Summer Training Report

On
Customer Pulling Schemes
(Evolution & Impact)
For

INDIAN OIL CORPORATION LTD.

Submitted in the partial fulfillment of
Master Degree In Business Studies
(Session 2004-06)
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 ACKNOWLEDGEMENT

Success is any endeavor for co-operations & guidance from all, especially dear
ones, seniors, colleagues and environment. This was amply brought to me while
undergoing this project.
I grateful acknowledge the inspiration; encouragement, guidance help and
valuable suggestion received from .my faculty members
I would like to give my heartiest thanks to xxxxxxxxxxx, UP State Office, Indian
Oil Corporation Ltd. For providing me an opportunity to undertake this project
with IOCL. I owe a deep sense of gratitude to xxxxxxxxxx, Lucknow, Indian Oil
Corporation Ltd. For his valuable help and cooperation from time to time. He was
always there to help me through his valuable guidance, suggestion and constant
encouragement throughout my summer training.

xxxxxxxxxxxxx
INDIAN OIL CORPORATION LIMITED

Indian Oil Corporation limited is the largest commercial enterprises in India by

sales turnover and is the only Indian company to find a place in “Fortune Global
500”the listing of worlds largest companies. Indian oil ranks 189 in “2004 fortune
Global 500” listing among petroleum refining companies.

LUBRICANT

Very few vehicle owners know what are lubricants, what is the main function of
lubricants and why we use lubricants. These are the question, which never
comes in our mind. Development of new technology in the auto sector, there are
increased refinement and performance in engine and other parts. advanced
lubricants have been developed by IOC to fulfil to these demands.

Lubricants are used to reduce friction between moving parts, thus

resulting in lower wear and tear. In many machines, lubricants also play a role in
cooling, rust prevention and help to avoid deposition of solids between closely
fitting parts. Liquid lubricants are most commonly used. A lubricant is a blend of
base oils and performance-enhancing additive as required by engine, gearbox
and other applications areas. At the refinery, the crude oil is refined into gasoline,
diesel, kerosene, LPG, and base stock (Lube). This base stock is further
processed, blended and strengthened with required properties to make different
kind of lubricants.
SERVO The Leader In India

SERVO has completed 30 years serving the lubrication needs of the Indian
industry. SERVO is India’s No.1 lubricants brand not only in terms of sales but
also in terms of quality and range. Servo has a range of over 470 grades of
lubricants-oil and greases. Our well-equipped R&D center at Faridabad, perhaps
one of Asia’s most advanced, is also India’s first in the petroleum industry to
have received the ISO ())! Accreditation. This together with the fact that our lube
blending plants at Mumbai, Calcutta, Chennai and grease plant at Vashi which
produce SERVO, are also ISO 9002 certified ensures that SERVO lubricants
meet international standards Servo has an excellent spread to meet the
requirement of various automotive, industrial, marine, aviation and railroad
applications .It is India’s largest selling lubricants brand and enjoys approvals
from major Original Equipment Manufacturers (OEM’s) including new generation
cars. In India, SERVO is the unquestioned leader, with a 42% share in a market
estimated at Rs. 55 billion comprising approximately one million metric tones of
lubricants. Servo’s fundamental strength is its extensive spread of production
units and distribution bases across the country. These include six lubricant
blending plants and a grease manufacturing plant – all of which are ISO
accredited. SERVO also has a formidable marketing reach, thanks to its
exclusive network of nearly 16,600 outlets/stockists and thousands of other multi-
brand Lube Bazaar shops.
SERVO offers a staggering range of lubricants for the automobile, industrial and
marine industries. It is the lubricant of choice for most of the latest international
automobiles that have been launched on the Indian roads. Another testimony to
Servo’s reliability and quality is its extensive use by heavy-duty trucks, battle
tanks of the Indian Army and the latest guided missile destroyers of the Indian
Navy. SERVO has a notable presence in the highly competitive markets of the
UAE, Nepal, Malaysia, Sri Lanka, Bangladesh and Mauritius. The company’s
aggressive marketing and advertising thrust together with state-of the-art
packaging has enabled SERVO to emerge as a truly global brand from India.
ACHIEVEMENTS

SERVO’s striking achievement is a steadily rising customer approval for its

products in India. The widespread popularity cuts across various customer
segments and automobile user communities. Whether it is Hyundai Santro,
Mitsubishi Lancer, Opel Astra, Daewoo Cielo, Fiat Uno or the Maruti family,
SERVO serves them all. On its part, SERVO woos and wins its retail customers
with a seductive combination of vehicle service, grocery shops and engine oil tie-
ups with leading international automobile manufacturers.

