INDIAN OIL CORPORATION LTD.

LOYALTY PROGRAM AND CUSTOMER RELATIONSHIP MANAGEMENT

TABLE OF CONTENTS
Acknowledgement ................................ ................................ ................................ ............................ 1 Company Certificate ................................ ................................ ................................ ......................... 3 1. Executive Summary ................................ ................................ ................................ ...................... 3 2. Introduction................................ ................................ ................................ ................................ ... 4 2.1. Origin ................................ ................................ ................................ ................................ ..... 5 2.2. Vision And Mission ................................ ................................ ................................ ................ 6 2.3. Products ................................ ................................ ................................ ................................ . 6 2.4. Services ................................ ................................ ................................ ................................ .. 7 2.5. Loyalty Programs ................................ ................................ ................................ ................... 8 2.6. Competitors ................................ ................................ ................................ ............................ 9 3. Objectives Of Study ................................ ................................ ................................ .................... 10 4. Concepts Used In Study ................................ ................................ ................................ .............. 11 4.1. Marketing ................................ ................................ ................................ ............................. 11 4.2. Customer Relationship Management................................ ................................ ..................... 12 4.3. Loyalty Programs ................................ ................................ ................................ ................. 12 4.4. Market Research And Analysis ................................ ................................ ............................. 15 5. Loyalty Program In Petroleum Sector & XtraRewards ................................ ................................ 16 5.1. Petro Bonus Program (BPCL) ................................ ................................ ............................... 16 5.2. Club HP & I-Mint Program (HPCL) ................................ ................................ ..................... 17 5.3. Xtrarewards Program (IOCL) ................................ ................................ ............................... 17 6. Methodology................................ ................................ ................................ ............................... 20 7. Tabulation & Results ................................ ................................ ................................ ................... 21 7.1. Break Up Of The Sample ................................ ................................ ................................ ...... 21 7.2. Profile Of Respondents ................................ ................................ ................................ ......... 26 8. Conclusion & Interpretation ................................ ................................ ................................ ........ 27 9. Recommendations ................................ ................................ ................................ ....................... 57 10. Limitation Of The Study: ................................ ................................ ................................ ........... 59 11. Appendices................................ ................................ ................................ ................................ 60 12. List Of Tables, Figures & Graphs ................................ ................................ .............................. 62 13. Bibliography ................................ ................................ ................................ ............................. 65

1. EXECUTIVE SUMMARY
To retain customers in this competitive world companies now come out with loyalty program to give more customer value. Today earning customer loyalty goes beyond gaining customer satisfaction. Loyal customers evangelize the brand by sharing their satisfactory experiences with their friends and colleagues. XtraRewards is a loyalty program offered by IndianOil. It is the countrys one and only cash customer Loyalty Program that rewards cash paying customers. A member can earn points on purchases at participating IndianOil retail outlets and enjoy benefits at affiliates and alliance partners. Each reward of the program requires the customers to collect a minimum number of points to redeem the gift. Example, for petrol worth Rs. 100, 334 points are required. As seen by simple calculation for a customer to earn 334 points he needs to first purchase petrol of Rs. 25,050. For middleclass segment of customers this amount of expenditure can take over a year and hence the program has been largely failing. There has been a rapid decline in the sales of the cards and also the members who have the card have found to be using it very rarely. The aim of IOCL currently is to make the XtraRewards program a success by shifting focus from fuel rewards to the alliance partners offer. Example, Dominos gives Rs. 100 discount on a purchase of Rs. 300. However it was seen that majority of the members were not making use of the alliance partners benefits. To understand the exact cause of the program not performing as expected, the awareness among the customers, their expectation and the reason was less usage by the existing members, a market survey at the IndianOil retail outlets was conducted. The conclusions and interpretation of the survey were used to suggest recommendations. Few of the recommendations have currently been to practice in Delhi. The primary drawback found during the market research was the lack awareness of XtraRewards program even after 4 years in the market which can be traced to lack of advertisement at the IndianOil retail outlets in forms of banners, leaflets etc and also incomplete awareness of the card holders regarding all the benefits provided by the program.

2. INTRODUCTION
Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas company headquartered at Mumbai, India. It is Indias largest commercial enterprise, ranking 125th on the Fortune Global 500 list in 2010. IndianOil and its subsidiaries account for a 47% share in the petroleum products market, 34.8% share in refining capacity and 67% downstream sector pipelines capacity in India. It is India's largest company by sales with a turnover of Rs. 271,074 crore and profit of Rs. 10,221 crore for the year 2009-10. The Indian Oil Group of Companies owns and operates 10 of India's 19 refineries with a combined refining capacity of 65.7 million metric tons per year. IndianOil operations are strategically structured along business verticals - Refineries, Pipelines, Marketing, R&D Centre and Business Development E&P, Petrochemicals and Natural Gas. To achieve the next level of growth, IndianOil is currently forging ahead on a well laid-out road map through vertical integration upstream into oil exploration & production and downstream into petrochemicals and diversification into natural gas marketing and alternative energy, besides globalisation of its downstream operations. IndianOil is currently metamorphosing from a pure sectoral company with dominance in downstream in India to a vertically integrated, transnational energy behemoth. The Corporation is already on the way to becoming a major player in petrochemicals by integrating its core refining business with petrochemical activities, besides making large investments in E&P and import/marketing ventures for oil & gas in India and abroad. IndianOil has a keen customer focus and a formidable network of customer touch -points dotting the landscape across urban and rural India. It has 18,643 petrol and diesel stations, including 2,947 Kisan Seva Kendras in the rural markets. With a countrywide network of 35,600 sales points, backed for supplies by 140 bulk storage terminals and depots, 98 aviation fuel stations and 88 LPGas bottling plants, IndianOil services every nook and corner of the country. With a steady aim of maintaining its position as a market leader and providing the best quality products and services, IndianOil is currently investing Rs. 47,000 crore in a host of projects for augmentation of refining and pipelines capacities, expansion of marketing infrastructure and product quality upgradation.

2.1. ORIGIN

Indian Oil owes its origins to the Indian government's conflicts with foreign-owned oil companies in the period immediately following India's independence in 1947. The leaders of the newly independent state found that much of the country's oil industry was effectively in the hands of a private monopoly led by a combination of British-owned oil companies Burmah and Shell and U.S. companies Standard-Vacuum and Caltex. The government's 1948 Industrial Policy Resolution declared the oil industry to be an area of the economy that should be reserved for state ownership and control, stipulating that all new units should be government-owned unless specifically authorized. India remained effectively tied to a colonial supply system, however. Between 1954 and 1957, two refineries were built by Burmah-Shell and Standard-Vacuum at Bombay, and another was built at Vishakhapatnam by Caltex. During the same period the companies found themselves in increasing conflict with the government and Burmah suspended all exploration activities in India. In 1958, the government formed its own refinery company, Indian Refineries Ltd. With Soviet and Romanian assistance and in 1959, the Indian Oil Company was founded as a statutory body. In September 1964, Indian Refineries Ltd. and the Indian Oil Company were merged to form the Indian Oil Corporation, Indias flagship National Oil Company.

2.2. VISION AND MISSION Vision: A major diversified, trans-national, integrated energy company with national leadership and a strong environment conscience, playing a national role in oil security and public distribution. Mission:
y

To achieve international standards of excellence in all aspects of energy and diversify business with focus on customer delight through value products and services and cost reduction.

y y

To maximize creation of wealth, value and satisfaction of stakeholders. To attain leadership in developing, adopting and assimilating state of the art technology for competitive advantage.

2.3. PRODUCTS IndianOil's product range covers petrol, diesel, LPG, auto LPG, aviation turbine fuel, lubricants, naphtha, bitumen, paraffin, kerosene, Xtra Premium petrol, Xtra Mile diesel, Servo lubricants, Indane LPG, Autogas LPG, Indian Oil Aviation.

2.4. SERVICES IndianOil has been lending its expertise in several areas of services namely refining, marketing, transportation, training and R&D. The strength of IndianOil springs from its experience of operating the largest number of refineries in India and adapting to a variety of refining processes along the way. The Corporation has commissioned several grassroots refineries and modern process units. With its vast experience in successfully implementing SH&E policy and practices at various units, IndianOil offers its services in ensuring that the clients work environment is safe, healthy and clean. IndianOil, the pioneer in cross-country petroleum product pipeline in the Indian sub-continent constructed and commissioned its first petroleum product pipeline, Guwahati-Siliguri Pipeline in the year 1964. Over the last four decades the pipeline network of IndianOil has grown to 10,899 km. IndianOil provides a wide range of marketing services and consultancy in fuel handling, distribution, storage and fuel/lube technical services. With a formidable bank of technical and engineering talent, IndianOil is fully equipped to handle small to large-scale infrastructural projects in the petroleum downstream sector. IndianOil's fuel management system to bulk customers offer customized solutions that deliver least cost supplies keeping in mind usage partners and inventory levels. IndianOil's world-class R&D Centre, established in 1972, has state-of the art facilities and has delivered pioneering results in lubricants technology, refining process, pipeline transportation, bio-fuels and fuel-efficient appliances. Over the past three decades, IndianOil R&D Centre has developed over thousands of formulations of lubricating oils and greases responding to the needs of Indian industry and consuming sectors like Defence, Railways, Public Utilities and Transportation. With a vision of evolving into a leader as technology provider through excellence in management of knowledge, technology and innovation, IndianOil has launched IndianOil Technology Ltd. The new subsidiary markets the intellectual properties developed by IndianOil R&D Centre.

