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A Study on Implementation of
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CRM in Retail Fuel Stations
by
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ALLAMPURI BHARGAVA
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“A STUDY ON IMPLEMENTATION OF CRM IN
RETAIL FUEL STATIONS”
ALLAMPURI BHARGAVA
__________________________________________ submitted by me
_____________________________________________
________________________________ under my
degree/diploma/certificate.
Analyzing all the facts and adding new possible ideas to make customer
loyal to the brand this report is prepared, this includes bringing awareness about
loyalty cards and extensive use of loyalty cards, loyalty benefits, customer drive
in factors and etc…
ACKNOWLEDGEMENT
I would also like to thank my parents and friends who rendered their
whole hearted co-operation in the successful completion of the project work.
The primary objective of this report is to provide the readers the insight
into CRM Practices followed in Fuel Retailing Industry, Behavior of customers
towards it, different opinions generated out of such practices, and new ideas that
can be implemented in order to improve customer loyalty
I hope that the report has made with the text which is interesting and
lucid. In writing this report, I have benefited immensely by referring to many
publications and articles in various books and online. I express my gratitude to
all such authors and publishers.
INTRODUCTION TO CRM
EMERGENCE OF CRM PRACTICE
ARCHITECTURE OF CRM
OPERATIONAL
ANALYTICAL
COLLABORATIVE
KEY PRINCIPLES
WHO NEEDS CRM?
ADVANTAGES OF CRM
CRM RELATED SURVEY FACTS
STEPS TO SUCCESSFUL IMPLEMENTATION OF CRM
CHALLENGES IN IMPLEMENTATION OF CRM
SUMMARIZING CRM ACTIVITES
FUEL RETAILING IN INDIA OVERVIEW
PROMISING ROAD AHEAD
A GLANCE OVER INDUSTRIES IN PETRO-RETAILING
NEW COMPETITORS
RETAIL SITE HEADACHE
CRM PRACTISE IN FUEL RETAILING BUSINESS
RESEARCH SURVEY
QUESTIONNAIRE & FEEDBACK FORMAT
RESULT AND ANALYSIS
SUGGESTIONS
SPECIAL FOCUS ON CUSTOMER RELATIONSHIP
BIBLOGRAPHY
INTODUCTION TO THE PROJECT
When a customer enters the fuel outlet he purchases fuel and cannot
expect any other services. When we observe the outlets in other nations there
are many other service provided to the customers, non fuel services are not
priority in our country. Marketing says ‘customer is king’ but in Indian fuel
retail industry customer is not the king, he is not provided with anything more
than refueling, where he is availing many facilities in other retail sectors like
discounts, rebates, loyalty benefits and many more. The competition in the
market is increasing due to the extensive growth in automobile market and
private players entrance into this segment. So very soon the drive in factor shifts
from Quality and Quantity to other non fuel services. Hence customer relation
management becomes vital tool in the acquisition and retention of the
customers. When customer starts demanding services the change in their
behavior, expectation can be analysed using CRM. The company which takes
the initiative of implementing non fuel services before other companies will get
edge in customer acquisition. Hence this project focuses upon the customer
expectations and the need for CRM in fuel retailing.
Main objective: The main objective of the study is to study the CRM
strategies being implemented and to find the factors that make customer drive-
in, improvising the organisational level CRM.
SPECIFIC OBJECTIVES:
1. To find the factors that drive in customers into the retail outlet.
The main aim of the study is to evaluate the services and CRM activities
implemented. The study is descriptive in nature. Surveys are best-suited
method for descriptive research. So survey method is used for the study.
SAMPLE SIZE:
SAMPLING FRAME:
RESEARCH INSTRUMENTS:
SOURCES OF DATA:
PRIMARY METHOD:
Primary data are those, which are collected fresh and for the first time and
this happen to be original in character. In this study primary data was collected
by interview schedule method.
SECONDARY METHOD:
Secondary data are those, which are collected from existing data.
Secondary data for this study include appropriate material from newspaper,
Company Reports, Standard Text Books, and information from Internet has also
been acquired wherever necessary.
FIELD WORK:
METHODOLOGICAL ASSUMPTIONS:
• All primary data collected is true and reflects the actual actions of the
Respondents.
• The data collected has been coded, tabulated and analyzed into logical
Statement using simple statistical methods, pie charts, etc.
