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ACKNOWLEDGEMENT
We thank Prof. Amit Baruah, under whose supervision and guidance this report
was completed successfully.
We would also like to thank our parents and friends who rendered their whole
hearted co-operation in the successful completion of the project work.
Finally, we are thankful to all the people who willingly responded to our
questionnaire and whose contribution has been invaluable. This project would not
have been completed without their participation.
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PREFACE
The primary objective of this report is to provide the readers the insight into CRM
Practices followed in Fuel Retailing Industry, Behavior of consumers towards it
and different opinions generated out of such practices.
We hope that the report has made the text interesting and lucid. In writing this
report, we have benefited immensely by referring to many publications and
articles. We express my gratitude to all such authors and publishers.
Any suggestions to improve this report in contents or in style are always welcome
and will be appreciated and acknowledged.
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DECLARATION
We hereby declare that all the information that has been collected, analyzed and
documented for the project is authentic possession of us.
We would like to categorically mention that the work here has neither been
purchased nor acquired by any other unfair means. The data and information
existing in this report are accurate and update to the current data, to the best of our
knowledge.
However, for the purpose of the project, information already compiled in many
sources has been utilized.
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CONTENTS
OPERATIONAL Pg. 13
ANALYTICAL Pg. 14
COLLABORATIVE Pg. 15
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SUMMARIZING CRM ACTIVITES Pg. 24
SUGGESTIONS Pg. 56
BIBLOGRAPHY Pg. 60
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OBJECTIVES OF STUDY
GOALS:
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INTRODUCTION TO CRM
Any CRM initiative is and has the potential of providing strategic advantages to
the organization, if handled right.
Most CRM initiatives begin with a strategic need to manage the process of
handling customer related information more effectively. For beginners it could
simply mean better lead management capabilities or sales pipeline visibility.
However, as organizations mature in their CRM initiatives, they begin to look at
CRM as tool to acquire strategic differentiators. Despite the immense benefits that
the CRM solutions can deliver, they are not entirely without their share of
problems.
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THE EMERGENCE OF CRM PRACTICE
Looking back at a snapshot history of marketing, we can see the following clear
developments and progression over the last four decades:
1960’s – the era of Mass Marketing, when Gibbs SR toothpaste began the
first marketing of this kind with its black and white campaign.
1980’s – where Niche Marketing made millionaires of those who were best
at it.
In recent years however, several factors have contributed to the rapid development
and evolution of CRM. These include:
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appliances and even consumables, the de-intermediation process is fast
changing the nature of marketing and consequently making relationship
marketing more popular. Databases and direct marketing tools give them the
means to individualize their marketing efforts.
3. The growth in service economy. Since services are typically produced and
delivered at the same institution, it minimizes the role of the middlemen.
4. Another force driving the adoption of CRM has been the total quality
movement. When companies embraced TQM it became necessary to involve
customers and suppliers in implementing the program at all levels of the
value chain. This needed close working relationships with the customers.
Thus several companies such as Motorola, IBM, General Motors, Xerox,
Ford, Toyota, etc formed partnering relations with suppliers and customers
to practice TQM. Other programs such as JIT and MRP also made use of
interdependent relationships between suppliers and customers.
9. On the supply side it pays more to develop closer relationships with a few
suppliers than to develop more vendors.
10. In addition several marketers are concerned with keeping customers for life
than making one time sale. There is a greater opportunity for up selling and
cross selling.
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ARCHITECTURE OF CRM
OPERATIONAL CRM
Operational CRM means supporting the "front office" business processes, which
include customer contact (sales, marketing and service). Tasks resulting from
these processes are forwarded to resources responsible for them, as well as the
information necessary for carrying out the tasks and interfaces to back-end
applications are being provided and activities with customers are being
documented for further reference.
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Operational CRM provides the following benefits:
• Delivers personalized and efficient marketing, sales, and service through multi-
channel collaboration.
• Enables a 360-degree view of your customer while you are interacting with
them.
• Sales people and service engineers can access complete history of all customer
interaction with your company, regardless of the touch point
ANALYTICAL CRM
In analytical CRM, data gathered within operational CRM and/or other sources are
analyzed to segment customers or to identify potential to enhance client
relationship. Customer analysis typically can lead to targeted campaigns to
increase share of customer's wallet.
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COLLABORATIVE CRM
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KEY CRM PRINCIPLES
DIFFERENTIATE CUSTOMERS
All customers are not equal; recognize and reward best customers
disproportionately. Understanding each customer becomes particularly important.
