“RELATIONSHIP MARKETING is the key to CUSTOMER

RETENTION”
A SUMMER PROJECT DONE IN INDIAN OIL CORPORATION
LIMITED.

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A Study on the Customer Satisfaction Level and to make
Newer and innovative strategies for effective customer
retention.

A summer (Dissertation) Project Report

Submitted in partial fulfillment of the requirements for

the award of the degree of Post Graduation Diploma in
Management (Marketing & HR)

By- Debdattaa Saha (P09011)

Under the guidance of Mr. Dipak Kumar Das (Retail Sales
Manager, IOCL, Kolkata Divisional Office)

and

Sir Cris Abraham K (Faculty Guide and Batch Coordinator,

DCSMAT Business School)

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 DCSMAT Business School

DC County, Pullikkanam, Vagamon

Idukki, Kerala - 685503

Date------------------

TO WHOMSOEVER IT MAY CONCERN

This is to certify that ___________________, PGDM student of

DCSMAT Business School; Kerala has done her/his Project titled
“_________________________” in our company during the period
from ___to__________.

During the above period, he/she has _________________________

(comments by the project guide or company official) and his/her
conduct and character were found to be good.

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We wish all the success in her future endeavors.

For ----------------------------Ltd.

Name ----------------
Designation ------------

CERTIFICATE
This is to certify that the project entitled
“___________________________________________” is the bona fide
record of the work done by ___________, PGP_______,
________trimester PGDM student of ___________ batch, submitted
in partial fulfillment of the requirements for the award of Post
Graduate Diploma in Management.

Faculty Guide: ________ Director: ____________

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Date:
Place:

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 Acknowledgement

First and foremost, I would like to express my gratitude to the Alma

Mater, “Institution, DC School of Management and Technology
Business School” for providing me a magnificent opportunity in the form
of this dissertation to work and learn.
Secondly I would like to thank my “Industry Guide (Mr. Dipak
Das)” who has helped me a lot in preparation of this project. He was always
been a constant source of inspiration during all the time of project. His
valuable feedbacks, guidance & encouragement helped me to accomplish
my task.

Thirdly I would like to thank my “Project Guide (Sir Cris Abraham

K)” on the completion of my project. He motivated me throughout the
project & always gave useful feedback whenever I felt short of ideas. I
cordially express my gratitude to him for sharing the journey of
conceptualizing and developing all the ideas. He stood in times of difficulty
and despite of his busy schedule devoted a major chunk of his time towards
this project. He has been a part of all the activities and duly guided the
project to its destination. I am indebted for his endeavors in making this
project a success. He has truly fulfilled his role as a guide.

I would also like to thanks my “Parents” for providing me with

constant motivation during my whole project tenure.

I would also like to thanks for the help and support extended by all my
“Friends” whose names could not be mentioned here. They all have been
very co-operative and provided impetus to this project. Without their help

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this project would not have reached its destination. I express my gratitude
for their suggestions and help they extended to this project.

I will not miss the opportunity of expressing thankfulness towards all

my teachers and the faculty of DCSMAT Business School for sharing their
knowledge, which provided necessary ingredients to this project.

Last but not the least I would like to thank each and every person
individually who has devoted their valuable time in the completion of my
survey data sheet.

In the end, I want to thank Mr. Bill Gates and his Microsoft Corp. for MS
Word, MS Excel and MS PowerPoint. Without them this report would not have
been in its present form.
TABLE OF CONTENTS
Title: Page

1. Executive Summary 9-12

a. Phase 1- The Starting of the Research 11
b. Phase 2- Survey Work Detail 11-12
2. Brief Analysis of the Report 13-14
3. Literature Review 15-20
a. Brief Survey of current trends & theories 16-17
b. Definitions 17-18
c. Customer satisfaction and its Process 18
d. Satisfaction-Loyalty Link 19
e. Consequences of Customer Loyalty 19-20
f. Target the Right Customers 20
4. Introduction 21-24
a. Customer Retention 22
b. Customer Satisfaction 22
c. Customer Relationship Marketing 23
d. Benefits of CRM 23
e. Customer Loyalty 23-24
5. An Insight into the Research 25-31
a. Need for the Research 26
b. Research Problem 26
c. Research Objective 27
d. Scope of the Research 27
e. Research Methodology 28
f. Type of Research 28
g. Sources of Information and Tools for data Collection 29-30
h. Sampling Techniques 30
i. Sample Size 31
j. Research Design 31

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 k. Limitations of Research 31
6. Industry Profile 32-37
a. Petroleum Industry 33
b. Evolution of Oil and Gas Industry in India 33
c. Preamble 34
d. Petroleum Sector Reforms, 1990 34
e. Foreign Companies in Exploration in India 34
f. Indian E & P companies 35
g. Opening of Oil/ Gas Fields for development
by private sectors 35
h. Various Production segments 36
i. India as an International refining destination 36
j. Indian Petroleum Retail market 36
k. Investment in Indian Petroleum Industry 37
l. Future of Indian Petroleum Industry 37
7. Company Profile of Indian Oil 38-55
a. Present Scenario 39
b. Profile 39-46
c. Vision and Mission 46
d. Objectives and Obligations 46-48
e. Indian Oil-A National Brand 48
f. Competitive Force Analysis 49-50
g. SWOT Analysis of Indian Oil 51-52
h. PEST Analysis of Indian Oil 53-54
i. 4P’s of Indian Oil 55
8. Competitor’s Profile 56-66
a. Bharat Petroleum Corporation Limited 57-61
b. Hindustan Petroleum Corporation Limited 61
c. Reliance Petroleum Limited 62
d. Essar Oil 62-63
9. An Evaluation of Customer Expectation
and Customer Satisfaction 64-96
a. Stage 1: City samples collected from IOCL ROs 65-83
b. Stage 2: City samples collected from Taxi Association 84-87
c. Stage 3: City samples collected from Bus & Truck Terminus 88-89
d. Stage 4: Highway samples collected from IOCL ROs 90-96
10.Suggestion and Recommendation 97-108
a. Non Fuel Retailing 98
b. India as a Non Fuel Retailing Destination 99
c. Recommendations for non fuel offerings 100-
102
d. Branded Fuel and its Promotion 103
e. Recommendation for promotion of Branded Products 103-
105
f. Recommendations for Fleet card users 106-107
g. Recommendations for Customer Retention 108
11.Conclusion 109-110

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12.Appendix A 111-112
13.Appendix B 113-114
14.Bibliography 115

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 Executive Summary
The Indian retail industry can be segmented in different segments
viz. cosmetics, footwear, sanitary products, entertainment etc. The
downstream petroleum retailing is one of the largest segments of the Indian
retail industry and the petro-retail sector is one of the most organized
sectors of the retail industry.

India had deregulated the petroleum retail sector in 2002 by

dismantling APM and enabling new players to enter the market. The entry
of private players like Reliance, Essar, Shell, NRL, and many more have
increased the competition by means of the quality of fuel and the non fuel
offerings at their retail outlets. With a market determined pricing
mechanism in place, prices will be lowered, which would reduce the margins
from fuel products. In such circumstances, the petroleum retailers will need
to have differentiated value propositions to improve revenues. It will require
customer centric approach and building of a strong brand equity and
identity. Non-fuel products tender higher margins as compared to petroleum
products and enable companies to sustain themselves, especially during
times when oil prices are high. However, it is to be kept in mind that
petroleum retailing is a retailing of petroleum product and service, with
differentiation possible in either or both areas.

Now, it is not all about offering fuel only at the petrol stations. The
new look petrol pumps, apart from dispensing fuels; now offer the best of
retail chains providing a value added service to busy consumers. This trend
is in circulation in the international markets and the big petrol station
convenience stores earn more than 30 to 40 per cent of their profits from
the non-fuel activities. The range of value added services is all beneath one
roof. The new-look petrol pumps are now the more advanced multi-purpose
dispenser petrol-pumps.

The petrol pumps are computerized, thus reducing waiting time which
not only ensures accuracy, but also saves a lot of time for customers and
avoids misconception and arguments. The study gives a comprehensive

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overview of petroleum industry in India, the way it has evolved through
shackles of time and its current status with respect to companies,
regulations and customers. The study tracks the origin and the journey of
industry till date. It has also focused on the kind of services expected by
consumers, which are being provided on retail outlets and which can be
provided on outlets and by which Customer can be retained and new
customer can be pulled as well as the brand image of the company
increases. These services will cumulatively increase the revenue realization
as well as optimal utilization of land available on an outlet.

The project title was “To study the buying behavior and customer
satisfaction based on which newer strategies can be made for
customer retention”. The research work was divided into two phases for
reporting & analyzing the factors respectively. Each phase is being
described as follows:-

Phase 1: Phase 1 was the starting point of research work & its duration was
about 2 weeks. Before going out for primary research work, I studied the
petroleum industry and its two branches i.e., upstream and downstream
with the help of internet & collected some useful insight about the industry.
In the primary research work, I first of all decided on the customer profiling
who all are linked with the petroleum industry and how and to what extent.
These persons/stakeholders were as follows:-

1.
2. 2 Wheelers
3. 4 Wheelers
4. 6 Wheelers
5. 10 Wheelers
6. 14 Wheelers
7. Taxi Drivers
8. Bus Owners
9. Transporters
10.Agricultural Customers
11. Corporate Customers

Then I had carried an exploratory survey for each stakeholder without

drawing any questionnaire. This random sample helps me to understand the
various factors affecting the buying decision of the fuel from a specific fuel
player in India. But the information which I get was quite raw & hence I
moved on to the second phase for a systematic review of the enlisted
factors gathered from the exploratory survey.

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Phase 2: After understanding the enlisted factors, I formed the
questionnaire, covering each & every aspect about buying behavior of the
customers and the extent of their satisfaction. I form different questionnaire
for all stake holders from the point of view of that segment of people. The
sample data collection from all the stakeholders had taken duration of
around 5 weeks. I decided to carry out the survey on the basis of
geographical segmentation. Firstly I divided the whole survey in to two parts
which are as follows:

•
• City
○ North
○ South
○ NH 35
○ Kalyani Expressway
• Highways
○ NH 34

In the first week I covered the Kolkata City North. I had taken a sample
of 100 from 4 Retail Outlets. In the second week I covered the Kolkata City
South. The third week was devoted to cover the Highways. In the fourth
week I covered the Taxi Drivers and Transporters.
From this survey I try to figure out the relationship between the buying
behavior of drivers & their economic background and tried to make some
strategies on the basis of which the permanent customers can be retained
by some new loyalty programs.
This survey was covered in the fifth week. The remaining days of my
research work were used to draft out the studied factors on the word file &
give it the shape of a project report.

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 Brief Analysis of the Report
Overall from the given feedback & analysis it can be clearly stated the
fact that the “Quality” and “Customer Service” have a neck-to-neck fight in
acquiring the top most factor which is affecting the buying decision of Fuel.
Hence in order to increase the sales we have to increase the perceived value
in the minds of consumers about the Quality parameter of the Fuel as well
as the Customer Service in the Indian Oil Retail Outlets.
The Customers choose a Retail Outlet, generally, on the basis of
Customer Service and Quality and Quantity. Their expectations as a general
customer confined to Quality and Quantity and Customer Service as well.
But today’s customers are smarter and choosier. Retaining such customers
need extensive smart services as well as customized products for them.
Only fuelling in the Retail Outlets is a decade old story. Now the faster
life style of the customers craves for multi-utility fuel stations where they
can have a cup of coffee while fuelling.
Our study and its analysis says that economical condition is a factor
for the amount of refueling per month but economical condition is neither
correlated with the type of product used and nor with the expectations of
the customer. All customers want an excellent Customer Service with
equally excellent Quality and Quantity.
It is also been found that the sale of the branded fuel is dependent on
its price to a great extent. Company can make some strategies by which
they can mould the customers about the branded fuels without changing its
price. For example, they can provide some gifts to the branded fuel
customers and can also introduce some loyalty programs exclusively for
branded fuel users.

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 Elaborate recommendations and strategies suggested are discussed
later in the report.

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 Literature Review
Businesses are in a constant race to increase profits, keep current
customers and gain or poach new ones, competing for customers on a
globalised market like never before. One of the many sets of tools aimed at
aiding the interaction between supplier and customer is customer
relationship management (CRM). CRM is aimed at building strong, long-term
relationships that keep customers coming back repeatedly. It aims to help
organizations build individual customer relationships in such a way that both
the firm and the customer get the most out of the exchange, providing both
parties with long term benefits. The purpose of this thesis is to provide a
better understanding of the use of CRM in B2B firms. To reach this
understanding the thesis starts with three research questions that focus the
objectives of CRM, CRM strategies, and how CRM is measured.

Using these three questions as a guide to the literature review for this
study, a frame of reference is developed and used to collect data from two
large firms operating from Sweden, Haldex and Nefab. These companies
were studied through case analysis and compared to each other and to
theory. The data collected from them was primarily attained through
structured interviews. The findings indicate that much of the explored theory
regarding CRM is true for the B2B sector. There are however a few areas in
which the firms diverge from theory, specifically those relating to the usage
of estimated values such as loyalty and satisfaction in customer evaluations.
It was also found that there is a lack of research in the areas of evaluation of
CRM. Furthermore the findings indicates that CRM in B2B settings focuses on
the organizational aspects of CRM, and a strong goal for businesses is to
unlock the information the employees have and store it in a place the
business can own and find use of.