The scope of the project is vast as the fuel retailing sector is expanding
very fast, the competition in the sector is very high with the entrance of the
private players. The Automatic price control mechanism of the government is
reducing the competition and giving edge to PSUs, where once subsidizing is
removed completely the services in fuel station play vital role in customers
drive in into the retail outlet. The CRM plays important role in increasing the
revenue and profits. Hence this project has wide scope in this sector.
INTRODUCTION TO CRM
Customer Relationship Management (CRM) can be widely defined as
company activities related to developing and retaining customers. It is a blend
of internal business processes: sales, marketing and customer support with
technology and data capturing techniques. Customer Relationship
Management is all about building long-term business relationships with
customers.
1960’s – the era of Mass Marketing, when Gibbs SR toothpaste began the first
marketing of this kind with its black and white campaign.
1970’s – saw the beginning of segmentation, direct mail campaigns and early
Telemarketing (such as publishing).
1980’s – where Niche Marketing made millionaires of those who were best at
it.
• 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.
ARCHITECTURE OF CRM
There are three parts of application Architecture of CRM:
1. OPERATIONAL - automation to the basic business processes
(marketing, sales, service).
OPERATIONAL CRM
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.
Examples of Campaigns directed towards customers are:
Acquisition: Cross-sell, up-sell
ADVANTAGES OF CRM
• Provide better CUSTOMER service.
• Increase CUSTOMER revenues.
• Increase CUSTOMER Lifecycle Value.
• Discover new CUSTOMERS.
• Cross Sell/Up Sell products more effectively.
• Help sales staff close deals faster.
• Make call centers more efficient.
• Simplify marketing and sales processes.
By reducing customer defection (by as little as 5%) will result in increase in
profits by 25% to 85% depending from industry to industry. An important facet
of CRM is “customer selectivity”. As several research studies have shown not
all customers are equally profitable (In fact in some cases 80% of the sales
come through 20% of the customers). The company must therefore be selective
and tailor its program and marketing efforts by segmenting and selecting
appropriate customers for individual marketing programs. In some cases, it
could even lead to “outsourcing of some customers” so that a company better
utilize its resources on those customers it can serve better and create mutual
value.
CAN CRM DRIVE REVENUE?
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.
Creating loyalty.
Creating profits.
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.
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%.
The government subsidises India’s NOCs to compensate for below-market
prices. Between April, 2005 and March, 2006 subsidies totaled approximately
$3.6 billion, according to a government advisory committee report. Since state-
owned oil companies command some 80% market share, private-sector
competitors must match their artificially-low prices to stay in business.
“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 manager of shell. “But the APM never really faded
away in practice, thanks to political reality.”
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.
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.
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. Today Shell operates 35 stations in southern India.
A VIEW ON INDUSTRIES IN PETRO- RETAILING SECTOR
History
The 1860s saw vast industrial development. A lot of petroleum refineries
came up. An important player in the South Asian market then was the Burmah
Oil Company Ltd. Though incorporated in Scotland in 1886, the company grew
out of the enterprises of the Rangoon Oil Company, which had been formed in
1871 to refine crude oil produced from primitive hand dug wells in Upper
Burma.
The search for oil in India began in 1886, when Mr. Goodenough of
McKillop Stewart Company drilled a well near Jaypore in upper Assam and
struck oil. In 1889, the Assam Railway and Trading Company (ARTC) struck
oil at Digboi marking the beginning of oil production in India.
While discoveries were made and industries expanded, John D
Rockefeller together with his business associates acquired control of numerous
refineries and pipelines to later form the giant Standard Oil Trust. The largest
rivals of Standard Oil - Royal Dutch, Shell, Rothschilds - came together to form
a single organisation: Asiatic Petroleum Company to market petroleum products
in South Asia.
Products
Brand ambassador
International rankings
1. BPCL is a Fortune Global 500 company as per the ranking of 2008. It was
ranked at position 287. It was ranked at position 325 as per the ranking of 2007.
2. BPCL was featured on the Forbes Global 2000 list for 2008 at position 967
Since 2002, they have introduced new generation branded fuels Speed, Hi
Speed Diesel and Speed 97, being the pioneers to introduce premium fuel
brands in the Country. Speed brand of petrol contains multi-functional fuel
additives that prevent formation of harmful deposits and help clean existing
deposits, thereby improving vehicle performance. Speed has been the market
leader in the branded fuels category. BPCL has also introduced a high-end
Octane 97 variant Speed 97 catering to the requirement of vehicles at the upper
end of the tier. To meet the growing needs of the diesel passenger car segment,
we introduced Hi-Speed Diesel which is a blend of diesel and world-class multi-
functional additive which uses the internationally renowned Green Burn
Combustion Technology. This multi-functional additive enables the high
performance vehicles to deliver their designed outputs.