And the same customers’ reaction to a cellular company operator may be quite
different as compared to a car dealer. Besides for the same product or the service
not all customers can be treated alike and CRM needs to differentiate between a
high value customer and a low value customer.
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MAXIMIZING LIFE TIME VALUE
Exploit up-selling and cross-selling potential. By identifying life stage and life
event trigger points by customer, marketers can maximize share of purchase
potential. Thus the single adults shall require a new car stereo and as he grows into
a married couple his needs grow into appliances.
INCREASE LOYALTY
Loyal customers are more profitable. Any company will like its mindshare status to
improve from being a suspect to being an advocate. Company has to invest in
terms of its product and service offerings to its customers. It has to innovate and
meet the very needs of its clients/ customers so that they remain as advocates on
the loyalty curve.
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ADVANTAGES OF CRM
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THE SURVEY FACTS
CRM is not just a guarantee for quicker growth and bigger revenues but also a
means to keep up with competition. Through CRM, you can determine the
Customer Lifetime Value or in other words, the present and projected business
worth of a customer to your organization. This once known, acts as the basis on
which you can formulate marketing strategies targeting customers individually.
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5 STEPS TO SUCCESSFUL IMPLEMENTATION OF CRM
Many organizations have burned their fingers trying to implement the technology
and manage costs. To successfully undertake CRM initiatives it is essential to
There are many technological components to CRM, but thinking about CRM in
primarily technological terms is a mistake. The more useful way to think about
CRM is as a process that will help bring together lots of pieces of information
about customers, sales, marketing effectiveness, responsiveness and market trends.
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KEY CHALLENGES IN IMPLEMENTING CRM SOLUTIONS
Companies around the world have leveraged CRM strategies to gain competitive
advantage. As more and more companies rush to implement CRM, precautions
must be taken to do it right. It is approximated that 50-70% CRM implementations
fail, depending on the Industry vertical. Hence, it is essential to identify the key
challenges, address risks and build a strategy that can make your CRM successful.
CRM is full of talk about strategy, but at the end of the day, someone has to lead
the way and implement, even if operations report that the network is operating
perfectly and services are running normally, your customers may not be happy,
leading to revenue shortfall and increasing levels of churn.
GAP MODEL
There is a gap because of which a market goes up or come down. What the
company perceives and what the customers perceives is different. It is this gap
which identifies a product of the company as product centric. The customer has a
different point of view. He may focus on the price.
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SUMMARIZING CRM ACTIVITIES
Creating loyalty.
Creating profits.
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FUEL RETAILING IN INDIA
OVERVIEW
1976, India barred the private sector from participating in fuel retail and
nationalised the local businesses of international oil companies. Brands commonly
seen at petrol stations elsewhere in the world - Shell, Esso and Caltex -disappeared
from the Indian market. Shell, for instance, became Bharat Petroleum and Esso
metamorphosed into Hindustan Petroleum.
While the private sector welcomed the liberalised market, in practice it came with
several strings attached. Private players were required to invest at least 20 billion
rupees (around $500 million) in refineries, pipelines or other energy-related assets
in the country, limiting the number of new entrants. And although the government
abolished formal controls on fuel prices, it continued to dictate them indirectly
through the pricing policy of India’s national oil companies (NOCs). These factors
have slowed the evolution of the sector – at least for the moment.
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PROMISING ROAD AHEAD
The Indian market for transportation fuels holds a lot of promise. The country’s
aspiring middle class, recently estimated at 40 million households by consultancy
McKinsey, is becoming increasingly motorised. Small towns are expanding at a
rapid pace, sparking investment in roads and other infrastructure. The largest
express highway project in India, for example, aims to link the cities of New Delhi,
Mumbai, Kolkata and Chennai with a system of four- to six-lane highways.
Automobile sales, which today number just over a million vehicles a year, could
reach 20 million a year by 2030, predicts US-based consultancy Keystone, making
India the third-largest automobile market in the world after China and the USA.
Moreover, the fact that many of India’s service stations are poorly designed and
congested leaves a natural opening for newcomers who offer a better alternative.
Typical old-fashioned Indian service stations feature long queues, cars jockeying
for position, oily forecourts and hand-operated petrol pumps that may not
accurately measure the volume of each sale. They also lack convenience stores or
other facilities.
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Shell is so far the only international oil company to enter the Indian retail market.
The company’s development of a liquefied natural gas terminal and regasification
facility at Hazira allowed it to meet the government’s call for investment. In 2005,
after an absence of nearly three decades, Shell opened a new petrol station in India.