2.5. LOYALTY PROGRAMS Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behaviour which is potentially beneficial to the firm. Forming a part of Customer relationship management, loyalty programs are widely-implemented strategy for managing a companys interactions with customers, clients and sales prospects. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold. The company has launched two loyalty programs XtraPower, a Fleet Card Program, aimed at Large Fleet Operators and XtraRewards, loyalty program for retail customers. The XtraPower, Fleet Card programme is a complete smart card-based fleet management solution for fleet operators and corporates for cashless purchase of fuel & lubricants from designated retail outlets of IndianOil through flexible pre-paid and credit facilities. The points accumulated by a card member can be redeemed for various exciting rewards. XtraPower also gives unique benefits like personal accident insurance cover and vehicle tracking facilities. Any business entity owning or operating a vehicle fleet can become a member of the XtraPower fleet card programme at a nominal annual charge. IndianOil XtraRewards, launched in 2007, is the countrys one and only cash customer Loyalty Program that rewards cash paying customers. Apart from rewarding Cash Customers, the program also rewards customers who pay by credit or debit cards. The XtraRewards card is a cashless card; a member can earn points on purchases at participating IndianOil retail outlets and enjoy benefits at affiliates and alliance partners of IndianOil covering prominent FMCG, Food, Automobile, Travel, Entertainment, Apparel and Hospitality sectors. The points can be instantly redeemed for fuel and Servo lubes and also various rewards from the XtraRewards catalogue. It is currently active in Mumbai, Delhi, Chennai, Ahmedabad, Bangalore,

Bhubaneswar, Coimbatore, Mysore, Pune and Secunderabad.

2.6. COMPET TORS Indi n Oil Corporation has t o major domesti competitors, Bharat Petroleum and Hindustan Petroleum. Both are state-controlled, li e Indian Oil Corporation. Bharat Petr leum Corporation Limited is one of the largest state-owned oil and gas company headquartered at Mumbai, India, with Fortune Global 500 rank of 307 (2010). On 24 January 1976, the Burmah Shell Group of Companies was taken over by the Government of India to form Bharat Refineries Limited. On 1 August 1977, it was renamed Bharat Petroleum Corporation Limited. It was the first refinery to process newly found indigenous crude Bombay High, in the country. Today Bharat Petroleum Corporation Limited has four refineries located at Mumbai, Kochi, Bina and Numaligarh. Bharat Petroleum is considered to be a pioneer in Indian petroleum industry with various path -breaking initiatives such as Pure for Sure campaign, Petro card, Fleet card etc. BPCL was also one of the foremost organi ations to implement ERP successfully across its business domain. Hindustan Petroleum Corporation Limited is an Indian stateowned oil company headquartered at Mumbai, India and is a Fortune 500 company of India listed at number 311. HPCL operates 4 refineries one at Mangalore, Karnataka, with a capacity of 9 MMTPA, second refinery of 9 MMTPA in Bathinda, Punjab, third in Mumbai, Maharashtra with a capacity of 5.5 MMTPA and forth at Visakhapatnam, Andhra Pradesh with a capacity of 7.5 MMTPA . HPCL also owns and operates the largest Lube Refinery in India producing Lube Base Oils of international standards. This Lube Refinery accounts for over 40% of the India's total Lube Base Oil production. HPCL had incorporated Loyalty Solutions and Research Ltd. in 2006 and launched i-mint, Indias first nationwide coalition loyalty and consumer reward program. Even though IndianOil is the market leader it is facing threat from both HPCL and BPCL in terms of technology and customer service including the loyalty program.

3. OBJECT

ES OF ST

Market share
1.50% 24%
47% 26.50%

IOCL

HPCL
BPCL

Others

FIG. 3.1. MARKET SHARE. IN PETROLEUM SECTOR *SOURCE INDIAN OIL & GAS AND CRISIL RESEARCH JULY 2010.

It is clear from the chart that IOC is the biggest player in the petroleum retailing business in India, followed by HPCL, BPCL and other private players. However IOC has been facing major setback in its loyalty program in comparison to both HPCL and BPCL Hence the object of the study was: y y y To understand the concept of loyalty program such as XtraRewards To conduct a customer awareness survey. To get the customers and members feedback and expectation on the program and know the reason for less than expected use of XtraRewards cards. Currently the program has 70,000 patrons in Delhi however less than 40% are active users. y y y y To increase active card usage of XtraRewards program. To find out alliance partners most preferred by customers. To suggest re-launch the program within the budget constraints. To obtain opinions and suggestions at IndianOil retail outlets and give recommendations to IndianOil to improve the implementation of XtraRewards loyalty program.

10

4. CONCEPTS USED IN STUDY

4.1. MARKETING Marketing is defined by the American Marketing Association as the set of process for creating, communicating, delivering and exchanging offerings that have value for customers, client partners and society at large. The Marketing has evolved from the production concept, where a firm focuses on production orientation i.e. producing as much as possible of a given product or service, to societal concept, where a firm focuses on building and keeping good customer relations and benefit of the society.

FIG. 4.1.1. MARKETING MANAGEMENT PHILOSOPHIES

A firm survives by producing goods that persons are willing and able to buy. Consequently, ascertaining consumer demand is vital for a firm's future viability. Today companies have a customer focus, they focuses their activities and products on consumer demands.

Price

Promotion

Target Customer

Place

Product

FIG. 4.1.2. FOUR Ps OF MARKETING

Production concept

Selling concep

Ma ke ing oncep

Socie al Ma ke ing oncep

11

4.2. CUSTOMER RELATIONSHIP MANAGEMENT Customer relationship management (CRM) is a widely-implemented strategy for managing a companys interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes, principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments. Benefi s of CRM sys em:
y y y y y

Quality and efficiency Decrease in overall costs Decision support Enterprise agility Customer Attention

CRM systems for marketing help the enterprise identify and target potential clients and generate leads for the sales team, it also helps in recognizing that service is an important factor in attracting and retaining customers.

4.3. LOYALTY PROGRAMS

Loyalty programs are structured marketing initiative for developing long lasting relationships with most valuable customers, creating and delivering unique, consistent and memorable engagements and developing better business understanding for driving footfalls and managing customer churn. India is a nascent market for loyalty programs and holds tremendous potential. Loyalty programs involve rewarding the customer and therefore encourage loyal buying behaviour which is potentially beneficial to the firm.

12

SE ME TAT ON

LIFECYCLE

FIG. 4.3.1. PRINCIPLES OF LOYALTY MANAGEMENT

Knowing the customer is the best loyalty program an organi ation can invest in. For example if a customer is highly happy about receiving discount on his purchase then design the loyalty program in such a manner that the customer is rewarded with a decent discount. Loyalty programs are emerging as a differentiator for companies to get an edge over their competitors. Loyalty programs are becoming more holistic, focusing on relationship rewards and recognition, which would result in strengthening their custo mer relationship. Steps To Design A Loyalty Program: 1. Link customer loyalty to business outcomes. Before making an investment it is important to know the potential returns. 2. Find loyalty indicator. 3. Identify the driver of customer loyalty. Every business has an attribute that impacts customer loyalty. 4. Identifying your loyal customer and their buying behaviour. An exhaustive search of minimum one year is required. Use this data for designing loyalty rewards. 5. Implement your customer loyalty program 6. Resurvey to check if the goals have been achieved.

CUSTOMER E PERIENCE

13

Adv n
y

es of loy l y c ds: Customer Relationship: Loyalty card programs can help retain customers, increase traffic and improve sales. Exclusive deals, discounts and incentives attract customers. Loyalty card incentives improve customer service and relationships with customers.

Marketing Campaigns: If a company requires registration to distribute a loyalty card, it can collect data that will help drive effective marketing strategies. Keeping records of past purchases can help design better promotions and advertising campaigns

Business Growth: Reduced advertising costs and increased return on investment (ROI) on marketing campaigns are two main business growth advantages. Loyalty cards can attract customers to a business and away from the competition.

