elibariki lukumay research_report_v 1.10 for m_sc marketing at mzumbe university
TRANSCRIPT
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ASSESSMENT OF THE IMPACT OF PETROLEUM MARKET
LIBERALIZATION ON MARKETING STRATERGIES EMPLOYED
BY OIL MARKETING COMPANIES IN TANZANIA
By
Elibariki Lembris Lukumay
A Dissertation Submitted in partial/fulfil1ment of the requirement for award of the
Master of Science in Marketing of Mzumbe University
2011
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CERTIFICATION
we undersigned certifies that we have read and hereby recommends for acceptance by the
Mzumbe University a dissertation entitled: assessment of the impact of petroleum market
liberalization on marketing strategies employed by oil marketing companies in Tanzania,
in partial/fulfillment of the requirements for award of the degree of Master of Science in
Marketing of the Mzumbe University.
…………………………………………………
Major Supervisor
…………………………………………………
Internal Supervisor
Accepted for the Board
…………………………………………………
DEAN/DIRECTOR, FUCULTY/DIRETCOTARTE/
SCHOOL/BOARD
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DECLARATION AND COPYRIGHT
I, Elibariki Lembris Lukumay, declare that this dissertation is my own original work and
that it has not been presented and will not be presented to any other University for a similar
or any other degree award.
Signature: …………………………………….
This dissertation is a copyright material protected under Berne Convention, the Copyright
Act (1999) and other international and national enactments, in that behalf, on intellectual
property. It may not be reproduced by any means, in full or in part, except for short extracts
in fair dealings; for research or private study; critical scholarly review or disclosure with an
acknowledgement, without the written permission of the Directorate of Postgraduate Studies,
on behalf of both the author and the Mzumbe University
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ACKNOWLEDGEMENT
Making this study a success would not have been possible had it not been for the help of a
good number of individuals and institutions.
First of all, I thank The Almighty God who made it possible for me to complete this work
successfully. God is the source of all knowledge, wisdom and mankind understanding.
Though difficult to mention each and everyone who deserve my appreciation, I wish to
express my sincere gratitude to all the individuals and institutions, mentioning but a few.
Dealer of Gapco Magomeni, Muslim Barwani of Gapco Nyerere Road, Colleagues at Gacpo
Tanzania Ltd and Gapoil Tanzania Ltd, friends and other Oil marketing Companies,
Colleagues and Friends at Ewura and TPDC
I wish to express my special thanks to Dr. Nsana, B my supervisor for this dissertation, for
his competent guidance without which this work would not have been a success.
Many thanks to staff of Mzumbe University-Dar es Salaam Business School, through whom I
have progressed to this stage of my academic career, having enjoyed their training and
guidance for my schooling.
I also wish to extend my appreciations to the management of most of the oil marketing
companies for accepting to corporate with me; Gapco Tanzania, Oryx Oil, BP, GBP,
MGS,NATOIL, Gapoil, Total Tanzania ltd, Engen Tanzania Ltd and Kobil
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DEDICATION
This dissertation is dedicated to my dear Wife and my Sons;
Mordecai Elibariki Lukumay
&
Ethan Elibariki Lukumay
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ABBREVIATION
EWURA ……………Energy and water Utilities Regulatory Authority
TPDC ………………Tanzania Petroleum Development Corporation
COCO ……………..Company Owned Company operated
CODO………………Company Owned dealers operated
DODO……………Dealers Owned Dealers Operated
OMC……………Oil Marketing Company
EWURA……………Energy and Water Utilities Regulatory Authority
TBS……………Tanzania Bureau of Standard
KOJ……………Kurasini Oil Jet
TPA……………Tanzania Ports Authority
LPG……………Liquefied Petroleum Gas
TAOMC ……… Tanzania Association of Oil Marketing Companies
EAC……………East Africa Community
RO……………Retail Outlet
TPDC……………Tanzania Petroleum Development Corporation
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LIST OF TABLES
Table 4.1: Oil Companies and Year of Establishment ..................................................... 36
Table 4.2: Kind of products sold by oil companies ................................................................ 38
Table 4.3: Petrol Station Used categorized by company ........................................................ 39
Table 4.4: Petrol Station Used categorized by District ........................................................... 40
Table 4.5: Length of time in using the petrol station .............................................................. 40
Table 4.6: Satisfaction with the service ................................................................................. 42
Table 4.7: Liberalization and Marketing Strategies changes- consumer ................................ 42
Table 4.8: Are there specific marketing Strategies?-Companies ............................................ 43
Table 4.9: Marketing changes witnessed-Consumers ............................................................. 44
Table 4.10: Trend of Petroleum products quality ................................................................... 45
Table 4.11: Trend of Petroleum products price controls-company ........................................ 46
Table 4.12: Trend of Petroleum products price controls-consumers ...................................... 46
Table 4.13: Trend of competition in the petroleum industry .................................................. 47
Table 4.13: Status of petroleum products promotion-Consumers .......................................... 48
Table 4.14: Status of Petroleum Products Distribution-Consumers ....................................... 49
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ABSTRACT
Marketing strategy is a method of focusing an organization's energies and resources on a
course of action which can lead to increased sales and dominance of a targeted market niche.
A marketing strategy combines product development, promotion, distribution, pricing,
relationship management and other elements; identifies the firm's marketing goals, and
explains how they will be achieved, ideally within a stated timeframe. Marketing strategy
determines the choice of target market segments, positioning, marketing mix, and allocation
of resources. It is most effective when it is an integral component of overall firm strategy,
defining how the organization will successfully engage customers, prospects, and
competitors in the market arena. Corporate strategies, corporate missions, and corporate
goals. As the customer constitutes the source of a company's revenue, marketing strategy is
closely linked with sales and more customers focused.
In the mid-1980s, Tanzania adopted a programme for economic liberalization of the entire
economy, including agriculture. After pressure from the IMF and the World Bank in
particular, but also from most of the bilateral donors, agricultural producer and input prices
were decontrolled, pan territorial prices were abolished, subsidies were removed and trade in
agricultural products and inputs was to a large extent taken over by private traders. The
international donor community promised that economic liberalization would provide a strong
stimulus to Tanzanian agriculture, resulting in increasing yields, increased labour
productivity, rising agricultural production and higher incomes. However, available data
show that, as far as food crop production is concerned, this promise has not been fulfilled.
Even compared to the ‘crisis years’ 1979–1984, labour productivity, yields and production
per capita of food grains stagnated or declined up to the end of the 1990s.
In Tanzania Oil marketing Companies have been adopting different marketing Strategies
since petroleum market liberalization in 2000, where the Government of the United Republic
of Tanzania has exempted itself in doing Petroleum business as it was creating unfair
competition
This study managed to establish the marketing strategies that are now being employed by
OMC’s after the Petroleum Market liberalization in 1994.
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The findings show that there have been changes in some marketing strategies employed by
OMC’s especially after petroleum Industry liberalization. Petroleum products prices had
increased substantially, trade liberalization had caused importation of substandard lubricants,
and integration of petroleum business and Non Fuel Business like ATM’s and Super markets
which deals with fast foods, and restaurants in the petrol stations were among other new facts
established. It is recommended among other things that the government need to Fully
Empower EWURA and ensure that they effectively regulate the petroleum market and that
no political interest is served on this. Agencies such as TBS should embark on modernized
techniques and technologies of identifying substandard products and work hand in hand with
the regulator to ensure that all substandard products are not allowed to reach the market
Based on the research findings, recommendations on ways to be applied for dealing with the
impact of petroleum Marketing liberalization have been highlighted at the end of this report.
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TABLE OF CONTENTS
CERTIFICATION ................................................................................................................ ii
DECLARATION AND COPYRIGHT................................................................................ iii
ACKNOWLEDGEMENT ................................................................................................... iv
DEDICATION .......................................................................................................................v
ABBREVIATION................................................................................................................ vi
LIST OF TABLES .............................................................................................................. vii
ABSTRACT ....................................................................................................................... viii
CHAPTER 1: INTRODUCTION ........................................................................................13
1.1 Background Information ........................................................................................... 13
1.1.1 Downstream Petroleum Sector in Tanzania ........................................................... 13
1.1.2 The Regulatory Framework .................................................................................... 13
1.1.3 Petroleum marketing strategy ................................................................................. 14
1.1.4 Challenges in the Petroleum Operations in Tanzania ............................................. 15
1.1.5 Liberalization history and Challenges .................................................................... 15
1.2 Problem Statement ..................................................................................................... 16
1.3 Research Objectives .................................................................................................. 16
1.4 Research questions .................................................................................................... 17
1.5 Hypothesis Delineation.............................................................................................. 18
1.5 Theoretical Framework .............................................................................................. 18
1.7 Rationale of the Study ............................................................................................... 19
1.8 Rationale of the Study ............................................................................................... 19
CHAPTER 2: LITERATURE REVIEW .............................................................................20
2.1 Chapter Overview ..................................................................................................... 20
2.2 Historical Background of Tanzanian Petroleum Industry and OMCs ...................... 20
2.3 Other Stakeholders to Tanzanian Downstream Petroleum Sector ............................ 23
2.3.1 Tanzania Petroleum Development Company (TPDC) ........................................... 23
2.3.2 Tanzania Revenue Authority (TRA) ...................................................................... 23
2.3.3 Tanzania Bureau of Standards (TBS) ..................................................................... 24
2.3.4 Ministry of Energy and Minerals (MEM) .............................................................. 24
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2.3.5 Energy and Water Utilities Regulatory Authority (EWURA) ................................ 24
2.3.6 Consumers .............................................................................................................. 25
2.4 Liberalization of of Petroleum Industry .................................................................... 25
2.4.1 Background ............................................................................................................. 25
2.4.2 Consequences of Petroleum Market Liberalization ................................................ 26
2.4.3 Marketing Strategies ............................................................................................... 27
2.4.4 Marketing process and services marketing ............................................................. 28
2.4.5 Marketing plan ........................................................................................................ 29
2.4.6 Market structure and Distribution facilities ............................................................ 29
2.4.7 Competitive position and Marketing changes ........................................................ 31
CHAPTER THREE: RESEARCH METHODOLOGY ......................................................32
3.1 Introduction ......................................................................................................... 32
3.2 Research design .................................................................................................. 32
3.3 Data sources and collection ................................................................................ 32
3.4 Study Area .......................................................................................................... 33
3.5 Research Instruments .......................................................................................... 33
3.6 Sampling frame, size and sample selection ........................................................ 33
3.7 Data management and analysis ........................................................................... 34
3.8 Data Cleaning...................................................................................................... 34
3.9 Research Problem ............................................................................................... 34
3.1.0 Reliability of data ................................................................................................ 34
CHAPTER FOUR: RESEARCH FINDINGS .....................................................................35
4.1 Introduction ......................................................................................................... 35
4.2 Characteristics of Oil Marketing Companies in Tanzania .................................. 35
4.3 Kind of products of products sold by oil companies .......................................... 37
4.5 Satisfaction with the service and Marketing changes ......................................... 41
4.6 Kind of changes experienced and witnessed ...................................................... 44
4.7 Trend of petroleum products quality................................................................... 44
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4.8 Trend of petroleum products price controls ........................................................ 45
4.9 Ranking of competition in the petroleum industry ............................................. 47
4.9 Petroleum Products Promotion ........................................................................... 48
4.11 Status of Petroleum Products Distribution .......................................................... 49
4.12 Specific Marketing Strategies ............................................................................. 50
4.13 Challenges faced by Petroleum Industry ............................................................ 51
4.14 Summary of the analysis ..................................................................................... 51
CHAPTER FIVE .................................................................................................................52
DISCUSSION, IMPLICATION OF FINDINGS AND RECOMMENDATIONS .............52
5.1 Introduction ......................................................................................................... 52
5.2 Discussions and Implications .............................................................................. 52
5.2.1 Conclusions ..................................................................................................... 52
CHAPTER 6 ........................................................................................................................55
RECOMMENDATIONS .....................................................................................................55
6.0 Recommendations ............................................................................................... 55
6.1 Petroleum industry challenges ............................................................................ 55
6.2 Petroleum product pricing................................................................................... 55
6.3 Research and Development................................................................................. 55
6.4 Compliance to other applicable regulations ........................................................ 56
6.5 Suggestions for Future Research ........................................................................ 56
REFERENCES ....................................................................................................................57
APPENDIX ..........................................................................................................................58
APPENDIX 2 .......................................................................................................................11
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CHAPTER 1: INTRODUCTION
1.1 Background Information
1.1.1 Downstream Petroleum Sector in Tanzania
Petroleum sector is generally categorized into two sub-sectors namely upstream and downstream.