PRODUCT

SERVO primarily caters to three segments: automotive, industrial and marine.

There are more than 450 different grades of lubes and oils, which cater to these
sectors. The products for the automotive sector include 2T/4T oils, gasoline
engine oils, diesel engine oils, gear and transmission oils, coolants and brake
fluids and automotive greases. IOC is a major supplier to auto original equipment
manufacturers (OEMs) like Tata Motors, Hyundai, Mahindra & Mahindra, Maruti
and state transport undertaking like BEST, APSRTC, and RSRTC etc.
SERVO provides more than 350 lubricants and greases to the industrial
segment. The marine sector, too, has a broad range of products to choose from.
This includes marine engine oils, hydraulic oils, gear oils, turbine oils,
compressor oils and stern tube oils. SERVO is also meeting the lubricants
requirements of the Indian defence forces.
Notable among automobile products, SERVO 2T Supreme, is a new generation
two-stroke engine oil recommended for two-stroke engines in motorbikes,
scooters, mopeds and outboard engines. Others in the category are Kinetic Ultra
2T, Bajaj SERVO Gen. 2T Zoom. SERVO 4T is a new generation four-stroke
engine oil specially recommended for four-stroke engines in motorbikes and
scooters.
Indian oil’s state of the art R&D center t Faridabad, one and only of ts kind,
keeps pace with international standards. This is also India’s first in the petroleum
industry to have received the ISO 9002 certified lube- blending plants at Mumbai,
Calcuttta,Chennai and Grease and at vashi of IOC ensure that SERVO lubricant
produced there meet international standards.
 SEGMENTATION OF AUTOMOTIVE LUBRICANTS

Automotive lubricant

Engine oil Gear oil Break oil Grease Coolants

Engine oil

Petrol engine oil Diesel engine oil Gas engine oil

Vehicle

2/3 Wheeler 4 Wheeler

2-Stroke 4-Stroke MUV/SUV Cars LCV/HCV Tractors

 INDIAN LUBRICANT MARKET

INDIAN OIL CORPORATION

Market Share: 42%

Indian Oil Corporation is the largest manufacturer of lubricants in India and is

also the only Indian company to figure in Fortune’s Global 500 list. Its Servo
brand is the most recognized brand in the country. The company operates six
refineries, with a total capacity of 24.55 t. and enjoys a market share of 42 per
cent in the industry. Incidentally, it is one of the three companies, which has a
refining capacity for lube oil base, an input in the manufacture of lubricants. In
order to increase its presence IOC has aimed at improving the image of the retail
outlets. Despite making a loss with superior industry network and superior
backing of infrastructure the company sees no problem in maintaining its status
as the leader in the lubricant industry.

TIE UPS:
Hyundai Santro, Mitsubishi Lancer, Opel Astra, Daewoo Cielo, Fiat Uno or the
Maruti family.

CASTROL INDIA

Market Share: 22%

Castrol India is the largest player in the lubricants segment. The company has
achieved an overall market share of 22 per cent in the lubricants market. The
company has seven plants in the country with a capacity of 3 lakh KL and on the
financial front too the company’s performance has been impressive. The
company has set up a new unit in Silvassa, which manufactures 150 different
types of products. The company is also modernizing its other plants.

TIE UPS:

Company has partnership with leaders like mahindra and Mahindra, Tatas, JCB,
Escorts. For the marketing of its lubricants it has tied up with the petrol pump
chain of Reliance and Essar, thereby gaining access to a new channel of
distribution.