Run by a former Pizza Hut manager with a track record of good customer service,
the station - on Dr. Rajkumar Road in Bangalore - quickly became a landmark
thanks to its team of efficient attendants directing traffic, cleaning windshields and
pumping petrol. Today Shell operates 35 stations in southern India.
India’s NOCs dominate the market that the newcomers have entered. Bharat
Petroleum, Indian Oil and Hindustan Petroleum have vast networks of petrol
stations across India - approximately 30,000 in all. Many of these petrol stations
were inherited from the old multinationals or established when land prices were
much lower than they are today.
NEW COMPETITORS
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The move toward liberalisation brought a sudden shift in priorities as the public -
sector companies prepared to face the new competition. “We’ve actually grown
more in the last four years than we had in the last 30,” says Tejbir Singh Sanghvi,
Deputy General Manager of Highway Retailing at Hindustan Petroleum. “The
government has given us more flexibility in terms of expanding our dealer
network. We’ve also had to develop a lot in order to compete. There are new
initiatives, new physical standards and new technologies. Fuel retail used to be a
seller’s market. Now the focus has shifted to the consumer.”
Newcomers to the Indian market face several challenges. For one, the government
has an indirect hand in pricing policy through its national oil companies. The
policy takes into account factors such as inflation and the proximity of upcoming
elections. For example, between 2002 and 2006 the price of petrol in the
international market increased one and a half times. During the same period the
retail price of petrol in India only rose by about 50%.
“It was assumed that after the APM (Administered Pricing Mechanism) was
dismantled in 2002, there would be a genuine free market in India for
transportation fuels,” says Vivek Srivastava of Reliance. “But the APM never
really faded away in practice, thanks to political reality.”
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RETAIL SITE HEADACHE
Securing prime retail sites is also a headache. Real estate prices remain high and
the process of acquiring real estate is mired in red tape. Moreover, land titles in
India tend not to be clear, lead ing to delays. And construction can be challenging –
schedules aren’t adhered to, quality needs to be closely monitored, and safety
consciousness has a long way to go.
Meanwhile, fuel retailers in India are gradually adopting the practices already used
in international markets, which plays to the strength of newcomers who are
building their networks from scratch. Fuel retailing in other parts of Asia, such as
Singapore, has moved towards providing convenience stops for customers,
following the model that prevails in Europe and North America. India is likely to
follow in the same direction, especially in cities. However, the pace of change and
the speed with which newcomers gain a foothold in the Indian market still depend
largely on government policy. As long as market forces do not determine prices
and subsidies to NOCs continue, these companies will have an advantage.
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CRM PRACTISE IN PETROL RETAILING BUSINESS
The definite answer would be NO. There has been no Customer Relationship
Management program followed at a Fuel Retail Station anywhere in the world for
various reasons, but a significant change has been observed with Oil Companies
which are into retailing going in for ERP & CRM implementation in the
organisation but restricted within the company, connecting to suppliers and
distributors but not at all the END CONSUMERS.
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THE NEED FOR CRM AT FUEL STATIONS IN INDIA
This project is exclusively done on all the leading petrol bunks in the city of
Hyderabad. The main reason for choosing this sector is that, there is not much of
customer relationship is being maintained with the bunks & the end user as such.
To bridge the gap between the customer & the dealers so that an effort is being
made to make a customer a brand loyal.
Rewarding loyalty
Premium fuels
Cashless transactions
Non-fuel services
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NEW PLAYERS IN PETRO-RETAIL SECTOR
The deregulation of the marketing sector has led to the grant of marketing rights to
Reliance Industries (5,849), Essar Oil (1,700), ONGC (1,110), and Shell (2,000).
Anticipating the immense competition ahead in the petro-retailing, the existing oil
marketing companies has geared up and the following are the changes that have
occurred in recent past since the deregulation of downstream oil industry.
From direct controls to third party audits – these certifying agencies require
their own infrastructure.
Given today's open & competitive environment, oil marketing companies, both
existing and new entrants, are going full steam ahead to capture the largest share of
the pie. While the PSUs have added more than 3000 retail outlets to their network
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in last three years since deregulation, the private players have added only a little
over450 retail outlets. However, we can say that with 30,000 petrol retail outlets
expected in the next 5 years, up by 30% from today, there is going to be a
downward pressure on profit margins and revenues per outlet which will push the
industry to reinvent itself.
And in order to reinvent; the industry will either face cut throat competition,
Consolidation or a sure path to increase customer loyalty by higher customer
satisfaction & increasing brand value through future vision thinking.