Brief Survey of Current Trends and Theories:

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 Loyalty is dead, the experts proclaim, and the statistics seem to bear
them out. On average, the U.S. corporations now lose half their customers in
five years, half their employees in four, and half their investors in less than
one (Reichheld, 1996). No, loyalty is not dead; it remains a dominant key of
success. In fact, the corporate leaders in loyalty – that apply a strategic
loyalty-based management – have enduring records of productivity, solid
profits and steady expansion.

More than a limited customer approach, the loyalty effect should be

viewed as a wide context in which all the key players of a firm are far more
powerful, further reaching, and more interdependent than we have ever
imagined. There would be no customer loyalty without loyal employees as
there would be no loyal employees without long term investors. We will later
focus on the customer side, but the employees and the investors
problematic should be kept in mind during the entire process. We will also,
now and then, show the implications of such a three dimensional
environment in which creating value for customers has become a strategic
issue. The advantages of loyalty are numerous, but the implementation of
such a culture does not go without posing problems. What should be done,
who should be responsible for these changes, who should be targeted, and
how should these changes be conducted are some of the questions we will
try to answer in this compilation of some classical theories of the day
(1998).

Definitions:

Loyalty
Reichheld opposes loyalty to the actual profit-theory. This theory gathers the
firm's resources toward one unique goal: creation of profit. Reichheld views
loyalty as a value-creation theory. The fundamental mission of a business is
oriented toward the creation of value for the customer and profit becomes a
consequence of value creation. It turns out to be a mean rather than an end.

Customer loyalty
Customer loyalty is not always easy to construe and many definitions have
been proposed.
Let's first settle what customer loyalty is not (Prus & Randall, 1995):

Customer loyalty is not customer satisfaction. Satisfaction is a

necessary but not sufficient criterion. We know that "very satisfied" to
"satisfied" customers sometimes switch to competitors.

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Customer loyalty is not a response to trial offers or incentives.
Customers who react to incentives are often highly disloyal and they often
leave as fast as they came. They are very much inclined to respond to a
competitor's incentive.

Customer loyalty is not a strong market share. High level of market

share can also be influenced by other factors such as poor performance by
competitors or price issues.

Customer loyalty is not repeat buying or habitual buying. Some of

your consumers choose your products because of convenience or habits and
they can be tempted to defect for any reason.

Prus & Randall then describe customer loyalty as follows: "Customer

loyalty is a composite of a number of qualities. It is driven by customer
satisfaction, yet it also involves a commitment on the part of the customer
to make a sustained investment in an ongoing relationship with a brand or
company. Finally, customer loyalty is reflected by a combination of attitudes
(intention to buy again and/or buy additional products or services from the
same company, willingness to recommend the company to others,
commitment to the company demonstrated by a resistance to switching to a
competitor) and behaviors (repeat purchasing, purchasing more and
different products or services from the same company, recommending the
company to others)".

Customer satisfaction
Satisfaction is often confused with loyalty. Satisfaction is an emotional or
feeling reaction (Westbrook, Newman, Taylor, 1978). It is the result of a
complex process that requires understanding the psychology of customers.
The range of emotion is wide with, for example, contentment, surprise,
pleasure, or relief. Satisfaction is influenced, in the end, by expectations and
the gap between perceived quality and expected quality, called "expectancy
disconfirmation". The figure below shows the predominant linkage of this
process.

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Satisfaction-Loyalty link
High-quality products and associated services designed to meet customer
needs will create customer satisfaction. This high level of satisfaction will
produce increased customer loyalty.
According to conventional wisdom, we would be tempted to believe that the
link between satisfaction and loyalty is a simple, linear relation. But reality
proves us wrong: it is neither linear nor simple (see figure "The effect of
satisfaction" below). The relation reacts differently according to time and
circumstances. Unless they are totally satisfied, there is always a chance
you will see your customers be lured away (Jones & Sasser Jr., 1995).

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Consequences of Customer loyalty
Businesses with high customers' loyalty rates have proven to reach great
financial results. Buchanan & Gillies identified six reasons explaining why
long-term customers are more profitable than others are:
1. Regular customers place frequent, consistent orders and, therefore,
usually cost less to serve.
2. Long-established customers tend to buy more.
3. Satisfied customers may sometimes pay premium prices.
4. Retaining customers makes it difficult for the competitors to enter a
market or increase their share.
5. Satisfied customers often refer new customers to the supplier at
virtually no cost.
6. The cost of acquiring and serving new customers can be substantial. A
higher retention rate implies that fewer new customers need be
acquired, and that they can be acquired more cheaply. In fact, the
acquisition cost of a new customer is three to five times more
expensive than retention cost.
We could also add that a loyal customer is more willing to give feedback on
his dissatisfaction and becomes this way a sort of quality controller. Finally,
loyalty is an excellent weapon, since it is almost impossible to measure a
competitor's retention rate.

Target the "right" customers

Before retaining all the customers at any price, it is very important to
identify your core customers. There are three easy questions you can ask
yourself (Reichhheld, 1996).
First, who are your more profitable and loyal customers? You will look
for those who spend more, pay promptly, require less service, and prefer
stable, long-term relationship.

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 Second, which customers place the greatest value on what you offer?
Those for whom the product fits best to their needs.
Third, which of your customers are worth more to you than your
competitors?

The more customers fitting one, two, or three of these groups you attract,
and the more you increase the chances to have loyal customers. All
customers are not good to keep. That's why it is critical to know the
characteristics of the customers you target.

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 Introduction
Customer Retention: It is the activity that a selling organization
undertakes in order to reduce customer defections. Successful customer
retention starts with the first contact an organization has with a customer
and continues throughout the entire lifetime of a relationship. A company’s
ability to attract and retain new customers, is not only related to its product
or services, but strongly related to the way it services its existing customers
and the reputation it creates within and across the marketplace.
Customer retention is more than giving the customer what they expect; it’s
about exceeding their expectations so that they become loyal advocates for
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your brand. Creating customer loyalty puts ‘customer value rather than
maximizing profits and shareholder value at the center of business strategy.
The key differentiator in a competitive environment is more often than not
the delivery of a consistently high standard of customer service.

Customer satisfaction: Customer satisfaction, a business term, is a

measure of how products and services supplied by a company meet or
surpass customer expectation. In a competitive marketplace where
businesses compete for customers, customer satisfaction is seen as a key
differentiator and increasingly has become a key element of business
strategy. Organizations need to retain existing customers while targeting
non-customers. Measuring customer satisfaction provides an indication of
how successful the organization is at providing products and/or services to
the marketplace. Customer satisfaction is an abstract concept and the
actual manifestation of the state of satisfaction will vary from person to
person and product/service to product/service. The state of satisfaction
depends on a number of both psychological and physical variables which
correlate with satisfaction behaviors such as return and recommend rate.
The level of satisfaction can also vary depending on other factors the
customer, such as other products against which the customer can compare
the organization's products.
Customer Relationship Marketing: Customer relationship management
(CRM) is a broadly recognized, widely-implemented strategy for managing
and nurturing a company’s 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. CRM denotes a company-wide business
strategy embracing all client-facing departments and even beyond. When an

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implementation is effective, people, processes, and technology work in
synergy to increase profitability, and reduce operational costs. It is
important to emphasize that CRM is a specialty within marketing, and to
implement CRM in a company, you can use tools as CRM systems, mailers,
databases etc. CRM is commonly misunderstood, thinking it is an IT system.
Benefits of CRM: These tools have been shown to help companies attain
these objectives:
• Streamlined sales and marketing processes
• Higher sales productivity
• Added cross-selling and up-selling
• Improved service, loyalty, and retention
• Increased call center efficiency
• Higher close rates
• Better profiling and targeting
• Reduced expenses
• Increased market share
• Higher overall profitability
• Marginal costing
Customer Loyalty: The term customer loyalty is used to describe the
behavior of repeat customers, as well as those that offer good ratings,
reviews, or testimonials. Some customers do a particular company a great
service by offering favorable word of mouth publicity regarding a product,
telling friends and family, thus adding them to the number of loyal
customers. However, customer loyalty includes much more. It is a process, a
program, or a group of programs geared toward keeping a client happy so
he or she will provide more business. Customer loyalty can be achieved in
some cases by offering a quality product with a firm guarantee. Customer
loyalty is also achieved through free offers, coupons, low interest rates on
financing, high value trade-ins, extended warranties, rebates, and other
rewards and incentive programs. The ultimate goal of customer loyalty
programs is happy customers who will return to purchase again and
persuade others to use that company's products or services. This equates to
profitability, as well as happy stakeholders.
Customer loyalty may be a one-time program or incentive, or an ongoing
group of programs to entice consumers. Buy-one-get-one-free programs are
very popular, as are purchases that come with rebates or free gifts. Another
good incentive for achieving customer loyalty is offering a risk free trial
period for a product or service. Also known as BRAND NAME LOYALTY , these

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types of incentives are meant to ensure that customers will return, not only
to buy the same product again and again, but also to try other products or
services offered by the company.
Excellent customer service is another key element in gaining customer
loyalty. If a client has a problem, the company should do whatever it takes
to make things right. If a product is faulty, it should be replaced or the
customer's money should be refunded. This should be standard procedure
for any reputable business, but those who wish to develop customer loyalty
on a large-scale basis may also go above and beyond the standard. They
may offer even more by way of free gifts or discounts to appease the
customer.

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Need for the Research

In today’s world earning trust and maintaining it is a big challenge to

any company, it is the customer for whom a company exists and tries to

deliver the best product and service in the society. So in this regard a

market research has been carried out to study and evaluate the extent of

customer satisfaction and hence making strategies to retain them. The

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market research has been given a title called “Relationship Marketing is

the key to customer retention.” In the beginning we have to know where

IOC stand in the customer mind and what are their expectation from us. For

that I carried out a survey on various Indian Oil retail Outlet both on Kolkata

City and National Highways. For carrying out the survey I prepared

questionnaires on the above topic. After preparing the questionnaires and

surveying the customer on the basis of it, I have got the trend and

purchasing behavior of the customers. So, the need for the research is very

strategic and important because this research is the only way by which

customers can be evaluated as per their expectations, their satisfaction

level and as well as their loyalty to a particular company.

Research Problem

The Research Problem was to find out the failure of Indian Oil Corporation

Limited in regards to Customer Retention. The major crisis of this project is

to find the loop holes of the existing loyalty programs and how far they are

successful. If the existing loyalty program cannot retain as much as the

customers possible then what should be the newer one and how it can be

implemented.

Research Objective

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 1. To understand the Petroleum Retail Industry by secondary market
research especially in Kolkata City and its outskirts Major Highways.
2. To analyze all the important properties & factors for the buying
behavior analysis.
3. To carryout comparative analysis of all the major brands of fuels
available.
4. To undertake exploratory survey of fuel market of Kolkata and its
outskirts along with the evaluation for Brand awareness with the help
of 2 Wheelers, 4 Wheelers, 6 Wheelers, 10 Wheelers, Taxi owners,
Transporters and Private Car Users.
5. To formulate questionnaire on the basis of which survey is conducted
and this will help to analyze and interpret the expectations of the
customers and their extent of satisfaction.
6. To analyze the economic demography of the customers on the basis of
their need to fuel per month and give finer strategy for each segment
customer.
7. To analyze all the survey data & formulate recommendations based on
it.

Scope of Research

• The research work will be totally concentrated inside the Kolkata

region and few major Highways in outskirts.
• The Research work will cover the respondents from 2 Wheeler, 4
Wheeler, 6 Wheeler, 10 Wheeler, Taxi Drivers and Transporters.
• It is based on detail analyzing of customer expectation from Indian Oil
Corporation outlet both in Kolkata as well as in Highways.
• This study will help the Company to find out how the expectations of
the customer can be fulfilled so as to increase customer retention rate
as well as converting them to loyal customer of Indian Oil Corporation.

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Research Methodolgy
This research work is done to first find out the factors which affect the
buying decision of fuel and the expectations of the customer and their
satisfaction level & secondly on the basis of survey analysis, formulate
recommendations to improve sales of Branded Fuels and other
recommendations to retain the customers.

Analytical Methodology
• Survey Methodology:
Here data were collected from various assigned IOC Retail
Outlet in Kolkata and in Highways (NH 34, NH 35, Kalyani Expressway)

• Statistical Methodology:
After collecting the data, they were uploaded to excel
sheet so as to analyze them with the motive of coming to various alternative
conclusion.

Type of Research
The research work conducted is exploratory & descriptive in nature. This
research work is used to investigate the factors which are affecting the
buying decision of fuel and branded fuel and their expectations as well as
their satisfaction level & marking perception of all profiles of customers
about various fuel brands available in market. It’s an exploratory and
descriptive research, as it has using both the secondary data and surveys
respectively.