Upstream activities involves exploration and production activities, while downstream includes
importation, storage, transformation, export, inland transportation of crude oil and refined
petroleum products, wholesale and retail distribution of petroleum products including liquefied
petroleum gas (LPG).
Tanzania consumes about 2.54 million cubic meters per annum of petroleum products wholly
imported from Mediterranean, Arabian Gulf and sometimes from Durban, South Africa.
Effective from January 2000, petroleum downstream sub-sector was liberalized enabling Oil
Marketing Companies to individually procure and trade petroleum products in accordance to
their market requirements and setting pump prices based on the prevailing market forces.1
One of the objectives of liberalization was to increase competition. The National Energy Policy
of February, 2003 (the Policy) states that “In line with the overall economic policy of the
country, the market oriented concept shall apply to the supply of energy products and services.
Implicitly, medium and long-term services of independent economic actors should determine
allocation of resources. Competition on fair and equitable conditions among independent actors
shall form the basis for market efficiency”. The Policy further states: “A regulatory agency will
be established to oversee activities in the petroleum sub-sector and deal with the enforcement of
open market and fair competition, administration of licensing and the overall monitoring of the
petroleum market.”2In line with this Ewura was established in the year 2007
1.1.2 The Regulatory Framework
The Energy and Water Utilities Regulatory Authority (EWURA) is an autonomous multi-
sectoral regulatory authority established by the Energy and Water Utilities Regulatory Authority
1EWURA homepage: Introduction to Petroleum (EWURA 2007/2008, accessed 15 June 2009); available from
http://www.ewura.go.tz/petroleum.html; Internet.
2 National Energy Policy (Tanzania: Ministry of Energy and Minerals, 2003), 11.
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Act, Cap 414 of the laws of Tanzania. It is responsible for technical and economic regulation of
the electricity, petroleum, natural gas and water sectors in Tanzania pursuant to Cap 414 and
sector legislation.3
Furthermore, The Petroleum (Conservation) Act, Cap 392 as amended in 2003 and 20074,
mandates EWURA to regulate the downstream petroleum sub – sector in Tanzania, ranging from
importation, unloading, transportation, storage, transporting to selling of petroleum products in
the country. EWURA’s jurisdiction in the petroleum sub – sector covers all aspects related to
technical, safety and economic regulation.
1.1.3 Petroleum marketing strategy
Petroleum marketing strategy various from each level, depending on the existing customers,
competition and the regulatory framework strength on that particular level. Retail outlets for
example adopts a deferent strategy compared to Oil Marketing companies (OMC’s) on area like
pricing, distribution, high quality products and advertisement.
Most of the RO uses pricing as the sole marketing strategy while OMC’s use the RO, price, and
quality products (distribution network) as the main marketing strategy.
Retail outlets located in the same trading area, tend to adopt low price as a sole strategy to win
more customers, while those in isolated areas tend to advocate more on things like quality fuel
and good services to the customers.
The parent companies which own the retail outlets have a lot of influence on the type of strategy
adopted by the retail outlet.
Before the EAC agreed on the quality of fuel to be imported to EA counties, BP Tanzania used
quality and advocated more about the use of high quality.
Oil marketing on the others hands uses both price, visibility (RO network), strong Brand
leverage, storage capacity, advertisement, quality products and quality service as there strong
marketing tools. 33 EWURA homepage: Overview (EWURA 2007/2008, accessed 15 June 2009); available from
http://www.ewura.go.tz/overview.html; Internet.
4 Petroleum (Conservation) Act, Cap 392, (Tanzania: Parliament of the United Republic of Tanzania,2007), 13.
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1.1.4 Challenges in the Petroleum Operations in Tanzania
According to EWURA 2007/2008 annual report, December 2008, downstream petroleum sector
in Tanzania is faced with the following three major challenges;
(i) Sale of adulterated petroleum products
(ii) Safety issues in the petrol stations which are below standards; and
(iii)Volatility of petroleum products prices in the world market that as a result makes long
term planning for the development sector very difficult to attain.
Gasoline (or Petrol) and Diesel (or Gasoil) are the major transport fuels in Tanzania.
Adulteration of these transport fuels has become an acute problem in the country. These fuels are
often adulterated with other cheaper products normally kerosene or JET A1 which their taxes are
set relatively low. With liberalization Tanzanian downstream petroleum sub-sector in January
2000 and subsequent absence of dedicated regulatory controls ever since until formation of
EWURA in 2006, the magnitude of fuel adulteration problem had grown into alarming
proportions.
1.1.5 Liberalization history and Challenges
According to BP website5, ‘Until July 1997 the Tanzania Petroleum Development Corporation
(TPDC) imported 70% of the main products on behalf of the government and sold these to the oil
marketing companies. The remaining 30% was produced locally by the TIPER refinery. In July
1997 the industry was partially liberalized, allowing oil marketing companies to import fuels
through a ministerial Technical Task Force which floated tenders amongst the oil marketing
companies. The successful company could import fuel on behalf of other oil companies.
The Oil marketing companies are now allowed to import any product they need to service their
customers. A system exists whereby importers can share their imports with the smaller oil
marketing companies. This system also helps small companies and new entrants to the market.
Following the amendment to the Petroleum Act in January 20006, which saw liberalization of
Petroleum industry, every company in the sector has been free to import products in accordance
with its requirements; local product prices being determined mainly by the market forces. In
contrast to pre-liberalized market conditions, following the liberalization, there has been no
significant experience of fuel shortages.
5 http://www.bp.com/genericarticle
6 http://www.ewura.go.tz/pdf/Notices/Detailed%20Analysis
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With respect to the consumption of petroleum products, EWURA’s own estimates (since the
sector was partially liberalized in 1997 there have been no reliable data collected) are that the
country’s total forecast consumption for the year 2007 amounts to 1.7 million tonnes. In addition
to internal consumption, some petroleum products are transited to landlocked countries
neighboring Tanzania. Currently there are approximately 20 oil marketing companies involved in
importation and transit of petroleum products. Each company imports from its supplier and at its
own schedule.
1.2 Problem Statement
As identified by EWURA’s 2008/20097, annual report in sub-chapter 4.5. (e) Timely availability
of petroleum data is still a challenge in downstream petroleum sector in Tanzania regardless of
long history that needed to be documented well and thoroughly for current and future reference.
The industry had been changing over years worldwide. Marketing factors have great contribution
to these changes.
Since there were no many studies done in this area, particularly in Tanzania, It is not evident
before this study as how petroleum Market liberalization has influenced changes in marketing
Strategies in the industry.
It is difficult to compile the information on Petroleum marketing strategies and Oil industry
development in Tanzania since the same is fragmented.
This study aimed at exploring these fragmented information, compile and analyze them into a
comprehensive study.
1.3 Research Objectives
The main focus of marketing activities of oil marketing companies is the identification and
satisfaction of clients’ needs and wants. These objectives can be attained by identifying the likely
marketing mix variables and strategies, including relevant environmental impacts on them. There
7 Ewura Annual Report for the Year 2008/2009 Published in December 2009, and available from
http://www.ewura.go.tz/annualreports.html ; Internet
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is, therefore, the need to carry out this research given the enormity of the problem facing the oil
and gas industry. Specifically the study sought to investigate the following:
This study aims at establishing the impact of petroleum market liberalization on marketing
strategies by oil Marketing Companies in petroleum industry in Tanzania. Knowing the causal
factors will in turn assist in improving the efforts towards improving the petroleum down stream
Sub sector in the following ways;
The OMC’s will now be able to understand precisely the marketing strategies employed
in the market and how those strategies benefit them
Ewura will now be able to identify the areas of weakness in the marketing strategies and
how they affect the consumer and deal with it accordingly
Consumer will also be able to identity those companies which uses unacceptable
marketing strategies and refrain from purchasing their products
More specifically, the study was conducted to pursue the following objectives:
(i) To identify marketing strategies employed by OMC’s after petroleum industry
liberation in Tanzania
(ii) Establish how petroleum industry liberalization has influenced marketing
strategies of OMC’s in Tanzania
(iii) To establish factors limiting marketing strategies advancement in petroleum
industry
1.4 Research questions
In an attempt to attain the above objectives, the study sought to answer the following research
questions:-
(iv) What marketing strategies are employed by OMC’s after petroleum industry
liberation in Tanzania?
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(v) How petroleum industry liberalization has influenced marketing strategies of
OMC’s in Tanzania?
(vi) What challenges are limiting marketing advancement in the petroleum industry in
Tanzania?
1.5 Hypothesis Delineation
A hypothesis is defined as a logically conjectured relationship between two or more variables
expressed in the form of a testable statement8. By testing the hypotheses and confirming the
conjectured relationships, it is expected that the solutions can be found to correct the encountered
problem.