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CROSS INDUSTRY CRM PRACTISE
ICICI set up as Development Bank over four decades ago to provide products and
services for the corporate segment, diversified into the retail segment of the
financial markets in the early 1990s.
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customer. ICICI believes that a true customer centric relationship can only be
accomplished by considering the unique perspectives of every single customer of
the organisation. Hence the pressing need to put in place a technology enabled
CRM solution.
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IMPLEMENTING CRM
A very detailed and comprehensive CRM action plan was developed based on the
understanding that CRM will require enterprise wide transformation.
The next step in the planning process was a Gap Analysis. This analysis essentially
compared current stage against optimal relative to the five aspects of business, to
identify and specifically describe the gaps.
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Successful customer retention is based very simply on the organisations ability to
constantly deliver on three principles:
The evaluation of each of the strategies identified to resolve the gaps at ICICI were
based on:
Time Required – including the time necessary for training and addressing
“cultural” change management issues related to a specific strategy.
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The next step in the planning process was the development of a very detailed
action plan. While the complete plan might span three or more years, it was based
on three-month phases with clear deliverables that will demonstrate both progress
and quick hits or measures of success. The plan identified interdependent activities
and should comprehensively detail the time and resources required for each
activity.
Another key factor for the planning process was the Leadership Action Plan.
Advancing on the CRM transformation map required significant organisation
change. This part of the action plan helped assess the drivers and restraints of
change and the organisation’s readiness to assess the change.
All processes were mapped on to product by understanding the details. During the
course of the process mapping, several opportunities for improvement were
identified and implemented.
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marketing efforts; CRM requires marketing experience. But CRM is strictly
not a marketing initiative.
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SURVEY
In order to get a real outlook regarding a need for CRM implementation at Retail
Fuel Stations, a lead of various Primary, Secondary Research & Methodology has
been designed.
Questionnaire.
Interviews.
Observation.
Feedback.
Enterprise Policies.
Case Studies.
Statistical Tools.
Marketing Concepts.
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CUSTOMER FEEDBACK
__________________________________________________________________
2. Do you visit?
a) Only One Fuel Station.
b) More than One less than Five.
c) Any fuel station.
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5. What is the usual Mode of Payment?
a. Cash
b. Credit / Debit Cards
c. Special Credit cum Loyalty Cards
d. Petro Cards
6. Do you trust upon the Fuel Quality & Quantity purchased by you at Fuel
Station of your Choice?
a) YES
b) MAY BE
c) NO
a) YES
b) NO
c) No Idea
8. Do you find any difference in the Quality of Fuel at different Fuel Stations?
a) YES b) NO
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9. Prioritize your Needs for Selecting a Fuel Station? (From 1 to 10, 1 Being Top
Priority)
NAME: Profession:
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ON SITE CUSTOMER SURVEY: {SHELL STATION (SOMAJIGUDA,
AMEERPET)}
1. Do you often Visit Shell Fuel Station. How many times per Month?
2. Brand Name.
3. Convenient Location.
4. Driveway Attendants.
5. Others
3. Are you satisfied with the services that are rendered to you at Shell?
4. Do you believe in the Quality & Quantity of Fuel that is provided in here?
a) YES b) NO c) Can’t Say
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QUESTIONNAIRE
5. Does customer come here only for refueling or any other service?
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RESULTS / ANALYSIS OF SURVEY AND OBSERVATION
The following are analysis obtained after scrutinizing the Feedback from
customers, and comparing various bits from cross industry CRM practises and also
from the Interview with Manager.
SURVEY RESULTS
Various, the highly visited fuel station being Indian Oil petrol station at
Panjagutta, & Greenlands intersection (Full Moon Service Station)
2. Do you visit?
a) Cash (72)
6. Do you trust upon the Fuel Quality & Quantity purchased by you at Fuel
Station of your Choice?
a) YES (2)
b) MAY BE (92)
c) NO (5)
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7. Do you prefer any other services to be provided in the petrol station?
b) NO
c) No Idea (97)
8. Do you find any difference in the Quality of Fuel at different Fuel Stations?
9. Prioritize your Needs for Selecting a Fuel Station? (From 1 to 10, 1 Being Top
Priority)
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ON SITE CUSTOMER SURVEY RESULTS:
1. Do you often Visit Shell Fuel Station. How many times per Month?
3. Are you satisfied with the services that are rendered to you at Shell?
a) YES (42)
b) NO
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4. Do you believe in the Quality & Quantity of Fuel that is provided in here?
