Oil in a time of recession

Posted on Updated on

(Published in Aurora Magazine, March-April, 2009)

By Jahanzaib Haque

With the full weight of the economic recession bearing down on Pakistan, most companies are running for cover and slashing their advertising budgets. The exceptions to this trend are the oil marketing companies which have continued to up the marketing ante this year.

The resident giants, PSO, Shell and Caltex along with relative newcomer Total have spent 1.5 billion rupees on advertising over the last five years, of which 425.7 million rupees was spent in 2008 alone.

Currently, PSO is putting the focus on projecting the company as “more than just a petrol pump”, via a print-exclusive corporate campaign. This effort follows after a year of rollercoaster oil prices and economic turmoil in Pakistan, which garnered a negative image for oil companies in the minds of the public.

Amir Abbasi, Manager Corporate Communications at PSO says the ongoing campaign became a necessity in light of the fact that the company was making huge contributions to the economy in multiple sectors, but such stories were not part of consumer perception when they thought about PSO. “We fuel aviation; we fuel the railways, power plants and more, so we really felt that PSO’s true face needed to be shown,” says Abbasi.

He adds that for PSO, “capturing market share is not a problem as we hold 70.6% of the overall market. Establishing a soft image for the company is our one line objective.”

As such, PSO’s first-ever image building campaign has highlighted the company’s role in industries quite outside the realm of the petrol station.

“When you talk about oil, you are talking about a product that affects everything”, says Hassan Ansari, Executive Director at Argus, the ad agency responsible for the campaign.

“PSO chose five general areas of focus, with the objective of getting people to make the connection with the company. I think it has worked, because when you see an aircraft and PSO, you have to think about what the relation is.”

In seeming tandem, Shell launched one of its largest 360 degree campaigns in January this year. The ubiquitous message of ‘I trust Shell’ is aimed at addressing the company’s track record with regard to the core issues consumers hold against oil companies. Shell’s localised research identified trouble areas related directly to the forecourt of the fuel industry, i.e. the petrol pump.

As Rehanul Haque, Marketing Manager at Shell explains:

“We tracked consumer preferences and views over the last year and found that there is a lack of trust on the part of consumers with regards to the oil companies in general, in terms of the quality and quantity of fuel provided at the pumps and the service at the stations.”

Shell’s research also indicated that consumers found Shell to be relatively trustworthy with regards to these key qualities, and as such, the campaign was built to highlight this finding.

“Any global brand needs to plug its value to the customer, and this is what this campaign is about” says Haque.

“We are highlighting the fact that our customers have actually said that they trust us.”

Running alongside messages of ‘I Trust Shell’ is the equally large scale ‘cut car’ campaign, promoting Shell’s premium motor oil brand, Shell Helix.

Launched in November 2008, this communication is part of a worldwide campaign that has also been developed around Shell’s extensive consumer research conducted on a global level.

Amjad Shahabuddin, Cluster Marketing Manager at Shell says the studies revealed that all consumers who buy motor oil do so in the hope that it will be effective in keeping their car engine clean. To address this issue practically (and with maximum visual impact), Shell displayed the sliced insides of a rally car test driven with Shell Helix.

Not to be outdone by Shell, Caltex has been running its largest-ever local campaign for its premium lubricant brand, Havoline and its new motorcycle oil – both undertaken on a global initiative.

While inside sources reveal that Shell holds a larger market share than Caltex in the branded lubricant market, sales of Havoline motor oil are being driven on a, sell less, earn more strategy.

As such, Caltex is the price leader in lubricants, with Havoline and its diesel engine oil brand, Dello, priced slightly higher than other oils in the market. However, given that motor oil is a product which is not purchased often, consumers may be ready to pay a little extra per month for a lubricant they feel will last longer and improve the overall driving experience.

Unlike PSO and Shell, Caltex has concentrated all its efforts on promoting its products and not on addressing public perceptions regarding oil companies.

Taimur Tajik, Creative Manager at Spectrum Communications explains that “Caltex projects its corporate image through developing its brands by running year-long campaigns. There is little you can do to make a company look better when fuel prices are fluctuating.”

Despite their differences and ongoing battles on multiple fronts, at the end of the day PSO, Shell and Caltex are all directly tied to the Pakistan government, which is responsible for setting oil prices in the country. The game of profit and loss, consumer perception and even the viability of marketing oil in Pakistan is, therefore, one in which the oil marketing companies first look to the government, before formulating any strategy.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s