About Petronas

PETRONAS Lubricants International (PLI) headquartered in Kuala Lumpur, Malaysia, operates in over 50 countries worldwide. As the national oil and gas company of Malaysia, it engages in upstream exploration and production, downstream refining and marketing, and gas and renewable energy solutions. With annual revenues exceeding $50 billion, PETRONAS is a major player in the global energy market. The company’s diverse operations include retail outlets like gasoline stations and supermarkets. PETRONAS is committed to sustainable energy initiatives and innovation in the energy sector.

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we aim to grow together

"SYMSON helps us conduct a two-country A/B test by implementing our new price elasticity model in one market while maintaining our traditional pricing in another. This approach allows us to learn from real-world results and refine our pricing strategies across the supply chain."

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Confidentiality Notice: Due to the terms of a Non-Disclosure Agreement (NDA) this business case will maintain a high-level overview. Detailed proprietary information, data points, and specific methodologies have been omitted to ensure compliance with confidentiality obligations.

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Petronas Lubricants, like many manufacturers experienced significant disruptions in their value chain due to the global COVID-19 pandemic. The simultaneous closure of economies and their rapid reopening exposed new levels of volatility, forcing businesses to rethink and recalibrate their strategies. This business case outlines how SYMSON partnered with Petronas Lubricants to analyze and optimize their value chain, from raw material acquisition to the impact of promotions, while factoring in global uncertainties.

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The Challenge

The pandemic introduced unprecedented challenges across the value chain. Supply bottlenecks, fluctuating demand, and unpredictable pricing became the new norm. Petronas Lubricants, as a manufacturer of essential products, needed to assess how its value chain processed and delivered value, particularly in the sourcing of its base element, base oil.

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• Base Oil Cost Fluctuations
  Petronas Lubricants encountered significant price swings in sourcing base oil, leading to difficulties in maintaining stable pricing across their product range. These fluctuations impacted cost structures, forcing the company to rethink its pricing models regularly.

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• Volatility in Supply and Demand
  With unpredictable shifts in demand and inconsistent supply availability, the company had to find ways to adjust pricing strategies dynamically. This required new methods to mitigate risks and optimize pricing decisions under uncertainty.

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• Promotional Campaign Effectiveness
  The unpredictability of the market made it difficult to assess whether promotional activities were generating value. Petronas needed insights into how pricing promotions were contributing to profitability amidst fluctuating market conditions.

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SYMSON’s advanced data analytics platform helped Petronas Lubricants map out their entire value chain, from raw material procurement to downstream market activities. This holistic approach allowed the company to reassess their pricing strategies, ensuring they could respond effectively to volatility. The scalable solution provided a framework that not only addressed current pricing challenges but also offered long-term adaptability across various markets and regions.

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The Opportunity

With SYMSON's support, Petronas conducted a comprehensive proof of concept, applying price elasticity analysis throughout the supply chain.

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The initiative sought to:

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• Compare Pricing Models:
  Implementing the new model in Country A while maintaining traditional pricing in Country B to gather insights on both approaches.

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• Enhance Data Usage
  Improving the collection, understanding, and utilization of data for more informed pricing decisions.

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• Optimize Pricing:
  Identifying price points that maximize revenue and align with customer willingness to pay, particularly in the unique context of gas station supermarket products.

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• Scale for Global Application:
  Designing a scalable pricing framework that could be adapted across 130 countries, considering local market nuances and store formats.

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The Solution

SYMSON’s collaboration with Petronas focused on several key areas:

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• Data Collection and Usage:
  Enhanced understanding of data fields and optimized data collection, providing a solid foundation for price elasticity analysis.

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• Price Optimization:
  Using machine learning, we refined pricing strategies to respond to customer behavior and market conditions more effectively.

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• Scalable Methodology:
  We introduced a methodology that allows for global application, ensuring consistency while accommodating regional differences.

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• Promotions Strategy:
  Clear guidelines for collaborating with resellers on promotions ensured alignment with pricing strategies, increasing both sales and brand consistency.

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Results and Future Outlook

Although detailed results cannot be disclosed due to NDA restrictions, the use of this analytical framework has helped Petronas Lubricants to better navigate future uncertainties in the value chain. The insights gained from the project will allow for continuous improvements and provide a foundation for future strategic initiatives across global operations.