assignment mgt162

8/19/2019 Assignment MGT162

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Executive Summary

The market for petroleum products is highly competitive, with major multinational

corporations especially in a mix-market country. PET !"#S markets its products directly to

customers as well as through its network of service stations, $P% dealers and industrial dealers.

&hat sets them apart are the variety of products, services, promotional strategy, product 'randing

and image, company identity and marketing strategies. The marketing strategy that 'een

analy(ed in this assignment are )ealing with *ompetition, Segmentation, Targeting Strategy, and

Positioning, and +arketing promotion ntegrated +arketing *ommunications +*/ and

Promotion +ix. n a market, there would 'e two different market categories0 consumer markets

and 'usiness markets. #s for oil and gas company, PET !"#S falls into 'oth market categorieswhich are consumer markets and 'usiness markets. +eanwhile, PET !"#S also considered as

'usiness market which they selling their oil and gas to 'usiness companies for resale or

producing another products. PET !"#S major product sale are fuels and lu'ricants for

+alaysia1s market. +eanwhile, lu'ricant products produced 'y PET !"#S into five categories

that are passenger car motor oil, motorcycle oil, duty engine oil, industrial 2 marine oil and,

transmission and gear oil. 3nder these segments, PET !"#S offered varieties of products

which key is to target different group of market and increase market shares. #fter examining the

market segmenting for PET !"#S products, PET !"#S will then have to devise a

promotional effort to market their products. PET !"#S, like any other company, has its own

promotion mix.

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"T !)3*T !"

"#+E !4 T5E *!+P#"6

!n #ugust 78, 798:, the first +alaysian oil and gas company was founded namely as

PET !"#S, short for Petroli;ram "ational uefaction, sale and transportation of $"%= iii/ the processing

and transmission of natural gas and the sale of natural gas products= iv/ the refining and

marketing of petroleum products= v/ the manufacture and sale of petrochemical products= vi/the trading of crude oil, petroleum products and petrochemical products= and vii/ shipping and

logistics relating to $"%, crude oil and petroleum products.

5 ST! 6

PET !"#S was esta'lished in #ugust 798: and operates under the terms of the

Petroleum )evelopment #ct passed in !cto'er 798:. t was modeled on PE T#+ "# , the

ndonesian state oil and %as *ompany founded in 7987 in succession to PE T#+ "#, whichhad 'een set up in 79?@. #ccording to the 7987 plan, PET !"#SA goals would 'e to safeguard

national sovereignty over oil and gas reserves, to plan for 'oth present and future national need

for oil and gas, to take part in distri'uting and marketing petroleum and petrochemical products

at reasona'le prices, to encourage provision of plant, e>uipment, and services 'y +alaysian

companies, to produce nitrogenous fertili(ers, and to spread the 'enefits of the petroleum

industry throughout the nation.

n 798B, PET !"#S went downstream for the first time when it was chosen 'y

the #ssociation of South East #sian "ations #SE#" / to 'egin construction on the second

#SE#" joint industrial project, a urea plant. The su'sidiary, #sean


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ineligi'le to join Organization of the Petroleum Exporting Countries !PE* /. This situation

'enefited to +alaysia and PET !"#S, 'y allowing the company a degree of commercial and

political flexi'ility and reinforcing PET !"#SA chief purpose, +alaysian self-reliance.

3ntil 798@, PET !"#S has supervised its foreign partnersA oil activities taking no direct

role in production, when the government saw to the creation of a su'sidiary for oil exploration

and production, PET !"#S *arigali. t 'egan its work in an oil field off the Peninsula.

PET !"#S retained its supervisory powers over all oil and gas ventures, particularly on issues

of health and safety and environmental control.

n early 798Cs, the government was determined to develop +alaysiaAs natural gas as well

as its oil Shipping *ompany + S*/.

n 79@D PET !"#S *arigali formed an exploration and production company with

Soci t "ational Elf #>uitaine of 4rance, it allowed Elf 'etter terms for recovering costs than it

had offered in earlier ventures. This development came against the 'ackground of the

governmentAs imposition of a depletion policy on PET !"#S.

n 79@F, PET !"#S went into refining and distri'ution. t initiated the construction of

refineries at +alacca and at Gerteh in order to reduce its dependence on oyal )utchHShellAs two

refineries at Port )ickson and EssoAs refinery in Sarawak.


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+alaysia in *am'odia. n 799?, a su'sidiary was created to import, store, and

distri'ute li>uefied petroleum gas $P%/.

n 799B, PET !"#S entered the aromatics market 'y way of a joint venture that created

#romatics +alaysia Sdn


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T6PES !4 P !)3*T

+ain Product

#ssociated Product

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*!+P#"6 + $EST!"ES " DC7C

Exploration 2 Production7-PET !"#S through PET !"#S *arigali together with partner 3nited "ational and %as

$imited ac>uired deepwater


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photovoltaic demonstration project in +alaysia.

