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Chapter II
A. The Industry
The oil industry, popularly known as the Petroleum Industry refers to the exploration,
production, refining, and transportation of crude and petroleum products either via rail, road,
pipelines or sea (with the use of oil tankers) and marketing of petroleum products. It plays very
vital role in the global economy of any nation because it promotes industrialization.
The upstream sector includes searching for potential underground or underwater crude oil
and natural gas fields, drilling exploratory wells, and subsequently drilling and operating the wells
that recover and bring the crude oil and/or raw natural gas to the surface. There has been a
significant shift toward including unconventional gas as a part of the upstream sector, and
corresponding developments in liquefied natural gas (LNG) processing and transport.
The downstream sector is the one closest to the consumers. This sector involves the
actual processing, selling and distribution of the natural gas and oil based products. This is the
stage where petroleum crude oil is refined and the raw natural gas are processed and purified
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Composition/Size/Market Segments
The Philippines’ Downstream Oil industry, small but growing. Its growth is marked by an
expected short – term increase in both liquid and gas production. The industry is currently
dominated by two (2) major oil refining and marketing companies; Petron and Pilipinas Shell. A
third oil refiner and marketer, Caltex Philippines Inc., and now operates as a plain marketing and
distributing company under the name “Chevron”, but still maintains its Caltex brand. Moreover,
there are also minor oil players and direct importers in the market that are currently gaining
momentum. On top of that PHOENIX PETROLEUM PHILIPPINES INC. is on 5th rank with a 4.7%
market share.
A fierce but friendly competition in the country’s oil industry has become the norm since
the passage of (Republic Act 8479) also known as the Downstream Oil Industry Deregulation Act
of 1998 with investments of more than P241 billion infused by around 284 oil industry players.
New and even the old players have to to find ways to be ahead of the competition amid rising oil
prices and emerging trends in the fuel business such as the entry of the electric vehicle.
Despite the rise of EVs, the fossil fuel industry sees a silver lining in the fact that car sales
will double to 2 billion by 2040, analysts said. An Asian car boom is shaping up, sparked by great
demand from China which forecast vehicle ownership ratio at 300 vehicles per 1,000 people. In
the Philippines, the shift to electric vehicles is unlikely to take place as fast as government wants,
which means a great number of vehicles will still rely on gasoline and diesel. But local oil players
are not being complacent to avoid being caught flatfooted when the shift to electric or hybrid cars
is revved up
For Chevron Philippines, Inc., which markets the Caltex brand, staying ahead of the
competition means improving fuel range by investing on new technology. Caltex fuels has been
synonymous with Clean fuels since we introduced our technologically advanced and exclusive
Techron fuel-cleaning additive in 2006. Just two years ago (2016), we launched our new and
improved Techron fuels with Clean and Glide Technology. It is designed with friction modifiers
that keep engines clean, giving motorists superior reliable performance (Chevron Philippines Inc.)
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Being the sector that is closest to the consumer, the downstream sector has also played
an important role in fueling the different industries. The fuel produced by this sector runs the
transportation and power industries. Not known to many, the downstream sector also plays a vital
role in pharmaceutical, packaging and manufacturing industries. The sector also supports the
agricultural sector through the production of fertilizers and pesticides, not to mention the
importance of fuel to run various agricultural machineries and equipment.
Products of the downstream sector reach the consumers in the form of:
Liquefied Petroleum Gas (LPG), Liquefied Natural Gas (LNG), Gasoline, Diesel Oil, Jet Fuel,
Heating Oil, Other Fuel Oils, Propane, Asphalt, Synthetic Rubber, Plastics, Petroleum Coke,
Lubricants, Phramaceuticals, Antifreeze, Fertilizers, and Pesticides. (PIP)
Petroleum is necessary for a great number of human needs. Today, petroleum is mostly
used as a source of energy, being rich in combustible carbon in the production of electricity or
running some sorts of heat engines. When thinking of petroleum, the average Filipino usually
equates it with gasoline, since this is the one petroleum product that the average consumer has
to purchase on a regular basis. It is relatively common and low-cost, often fluctuating in price due
to economic, political, or supply level concerns. Therefore, gasoline gets the most attention, but
petroleum is used to make several other products which in turn have several uses themselves.
As of December 2018, actual crudes and petroleum products inventory closed at 23,502
thousand barrels (MB) or 50-day supply equivalent; 44 days for crude oil and products in country
stocks and 6 days in-transit. This was higher by 15.4 percent from December 2017’s 20,362 MB.
(DOE)
The government continued to enforce the Minimum Inventory Requirement (MIR) given the
continuing risks faced by the downstream oil industry sector such as geopolitical instability and
supply delivery problems to areas affected by calamities (e.g. typhoon, flood, earthquake, etc.).