The researcher in this particular study believes that there is a significant relationship between the
petroleum industry liberalization and the marketing strategies employed by Oil marketing
Companies in Tanzania.
Hence the hypotheses in this research are conjectured as follows;-
H0: There is a significant relationship between downstream petroleum industry liberalization and
the marketing strategies employed by Oil marketing Companies.
H1: There is no significant relationship between the existing downstream petroleum industry
liberalization and the marketing strategies employed by Oil marketing Companies
The above mentioned hypothesis statement suggests that downstream petroleum liberalization
and marketing strategies to be the two main variables this research will be working on. These
variables will be given measuring criteria that will enable their quantification during research
data analysis stage.
1.5 Theoretical Framework
Deriving from the research objectives as outlined in subsection 1.3 above, three following
variables are involved in this study;-
8 Prof. J. MUMBA, Ph.D., “Hypothesis Development”, Research Methods (RM 502) Notes (Arusha: ESAMI, 2007),
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(i) Downstream petroleum liberalization
This is of primary interest to the researcher because of its significant impact petroleum
industry particularly the regulatory frame work, OMC’s business and marketing
conducts, Malpractice, the environment, health and economy of the country. The goal of
this study is to understand and explain impact of liberalization on the marketing strategies
(ii) Marketing strategies
It is not yet very clear what types of marketing strategies are employed by OMC’s and
how effectives are those strategies. This study is intended to establish precisely those
strategies and how those strategies, and the impact of those strategies to the government
revenues, final consumer, and the entire country economy
1.7 Rationale of the Study
The findings of this study are expected to open up room for a wider understanding of the impact
of petroleum industry liberalization on marketing strategies used in Tanzania petroleum industry.
Also highlights of the study on marketing trends in the industry will help stakeholders in the
industry to shape their marketing strategies more precisely.
The study is also expected to provide an expanded research base for future studies. Since the
Researcher is working within the industry, it will also sharpen the researcher’s performance
skills and knowledge of all related matters to this study
1.8 Rationale of the Study
All 10 companies responded to the questionnaire and discussion requested. This provides 100%
response rate. On the other hand, the researcher secured more responses than had targeted. The
researcher secured 2 more individual responses above a target of 30 individual responses.
Therefore actual response for individual respondents was 32 respondents giving a percentage of
106.7%. Individual responses were above the target because 45 questionnaires were circulated to
provide for non responses. The two additional responses were used because they were considered
to be useful and value adding to the analysis and conclusions.
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CHAPTER 2: LITERATURE REVIEW
2.1 Chapter Overview
This chapter included reviewing relevant books. Reports, paper presentations that were
recognized as key marketing processing in general marketing knowledge, reviewing of
marketing strategies that would enhance determination of marketing activities as an essential
ingredient for effective operation. Market structure and distribution facilities review was done
because of the nature of operation of petroleum industry. Competition position and
environmental considerations were considered to add body of knowledge to the study.
Information about stakeholders to the industry such as major petroleum companies operating in
Tanzanian market together with the market shares is availed. Other key petroleum stakeholders
including government agencies and consumers are also covered.
Marketing strategy is a method of focusing an organization's energies and resources on a
course of action which can lead to increased sales and dominance of a targeted market
niche. A marketing strategy combines product development, promotion, distribution,
pricing, relationship management and other elements; identifies the firm's marketing goals,
and explains how they will be achieved, ideally within a stated timeframe. Marketing
strategy determines the choice of target market segments, positioning, marketing mix, and
allocation of resources. It is most effective when it is an integral component of overall firm
strategy, defining how the organization will successfully engage customers, prospects, and
competitors in the market arena. Corporate strategies, corporate missions, and corporate
goals9.
2.2 Historical Background of Tanzanian Petroleum Industry and OMCs
By 1936 SHELL and TEXACO had established branches in Tanzania mainland. By then both
SHELL AND TEXACO initially distributed Kerosene. During and after World War II, the
demand for petroleum products increased both in quantity and variety. Early in 1950’s Shell and
BP consolidated their marketing activities. The first recorded company to have traded in oil in
this part of the world in SHELL. SHELL was followed by other companies10.
9 Retrieved from "http://en.wikipedia.org/wiki/Marketing_strategy
10 TPDC homepage: Background (TPDC 2009, accessed 3, July. 2009); available from http://www.tpdc-
tz.com/about_us_new.htm; Internet.
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The backbone of the Oil industry activities in this country grew stronger with the operations of
the foreign Oil Marketing Companies. Most of the companies operating in the industry in
Tanzania were subsidiaries of Multinational or International oil companies.
SHELL and BP as a consolidated entity were operating in Tanzania by 1960 along with Texaco
and Standard Vacuum (Stanvac). When Texaco and Stanvac later re-organized, the former was
reduced to Caltex in 1961 and the later broke up into ESSO and Mobil in 1962. In 1994/95
Caltex and Esso were sold out to a local entrepreneur and are now known as GAPOIL and
GAPCO respectively. Mobil runs a low key outfit which concentrates on aviation activities and
lubricants.
AGIP and TOTAL entered the market in the 1960’s. The entry of these companies provided a
stimulus to the industry. Hitherto, the industry was only involved in marketing and distribution
of petroleum products. The entry of AGIP into the market changed all that. ENI and AGIP took
new initiatives in both upstream and downstream operations. A refinery company; Tanzanian
and Italian Refining Company (TIPER) which was incorporated on 18th May, 1963 to refine
crude oil and produce refined products for the inland market. The refinery became operational in
June, 1966. In May, 1969 AGIP SpA concluded and signed an exploration contract styled
Production Sharing Agreement with the Government of Tanzania. Under this Agreement AGIP
SpA accepted to undertake exploration activities in the area covered by the Agreement and meet
agreed targets of quantum of work and expenditure levels specified in the Agreement. These
exploration activities on the region south of Dar es Salaam and succeeded to discover two gas
fields Songo-Songo and Mnazi Bay. Meantime the Tanzania Government Agency (TGA) which
later evolved into Tanzania Petroleum Development Corporation – TPDC represented the
Government interests during the implementation of this Agreement. TGA had the task of
ensuring that the agreed activities are carried out with diligence and in accordance with accepted
industrial practices. It also had the duty to broaden and deepen the process of transfer of
technology in exploration and production to the indigenous Tanzanians.
AGIP carried out substantial marketing activities in the country and indeed it was the second
largest marketing company with about 25% market share by early 1990’s. Its distribution net
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work consisted of 5 depots located in Dar es Salaam, Moshi, Mwanza, Mikumi and Mbeya depot
jointly owned with TOTAL. It was in December 1999 when ADHOL acquired the interests
(50% shares) of AGIP PETROLI in AGIP [TANZANIA] which was then renamed ORYX OIL
COMPANY LTD (OOCL). The remaining shares (50%) were acquired in mid-2004.
BP was the largest company with the market share of about 45%, thus extensive marketing
activities which covers almost the whole country. The distribution network includes 10 depots
located in Dar es Salaam, Mtwara, Tanga, Mikumi, Zanzibar, Moshi, Tabora, Kigoma, Mwanza
and Bukoba by year 2005 with 80 retail outlets.
In the midst of foreign companies, in 1997 TPDC embarked on the task of importing the crude
oil. This task provided the backbone of the marketing activities of TPDC. In the year 1982
TPDC also began importing the refined products required to top up the refinery output in order to
meet the market requirement.
Importation and supply of fuel in Tanzania is governed by Petroleum rules of 1951 and
conservation act of 1981. Petroleum industry was under Government’s control until 1997 where
it had traditionally been a highly regulated business. Only one refinery operated in the country,
TIPER that imported crude oil to process into refined products. Due to lack of installed capacity
and dilapidated state of the machinery, the TIPER refinery could only process 50% of the
national requirement of petroleum products. The Tanzania Petroleum Development Corporation
(TPDC) imported the balance in a form of refined products. Both imported and locally refined
products were then sold through TPDC to about 7 downstream Oil-Marketing Companies
namely BP, ORYX, TOTAL, GAPCO, GAPOIL, BULK OIL and NATOIL. All these companies
possessed storage facilities11.
Effective from January 2000, petroleum downstream sub-sector was liberalized enabling oil
marketing companies to individually procure and trade petroleum products in accordance to their
market requirements and setting pump prices based on the prevailing market forces.
11 Tanzania National Website: Energy (accessed 3, July. 2009); available from www.tanzania.go.tz/energy; Internet.
23
After deregulation number of players increased from 7 to 51 according to the Ministry of Energy
and Minerals’ Oil Marketing Companies compiled list by 2006. TPDC’s role as a sole importer
(i.e. Coordinator of all importations) was stripped. Every company was allowed to import its
petroleum products requirements to cater for its market. Out of the 51 registered oil marketing
companies, fewer than 28 are currently active (Appendix 3). Of these, 18 own and operate
storage depots. The closed down TIPER refinery currently acts as an oil storage depot.
2.3 Other Stakeholders to Tanzanian Downstream Petroleum Sector
2.3.1 Tanzania Petroleum Development Company (TPDC)
TPDC was formed in 1969; the primary role was to oversee the operations of AGIP, the only
concession holder working then in the country. Following the discovery of the Songo Songo Gas
field, and subsequent relinquishment by AGIP, TPDC undertook the confirmation of the gas
field, and eventual appraisal. It is now geared to the development of the field as well as
exploration in other basins in the country. In the interim, TPDC undertook the function of the
sole importer of both white and crude petroleum products and marketing. With the onset of
economic liberalization, the oil marketing operations ceased in the year 200012. Hence, currently,
TPDC has no role in Tanzanian downstream petroleum sector
2.3.2 Tanzania Revenue Authority (TRA)
The Tanzania Revenue Authority Act No. 11 of 1995 established TRA. The Authority is a semi-
autonomous agency of the Government, responsible for the administration of the Central
Government taxes as well as several non-tax revenues13. Being the authority in charge of tax
collection in the country, TRA administers tax issues for all imported goods including petroleum
products. Tax revenues from importation of petroleum products contribute 40% of all country’s
imports and about a quarter of all TRA tax collections. This implies Tanzanian downstream
12 TPDC homepage: Background (TPDC 2009, accessed 3, July. 2009); available from http://www.tpdc-
tz.com/about_us_new.htm; Internet.
13 Tanzania Revenue Authority Homepage: Functions of TRA (TRA 2009, accessed 3 July 2009) available from
http://www.tra.go.tz/tra/index.php; Internet.
24
petroleum sub-sector is one of the major sources of tax revenues and that malpractices such as
tax evasion and adulteration may lead the nation into to a significantly huge loss of revenues.