Making a Difference through Innovative Retailing
Recognizing the customer need for pure quality and correct quantity of
fuel for their vehicles and launched the flagship initiative of Pure For Sure
(PFS) offering the guarantee of pure quality and correct quantity of fuel to our
customers. The petrol pumps displaying a prominent ‘Pure For Sure’ signage
have become landmark destinations as the movement has gained momentum
across our Retail Network.
Fostering Loyalty
On the highways they offer a home away from home to the truckers and
the tourists in the form of the Generation Next OSTSs/OSTTSs (One Stop
Truck cum Tourist Shop) branded as GHAR. These outlets are built on a
minimum of 3 to 5 acres plot sizes and house dedicated and fully automated
MS/HSD petrol/ diesel Fuelling facilities to fuel all kinds and sizes of vehicles
besides the specially designed offerings for the highway travelers, that include a
Food Court for Tourists and a Dhaba for truckers, a dormitory with beds, a Safe,
Secured and Spacious parking for trucks and cars, a vehicle wash facility,
Bathing facilities, dedicated toilets for Truckers and dedicated toilets for
Tourists, Children’s Play area, Amphitheatre for entertainment, Health care
centre, Smartfleet Customer service centre ,Sanjha Chula for self cooking and
captive power generation.
HPCL (Hindustan Petroleum Corporation Limited):-
HPCL also owns and operates the largest Lube Refinery in India producing
Lube Base Oils of international standards. With a capacity of 335 TMT. This
Lube Refinery accounts for over 40% of the India's total Lube Base Oil
production. Presently HPCL produces over 300+ grades of Lubes, Specialities
and Greases.
History
1962: On 31st March,1962 the name was changed to ESSO Standard Refining
Company of India Limited.
1974: Hindustan Petroleum Corporation Limited comes into being after the
takeover and merger of erstwhile Esso and Lube India Undertaking
1976: Caltex Oil Refining Ltd. is taken over by the Government of India and
subsequently merged with HPCL in 1978.
1979: Kosan Gas Company, the concessionaries of HPCL in the domestic LPG
market, are taken over and merged with HPCL.
HPCL thus comes into being after merging four different organisations at
different points of time.
Major functions
1. Refineries
2. Aviation
4. International trade
5. LPG - HP GAS
6. Lubes - HP LUBES
7. Retail
9. Joint Ventures
10.Alternate Energy
Refineries
International rankings
1. HPCL is a Fortune Global 500 company as per the ranking of 2009 and was
ranked at position 311.
2. HPCL was featured on the Forbes Global 2000 list for 2009 at position
1002
Club HP
The "Club HP" concept also recognizes the fact that the consumer today
places very high importance on vehicle care and at the same time expects other
value added services from a fuel retail outlet that help him take care of diverse
activities under one roof and in the shortest possible time. The Club HP outlets
provide a distinct set of basic and value added offerings which include
"Efficient & Expert Service", "Quick Care Point", "Digital Air Towers",
"Vehicle Finance and Insurance related assistance", "Bills Payment facilities",
“Refreshments”, "HPCL - ICICI Credit Cards", "Club HP Smart 1 Cards” and a
host of other amenities.
The roll out of "Club HP" began in a phased manner, initially targeting 85
outlets in the cities of Mumbai, Delhi, Bangalore and Kolkata. Encouraged by
the initial experience, the “Club HP” brand has been quickly expanded to cover
over 1000 outlets in all major cities and towns across India. The distinctive red
and blue Club HP logo is an all too familiar symbol inviting motorists looking
for a quick and refreshing fuelling experience.
"Club HP" outlets are categorized as Standard, Mega and Max depending
on the levels of services and amenities available.
Vehicle Care - The Club HP outlets have been carefully selected to ensure that
they can offer high quality vehicle care. Each Club HP Mega and Max outlet is
equipped with a service station. In addition, the outlets will also provide vehicle
consumable and accessories, all under one roof. More and more outlets will
progressively upgrade to “Authorised Service Stations” as part of our
association with various vehicle manufacturers.