Current MIR for refiners is in-country stocks equivalent to 30 days while an equivalent of 15 days
stock is required for the bulk marketers and 7 days for the LPG players.
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The DOE issued a directive sometime in September 2018, which required the oil companies to
provide updates on the status of their oil supply and facilities in the Northern and Central parts of
Luzon which were hit by Typhoons Ompong and Rosita in order to monitor and ensure continuous
oil supply in the affected areas.
Investments in the country’s upstream oil and gas sector had been on a rapid declining
pace in recent years due to confluence of factors – in fact plummeting to the level of US$74.2
million this 2018 from a hefty US$831.248 million five years ago, according to data from the
Department of Energy (DOE).
Oil production in the Philippines could rise 50 percent or up to 39,000 barrels per day by
2019 from 26,000 bpd in 2013, according to data from the United States Energy Information
Administration (EIA). In a recent report on the Philippines, EIA said the current exploration round
launched by the Department of Energy (DOE) could boost the country’s oil production and reduce
its dependence on fuel imports. Specifically, EIA said that the 11 oil and gas blocks in the Palawan
Basin and nearby areas offered by the DOE for exploration could significantly boost production.
The oil industry with its high demand due to many purposes, the cost of its product is
rapidly increasing. Gasoline prices can change rapidly if something disrupts crude oil supplies,
refinery operations, or gasoline pipeline deliveries. Even when crude oil prices are stable, gasoline
prices fluctuate because of seasonal changes in demand and in gasoline specifications.
The high periods of volatility also have a large impact on other industries due to their
dependence on the energy sector. The volatility faced by the oil industry depends on several
political, economical, and geographic factors. It is also integral part of every economy in the world
and the global economy as whole. The prices of the most commodities are correlated to the price
of oil and gas
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In 2002 Young entrepreneur Dennis Uy establishes an oil company in Davao City. The
dream to be fourth behind the top 3 major players is underway. As a newborn venture, we face
some uphill challenges. With just a handful of employees and limited resources, we spend the year
adjusting and laying the groundwork for solid, imminent growth. 2 years after our company is
renamed Davao Oil Terminal Services Corporation (DOTSCO). In 2005 Cebu Pacific Air is our first
customer. DOTSCO provides the rising airline the lease of a storage tank, and later, into-plane
services, eventually becoming their exclusive logistics provider in Mindanao and major fuel
supplier. We venture into retail by opening our first five gas stations in Davao and Mindanao,
introducing the “Phoenix Fuels Life” brand. A year after getting Cebu Pacific Air as our first
customer, we are officially renamed “Phoenix Petroleum Philippines, Inc.” It sounds complete and
comprehensive. And more ambitious.
We add lubricants to our product line and grow to 20 stations by year-end, all in
southern Mindanao. To serve our domestic fuel requirements, we acquire our first shipping vessel,
which later becomes its own business, Chelsea Shipping Corporation. At this point, Phoenix ranks
570th among the country’s Top 10,000 Corporations based on revenue. Not too bad for an upstart.
Year 2007 we are listed on the Philippine Stock Exchange on July 11, the first oil company to list
on the PSE after the passage of the Oil Deregulation Law in 1998. The IPO is 15 times
oversubscribed and fuels our expansion from Davao to the rest of the Philippines. In just one year
we jump from 570th to 473rd among the country's Top 10,000 corporations. In the year 2018 we
form a joint venture with TIPCO Asphalt of Thailand and PhilAsphalt to market bitumen in the
Philippines (expanding our portfolio to include bitumen and bitumen-related products). We launch
the cutting-edge Phoenix PULSE Technology in our fuel products. Phoenix PULSE Technology
has advanced cleaning and protection properties for enhanced power and acceleration, making
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Starting March 28, 2019, entrepreneurs who want to boost their business without
increasing operating expense can now apply for the Phoenix Fleet Card program, which offers a
range of exclusive perks and benefits for members. With two card types—single card and dual
card—Phoenix Fleet cardholders can choose, modify, and control their package based on their
preference and needs. Single cardholders may either have a driver-specific, vehicle-specific, or
driver-vehicle-specific card type depending on their needs.
Loyalty programs are ubiquitous, but consumer appetite for the promise of savings and
recognition is not dwindling. Consumers are asking for more and expect programs to deliver
beyond the points. In return, loyalty program members display greater potential than the average
consumer for a more substantial relationship.