2.3.3 Tanzania Bureau of Standards (TBS)
Tanzania Bureau of Standards (TBS) was established under the Ministry of Industry, Trade and
Marketing by an Act of Parliament, The Standards Act No.3 of 1975 as the National Standards
Institute and became operational in April 1976. The Bureau was established as part of the efforts
by the government to strengthen the supporting institutional infrastructure for the industry and
commercial sectors of the economy. Specifically, TBS was mandated to undertake measures for
quality control of products of all descriptions and promote standardization in industry and
commerce. It was subsequently renamed Tanzania Bureau of Standards through an amendment
to the Act by Act No.1 of 197714.
TBS sets and advise standards of quality specification for all petroleum products to be used in
the country. Selling or offering for sale petroleum products that are out of specification
contravenes the law, and is punishable under the law.
2.3.4 Ministry of Energy and Minerals (MEM)
Downstream petroleum sub-sector falls under the Energy sector of Ministry of Energy and
Minerals. The ministry’s mission is to provide an input into the development process of the
country through establishment of a reliable and efficient energy production, procurement,
transportation, distribution and end use system in an environmentally sound manner15. Ministry
of Energy and Minerals have a mandate of developing policies related to petroleum sectors.
2.3.5 Energy and Water Utilities Regulatory Authority (EWURA)
14 Tanzania Bureau of Standards Website: About TBS (TBS, 2009, accessed 4, July 2009): available from
http://www.tbstz.org/tbs_about/
15 Tanzania National Website: The Homepage of the Ministry of Energy and Minerals, Mission (accessed 4, July.
2009); available from www.tanzania.go.tz/energy; Internet.
25
The Energy and Water Utilities Regulatory Authority (EWURA) is an autonomous multi-
sectoral regulatory authority established by the Energy and Water Utilities Regulatory Authority
Act, Cap 414 of the laws of Tanzania. It is responsible for technical and economic regulation of
the electricity, petroleum, natural gas and water sectors in Tanzania pursuant to Cap 414 and
sector legislation16.
The functions of EWURA include among others, licensing, tariff review, monitoring
performance and standards with regards to quality, safety, health and environment. EWURA is
also responsible for promoting effective competition and economic efficiency, protecting the
interests of consumers and promoting the availability of regulated services to all consumers
including low income, rural and disadvantaged consumers in the regulated sectors.
2.3.6 Consumers
Tanzanian Petroleum products consumers entail all key sectors of social-economic life such as
agriculture, transportation, industrial, mining and domestic. Some of these consumers like in the
mining sectors import their own fuel; some acquire the fuel from the importing oil companies
and the rest from a chain of about 1,000 retail outlets spreading throughout the country.
Of major interest to this study will be the retail outlets consumers. This is due to the fact that
petroleum products adulteration malpractices in the country have mostly affected the retailing
sector. This is suspected to be caused by the environment at which the retailing activities are
taking place from products sources, to how the products are delivered and stored at the retail
outlets until finally sold to the final consumers.
2.4 Liberalization of of Petroleum Industry
2.4.1 Background
Tanzania has come a long way in liberalizing its trade regime over the past two decades, as
reflected by the decline of its IMF trade restrictiveness index rating to 6 (moderate) from 10
(restrictive). During 1980-86, nontariff barriers covered more than 50 percent of imports, and the
average simple tariff rate was about 40 percent; but by 1999, nontariff barriers were largely
16EWURA homepage: Overview (EWURA 2007/2008, accessed 4 July 2009); available from
http://www.ewura.go.tz/overview.html; Internet.
26
confined to restrictions on imports of petroleum products (owing to physical constraints at port
facilities), and the simple tariff rate was between 15 and 20 percent17
Until the year 2000, the Ministry of Energy and Minerals was the regulator for the entire
petroleum sector. In 2000, the downstream petroleum industry was liberalized as part of
Tanzania’s structural reforms. One of the objectives of liberalization was to increase
competition. The National Energy Policy of February, 2003 (the Policy) states that “In line with
the overall economic policy of the country, the market oriented concept shall apply to the supply
of energy products and services. Implicitly, medium and long-term services of independent
economic actors should determine allocation of resources. Competition on fair Petroleum Sector
Inquiry – Stakeholders Comments document and equitable conditions among independent actors
shall form the basis for market efficiency”. The Policy further states: “A regulatory agency will
be established to oversee activities in the petroleum sub-sector and deal with the enforcement of
open market and fair competition, administration of licensing and the overall monitoring of the
petroleum market.” 18
2.4.2 Consequences of Petroleum Market Liberalization
There is no much publication on the impact petroleum market liberalization in Tanzania.
However it is obvious that Oil marketing Companies had adopted different marketing strategies
as a result of market liberalization which had paved way to increased numbers of competitors in
the industry.
Margin have been narrowed as a result of increased numbers of players in the industry which has
pushed some of unfaithful petroleum dealers to employ unscrupulous marketing strategies while
others have embarked on strategies like advisements, price skimming to mention but a few.
The other major problem as a result of liberalizing the industry is adulteration of oil products like
mixing kerosene with diesel thus damaging motor vehicle engines and also exploiting buyers to
realize higher profits19
17
Tanzania's experience with trade liberalization , available http://www.imf.org/external/pubs/ft/fandd/2000/06/kanaan.htm
18National Energy Policy (Tanzania: Ministry of Energy and Minerals, 2003), 11.
19 http://www.ippmedia.com/frontend/index.php?l=20079
27
2.4.3 Marketing Strategies
Marketing strategies and tactics are concerned with taking decisions on a number of variables to
influence mutually-satisfying exchange transactions and relationships. Typically, marketers have
a number of tools they can use; these include megamarketing (Kotler1996) and the so-called 4Ps
of marketing (McCarthy, 1995), among others. Marketing seems easy to describe, but extremely
difficult to practice (Kotler and Connor, 1997). Organizational managers in many firms have
applied the so-called marketing concept, which may be simple or complex. The marketing
concept and variants like the total quality management concept for example, are essentially
concerned with satisfying clients’ needs and wants beneficially. Developing and implementing
efficient and effective marketing strategies which incorporate relevant dimensions of the
marketing concept involve the organic tasks of selecting a target market (customers/clients) in
which to operate and developing an efficient and effective marketing ingredient combination.
Marketing thought, with its practice, has been moving speedily into the service industry (Kotler
and Connor, 1997). Literature, partly, centre’s on the discussion of whether physical product
marketing is similar to, or different from, the marketing of service and concludes that the
differences between physical product and service might be a matter of emphasis rather than of
nature or kind (Creveling, 1995). Marketing is one of the salient and important organic functions
which help to service organizations to meet their business challenges and achieve set goals and
objectives (Kotler and Connor 1997). The word “service” is used to describe an organization or
industry that “does something” for someone, and does not “make something” for someone
(Silvestro and Johnston, 1990). “Service” is used of companies or firms that meet the needs and
want of society such organizations are essentially bureaucratic (Johns 1990; Osuagwu, 1999).
“Service” may also be described as intangible its outcome being perceived as an activity rather
than as a tangible offering. Services include a wide range of activities and form some of the
growing sectors of the economies of developed and developing countries. Services include
professional services (legal, accounting, medical, management consulting, etc), general services
(insurance, postal, telephone, transportation, internet, tourism, etc), maintenance and repair
services, and services from marketing researchers and product manufacturers, among others. Oil
and gas service is not a tangible thing like food, clothing and car. The main factor that affects a
28
2.4.4 Marketing process and services marketing
According to Kotler and Keller (2005), marketing deals with identifying and meeting human and
social needs, in a profitable way. The human and social needs may be met using goods, services,
events, experience, persons, places, properties, organizations, information and ideas.
The marketing mix elements that are also processes suggested by Kotler` and Keller, include;
Product (variety, quality, design, features, brand name, packaging, sizes, services, warranties,
returns), Price (list price, discounts, allowances, credit terms), Promotion (sales promotion,
advertising, sales force, public relations, direct marketing), and Place (channels, coverage,
assortments, locations, inventory, transport).
For services marketing, the traditional 4 P's model is extended to seven P's. the seven P’s include
all the four traditional four P’s above and additional P’s for people (the perceived quality of
personnel who are involved in the service provision, and the extent to which the service
personnel are satisfied with the service organization, also referred to as ‘internal marketing’),
process (the way the service delivery process is handled by the service organization, and the
overall satisfaction that the client gets from the service) and physical evidence (the tangible
elements that accompany the service provision, and through which potential clients may judge
the quality of services offered by service providers, including the premises, layout of service
points the equipment and general appearance).
Kotler and Keller (opcit) admit that at one time, service firms lagged behind manufacturing firms
in their use of marketing because they were small, or they were professional businesses that did
not use marketing, or they faced little demand or little competition.
Most traditional marketing theorists insisted on goods marketing rather than services, as is
evident from the article by Converse (1921), where he insisted that the main function of business
is to market goods, with accounting, banking, insurance and transportation being only aids, to the
production and marketing of goods. Shostack (1977) in his article 'Breaking free from product
marketing' claims that service industries have been slow to integrate marketing into the
mainstream of decision-making and control because marketing offers no guidance, terminology,
or practical rules that are clearly relevant to services.
29
The significance of services today is a result of serious works by Kotler (1961), who observed
the unique characteristics of services of invisible nature. Marketing processes have to be
modified to discharge effective marketing operations especially when dealing with petroleum
products that also require special care.
2.4.5 Marketing plan
The concept of marketing planning addresses areas like 'generic' strategies and strategies for
pricing, distribution, promotion, advertising and market segmentation. Factors such as market
penetration, market share, profit margins, budgets, financial analysis, capital investment,
government actions, demographic changes, emerging technology and cultural trends are also
addressed.
Successful marketing activities would be enhanced by how well a company plans its marketing
activities, for the success of the companies (Luxbacher, 2006). The more realistic marketing
plan, articulates all key areas of the company, for a successful business. New approaches to the
marketing concept consider new market trends, namely, acceleration of the rhythm of change
and increase of the diversity and complexity of the products. These trends are even more evident
in the high-tech industries, such as that of petroleum business where the market is always under
transformation and evolution.20
2.4.6 Market structure and Distribution facilities
An impirical study done by Parasuraman, A, L. L. Berry & V.A. Zeithaml (1985), argues that it
is indispensable to have a deep knowledge of the market because the success of any business
does not take place just because one wishes it requires an accurate planning of the activity to be
developed and a deep knowledge of the market, because it is the only way that he has to set out
an effective plan of action21.