Dis dv n
y

e of loy l y c ds:

Customer Stalking: Loyalty cards potentially endanger business growth if a company does not develop the correct strategy. Excessive advertisements can be a turn-off and may be disregarded as junk advertisements. Furthermore, customers may feel offended if they are uncomfortable sharing sensitive information in order to get the incentives of the program.

Reduced Profit:

Overuse of the loyalty card program causes other marketing

campaigns to lose effect. Difficulties arise in attracting more customers willing to purchase at regular prices. As a result, customers may refuse make purchases unless

there is a reduced price or other incentive. If the average customer chooses this behaviour, the business can suffer a reduction in long-term and short-term profits.
y

Decreased Brand Value: When used ineffectively, loyalty card programs actually can reduce the value of the product or service offered because customers can make assumptions about the value of brands based on the price.

Customer Resistance: Some savvy consumers may resist signing up for customer loyalty cards because they don't want companies collecting information about their purchases. They view this as an invasion of their privacy as a consumer. Inc.com reports that more and more customers are aware of the fact that using their customer loyalty cards help businesses collect information on their buying behaviour that they may use to create future promotional offers.

14

4.4. MARKET RESEARCH AND ANALYSIS

PROBLEM IDENTIFICATION & DISCOVERY

IDENTIFICATION & DISCOVERY OF NEW PROBLEM

RESEARCH DESIGN

CONCLUSION & INTERPRETATION

SAMPLING

DATA PROCESSING & ANALYSIS

DATA GATHERING

FIG. 4.4.1. MARKET RESEARCH FLOWCHART

Market research is a systematic and objective process of generating information for aid in making business decisions. The research information is neither intuitive nor haphazardly gathered. Business research must be objective and detached and impersonal rather than biased. It should facilitate the managerial decision process for all aspects of a business.

15

5. LOYALTY PROGRAM IN PETROLEUM SECTOR & XTRARE ARDS

Now loyalty card in petroleum sector is gaining momentum as all major companies are focusing on Customer Relationship Management (CRM) so that they could develop and retain customers. The immense competition is making loyalty programs an integral program for the day -to-day functioning of petro-retailing. Of course, right now many such loyalty programs are being run by the petro-retailers like Smart Fleet (BPCL), I-Mint (HPCL), Drivetrack (HPCL), Petrocard (BPCL) and others. However, these programs are mainly focused at the bulk consumers and the small consumers are left unnoticed more or less. But in present, such differ ntiation is e minimi ed and loyalty program is made available for every segment of consumers.

5.1. PETRO BONUS PROGRAM (BPCL)

Bharat Petroleum Corporation Limited introduced "PetroBonus" Programme to meet the changing needs and desires of the customer. The Programme offers its members the convenience and rewards while purchasing the fuel using the Petro Card. The proposition of earn while you spend articulates BPCLs desire to deliver more value to its customers. For customers the key benefits of the Petro Card are: cashless convenience, acceptance at over 4300 outlets across the country, Quality assurance at Pure for Sure outlets, managing and tracking of fuel spends. The card cost Rs. 250 and a the member gets an umberella worth Rs. 200 free with the card. The card also provides its members with double points on festivals and its offers includes movie tickets an option availed and prefered by many members.

16

5.2. CLUB HP & I-MINT PROGRAM (HPCL As part of HPCL's strategic retail marketing initiative HPCL also introduce many program like Club HP & i-mint to maintain loyal customer, Club HP provides high quality

personalized vehicle and consumer care through a select set of outlets. This Card gets you Convenience in addition to Rewards which are unmatched to any similar card scheme. . 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 and a host of other amenities. To deliver the many conveniences and services, Club HP membership is associated with leading companies like Coca Cola India, ICICI Bank, Fed Ex, Western Union Money Transfer, Caf Coffee Day, US Pizza and Skypak. The Club HP outlets are categorized as Standard, Mega and Max depending on the levels of services and amenities available. I-mint is a pure loyalty program and rewards the customers for the purchases made by them at the partner's establishments irrespective of the mode of payment which could be through credit/debit cards, cheque or even payment made by cash. The main differentiation of this program from the current loyalty programs is provision to the customers to consolidate reward earnings in a single loyalty account. These points can be redeemed against a wide array of products and services from the gift catalogue.

5.3. XTRAREWARDS PROGRAM (IOCL In the present world where there is intense competition, it becomes very necessary to retain loyal customers. The commercial benefits of loyal customers are well-known by the brand managers. The cost of acquiring a new customers is always more than retaining an old customer. IndianOil's loyalty programmes are designed exclusively to benefit the large number of its customers who have been patronising the brand for over five decades. In order to do that IndianOil launched XtraRewards in 2007, the countrys one and only cash customer Loyalty Program that rewards cash paying customers. Currently the scheme is available in 1106 outlets out of 18643 in India and in 117 out of 205 retail outlets in Delhi.

17

The XtraRewards card is a cashless card; a member can earn points on purchases at participating IndianOil retail outlets and enjoy benefits at affiliates and alliance partners. The point system of the program rewards 1 point against purchase of fuel worth Rs. 75.The points are added in cumulative nature that is if a customer fills his tank with Rs. 50 petrol the charge slip would show Zero points but the next time when the customer fills his tank with Rs. 25 the charge slip would show 1 point earned. The points can be instantly redeemed for fuel and Servo lubes and also various items in the XtraRewards catalogue. One of the unique features of this card is that the company has ties ups with different alliance partners. Once the customer swaps his card he receives a charge slip which states his points earned and his total accumulated points. With this charge slip he also receives discount at one of the alliance partners outlet. There are two types of memberships - Individual and Corporate. Those having vehicles for personal use can enrol under Individual
l

Type

of

membership. All companies/entities/persons having commercial vehicles can enrol as Corporate. Individuals can pay the enrolment fee which is Rs. 60 and pick up a pre-activated ready-to-use XtraRewards card from any participating Retail Outlets of IndianOil. For Corporate Membership one should obtain a physical application form for Corporate from the Retail Outlet from which they meet their fuel requirements, fill up and submit the same at the said Retail Outlet with copies of the RC of each vehicle they own. The XtraRewards Card will be issued directly by IndianOil to the concerned Corporate. All vehicles of a company can get the XRPs on a single card while fuelling at participating IndianOil retail outlets, provided they produce the XtraRewards Card at the time of purchase of fuel. The company can redeem the XRPs only through its authorised representative, whose name is shown in the application form.

18

SR. NO. 1 2 3 4 5 6 7 8 9 10 11 12

PRODUCT DESCRIPTION Rs.100 worth of fuel Rs.100 worth of petrol + oil mix Rs.100 worth of Xtra Premium Rs.100 worth of Xtra Premium + oil mix Rs.100 worth of Xtra Mile Rs.100 worth of diesel Rs.100 worth of Auto LPG Rs.100 worth of CNG 500 ml servo 2T supreme 40 ml servo 2T supreme pouch 60 ml servo 2T supreme pouch 500 ml servo kool plus

POINTS REQUIRED 334 334 334 334 334 334 334 334 234 20 29 400

FIG. 5.3.1 XTRAREWARD FUEL & LUBE POINT SYSTEM

The program can track and communicate sales promotion offers at the point of purchase through the charge slip as well as the SMS sent to the card holders registered mobile number. The aim of IndianOil is to seek to inculcate the habit of redeeming points. The XtraRewards program also seeks to provide privileged services with the IndianOil alliance partners like Dominos, Slice of Italy, Nirulas, Carnation, Mahindra First choice, Welcome Heritage, Adventure Island, World of Wonder and Rajdhani.

19

6. METHODOLOGY
As the market survey was to be conducted at the retail outlets care had to be taken to ensure that the time duration of the questionnaire designed was 30 to 40 seconds and yet covered the basic required aspects. Feedbacks were also taken from the petrol pumps attendants and the manager regarding the difficulties faced by them in selling the card and after due analysis certain recommendations were made. Unive se of s udy: The universe of study were the people who use the services at petrol pumps. Loc le of s udy: The locale of the study was the IndianOil petrol pumps. S m le of s udy: The sample size of 506 participants was taken. Sampling was done as convenience sampling. D collec ion:

The data collected was primary data. The data was collected through a structured questionnaire. The responses were recorded and the comments were also noted. D An lysis:

Analysis was done using SPSS statistics19 software. Graphs and tables are shown. Chi square test of independence is also applied where it is possible.

Field Ex e ince: It was very taxing to get the information filled from the respondents as they used to get irritated in the heat and most customer were in rush and refused to fill in the survey stating they had time constraint. It was difficult to convince customers to give feedback. It was also found during a test run of the questionnaire that most customers were unwilling to share their salary bracket and their educational background, hence the questionnaire was modified to exclude the salary question.

20

7. TABULATION & RESULTS

7.1. BREAK UP OF THE SAMPLE

The market search population mix was male dominant with 94.27% male

respondents and only 5.73% female respondents out of a total of 506 respondents. It was seen that the

preferences also changed with respect to gender.