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The Pinoy Tsuper Hero program is presented by Phoenix Petroleum Philippines and use
to promote PTC (PINOY TSUPER CARD), in partnership with ABS-CBN Lingkod Kapamilya
Foundation Inc. and Bayan Academy for Social Entrepreneurship and Human Resource
Development. The program aims to bring out the “superhero” in every driver and promote driving
as a noble profession. Regional finalists are selected from drivers who register at the selected
Phoenix station in their area during the registration period. During the qualifying period,
candidates attend trainings about road safety, environment protection, and leadership. Applicants
are screened and the top 10 finalists are called in for training and mentoring by industry experts.
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Figure 1. Trike driver from Rizal wins third Pinoy Tsuper Hero
Figure 1 shows A tricycle driver from Rizal was hailed as the third Pinoy Tsuper Hero
Grand Winner during the recent grand finals held at ABS-CBN Dolphy Theater. The program aims
to bring out the “superhero” in every driver and promote driving as a noble profession. Regional
finalists are selected from drivers who register at the selected Phoenix station in their area during
the registration period. During the qualifying period, candidates attend trainings about road safety,
environment protection, and leadership. Applicants are screened and the top 10 finalists are called
in for training and mentoring by industry experts. Its goal is to change the perception towards
drivers from being offenders to defenders. It recognizes drivers who are able to create difference
in the lives of their families, to generate leadership in their own transport groups and to create
C. Competitive Situation
The major oil companies (Petron Corp., Chevron Phils. and Pilipinas Shell Petroleum Corp.)
got 52.8 percent market share of the total demand while the other industry players which include
PTT Philippine Corp. (PTTPC), Total Phils., Seaoil Phil. Inc., TWA Inc., Phoenix, Liquigaz,
Prycegas, Micro Dragon, Unioil, Isla Gas, Jetti, Eastern Petroleum, Petrotrade, South Pacific,
Marubeni, SL Harbour, Rockoil, RK3 Int’l., Insular, ERA 1, High Glory, Warbucks, Perdido and
Filoil Logistics Corp., as well as the end users who imported directly most of their requirement
captured 47.2 percent of the market
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FREQUENT VISIT
BONUS: Every 3rd day
visit at Petron
automatically entitles you
to the Frequent Visit
Bonus. Regular Points you
earn during your 3rd day
visit are now DOUBLED!
Year-round Personal
Accident Insurance.
Coverage is a must should
accidents happen. Your
Petron Value Card
automatically enrolls you
to a P10,000 Accidental
Death and Disablement
coverage and P1,000 in
Medical Reimbursement
Privileges at Major
Establishments
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Scholarship - Unlad sa
Pasada Program
Use of television
Insurance - free accident
insurance and related ads, brand
Pepenge benefit endorsers.
Pasada Card
Shell Rewards - points can be
redeemed for free home Use of PPC- Pepeng
appliances and other
reward items Pasada Club
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Chapter III
The PTC card has “PINOY After sales promotion Provided that Pinoy Tsuper
TSUPER PROGRAM”. A campaign is ended, Program is on National
program presented by Phoenix Television, there is a big
customer who switched from
Petroleum Philippines, in
competitor's brand might go chance to consumers to see
partnership with Abs- cbn
Lingkod Kapamilya Foundation back to their previous brand. our product.
PROMOTION Inc. and Bayan Academy for
Social Entrepreneurship and
Human Resource
Development.
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Chapter IV
The main goal of this plan is to put the PTC card as one of well preferred loyalty card by
using modern and traditional advertising, to boost the reputation of the company, and to
increase market share of Phoenix Petroleum Philippines.
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Chapter V
A. Market Targeting
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PTC card holders enjoyed our innovative promotions, such as the groundbreaking
10 pesos per liter promo, the Summer Combo Panalo which gave away ₱500,000 to lucky
winners, Scratch-a-Prize which raffled off latest gadgets as prizes, and the collectible
Justice League selfstirring mugs. PTR card holders also can join the PTC (Phoenix Tsuper
Club Program). The program is open to professional drivers nationwide and offers many
benefits
Product positioning
To be an indispensable partner in the journey of everyone whose life we touch is
our kind of repositioning. Repositioning a brand or product means altering its place in the
minds of the consumer, or essentially changing the brand’s or product’s image or identity.
When you are repositioning, or trying to change the consumers’ perception of a brand or
product after it has already been solidified, may confuse or alienate consumers in the
target market. Phoenix Petroleum Philippines aims to reposition the mind of every
consumers who availed PTC card that they are not just consumers and we are not just
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Product features
Pinoy Tsuper Card is the improved Loyalty Program for loyal professional drivers of
Phoenix. It was established to provide ease to the lives of our loyal professional drivers. A reality
game show is produced to advocate the PTC card. The Pinoy Tsuper Hero program is presented
Inc. and Bayan Academy for Social Entrepreneurship and Human Resource Development.