HINDUSTAN PETROLEUM CORPORATION LIMITED

Market share:16 %

HPCL is the largest player in the lubricants segment. The company has achieved
an overall market share of 22 per cent in the lubricants market The HP engine oil
product rang covers 300 brands of lubricants, grease and specialties catering to
the automotive as well as the industrial sector. The brand names are Milcy and
Lal Ghoda. HPCL market now extends to countries like Nepal, Sri Lanka,
Bangladesh, and Malaysia.

BHARAT PETROLEUM CORPORATION LIMITED

Market Share: 7%

BPCL another strong competitors in the lube industry. At present, BPCL sell 125
thousand tones and aims to increase its sale volume to 250 TMT within the next
two years. The company offers its lubricants under the brand name “MAK”
GULF OIL

Market share: 3%

Gulf Oil International was the first multinational to enter the lubricants market in
India. In collaboration with the Hinduja group, Gulf Oil India created a significant
presence in a short time; Gulf Oil has grown to be one of the largest corporations
in the world, with operations ranging from oil exploration to retailing. On the
financial front, the company’s performance has been satisfactory. The company
has setup its own 75000 tonne blending plant has Silvassa which blends 200
quality lubricants with international formulations. It believes that product and
packaging development to be its area of strength. The Gulf Oil plans to tap the
market in the east and north-east, and for this it has entered into an exclusive
contract with the private blender.
 MARKET SHARE OF LUBRICANT IN INDIA

MARKET SHARE IN INDIA

1.5 IOCL
2.5 2 HPCL
3 2 1 1 CASTROL
7 BPCL
42
GULF OIL
TIDE WATER OIL
ELF
22 SHELL
16 IBP
PENNZOIL
OTHERS

source:

DISTRIBUTION NETWORK OF SERVO

 Indian Oil Blending Ltd (IOBL) is a fully owned subsidiary of Indian Oil,
engaged in the manufacturing of lubricants and greases and catering to the
defense, railways, state transport among others.

 Where blending of lubricants (mixing of base oil with additives) is done

at blending plants.

 After blending of lubricants, then filling of barrel, bulks work has to be

done. And dispatched to SCFP.

 SCFP then moves the lube to Dealer Operated Godowns (DFOLG)

and carrying and Forwarding Agent (CFA) .

 After that, product has dispatched to the following:

• Servo Stockist automotive (SSA)

• Servo Stockist Industrial (SSI)

• Direct Institutional Customers (such as Defence, Railways,

Govt. customers and large industrial customer

SSA deals with sales and promotion of product’s and supplies products in the
market
 DISTRIBUTION NETWORK

Indian Oil Blending Ltd.

Small Can Filling Plant

(SCFP)

Carrying and Dealers

Forwarding Operated
Agent Godowns
(CFA) (DOLG’s)

Institutional Servo Stockist Servo Stockist

Customers Automotive Industry
(SSA) (SSI)

Retail outlets Bazaar Traders Original Equipment Fleet Operation

(RO’s) Manufacturer (Transporters)
(OEM)

End
customer
 SWOT ANALYSIS

STRENGTH

 Indian Oil Corporation (IOC), India’s largest commercial enterprise and the
only global Fortune 500 Company, ranked 189 by revenue in the year
2004, owns SERVO.
 Servo has been designated as a Super Brand.
 India’s no. 1 lubricant brand in term of Sales (42% market shares)
 Servo oil has wide range of over 400 grades for automotive, industrial and
marine use.
 Distribution network with 204 Servo Stockist all over India.
 Strong presence of more than 11,000 retailers, beside a countrywide
network of bazaar traders.
 Indian Oil modern and well-equipment R&D center at Faridabad, One of
the most advanced in Asia, keeps pace with international standards.
 ISO 9002 certified lube-blending plants of IOC at Asaoti, Mumbai,
Calcuttta, Chennai and grease plant at Vashi (near Mumbai) ensure that
SERVO lubricants produced their meet International Standards.
 SERVO range of lubricants is fast emerging as a Global brand with wide
acceptance in UAE, Malaysia, Mauritius, Bangladesh, Bahrain, Sri Lanka,
Nepal, Yemen, Kenya, Kuwait, Burkina Faso, Reunion Island and other
markets.
 Genuine Oil tie ups with Hyundai motors, Maruti Udyog Ltd., kinetic
Motors and Equipments Ltd., Mitsubishi Lancer, L&T Kumatsu, CKD
Skoda, Elgi Air compressor etc.
OPPORTUNITY