GRAPH 7.1.1. GENDER DISTRIBUTION OF THE RESPONDENTS

While designing the questionnaire, five different age groups were identified where it was highly likely that the customer preference would change.

These age groups started from 18 and the last age group option was 56+. The age distribution of the respondents had maximum respondents in age group from 26-35 years (39.13%) and 36-45 years (35.57%)

GRAPH 7.1.2. AGE DISTRIBUTION OF THE RESPONDENTS

21

The

occupations

of

the

respondents were recorded with 3 options, namely

Student, Self Employed and Salaried. The other option was kept to cover currently unemployed segment also. The occupation distribution had maximum respondents as salaried employees (64.62%) followed by self employed (32.02%)

GRAPH 7.1.3. OCCUPATION DISTRIBUTION OF THE RESPONDENTS

For the monthly fuel expenditure of the respondents five options were used. These options were kept keeping in mind that how a customers change preference to would their

according

monthly income.

There was a

fairly even distribution however maximum were in the bracket of Rs. 2501-5000 (32.21%) and nil were found over Rs. 7501+ .

GRAPH 7.1.4. MONTHLY FUEL EXPENDITURE DISTRIBUTION OF THE RESPONDENTS

22

Of

the

506

respondents

79

respondents owned a 2 wheeler where as majority where 4 of the

respondents owners

wheeler in

counting

upto 427

number. As the program targets 4 wheeler primarily they comprised the majority of the respondents.

GRAPH 7.1.5. VEHICLE OWNED BY THE RESPONDENTS

Of the 506 respondents it was seen that the awareness of the

respondents about the IndianOil XtraRewards program had 67.39% respondents program. not aware of the

GRAPH 7.1.6. AWARENESS OF THE RESPONDENTS ABOUT XTRAREWARDS

23

It was found during the survey that of a total of 165 who were aware of the program, 149 respondents said they came to know about the program through the petrol pump attendants. It was found that none of the respondents had come across a banner or leaflet regarding the XtraRewards program.

GRAPH 7.1.7. SOURCE AWARENESS ABOUT XTRAREWARDS

Even though 32.61% of the respondents were aware of the IndianOil XtraRewards program, but only 29.64% of the

respondents were aware of the alliance partners which showed lack of complete awareness among the customers.

GRAPH 7.1.8. AWARENESS OF THE RESPONDENTS ABOUT XTRAREWARDS ALLIANCE PARTNERS

24

To understand the preference of the customers in terms of service and benefits, all the respondents were asked for their most

preferred alliance partner offer. This also helped in realising the offers which if made a part of the alliance partner would benefit IndianOil. 58.70% respondent

showed high preference to car services followed by 24.9% preferring food offers.
GRAPH 7.1.9. MOST PREFERRED ALLIANCE PARTNERS OFFER BY RESPONDENT

The respondents were asked which is the best feature of the XtraRewards Program so that IndianOil can capitalize on its strength and identify its

weakness to improve. It was seen that after complete knowledge of the program 54.35% of the respondents favoured the alliance partners but an alarming 44.47% felt that they were not happy with any aspect of the program.
GRAPH 7.1.10. BEST FEATURE OF XTRAREWARDS PROGRAM BY RESPONDENT

25

7.2. PROFILE OF RESPONDENTS

TABLE 7.2.1. PROFILING ON BASIS OF AGE, GENDER & VEHICLE

Monthly Expenditure on Fuel 0-1000 Age 18-25 26-35 36-45 46-55 56+ Total 8 48 23 7 0 86 1001-2500 19 49 59 9 0 136 2501-5000 1 67 52 43 0 163 5001-7500 1 34 46 33 7 121 Total 29 198 180 92 7 506

TABLE 7.2.2. PROFILING ON BASIS OF MONTHLY FUEL EXPENDITURE

Age Salaried 18-25 26-35 36-45 46-55 56+ Total 17 165 91 47 7 327

Occupation Self Employed 0 33 84 45 0 162 Student 12 0 0 0 0 12 Others 0 0 5 0 0 5 Total 29 198 180 92 7 506

TABLE 7.2.3. PROFILE ON BASIS OF OCCUPATION

26

8. CONCLUSION & INTERPRETATION

GRAPH 8.1. AWARENESS OF XTRAREWARDS VS GENDER

Of a total of 506 respondents 477 were males of which only 152 were already aware of the XtraRewards Program. Only 29 were female respondents of which 13 were already aware of the XtraRewards program. The reason that was seen primarily to lack of awareness was lack of advertisement in forms of banners and leaflets at the retail outlet and also the program was not advertised through medias like newspapers, television, magazines etc. As a customer at any petrol pump is usually lacking time the petrol pump attendants also found it difficult to talk to the customers about XtraRewards. Also due to lack of banner at the retail outlets no customer showed self interest in enquiring about the program and its benefits. Most customers feedback included that they would be interested in the program but were unaware of XtraRewards due to lack of promotional advertising.

27

GRAPH 8.2. AWARENESS OF XTRAREWARDS VS AGE

The XtraRewards awareness variation with age showed an interesting mix with 12 out of 29 respondents of the age group of 18-25 years being aware of the program. This showed that in comparison the youth was better aware of the program. Also it was seen that age group 36-45 years which dominated the respondents age and which is the most potential age group to capture had only 46 out of 180 respondents aware of the program. A similar case was with the age group 26-35 years where only 65 out of 198 respondents were aware of the program. This figure is a problem as the age group 26-35 years and 36-45 years comprises of high potential customers and hence need to be tapped for market success. In age group 46-55 years 35 out of 92 respondents were aware and displayed a better ratio in comparison.

28

C i squ e es of inde endence if A e is

f c o fo

oduc

w eness:

A e * Aw e of Indi n Oil X Count

Rew ds P o

m C oss

bul ion

Aware of Indian Oil XtraRewards Program Yes Age 18-25 26-35 36-45 46-55 56+ Total 12 65 46 35 7 165 No 17 133 134 57 0 341 Total 29 198 180 92 7 506

TABLE 8.1 AGE & PRODUCT AWARENESS

Value

df

Asymp. Sig. (2-sided)

Pearson Chi-Square

20.797

TABLE 8.2 CHI SQUARE TEST FOR PRODUCT AWARENESS & AGE

Using the SPSS Statistic19 software, the chi square test was performed to check if the product awareness (XtraRewards) is independence of age of the customer. We see that level of significance is .000 which means that the test would hold true 100% each time it is conducted. Hence we can conclude that the product awareness (XtraRewards program) is not independent of the age of the customer.





 







.000

29

GRAPH 8.3. AWARENESS OF XTRAREWARDS VS MONTHLY FUEL EXPENDITURE IN RS.

Of a total of 506 respondents 163 respondents were in the group of monthly fuel expenditure of Rs. 2501-5000. Out of 163 it can been seen that 128 respondents were unaware about the program and only 35 i.e. 21.47% respondents were already aware of XtraRewards. The matter of concern can also be seen in group Rs. 1001-2500 where out of 136 only 17 i.e. 12.5% respondents said that they were aware of the program. The higher bracket group Rs. 50017500 showed a favourable awareness graph with 80 (66.11%) out of 121 respondents being aware of the program. As group 1001-2500 and group 2501-5000 have the highest segment share (32.12% & 26.88% respectively) in terms of monthly fuel expenditure it is highly important to tap this potential segment.

30

C i squ e es of inde endence if Mon ly fuel ex endi u e is w eness:

f c o fo

oduc

Mon ly Ex endi u e on Fuel * Aw e of Indi n Oil X Count

Rew ds P o

m C oss

bul ion

Aware of Indian Oil XtraRewards Program Yes Monthly Expenditure on Fuel 0-1000 1001-2500 2501-5000 5001-7500 Total 33 17 35 80 165 No 53 119 128 41 341 Total 86 136 163 121 506

TABLE 8.3. MONTHLY FUEL EXPENDITURE & PRODUCT AWARENESS

C i-Squ e Tes s Asymp. Sig. (2Value Pearson Chi-Square 97.342 df 3 3 sided) .000 .000 Exact Sig. (2sided) .000 .000

TABLE 8.4. CHI SQUARE TEST FOR PRODUCT AWA RENESS & MONTHLY FUEL EXPENDITUR E

Using the SPSS Statistic19 software, the chi square test was performed to check if the product awareness (XtraRewards) is independence of the monthly fuel expenditure of the customer. We see that level of significance is .000 which means that the test would hold true 100% each time it is conducted. Hence we can conclude that the product awareness (XtraRewards) is not independent of the monthly fuel expenditure of the customer.