Use a simple point system. This is one of the features of PTC loyalty program
methodology. Frequent customers earn points, which translate into some type of reward.
Whether it's a discount, a freebie, or special customer treatment, customers work toward a
C. Pricing Program
Pricing is the process whereby a business sets the price at which it will sell
its products and services, and may be part of the business's marketing plan.
In order to have many members of PTC (Phoenix Tsuper Card) we will offer it for
free. Free and easy to apply for all the professional drivers who are willing to join the club.
In order to avail the PTC card you will just need to spend as much as Php 500 worth of
Petroleum products in any of Phoenix Petroleum Station. We believe that giving it for free in
exchange of purchase to any Phoenix Petroleum products will increase the sales of the company.
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Phoenix decided to go on a direct distribution of PTC card in which they train every
employee on the program and make it part of the check out process. Make sure employees not
only ask if the customers have a rewards card, but train them how to sell the customer so they
sign up. We also created an application which details the benefits in five simple bullet points. That
way, the cashier just has to take out the application and run through the bullet points with the
customer. Promote the fact that the program is FREE. And promote it with signs at the cash wrap
and on the receipt and anywhere else it makes sense. And to generate more sales we also run
contests in our stores and provide a pizza party or other incentive for the store that signs up the
most members in a month. We made sure the stores were engaged by reporting numbers each
week and sharing them on weekly conference calls. Nothing like a little friendly competition to
stoke the fire.
Company
Phoenix Stations
Employees
Consumers
Figure 10. Sales and Distribution
● Policies
After purchasing worth Php 1,500.00 the customer can fill up the application form for
PTC card. Once the application form is filled up, it will be directly transmitted to the main
office and the customer will be given an acknowledgement receipt. The said receipt will be
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the proof of application for the mean time, and for the next purchase points that will be earned
by the customer is manually recorded since the card will be given to them 1 week after the
application.
The PTC card’s target will be all of the public utility drivers, including the drivers of
TNVS.
● Extent/terms of distribution
7 days after the application, card will be given to the drivers. The employees will
discuss the term and conditions and all they need to know about the card. They can choose
a reward, List of rewards as follows:
This part will discuss the specific mix of advertising, personal selling, sales promotion,
public relations, and direct marketing a company uses to pursue its advertising and
marketing objectives. Which will include:
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Advertising Program
1. Advertising Program
The main objective of this program is to introduce the brand to the public and to provide
quality content, regularly, adding new information, and establishing trust by becoming an
authorative source to purchase a product. The idea is to make people aware, open to
communicate and induce.
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Target Audience
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T-Shirt for all consumers that will apply for PTC membership
The objective of this is to give
something in return for those
Objectives consumers that will apply for PTC
card.
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Raffle for all who will avail the PTC membership card on August 19, 2019.
The main objective of this strategy
is to let the customers rush to
avail the PTC card. This will
Objectives definitely increase the sale of all
the stores.
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Chapter VI
INVESTMENT PLAN
Investment Plan
1. Advertising Program
a. Tarpaulin 6*8 – 1000 Pcs P 480,000.00
b. Radio ads P 60,000.00
2. Sales Promotion
a. T-shirts – 20,000 Pcs P 2,400,000.00
b. Raffle for all who will avail the PTC P 150,000.00
membership card on the first day.
3. Public Relations
a. Beauty Blogger P 93,600
Total Public Relations Program
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Chapter VII
ESTIMATES OF PROFITABILITY
The table below shows the sales forecast for three consecutive years.
Yearly Sales Forecast
Fiscal Year 2020 2022 2023
The table on the next section shows the projected market share, and total distribution of
marketing budget.
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Chapter VIII
EVALUATION OF RESULTS
On the other hand, Phoenix needs to invest for some sales promotions for the PTC
card such as T-Shirt for all consumers that will apply for PTC membership, Raffle for all
who will avail the PTC membership card on the first day. Phoenix also needs some
advertising programs to expose the product to public. Tarpaulin and radio ads will be used
to display the product, to put the PTC card on public, and to raise the awareness of those
consumers that will hear the radio ads, see the tarpaulin ads. Another part of the strategy
is to have a social media accounts such as Facebook, Instagram, and Twitter. It will surely
help by spreading the product features online and getting the attention of those consumers
who are using social media. This marketing plan goals to exhibit the product on its best,
by doing this strategy we are confident to reach the accurate target market share by the
year 2023. However Phoenix will also continue to study the market behavior to provide
the best offers for consumers.
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