F-PET !"#S signed a %as Sales #greement with upstream contractors Sarawak Shell


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P$#"" "%

/ +ission statementMTo develop and add value to petroleum resources wherever it operates, converting

these resources into higher-value products that would satisfy the needs of customers

and 'ring 'enefits to the people.M

/ %oalsPET !"#S1 goal was to improve efficiency and control 'y automating manual

activities via straight-through processing. There are few ways to create PET !"#S

to achieving their organi(ational goals and well know their products to all over

country such as promote it in the ways of campaign, through internet, and so on.

MISSION

Support PET !"#S1 aspiration in developing +alaysia into a Su'surface products

and expertise center and serving the interest of the +alaysian !il 2 %as industry in

esta'lishing and enhancing their 'usiness capa'ilities in the su'surface sector.

VISION

To esta'lish +alaysia as a hu' of excellence for su'surface products solutions for oil

2 gas and petrochemical industry in the #sia Pacific region.

/ !'jective

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• Support and engage with PET !"#S1 initiative to develop +alaysia into a

Su'surface products and expertise center.• Provide a platform for foreign expertise and the +alaysian industry to

colla'orate and create 'usiness relationships so as to increase local capa'ility

in su'surface technology.• Provide 'usiness opportunities among mem'ers and actively participate in

tenders and or projects locally or internationally.• Encourage and mo'ili(e services companies to fully engage with

PET !"#S, and 'ecome active players in sharing and developing su'surface

expertise.• Promote agenda and programs that will enhance and work closely with

PET !"#S, including technical conferences, forums, etc.

I/ Single used plansSingle-use plans are created to address short-term challenges or provide guidance for

short-term initiatives. Single-use plans can 'e created in teams or 'y individual

managers. The scope of these plans is generally smaller than the scope of standing

plans. 4or example, single-use plans can 'e created for specific work groups or

departments to guide their contri'utions to short-term company o'jectives.

There are two type of single-use plans which is Programmes and projects. *ompanylike petronas also has a lot of single use plans. 4or example is,

i) Programme- coordinates complex activities which are related to a major non-recuring

goal.bring out inner leaderThrough strategic colla'oration with 3niversity of +el'ourne, programmed such

as


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PET !"#S and *hina "ational Petroleum *orporation *"P*/ signed a

+emorandum of 3nderstanding +o3/ to colla'orate in the area of Enhanced !il

ecovery E! /. This +o3 will ena'le PET !"#S to enhance its E!

technology and capa'ility 'y tapping into *"P*1s expertise.

! %#" N "%

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PET !"#S *orporate Structure

!rgani(ation1s *hain of command

There is a chain of command that extends from upper organi(ation levels to the lowest

levels and clarifies who reports to whom. The orders move from upward to downward and

suggestions move downward to upward direction. 4or example, the 4inance )epartment is incharge of treasury, tax, finance and accounts service meanwhile %as and Power )epartment is in

charge of glo'al $"%, infrastructure and utilities .The continuous improvement section is made

for this purpose. t encourages employees to give their suggestions and share the new ideas.

Span of control

Span of control of this organi(ation is narrow. This is 'ecause in PET !"#S

organi(ation there are higher num'ers of communication issues among different management

levels. The jo's are formali(ed, there are explicit jo' descriptions, numerous organi(ational

rules, and clearly defined procedures covering work procedures.

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Types of departmentali(ation

!rgani(ational structure is the formal framework 'y which jo's tasks are divided,

grouped, and coordinated. PET !"#S is a function-'ased organi(ation. The tasks are divided

into separate jo's and then these jo's are grouped together under different departments i.e.functional departmentali(ation is found in organi(ation. Each major area is kept under the

manager who is specialist in that concerned field and is responsi'le for all activities, which that

department performs.

$ine 2 staff responsi'ilities

+anagers with line authority in an organi(ation are those who are directly responsi'le for

achieving organi(ation goals. $ine authority is represented 'y a standard chain of command start

with a 'oard of directors and extends downwards through various levels in organi(ation. This

type of authority is mainly 'ased on legitimate power. 4or example, managers involved with

manufacturing may limit line functions to production and sales.

+!T I#T !"

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Every company is responsi'le for their employees need. To ensure their employees give fully

commitment to achieve goals that set 'y the company, top level management need to motivate

their employees 'y giving satisfaction to done the jo'.

#ccording to #'raham +aslow 79?:/, to motivate our workers, management can provideindividuals needs 'y five districts level.

$evel of individuals need PET !"#S provide to their employees7. Physicological- the most fundamental

human needs.

• PET !"#S has provide enough

facilities to their workers such as,

cafeteria, toilet,hall prayers and

mos>ue, transportation,D. Safety-is a need for security in 'oth

physical and interpersonal events day to

day life.

• Every new workers that sign contract

with PET !"#S, the company will

provide life insurances to guarantee

their safety.F. Social-needs or 'elongingness needs. • Each year PET !"#S held events,

such as sport events and recreational

programmed.:. Self-esteem-individuals needs for the

high regard of others.

• PET !"#S give maternity 'enefits to

their workers they also have staff careservices.

?. Self-actuali(ation-needs for self

fulfillments.