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Sources of Information and Tools for Data
Collection
a) Primary Data:
The data was been gathered through a survey based research
approach with the help of questionnaire in 24 Indian Oil Retail Outlets
all over Kolkata and its outskirts highways. The questionnaire was
made in English but it was translated to Hindi and Bengali language
for the convenience of the respondents. As the research work of
writing & asking question was totally carried out by one person only,
so human error related to recording of responses cannot be totally
ruled out.

Name and Address of the City Retail Name and Address of the Highway Retail
Outlets Outlets

 Drive In  Gouripur Service Station

63/2B, Belgachia Road, Gouripur, P.O. Birati, NH-34,
Belgachia, Kolkata – 700037 Pin-700051

 R.B. Trading and Co.  Kanai Lal Paul

101/2A, B.T. Road, Baranagar, Chandpara, Dist. 24 Parganas
Kolkata – 700090 (North),
Pin-743245

 R.N. Singh and Sons  Garai Brothers

16, Beliaghata Main Road, Bhatjungla, NH-34, Krishnagar,
Beliaghata, Kolkata – 700010 Dist. Nadia, Pin-741102

 Salt Lake Service Station  Maa Sarada Fuels

DD-29, Sector-I, Salt Lake, P.O. Gacha, Dist. Nadia, Pin-741126
Kolkata – 700064

 Prince Service Station  Sadananda Singha and Brothers

377-B, Prince Anwar Shah Road, Chatimtala, NH-34, Chakdah, Dist.
P.O. Jodhpur Park, P.S. Jadavpur, Nadia,
Kolkata – 700068 Pin-741222

 Binnu Enterprise  Maa Durga Fuel Station

553, Block N, New Alipore, New Vill.&P.O. Habibpur, P.S. Ranaghat,
Alipore, Kolkata – 700053 Dist. Nadia, Pin-741403

 Anderson Auto Service  Zaman Service Station

7, Belvedere Road, Kolkata – NH-35, Baluigachi, P.O.
700027 Lakshmipool,
P.S. Habra, Dist. 24 Parganas
(North)
Pin-743234

 Bypass Services  Gateway Transport Company Private

Plot-3B, RashBehari Avenue Limited
Connector, Rajdanga, Nabapally, Court Road, P.O.&P.S. Bongaon,

Page | 30
 Kolkata - 700107 Pin-743235

 Shantanu Carfil  Basanta Bahar Service Station

Plot No. 970 & 971, Baroda Vill. Hatishala, P.O. Dignagar,
Avenue, Baishnabghata, Patuli P.S. Kotwali, Dist. Nadia, Pin-
Connector, Kolkata – 700084 741401

 Shankar Auto Service  Debnath Auto Fuel Service

57/1, Diamond Harbour Road, Debagram, NH-34, Dist. Nadia,
Iqbalpur, Kolkata – 700023 Pin-741137

 Gopal Traders  Pragati Service Station

IndiraNagar, Rekjoani, Raghunathpur, Kalyani, Dist. Nadia,
P.O.&P.S. Rajarhat, 24 Parganas Pin-741245
(N), Kolkata – 700135

 Lauhati Service Station  Nilachal Fuels

P.O. Lauhati, 24 Parganas (N), Bahadurpur, P.S. Dhubulia, Dist.
Kolkata – 700135 Nadia
Pin-741183

b) Secondary Data:
• The source of secondary data was the articles on the fuel and branded
fuel mentioned on the internet.
• Research reports on Non Fuel Retailing
• Performance and strategy reports of petroleum companies.
• Articles on Non Fuel retailing and Branded Fuels, Loyalty Programs,
Customer Retention Programs.
• White papers on non fuel retailing and Branded Fuels, Loyalty
Programs, Customer Retention Programs.
• Newspaper articles and Online journals
The sources of all the sites are mentioned in bibliography & under the
subscript where ever it is used in this report.

Sampling Techniques
Random sampling technique has been used, as the respondents are
scattered all over the Kolkata region & the population of respondents are
homogeneous in nature.

• Stratified Random sample technique: A method of

sampling, which involves the division of a population into smaller
groups, known as strata. In stratified random sampling, the strata are
formed based on their members sharing a specific attribute or
characteristic. A random sample from each stratum is taken, in a

Page | 31
 number proportional to the stratum's size when compared to the
population. These subsets of the strata are then pooled to form a
random sample.
• Trend Analysis Technique: An aspect of technical analysis that
tries to predict the future movement of a stock based on past data.
Trend analysis is based on the idea that what has happened in the
past gives traders an idea of what will happen in the future.
There are three main types of trends: short-, intermediate- and long-
term.
• Interval Scale Technique: It is an interval scale because it is
assumed to have equidistant points between each of the scale
elements. This means that we can interpret differences in the distance
along the scale. We contrast this to an ordinal scale where we can only
talk about differences in order, not differences in the degree of order.

Sample Size
Area Sample Size

Kolkata City 300

Highways 300

Taxi 50

Miscellaneous 100

Total 750

Research Design:
This Research is Descriptive one. The topic characterizes following things:
1. Information needed is defined only loosely.
2. Research process is structured but flexible.
3. Sample is not very huge and not completely representative.
4. Analysis of secondary data is qualitative.

Page | 32
The major part of the research is an exploratory research design. Some
portions follow the descriptive design criteria. This type of research design is
generally followed by further exploratory or conclusive research.

Limitation of the Research:

There were few limitations in this research work. The sample covers all the
major portions of Kolkata and its outskirts, but still it was not able to cover
the full width of Kolkata. This limitation is because of the time span. So,
there is a much broader need to increase the sample size to get more
results.

Also the secondary data on fuel and branded fuel and all other components,
available on internet is not sufficient. There is no where mentioning of %
wise market share of fuel in Kolkata in regards to branded fuel and others.
This data was needed to check the % error in the report. So, error in report
cannot be reported which is a big limitation of the given analysis.

One of the limitations was that, I was the only person involved in reporting
the data. Therefore, asking of same question from so many people can
register some error in reporting the data which is called human error.

Page | 33
Page | 34
 Industry Profile
The petroleum industry includes the global processes of exploration,
extraction, refining, transporting (often by oil tankers and pipelines), and
marketing petroleum products. The largest volume products of the industry
are fuel oil and gasoline (petrol). Petroleum is also the raw material for many
chemical products, including pharmaceuticals, solvents, fertilizers,
pesticides, and plastics. The industry is usually divided into three major

Page | 35
components: upstream, midstream and downstream. Midstream operations
are usually included in the downstream category.

Petroleum is vital to many industries, and is of importance to the

maintenance of industrial civilization itself, and thus is a critical concern for
many nations. Oil accounts for a large percentage of the world’s energy
consumption, ranging from a low of 32% for Europe and Asia, up to a high of
53% for the Middle East. Other geographic regions’ consumption patterns
are as follows: South and Central America (44%), Africa (41%), and North
America (40%). The world consumes 30 billion barrels (4.8 km³) of oil per
year, with developed nations being the largest consumers. The United States
consumed 25% of the oil produced in 2009. The production, distribution,
refining and retailing of petroleum taken as a whole represents the world's
largest industry in terms of dollar value.

Over the years India Petroleum Industry has played an influential part in
triggering the speedy expansion of the country's economy by contributing
15% in the total GDP. Further to this, petroleum exports gave new
dimension to foreign exchange earnings by drawing US$ 23.64 billion in the
FY 2008-09.

To assist and acknowledge the expansion of the sector, the Cabinet

Committee on Economic Affairs felicitated 44 petroleum research
blocks on November 2008 under the New Exploration Licensing Policy
(NELP-VII).

Evolution of Oil and Gas Industry in India:

At Independence, India's domestic oil production was just 250,000 tonne per
annum. The entire production was from one state-Assam. Most foreign
experts had written off India as far as discovery of new petroleum reserves
was concerned. The Government announced, under Industrial Policy
Resolution, 1954, that petroleum would be the core sector industry.

Preamble:
Petroleum exploration & production was controlled by the Government-
owned National Oil Companies (NOCs), ONGC and OIL, in pursuance of the
Industrial Policy Resolution, 1954. In the early 70s, they supplied nearly 70%
of the domestic requirement. However, by the end of the 80s, they had

Page | 36
reached the stage of diminishing returns. Oil production had begun to
decline whereas there was a steady increase in consumption and today the
two NOCs are able to meet only about 35% of the domestic requirement.
This was further compounded by the resource crunch in the beginning of the
90s. The Government had no money (FE) to give to the NOCs for the
development of some of the then newly discovered fields. While some of
these fields could be developed by ONGC (Gandhar, Neelam, Bombay High,
Lakwa, Heera, Geleki etc.), for others there was no money available for
indigenously developing the fields. The problem had elements such as the
administered oil price, non-availability of appropriate technology, logistics
etc.
Petroleum Sector Reforms, 1990:
The Government launched the Petroleum Sector Reforms (PSR) in 1990. Till
then, three rounds of exploration bidding had been gone through with no
success in finding new oil/gas deposits by the foreign companies who only
were allowed to bid. Under the PSR, the Fourth, Fifth, Sixth, Seventh and
Eighth Rounds of exploration bidding were announced between 1991 and
1994. For the first time Indian companies with or without previous
experience in E&P activities were permitted to bid starting with the Fourth
Round.
The Government then announced the Joint Venture Exploration Program in
1995. The exploration blocks were in those areas for which the Petroleum
Exploration License was with the NOCs and they were required to have a
25% to 40% Participating Interest from day one.
Foreign Companies in Exploration in India:
Foreign companies entered the Indian E&P scene since early fifties (Indo
Stanvac Project- A Joint Venture between Government of India and Standard
Vacuum oil Company for West Bengal on land in early fifties, Carlsbons
Natomas for Bengal offshore in early seventies, Assamerc for Cauvery
offshore and Reading and bates for Kutch offshore also in early seventies
and later since the first round in 1980; Shell for Kerala offshore and
Chevronn- Texaco in Krishna - Godavery Offshore). This was certainly not as
much as elsewhere in the world.
Indian E&P Companies:
Most of the Indian companies barring HOEC have been riding piggyback on
the foreign companies for exploration and development ventures in India. In
this regard, Reliance Petroleum Ltd. has taken the first step by joining up
with ONGC in bidding for exploration as well as development ventures in
India and abroad. Some of the downstream companies like IOC; GAIL has
entered also upstream in consort with ONGC and OIL.

Page | 37
Opening of the Oil/Gas Fields for Development by Private
Companies:
The Indian oil/gas fields discovered by the two NOCs were first offered in
1992 under the First Offer. The second such offer was made in 1993.
Development of fields is characterized by a comparative lack of business risk
but is a cost intensive venture. Only those companies who have previous
experience of field development can undertake such ventures. Unlike the
Exploration blocks, field development contracts have upfront payments to
be made to the NOCs for past costs as well as in the form of signature
bonus. At the stage of oil/gas production, companies are also required to
make production bonus payments. Lack of previous experience forces the
Indian companies to seek foreign partners not only to work as Operator but
also to share costs. It would help Indian cause if the government were to
introduce the practice of Pure Service Contract like in some of the other
producing countries.
Today 74 Exploration Contracts and 28 Development Contracts are in
operation. There are a total of 103 PSCs in operation. This is a sizable
number but unfortunately this is not made known to a large number of
people/enterprises. The Development Contracts are likely to add about
150,000 barrels of oil per day (or about 7.5 MMT per year) and about 7
million cubic meters per day of gas production. In terms of money about 4
billion dollars are expected to be pumped into these ventures over the next
10 to 15 years.

Various Production Segments:

• Refinery production: Refinery production in context of crude oil
escalated from 156.11 MT in FY 2007-08 to 160.67 MT in FY 2008-09.
Indian Oil Corporation Ltd is looking forward to elevate the capacity of
its Haldia refinery and Panipat refinery plants to 7.5 million tones and
15 million tonne respectively in 2010.

Page | 38
 • Natural Gas Production: The natural gas production in 2008-09
increased from the previous year's 32.40 billion cubic meters tonne
(BCM) to 32.84 BCM. In 2009 alone the Natural gas production was
registered at 33,846 million cubic meters.

• Crude Oil Production: The projected production of crude oil during the
11th Five-Year Plan (2007-2012) is 206.76 MMT, while that of natural
gas is 255.27 BCM. Cumulative production of crude oil between April-
December 2009 was 25,152 MT, while cumulative production of
refinery production during the same period was 119,283 MT.

India as an International Refining Destination:

India is steadily emerging as an international destination for oil refining with
investment requirements lesser by 25% - 50% as compared to its Asian
counterparts. As per the analysis carried out by Deutsche Bank, India is
expected to enhance its refining competence by 45% in the next 5 years.
Being the fifth biggest worldwide nation in context of distillation capacity,
India enjoys 3% of the international capacity share. To move ahead in
making its presence felt strongly in the global market, Indian petroleum
firms are planning to raise their distillation capacity from the existing 149
mtpa to 243 mtpa by FY 2011-12.

Indian Petroleum Retail Market:

Expansion of Indian petroleum retail market is triggered by the growth in
automobile sales that resulted in major foreign investments. The growth is
estimated to sustain and the market is likely to expand further by 20 million
every year till 2030, placing India at the world map in terms of being the
biggest automobile market.
Accordingly, the petroleum dealers Bharat Petroleum Corporation, Hindustan
Petroleum Corporation and Indian Oil Corporation in collaboration with each
other are looking forward to add 2,262 petrol pumps in India by 2010.