20 http\\www.marketresearch.com/browse.asp?categoryid
21 Parasuraman, A., Zeithaml, V. A. and L. L. Berry, 1985 pg. 77-98
30
Therefore short, medium and long-term levels of planning are important for a successful
business. This is so because plans set basis for evaluation and measure of performance over a
time period. It also allows adjustments based on changes taking place in the market
The number of suppliers of goods or services provides a marketing structure that often has
implication on how marketing processes the P-P-P-P (i.e. price, product. place and promotion)
are designed in the market programme. The market structure shows that with the exception of
aviation needs, all marketing companies are active in the distribution of fuel products in the
inland market, in the main segments of the market (S. Barongo & I. Reweta 1996). The price
factor has been the most dynamic factor in the petrol business that is influenced by the number of
producers and how the sector is organized at global level.
Distribution facilities are special starting with ship tankers, that distribute oil globally and very
few developing countries own them. The main part of distribution facilities used by the Oil
marketing companies are owned by third parties. Oil tankers that haul are costly and owned by
independent business organ that only provide delivery service from a refinery or bulky seller to a
retail outlet. Storage tankers are often owned by global oil dealers such as Oryx, BP, Shell, and
Total. The main mode of transportation of products in local market areas is the road. Road
transport is used to deliver products from a depot to retail and consumer outlets in prescribed
locality. This mode however is suitable for medium distances from 250 kilometers up to 300
kilometers. Under normal circumstances, a distance of over 300 kilometers would be covered by
rail or pipeline.
In case of Tanzania, where there is a limited rail transporting capacity and virtually no pipeline
transportation, road transportation has been sought as an alternative despite its inefficiency and
poor road condition. (Masili T.F, 2004)
Masili argues that though in Tanzania, pipeline is currently limited to ferrying imported
petroleum products from port jetties to land storage tanks, it was high time to start thinking about
putting up pipeline networks to transport refined petroleum products for the regions of Iringa,
Mbeya and Rukwa in case Indeni Refinery in Zambia closes down and decide to use pipeline
facility t transport refined petroleum products. In Kenya pipeline transportation has replaced
31
railway and road transportation of petroleum products to long distances such as Nairobi, Kisumu,
Eldorate etc from Mombasa port.(Masili T. F, 2004) This is to say that losses experienced during
transportation, may due to bad roads and temperature would be influencing product prices.
2.4.7 Competitive position and Marketing changes
Based on market structure oil companies in the world are few in number and all compete to get
the highest market share.
An empirical study by Barongo and Reweta (1996) stresses that marketing activities are the
principal activities in the country. Some companies have long time track record in distribution of
petroleum products while others are young and struggling to establish themselves. (S. Barongo &
I. Reweta 1996).
Some traditional brands have disappeared in Tanzania while some of other brands were changed
to other brands. Some of the brands that disappeared were:- Esso, AGIP, Shell (which is coming
back now). Disappearance of some brands was due to change in technology, phasing out of
company’s operations in the country or take overs by other companies example AGIP was taken
over by Oryx Oil Company. Some of other changes in the industry were; increase in number of
Oil companies and increased number of products offers. There have been a massive increase in
petrol stations for both fuel and lubricants while private shops/stores for LPGas and lubricants
have greatly increased (Impact Consultants Ltd 2003).
32
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction
This chapter describes how the study was designed and conducted. It clearly discusses in detail
the research design, type of data sources and collection procedures, the sampling frame and
sample size, the sampling procedure used and the study area. The methods used to analyze the
data; together with assessment of research quality are presented.
3.2 Research design
As defined by Kothari (2000), a research design is the arrangement of conditions for the
collection and analysis of data in a manner that aims at combining relevance to the research
purpose and economy in procedure. It is a conceptual structure within which research is
conducted including collection, measurement, and analysis of data. This study was designed as a
study of descriptive nature, which was concerned with determining the frequency with which
something occurred or relationship between variables (Churchill, 1976). The researcher
employed both desk research and field survey.
The Desk research included reviewing of various literatures from different countries and what
was done in Tanzania. This was scrutinized to fit this study, remembering that secondary data is
initially collected for another purpose.
Field survey provided primary data that were collected from 10 petroleum companies and 50
individuals. The purpose of this part was to answer questions and meet objectives of the study to
arrive to conclusions that can be generalized (Graziano & Raulin, 1993).
3.3 Data sources and collection
The study made use of primary data that were collected from various Oil Marketing companies
as well as from individual consumers of petroleum products through a questionnaire developed
specifically for meeting the objectives of this study (Appendix 1). The questions were developed
in such a way that they captured not only the perceptions of the respondents on the impact of
petroleum market liberalization on marketing strategies employed by oil marketing companies,
but also the trend of competition, distribution and promotion, challenges faced by Oil marketing
companies in marketing petroleum products. Such variables were considered important as the
different trends and challenges analyzed would add value to the industry.
33
3.4 Study Area
As the title of research suggests, this study was intending to cover the downstream petroleum
sector in Tanzania. The researcher collected data from ten (10) Oil marketing companies in Dar
es Salaam, though studies and findings of this research work are meant to represent the situation
in the whole of Tanzania mainland
3.5 Research Instruments
Likert scale was used to capture data of judgmental nature. In gathering other data, both open
and close ended questions were used, and for the close ended questions, the phrase ‘others
(specify)’ were used to avoid limiting the respondent on the possible responses.
The actual collection of data was done through the use of ‘drop and pick’ method, although the
researcher was available to give explanations to any misunderstood question by the respondent.
Discussions with some respondents on various aspects not expressly addressed by the
questionnaire were done during the questionnaire administration. This provided an important
qualitative input to the findings of the study.
3.6 Sampling frame, size and sample selection
The sampling frame for this study was based on all Oil marketing companies registered in
country. Currently there are 46 Oil companies registered in the United Republic of Tanzania.
(Appendix 2)
Sample of 10 companies based in Dar es Salaam was justifiable on the grounds that a
representative sample can be obtained, as the 10 companies picked formed 82% of the Fuel and
lubricant market share. This made it possible to consider that reasonable conclusions for the
whole country can be made by surveying the Dar es salaam-based companies.
Considering the compromise between time available for the study and the reliability of the
findings, the sample size used was 10 Oil companies and 30 individuals.
The sampling procedure included both the purposive and random sampling. This was necessary
because it was to the interest of the study that the responses of the large multinational companies
were obtained, a random sample from the list of the other relatively smaller companies was then
34
selected. This was necessary for the study to be useful in confirming factors influencing
marketing changes in the industry as a whole.
3.7 Data management and analysis
The data collected in this study were edited, summarized, tabulated, and quantitatively analyzed
using statistical package for social sciences (SPSS). This is due to the user friendliness of the
package, e.g. the wide range of choices in selecting and deleting the variables at various stages of
the analysis and ability to test various relationships. The software was used to analyze
frequencies which were helpful for drawing conclusions. In addition to that profiles of
respondents together with the responses obtained for different are summarized and presented.
3.8 Data Cleaning
Questionnaires were checked if well completed and correctly filed. Upon keying data to the
SPSS program was also checked for any missing data. All questionnaires collected were found to
be satisfactorily answered and all of them were useful to this study.
3.9 Research Problem
To ensure reliability of data, the study made use of primary data collected specifically for this
purpose. Moreover, it was stressed to the respondents that the data to be collected is strictly for
academic purposes, in order to avoid the possibility of having biased responses. This went hand
in hand with allowing anonymity to the respondents.
3.1.0 Reliability of data
The Likert scale was assessed for accuracy especially to see if it measured what was intended.
The researcher used a scale of 1 to 5. A scale range was such that, 1=strongly disagree,
2=disagree, 3=not sure, 4=agree, and 5=strongly agree. Reliability analysis provided a rate 4.
(Alpha= .85). This research output mean that the instrument strongly in agreement.
35
CHAPTER FOUR: RESEARCH FINDINGS
4.1 Introduction
This chapter discusses the findings of the study. On top of the data collected using the
questionnaire, the researcher solicited some responses using discussion with experienced oil
companies high level staff as an extension of the open ended questions.
The chapter presents characteristics of oil market companies of Tanzania followed by analysis of
research questions under the study.
4.2 Characteristics of Oil Marketing Companies in Tanzania
The results show that for a very long time Tanzania was served by the 7 group Oil companies
until recently as from 1990s after trade liberalization more new companies came in to supply oil
and related products. Increase in number of oil companies to 16 oil companies in 2005 from 7 in
1990s has increased competition among oil companies where the market share of giant
companies has been reduced. For example, in 1994, BP had 45.9% market share which has been
reduced to 19.2% in 2005. AGIP (now Oryx had 18.2% market share in 1994 which has been
reduced to 12.9% in 2005, Caltex market share in 1994 was 14.6% which has been reduced to
6.4% in 2005. Only TOTAL seem to have improved its market share, whereby in 1994, TOTAL
had 10.2% market share which has improved to 13.6% in 2005. GAPCO market share was 9.8%
in 1994 while in 2005 its market share had gone down to 8.5%
4.2.1 Oil Companies and Year of Establishment
The study revealed that there were more than 70 companies selling petroleum products in
Tanzania by June 2011. Only 46 of the 70 companies were authorized to import oil products. The
list of the 46 Oil companies is presented in table 4.1 indicating the name and year of registration.
36
Table 4.1: Oil Companies and Year of Establishment
REGISTERED
PETROLEUM COMPANY
YEAR OF REGISTRATION
1. BP Tanzania Ltd 1936
2. Caltex Tanzania Ltd 1998 for 2nd time, 1961 for 1st time
3. East African Fuel Company
Ltd
1998
4. Engen Petroleum Tanzania
Ltd
1996
5. Gapco Tanzania Ltd 1994
6. Kobil Tanzania Ltd 2000
7. Mansoor Industries Ltd 1999
8. National Oil Tanzania Ltd 1994
9. Oilcom Tanzania Ltd 1998
10. Oryx Tanzania Ltd/Agip 1999/1966
37
Continuation of table 4.1 Oil Companies and Year of Establishment
11. Shell Tanzania Ltd 1998 for the 2nd time, 1936 for
the 1st time
12. Total Tanzania Ltd 1969
13. Kotra Company Ltd 1998
14. Jitegemee Trading
Company Ltd
1998
15. H.A.M (T) Ltd 2000
16. Gapoil 1995
Source: Tanzania Association of Oil Marketing Companies annual report 2005
Along with increased number of Oil companies, there have been increased retail petrol outlets.
Some of new petrol stations that were established in late 1990s were:- Oryx Kimara, Engen
Ubungo, BP Fire, GAPCO Magomeni, BP Bahama mama, Hass Vctoria, BP Mwenge, BP
Mikocheni, TOTAL Morogoro/Bibi titi road.
Another notable change in the petroleum industry was a closure of TIPER refinery in 2001.
Therefore, currently no oil refine is been carried in the country. Oil companies import oils ready
for use.