Quick Care Points - Consumers are offered a free check up of vital elements
such as engine oil, brake oil, battery water, coolant, fan belt, radiator hose etc.
by the specially trained "Club HP" attendants. In addition, a quick inspection of
the tyres is done and recommendations given in case any immediate action is
required.
Digital Air Towers – The performance and safety of new generation cars
depend a lot on the correct air pressure maintained in the tyres. The specially
designed digital air pressure equipment not only ensures accurate air pressure in
the shortest time but also adds to the comfort and safety of travel.
‘Good Fuel Promise’ Towers - Consumers are offered the facility to personally
conduct simple tests with the help of specially designed standard apparatus. A
simple procedure booklet is also provided to help anyone check the quality and
quantity of fuel. The consumers are also invited to fill in the printed certificate
booklet which will be available at all "Club HP" outlets in order to record their
assessment. This feedback is regularly screened by the HPCL team to plan
remedial actions or service upgrades in accordance.
Vehicle Finance and Insurance Related Counsel - HPCL has tied up with
leading vehicle insurance and finance service providers for these activities
which include assistance towards issuance and renewal of policies as well as
extension of loans for purchase of new or second hand vehicles.
ATMs - HPCL has taken the lead in providing ATM facilities at its outlets in
association with leading banks and is targeting over 400 ATMs very soon.
Select Club HP outlets have already been equipped with ATMs.
Bills Payments - HPCL has tied up with Skypak Financial Services which is
providing "Drop boxes" at all "Club HP" outlets in a phased manner.
Consumers can utilize these drop boxes to pay bills relating to a variety of
service providers.
HPCL - ICICI co - branded Credit Cards and the Club HP Smart1 Cards -
Customers visiting the "Club HP" outlets will be able to use the HPCL - ICICI
Credit Cards to reap the higher reward points offered by this unique product.
Basic Amenities - Each "Club HP" outlet will extend basic amenities such as
"safe drinking water" through water purifiers, hygienic rest room facilities, food
counters, basic medicines and first aid facility. HPCL has also tied up with Coca
Cola India to provide beverages and bottled water as well as snacks at all "Club
HP" outlets.
History
IBP Co. Limited got merged with its parent company 'Indian Oil
Corporation Limited' on 02-05-2007 under the Ministry of Petroleum & Natural
Gas, Government of India. The merger ends the history of 98 year old 'IBP Co
Limited', the oldest oil company in India.
IBP Co. Limited was born in the then undivided British India as “Indo-
Burma Petroleum Company Limited” a joint stock private company on 08-02-
1909 at Burma, presently Myanmar.
The developments that followed Second World War forced the company
change its head quarters to Kolkata permitting the British Government to
bombard and destroy its only refinery at Rangoon. Thereafter the company
joined hands with the then Indian Oil Company (Later formed as Indian Oil
Corporation Limited after merger with Indian Refineries Company Limited) and
carried out business in petroleum products at Mumbai and Kolkata.
Though it was initially taken over by IOC in 1970, it got separated and
formed as a public sector company in 1974 under the Ministry of Petroleum and
Natural Gas, Government of India. By this time all the foreign private oil
businesses were nationalized and made public sector companies. The Indo
Burma Petroleum Company Limited changed its name to IBP Co. Limited in
1983. During 2002, it was once again acquired by the IOC and became one if its
group companies.
The IBP’s first packaged slurry explosive manufacturing plant was set up
in Korba (then in MP now in Chattisgarh) in the year 1976 under the
collaboration from Ireco Inc. USA. The unit commenced its commercial
production in August 1977. Thereafter the chemical division has diversified its
business in to a unique technology ‘the bulk delivered slurry explosives’ with
the first ever plant of its kind set up in India at Kudremukh with a capacity of
5000 Tons per annum in 1980. The first ever supply of site-mixed bulk slurry
explosives took place on 20-12-1980 in a blast using 63 tons of this product.
Over the past 25 years, by 20th Dec 2005 it has completed supply of 64,695 MT
of SMS explosives to Kudremukh Iron Ore Project.
For IBP, the journey in bulk explosives commenced at Kudremukh
continued a long way with new plants set up in both coal and metal mining
sectors. The second plant came up at Singrauli (MP) in the year 1983 followed
by Block-II Dhanbad (Jharkhand), Ramagundam (AP), Rampur Agucha
(Rajasthan), Kusmunda (Chattisgarh) etc. In terms of volume, the production of
bulk explosives reached a peak level of 55000 MT, followed by 25000 MT of
packaged explosives.