Investments in India Petroleum Industry:

• In 2010 the state-owned oil firms are expected to splurge US$ 11.34
billion on developing supplies and constructing new shipping networks
for petroleum and natural gas.

Page | 39
 • Indian Oil Corporation is looking forward to establish a petroleum plant
in the state of West Bengal by bringing in investments worth US$
596.63 million
• ONGC will bring in US$ 694 million for raising services at its oil fields in
Assam and adjoining states to enhance the petroleum output. In
addition it will also splurge US$ 5.65 billion on capital expenses in the
next two years.
• GAIL (India) Limited and OVL, the international associate of leading oil
and gas player ONGC, are expected to bring in investments worth US$
250 million.

Future of Indian Petroleum Industry:

As per the latest CII-KPMG analysis, the energy industry of India will help tin
the expansion of the petroleum sector by bringing in investments worth US$
120 billion-US$ 150 billion in the next 3-5 years. By 2012, the prospects in
India Petroleum Industry are estimated to accomplish US$ 35 billion to US$
40.

Page | 40
Page | 41
 Company Profile of Indian Oil Corporation
Limited
Present Scenario: Indian Oil Corporation Ltd. is currently India's largest
company by sales with a turnover of Rs. 271,073 crores and profit of Rs.
10,220.55 crores for fiscal 2009-10.

Consistently improving its position in the Fortune 'Global 500' listings,

moving up 11 places, Indian Oil is ranked 105th in 2009, making it the
highest ranked Indian company. It is also the 18th largest petroleum
company in the world. Indian Oil’s vision is driven by a group of dynamic
leaders who have made it a name to reckon with.

In this section, you can peruse through the profile and spread of Indian Oil
across the country & abroad. You can also know about Indian Oil’s current
financial performance, special initiatives and causes along with the
prestigious recognitions & awards that have come its way for exceptional
performances.

Profile: Indian Oil Corporation Ltd., currently India's largest company by

sales with a turnover of Rs. 271,073 crores and profit of Rs. 10,220.55 crores
for fiscal 2009-10, is also the highest ranked Indian company in the
prestigious Fortune 'Global 500' listing, having moved up 11 places to the
105th position in 2009.

 India’s Flagship National Oil Company:

Incorporated as Indian Oil Company Ltd. on

30th June, 1959, it was renamed as Indian Oil
Corporation Ltd. on 1st September, 1964 following
the merger of Indian Refineries Ltd. (established

Page | 42
1958) with it. Indian Oil and its subsidiaries account for approximately 48%
petroleum products market share, 34% national refining capacity and 71%
downstream sector pipelines capacity in India.

For the year 2008-09, the Indian Oil group sold 62.6 million tonne of
petroleum products, including 1.7 million tonne of natural gas, and exported
3.64 million tonne of petroleum products.

The Indian Oil Group of companies owns and operates 10 of India's 20

refineries with a combined refining capacity of 60.2 million metric tonne per
annum (MMTPA, .i.e. 1.2 million barrels per day). These include two
refineries of subsidiary Chennai Petroleum Corporation Ltd.

The Corporation's cross-country network of crude oil and product pipelines,

spanning over 10,000 km and the largest in the country, meets the vital
energy needs of the consumers in an efficient, economical and environment-
friendly manner.

Indian Oil is investing Rs. 43,400 crores (US $10.8 billion) during the period
2007-12 in augmentation of refining and pipeline capacities, expansion of
marketing infrastructure and product quality up gradation as well as in
integration and diversification projects.

 Network Beyond Compare:

As the flagship national oil company in the

downstream sector, Indian Oil reaches precious
petroleum products to millions of people every day
through a countrywide network of about 35,000
sales points. They are backed for supplies by 167
bulk storage terminals and depots, 101 aviation fuel
stations and 89 Indane (LPGas) bottling plants.
Indane earned the coveted status of 'Superbrand' in 2009 and was poised to
expand in the rural market through the Rajiv Gandhi Gramin LPG Vitarak
Yojana. About 7,335 bulk consumer pumps are also in operation for the
convenience of large consumers, ensuring products and inventory at their
doorstep.

Indian Oil operates the largest and the widest network of petrol & diesel
stations in the country, numbering over 18,278. It reaches Indane cooking
gas to the doorsteps of over 53 million households in nearly 2,700 markets
through a network of about 5,000 Indane distributors.

Indian Oil’s ISO-9002 certified Aviation Service commands over 63% market

Page | 43
share in aviation fuel business, meeting the fuel needs of domestic and
international flag carriers, private airlines and the Indian Defence Services.
The Corporation also enjoys a dominant share of the bulk consumer
business, including that of railways, state transport undertakings, and
industrial, agricultural and marine sectors.

 Technology Solutions Provider:

Indian Oil’s world-class R&D Centre is perhaps Asia's finest. Besides

pioneering work in lubricants formulation, refinery processes, pipeline
transportation and alternative fuels, the Centre is also the nodal agency of
the Indian hydrocarbon sector for ushering in Hydrogen fuel economy in the
country. It has set up a commercial Hydrogen-CNG station at an Indian Oil
retail outlet in New Delhi this year. The Centre holds 214 active patents,
including 113 international patents.

Indian Oil has joined the league of global technology providers last year with
the selection of its in-house developed INDMAX technology (for maximizing
LPGas yield) for the 4 MMTPA Fluidized Catalytic Cracking (FCC) units at the
Corporation's upcoming 15 MMTPA grass roots refinery at Paradip in Orissa,
as well as for the FCC unit coming up at BRPL.

A wholly-owned subsidiary, Indian Oil Technologies Ltd., is engaged in

commercializing the innovations and technologies developed by Indian Oil’s
R&D Centre. The lubricant technology team endeavored to develop more
energy efficient, environmental friendly and longer drain SERVO lubricants.
Over 181 lubricant formulations were developed during the year of which
75% were commercialized.

 Customer First:

At Indian Oil, customers always get the first priority. New initiatives are
launched round-the-year for the convenience of the various customer
segments.

Exclusive XTRACARE petrol & diesel stations unveiled in select urban and
semi-urban markets offer a range of value-added services to enhance
customer delight and loyalty. Large format Swagat brand outlets cater to
highway motorists, with multiple facilities such as food courts, first aid, rest
rooms and dormitories, spare parts shops, etc. Specially formatted Kisan
Seva Kendra outlets meet the diverse needs of the rural populace, offering a
variety of products and services such as seeds, fertilisers, pesticides, farm
equipment, medicines, and spare parts for trucks and tractors, tractor
engine oils and pump set oils, besides auto fuels and kerosene.

Page | 44
SERVOXpress has been launched recently as a one-stop shop for auto care
services.

To safeguard the interest of the valuable customers, interventions like retail

automation, vehicle tracking and marker systems have been introduced to
ensure quality and quantity of petroleum products.

 Widening Horizons:

To achieve the next level of growth, Indian Oil is

currently forging ahead on a well laid-out road map
through vertical integration— upstream into oil
exploration & production (E&P) and downstream into
petrochemicals – and diversification into natural gas
marketing, bio fuels, wind power projects, besides
globalization of its downstream operations.

Petrochemicals

In petrochemicals, Indian Oil is envisaging an investment of Rs. 20,000

crores (US$ 4 billion) by the year 2011-12. Through the world’s largest
single-train Linear Alkyl Benzene (LAB) plant with an annual capacity of
1,20,000 tonne set up at its Gujarat Refinery, the Corporation has already
captured a significant market share of LAB in India, besides exporting the
product to Indonesia, Turkey, Thailand, Vietnam, Norway and Oman.

A world-scale Paraxylene/Purified Terephthalic Acid plant (annual capacities:

PX - 3,63,000 tonnes, PTA – 5,53,000 tonnes) for polyester intermediates is
already in operation at Panipat, while a Naphtha Cracker with a capacity of
800,000 tonnes of ethylene per annum, 6,00,000 TPA of Propylene, besides
an annual production of 3,25,000 TPA of Mono Ethylene Glycol, 1,40,000 TPA
of Butadiene, 6,50,000 TPA of Polyethylene and 6,00,000 TPA of
Polypropylene, equipped with downstream polymer units is to be completed
by December 2009 at Panipat.

A grassroots refinery at Paradip is proposed to be completed by the year

2011-12, subsequently followed by the setting up of an integrated
petrochemical plants with an estimated investment of Rs 12,000 crores (US$
2.5 billion) which will further strengthen the Corporation’s presence in the
sector.

Page | 45
During the year, LAB sales touched 126 TMT including the export of 19 TMT
to 13 countries and over 30% growth achieved in PTA sales (535 TMT).

Oil Exploration & Production

In E&P, Indian Oil has non-operator participating interest in seven oil & gas
blocks awarded under various NELP (New Exploration Licensing Policy)
rounds and two Coal Bed Methane blocks in India, in consortium with other
companies. In addition, Indian Oil has two onshore type ‘S’ NELP blocks, with
100% participating interest (PI) and sole operatorship. It also has
participating interest in an onshore block in Assam and Arunachal Pradesh
through a farm-in.

Overseas ventures of the Corporation includes two blocks (86 and 102/4) in
Sirte Basin and Areas 95/96 in Ghadames basin of Libya, Farsi Exploration
Block in Iran, onshore farm-in arrangements in one block in Gabon, one on
land block in Nigeria, one deepwater offshore block in Timor-Leste and two
onshore blocks in Yemen. In all, Indian Oil has 12 domestic exploration
blocks, including 2 blocks where gas discoveries have been made and 9
overseas exploration blocks, & the Farsi block in Iran where commerciality of
gas discovery has been established. Indian Oil has incorporated Ind-OIL
Overseas Ltd. – a special purpose vehicle for acquisition of overseas E&P
assets – in Port Louis, Mauritius, in consortium with Oil India Ltd. (OIL). A
consortium of Repsol, Petronas, OVL, Indian Oil and OIL has been awarded a
project for the development, extraction, up-gradation and marketing of
heavy oil in Carabobo heavy oil region of Venezuela.

Gas

During 2009-10, Indian Oil sold 1.89 MMTPA of Natural Gas generating
revenues of Rs. 2,989 crores. A technology innovation has been initiated to
reach LNG (Liquefied Natural Gas) directly to the doorstep of bulk consumers
in cryogenic containers for industrial as well as captive power applications.

To consolidate its city gas distribution (CGD) business, Indian Oil has tied up
with several players such as Adani Energy, Reliance Gas Corporation, OIL
and ONGC, etc., to set up joint ventures in various cities of India. The

Page | 46
Corporation has also entered into franchise agreements with CGD players
such as Indraprastha Gas Ltd., Mahanagar Gas Ltd., Adani Energy Limited,
GEECL, SITI Energy and GSPC Gas Ltd. to market CNG through its retail
outlets

Bio-fuels

To straddle the complete bio-fuel value chain, Indian Oil formed a joint
venture with the Chhattisgarh Renewable Development Authority (CREDA)
with an equity holding of 74% and 26% respectively. Indian Oil CREDA
Biofuels Ltd. has been formed for carrying out farming, cultivating,
manufacturing, production and sale of biomass, bio-fuels and allied products
and services.

A pilot project of jatropha plantation on 600 hectares of revenue wasteland

is underway in Jhabua district in Madhya Pradesh to ascertain the feasibility
of revenue land-based commercial biodiesel units and to develop
benchmarks for plantation costs and output.
Indian Oil has also signed a MoU with M/s Ruchi Soya Industries Ltd. to take
up contract farming on one lakh hectare of private and panchayat wasteland
in the state of Uttar Pradesh. A MoU for collaborating on commercial
production of biodiesel from algae has also been signed with PA LLC.

Wind Energy Business

IndianOil has forayed into wind energy business with the commissioning of a
Rs. 130 crores, 21 MW wind power project in the Kutch district of Gujarat.
The cumulative power generation from the 14 wind turbine generators has
crossed 159 lakh KW since commissioning in January 2009.
It has also commissioned two pilot solar lantern charging stations at its Kisan
Seva Kendra at Sathla near Meerut and Chokoni near Bareilly.

Consultancy

For over two decades now, Indian Oil has been providing technical and
manpower secondment services to overseas companies. Such services have
been extended to Emirates National Oil Company (ENOC), Kenya Pipeline
Company and Aden Refinery, Yemen. For the first time, SAP
implementation / IT consultancy was provided in Sri Lanka. Consultancy on

Page | 47
pipelines was provided to Greater Nile Petroleum Operating Company
(GNPOC), Sudan .The 2nd India-Africa Hydrocarbons Conference at New
Delhi was jointly organized by MoP&NG, FICCI and Indian Oil. Kuwait
Petroleum Corporation (KPC) selected Indian Oil as a training provider.

Globalization Initiatives
Indian Oil has set up subsidiaries in Sri Lanka, Mauritius and the United Arab
Emirates (UAE), and is simultaneously scouting for new business
opportunities in the energy markets of Asia and Africa.