 Overseas market.
 Foray into the untapped Rural Market, which constitutes 85% of the
market.
 Leverage its financial strength for expansion of customer base through
strategic alliance with Original Equipment manufacturers.
 Continuous improvement in the technology in the end user industry
because of continued growth of the light commercial vehicle (LCV),
Passenger Car Motor Oil (PCMO’s) and Multi Utility Vehicle (MUV)
segments and rapid shift to 4-stroke engines in the 2-wheeler segments.
 Opportunities for growth are likely to result from Foreign Direct Investment
particularly in the Transport Equipment Manufacturing (TEM) and
Machinery manufacturing segments.

WEAKNESS

 Lags behind in promotional activities.

 Being a PSU’s, decision-making process is slow.
 Significant improvements are requirement in packaging of lubes as often
there are complaints of leakage or the quantity being short.
 Spurious equivalent of servo on market.
THREAT

 An increase in base oil price with no corresponding increase in product

price coupled with additional advertising expenditure is likely to keep
margins under pressure.
 Government has already given permission to Reliance, Essar Oil, ONGC,
Shell and Numaligargh Refinery to set up retail marketing stations thereby
giving rise to stiff competition.
 Due to lack of promotional activities competitors like BP and Castrol etc.
are gradually taking away the market.
 Tie ups of players in the market with automotive companies and OEM’s
like the tie up of Castrol with mahindra & mahindra for supply of the diesel
engine oil for its tractors is gradually eroding the market share of SERVO.
IMPACT AND EVALUATION OF CUSTOMER
PULLING SCHEMES
DATA COLLECTION

My research project was descriptive as well as analytical one.

Descriptive research includes surveys and fact-finding enquiries of different
kinds. Its major purpose is description of state of affairs, as it exits at present. As
I collected primary data from different Retail shops and SSA. So my research
was descriptive one.

On the other hand some secondary data about the product and it position in the
market was also available so I used secondary data for comparing and fact-
finding, so my research is also analytical.

Data can be either be collected through census method or through sampling

method. In my case only sampling method was useful, as I have to gather data
about the satisfaction level of customers and market position of Servo. and what
schemes should be launched to attract customer toward servo lubricants.
I need both primary and secondary data for my project. And also what made me
to collect primary data were the recent discoveries& changes in the market
position of servo lubricants.

For the collection of data a questionnaire was framed which was to be filled by
End customers and mechanics. The questions asked were highly structure one
and objective type, in order to take the least time of the respondents.
RESEARCH PROCESS STAGE

Stage one: Formulation of Research Objective

The first week I was spent time on knowing about the company and its product
name, quality, price etc. I also come to know about the company’s objective and
deciding about the research problem.

Stage two: Extensive literature survey

Company website and experts were contacted before deciding the research
project.

Stage three: Desk research

Then I spent time on preparing and formulating questionnaire deciding sample
and collecting information about different customers.

Stage four: Fieldwork

After data was prepared the next step to meet customer and mechanic. The data
as collected by personal interview as per questionnaire prepared. I had cover
Lucknow district with help of SSS of Lucknow. About 100 direct customer and
mechanic were contacted in Lucknow district.

Stage five: Analyze the data

The data collected was then classified and analyzed. Simple stoical tools such as
percentage, graph etc were used to analyze and interpret.

Stage six: Interpretation of data and preparation of report

To explain and summaries the finding of the study interpretation was done and
finally the report was prepared
Response received
I visited many places around 40 km in Lucknow district. Where I met different
type of mechanic and end customer of lubricants. The feedback and the
information I received from customers I was filled in the questionnaire. Persons I
met in the field they give me good response about the servo lubricants and gave
me some valuable schemes.
I analyzed in the market that there were different types of lubricants users in the
market. I observed that 60% of customers are quality based. They don’t want any
schemes. Most of customers are well influenced from Castrol and bp brand. I
made visits to Lucknow city along with one of the sales executive of SSA. Who
had a better knowledge of routs? I received mix views of customers.
 (RESPONSE FROM CUSTOMER)