Competitors
Over the years, the number of competitors in India grew from only two in
the beginning to more than forty today, adversely affecting the market share in
Industrial explosives of IBP from a high of around 30% down to 18%. Though
the installed capacity of the company is more than 1,25,000 tons, the capacity
utilization is only around 60% due to current price sensitive market and intense
competition from private players. Presently, IBP is the only central public sector
company servicing the market for industrial explosives. The business group
experienced very high profits in the beginning when there were only two
competitors (IEL and IDL) and progressively incurred losses from the late
nineties. However, a turnaround is expected in the business during the current
year owing much to the reorganization of the marketing department and the
required thrust planned and given by this department. This included significant
volumes and price from Coal India Limited besides the thrust in the non-coal
mining sector of the country that resulted in threefold increase in volumes.
New technologies
The advent of modern technologies in manufacture of explosives
including emulsions lead IBP to radically change the original technology from
Ireco Inc. and introduce new and cost effective technologies in both slurry and
emulsion products. However, the original Ireco’s slurry technology obtained in
80’s was modified through in house marketing and R&D efforts and made
superior to that of emulsion technology. Therefore, the superior techno-
economic advantages of site mixed slurry explosives over that of bulk emulsion
explosives were made available and the majority of IBP’s plants (9 out of 14)
continue to produce highly improvised bulk slurry explosives.
The site mixed slurry explosives, as the name suggests are manufactured
on site in a specially designed truck (called pumptruck) by carrying non-
explosive ingredients in separate chambers, mixing them in tailor-made
proportions and pumping them in liquid form directly in to bore holes. The
poured mixture acquires the characteristics of an explosive within about ten
minutes of pumping and solidifies slowly to the shape of the bore hole. Unlike
bulk emulsions, the SMS can be pumped in various densities ranging from 0.6
g/cm³ to as high as 1.20 g/cm³ and the energy can be varied to produce twenty
different types of chemically balanced explosive products to exactly the suit the
rock conditions and achieve techno-economic advantages for the customers.
The system eliminated the need for packaging, inventory, storage and handling
of various types of explosives and thus lowered direct costs to customers.
Expansion
The expansion phase of IBP in the field of explosives still continues with
plant-set up possibilities in the Cement Sector at Gulbarga, Bauxite mining
(NALCO, Orissa) Lignite (NLC, Tamilnadu) and Iron ore mining (NMDC,
Donimalai, Karnataka), Orissa & Rock phosphate mines of RSMM, Rajasthan
etc.
Overview Indian Oil operates the largest and the widest network of fuel
stations in the country, numbering about 17606 (15557 regular ROs & 2049
Kissan Sewa Kendra). It has also started Auto LPG Dispensing Stations
(ALDS). It reaches Indane cooking gas to over 47.5 million households through
a network of 4,990 Indian distributors. In addition, Indian Oil's Research and
Development Center (R&D) at Faridabad supports, develops and provides the
necessary technology solutions to the operating divisions of the corporation and
its customers within the country and abroad.
Products
Indian Oil's product range covers petrol, diesel, LPG, auto LPG, aviation
turbine fuel, lubricants, naphtha, bitumen, paraffin, kerosene etc. Xtra Premium
petrol, Xtra Mile diesel, Servo lubricants, Indane LPG, Autogas LPG, Indian
Oil Aviation are some of its prominent brands. Recently Indian Oil has also
introduced a new business line of supplying LNG (Liquefied natural gas) by the
cryogenic transportation. The branding called "LNG at Doorstep". Lng
headquarters are located in scope complex, Lodhi Road Delhi.
Refineries
• Guwahati Refinery, the first public sector refinery of the country, was
built with Romanian collaboration and was inaugurated by Late Pt.
Jawaharlal Nehru, the first Prime Minister of India, on 1 January 1962.
Subsidiary refineries
• Indian Oil Technologies Ltd. headquarters are located at Indian Oil R&D
Centre, Faridabad.
• Lanka IOC PLC - Group Company for Sri Lanka retail and storage
operations which is listed on Colombo's stock exchange. It was locked
into a bitter subsidy payment dispute with Sri Lanka's Government
which has since been resolved.