Lanka IOC Plc (LIOC)

Lanka IOC Ltd. operates about 150 petrol & diesel stations in Sri Lanka, and
has a very efficient lube marketing network. Its major facilities include an oil
terminal at Trincomalee, Sri Lanka's largest petroleum storage facility and
an 18,000 tonnes per annum capacity lubricants blending plant and state-of-
the-art fuels and lubricants testing laboratory at Trincomalee. Presently, it
holds a market share of about 40%. In a highly competitive bunker market,
catering to all types of bunker fuels and lubricants at all ports of Sri Lanka,
viz., Colombo, Trincomalee and Galle. It is the major supplier of lubricants
and greases to the three arms of the Defence services of Sri Lanka. LIOC's
market share in petrol increased stands at 24.8% in 2008 with an overall
market share of 16.9%.

Indian Oil (Mauritius) Ltd. (IOML)

Indian Oil (Mauritius) Ltd. has an overall market share of nearly 22% and
commands a 35% market share in aviation fuelling business, apart from its
bunkering business. It operates a modern petroleum bulk storage terminal
at Mer Rouge port, besides 17 filling stations. In addition to the ongoing
expansion of retail network, IOML has to its credit the first ISO-9001 product-
testing laboratory in Mauritius. Overall sales grew by around 10% to 237
thousand kilolitres (KL) from 217 thousand KL last year to emerge with the
third largest market share of 24.4% on a turnover of MUR 4.6 billion (INR 6.8
billion).IOML's market share touched a high of 41.9% and the company is the
only one operating Retail Outlets round the clock.

Indian Oil Middle-East FZE (IOME)

The Corporation's UAE subsidiary, IOC Middle East FZE, which oversees
business expansion in the Middle East, is mainly into blending and marketing

Page | 48
of SERVO lubricants and marketing of petroleum products in the Middle East,
Africa and CIS countries. Finished lubes were exported to Oman, Qatar,
Yemen, Bahrain, UAE and Nepal.

 India Inspired:

As a leading public sector enterprise of India, Indian Oil has successfully

combined its corporate social responsibility agenda with its business
offerings, meeting the energy needs of millions of people everyday across
the length and breadth of the country, traversing a diversity of cultures,
difficult terrains and harsh climatic conditions. The Corporation takes pride
in its continuous investments in innovative technologies and solutions for
sustainable energy flow and economic growth and in developing techno-
economically viable and environment-friendly products & services for the
benefit of its consumers.

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:
 To achieve international standards of excellence in all aspects of
energy and diversified business with focus on customer delight
through value of products and services and cost reduction.
 To maximize creation of wealth, value and satisfaction for the stake
holders.
 To attain leadership in developing, adopting and assimilating state-of-
the-art technology for competitive advantage.
 To provide technology and services through sustained research and
development.
 To foster a culture of participation and innovation for employee growth
and contribution.
 To cultivate high standards of business ethics and Total Quality
Management for a strong corporate identity and brand equity.
 To help enrich the quality of life of the community and preserve
ecological balance and heritage through a strong environment
conscience.

Objectives and Obligations:

Objectives:

Page | 49
 • To serve the national interests in oil and related sectors in accordance
and consistent with Government policies.
• To ensure maintenance of continuous and smooth supplies of
petroleum products by way of crude oil refining, transportation and
marketing activities and to provide appropriate assistance to
consumers to conserve and use petroleum products efficiently.
• To enhance the country's self-sufficiency in crude oil refining and build
expertise in laying of crude oil and petroleum product pipelines.
• To further enhance marketing infrastructure and reseller network for
providing assured service to customers throughout the country.
• To create a strong research&development base in refinery processes,
product formulations, pipeline transportation and alternative fuels with
a view to minimizing/eliminating imports and to have next generation
products.
• To optimise utilisation of refining capacity and maximize distillate yield
and gross refining margin.
• To maximise utilisation of the existing facilities for improving efficiency
and increasing productivity.
• To minimise fuel consumption and hydrocarbon loss in refineries and
stock loss in marketing operations to effect energy conservation.
• To earn a reasonable rate of return on investment.
• To avail of all viable opportunities, both national and global, arising
out of the Government of India’s policy of liberalisation and reforms.
• To achieve higher growth through mergers, acquisitions, integration
and diversification by harnessing new business opportunities in oil
exploration&production, petrochemicals, natural gas and downstream
opportunities overseas.
• To inculcate strong ‘core values’ among the employees and
continuously update skill sets for full exploitation of the new business
opportunities.
• To develop operational synergies with subsidiaries and joint ventures
and continuously engage across the hydrocarbon value chain for the
benefit of society at large.
Obligations:
• Towards customers and dealers:- To provide prompt, courteous
and efficient service and quality products at competitive prices.

Page | 50
 • Towards suppliers:- To ensure prompt dealings with integrity,
impartiality and courtesy and help promote ancillary industries.

• Towards employees:- To develop their capabilities and facilitate

their advancement through appropriate training and career planning.
To have fair dealings with recognised representatives of employees in
pursuance of healthy industrial relations practices and sound
personnel policies.

• Towards community:- To develop techno-economically viable and

environment-friendly products. To maintain the highest standards in
respect of safety, environment protection and occupational health at
all production units.

• Towards Defence Services:- To maintain adequate supplies to

Defence and other para-military services during normal as well as
emergency situations.
Indian Oil: A National Brand

Indian Oil has been adjudged India's No. 1 brand by UK-based Brand
Finance, an independent consultancy that deals with valuation of brands.
It was also listed as India's 'Most Trusted Brand' in the 'Gasoline' category
in a Readers' Digest - AC Nielsen survey. In addition, Indian Oil topped
The Hindu Businessline's "India's Most Valuable Brands" list.

However, the value of the Indian Oil brand is not just limited to its
commercial role as an energy provider but straddles the entire value
chain of gamut of exploration & production, refining, transportation &
marketing, petrochemicals & natural gas and downstream marketing
operations abroad. Indian Oil is a national brand owned by over a billion
Indians and that is a priceless value.

Due to innovative initiatives, strong brand communications and sales

promotion campaigns conducted during the year, Indian Oil's branded
fuels - XTRAPREMIUM petrol and XTRAMILE diesel - maintained their firm
leadership status, with a market share of 48.6% and 59.6% respectively
among branded fuels in the market. XTRAPREMIUM and XTRAMILE are
now available at 6,446 and 9,256 retail outlets of Indian Oil respectively.

Indian Oil is a heritage and iconic brand at one level and a

contemporary, global brand at another level. While quality, reliability and
service remains the core benefits to our customers, our stringent checks

Page | 51
are built into operating systems, at every level ensuring the trust of over
a billion Indians over the last four decades.

Competitive Force Analysis:

Threat of Intense Segment Rivalry: It is witnessed in the holistic

service offered by the retail outlet majors (IOCL, HPCL, and BPCL). If
IOCL has “SWAGAT” Outlets, HPCL and BPCL has “Club HP” and “Ghar”
Outlets. It is noted that most of these outlets have same facilities like
Quality verification checks, Truck driver amenities, etc, and leading to
intense segment rivalry. However, IOCL has the edge in terms of vast
refining and distribution network hence is the market leader.

Threat of New Entrants: In the current Indian scenario, entry and

exit barriers are high and profit potential is high but firms face more
risk because poorer performing firms stay in and fight it out. Like, IBP
was facing bleak prospects till the time Indian Oil purchased it with a

Page | 52
premium of over 60%. Till the recent crude oil spike, Reliance Retail
Petroleum, Essar Oil and Shell gave a head-on-clash with oil PSU’s.
Adding to its newer plants come with better crude handling capacities
(like better Nelson’s index) and therefore refinery margins are good
thus reflected in the net margins.

Threat of Substitute Products: Threat is from cleaner and efficient

fuels like Compressed Natural Gas (CNG), where it was implemented
on a war-footing in Delhi to control emissions. Also the increased
awareness on Jatropa and Pongamia, Central Government’s
encouragement in the form of Bio-fuel purchase policy for 5% bio-fuel
blended Diesel. Electric Reva also poses a challenge to the existing
players.

Threat of Buyer’s growing Bargaining Power: “Consumer is

always the king”-is apt in the case of petroleum products in India.
Consumer’s interest is protected by the Government by not raising the
fuel prices beyond a limit and indirectly consumer is exercising his
bargaining power. Also all the Oil PSU’s are offered varied services to
the consumer including intangible ones like frequent quality checks
and tangible ones like amenities, ATM, car care, etc, which was not
even a moot concept in the past. Hence the buyer’s bargaining power
has increased.

Threat of Supplier’s Bargaining Power: Petroleum is synonymous

with OPEC cartel. Big-wigs like Exxon-Mobil, Total, Occidental
Petroleum, IOCL, and BPCL are not shielded from the vagaries of Oil
and Petroleum Energy Conservation. Though OPEC claims that it’s the
tax structure in the respective countries which makes petroleum
products expensive, crude oil price varies in NYMEX or in UK or in
Singapore in accordance with production levels of Oil and Petroleum
Energy Conservation. Today, world is gaining its spine power once
again after the Global Meltdown, and crude oil prices, hence, are
declining but Oil and Petroleum Energy Conservation has already
initiated significant production cuts whose effect might be felt in the
forthcoming months.

Page | 53
 SWOT Analysis of Indian Oil Corporation Limited

Strengths:
∗ IOC controls 10 refineries, by virtue of which it has a total share of
around 40% of India’s overall refining capacity. IOC has also acquired
equity stakes in Cochin Petroleum Corporation Limited and
Bongaigaon Refinery Pipeline Limited, and in 2001, these refineries
became subsidiaries of IOC.
∗ 58% of IOC’s refining capacity is located in the Northern and Western
regions, which are high demand and high growth areas.
∗ Although its refineries are located in the interior of the country, and
not near the major ports, IOC has a very strong distribution network by
virtue of having a share of 48% in the country’s product pipelines. The
total capacity of these product pipelines is 49.79 Million Metric Tonne.
∗ IOC also acquired management control of the marketing company IBP,
thereby strengthening its position in these activities. It also has a
dominant share in all segments in terms of marketing infrastructure.
Its network includes 18,278 retail outlets of petrol and diesel, 8000
LPG distributors, and 3963 kerosene/LDO dealers.

Weaknesses:
∗ The major weakness for the company is the R&D. The company starts
working on it.
∗ The petrochemical product development technology is another
weakness for the company.
∗ The technological drawback, as compared to some major foreign
player is another weakness for the company.

Opportunities:
∗ Since the company has the maximum no. of outlets and also the
maximum no. of refineries in India, it can very easily go for extension

Page | 54
 at any point of time, and can introduce any new products, which will
get support from its huge market network.
∗ The company can make the buying process easier for the customers,
by implying many more schemes in the range of XTRAPOWER and
XTRAREWARD.
∗ The company can think over the issue to build its own pipelines, so
that it will be an independent player and it will also support its aviation
fuel supply.

Threats:
∗ Foreign players with more advanced technologies are the biggest
threat to the company.
∗ The crude oil supply is also a big issue in front of the company
because the company cannot fix its price and so, sometime had
operated in loss also. It is the biggest problem because the maximum
part of their crude is been reported.
∗ In future the market will welcome more private players, which will eat
up its market share.
∗ If the Govt. policies allow the private players to set their own price, the
private player can seriously harm the market share of IOCL.

SWOT Analysis at a Glance

Strength Weakness

∗ PSU unit ∗ PSU unit

∗ Vast refining and distribution ∗ Upstream R&D
network ∗ Petrochemical development
∗ Diversified outlook technology
∗ Old refineries leading to poor
refinery margins

Opportunity Threat

∗ To expand in South East Asia ∗ Volatility of Crude oil price

∗ Can become an independent ∗ Increased competition from
E&P player private and foreign players
∗ Expansion easily possible due
to huge distribution network

Page | 55
 PEST Analysis:
Political – Legal Environment

 Entire oil industry is been governed by OIL Ministry and OIDB a Govt.
body

 This two Institutes are responsible for all the decision related to the
price, quality specification etc.

 Beside this the international politics also affect this international

commodity “Oil” a lot and also its companies

 Any company operated in India had to work according to the norms

and on the prices specified earlier by Govt. bodies

Economic environment

 The gradual reduction of tariff protection has ensured that prices of

most goods in countries like India are closer to global levels or even
much lower.

 The lower prices are much more extensive in the services sector,
which accounted for 52.4% of the Indian economy in 2004- 05.

 The use of GDP based on purchasing power parity in the calculation of

oil intensity is also validated by the fact that the figures on oil
consumption are measured in terms of volumes of input (million tons
of oil equivalent-mote) while the GDP estimated on the market

Page | 56
 exchange rate gives only the value of output and not the actual
volumes.

 It is only the GDP estimated on a purchasing power parity basis which

gives some indicator so the volume of output which should form the
basis of cross country comparisons of output and estimation of oil
intensity therein.

 However, though the oil intensity in India is comparatively much lower

than in most other developed and developing countries the negative
impact of high oil prices on the economy is accentuated by the
distorted pattern of oil consumption in India.

Social Cultural Environment

 Social cultural variation in the Indian context is very important for any
company to work in it.