4.3 Kind of products of products sold by oil companies
The company respondents were asked to list kind of products they dealt with. The responses
were as summarized in table below.
38
Table 4.2: Kind of products sold by oil companies
Kind of Products Frequency Percent
Fuels, LPG, Lubes 3 30% Fuels, Lubes 7 70%
Total 10 100%
Source: Field survey
This table shows that there are mainly two groups of companies, that there were those that dealt
with fuel and lubricants only (70%) and those who dealt with fuel, gas (LPG) and lubricants
(30%) of the companies.
During a discussion with some respondents, most of them admitted that some new brands had
been introduced such as Oryx petrol, sigma trubo, catrol motor oil SAI 40, SAE 90, and Real
Star lubricant for Gapco, and mogas. The nature of competition is on products offered that are
similar and used for one function. However there an increasing number of brands of specific
petroleum products especially lubricants as mentioned above. Some of the services offered by
petrol stations were: car wash, regular minor services (i.e. change filters, oil, water, tyre, wheel
balancing and alignment, retail stores, fast foods, fitness centre, ATMs, restaurants)
It may be noted that the above competition is intra competition based on goods and services. It
has to be known that petroleum products also compete with other sources of energy including
charcoal, fire wood, solar energy, biogas, electricity.
4.4 Which petrol stations customers used
Individual consumer respondents were enquired as which petrol stations they normally used and
their responses were as tabulated below.
39
Table 4.3: Petrol Station Used categorized by company
SN Petrol Stations Frequency Percent
1 BP 10 19%
2 Engen 5 10%
3 Camel Oil 3 6%
4 Simba Oil 1 2%
5 GBP 1 2%
6 Gapco 12 23%
7 lake Oil 3 6%
8 Oryx 7 13%
9 Oilcom 6 12%
10 Total Tanzania Ltd 4 8%
Total 52 100%
Source: Field survey
The above table shows the rate of use of petrol stations. The aim of the question was the
establish respondents satisfaction with the service they get from those petrol stations they use
mostly and establish whether they had witnessed any change of some marketing variables such
as product quality.
From the above result it now obvious that customer prefer refilling on Gapco, BP, Oryx, Oilcom,
Engen and Total.
All of the above Companies have wider spread network coverage of retail outlets and that could
be and added advantage over the other companies in which few customers have expressed
interest.
40
Table 4.4: Petrol Station Used categorized by District
District Frequency Percentage
Kinondoni 21 40%
Ilala 12 23%
Temeke 19 37%
TOTAL 52 100%
Source: Field survey
It can be seen from the table above that Kinondoni and Temeke percentages are higher than Ilala.
This is explained by a reason that though Ilala is part of of Dar es salaam city center where
businesses are mainly carried in the area and centre of all good offices there limited number of
petrol stations for safety reasons such as government ministries’ and departmental offices.
4.5 Length of time in using petrol station
To establish a trend of those marketing variables and objectivity of the consumer respondents,
consumer respondents were asked to indicate a time they had been using the stations. The
respondents were given choices of: less than one year, 1 to 5 years, 5 to 10 year and more than
10 years. The responses were as shown below.
Table 4.5: Length of time in using the petrol station
Time length Frequency Percent Less than a year 6 12%
1 to 5 years 20 38% 5 to 10 years 15 29%
More than 10 Year 11 21% Total 52 100%
Source: Field survey
41
As it can be seen on the table above that the majority of customers (38%) had used the petrol
station they indicated for a period of 1 to 5 years. Between the periods of 6 to 10 years only 29%
of customers have indicated to have used petrol stations while and 21% used the petrol stations
they indicated for a period of more than 10 years and 12% only have used petrol station
indicated for less than one year.
The difference in use of services of a particular petrol station was explained to include:-access
convenience, 24 hours service availed, belief that customers were given petrol for money paid
and the right quality of products, quality customer care/service and availability of other non fuel
business like ATMs, Super market and service bay
4.5 Satisfaction with the service and Marketing changes
Individual consumer respondents were asked to indicate whether they were satisfied with the
services they obtained from their petrol station of preferences and as well both individual
consumer and company respondents were asked to give their opinion whether they had witnessed
marketing changes in the industry. The responses for both questions are as summarized in the
below shown table.
42
Table 4.6: Satisfaction with the service
Satisfied with the services? Frequency Percent
Yes 38 73%
No 14 27%
Total 52 100%
Source: Field survey
This table shows that majority (73%) of the individual consumer respondents were satisfied with
the service they got from those petrol stations of their choice. 27% of the individual consumer
respondents were not satisfied. Some of the reasons given for not being satisfied with the
services were a habit of mixing kerosene with petrol (fuel adulteration) done by some petrol
stations, selling of substandard lubricants or service stations that put diesel into a car that was
meant for petrol. Some of the customers indicated to have reported substandard lubricants,
adulterated fuel and over pricing incidents to Ewura and between years 2008 to 2011.individual
customers have also expressed appreciations to a good job done by Ewura
Table 4.7: Liberalization and Marketing Strategies changes- consumer
Agreement whether liberalization has influenced change in Marketing strategies?
Frequency Percent
Yes 42 93%
No 3 7%
Total 45 100%
Source: Field survey
The above table shows that there is a correlation between liberalization of petroleum market and
change in marketing strategies employed by oil marketing companies. Of the 45 respondent, 42
(93%) have indicated to agree with this argument while 3 (7%) thought that there was no
correlation between there two variables above.
43
Table 4.8: Are there specific marketing Strategies?-Companies
Are there specific marketing Strategies Frequency Percent
Yes 10 100%
No 0 0%
Total 10 100%
Source: Field survey
Tables above indicate that Oil marketing Companies have specific marketing Strategies that are
used to market there products. Respondent where asked further to list down some of those
strategies and most of the companies where found to have more or less same strategies in place.
Most of the companies have segmented there markets and they have specific strategies for each
segment.
Most of the companies have indicated things like better pricing model, better terms of payment,
convenient and efficient loading facilities at the depots, discounts offerings on bulk purchase,
promotions via radio and road shows, advertisement and sponsorship, publicity and branding,
offering of quality products and safety measure practices.
44
4.6 Kind of changes experienced and witnessed
Customers observed the market changes on such things as shown on the table below.
Table 4.9: Marketing changes witnessed-Consumers
Changes Witnessed Frequency Percent
Competition 15 21.7%
Free market 5 7.2%
Technological Advancement 5 7.2%
High quality 8 11.6%
More Retail Outlets 14 20.3%
Poor quality 7 10.1%
Price irregularity 15 21.7%
Total 69 100%
Source: Field survey
From the table above, it is seen that (21.7%) of the individual consumer respondents attached
marketing changes to increase in number of service stations, those who attached marketing
changes to price irregularity were 21.7% where as another (5%) said marketing changes were
due to free market. Other listed marketing changes witnessed as can be seen on the table above
were: competition, high and poor quality products, and increase in number of oil companies.
On the other hand, company respondents indicated factors such as liberalization of petroleum
sector, mushrooming of Oil marketing companies and private petrol stations and price war as
marketing changes that they mainly experienced. It can be noted that company respondents
marketing changes were not very different from those indicated by the individual consumer
respondents.
Responses noted above were also in line with literatures cited changes. Such changes as
increased number of oil companies, increased number of products offers and increased number
of petrol retail outlets (Impact Consultants Ltd 2003).
4.7 Trend of petroleum products quality
45
Both individual consumer and company respondents were asked to indicate a trend of petroleum
products quality. Respondents were given options to choose from and the options were to
indicate whether the quality of petroleum products had improved, remained the same or had
decreased. There were mixed responses with individual consumer respondents as shown in the
summary on the table below. On the other side, all company respondents indicated that the
quality of petroleum products had improved.
Table 4.10: Trend of Petroleum products quality
Trend of Petroleum products’ quality Frequency Percent
Has improved 35 67%
Has remained the same 2 4%
Has decreased 15 29%
Total 52 100%
Source: Field survey
As can be seen from this table, 67% of the respondents felt that the quality of petroleum products
had increased, when 29% of the respondents indicated that the quality of petroleum products had
gone down. Only 4% of the respondents thought that the quality of the petroleum products had
remained the same.
For those who supported the assertion that the quality had improved, when they were asked in a
discussion as what exactly influenced them to take such a position/comment, most of them
mentioned factors such as improved product performance, improved product features such as
packaging and availability (now sold in supermarkets unlike in he past when they were found in
oil companies’ retail outlets) been among factors that contributed to their position/comment.
4.8 Trend of petroleum products price controls
Both individual consumer and company respondents were asked indicate a trend of price control
for petroleum products. Respondents were given options to choose from and options were:
46
petroleum product price were highly controlled, partially controlled, controlled accordingly or
were uncontrolled or they were unaware of the trend.
There was almost a similar direction of thinking for both company and individual consumer
respondents. Though all respondent from Oil marketing companies indicated that the price where
controlled accordingly. Summary of their responses are tabulated below.
Table 4.11: Trend of Petroleum products price controls-company
Trend of Petroleum products price controls Frequency Percent
Controlled Accordingly 8 80%
Partially Controlled 2 20%
Un aware 0 0%
Uncontrolled 0 0%
Highly uncontrolled 0 0%
Total 10 100%
Source: Field survey
Table 4.12: Trend of Petroleum products price controls-consumers
Trend of Petroleum products price controls Frequency Percent
Controlled Accordingly 21 34%
Partially Controlled 14 23%
Un aware 1 2%
Uncontrolled 25 40%
Highly uncontrolled 1 2%
Total 62 100%
Source: Field survey
It is obvious from the tables above that both individual consumer respondents were of the
opinion that prices were not controlled. Overall 57% of the respondent believe that the price are
controlled while 2% where not aware of the situation. 42% of the respondent believe that the
price where not controlled at all. When they were asked to explain the basis of there belief most
47
of the respondent where of the opinion that oil marketing companies where more powerful and
very influential to the extent of dictating all terms which where in there favor.
4.9 Ranking of competition in the petroleum industry
Table 4.13: Trend of competition in the petroleum industry
Ranking Competition Frequency Percent
Very High Competition 35 67%
High Competition 12 23%
Moderate Competition 5 10%
Low Competition 0 0%
No Competition 0 0%
Total 52 100%
Source: Field survey
As one the variables a researcher wanted to establish its status, respondents were asked to rank
competition among Oil companies. There were similar trend of results between individual
consumer and company respondents. 47 of the individual consumer respondents (90%) were of
the opinion that competition has increased. The remaining percentage (0%) of individual
consumer respondents were of different views, i.e10% thought that competition remained the
same while none were of the opinion that competition had decreased. All Oil marketing company
respondents were of the opinion that competition had increased.
However, a discussion with one of the senior officials of two of the oil marketing Companies
revealed that competition in industry was growing very high.