• Green Gas Ltd. - joint venture with Gas Authority of India for city-wide
gas distribution networks.
• Indo Cat Pvt. Ltd., with Intercat, USA, for manufacturing 15,000 tonnes
per annum of FCC (fluidised catalytic cracking) catalysts & additives in
India, for catering to rising global demand.
• Numerous exploration and production ventures with Oil India Ltd., Oil
and Natural Gas Corporation
International rankings
IOCL was featured on the 2008 Forbes Global 2000 at position 303.
Loyalty programs
Competitors
Concerns
Indian Oil Corporation earned concerns about the state of affairs in its
marketing business when Shanmugam Manjunath, a marketing manager and an
MBA from prestigious Indian Institute of Management Lucknow, was murdered
in 2005 for sealing a corrupt petrol station in the state of Uttar Pradesh (U.P.).
The corporation's Mathura Refinery unit has also remained constantly in news
due to the threat of air pollution created by it.
Oil Industry Development Board
India has begun the development of a strategic crude oil reserve sized at
37.4 million barrels, enough for two weeks of consumption. Petroleum stocks
have been transferred from the Indian Oil Corporation (Indian Oil) to the Oil
Industry Development Board (OIDB). The OIDB then created the Indian
Strategic Petroleum Reserves Ltd (ISPRL) to serve as the controlling
government agency for the strategic reserve.
SHELL PETROLEUM:-
On 15th October 1932, when civil aviation arrived in India, the company
fueled J.R.D. Tata's historic solo flight in a single engine de Havilland Puss
Moth from Karachi to Bombay (Juhu) via Ahmedabad.
Then, the company introduced LPG as a cooking fuel to the Indian home
in the mid-1950s. Besides selling bitumen, the company pioneered desert road
construction in India. In 1955 the company commissioned what was then
India’s largest refinery which was the first to process newly found indigenous
crude (Bombay High), in the country.
On 24th January 1976, the Burmah Shell Group of Companies was taken
over by the Government of India.
With nearly US$1 billion invested already, Shell is the largest and most
diversified international investor in India’s energy sector.
OIL PRODUCTS:
Lubricants
Bitumen
LPG
Retail
Technology Solutions
• Catalyst sales
Trading
TECHNOLOGY
• Located at Bangalore.
• Located at Chennai.
• Start-up: mid-2008
Jamnagar Refinery:
Refining activities of Reliance Industries Limited are carried out at the
Jamnagar refinery complex with refining capacity of 27 million tonnes per
annum (540,000 barrels per day).The refinery is able to process a wide variety
of crudes- from very light to very heavy (from 18 to 45 degree API) and from
sweet to very heavy (with sulphur content from 0 to 4.5%).
RPL commenced its crude processing on 25 December 2008. The
secondary processing units are commissioned and the entire refinery complex is
expected to attain full capacity shortly. With an annual crude processing
capacity of 580,000 barrels (92,000 m3) per stream day (BPSD), RPL will be
the sixth largest refinery in the world. It will have a complexity of 14.0, using
the Nelson Complexity Index, ranking it amongst the highest in the sector. The
polypropylene plant will have a capacity to produce 0.9 million metric tonnes
per annum.
Expansion:
Reliance petroleum is in the process of purchasing the downstream
business of Mobil in Australia. This will give them two more refineries and 800
service stations in Australia.
Retailing in India:
Reliance Industries Ltd has moved ahead with its petroleum retailing plan
and set up a network of 500 outlets by the end of 2003. The Company was
granted marketing rights for setting up 5,849 petrol pumps across the country.
The company has received close to 50,000 applications for land from
across the country for setting up retail outlets. The company had invited
applications in the month of August 2002.
The petroleum retail business of the company was put on a fast track after
the launch of Reliance Infocomm. The company was largely focusing on the
highways for opening its retail outlets.
Initially the company got the sales which made the PSUs to worry about
the future of them in the sector.
Reliance petroleum came up with the slogan that private players should
also be given subsidies in order to provide fuel at the cost which PSUs sell.
But later on the company stopped its operations due to APM and
competitive subsidized prices of PSUs and other factors. Only some outlets in
different locations of the country are operating now.
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, leading 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.
Rewarding loyalty
Premium fuels
Cashless transactions
Non-fuel services
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.
Shifting focus from the urban to highways and sub-urban areas.
More communication with the customers in the media and onsite.
