SUMMER INTERNSHIP REPORTGROUP MEMBERS:1. FAUZ ALI SIDDIQUI2. SYED MAAZ ALI3. SALMAN SHAHEEN4. SYED MIERAJ UL HUDA SHAH5. MUHAMMAD MUZAMMIL6. SULTAN ALI KHANSUPERVISOR:1. MAM AISHA RASHID2. MAM KINZA SIDDIQUIDEPARTMENT:RETAIL FUELSPROJECT NAME:How BTL activities affect consumer purchase decisions.

TABLE OF CONTENT:

TopicPage no.

Acknowledgement3

Executive summary4

Background Information of PSO5

Company overview11

Marketing department at PSO12

Introduction14

The problem statement15

Literature review16

Questionnaire20

Analysis27

Recommendations27

Conclusion28

We at PSO28

ACKNOWLEDGEMENT:First and foremost, we would like to think Almighty ALLAH for guiding us and helping us in every path of our life, even in the smaller material things like this report. We are also thankful to our parents for their unconditional love and support in whatever we do. We are also thankful to PSO for hiring us in their summer internship program and providing us opportunity to learn in their well organized, competitive and professional environment. We would also like to thank employees and management of RETAIL FUELS department specially MADAM AISHA RASHID, MADAM KINZA SIDDIQUI and SIR JAHANGIR SOOMRO for their support and guidance which enabled us to gain valuable information about the work environment of RETAIL FUEL department as well as retail outlets which would be very beneficial for our future jobs. A special mention goes out to all those people who gave us a part of their valuable time to fill up the questionnaires hence enabling us to conduct the research survey.

EXECUETIVE SUMMARY:Energizing the Nation in order to progress, every country requires a proper source of energy, to strengthen and energize all the sectors responsible for development. Pakistan State Oil, the largest energy company of Pakistan, is fuelling all the major sectors including automotive, aviation, railways, power projects, industries and agriculture sector, thus steering the national economy towards progress and stability. With extensive reach from Karachi to Khyber, PSO is effectively fulfilling the responsibility of driving the nation towards growth and development. According to one report Pakistan is on 34th number in the oil import. And they are on the 22nd number in the consumption in world ranking. Total oil production in Pakistan is 68,870 barrels per day, and the total countrys consumption is 345,000 barrel per day and net import of the country is 290,600 barrel per day. Pakistan state oil is largest marketing oil company in Pakistan and also among the top 1000 largest companies in Asia. Pakistan state oil was set up in December 29th 1976 through the merger of ESSO undertaking with the Pakistan national oil limited (PNOL) and premier oil company limited (POCL).In this report we have summarized all our work which we have done till now during our internship period. We have been in Account Payable Department, where we dealt particularly with revenue & capital related payments. We also learnt about other miscellaneous payments & how the cheque is finally prepared for the vendors & the tracking system they have for theirs payments to keep check on the processing time period of each bill by different concerned departments.

1. Background Information of PSO:

Chronology of Events leading to the formation of:

Pakistan State Oil Co. Ltd. (PSO)

01-01-1974Federal Government takes over management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited), renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control) Act, 1974.

03-06-1974 Government incorporates "Petroleum Storage Development Corporation" PSDC.

23-08-1976 Name of PSDC changed to State Oil Company Limited (SOCL).

15-09-1976 Government purchases ESSO Undertakings, vests their control in SOCL.

30-12-1976Government merges PNO and POCL into SOCL (State Oil Company Limited) and names it as Pakistan State Oil Company Limited (PSO).

1.1. PSO VISION:

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

1.2. PSO COMPANY PROFILE:

Pakistan State Oil (PSO) is the oil market leader in Pakistan enjoying over 82% share of Black Oil market and 61% share of White Oil market. It is engaged in import, storage, distribution and marketing of various POL products, including Mogas, HSD, Fuel Oil, Jet Fuel, Kerosene, LPG, CNG and petro-chemicals. This blue chip company, the winner of "Karachi Stock Exchange Top Companies Award" and a member of World Economic Forum, has been a popular topic of case studies in Pakistan and abroad based on its radical corporate turnaround over the last few years.