VEHICLE USED BY
DIFFERENT CATEGORY OF PEOPLES
 vehicle used (student)

20%

2-w heeler
4-w heeler

80%

vehicle used (in jobs)

35%
2-w heeler
4-w heeler
65%

vehicle used (auto/taxi)

35%
3-w heeler
4-w heeler
65%
 LUBRICANTS USED BY
DIFFERENT CATEGORY OF PEOPLES

total % of lubricant used (students)

5% 10%
20% servo
castrol
hero honda
others
65%

total % of oil used (in jobs)

8% 20% servo
22%
castrol
hero honda

50% others

total %of oil used (auto/taxi)

23%
41% servo
castrol
others
36%
 WHY CUSTOMER USING PARTICULAR LUBRICANT

STUDENT TREND
Finding
• 65% Student using Castrol, because of quality
• They are concentrate on quality.

IN JOBS
Finding:
• 50% persons are using Castrol brand, because of quality.
• 50% says if you improve your quality, then we try to use servo.
• Less the price and grab the market

AUTO/TAXI DRIVERS
Finding:
• They are price conscious
• If you decrease your price then we wish to use
• Give good quality at low price
 HOW MANY CUSTOMERS SWITCH TO SERVO BRAND

switch to servo brand

40%
servo
no response
60%

In market survey I found that many customers wish to use servo. Almost 60
percent of people say “yes “and 40% people say “no”. In the market I realize that
people are not aware from servo brand. They are well influenced from Castrol
and BP product. The reason behind the non-awareness of servo is improper
marketing in bazaar trade hence company must try to improve it’s services.
SCHEMES

STUDENTS

 Free some food items with purchasing of 1-lit oil.

 Some long term discount schemes on one lit pack, whenever a
customer change his oil then he will get some discount on purchasing
 One cold drink with purchase of one litre pack
 Gift items like key chain, pen set with one lit pack

IN JOBS

 Free coupon schemes while purchasing oil.

 Buy 2-liter lube and get half litre free.
 Purchasing of 3 lit of multigrade engine oil and get 500ml gear oil free.

AUTO/TAXI DRIVERS

 Price reduction with maintenance of quality

 Discount schemes on accessories of 3/4 wheelers
 Free gift with every pack such as key rings, t-shirts, caps. Etc. it will
attract customer
 Purchasing of 3 lit of multigrade engine oil and get 500ml gear oil free.
 (RESPONSE FROM MECHANIC)
LUBRICANT USED BY 2/3 AND 4-WHEELER MECHANIC

lubricant used (4-wheeler mechanic)

40 35
35 30
% of lube used

30
25
20 15 Series1
15 10 10
10
5
0
servo castrol shell mak others
Brands

lubricant used(2-wheeler mechanic)

50 45

40
% of lube used

30
30 25
Series1
20

10

0
servo castrol others
Brand
 HOW MANY CUSTOMERS SWITCH TO SERVO BRAND

switch to servo brand

10%

Yes
No
30% can't say
60%

SCHEMES

 Introduce some cash coupon schemes for mechanic. In which buy 1-lit
pack, and mechanic will get some amount.
 Free gifts for mechanic such as t-shirts, caps, etc
 Time to time promotion schemes.
 Some discount for mechanic for purchasing mechanical tools
 While purchasing oil from SERVO Shoppe then he will get some
petrol/diesel coupons
SUGGESTION; -

 Company should try to open-minded, attracts customers.