 





"



 



31

GRAPH 8.4. AWARENESS OF XTRAREWARDS ALLIANCE PARTNERS VS GENDER

It can be clearly seen from the graphs that out of 477 male respondents only 137 respondents (28.72%) were aware of the alliance partners, however the percentage ratio was better in females respondents with 13 (44.83%) out of 29 respondents being aware of the alliance partners. However as the number of female respondents were very less in number it is very difficult to deduce any logical reasoning for higher percentage awareness between females in comparison to males. But the matter of concern in the male respondents was that even though 152 male respondents were aware of XtraRewards program only 137 were aware of the alliance partners, this showed that 15 of the male respondents were aware of XtraRewards but were not aware of the alliance partnerships & their benefits. This number points out to lack of complete awareness among the customers which becomes a hurdle in promoting the alliance partners and their offer.

32

GRAPH 8.5. AWARENESS OF XTRAREWARDS ALLIANCE PARTNERS VS AGE

As we had seen earlier, the age group 26-35 years had the highest share of 39.13% i.e. 198 out of a total of 506 respondents, followed by age group 36-45 years with a share of 35.57% i.e. 190 respondents, and both the groups form the must tap segment of the market. From the graph above it can be seen that both the dominant age groups showed higher unawareness of the XtraRewards alliance partners. Where only 28.78% of 26-35 years age group were aware of the alliance partners an even lower 23.15% of 36-45 years age group were aware of the alliance partners. The age group 46-55 had a total share of 18.18% i.e. 92 respondents of which 35 i.e. 38.04% respondents were aware of the alliance partnership and their benefits.

33

C i squ e es of inde endence if A e is

f c o fo

oduc

w eness:

A e * Aw eness Of Alli nce P Count

ne s C oss

bul ion

Awareness Of Alliance Partners Yes Age 18-25 26-35 36-45 46-55 56+ Total 8 57 44 35 6 150 No 21 141 136 57 1 356 Total 29 198 180 92 7 506

TABLE 8.5. AGE & PRODUCT AWARENESS

C i-Squ e Tes s Asymp. Sig. (2Value Pearson Chi-Square 16.126 df 4 sided) .003 Exact Sig. (2sided) .003

TABLE 8.6. CHI SQUARE TEST FOR PRODUCT AWARENESS & AGE

Using the SPSS Statistic19 software, the chi square test was performed to check if the product awareness (XtraRewards Alliance Partners) is independence of age of the customer. We see that level of significance is .003 which means that the test would hold true 99.7% each time it is conducted. Hence we can conclude that the product awareness (XtraRewards program Alliance Partners) is not independent of the age of the customer.

&$

$&

&%$

)(

'

%$

34

GRAPH 8.6. AWARENESS OF ALLIANCE PARTNERS VS MONTHLY EXPENDITURE

As before, a similar dissatisfying trend continued in the monthly expenditure of fuel sector. Out total of 506 respondents 163 respondents were in the group of monthly fuel expenditure of Rs. 2501-5000 and only 35 i.e. 21.47% respondents were aware of the alliance partnerships and the same number was unaware of the XtraRewards program. Again the matter of concern can be seen in group Rs. 1001-2500 where out of 136 only 5 i.e. 3.67% respondents were aware of the alliance partners where as 12.56% of the respondents had said that they were aware of XtraRewards. The higher bracket group Rs. 5001-7500 showed a favourable awareness graph with 77 (63.63%) out of 121 respondents being aware of the alliance partners however initially 66.11% respondents said they were aware of XtraRewards program. This continues to raises the issue of incomplete information amongst the customers.

35

C i squ e es of inde endence if Mon ly fuel ex endi u e is w eness:

f c o fo

oduc

Mon ly Ex endi u e on Fuel * Aw eness Of Alli nce P Count

ne s C oss

bul ion

Awareness Of Alliance Partners Yes Monthly Expenditure on Fuel 0-1000 1001-2500 2501-5000 5001-7500 Total 33 5 35 77 150 No 53 131 128 44 356 Total 86 136 163 121 506

TABLE 8.7. MONTHLY FUEL EXPENDITURE & PRODUCT AWARENESS

C i-Squ e Tes s Asymp. Sig. (2Value Pearson Chi-Square 119.366 df 3 sided) .000 Exact Sig. (2sided) .000

TABLE 8.8. CHI SQUARE TEST FOR PRODUCT AWARENESS & MONTHLY FUEL EXPENDI TURE

Using the SPSS Statistic19 software, the chi square test was performed to check if the product awareness (XtraRewards Alliance partners) is independence of the monthly fuel expenditure of the customer. We see that level of significance is .000 which means that the test would hold true 100% each time it is conducted. Hence we can conclude that the product awareness (XtraRewards program Alliance partners) is not independent of the monthly fuel expenditure of the customer.

15

51

145

87

45

4 1

21

36

From total of 506 respondents 165 respondents were aware of XtraRewards but 15 out those 165 respondents said that they were unaware of the alliance partnerships and their offers. This 15 number even included customers who are members of the XtraRewards program, further information on the same is given later. In the reason for unawareness about the alliance partnership the customer said that the petrol pump attendants had mentioned only the point system and the fuel and lube rewards to them, also the booklet showed to them had no picture of the alliance partners of IndianOil. The website of XtraRewards (www.XtraRewards.com) also had no clear mention of the alliance partners and their offer on the main homepage.

@ E

DCC

A@

GRA

8.7. AWARENESS F A

AN E ARTNERS VS AWARENESS F XTRAREWARDS

37

GRAPH 8.8. XTRAREWARDS CARDHOLDER VS AGE

It can be clearly seen from the graphs the XtraRewards Cardholder were distributed in 3 age groups, 36-45 years, 46-55 years and 56+ years. A very large untapped market fell in the age group of 26-35 years, where 65 respondents (shown earlier) were aware of the program, none of them were a member of the program. In age group 36-45 years, out of the 46 respondents aware of the program only 10 were cardholder which is 21.73% and in age group 46-55 years 9 i.e. 34.61% were cardholders out of the 35 respondents who were aware of XtraRewards. The first aim should be to understand in detail why the customers aware of the program are not a member of the program and how to convert them. The respondents feedback said that most of the customers who were aware of the program found the point system not very lucrative and the offers were not much appealing to their requirements.

38

C i squ e es of inde endence if A e is

f c o fo

oduc

do ion:

A e*X Count

Rew ds C d Holde C oss

bul ion

XtraRewards Card Holder Yes Age 18-25 26-35 36-45 46-55 56+ Total 0 0 10 9 2 21 No 12 65 36 26 5 144 NA 17 133 134 57 0 341 Total 29 198 180 92 7 506

TABLE 8.9. AGE & PRODUCT ADSORPTION

C i-Squ e Tes s Asymp. Sig. (2Value Pearson Chi-Square 46.249 df 8 sided) .000 Exact Sig. (2sided) .

TABLE 8.10. CHI SQUARE TEST FOR PRODUCT ADORPTION & AGE

Using the SPSS Statistic19 software, the chi square test was performed to check if the product adsorption (XtraRewards cardholders/membership) is independence of the age of the customer. We see that level of significance is .000 which means that the test would hold true 100% each time it is conducted. Hence we can conclude that the product adsorption (XtraRewards cardholders/membership) is not independent of age of the customer.

GI

IG

H S

RQ

HI

HI

IHG

39

GRAPH 8.9. XTRAREWARDS CARDHOLDER VS MONTHLY FUEL EXPENDITURE

It can be clearly seen from the graphs the XtraRewards Cardholders were distributed in 2 groups, Rs. 2501-5000 and Rs. 25001-7500. A very large untapped market fell in the group of Rs 1001-2500, where 119 respondents were unaware of the program and 17 i.e. 12.5% were aware but not a member of the program. In group Rs. 2501-5000, out of the 35 respondents aware of the program only 10 were cardholder which is 28.57% and in group Rs. 5001-7500, 11 i.e. 13.75% were cardholders out of the 80 respondents who were aware of XtraRewards. Both the awareness and not a XtraRewards cardholder percentage was higher in Rs 50017500 group, this reflected that the program is unable to capture the customer interest. The respondents feedback said that most of the customers who were aware of the program found the point system not very lucrative and group Rs. 5001-7500 looked forward to more car service option and on spot benefit for the same.

40

C i squ e es of inde endence if Mon ly fuel ex endi u e is do ion:

f c o fo

oduc

Mon ly Ex endi u e on Fuel * X Count

Rew ds C d Holde C oss

bul ion

XtraRewards Card Holder Yes Monthly Expenditure on Fuel 0-1000 1001-2500 2501-5000 5001-7500 Total 0 0 10 11 21 No 33 17 25 69 144 NA 53 119 128 41 341 Total 86 136 163 121 506

TABLE 8.7. MONTHLY FUEL EXPENDITURE & PRODUCT ADSORPTION

C i-Squ e Tes s Asymp. Sig. (2Value Pearson Chi-Square 109.317 df 6 sided) .000 Exact Sig. (2sided) .