Excellence in Customer Service:

PSO serves a wide range of customers throughout Pakistan, including retail, industrial, aviation, marine and government/defense sectors. Professionals at PSO strive for providing unmatched and diverse services to the customers in line with best international practices. PSO's state-of-the-art New Vision retail outlets are equipped with the most modern facilities, including auto car wash, electronic dispensing units, convenience stores, business centers, internet facilities and Easy Payment Centers for payment of utility and Citibank credit card bills. The concept of Quick Oil Lube Vans introduced by PSO provides the lube change facilities at customers' doorsteps. About 21 Mobile Quality Testing Units ensure top of the line quality of products and services. As innovative customer service initiatives, PSO has launched Loyalty Card, Corporate Card, Fleet Card and Prepaid Card. These cards provide added convenience, flexibility and security to the customers while enabling them to earn redeemable loyalty points and avail attractive discounts for purchase of non-petroleum products at a large number of merchant outlets in various cities on use of Loyalty and Corporate Cards. For efficient handling of customer complaints, queries and suggestions, PSO has developed Customer Service Centers at all its 14 divisional offices. Furbished with a toll free telephone number (0800-03000) and automated customer feedback registration system, these centers provide an efficient system of 24-hour customer care. An attractive and comprehensive.

Total Quality Control:

PSO has been meeting the country's fuel needs by merging sound business sense with national obligation. In order to satisfy the customers' needs while ensuring the highest quality of products and services, PSO has introduced total quality management system in its operational activities. Consistent conformance to prescribed standards and specifications across the whole range of activities from receipt, storage, transportation and delivery of products is the cornerstone of PSO's quality management system. In addition to quality assurance in upkeep and maintenance of existing facilities, compliance with quality standards is ensured in construction of new facilities like recently developed state-of-the-art facilities for Aviation customers at Lahore Airport.

Health, Safety and Environment:

Ensuring the health and safety of PSO employees, contractors, customers and members of public likely to be affected by the Company's operations is one of the basic corporate objectives, and as a priority it ranks equally with market share and profit. Accordingly, it is the Company's policy to perform work in the safest practicable manner, consistent with best industrial practices while adhering completely to the requirements of health and safety codes and practices. The Company's Health, Safety & Environment (HSE) Steering Committee monitors HSE compliance on regular basis while HSE Site Committees ensure that HSE Requirements are met at all operating locations, including Depots, Terminals, Plants, Retail Outlets and Airports. Use of relevant safety equipment at work is mandatory for employees. Regular HSE audit of facilities and HSE training of relevant staff is carried out and commissioning of new facilities is subject to HSE clearance. Adequate resources are made available to ensure the success of HSE policy.

Corporate Social Responsibility:

PSO is highly committed to fulfillment of its corporate social responsibility and believes that the benefits of the Company's progress and financial gains must flow down to public at large up to the grassroots levels, particularly to the under-privileged and deprived sections of the populace irrespective of ethnicity, caste and creed. PSO has undertaken a wide range of initiatives to support several social, health and educational programs. Such initiatives include instituting gold medals, cash awards and scholarships for top students of leading professional educational institutes, providing computer training to students and other residents of Badin district in rural Sindh province through a well facilitated training institute established for this purpose, providing moral and financial support in form of donation on compassionate basis to charitable institutions, installing direction signs and traffic signals at major streets and thorough fares, supporting Citizen Police Liaison Committee and sponsoring road awareness programs like Karavan Karachi for the children.

Reform of Corporate Governance:

PSO's comprehensive and far-reaching corporate renewal program resulting in dramatic corporate transformation has been widely appreciated at various national and international forums, by world's leading consulting and financial advisory firms and by leading educational institutions. This program covers the revamping of the organizational architecture, rationalization of staff, employee empowerment and development, and efficiency and transparency in decision-making through Cross-Functional Teams.