• PET !"#S develop PET !"#S

leadership centre P$*/, to increase

their workers performances.


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provide good jo' context that can 'e a factor causes feelings of jo' dissatisfaction. 4or

example, the working condition. Petronas has provide good working condition with

enough facilities to their workers such as cafeteria, toilet, transportation and many more.

D. Satisfier Factor (Motivating)Satisfier factor also known as motivating factor. &here hygiene factor is often associated

with jo' context, satisfier factor, on the other hand, is related to the jo' content of

individual. Satisfier factor causes feelings of satisfaction. +eaning to say, the workers

will find their own encouragement if they feel enjoy with their work and they love it.

$E#) "%

n Petronas, the top level of management such as its *hairman of Executive !fficer

*E!/ uses 'ehavioural theories 'ased on the managerial grid model. n general, managerial grid

is a 'ehavioural leadership model developed 'y o'ert .


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Petronas uses Team +anagement approach as it is very concerned 'oth of its

production and its employees. &hile the company focuses on its oil and gas production, 'ut at

the same time, the company also concern for its employees1 welfare. 4or instance, the company

rewards its loyal employees and their families in terms of receiving life insurance, health care

coverage maternity 'enefits, staff care services and also recreational programmes.

*!"T !$

*ontrolling is the process of regulating organi(ational activities, so that actual performances

conform to expected organi(ational standards and goals.

Process Tec nology and O!erations

The Process Technology and !perations jo' area at PET !"#S represents the largest technical

population in PET !"#S encompassing upstream to downstream 'usinesses. &e 'ring our

expertise to crucial areas0 from oil and gas extraction facilities and manufacturing plants to the

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petrochemical refineries and chemical la'oratories. &e supervise day-to-day operations, advise

on optimum operations, research and develop new processes and products, and provide analytical

la' services amongst others.

Process crude oil and natural gas 'y PET !"#S0-

There are many types of controls in management. PET !"#S also has use one of that way to

control their production and services. 4or example is PET !"#S Technical Standards.

The o'jective is to set the recommended standard for good technical practice to 'e applied 'y

PET !"#S1 in oil and gas production facilities, refineries, gas processing plants, chemical

plants, marketing facilities or any other such facility, and there'y to achieve maximum technical

and economic 'enefit and re>uirements.

n management usually the company from the upper level management must set performances

for the lower level management. The standard must 'e same with target so the company can

compared the actual performances. The standard must 'e measurea'le and accepted 'y all

mem'ers 2 in line with organi(ation strategic planning.

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Secondly, company measures the actual performances. PET !"#S must decide what to

measures, when to measure and how fre>uently to measures.

Thirdly, PET !"#S must compare actual performances with standards. This step involves

determining if actual performances compare to standards falls. f performances match the

standard, no corrective action is re>uired.

4inally, PET !"#S take corrective actions if a performance does not meet the standard this

step must 'e apply. 4or example PET !"#S provides incentives to enhance performances of

their workers.

*!++3" *#T !"

"usiness #o$$unication


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i. %overnments - comprises the +alaysian %overnment and the various local governments where

PET !"#S has its operations.

ii. *ustomers consists of retailersHdealers and end-users of its products and services.

iii. Employees

iv. $ocal community - people living in countriesHplaces where PET !"#S runs its operations

v. Environment

There is several type communication uses 'y PET !"#S, one of that is ver'al communication.

t is o occurs either orally or in writing. 4or example is oral communication, this is a form of

spoken information, such as meeting, group discussion and many more. #nother type or ver'al

communication is written communication, where'y organi(ational mem'er share information 'y

disseminating messages, such as reports forms manuals and many more.

PET !"#S also use electronic communication to conveys information to their stakeholder

especially customers and local community. Electronic communication is gradually playing a

major role in management due to challenges and demands of glo'ali(ation that managers

encounter. t enhances the speed of message delivery and happen in real time. Some example of

electronic communication used 'y PET !"#S is0-

i/ Telecommuting- workers is linked to central office or employment location.

PET !"#S has many oil rig at many places around the world, they need to

communicate each other, so to make easier telecommuting the solution.ii/ Electronic mail e-mail/- PET !"#S also use e-mail to reduced the cost and time of

works. This is 'ecause e-mail is one of effective and faster way to use to transfer the

information. Every PET !"#S workers needs to have an e-mail account so they can

easily know information given 'y management.iii/ The internet- PET !"#S use this platform to transfer their information to their

stakeholder. 4or example PET !"#S use 6ouTu'e as one of the way to advertise

their products. PET !"#S also use 4ace'ook as platform to advertise their products

and to convey the latest news a'out their company.iv/ Social responsi'ility- PET !"#S use this approach to communicate with local

community. 4or example PET !"#S hosted OSentuhan Gasih programmed. This

programmed hosted a series of gatherings for underprivileged children from

orphanages and shelter homes in and around our areas of operations, in the spirit of

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sharing and caring.


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social responsi'ility, it will make us proud to 'ecome +alaysian. #lthough we are still

development country, we have Petronas ually with other multinational company.

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assignment mgt162

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