TABLE 8.12. CHI SQUARE TEST FOR PRODUCT ADSO RPTION & MONTHLY FUEL EXPENDITUR E

Using the SPSS Statistic19 software, the chi square test was performed to check if the product adsorption (XtraRewards cardholders/membership) is independence of the Monthly fuel expenditure of the customer. We see that level of significance is .000 which means that the test would hold true 100% each time it is conducted. Hence we can conclude that the product adsorption (XtraRewards cardholders/membership) is not independent of Monthly fuel expenditure of the customer.

TX

XT

WX

WX

a`

XWT

W T

UT

41

GRAPH 8.10. XTRAREWARDS CARDHOLDER VS AWARENESS OF ALLIANCE PARTNERS

During the survey 21 respondents out of 506 respondents were XtraRewards member and cardholder. However out of the 21 members 1 member said that he was not aware of the alliance partnership and their offers. In the reason for unawareness about the alliance partnership the customer said that the petrol pump attendants had mentioned only the point system and the fuel and lube rewards to him, also the booklet showed to them had no picture of the alliance partners of IndianOil. Also being a recent user he said he had yet not been on the XtraRewards website. This feedback pointed out to the fact that a written one line mention of the alliance partners in the membership booklet is insufficient and a pictorial representation is more important to capture the customers and make them aware. However as the sample size of the cardholders is very small, logical deductions are difficult to make.

42

GRAPH 8.11. XTRAREWARDS CARDHOLDER VS LEVEL OF SATISFACTION

It can be clearly seen that out of the 21 cardholder and users, 17 members said that they were dissatisfied with the XtraRewards program. The reasons specified by the members included:y

Loss of pin number was a problem. They found it very difficult to retrieve the number back from customer care.

y y y

The points were not available at every retail outlet. The machine gave technical problems, the server was usually down. Redemption of the gift was troublesome, the gifts did not reach even after repeated complain at the customer care.

43

GRAPH 8.12. NOT A XTRAREWARDS CARDHOLDER VS WHY NOT CARDHOLDER IF AWARE

It was found that a total of 144 respondents who were aware of the XtraRewards program were not a cardholder, the most common reason for this was that the respondents were not interested in the program (118 respondents), whereas 23 respondents said that they found the offers provided in the program unattractive. 2 of the respondents were a member of the HP loyalty program and 1 respondent said that he was unaware that a membership card needs to be made to avail the program. The reason was lack of interest in the program included reasons such as:y y

Point system is not lucrative. They would prefer higher discounts from the alliance partners. SBI cardholder gets 30% off at Rajhani Hotel then same should be provided by XtraRewards (currently XtraRewards provides 10% off at Rajdhani Hotel)

Higher fuel rewards at lower points. Currently for Rs 100 worth fuel 334 points is required.

44

Out of 477 male respondents 288 respondents said they look forward to car services offer and would prefer on-spot services like monthly brake oil check and car insurance advise. 5 respondents said they would prefer other offers such as related to scooters and bike as there was no provision for them in the program.

GRAPH 8.13a.GENDER VS MOST PREFERRED ALLIANCE PARTNER OFFER

Out of the 29 female respondents 9 said they look forward to car services however 8 were interested in food offers. Hence we see a change in offer requirement with gender. 3 respondents said they would prefer other offers such as apparels and VLCC.

GRAPH 8.13b.GENDER VS MOST PREFERRED ALLIANCE PARTNER OFFER

45

GRAPH 8.14.AGE VS MOST PREFERRED ALLIANCE PARTNER OFFER

It can be seen from the graph at in each age group respondents looking forward to car services is higher in number, followed by food offers. A total of 297 respondents i.e. 58.69% respondents preferred car service offers. 126 respondents i.e. 24.90% respondents were interested in various food offers. Most of the customers preferred on-spot services. In car services preference was for a free monthly check regarding brake oil and maintenance advice. Also customers were interested in car insurance advice from experts. Customers also showed an interest in In&Out stores such as at BPCL.

46

C i squ e es of inde endence if A e is

f c o fo

oduc

efe ence:

A e * Offe Mos P efe ed C oss Count

bul ion

Offer Most Preferred Holiday Food Offers Age 18-25 26-35 36-45 46-55 56+ Total 8 61 43 14 0 126 Car Service 20 107 96 68 6 297 Packages 0 0 4 0 0 4 none 1 25 35 10 0 71 others 0 5 2 0 1 8 Total 29 198 180 92 7 506

TABLE 8.13. AGE & PRODUCT PREFERENCE

C i-Squ e Tes s Asymp. Sig. (2Value Pearson Chi-Square 40.436 df 16 sided) .001 Exact Sig. (2sided) .

TABLE 8.14. CHI SQUARE TEST FOR PRODUCT PREFERENCE & AGE

Using the SPSS Statistic19 software, the chi square test was performed to check if the product preference (most preferred alliance partner offer) is independence of the age of the customer. We see that level of significance is .001 which means that the test would hold true 99.9% each time it is conducted. Hence we can conclude that the product preference (most preferred alliance partner offer) is not independent of age of the customer.

ef

fe

dd

ih

d e

47

GRAPH 8.15. MONTHLY FUEL EXPENTIDURE VS MOST PREFERRED ALLIANCE PARTNER OFFER

It can be seen from the graph that with increasing monthly fuel expenditure the customers most preferred offer slowly shifted from food offers for group Rs. 0-1000 to none in group Rs. 1001-2500 and finally car services in group Rs. 2501-5000 and Rs. 5001-7500. This shows the change in the customer requirement with the segmentation. Where the lower segment Rs. 0-1000 laid emphasis on food offer (62 out of 86 respondents) specifically they preferred offers such as big bazaar and reliance fresh. The lower middle segment Rs. 10012500 found, 63 out of 136 respondents said they found none of the offers attractive. The upper middle segment Rs. 2501-5000 and upper segment Rs. 5000-7500 both showed a higher preference for car services with 120 out of 163 respondents in Rs. 2501-5000 and 108 out of 121 respondents in Rs. 5000-7500.

48

C i squ e es of inde endence if Mon ly fuel ex endi u e is efe ence:

f c o fo

oduc

Mon ly Ex endi u e on Fuel * Offe Mos P efe ed C oss Count Offer Most Preferred Food Offers Monthly Expenditur e on Fuel 0-1000 1001-2500 2501-5000 5001-7500 Total 62 24 31 9 126 Car Service 20 49 120 108 297 Holiday Packages 0 0 4 0 4

bul ion

none 0 63 6 2 71

TABLE 8.15. PRODUCT PREFERENCE & MONTHLY FUEL EXPENDITURE

C i-Squ e Tes s Asymp. Sig. (2Value Pearson Chi-Square 307.241 df 12 sided) .000 Exact Sig. (2sided) .

TABLE 8.16. CHI SQUARE TEST FOR PRODUCT PREFER ENCE & MONTHLY FUEL EXPENDITURE

Using the SPSS Statistic19 software, the chi square test was performed to check if the product preference (most preferred alliance partner offer) is independence of the age of the customer. We see that level of significance is .000 which means that the test would hold true 100% each time it is conducted. Hence we can conclude that the product preference (most preferred alliance partner offer) is not independent of age of the customer.

qu

uq

tt

t q y

xw

t q

rq

others 4 0 2 2 8

Total 86 136 163 121 506

49

GRAPH 8.16. XTRAREWARD CARDHOLDER VS MOST PREFERRED ALLIANCE PARTNER OFFER

Out of the 21 XtraRewards cardholder, 18 respondents gave a preference to car services and 1 said she would prefer offers on apparels. From the graph we can see even in case of respondents who are aware of XtraRewards but not a cardholder 106 out of 144 respondents preferred car services offer and the respondents not aware of XtraRewards 173 out of 341 respondents gave preference for car services and 95 respondents gave a preference for food offers. Hence from all the graphs its clear that car services offer is the most preferred offer by the customer and needs to be capitalised on.

50

Out of 477 males, 255 said that Alliance partners were the best feature of the XtraRewards program whereas 217 males said that they werent attracted to any of the features.

GRAPH 8.17a. GENDER VS BEST FEATURE OF XTRAREWARDS

Out of 29 female respondents 20 felt that the Alliance partners was the best feature of the program and 8 felt that none of the features appealed them.

GRAPH 8.17b. GENDER VS BEST FEATURE OF XTRAREWARDS

51

GRAPH 8.18. AGE VS BEST FEATURE OF XTRAREWARDS

From the graph we can clearly see that the respondents dominatingly fell in just two categories, either alliance partners or none of the features. 275 out of 506 respondents i.e. 54.34% respondents felt that the alliance partnership offers was the best feature of the program but 225 i.e. 44.46% respondents found none of the features to their liking. Hence it is important to better the alliance partnership according to the flavour of the customers to gain higher members in the XtraRewards program. The current point system makes it very difficult for a customer to avail fuel & lube rewards or redeem other gift hampers, hence to promote the program and sales the alliance partnership has to be put on the front foot.