Building PFS, Club HP, Q&Q as a brand.
From fuel dispensing to multi product selling.
From commodity selling to brand marketing.
From executive level sales management to intermediary supervisory cadres.
From direct controls to third party audits – these certifying agencies require
their own infrastructure.
From dealer proprietor to reputed companies from other sectors making
forays into petro-retail management.
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.
Time Required – including the time necessary for training and addressing
“cultural” change management issues related to a specific strategy.
Another key factor for the planning process is 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.
Selecting and Implementing a Technology Based Solution:-
From whom to buy: Some Criteria included were CRM expertise, Retail
Finance Experience, Credentials including financials, client list, life history, etc.
A detailed Request for Information (RFI) was sent to each of the shortlisted
companies. After receiving the RFIs, another round of evaluation was done.
After short listing two product vendors and system integrators, reference calls
were made to several of the past clients of all shortlisted companies.
PROCESSES:-
All processes are mapped on to product by understanding the details.
During the course of the process mapping, several opportunities for
improvement maybe identified and implemented.
• Questionnaire.
• Interviews.
• Observation.
• Feedback.
• Enterprise Policies.
• Statistical Tools.
• Marketing Concepts.
SAMPLE SIZE:
2. Do you visit?
a) Only One Fuel Station. b) More than One less than Five.
c) Any fuel station.
6. Do you trust upon the Fuel Quality & Quantity purchased by you at Fuel
Station of your Choice?
a) YES b) MAY BE
a) YES b) NO
c) No Idea
a) YES b) NO
PERSONAL INFORMATION:-
NAME: EDUCATION:-
1. Do you often Visit this Fuel Station. How many times per Month?
3. Are you satisfied with the services that are rendered to you here?
5. Do other services like Car wash, Convenience stores, Good Drive way
Attendants, Other facilities attract you towards this station?
a) YES b) NO c) MAY BE
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QUESTIONNAIRE TO THE MANAGER
5. Does customer come here only for refueling or any other service?
9. What are your strategies to attract customers and make them drive-in?
“The margins in this “Artificial price
sector are very low so monitoring of the government
implementation of customer in public sector oil companies “We travel away from
satisfaction programs is less. is giving tough competition to home to different places
In our outlet we provide cold us, our fuel is not subsidized across India, we rest, cook
water, air cooled driveways in hence cost is little more than and bath in places like
summer along with air filling, them. petrol bunks or dhabas.
vehicle wash and wheel
We are providing much Good facilities in
alignment.
better service than other petrol bunk for cooking,
Good ambience, competitors and customers bathing, and safe parking
visibility from distance results are receiving that, our fuel is place makes us enter petrol
in drive in. we have high quality. bunk as now a day we see
customers who are loyal to many truck steal incidents.
Once this price
our fuel station one of them
monitoring is removed we will Companies should
get services from us since 31
provide many more services introduce card which
years.
to our customers, our key functions across India in all
If company starts factors are spacious outlets, stations so that we need not
implementing the CRM that quality of fuel, convenience carry cash for fuel”
would give much more stores, good drive way
advantage to the outlets” attends.”
INTERVIEW
Bhadur singh
TARNAKA FILLING
AVAILABLE
Truck driver
MANAGER
MANAGER
STATION
UPPAL
I am employ in Municipal I refuel my
I being mechanic deal with Corporation which is a vehicle daily and
different vehicles, fuel is the important government department, our quality differs from
factor that determines vehicles vehicles get refueled in local outlet to outlet I like
performance and life. petrol bunks through local tie to refuel my vehicle
ups. The payments are on at IBP amberpet as I
Customers ask us for better fuel trust the quality
stations but that cannot be suggested credit basis will be paid per
month. there I refuel in same
easily, fuel quality should be improved bunk since four
in outlets. The fuel station depends years.
We purchase lubricants from upon the local department and
influences, if there is tie up with Air check and
dealers not fuel stations because they other facilities are
offer at discount prices but not in fuel the company across the state
same companies outlets are not properly
stations if some tie up system is maintained properly
available in outlets we obviously used and also payment will be
directly from central head in outlets, toilets and
purchase from outlets. drinking water should
office.
Lubricants and coolants should be provided
be made available in highway outlets My department uses compulsorily in
because they are required in nearly 75 ltrs a day, being a outlets.
emergency. small office and town it is much
more in big cities.