PSO's corporate structure has evolved into a matrix, which has divided the Company's major operations into independent activities supported by the financial, legal, information and other services. These activities operate in an autonomous and collegial manner in the form of Strategic Business Units based on the clear and transparent allocation of responsibility and accountability. This structural change has been reinforced and related checks and balances have been established by putting in place several corporate monitoring and control systems.

One of the top priority areas of PSO's corporate reform is Human Resource Development. The Company has undertaken several initiatives to ensure induction and training of professionals with the objective of ensuring high level of professionalism and productivity at all levels of its employees. Through computer training, various in-house courses, sponsorship of staff for studies at professional institutions and seminars, the Company is providing its employees the opportunities for continuous development and learning.

Effective implementation of corporate reform and business development strategies in line with best international practices has enabled PSO to maintain its market leadership position in a highly competitive business environment

1.3. PSO MISSION STATEMENT & VALUES

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 for 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

1.4. PSO VALUES

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.

2. COMPANY OVERVIEW:

Major stakeholder:Government of Pakistan: 51% shares.Distribution outlets:About 3700Out of which1,610 Outlets have been upgraded as per as new visionSTORAGE DEPOT:29TOTAL STORAGE:81% of National storageTANK LORRIES6000

3. MARKETING DEPARTMENT AT PSO: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.

3.1. MARKETING DEPARTMENT SUBSECTIONS: Retail Fuels. Gaseous Fuels. Lubricant Sales and Agency Trade. Lubricants Marketing. Business to Business (B2B). Brand Management. Cards.

3.2. RETAIL FUELS: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.

3.3. DEPARTMENTAL HIERARCHY: GENERAL MANAGERS

DEPUTY GENERAL MANAGER

REGIONAL MANAGERS

DIVISION/BUSINESS MANAGERS

AREA/TERRITORY INCHARGE

4. INTRODUCTION

Most engine lubricants are nearly the same. Its the brand or friends recommendation which affect the purchase decision. When a customer compares the brands available, factors such as brand, promotion and ease of purchase as well as mechanics recommendation affects his/her decision. Marketing influences the decision making of the customer when purchasing the product. We are conducting this research to find other elements that influence the consumers buying behaviour. We need to understand and what are the components that are most looked for by consumers when making the purchase decision.Motor oil is a lubricant used in internal combustion engines. These include motor or road vehicles such as cars and motorcycles, heavier vehicles such as buses and commercial vehicles, locomotives and aircraft, and static engines such as electrical generators. In engines, there are parts which move against each other causing friction which wastes otherwise useful power by converting the energy to heat. Contact between moving surfaces also wears away those parts, which could lead to lower efficiency and degradation of the engine. This increases fuel consumption, decreases power output and can, in extreme cases lead to engine failure. Lubricating oil creates a separating film between surfaces of adjacent moving parts to minimize direct contact between them, decreasing heat caused by friction and reducing wear, thus protecting the engine. In use, motor oil transfers heat through convection as it flows through the engine by means of air flow over the surface of the oil pan, oil cooler and through the build up of oil gases evacuated by the Positive Crankcase Ventilation (PCV) system. In petrol (gasoline) engines, the top piston ring can expose the motor oil to temperatures of 320F (160C). In diesel engines the top ring can expose the oil to temperatures over 600F (315C). Motor oils with higher viscosity indices thin less at these higher temperatures.

4.1. THE PROBLEM STATEMENT

The problem of this study is to evaluate the key factors or components that influence the purchase of lubricants by the consumer and what can be the below the line activities that can help them to buy lubricants. The result gained can assist company to decide on how to market and target the product. This will also help to promote the correct product placement at the right time and at the right place to the correct person.

4.2. THE RESEARCH OBJECTIVES

Specifically, this study is seeking input to the following questions:1. To choose the key components that affects the overall purchase of passenger car motor oil from the consumer.1. To scrutinize which are the vital components that managers should allocate the resources for better quality services.1. To assist the lube marketing manager on which are the main components that can boost the sales of the company?

This research will also help companies to evaluate the information whether the product are meeting customers expectation and influence the mind of customer in purchasing lubricant. This study would help them to develop and enhance the services provided to the consumers.