 Being a PSU’s decision-making process is slow, need to improvement in
services.
 Need strong marketing campaign
 Awareness about the servo product to every class peoples
 Company must try to improve its packaging because some time customer
are facing problem of leakages
 Glamorous packing, which attract customers
 Free gifts serves for mechanics, then mechanic will attract customer to
buy the product. This may change brand loyalty of the customer for ever
 Attract mechanic to give them some discount card schemes.
 More concentration on bazaar retailer.
 Company should open servo Shoppe in cities also because any bazaar
retailer can’t keep all the variety and grades of oil.
 Company ‘s sales or technical executive must make regular visits to
market and check out new trend and problem of the customer as well as
mechanic.
 Proper feedback must be taken at regular time from the customers as well
as mechanics
 Increase in activities of customer and mechanic awareness through more
advertisement and mechanics meet at regular interval
 There should be profit margin for every mechanic
 Good schemes should be provided for end customers.
 Must keep in touch with the market
 QUESTIONNAIRE CUSTOMER
1. Which vehicle you have?
a) Two-wheeler
b) Four wheeler
c) Others
2. Which brand of lubricant you are using?
a) Servo
b) Castrol
c) Mak
d) Pennzoil
c) Shell
d) Others
3. Which grade of oil you are using?
a)…………………………………………………….
b)……………………………………………………
4. For how long period you are using this particular brand?
a) 0-2 years
b) 2-5 years
c) Above 5 years
5. Which factor influences you to using particular brand?
a) Price
b) Quality
c) Incentive price
d) Free gifts
e) Belief in brand image
f) Advertising
g) Others
6. While purchasing lubricating oil, who takes decision?
a) You
 b) Mechanic
c) As recommended by the manufacturer
7. Where do you go for the servicing of your two/wheeler/four wheeler?
a) Authorized dealer
b) ASC (authorized service center)
c) Local mechanic
8. Would you like to switch to Servo brand?
a) Yes
b) No
If yes, then why………………………………………………………………….
If no, then why…………………………………………………………………….

9. What kind of schemes you expect from Servo lubricating oils?

……………………………………………………………………………………
……………………………………………………………………………………
……………………………………………………………………………………
………
10. How can we improve our schemes/services? Give suggestion?
……………………………………………………………………………………
……………………………………………………………………………………
……………………………………………………………………………………
………

PERSONAL INFORMATION

Name …………………………………………………………………..………….
Address…………………………………………………………………………..
…………………………………………….…………………………………...…
MECHANIC QUESTIONNAIRE
1. Name of workshop……………………………………………………………….
2. Address…………………………………………………………………………..
…………………………………………….…………………………………...
3. Experience (no of years)……………………………………………………..….
4. Average monthly consumption of lubes……………………………………....
5. No of vehicle service in a day…………………………………………………
6. No of vehicle service per month………………………………………………
7. Which type of vehicle you are servicing?
a) Two-wheeler
b) Four wheeler
c) Others
8. Which brand of lubricant you are using?
a) Servo
b) Castrol
c) Mak
d) Pennzoil
c) Shell
8. Which grade of oil you are using?
a)…………………………………………………….
b)……………………………………………………
9. For how long period you are using this particular brand?
a) 0-2 years
b) 2-5 years
c) Above 5 years
10. Which factor influences you to using particular brand?
a) Price
 b) Quality
c) Incentive price
d) Free gifts
e) Belief in brand image
f) Others
11. Would you like to switch to Servo brand?
a) Yes
b) No
If yes, then why………………………………………………………………….
If no, then why…………………………………………………………………….

12. What kind of schemes you expect from Servo lubricating oils?
……………………………………………………………………………………
……………………………………………………………………………………
……
13. How can we improve our schemes/services? Give suggestion?
……………………………………………………………………………………
……………………………………………………………………………………
……
LEARNING

The organization can utilize the talent of student with the difficulties faced at
actual working environment to prepare them to face the future challenges and
provide practical exposure.
I completed my summer training in the lube department of marketing division of
IOCL, Lucknow. I got great experience in my 8-weeks training period in IOCL.
During training I got opportunity to interact with the people in the top
management of the company. I had learnt a lot during this training and I think
these learning experiences would be great helping me future.

CONCLUSION
.
The lubricants industry in India is one of the few sub-sectors of the petroleum
industry, which was opened out completely to private and foreign companies.
SERVO is India’s No.1 lubricants brand not only in terms of sales but also in
terms of quality and range..
In urban market, whenever a customer goes to the retail shop, he is facing many
brand lubricants, and then customer is confused. Some times he purchase
duplicate lubricant. So company has to spend more on promotional schemes,
advertisement campaign and awareness programs. There is another problem in
lube industry is facing competition from local brands which is easily available in
the market, so servo need to Increase in activities of customer and mechanic
awareness through more advertisement and mechanics meet at regular interval.
Which helps customer to choose original product.