Mahender Yadav
Vehicle Mechanic
Shop owner
Ram Das
I am the owner of a transport When such good offers are provided in
company, my trucks travel across India. I other retail sector why not in fuel retailing.
got some fleet cards or loyalty cards, There is nothing like improvement in this sector
which are not extensively in use. except number of outlets and the colourful
outlets.
My trucks need to be refueled in
different parts of the country if cards are Many more services can be provided in
provided by a company which may be outlets, the driveway attends should be trained
prepaid or credit basis using which my to be polite and customer friendly.
trucks can be refueled in the outlets of
Cashless service should be provided and
the company, it would be better and
outlets should be designed such that a person
convenient to us.
can do other works apart from refueling. (ATM,
Also there should be something Convenience stores…).
which says where the nearest outlet is
If CRM is implemented in fuel stations or
maybe a route can be planned and
companies that will be fetching for companies
outlets in the route are given or a call
and also helpful for customers.
centre to assist.
Insurance renewal, PUC services should
Loyalty benefits should be
be provided and renewal should be intimated.
provided and should be attractive
Karthik Rao. J
B. Nagaraju
Software
Engineer
CUSTOMER FEEDBACK
OFF – SITE CUSTOMER SURVEY
(As part of my M.B.A curriculum this project is done)
ANS) Not particular but nearby home or office, some are particular about
(quality)
2. Do you visit?
a) Only One Fuel Station. (37) b) More than One less than Five.(74)
c) Any fuel station. (39)
6. Do you trust upon the Fuel Quality & Quantity purchased by you at Fuel
Station of your Choice?
c) No Idea. (10)
Depending upon the first, second and third order of preferences the
weightage is assigned to the above preferences. The option which gets 1st, 2nd, or
3rd preference is given one point.
ON SITE CUSTOMER SURVEY
1. Do you often Visit this Fuel Station. How many times per Month?
3. Are you satisfied with the services that are rendered to you here?
5. Do other services like Car wash, Convenience stores, Good Drive way
Attendants, Other facilities attract you towards this station?
A) 1. Convenience stores, free air check up, four wheeler windshield cleaning,
two wheeler oil check and change free.(Shell)
2. Pure drinking water, wheel alignment, air check, cold drinking water, air
cooled driveways (in summer), petro-card, credit card, fleet card, V-care.
3. ATM (B P Medchal).
A) Yes (all)
A) Yes (all)
A) Yes (all)
Depending upon the second question in the offsite survey the answer are
quantified and represented in graphical format.
1. Customers are loyal to the retail outlet but when the case of the people
who travel extensively is considered many of them are using less than
five outlets, these people can be made loyal to the brand or company.
3. The above graph clearly shows that the customers are loyal in good
number and can be made loyal and retained with good strategic efforts.
Analysis of the reason for choosing a fuel outlet:-
Depending upon the third question in offsite survey and second question in
onsite survey the answers are quantified and represented in graphical format.
1. The major factor that influences customers drive into the fuel station is
quality and quantity (Q&Q). Hence Q&Q should be maintained properly
across the outlets compulsorily.
3. Loyalty cards play vital role in driving in customers but awareness about
loyalty cards and its use is less. So loyalty cards should be promoted and
good loyalty benefits should be provided.
Depending upon the fourth question in offsite survey and fifth question in onsite
survey the analysis is done.
1. This graph clearly says that customer expects many non fuel services
from the fuel stations.
Depending upon the fifth question of offsite survey the answers are quantified
and represented graphically.
Depending upon the 4th and 6th question in onsite and offsite questionnaire the
analysis is done
5. Quantity is major issue in the fuel outlets the dispensers are tampered and
altered, this should be strictly avoided and companies should take care
and inspect.
6. Quality is other issue in outlets where petrol and diesel are contaminated
by kerosene and some time thinning solvents, this should be avoided.
7. Customers are loyal to outlet or a brand for its Quality and Quantity.
Depending upon the 10th question in the offsite question paper analysis is done
4. Now a day’s all the companies are providing Quality and Quantity
assurance so now all the other factors in the list come into picture and
will constitute to the drive in factors.
INFERENCE FROM THE SURVEY
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 Retail Outlet 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 Retail Outlet
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.
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 Retail Outlet in long run. Hence in order to maintain
the throughput, all players will strive to drive volumes to their retail sites.
6. Leveraging automation and communication for enhanced offerings
7. Competition on price
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.