Factors that influence commercial customer’s choice of petroleum fuel supplier in Zambia: a case of spectra oil in Lusaka.

Abstract

Oil Marketing Companies (OMC) uplift the refined products petroleum fuels from TAZAMA fuel Terminals dotted around the country and distribute them for sale to the service stations and commercial customer. Since 2013, Zambia’s petroleum sector has experienced a significant increase (from 21 licensed Oil Marketing Companies to over 55 in 2018). This has resulted in fierce competition among OMCs when it comes to serving commercial customers. Unlike service stations customers who are subjected to Uniform Pump Pricing (UPP), Commercial customers are bulk buying customers, product get delivered to their site and are able to negotiate price. Furthermore, all OMCs draw fuel from TAZAMA and this has limited the avenue of differentiating of one OMC offering from the other. Against this background, most OMCs have found it very challenging to create brand loyalty among their commercial customers. This deemed it imperative to investigate what influences choice of petroleum fuel supplier among commercial customers in Zambia. The target sample was 150 commercial customers of Spectra. The study employed purposive sampling techniques to select respondents. Both qualitative and quantitative data analysis methods were used as regards sources of data. The study utilized a descriptive, correlational methods, and cross sectional study. Primary data was analyzed with the use of SPSS version 21. It was concluded from the findings that choice of Petroleum fuel supplier is affected by Time and Territory Management, brand preference, service quality and advertising. All these variables were found to be positively related to commercial customer’s choice of petroleum fuel supplier and the relationships were also significant. The study recommended that management should allocate or rather invest more in customer service excellence training of its staff and advertising in order to improve its brand loyalty and raise brand awareness among commercial customers Keywords: oil marketing company, commercial customer, brand preference, advertising, service quality, time and territory management.