52

C i squ e es of inde endence if A e is

f c o fo

oduc

efe ence:

A e * Bes Fe u e of X Count

Rew ds P o

m C oss

bul ion

Best Feature of XtraRewards Program Fuels & Lubes Alliance Partner Age 18-25 26-35 36-45 46-55 56+ Total 21 100 92 60 2 275 Rewards 0 1 4 1 0 6 none 8 97 84 31 5 225 Total 29 198 180 92 7 506

TABLE 8.17. AGE & PRODUCT PREFERENCE

C i-Squ e Tes s Asymp. Sig. (2Value Pearson Chi-Square 14.831 df 8 sided) .063 Exact Sig. (2sided) .093

TABLE 8.18. CHI SQUARE TEST FOR PRODUCT PREFER ENCE & AGE

Using the SPSS Statistic19 software, the chi square test was performed to check if the product preference (best feature of XtraRewards) is independence of the age of the customer. We see that level of significance is .063 which means that the test would hold true 93.7% each time it is conducted. Since the level of significance is not within the permissible range of .05 to .00, the test doesnt hold valid.

53

GRAPH 8.19. MONTHLY EXPENDITURE ON FUEL VS BEST FEATURE OF XTRAREWARDS

It can be seen from the graph that with increasing monthly fuel expenditure the customers favour of the best feature of the XtraRewards slowly shifted from a higher none for group Rs. 0-1000 and Rs. 1001-2500 to alliance partners in group Rs. 2501-5000 and Rs. 5001-7500. This shows the change in the customer preference and requirement with the segmentation. In the lower segment Rs. 0-1000, 56 out of 86 respondents and the lower middle segment Rs. 1001-2500, 94 out of 146 respondents found none of the XtraRewards features to their liking. The upper middle segment Rs. 2501-5000 and upper segment Rs. 5000-7500 both showed a higher preference for alliance with 121 out of 163 respondents in Rs. 2501-5000 and 84 out of 121 respondents in Rs. 5000-7500. This showed that the alliance partnership catered to and appealed more to the upper middle and upper segment of the society.

54

C i squ e es of inde endence if Mon ly fuel ex endi u e is efe ence:

f c o fo

oduc

Mon ly Ex endi u e on Fuel * Bes Fe u e of X Count

Rew ds P o

m C oss

bul ion

Best Feature of XtraRewards Program Fuels & Lubes Alliance Partner Monthly Expenditure on Fuel 0-1000 1001-2500 2501-5000 5001-7500 Total 30 40 121 84 275 Rewards 0 2 3 1 6 none 56 94 39 36 225 Total 86 136 163 121 506

TABLE 8.19. PRODUCT PREFERENCE & MONTHLY FUEL EXPENDITURE

C i-Squ e Tes s Asymp. Sig. (2Value Pearson Chi-Square 88.497 df 6 sided) .000 Exact Sig. (2sided) .000

TABLE 8.20. CHI SQUARE TEST FOR PRODUCT PREFER ENCE & MONTHLY FUEL EXPENDITURE

Using the SPSS Statistic19 software, the chi square test was performed to check if the product preference (best feature of XtraRewards) is independence of the age of the customer. We see that level of significance is .000 which means that the test would hold true 100% each time it is conducted. Hence we can conclude that the product preference (best feature of XtraRewards) is not independent of age of the customer.

55

GRAPH 8.20. XTRAREWARDS CARDHOLDER VS BEST FEATURE OF XTRAREWARDS

As it can be seen from the graphs, out of the 21 XtraRewards members 19 respondents said that the alliance partnership was the best feature of the program. Whereas the 86 out of 144 respondents who were aware of the program but not a member said that they did not find any feature much appealing. Whereas the 341 respondents who were unaware about the program after learning about XtraRewards, 199 respondents found the alliance partners to be the best feature of XtraRewards. This further confirmed that for the program to be a success and to increase card sale the alliance partners have to put in the fore front. The respondents also gave the feedback that they would be interested in the program but were unaware due to lack of advertisements and banners at the retail outlets.

56

9. RECOMMENDATIONS
1. *As it was seen that people were interested in the program but unaware the fore most thing to be done is put up banners or standee advertisements with pictures of the alliance partners, at the petrol pump at a strategic position so that a customer entering the petrol pumps reads about the program and seeks information on his own. As the petrol pump attendants do not get sufficient time to talk to the customers in relation to XtraRewards a banner would self provoke the customer to enquire about the program. Also due to budget constrain advertisements in newspapers and magazine is not possible hence instead leaflets or flyers should be distributed at the retail outlets. 2. *The website of XtraRewards should be updated regularly with a clear mention of the alliance partners on the home page and pictorial representation. 3. *As many customers find it highly cumbersome to fill a manual application at the retail outlet there should be provision for online application completion. The customer can be provided with a PIN code on spot after membership payment which they can use later to register online themselves or manually at a retail outlet when they have sufficient time. 4. *Currently IndianOil gives a CCD hot coffee coupon worth Rs. 50 as a gift with the purchase of XtraRewards card of Rs. 60. However during the summer season customers have shown reluctance in this scheme, hence instead a cold coffee or any cool drink offer should be given in summer season instead. 5. *To give an initial boost to the program, XtraRewards cards should be distributed at places such as car showroom, where a customer can get a membership free with the purchase of a new car. 6. The follow of cards can also take place at the alliance partners, where at a certain minimum purchase the customer can get the XtraRewards membership for free. E.g., at Dominos buy a meal worth 300 and get XtraRewards card for free. This would increase awareness in public and also the regular customers to the alliance partners would be enticed to join the membership to avail future discounts at their favourite outlets. 7. *As it was seen that few respondents who were aware of the XtraRewards said they were unaware of the alliance partners as no pictures were present in the XtraRewards booklet, hence its important to have a picture of all the alliance partners in the booklet.

57

8. Currently XtraRewards booklet is available in English only, it might be beneficial to keep few copies in Hindi, as in certain parts of Delhi Hindi is the preferred language. 9. *The alliance partners should include alliances such as big bazaar, vishal mega mart and reliance fresh, these would attract the lower and the lower middle segment. Big bazaar and Reliance fresh is also popular in upper middle segment. To attract female customers the VLCC alliance which was present previously should be enrolled again. 10. If inactivity of card is seen for more than a month, a sms regarding special offer just for him should be send. This would increase customer value by making him special. 11. During festive season (including birthday of cardholder) special offers or if possible double point earning bonus should be provided. The current program allots 100 points to its members on their birthday but most of the members are unaware of the provision. A sms should be sent to the members on their birthday wishing them and gifting them 100 points as bonus on purchase of fuel the same day. 12. If possible clubbing out points should be allowed. Such as in shoppers stop, where two or more customers can club their points by providing the pin number for each of the cards and then confirming with a security key. This allows friends and family members and relatives to collect collective higher points and redeem quality gifts. 13. A promotional campaign may do wonders. Camps can be set selected retail outlets located at prime locations such as the main roads where customer inflow is higher. 14. The major cause of dissatisfaction between the current members was seen to be technical problem of the server. IndianOil needs to look into the technical aspect and in the mean time the customer should be provided with a provision to sms or call at the care centre confirming their purchase so that they be rewarded their points. 15. Members who redeem the points for the gift complained about the gift not reaching within the specified times, for this IndianOil has to look into its operational aspect. 16. If possible the toll free number should be printed on the card so that the customer can call immediately in case of any query. Customers tend to discard the booklet soon and hence it would be beneficial to print the toll free number on their card itself. 17. Many customers lose either PIN number and find it difficult to retrieve it from the customer care. A number should be provided where they can sms in case of loss of pin number and retrieve a new PIN code within 24 hours.
*Point 4 and 5 implemented starting July. Point1,2,3,7 & 9are under consideration.

58

10. LIMITATION OF THE STUDY:

1. The questionnaire was administered at selected 20 retail outlets (out of 117 Delhi retail outlets with XtraRewards program) and hence this might have not been an accurate picture. 2. Due to reluctance of majority of respondents in giving information pertaining to their educational background and monthly income, these two important parameters had to be dropped from the questionnaire. 3. As the customers at retail outlets were lacking time and showed reluctance in answering the questionnaire in heat, care had to be taken that the time for filling the questionnaire was not over 1 minute. Hence only very vital questions could be included and few questions which would be an additional help in the study had to be dropped according the priority of information required. 4. The survey was done only at IndianOil retail outlets and a comparative study could not be done at the competing out lets of BPCL and HPCL. Hence a clear picture of XtraRewards in comparison with that of competitors like Petro card of BPCL and imint of HPCL could not be undertaken. 5. In the questionnaire the details of the people who came to the petrol pump that time in a particular vehicle was recorded. No information related to the other vehicles, if any, owned by the customer could be recorded. 6. The gender mix was highly disproportionate. Any logical deduction for female respondents was difficult cause of the insufficient number of respondents. 7. Most of the Dealers/ Mangers were reluctant in giving the exact card sale figure at their petrol pumps, hence it was difficult to differentiate which petrol pumps needed more focus than the other.