 The India is basically can be divided into four major regions on the
basis of language, demography and also the income states. These are
the south, north, east and west.

 The IOCL as a company also operates differently in different regions

and also use different languages to attract people towards them.

 This is also, a reason for which the companies have three refineries in
the south region out of eleven in total. And that also because of the
merger with MRPL a local regional company

Technological Environment

 Indian Oil has, till date, invested close to Rs. 1,000 crore in setting up
world-class facilities at its R&D Centre and it plans to invest about Rs.
500 crore during the period 2007-12 to maintain its leadership in
downstream R&D activities in the hydrocarbon sector.

 This the reason , that’s why IOCL have the India's first experimental H-
CNG (Hydrogen-Compressed Natural Gas) dispensing unit at the R&D
Centre campus at Faridabad and has been in the forefront of

Page | 57
 technology development for Bio-diesel production from various edible
and non-edible oils and its application in vehicles.

 Pioneering studies by India Oil’s R&D Centre established that Bio-

diesel produced from Jatropha seeds were at par with that produced
from vegetable oils.

4 P’s of Indian Oil Corporation Limited

Products Price Place Promotion

• Petrol • Price for • Located all • Subhiksha:

• Diesel all the over India. Two ZOOP
• LPG products • Maximum noodles
• Auto LPG of all number of packet free
• Aviation company refineries. on purchase
Turbine is decided • Only of Rs. 250/-
Fuel by company • Dominos:
• Lubricants petroleum having Rs. 50/- off
• Naphtha ministry. retail outlet on each
• Bitumen • Very less outside midsize
• Paraffin difference India dominos
• Kerosene in price of (SriLanka) pizza.
all PSU’s • PVR cinema:
branded Rs 10/- off
products. on eatables
purchased
in PVR
cinema.
• Rajdhani
Thali: 10%
off on each
Rajdhani

Page | 58
 Thali.
• Yoko
Sizzlers:
10% off in
Yoko
Sizzlers AC
Restaurants.
• 10 litres of
fuel free on
Power FM
contest.

Page | 59
Page | 60
 Major Competitors of Indian Oil Corporation
Limited
Bharat Petroleum Corporation Limited: Bharat Petroleum
Corporation Limited (BPCL) is one of India's largest PSU oil and gas
companies, with Fortune Global 500 rank of 289 (2009). Its corporate office
is located at Ballard Estate, Mumbai. As the name suggests, its interests are
in downstream petroleum sector. It is involved in the refining and retailing of
petroleum products.
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.

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BPCL's growth post-nationalisation (in 1976) has been phenomenal. One of
the single digit Indian representatives in the Fortune 500 & Forbes 2000
listings, BPCL is often referred to as an “MNC in PSU garb”. It is considered a
pioneer in marketing initiatives, and employs “Best in Class” practices.
Offering World Class Fuels
Since 2002, we have introduced new generation branded fuels Speed, Hi
Speed Diesel and Speed 97, being the pioneers to introduce premium fuel
brands in the Country. These specialized products we launched in line with
global trends and keeping pace with the technological advancements in the
automobile industry leading to introduction of new generation vehicles.
Speed brand of petrol contains multi-functional fuel additives that prevent
formation of harmful deposits and help clean existing deposits, thereby
improving vehicle performance. Speed has been the market leader in the
branded fuels category.
BPCL has also introduced a high-end Octane 97 variant Speed 97 catering to
the requirement of vehicles at the upper end of the tier. To meet the
growing needs of the diesel passenger car segment, we introduced Hi-Speed
Diesel which is a blend of diesel and world-class multi-functional additive
which uses the internationally renowned Green Burn Combustion
Technology. This multi-functional additive enables the high performance
vehicles to deliver their designed outputs by removing harmful deposits
from all fuel metering systems and components. This also reduces particle
level, black smoke and provides longer engine life.

Making a Difference through Innovative Retailing

At Bharat Petroleum we understand your needs as customers and
relentlessly work towards fulfilling these needs. We have consciously worked
towards providing added value to our customers in fuel and non-fuel areas.
The Corporation offers products and services that have been designed to
meet the need gaps of its customers. We have introduced several
pioneering offerings in Indian Petroleum retailing scene.
Servicing the Customers Need
We recognized the customer need for pure
quality and correct quantity of fuel for their
vehicles and launched the flagship initiative
of Pure For Sure (PFS) offering the guarantee
of pure quality and correct quantity of fuel to

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our customers. The petrol pumps displaying a prominent Pure For Sure
signage have become landmark destinations as the movement has gained
momentum across our Retail Network.
We now offer a robust and automated network of retail outlets, which
leverage technology to deliver the assurance of quality and quantity
promise, ensure integration of payment with fueling and improves the
service efficiency at the forecourt of the petrol pump.
Fostering Loyalty
We share rewarding relationships with our
customers and building loyalty has been a
center of focus with us. Recognizing the need of
our customers to make life more convenient and
rewarding and introduced the first loyalty-cum-
rewards program, PetroBonus. Equipped with
Smart Card Technology, the Petro Card program
combines convenience in payment along with
an inbuilt rewards program that rewards the customer with Petromiles every
time he fuels. A similar program, Smart Fleet was launched for Fleet Owners.
The SmartFleet Programme offers the fleet owner an unbeatable
convenience, security and a host of privileges such as cashless transactions,
vehicle tracking, Credit Option for Fleet Owners and Cash Management
System.

Delivering Convenience
Bharat Petroleum has pioneered the concept
of Convenience Stores in the Country. The In
&Out Convenience Stores are the largest
network of stores spread across the BPCL
network, offering convenient timings and
location for the motorists and neighboring
localities. The offerings range from
convenience products, ATMs, Money Transfer facilities, Courier services,
Launderettes, Music, Greeting Cards, Bill Payments, Movies / Entertainment
Tickets, etc. The network also has a good spread of Fast Food destinations
throughout tie ups with Mc Donalds, Caf Coffee Day, Subway, Pizza Hut and
other leading retail chains.
Caring for your Vehicles Needs
We also aim to provide service centre facilities through our V-CARE (Vehicle
Care) Centres across the urban network. The V-Care Centres provide

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customers with reliable, transparent and value for money services for the
basic vehicle care needs. We have tie ups with Hero Honda and General
Motors for being their authorized After Sales Service Centres apart from the
other brands of cars and two-wheelers. With our reach to the nook & corner
of the country we are always near to the customers.
Partnering your Highway Journeys
On the highways, we offer a home away from home to the
truckers and the tourists in the form of the Generation Next
OSTSs/OSTTSs (One Stop Truck cum Tourist Shop) branded as
GHAR. These outlets are built on a minimum of 3 to 5 acres plot
sizes and house dedicated and fully automated MS/HSD petrol/
diesel Fuelling facilities to fuel all kinds and sizes of vehicles besides the
specially designed offerings for the highway travelers, that include a Food
Court for Tourists and a Dhaba for truckers, a dormitory with beds, a Safe,
Secured and Spacious parking for trucks and cars, a vehicle wash facility,
Saloon, Laundry and Tailor shop, a Kirana shop, Bathing facilities, dedicated
toilets for Truckers and dedicated toilets for Tourists (Gents, Ladies &
Handicapped),Childrens Play area, Amphitheatre for entertainment, Health
care centre, Smartfleet Customer service centre ,Sanjha Chula for self
cooking and captive power generation. Assuring a network of outlets on the
highway shows our commitment to serve our highway customers with as
much care as in the key cities.

AUTO LPG
Introduction of LPG as Auto Fuel
With the menace of rising vehicular pollution, use of LPG as an
auto fuel was proposed as a pollution abatement measure.
LPG being a clean environmentally friendly fuel will reduce air
pollution to a great extent if the vehicles are fuelled with LPG.
Bharat Petroleum was the first Oil Company to take the
initiative for setting up of an Auto LPG Dispensing Station
(ALDS) and run vehicles on LPG as a pilot project in Delhi in October 1999.
We have today over 70 Auto LPG Dispensing Stations (ALDS) in various cities
(including metros) in the country.
CNG
CNG (Compressed Natural Gas) is a mixture of hydrocarbons consisting of
approximately 80 to 90 percent methane in gaseous form. Because of its low
energy density, it is compressed to pressure of 200 to 250 Kg/cm2 (to
enhance the vehicle on-board storage in a cylinder), hence the name

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Compressed Natural Gas. Colourless, non-carcinogenic and non-toxic, CNG is
inflammable and lighter than air. It is not a liquid fuel, and is not the same
as LPG (Liquefied Petroleum Gas), which consists of propane and butane in
liquid form. Superior to petrol, it operates at one-third the cost of
conventional fuel and is hence, increasingly becoming popular with
automobile owners. Commonly referred to as the green fuel because of its
lead free characteristic, it reduces harmful emissions and is non-corrosive,
thus enhancing the life of spark plugs. Another practical advantage observed
in countries where CNG is in already in vogue is the extension of life of
lubricating oils as the fuel does not contaminate and dilute the crankcase oil.
In the next millennium, alternative fuels like Compressed Natural Gas (CNG)
and Liquefied Petroleum Gas (LPG) would be increasingly used in
automobiles. Mumbai already has over 10,500 private cars/taxis that run on
CNG and in Delhi, all public transport runs on CNG.
Car manufacturers have been conducting tests on their vehicles, using
LPG/CNG - both in dedicated and bi-fuel modes. While these fuels will not
totally replace petrol and diesel, they may be targeted for use in particular
segments, like commercial and public transport vehicles.
Diesel was for a long time considered eco-friendly because it is more fuel-
efficient than petrol i.e. 15-20 percent more mileage than one litre of petrol.
But the 1990s have seen diesel being increasingly acknowledged as
extremely detrimental to health and environment. Experiments have
revealed that besides a very tiny - one micron or less, which are injurious to
health.
Recognizing the gravity of the situation, authorities are intensifying the
thrust on use of alternate fuels like CNG and LPG which besides being less
hazardous are cost-effective.
Hindustan Petroleum Corporation Limited: HPCL is a
Fortune 500 company, with an annual turnover of Rs. 1,16,428 Crores and
sales/income from operations of Rs 1,31,802 Crores (US$ 25,618 Millions)
during FY 2008-09, having about 20% Marketing share in India and a strong
market infrastructure. Corresponding figures for FY 2007-08 are: Turnover of
Rs 1,03,837 Crores and sales/income from Operations of Rs.1,12,098 Crores
(US$ 25,142 Million).

HPCL operates 2 major refineries producing a wide variety of petroleum fuels

& specialties, one in Mumbai (West Coast) of 6.5 Million Metric Tonnes Per
Annum (MMTPA) capacity and the other in Vishakapatnam, (East Coast)
with a capacity of 7.5 MMTPA. HPCL holds an equity stake of 16.95% in
Mangalore Refinery & Petrochemicals Limited, a state-of-the-art refinery at

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Mangalore with a capacity of 9 MMTPA. In addition, HPCL is constructing a
refinery at Bhatinda, in the state of Punjab, as a Joint venture with Mittal
Energy Investments Pte. Ltd.

HPCL also owns and operates the largest Lube Refinery in the country
producing Lube Base Oils of international standards, with a capacity of 335
TMT. This Lube Refinery accounts for over 40% of the India's total Lube Base
Oil production.

HPCL's vast marketing network consists of 13 Zonal offices in major cities

and 90 Regional Offices facilitated by a Supply & Distribution infrastructure
comprising Terminals, Aviation Service Stations, LPG Bottling Plants, and
Inland Relay Depots & Retail Outlets, Lube and LPG Distributorships.
HPCL, over the years, has moved from strength to strength on all fronts. The
refining capacity steadily increased from 5.5 MMTPA in 1984/85 to 13
MMTPA presently. On the financial front, the turnover grew from Rs. 2687
Crores in 1984-85 to an impressive Rs 1,16,428 Crores in FY 2008-09.

Reliance Petroleum Limited: The Reliance Group, founded by

Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise,
with businesses in the energy and materials value chain. Group's annual
revenues are in excess of US$ 44 billion. The flagship company, Reliance
Industries Limited, is a Fortune Global 500 company and is the largest
private sector company in India.
Backward vertical integration has been the cornerstone of the evolution and
growth of Reliance. Starting with textiles in the late seventies, Reliance
pursued a strategy of backward vertical integration - in polyester, fibre
intermediates, plastics, petrochemicals, petroleum refining and oil and gas
exploration and production - to be fully integrated along the materials and
energy value chain.
The Group's activities span exploration and production of oil and gas,
petroleum refining and marketing, petrochemicals (polyester, fibre
intermediates, plastics and chemicals), textiles, retail and special economic
zones.
Reliance enjoys global leadership in its businesses, being the largest
polyester yarn and fibre producer in the world and among the top five to ten
producers in the world in major petrochemical products.
Major Group Companies are Reliance Industries Limited (including main
subsidiary Reliance Retail Limited) and Reliance Industrial Infrastructure
Limited

Page | 66
 Essar Oil: Essar Oil's assets include developmental rights in proven
exploration blocks, a 10.5 mtpa refinery on the west coast of India and over
1,300 Essar-branded oil retail outlets across India. Plans are under way to
increase its exploration acreage in various parts of the globe, expand its
refinery capacity to 36 mtpa, and open 3,000 outlets countrywide.