In the context of competition trend, when both individual consumer and company respondents
were asked to pin point factors that could have lead increased competition if they thought so, a
total of 55 respondents (88.71% of 62 total respondents-consumer and company respondents)
listed some factors such as increase in petrol stations, free market facilitating more petroleum
product imports and increased number of oil companies. Two of the respondents of this question
48
indicated that tax evasion could be fueling competition on one hand and killing competition on
the other hand depending on how advantage saved from evasion is used. If the saving from tax
evasion would reflect in petroleum products prices, then this would fuel price war.
4.9 Petroleum Products Promotion
Respondents were asked of their perception on the status/trend of promotion in the petroleum
industry. There were mixed responses to this question, both from the individual consumer and
company respondents.
For company respondents, a split of perception was noted, that 30% believed that petroleum
products were moderately promoted, another 30% believed that petroleum products were ‘just
promoted’ while the remaining 40% believe that petroleum products were not promoted. On the
other side, individual consumer respondents split as shown in the table below.
Table 4.13: Status of petroleum products promotion-Consumers
Status of Petroleum product promotion Frequency Percent
Highly Promoted 1 2%
Moderately Promoted 9 17%
Just promoted 10 19%
Not Promoted 28 54%
Not Sure 4 8%
Total 52 100%
Source: Field survey
It is clear from the above table that majority of individual consumer respondents (54%) were of
the opinion that petroleum products were not promoted. The remaining percentage splitted
between those who thought promotion was moderate (17%), those who believed petroleum
49
products were ‘just promoted’ (19%), while the 8% of the individual respondents were not aware
of status of promotion in the petroleum industry.
4.11 Status of Petroleum Products Distribution
Both individual consumer and company respondents were asked of their perception of about the
status of petroleum products distribution. There were different responses to this question,
company respondents splitted in two groups, one group (45%) believing that petroleum products
were adequately distributed while the second group (55%) believed that petroleum products were
not adequately distributed.
On the other side, individual consumer respondents were of different opinions as tabulated
below.
Table 4.14: Status of Petroleum Products Distribution-Consumers
Status of Petroleum product promotion Frequency Percent
Adequately distributed 35 67%
Inadequately distributed 13 25%
Not Sure 4 8%
Total 52 100%
Source: Field survey
Most of the individual consumer respondents (67%) were of the opinion that petroleum products
were adequately distributed, while 8% as can be seen on the above table were not sure of the
status of distribution of petroleum products. Only 13 individual consumer respondents were of
the opinion that the distribution was inadequate.
It can be observe that there were mixed perception between individual consumer respondents and
perception of the company respondents concerning the status of the distribution of petroleum
products. Researcher accords these two different positions to a limitation of this study. That is
consumer were likely to be thinking of Dar es Salaam petroleum product market (which is likely
50
to be adequately distributed) while company respondents might have focused on the distribution
to the whole country whereby a greater chance of inadequacy would be expected. This limitation
would be noted in chapter five to help future researches on this field.
4.12 Specific Marketing Strategies
Company respondents were asked to indicate their specific marketing strategies, all 10 Oil
companies indicated to have specific marketing strategies. Most of the respondents added a word
‘it depends’, to clarify more, respondents said marketing strategies adopted depended on which
product one is referring to and probably the kind of customer expected to be served. Some of the
strategies mentioned were: pricing strategy where price was key factor to get and/maintain the
market, cost minimization was another marketing strategy mentioned to be adopted by some of
these Oil companies. Differentiation was another strategy mentioned to be adopted by the
companies in the industry. When other indicated to be using quality of product and service as
their marketing strategy, other Oil companies indicated to be strategizing by establishing
reliability of their supplies.
A further discussion with different officials of these companies revealed that marketing strategies
employed by these companies were very much influenced by the free market economy. The free
market policy has opened doors for oil marketing companies to compete and find the strategies
of ensuring that they exist in the market profitably. That is for those who capitalized on pricing
strategy they experienced price marketing changes, likewise for those who used a niche strategy,
faced marketing changes related to the niche.
It was interesting to note during discussion with one of Oil marketing company officials that they
used corporate responsibility as one of their marketing strategy.
51
4.13 Challenges faced by Petroleum Industry
Both individual consumer and company respondents were asked to list some challenges they
thought were facing the petroleum industry. There were a number of challenges listed by all
respondents. Some of the challenges listed were: Fuel adulteration, depreciation of the local
currency against dollar, fake/sub-standard imported products especially lubricants, increase in
fuel prices was also mentioned as a challenge to the industry. Infrastructure especially roads
were still an issue to many Oil companies for efficient and effective transportation system, Tax
rates and tax evasion were still a big challenges to the industry. Meeting environmental concern
by the public had remained to a great concern and challenge to petroleum industry.
4.14 Summary of the analysis
This chapter presented mainly the findings gathered from the field during the field data
collection phase of the study. A number of descriptions have been given on the data gathered.
These findings are useful in coming up with conclusions that are useful in attempting to answer
the research questions, and to give recommendations that will be useful to both the practitioners,
policy makers and regulators of petroleum industry (EWURA). Such conclusions and
recommendations are presented in the next chapter.
52
CHAPTER FIVE
DISCUSSION, IMPLICATION OF FINDINGS AND RECOMMENDATIONS
5.1 Introduction
While the previous chapter dealt with the presentation and discussion of the research findings,
this chapter presents the summary and conclusions of the study, together with recommendations
that may be useful to the practitioners, policy makers and regulators of the petroleum industry
regarding factors influencing marketing changes in the petroleum industry in Tanzania.
Moreover, the suggested areas for further research are given so as to explore more and shed more
light on issues of marketing in petroleum industry.
5.2 Discussions and Implications
This study aimed at establishing how petroleum market liberalization has influenced the
marketing strategies employed by Oil marketing companies in Tanzania. More specifically, it
aimed at identifying and studying the alternative marketing approaches pursued by Oil
companies, examining marketing trends that have taken place in the industry, examining specific
marketing strategies used by different Oil companies.
The study also sought to establish challenges faced by petroleum industry and give
recommendations for a way out.
5.2.1 Conclusions
It was clear from the analysis made that petroleum market liberalization has played a greater role
in influencing the marketing strategies employed by Oil marketing. Some of the marketing
strategies were positives especially where price, quality, convenience and customer care were
used as a strategy. On the other hands where fuel adulation was used the consumers where highly
affected by such negative strategies.
Some of the government efforts to control petroleum industry are controls on quantities imported
by the installing meters at Dar es Salaam (KOJ) and Tanga ports. Fuel marking/bio coding by
Ewura has been some of controls put up by the government. However government should seek to
53
increase its checks and balance on the marketing strategies used in the industry. This should be
so because petroleum industry is one the industries that forces of demand and supply do not work
effectively. Petroleum products are very unique and so basic, demand side of the industry does
not have strong options that could affect supply and other variables such as price and quality. It
is therefore important to put up checks and balance between demand and supply of petroleum
products. In line with this, government has taken a strong initiative of establishing a regulatory
authority (EWURA) in the year 2007
Competition in the industry is not very strong enough to check and balance variables such as
prices and quality. Though there indications of competition in the industry as stipulated on
previous chapter, the variable (competition) is still ranked moderate. Policy makers should
address this fact in order to boost up serious competition in the industry. The first issue that
needs to be addressed concerns the seriously unequal bargaining position of the independent
gasoline retailers’ vis-à-vis their suppliers. There is recognition from a discussion in the previous
chapter that some of retail stations are not independently owned (CODO), and some of them are
managed by employees of the “flag” companies (COCO). With this in mind, the Ewura should
constantly take immediate steps to control petroleum distribution and product pricing.
Petroleum products are not adequately promoted. There was admission from both sides of
consumers and oil companies that promotion for petroleum products was very low and
sometimes, one might say that promotion for petroleum products is almost not there. This is
could be explained by the fact that competition in the industry is as well ranked very low. This
could be useful to future researches in the industry to establish whether sales and market share
could be increased by increasing promotion of petroleum products. Research and Development
(R&D) should be utilized by the Oil companies to establish unutilized markets and seek to
establish better ways and strategies to reach them. For those Oil companies that do not have
research and development department, it would be of great importance to establish one.
54
Distribution of petroleum products is not adequate. Though there have been controversial
responses between individual consumer respondents and company respondents, more weight was
given to company respondents particularly on this question because they better know where
certain products are distributed and where they are not. Company respondents generally were of
the opinion that distribution of petroleum was not adequate. This could prompt future researchers
to look at this scenario as pointed out in the previous chapter that may be company respondents
were basing their opinion countrywide while individual consumers considered only areas of their
reach.
Based on the findings of this study, product quality had generally improved. Product
performance and improved product features had been mentioned as some of the factors
contributed to improved product quality. On the other hand, challenges that are faced from
inferior and substandard imported products should be combated by the respective stakeholders
such as government agency on quality control (Tanzania Bureau of Standards-TBS) and Ewura
There were a lot of challenges mentioned to be facing petroleum industry. Some of the
challenges have been mentioned in some of the conclusions made above. Other challenges such
poor infrastructural system, high tax rates and tax evasions, environmental challenges should be
looked at with closer eyes from all stakeholders to this industry. There is a saying that “it takes
two fingers to crush lice”
55
CHAPTER 6
RECOMMENDATIONS
6.0 Recommendations
Basing on the findings and conclusions of this study, the following recommendations are put
forward.
6.1 Petroleum industry challenges
Petroleum industry is faced with a lot of challenges as already mentioned in the previous
discussions. TBS should take a firm role in combating substandard petroleum products imported
as well as those locally made. Government should keep on giving priority to the infrastructural
systems, new ways of transporting petroleum products may be adopt such as constructing
pipeline for transporting fuel etc as this mean would minimize looses to oil companies and at the
same time would encourage investments. It would add value to review tax rates on petroleum
products, this would discourage tax evasion. Oil company as individual companies and
petroleum industry as a sector in the economy should seek to protect and conserve environments.
6.2 Petroleum product pricing
As it has been discussed in the previous discussions, determination of petroleum product price
should be left only to the market forces because a force of demand has negligible influence on
supply and price of these products. There is then a necessity for government to constantly
intervene and adjust the prices both through advices to oil companies and though its policy.
6.3 Research and Development
A role played by research and development should be enhanced in the industry. It would be
helpful for each Oil company to have its own research and development department and
collectively the Tanzania Association of Oil Marketing Companies (TAOMC) should seek to
56
establish such a department too. The department would facilitate improvement in production,
operation and marketing of petroleum products.
6.4 Compliance to other applicable regulations
Clients should adhere to other laws related to the procurement of goods/services when procuring
audit services, in the case of Tanzania, the Public Procurement Act (2004), especially the
competitive tendering practice should be applied.