59

11. APPENDICES
X Rew ds Ques ionn i e: 1. Gender? M 2. Age (in years)? 18-25 26-35 36-45 46-55 56 & above F

3. Occupation? Student Self Employed Salaried Home Maker Others

4. Vehicle Owned?
2 Wheeler 4 wheeler

5. Monthly Expenditure on fuel (in Rs.)? 0 to 1000 1001-2500 2501-5000 5001-7500 7501 & above

6. Are you aware of the Indian Oil XtraRewards Program? Yes No

7. If answer to Q6 is Yes, kindly specify the source of information?

Pump Attendants Friends Internet Leaflets & Banners Others

8. Are you an XtraRewards card holder? Yes No

60

9. If answer to Q8 is No, kindly mention most appropriate reason? Not Interested in any program Cost of card not justified XtraRewards Benefits are unattractive. Member of other program in IOC Member of Program in other petrol pumps. Not aware card needs to be made Others please specify

10. If answer to Q8 is Yes, Kindly mention how often do you use the card? Never Rarely Often Always

11. Are you aware of the alliance patterns of XtraRewards and their offers? Yes No

12. Which of the following alliance patterns offer would you prefer? Food Offers Car Service Holiday Packages Amusement Park Ticket Others please specify None

13. How satisfied are you with the benefits provided by XtraRewards program? Dissatisfied (Please specify)............................. Average Very satisfied

14. Which is the best feature of the XtraRewards? Low cost of card Alliance patterns Gift hampers Fuel & lubes rewards Others please specify None

15. Any other comments or feedback?

N me (o ion l ...................... P one numbe (o ion l ......................

61

12. LIST OF FIGURES, TABLES & GRAPHS

Lis Of Fi u es: Fig. 3.1. Market Share. In Petroleum Sector................................................................ ............12 Fig. 4.1.1. Marketing Management Philosophies......................................................... ............13 Fig. 4.1.2. Four Ps Of Marketing..................... ........................................................... ............13 Fig. 4.3.1. Principles Of Loyalty Management................................................................ ........15 Fig. 4.4.1. Market Research Flowchart................................................................................. ...17 Fig. 5.3.1 XtraRewards Fuel & Lube Point System.................................... .............................21

Lis Of T bles: Table 7.2.1. Profiling On Basis Of Age, Gender &Vehicle.....................................................28 Table 7.2.2. Profiling On Basis Of Monthly Fuel Expenditure ..............................................28 Table 7.2.3. Profile On Basis Of Occupation..........................................................................28 Table 8.1. Age & Product awareness.......................................................................................31 Table 8.2. Chi Square Test For Product Awareness & Age.....................................................31 Table 8.3. Monthly Fuel Expenditure & Product Awareness..................................................33 Table 8.4. Chi Square Test For Product Awareness & Monthly Fuel Expenditure.................33 Table 8.5. Age & Product Awareness......................................................................................36 Table 8.6. Chi Square Test For Product Awareness & Age....................................................36 Table 8.7. Monthly Fuel Expenditure & Product Awareness..................................................38 Table 8.8. Chi Square Test For Product Awareness & Monthly Fuel Expenditure.................38 Table 8.9. Age & Product Adsorption............................................................ .........................41

62

Table 8.10. Chi Square Test For Product Adsorption & Age..................................................41 Table 8.7. Monthly Fuel Expenditure & Product Adsorption..................................................43 Table 8.12. Chi Square Test For Product Adsorption & Monthly Fuel Expenditure...............43 Table 8.13. Age & Product Preference ..................................................................................49 Table 8.14. Chi Square Test For Product Preference & Age.................................................49 Table 8.15. Product Preference & Monthly Fuel Expenditure................................................51 Table 8.16. Chi Square Test For Product Preference & Monthly Fuel Expenditure...............51 Table 8.17. Age & Product Preference....................................................................................55 Table 8.18. Chi Square Test For Product Preference & Age...................................................55 Table 8.19. Product Preference & Monthly Fuel Expenditure................................................57 Table 8.20. Chi Square Test For Product Preference & Monthly Fuel Expenditure...............57

Lis Of G

s:

Graph 7.1.1. Gender Distribution Of The Respondents.......................................................... .23 Graph 7.1.2. Age Distribution Of The Respondents.................................. ..............................23 Graph 7.1.3. Occupation Distribution Of The Respondents....................................................24 Graph 7.1.4. Monthly Fuel Expenditure Distribution Of The Respondents............................24 Graph 7.1.5. Vehicle Owned By The Respondents ............................................................... .25 Graph 7.1.6. Awareness Of The Respondents About XtraRewards........................................25 Graph 7.1.7. Source Awareness About XtraRewards ............................................................. 26 Graph 7.1.8. Awareness Of The Respondents About XtraRewards Alliance Partners............26 Graph 7.1.9. Most Preferred Alliance Partners Offer by Respondent..................................... 27 Graph 7.1.10. Best Feature Of XtraRewards Program By Respondent.................................. .27 63

Graph 8.1. Awareness Of XtraRewards Vs Gender ............................................................... .29 Graph 8.2. Awareness Of XtraRewards Vs Age......................................................................30 Graph 8.3. Awareness Of XtraRewards Alliance Vs Monthly Expenditure ...........................32 Graph 8.4. Awareness Of XtraRewards Alliance Partners Vs Gender....................................34 Graph 8.5. Awareness Of XtraRewards Alliance Partners Vs Age.........................................35 Graph 8.6. Awareness Of Alliance Partners Vs Monthly Expenditure...................................37 Graph 8.7. Awareness Of Alliance Partners Vs Awareness Of XtraRewards.........................39 Graph 8.8. XtraRewards Cardholder Vs Age...........................................................................40 Graph 8.9. XtraRewards Cardholder Vs Monthly Fuel Expenditure.......................................42 Graph 8.10. XtraRewards Cardholder Vs Awareness Of Alliance Partners............................44 Graph 8.11. XtraRewards Cardholder Vs Level Of Satisfaction.............................................45 Graph 8.12. Not A XtraRewards Cardholder Vs Why Not Cardholder If Aware..................46 Graph 8.13a. Gender Vs Most Preferred Alliance Partner Offer.............................................47 Graph 8.13b. Gender Vs Most Preferred Alliance Partner Offer.............................................47 Graph 8.14. Age Vs Most Preferred Alliance Partner Offer....................................................48 Graph 8.15. Monthly Fuel Expenditure Vs Most Preferred Alliance Partner Offer................50 Graph 8.16. XtraRewards Cardholder Vs Most Preferred Alliance Partner Offer...................52 Graph 8.17a. Gender Vs Best Feature Of XtraRewards......................................................... ..53 Graph 8.17b. Gender Vs Best Feature Of XtraRewards..................................................... .....53 Graph 8.18. Age Vs Best Feature Of XtraRewards................................................................ .54 Graph 8.19. Monthly Expenditure On Fuel Vs Best Feature Of XtraRewards..................... ...56 Graph 8.20. XtraRewards Cardholder Vs Best Feature Of XtraRewards................................58

64

13. BIBLIOGRAPHY

Websi es:
y y y y y y y

www.wikipedia.org www.google.com www.indianoil.com www.hpcl.com www.bpcl.com www.XtraRewards.com www.team-bhp.com/forum

Books nd ou n ls :
y y y y y

XtraRewards Program Manual version 1 XtraRewards booklet. Business research methods - William G. Zikmund Principles of Marketing (11th edition) - Philip Kotler and Garry Armstrong Marketing Management (13th edition) - Philip Kotler, Kevin Keller and Mithileshwar Jha

The Long Term Impact Of Loyalty Programs On Consumer Purchases Behaviour (2001) Yuping Lui

Consumer Trust, Value And Loyalty In Relational Exchanges (2002), Journal Of Marketing Sirdeshmukh, Deepak, Jagdip Singh and Barry Sabol

Mismanagement Of Loyalty (2002) Harward Business Review- Werner Reinarts and V Kumar

Loyalty Programs: Making Sure You Invest In Only The Right Customers (2004) Tim Tyler

Do Loyalty Programs Really Enhance Behavioural Loyalty? (2006) ERIM Report Series Research In Management- Jorna Leenheer, Herald J. Van Heerde, Tamno H.A. Bijmoly And Ale Smidts

65