Our global portfolio of onshore and offshore oil and gas blocks, with about
70,000 sq km is available for exploration. We have over 300,000 bpd
(barrels per day) of crude refining capacity that is being expanded to
750,000 bpd, with a goal to reach a global refining capacity of 1 million bpd.
We have a 50 percent stake in Kenya Petroleum Refineries Ltd., which
operates a refinery in Mombasa, Kenya, with a capacity of 80,000 bpd.

Our Exploration and Production (E&P) business has participating interests in

several hydrocarbon blocks for exploration and production of oil and gas.
This includes the Ratna and R-Series blocks on Bombay High, and an E&P
block in Mehsana, Gujarat, which has currently started commercial
production. It has also been awarded a Coal Bed Methane (CBM) block at
Raniganj in West Bengal, and two more E&P blocks in Assam, India. The
overseas E&P assets include three onshore oil and gas blocks in
Madagascar, Africa, and one offshore block each in Vietnam and Nigeria.
We have a 10.5 mtpa refinery at Vadinar in Gujarat, which started
commercial production on May 1, 2008. It has been built with state-of-the-
art technology and has the capability to produce petrol and diesel suitable
for use in India as well as advanced international markets.
It will also produce LPG, Naphtha, light diesel oil, Aviation Turbine Fuel (ATF)
and kerosene. The refinery has been designed to handle a diverse range of
crude — from sweet to sour and light to heavy. It is supported by an end-to-
end infrastructure setup including SBM (Single Buoy Mooring), crude oil
tankage, water intake facilities, a captive power plant (currently 120 MW,
being expanded to 1,010 MW), product jetty and dispatch facilities by both
rail and road.
The refinery is strategically located in Vadinar, a natural all-
weather, deep-draft port that can accommodate Very Large
Crude Carriers (VLCCs). Vadinar also receives almost 70
percent of India’s crude imports. Post its expansion to 36
mtpa, the refinery will run at a Nelson Complexity of 12.8.
This means it will be able to refine all varieties of crude,
producing Euro 5 grade fuels. It will also be among the
largest single location refineries in the world thus
leveraging on economies of scale.

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Essar Oil serves retail customers through a modern, countrywide network of
over 1,000 retail outlets. We were the first private Indian company to enter
petro retailing, looking beyond urban markets and reaching out to
consumers in India’s heartland.
We offer a wide range of products to bulk customers in the industrial and
transport sectors. EOL has product off take and infrastructure sharing
agreements with oil PSUs, namely Bharat Petroleum Corporation Ltd (BPCL),
Hindustan Petroleum Corporation Ltd (HPCL) and Indian Oil Corporation
(IOCL). We have received approvals to supply Aviation Turbine Fuel (ATF) to
the Indian Armed Force.

Page | 68
The Customer Expectations and the Customer Satisfaction are the two twins
which comes one after the other. When the Customer Expectations get
fulfilled it adds to Customer Satisfaction. This Research has been done upon
various types of wheelers owning customers both in Cities and Highways.
The detailed analysis of the survey research is discussed below:

Stage 1:
City Sample Collected from IOCL Retail
Outlets
Page | 69
Sample Summary

a. Vehicle type percentage on Total vehicle sample collected

Vehicle Type Number of Vehicle On Percentage

road

2 Wheeler 56 18.67%

4 Wheeler 207 69%

6 Wheeler 18 6%

10 Wheeler 19 6.33%

Total 300 100%

b. Vehicle type percentage based on different expenditure per

month for fueling

Amount 2 Wheeler 4 Wheeler 6 Wheeler 10 Wheeler

Less than Rs 3.57% 2.42% 0% 0%

500

Rs 500-Rs 46.43% 8.21% 5.56% 0%

1500

Rs 1500- 25% 19.32% 33.33% 0%

Rs3000

Above Rs 25% 70.05% 61.11% 19%

3000

Total 100% 100% 100% 100%

Analysis to find out Total Fuel Requirement of Vehicles in

City

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 Figure 1: Pie Chart Showing the Total Fuel Requirement in City.

Depiction from the Figure 1: The Pie chart above shows the total fuel
requirement in city. The total sample customers were 300 and out of which
the highest 63% lies within the range of above Rs. 3000. The next range
followed is Rs. 1500 – Rs. 3000. If the above chart is plotted in an interval
scale of 4, where 4 is of highest importance and 1 is of the lowest, then:

4 3 2 1

Above Rs.3000 Rs.1500 - Rs.500 – Less than

(63%) Rs.3000 Rs.1500 Rs.500

(20%) (14.67%) (2.33%)

Inference: It is observed that the customers in city have a fuel requirement

of above Rs. 3000 the most. Out of 300 sample customers, 63% fuels above
Rs. 3000 per month which includes personal as well as commercial heavy
vehicles. It is also observed from the survey that the heavy vehicles in
commercial use have a requirement of nearly Rs. 10000 above per month.
So, this group of customers seems to be important to Indian Oil and
emphasis should be given on their expectations and finally on their
retention.

Analysis to find out Total fuel requirement in city on

Wheeler basis

Figure 2: Bar Graph showing percentage of customers lying in the fuel

requirement range on the basis of type of vehicle used.

Depiction of the Figure 2: Out of 300 customers, 18.67% is using 2

Wheelers, 69% is using 4 Wheelers, 6% is using 6 Wheelers and 6.33% is
using 10 Wheelers. Amongst 2 Wheeler Customer, 8.67% lies in the range of
Rs.500 – Rs.1500. Therefore for 2 Wheelers this range is the significant one
and emphasis should be given on them with regards to their expectation. 4
Wheeler customers are found as the most potential as because they

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constitute a major portion in the city vehicle with 69% and mostly lie
between the range of above Rs.3000 with 48.33%.

Inference: The most important group of customers is found to be the 4

wheeler owners in city lying in the range of above Rs.3000 with 48.33%. So,
the most emphasis must be given on their expectations. The 4 wheeler
customers are generally with a sound economical profile. Out of 207 4
wheelers, it was observed during the market research that 50% - 60% of the
customers are having a deluxe car. This creates a room for customer pulling
in regard to branded fuel. It also signifies that there is a great chance of
earning extra revenues by providing non fuel services to the customers and
by this IOCL can make the customer feel delighted.

Analysis to find out the Type of Fuel Used by Vehicles in

City

Figure 3: Pie Chart showing the analysis of type of fuel used in City.

Depiction of the Figure 3: The highest used fuel in city is the Unleaded
Petrol with 40.67% and then follows HSD with 28.67%. The demand of
branded fuel both for petrol and diesel is comparatively low with 18.67% and
12% respectively. If the above chart is plotted in an interval scale of 4,
where 4 being the largest group and 1 is the smallest, then:

4 3 2 1

Unleaded HSD Xtra Premium Xtra Mile

Petrol (40.67%) (18.67%)
(28.67%) (12%)

Inference: As the number of 4 wheelers is more in city, so the demand for

petrol is higher than that of diesel. Most of the 4 wheelers are Petrol
running. But the inference which can be drawn from the above chart is very
crucial. Indian Oil being a Public Sector Undertaking Company, literally it
does not have any regulation over price fixing. Therefore, it does not add
much value to IOCL as far profit maximization is concern. To maximize the
profit, IOCL need to focus much on the sale of the branded products like Xtra
Mile and Xtra Premium. But from the above chart is clearly understood that
the sale of Xtra Mile and Xtra Premium is comparatively very low and hence,
chance to maximize profit slashes to a great extent. Strategies should be

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made in such a way that pulls the customer from normal petrol and diesel to
branded products.

Analysis to find out the type of fuel used in City by

Different Wheelers

Figure 4: Bar Graph showing Wheeler based type of fuel used in City

Depiction of the Figure 4: From the above graph it is observed that in

case of 2 wheelers majority of 13.33% choose to use Unleaded Petrol and
only 5.33% uses Xtra Premium. In case of 4 wheelers, Unleaded Petrol has a
demand of 27.33% which is the highest.
Inference: It can be concluded that the demand for Unleaded Petrol is the
highest amongst the 2 wheelers and 4 wheelers. But quite an interesting
demand has been noticed for Xtra Mile Diesel among 4 wheeler customers.
It is observed from the data collected that customers having diesel cars has
an increasing tendency to use Xtra Mile as compared to that of Xtra
Premium. It may be because of the high price for Xtra Premium. Another
important reason found for less demand of branded fuel is high price.
Customers do not will to buy products of high price differences because they
are not aware of the advantages of the branded fuels. Another sufficient
reason is that the customers do not understand the basic differences
between the normal products and branded products even after one or two
uses where the fact is at least a car should run at least 1000 to 1500 km to
feel the service at first use. This proves that there is lack of knowledge,
awareness and information about the products. Some value added services
and gifts should be provided to pull the customers to Branded Products.

Analysis to find out the factors on which 2 wheeler

customers depends the most while choosing a Retail
Outlet in a city market

Figure 5: Bar graph showing the factors which affect the choice of visiting a
Retail Outlet for 2 Wheeler Customers.

Depiction of Figure 5: It is observed that the 2 wheeler customers are

mainly focused on the Quality and Quantity and Customer Service as well
irrespective of their fuel requirement. The importance of Quality and

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Quantity and Customer Service is equal in case of the entire 2 Wheeler
Customers.

Inference: Thus, it is inferred that Q&Q and Customer Service is equally

important for the 2 Wheeler customers and as because the majority of the
customers are lying between the range of Rs. 500 to Rs. 1500, so, the Q&Q
and Customer Service should be world class to retain them.

Analysis to find out the factors on which 4 wheeler

customers depend the most while choosing a Retail Outlet
in a city market

Figure 6: Bar graph showing the factors which affect the choice of visiting a
Retail Outlet for 4 Wheeler Customers.

Depiction of Figure 6: It is observed that the 4 wheeler customers are

mainly focused on the Quality and Quantity and Customer Service as well
irrespective of their fuel requirement. The importance of Quality and
Quantity comes first with 89.37% and Customer Service follows it with
81.64%.

Inference: Thus, it is inferred that Q&Q and Customer Service is more or

less of higher importance for the 4 Wheeler customers and as because the
majority of the customers are lying between the range of above Rs.3000, so,
the Q&Q and Customer Service should be world class to retain them.

Analysis to find out the factors on which heavy vehicle

customers depend the most while choosing a Retail Outlet

Figure 7: Bar Graph to show the factors on which the heavy vehicle
customers depend the most while choosing a Retail Outlet.

Depiction of the Figure 7: The above Bar Graph shows that for heavy
vehicle customers, the customer service is the factor which affects the
choice of Retail Outlet. Next comes the Quality and Quantity which is also
very important for the heavy vehicle customers. They prefer the Retail
Outlet with good reputation of Quality and Quantity and above all they are
experienced too to comment on this part.

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Inference: Though the parking space and garage facility is a vital basis to
choose a Retail outlet, but Customer Service and Quality and Quantity hits
the list. The overall survey shows that how good your house keeping may be
and what more extra facilities you may provide, but the basic expectation of
the customers is all around basic customer service that includes excellent
behavior of the sales person and good quality fuel and in accurate
measurement.

Analysis to find out the most important factor for

choosing a RO

Figure 8: Bar Graph showing the total analysis for the factors on which
customers depend to choose a retail outlet in city market.

Depiction of the Figure 8: On the whole customers in city market

generally look for Retail Outlets with excellent reputation of providing
quality products and in accurate quantity, i.e., these two factors are the
primary need and basis to go to a retail outlet. Others facilities are
secondary to the customers.

Inference: It is true that if a coffee shop or an ice cream parlor could have
been there in a Retail Outlet, the extra revenues could be earned. But that
definitely does not fall under the basis for choosing a Retail Outlet. For
vehicles parking space is an all time necessary facility but they do not think
it as the primary need to visit a Retail Outlet. Irrespective of whatsoever
facility is available in the RO, the most sought after privilege is the Q&Q and
Customer Service to quite a large extent.

Analysis to find out the most sought after facility among 2

wheeler customers in city market

Figure 9: Bar Graph showing the percentage of customer responded for

different tangible expectation in Retail Outlets.

Depiction of the Figure 10: ATM has the highest respondent of 85.71% of
2 wheeler customers and washroom being the 2nd most important with
66.07%.

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Inference: So, it can be concluded that in city retail outlets ATM has
become a hot cake expectation amongst the 2 wheeler customers and they
also expect for a neat and clean washroom.

Note: Others comprise of expectations like Cold Drinking Water, Wind

Screen Wash, Air Checking facility, Pollution Checking Centre, Ice Cream
Parlours, Cafeteria, etc.

Analysis to find out the most sought after facility amongst

4 wheeler customers in city market

Figure 10: Bar Graph showing the extra facilities that 4 wheeler customers
want the most.

Depiction from Figure 10: Similar to the 2 wheeler, 4 wheeler customers

has the most demand for ATM in Retail Outlets and next on the line a neat
and tidy washrooms.

Inference: As it is seen from the graph, except ATM and washroom other
facilities are having a row clutching fight. Unlike others, ATM comes to be
the most sought after facility which customers feel should be there in ROs.