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QUESTIONNAIRE RESULTS
Lubricants - Reliance
5. Does customer come here only for refueling or any other service?
Ans: Mostly for Fuel only, very rare for Lubricants only
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7. Which the most frequently used mode of payment?
Ans: CASH & CREDIT CARDS
NO – Reliance
10. No. of Employees: Total 17 (12 in 1st Shift Rest in 2nd Shift) – Shell.
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ANALYSIS
4. Customers are tending towards Quality of Fuel & the pleasing Driveway
Attendants.
7. Due to the lack of Customers Survey Information, Customer Data and Huge
No. of Customers; it became impossible for Oil Retailing Firms to come
with any innovative strategy to tap the growing customer base & build a
brand loyalty within the customers.
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SUGGESTIONS
Ever since the market was deregulated, the oil companies are busy in
bringing the branding concept in petro-retailing which was a commodity market
for years with no differentiation. However, consistent efforts make them taste
success with the advent of branded fuels such as Speed, Xtrapremium etc. Also, at
the same time RO branding was initiated and PFS (Pure For Sure), Club HP and
Q&Q outlets came into existence. But still the oil companies have not found the
way how to make a customer say pointing towards a RO that as this outlet belongs
to a particular company, it will be the best in Q&Q and others concerns. In other
words, corporate branding is what on the cards in the future of petro-retailing.
Today, there are so many branded fuels of different oil companies in the
market like Speed (BPCL), Turbojet (HPCL), Xtrapremium (IOCL) etc. But these
fuels are more or less same with slight variations in the chemistry. Also, there is a
lack of product assortment in this business of branded fuels. There is not much
options to choose among. However, with high investment in R&D, things are not
going to remain same and very soon we will see a full range of premium branded
fuels like 93-octane petrol, 97-octane petrol, 125-octane petrol etc.
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3. Emergence of non-fuel services as a major activity at retail outlets
The dismantling of APM has removed the privilege of assured returns from
the PSUs and thus, it has increased pressure on their margins, as to compete with
the private players, who are with deep pockets, it is imperative to make huge
investment in the services being offered at the ROs. Since the base product is
same, the differentiating factor would be the non-fuel services. Also, the changing
face of the Indian consumer is one of the main reasons behind the non-fuel services
in petro-retailing. Today, he is looking at a one stop solution to all his needs –
buying groceries, withdrawing cash from his bank, making utility payments,
renewing his insurance cover, grabbing a quick bite, obtaining Pollution Under
Control Certification and of course filling fuel in his car. On the other hand the
driver on the highways is seeking a clean and hygienic place to relax and freshen-
up, service his vehicle and have a good meal at the restaurant in the pump.
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5. Attempt by all players to drive volumes to retail sites
In order to saturate the market before the private players can consolidate
network, the PSUs are vigorously setting up new outlets. In the last three years, the
PSUs have added more than 3000 outlets to their network. However, it will reduce
the throughput per RO in long run. Hence in order to maintain the throughput, all
players will strive to drive volumes to their retail sites.
7. Competition on price
Price was till recently not a differentiating factor in Indian market because
prices were same for all the companies. However, with private players coming into
the market, the picture has changed. Essar & Shell is a glaring example of this. In
the future when the market determined pricing mechanism will come into full
effect, we will see the focus of competition shifting from Q&Q to price.
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8. Adoption of New Retail Skills
In the changed scenario, petro-retailers will have to take a look into the retail
skills they have and accordingly have to make adjustments in that. Network
optimization, Proposition/Brand Management, Dealer Management, Site
Operations Management, Partner Management, Customer Relationship
Management etc. are some of the skills that should be incorporated to succeed.
However, strategic foresight is one thing but what matters most is the superior
execution of those strategies and this is the factor which shapes core competency
for a company that is hard to replicate by the competitors.
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SPECIAL FOCUS ON CUSTOMER RELATIONSHIP
Though, the very basic implementation of CRM is very difficult at retail outlet but
a CRM network would be easily setup with Enterprise and its various retailers,
hence reducing burden on low margin ridden Retailers.
As a CRM implementation in itself is a lengthy & risky process, but few Customer
driven, behavioral & management techniques should be used in order to achieve
greater revenues and Brand Loyal customers so as to surpass the upcoming serious
competition; stands bare essential.
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BIBLOGRAPHY
www.shell.com
www.google.co.in
www.e-retail.com
www.managementparadise.com
www.businessline.com
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