LITERATURE REVIEW

4.3. BRAND AWARENESS

Brand awareness is the consumers ability to identify a brand under different conditions (Keller, 2003). This is the factors which can expose or destroy the brand. When a cue or special word is mentioned, the customer must be able to recall the specific brand. This is known as brand recall. The minimum of brand awareness is brand recognition and is influenced by aided recall (Holden, 1993). When a consumer making a purchase decision at the point of purchase, brand awareness has a big influence on their decision.

On the next level, unaided recall is brand awareness where the consumer is able to recall the brand by referring to any other cue about the brand. (Ross and Harradine,2004). Although the brand name is not provided, the fact that they can recall the name implies that the brand has a very strong position in their mind. This is called brand awareness. The first-named brand in an unaided recall thus represents the highest level of brand awareness (Laurent, 1995; Mariotti, 1999). When repeated exposure to the brand is done, the familiarity of the brand increases and brand awareness is enhanced (Keller,2003).

As seen from this, advertising is the first platform to build brand awareness (Gregory,1993;Hoyer and Brown,1990). Many world famous brands use the power of television and magazines to advertise their products and expose potential customers to them.(Waterschoot, cited in Ross and Harradine,2004).

Some functions that brands can perform for customers are such as signal of the product characteristics; simplify decision making; serve as a guarantee by providing trust, consistency or a set of promises and a reduction of risk ; fulfill a personalization, social or status function; or provide pleasure. (Lambin,2002,Varrey 2002, Picton and Broderick,2001). The small set of brands which the consumer automatically retrieves is important since a brand is not part of the consideration set is unlikely to be chosen (Mowen and Minor, 2001).

According to Woodside and Wilson(1885), there exists a relationship between brand awareness and purchase decision. When the customer recalls the brand easily in an unaided situation, the intention to purchase is higher and the purchase is more likely. Usually brands which are at the top of the mind have the highest possibility of purchase. The decision-making process is further simplified by a brands associated with quality (Vranesevic and Stancec, 2003).

The usual consumers perception of brand is based on the belief that when the consumer is familiar with the brand, the organization must have spent heavily on advertising. If the organization spends a lot on advertising, it must have good profits which mean that many consumers are satisfied with the product; therefore the product must be good, especially in brand awareness familiarity has a great impact of a brand. (Macdonald and Sharp,2003).

4.4. PRICE

When consumer decides on purchase of the engine lubricant, one of the major factors affecting the purchase is pricing. This pricing is tailored according to the class and standards of reliability. When the price is not set to include the marginal cost and the price does not reflect the actual cost of production, it will not influence the customer to purchase the optimal quantity. When this price-marginal-cost equality is violated due to inherent market conditions, second-best solutions are often utilized (Farrell, 1958; Leinbenstein, 1966; Lipsey and Lancaster, 1956).

The determination of optimal prices together with cost-efficient operating is obviously is different (Boronico et al., 1995; Crew and Kleindorfer, 1993). Colvin et al. (1992) argues that lubricants producers should reconsider their methods of pricing because of the current market trend of growing capital required for brand products. The reliability also affects the margins for the product since consumers usually choose a product based on the reliability.(Chen,1984). None of early records of oil and gas industry considers the reliability.

4.5. Place of Purchase

Most consumers want an easy and accessible place to purchase the products. When the service at the outlet is good, they will return to make more purchases. As stated by Levesque and McDougall, 1996, p. 14), satisfaction is and overall customer attitude towards a service provider. If what the customer receives is different from what they anticipate then there will an emotional respond to this (Zineldin, 2000). A similar response is given by Gerpott(2001) who proposes that satisfaction is based on a customers estimated experience of the extent to which a providers services fulfill his or her expectations. When customers are satisfied, this brings many benefits. Satisfied customers are not much sensitive about price, usually buy additional products, are less influenced by competitors and stay loyal longer (Zineldin, 2000). Although customer satisfaction is important, it is not equally important to all the customers. There are two types of customers. The first do not fall into the service of the company, while the second are customers who are crucial to the companys existence. The first type of customer can usually be ignored but the second type must be taken care of properly to ensure that the goal of satisfying customers is met. (Bhote,1996). Convenient for the customer can be defined as a commitment to continue to purchase product on an ongoing basis (Zineldin, 2000, p. 28).