6.5 Suggestions for Future Research
Due to limited resources in terms of time and finances, the survey was made only for Dar es
Salaam-based companies. Although this is considered reasonable due to the large proportion of
Oil companies being in the city, a more insightful study done across the whole country could
make the conclusions richer as they will incorporate the views of the up-country operating
companies as well as individual consumers. This could be important as the extent of competition
in those places could be different due to the number of petroleum products operators and the
customers.
More areas that could be useful to the industry are recommended for future research as follows:
(i) The role of research and development in enhancing competition the petroleum
industry
(ii) Position of promotion in the petroleum industry in enhancing utilization of unutilized
markets
57
REFERENCES
Akinyele, S.T. (2010). Impact of strategic marketing management on the performance of
firms in the downstream sector of Nigerian oil and gas Industry, PhD Thesis postgraduate
school, Covenant University, Ota.
Bartlett, James E., J. W. Kotrlik, and C.C. Higgins, “Organizational Research:
Determining Appropriate Size in Survey Report,” Information Technology, Learning, and
Performance Journal, 19, no. 1 (2001): 43-50
Bryan, Adam, “Paradigm peace and the implications for quality,” International Journal of
Social Research Methodology, no. 9 (2006):111-26
Denzin, Norman K.., The Research Act: A Theological Introduction to Sociological
Methods. Chicago: Aldine, 1970.
Dixon, B. R., A Handbook of Social Science Research: A Comprehensive and Practical
Guide for Students. Oxford: Oxford University Press, 1988.
EWURA Annual Report for the Year Ended June 2008(Dar es Salaam: EWURA, 2008
EWURA homepage: Introduction to Petroleum. EWURA 2007/2008, accessed 15 June
2009; available from http://www.ewura.go.tz/petroleum.html; Internet.
EWURA homepage: Overview. EWURA 2007/2008, accessed 15 June 2009; available
from http://www.ewura.go.tz/overview.html; Internet.
EWURA homepage: Overview. EWURA 2007/2008, accessed 4 July 2009; available from
http://www.ewura.go.tz/overview.html; Internet.
EWURA Licensing Database. Dar es Salaam: EWURA, 2009, summary sheet
Gashaza, Julius. “Adulteration of Petroleum Products Paper” EWURA, 2009, 1.
Gashaza, Julius. “Adulteration of Petroleum Products Paper” EWURA, 2009,1
http://www.bp.com/genericarticle.do?categoryId=16003471&contentId=7020815
http://en.wikipedia.org/wiki/Marketing_strategy"
http://www.tanzania.go.tz/energy.html
http://www.ewura.go.tz/pdf/Notices/Detailed%20Analysis
58
APPENDIX
1
A QUESTIONNAIRE ON MARKETING STRATEGIES EMPLOYED BY OIL
MARKETING COMPANIE IN TANZANIA
QUESTIONAIRE FOR OIL COMPANIES
Identification: (Please do not fill this identification part)
Questionnaire serial
No.
Company
name(optional)
District Location
Introduction:
As a partial requirement for fulfillment of Masters of Science’s degree in Marketing at the
Mzumbe University, a student is required to submit a dissertation which in this case, this
questionnaire is drafted to collect information for the dissertation. This study aims at examining
the impact of petroleum industry liberalization on marketing Strategies employed by Oil
Marketing Companies in Tanzania. Results of this study will add to the body of knowledge of
the industry. We therefore request you to supply the information asked for below.
We would like to assure you that no information will be used for purpose other than this study.
Thank you for your willingness to participate in this study
Section A: General Information
Please answer the following questions by ticking or writing correct answers in spaces provided.
1. For how long have you been operating in Tanzania?
_________________________________
2
2. What products offered by your company? (please list them)
…………………………………………………………………………………………………
…………………………………………………………………………………………………
……………………………………………………………….
3. Have been in this industry for more than 10 years?
(a) Yes (b) No
4. If answer to question No. 3 is ‘Yes’, how have marketing strategies been different from
those before petroleum industry liberalization?,
……………………………………………………………………………………..
……………………………………………………………………………………...
………………………………………………………………………………………
Section B: Marketing variables Strategies
Please tick or circle an answer of your choice for those questions with alternative choices.
1. What has been the quality of petroleum products in Tanzania since liberalization of the
Petroleum sector (generally)?
(a) Has improved
(b) Has remained the same
(c) Has decreased
2. What has been the trend of price control of petroleum products after liberalization of the
sector?
(a) Is controlled accordingly
(b) Is partially controlled
(c) Unaware
3
(d) Uncontrolled
(e) Highly uncontrolled
3. How would you rank competition among companies in the petroleum industry?
a) Very high competition
b) High competion
c) Moderate competion
d) Low competition
e) No competition
4. What has been the trend of competition among companies dealing with the distribution of
petroleum products within the industry in Tanzania over time from 1980s?
(a) Competition has increased
(b) Competition has remained in the same level
(c) Competition has decreased
5. If your answer to question no 4 is (a) what factors do you think could have caused the
increased competition?
a) Information Communication and Technology (ICT)
b) increased demand
c) managements
d) promotion
e) Others (please mention)…………………………………………………………
4
6. What is you opinion on petroleum product concerning their promotion in Tanzania?
(a) Highly promoted
(b) Moderately Promoted
(c) Just promoted
(d) Not promoted
(e) No sure
7. What is your comment on distribution of petroleum products in Tanzania?
(a) Adequately distributed
c) Inadequately distributed
(b) Not sure
8. Are there specific marketing strategies that you use to market your products?
a) Yes
b) No
9. If the answer to question No 8 is “Yes”, could you list down some of the specific
strategies that you use?
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
5
10. What challenges do you face in marketing of petroleum products
…………………………………………………………………………………………………
…………………………………………………………………………………………………
…………………………………………………………………………………………………
11. What should be done to rectify any change/irregularity if the strategy has a negative
impact to the economy?
………………………………………………………………………………………………
………………………………………………………………………………………………
……………………………………………………………………………………………..
12. Give any comment / observation on Petroleum Industry in Tanzania you might have BUT
not covered here before.
…………………………………………………………………………………………………
…………………………………………………………………………………………………
…………………………………………………………………………………………………
6
A QUESTIONNAIRE ON MARKETING STRATEGIES EMPLOYED BY OIL
MARKETING COMPANIE IN TANZANIA
QUESTIONAIRE FOR INDIVIDUALS
Identification: (Please do not fill this identification part)
Questionnaire serial
No.
Region District Location
Introduction:
As a partial requirement for fulfillment of Masters of Science’s degree in Marketing at the
Mzumbe University, a student is required to submit a dissertation which in this case, this
questionnaire is drafted to collect information for the dissertation. This study aims at examining
the impact of petroleum industry liberalization on marketing Strategies employed by Oil
Marketing Companies in Tanzania. Results of this study will add to the body of knowledge of
the industry. We therefore request you to supply the information asked for below.
We would like to assure you that no information will be used for purpose other than this study.
Thank you for your willingness to participate in this study
Section A: General Information
Please answer the following questions by ticking or writing correct answers in spaces provided.
1. Please indicate your sex. (optional)
(a) Male
b) Female
2. Indicate at least two petrol stations you normally use to have your petroleum products
(e.g BP (Mikocheni) , Gapco ( Azikiwe) etc…) _________________________________
7
3. For how long have you been purchasing petroleum products in those stations / centers?
(a) Less than a year (b) 1-5 Years (C) 6-10 Years (D) More than 10 years
4. What products do you normally purchase from those stations (e.g. Oils (lubes), petrol,
kerosene. LPGas etc)……………………………………………………….
5. Are you satisfied with the services that are being offered by those stations?
(a) Yes
(b) No
6. Are you aware or Do you agree that petroleum industry liberalization has constituted to
changes in oil marketing companies’ Marketing Strategies in Tanzania?
(a) Yes (b) No
7. If answer to question No. 6 is ‘Yes’, what kind of changes you have witnessed?
……………………………………………………………………………………..
……………………………………………………………………………………...
………………………………………………………………………………………
8
Section B: Marketing variables Strategies
Please tick or circle an answer of your choice for those questions with alternative choices.
1. What has been the quality of petroleum products in Tanzania since liberalization of the
Petroleum sector?
(a) Has improved
(b) Has remained the same
(c) Has decreased
2. What has been the trend of price control of petroleum products after liberalization of the
sector?
(a) Is controlled accordingly
(b) Is partially controlled
(c) I am Unaware
(d) Uncontrolled
(e) Highly uncontrolled
3. How would you rank competition among companies in the petroleum industry?
a) Very high competition
b) High competion
c) Moderate competion
d) Low competition
e) No competition
9
4. If your answer to question no 3 is (a) what factors do you think could have caused the
increased competition?
a) Information Communication and Technology (ICT)
b) increased demand
c) managements
d) promotion
e) Others (please mention)…………………………………………………………
5. What is you opinion on petroleum product concerning their promotion in Tanzania?
(a) Highly promoted
(b) Moderately Promoted
(c) Just promoted
(d) Not promoted
(e) No sure
6. What is your comment on distribution of petroleum products in Tanzania?
(a) Adequately distributed
c) Inadequately distributed
(b) Not sure
7. What challenges do you think are facing marketing of petroleum products
…………………………………………………………………………………………………
…………………………………………………………………………………………………
………………………………………………………………………….
10
8. What should be done to rectify any change/irregularity if the strategy has a negative
impact to the economy?
………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………
9. Give any comment / observation on Petroleum Industry in Tanzania you might have BUT
not covered here before.
…………………………………………………………………………………………………
…………………………………………………………………………………………………
…………………………………………………………………………..
11
APPENDIX 2
REGISTERED PETROLEUM
COMPANY YEAR OF REGISTRATION
1. BP Tanzania Ltd 1936
2. Caltex Tanzania Ltd 1998 for 2nd time, 1961 for 1st time
3. East African Fuel Company Ltd 1998
4. Engen Petroleum Tanzania Ltd 1996
5. Gapco Tanzania Ltd 1994
6. Kobil Tanzania Ltd 2000
7. Mansoor Industries Ltd 1999
8. National Oil Tanzania Ltd 1994
9. Oilcom Tanzania Ltd 1998
10. Oryx Tanzania Ltd/Agip 1999/1966
11. Shell Tanzania Ltd 1998 for the 2nd time, 1936 for the 1st
time
12. Total Tanzania Ltd 1969
13. Kotra Company Ltd 1998
14. Jitegemee Trading Company Ltd 1998
15. H.A.M (T) Ltd 2000
16. Gapoil 1995
17. World Oil
18. HASS Petroleum 1997