum revenue layer by layer from the segments willing to pay the high price the company makes favor but more profitable sales marketer prefer to this type of price strategies because there is every product that comes in the market will have to go out from the market. Market penetration price: Settings a low price for a new product in order to attract a large number of buyers and large market shares. Companies also adopt this strategy when they enter in the market. Shell Pakistan limited also comes up with the penetration strategy because it is an international market and they just want to enter this market now this company enjoying the high profit and continuums in the product life cycle.

Selection of Pricing Method:

Companies usually select the price of their products in accordance to the following three: customer demand schedule, the cost function and competitors price. However companies adopt various strategies in order to price their products. The strategies adopted by the shell Pakistan ltd are: 1: Price of competitor s product 2: Price premium for high quality 3: Price premium for high purity 4: Price premium for better services 5: Is the appropriate price for shell.

 Going price rate:

Going price rate means that a company bases the price of its product in accordance to the price offered by its competitors. In fact shell Pakistan s competitors are like; PSO TOTAL ATTOCK CALTEX ADMORE

Market Targeting :
It is the process of evaluating each market segment s attractiveness and selecting one or more segments to enter. Market targeting depends upon the financial positioning of company. If company is strong financially then he must go for market targeting. Shell in Pakistan produces verities of products. All these products are available urban as well as rural area.

Market Segmentation :
Market is the processing which dividing a market in to distinct group of buyers on the basis of needs characteristics or behave who might requires separate products or marketing mixing. Market consist of buyers and buyers differs in one or more ways they may differing their wants, resources, locations, buying attitude and buying practice. Shell Pakistan ltd. Divide his market in to following segments: Demographic segmentation Geographic segmentation Psychographic segmentation

Levels of Market Segmentation:

There are three levels of market segmentations 1.Mass marketing 2.Segment marketing 3.Niche marketing

Mass Marketing:
Shell Pakistan limited go for the mass marketing because its distribution is very extensive. Internationally its products are goes into international market.

Positioning:
The process of arranging of product to occupy clear distinct and desirable place related to competing products in the minds of target consumer. Shell Pakistan companies lies its growth stage in the market and enjoys 65% shares. Now gradually with the increase of growth rate is expands its products line and also its distributions.

Marketing Channel:
Marketing channels are set of interdependent organizations involved in the process of making a product or service available for use or consumption The entities involved in the distribution of Shell products in Pakistan are: Supply Chain Department Shell Depots Distributors Fuel Stations Consumer

The Market Share of Shell: At the moment Shell Pak. has a market share of about 40% to 45% in Pakistan. It is trying hard to become the market leader in Pakistan.

Qualities of a good Market Leader:

Customer Knowledge: Shell Pakistan is fully committed to achieve excellence in customer services and product quality. This can only be done by having complete knowledge of the needs and wants of their customers. It is due to this reason that Shell Pakistan has established a special customer service centre by the name of Shell Edge.

 Long Term Planning: Shell enjoys a 100-years history in the subcontinent. Shell s long term commitment towards developing the petroleum industry in Pakistan is reflected by a capital investment of Rs.703 million in 2006.
Line Extension: Line extension means including new products in the product line. Shell has recently extended the product line of its lubricants by producing CNG lubricants by the name of Shell CNG Engine Oil.

 Heavy Advertising: Another feature of a good market leader is to heavily advertise in order to compete with the competitors and to create more awareness amongst already existing and new customers. Shell also adopts the same strategy. It advertises both on electronic and print media to keep its customers well informed. The company has also started a magazine named Spirit to promote its products.

 Effective Placement of Products: Shell has established a special council called Product Placement Council. Its sole function is to keep an eye on proper placement of the various products offered by the company. The council makes contracts with dealers and retailers regarding the placement of the products.

Promotion:
Advertising: Advertising is any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. Kinds of Advertisement: There are different kinds of advertisements which a company may adopt during the PLC. Shell also requires advertising its products in order to create awareness about the new or already existing products. The types of advertisements which Shell Pakistan Ltd. Has adopted are as follows:

 Informative Advertisement: The type of advertising which is done during the introduction stage of a product is known as informative advertising. Shell adopted this strategy when it launched its Shell Helix CNG Oil. It adopted all kinds of media to inform the public about the new product. Shell advertised through Television, News Papers, billboards, etc. to build a good product image in the minds of the customers.

 Persuasive Advertising: The advertising done to compete with the competitors and to create more demand of the product in comparison to the competitor s products, is known as persuasive advertisement. Shell Pak Ltd. also adopts such strategy to compete with its competitors. You must have seen various adds of Shell featuring celebrities like Michael Schumacher in order to make them attractive and also adds in which comparison is made among Shell and competitor s products. Comparison features include purity, viscosity, efficiency and performance.

 Kinds of Media to be Used for Advertising: Media is basically a carrier which carries a message or any kind of information from the sender to the receiver. The different kinds of media used by Shell Pak .Ltd. are: Television Radio(Especially FM stations) Internet Telephone Service (This function is performed by Shell Edge customer services centers. Their toll free number is 0800 22737) Newspapers Magazines (Shell has its own magazine Spirit ) Billboards

Competitor:
PSO TOTAL ATTOCK CALTEX ADMORE

The SWOT Analysis:

SWOT stands for Strengths, Weaknesses, Opportunities &Threats. In which, Strengths and weaknesses are related with internal environment of the organization and opportunities and threats are related with external environment of the organization.

 Strengths:
Shell strengths mean what are the positive points of the organization. The strengths of shell Pakistan Ltd are: The managers regard their sub ordinates. Main focus of the organization to increase their customers. Managers use participative approach. Their employees are highly motivated. They hire local employees. No clash with GOVT. or any agency. They care about the hygienic factor. Shell is using effective means for the promotion of its products. Shell provides in time deliver to their petrol pumps. Incentive based policies for motivating employees. Shell has international Standard petrol pumps. Mobile training units keep the staff up-to-date.

 Weaknesses:
They are not offering any package to their regular customers. They are not offering any bonus package scheme. Shell has eight regional retail managers. They are insufficient to handle the problems. They have no proper shades and sitting arrangement at the filling stations. There is no proper drainage system at filling station.

Opportunities:
Shell is an international company so it should introduce packages. Company has an opportunity to give special packages to its employees. Company has opportunity to install more CNG as well as petrol pumps in rural areas of Pakistan

 Threats:
Threats are actually competitors. PSO and CALTEX improvement. Installation of stations by TOTAL. The smuggling of petrol in Baluchistan from Iran. Entry of new companies in the refinery sector.