A more elaborated definition is to define conveniently as the customers liking, commitment, trust, willingness to purchase, and repurchase products, with the first four being emotional-cognitive convenient constructs, and the last two being behavioral intentions (Stauss et al., 2001). This research focused of third components that affect the purchase of lubricants at Central Region. It is investigated that the component of convenient when purchase oil lubricants difference in the mind of consumers that effecting of lube purchase oil among the Malaysians.4.6. MECHANICS RECOMMENDATION

One of the important influences of purchase decisions especially for engine lubricant are the mechanics. This is stated as A decision making process carried out by individuals in interaction with other people, in the context of formal organization. (Webster and Wind, 1972). The overall purchasing behavior of consumers can be affected by mechanics recommendation. These factors can be defined as variables which relate directly to the buying task, whereas non-task variables are those that extend beyond the buying problem, variables that may influence the individual decision maker(s), such as emotion, personal goals and internal wants.

(Rui da Silva, Gary Davies, Pete Naudia, 2003). Sheths (1973) model states a generic model of organizational buying, characterizing organizational buyer behavior as encompassing three distinct aspects: the psychological world of the individuals involved in the buying decisions, the conditions that precipitate joint or group decision making among the individuals involved, and the inevitable conflict among the decision makers and how it is resolved through resorting to a variety of tactics. According to Rui da Silva, Gary Davies, Pete Naudia, 2003 conclude that consumer buying is influenced by experts (Mechanics) and personal characteristics. The way they buy will be affected by other factors such as context and organization. In our study we are particularly interested in component of experts like mechanics that affects the purchase lubricants.

5. QUESTIONNAIRE:

Now we should see the analysis of the that we have collected from the questionnaire

Q1: Which type of vehicle do you mostly drive?

Q2: Which engine oil you use for your vehicle?

Q3: How did you become aware of this lube brand?

Q4: What would be the reason for you to try a new lube?

Q5: Why do you go to particular pump?

Q6: How according to you the various factors affecting the purchase behavior of lubricants can be rated?

Q7. What you want the company should give from the following offers?

Q8. Gender?

Q9: Age?

Q10: What is your area of residence?

Analysis:The sample maximally belongs to the Tariq Road, Karachi with the age group of 21-30 years, male. Out of which most of the people have 1000cc car (28%) which makes Carient lube the highest selling lube, according to the research. People go to the pump which is convenient to them and they use lubes with their friends suggestions, mostly. More over people are much more satisfied (rather than unsatisfied or fully satisfied) with the products and services provided by PSO. Finally it is also analyzed that customers like discounts or any other promotional technique rather than gifts. Research also provides sufficient evidence to support the hypothesis that marketing campaign has positive impact on lube selling.

Recommendations: First, customer foot fall should be observed in any particular area, and then any promotional campaign should be run according to the highest sales area. Promotional techniques should be used for lubricants other than Carient and Havoline Campaigns of giving gifts will not be very much effective. Services need to be improved. Customer awareness sessions are needed to organize to inform them about Talluq helpline. Campaigns can be run through digital marketing as well.

Conclusion:From this research it is concluded that BTL campaigns will be helpful in increasing revenue of fuel in lubricants but moreover PSO specially also needs to create customer goodwill by giving valuable services to them.

We at PSO:It was very exciting for all of us to join PSO House. Like all other interns we were also thrilled to work in the head office of any big company. On our first day when we reached there was a big queue, which was not expected. Then we realized that it is just PSO which provides platform to all the students across Pakistan to meet each other, share their values, knowledge and experiences. When we were allocated to our departments, again we were not expecting such a polite behavior from all employees. Everyone gave us information regarding his/her work and guided us throughout the period. Finally it was a very good time which was spent here. We learnt about corporate environment, building relationships, cooperation and tolerance attitude and most importantly about our fields. We are thankful to all the employees of PSO who were very supportive with us.

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