Analysis to find out the most sought after facility amongst

heavy vehicle customers in city market

Figure 11: Bar graph showing the demand of extra facilities among the 4
wheeler customers.

Depiction of Figure 11: ATM, Washroom and Spare Parts shop is found to
be the most demanded extra non fuel facilities among heavy vehicles
running in city market. Restaurant and road side Dhaba seems to be another
important factor for the heavy vehicle customers.

Inference: It is very likely that the owners of heavy vehicle, generally does
not drive the truck or bus. The drivers are the one who really understand the
need of the road journeys. Therefore to facilitate this group of customer,

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though in very small number yet profitable, IOCL should drag them into
some loyalty programs and make necessary promotions. In city heavy
vehicles are few but they are the potential customers because small cars
take fuel in smaller quantity but heavy vehicles require fuel above 25000 on
average per month. So, much more emphasis should be given on their need
according to the site of the RO.

Analysis to find out the overall expectations of the

facilities in city

Figure 12: Bar graph showing the overall expected non fuel services of the
customer in city.

Depiction of Figure 12: Overall ATM is the most sought after non fuel
services among the customers in city. 78% of the customers need ATMs in
ROs. Washrooms are also very important facility demanded by 64%
customers.

Inference: We should keep in mind that the majority customers in city are
the small personal car users who really faces problem at times if ATM is not
near and they are in need of fuel. Washroom is another very important
facility which is made compulsory by IOCL but unfortunately very poorly
managed. It is utmost necessary to see that the washrooms are neat and
tidy.

Basic expectation of a customer from a Retail Outlet (2

wheeler)

Figure 13: Bar Graph showing the basic expectation of 2 Wheeler

Customers in City.

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Depiction from Figure 13: The 2 wheeler customer’s basic expectation
hits the Customer Service with the maximum of 94.64% and it follows with
Quality and Quantity at 89.29%.

Inference: It is proved here that the 2 wheeler customers are mostly

looking for Customer Service and Quality and Quantity. Though IOCL have a
very good reputation for Q&Q, but has to do much with its Customer Service
in ROs. In figure 2 it was observed that the basis of choosing a RO for 2
Wheeler Customers majorly confined to Q&Q and Customer Service and here
for the basic expectation the scenario is almost similar.

Basic expectation of a customer from a Retail Outlet (4

wheeler)

Figure 14: Bar graph showing the basic expectations of the 4 wheeler
customers in city.

Depiction of Figure 14: In case of 4 wheeler Quality and Quantity seems

to be the most important one. The basic expectation of the customers is
Quality and Quantity with 88.41% and next the customer service with
85.99%. This little difference between Q&Q and Customer Service is very
negligible.

Inference: It can be make out very clearly that in city 4 wheelers are the
major players and they should be look after very carefully by enhancing the
customer service as far as possible. By giving good services promptly and
giving the extra facilities as much as possible will retain the customer.

Basic expectation of heavy vehicle customers from a

Retail Outlet

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Figure 15: Bar graph showing the basic expectation of the heavy vehicle
customers in city market.

Depiction of Figure 15: Here in case of heavy vehicle customers, the

customer service is their basic expectation. As the sample size of heavy
vehicle customers is small in city market, it becomes very difficult to
comment. But as far as the above chart is concern and with the help of trend
analysis, it can be said that the basic expectation of these customers are
nothing but customer service.

Inference: Despite the no. of heavy vehicles are much lesser in cities as
compared with highways, it is not advisable to neglect them and focus only
on 4 wheeler customers. There are ROs in city where heavy vehicle
customers do not go at all and there are ROs where a good no. of heavy
vehicles goes per day. So, on the basis of the potential of the market where
the RO is located, strategies should be made. We have to keep in mind that,
1 heavy vehicle customer approximately equals 3 small car customers,
because their need is quite higher than 4 wheeler customers. Promotion of
fleet card is needed in city. There is rarely a fleet card user in city. There
should be absolutely excellent customer service in city ROs for the
customers irrespective of the type. There are complains where it is said that
wind screen wipe is only meant for small cars but not for heavy vehicles,
where in fact it’s not true. Gifts are only given to the small car customers not
to the heavy vehicles. These imbalances should be scrutinized minutely and
necessary actions should be taken. The dealer should be made aware that
these services, if found to be not provided will be a violation of the rules and
decorum of the company. They should be made aware that these services
will enhance their sale and reputation of the RO.

Analysis to understand the overall expectation of the

customers in city

Figure 16: Bar Graph showing the overall expectations of the city
customers.

Depiction of Figure 16: The overall scenario of the city says that the
customer service is the most expected among the city customers where as
the quality and quantity is also found to be an important one. The difference
between the both is very negligible because the sample size was not too big.
As such quality and quantity and customer service proves to be the basic
expected factors in city customers.

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Inference: It is to keep in mind that millions of loyalty programs will not
prove worthy if the basic expectations of the customers are not met. It is of
prime importance that each RO in city should be with world class customer
services. The customer service is a wide area to deal with. It comprises of
neat and clean washrooms, providing cold drinking water, wind screen wipe
and a sophisticated, polite behavior of the staffs. IOCL has many loyalty
programs like co-branded cards, fleet card, Xtra rewards, easy fuel, etc but
the basic need to pull the customers into a loyalty program is to meet their
basic expectation. Because if their expectations are fulfilled, then only they
will be agreeable to become a loyal customer. IOCL should deal with their
dealers accordingly. Dealers are the bridge between the company and the
end user. So, they need to be loyal to the company.

To find out the Brand Awareness amongst the Customers

in City

Figure 17: Pie Chart showing percentage of Customers who knew about
Branded fuels.

Depiction of Figure 17: 76% of the total customers knew about branded
fuel but only 49.33% is using it. 24% is unaware of the branded products.

Inference: There are 24% customers who are not at all aware of the
branded fuel and 26.67% of the customers knew but does not use it. In the
survey I tried to find out the reason for not using the branded products. The
majority was due to high price. So, it is understood that two necessary
things has to be done by Indian Oil:

1. Make extensive promotions and awareness programs to promote

branded fuels, such as advertising in TV, Radio FMs, Print Media, Brand
Ambassadors, Conducting some social Rallies, tie ups with some
reputed brands like Reebok, Nike, Pantaloons, West Side, etc.
2. To pull the non users by giving gifts for purchasing branded products,
lucky draw coupons, providing a new type of loyalty card exclusively
for branded fuel users, etc.

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 Testing the Loyalty among the City Customers

Figure 18: Pie Chart showing the percentage of loyal customer in City

Depiction of Figure 18: In city, more than half of the total customers are
flying customer. Only 4.67% tends to be the loyal customer and 2% wants to
be in a loyalty program. 38.67% of the customers are permanent.

Inference: As the number of RO is large in city, so the availability to the

customer is more. The customers are of changing nature in city because
they generally visit to the RO as per their convenience. There is a tendency
in customers to visit to a RO which is near to their place. There are many
customers too who does not even know on which company RO they are
standing. They also fuel their vehicle as per their necessity. So, it is an
immense opportunity for Indian Oil to make these customers aware and pull
them to their ROs permanently.

As the no. of heavy vehicles is less in city, the chance of getting loyal
customer diminishes. But Indian Oil must come up with some new strategies
for middle class people who can be a part of the loyalty programs. The Citi
Bank Co-branded card is for those people who are above middle class
because survey says that account with Citi Bank is majority in hi profile
customers. To pull the middle class customers into loyalty program IOCL
should tie up with SBI or AXIS bank for Co-branded card which is easily
available to this group of customers. It was also found that the permanent
customers are the very middle class person who does not have an account
with citi bank or so but are willing to be a part of the loyalty programs.

After the city analysis done with the samples collected from different retail
outlets of Indian Oil, now it’s time to collect some open views from some
commercial segment of customers like Taxi Drivers Association, Public Bus
Terminus and Transport Truck Terminus.

Stage 2:
City Sample Collected from Taxi Drivers
Association
Total Sample IOCL Customer BPCL Customer HPCL Customer
50 16 22 12

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 Preferred Petrol Pump in City among Taxi Drivers

Figure 1: Pie Chart showing the preference for the oil company for fuelling
amongst the Taxi Drivers.

Depiction of Figure 1: It is observed that the Taxi Drivers mostly prefer

the Bharat Petroleum (44%) Retail Outlets rather than any other. Indian Oil
is just behind BPCL in the preference with 32%.

Inference: The taxi drivers prefer to go to BPCL outlets rather than any
others. This may probably because of the customer service. BPCL is quite
ahead in customer service and promotional marketing. IOCL has to come up
with equally good customer service rather with much more refined, new, and
better one.

Analysis to find out the reasons for the choice of Retail

Outlet

Figure 2: Pie chart showing the reasons for the preference of RO.

Depiction of Figure 2: The pie chart shows that 28% of the customers
prefer the RO because of good service, 24% because of loyalty program, and
so on.

Inference: Customer Service is nothing but a series of activities designed to

enhance the level of customer satisfaction i.e., the feeling that a product or
service has met the customer expectation. To enhance the Customer
Service IOCL should train the Retail Dealers and the staffs. The following are
some suggestions which IOCL may follow for RO staffs grooming:

Know your product – Let them know the importance of products they are
offering back to front. In other words be an information expert. It is okay to
say "I don't know", but it should always be followed up by "but let me find
out" or possibly” but my friend knows!" Whatever the situation may be,
make sure that they don't leave the customer with an unanswered question.

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It has been observed that the sales personnel do not have much information
about the facilities available in the RO like, whether Debit card is accepted
or not, etc.

Body Language and Communication – Most of the communication that we

relay to others is done through body language. If we have a negative body
language when we interact with others it can show our lack of care. Two of
the most important parts of positive body language are smiling, and eye
contact. Make sure that they look to the customers with an eye contact. It
shows that we are listening to them, not at them. And then of course smiling
is just more inviting than someone who has a blank look on their face.
It has been found that the sales personnel are very reluctant and lazy type
with a neglecting attitude. The politeness, humbleness and always ready to
help attitude can work miracles. Big players go for many loyalty programs
and much more marketing gimmicks for retaining the customers, but the
main “mantra” for customer retention follows under creating a relationship
with the customer. Loyalty program may fetch customers for some time
span but excellent relationship marketing will create a relationship for life
long.
Anticipate Guest Needs - Nothing surprises your customer more than an
employee going the extra mile to help them. Always look for ways to serve
your customer more than they expect. In doing so it helps them to know that
you care and it will leave them with the "Feel Good Factor" that they are
searching for. Make them feel that you are always at their service.
Do not stop at customer satisfaction, go beyond customer delight. While
fuelling give the customer a pen and paper and ask him to fill up a customer
service feedback form and insist him to put his birthday, anniversary date.
By maintaining this data, send him a card on his birthday or a message
wishing him. This will create a beautiful lifetime relationship.

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 Analysis to Find out the Branded Fuel User

Figure 3: Pie Chart showing the % of Figure 4: Pie chart showing the
Taxi Drivers using Branded Fuel. reasons for not using Branded Fuel.

Depiction of Figure 3: It shows that Depiction of Figure 4: It shows that

only 40% of the customers are using out of 30 non user of branded fuel,
branded fuel and rest 60% are not. 56.67% does not use it because of
high price.

Inference: The reason need to be Inference: It can be said that a vital

found out for low rate of using
branded fuel.
reason for not using the branded fuel
is high price. IOCL must follow
extensive promotions and
advertisements demonstrating its
advantages and benefits.

When it comes to name brand items everyone knows that you can save a lot
of money by getting the store brand and the less popular name brand of just
about anything on the shelf. Many people don't bother buying them because
they feel that the name brands are the only ones that really work.

Everyday we are bombarded with tons of commercials that advertise just

about everything you can think of. In a way they are actually programming
people to buy the more expensive brand items. Of course when we think of
television actually programming someone we usually think that our children
are a lot more susceptible than we ourselves are. I decided to ask several
people in my area if they buy more name brand products or if they buy more
of the so called knock off products. I was not surprised to find that the
majority of people I spoke with will buy the name brand products just
because they think it works better. When I asked why they felt it would work
better many of them would say that they guess it's because the commercial
makes it looks appealing to them. You have got to admit that it really is a
great way to get people interested in your product and to make people want
to actually purchase it.
Stage 3:

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 City Sample Collected from Bus Terminus and
Truck Terminus
Total Sample IOCL Customer BPCL Customer HPCL Customer

100 23 51 26

Preferred Petrol Pump in City among Bus and Truck

Owners

Figure 1: Pie chart showing the percentage of preferred petrol pumps by

bus and truck owners.

Depiction of Figure 1: It is depicted in the chart that 51% of the

customers prefer Bharat Petroleum, 27% of the customers prefer Indian Oil
and 22% of the customers prefer Hindustan Petroleum.

Inference: As was in the case of Taxi, the same scenario repeats here
again. The customers prefer Bharat Petroleum much than any others that
may be because of the good customer service and other facilities available.
To find out the real scenario behind this ratio, it is firstly need to be
understood, what is the reason for going to this RO rather than Indian Oil.

Analysis to find out the reasons for the choice of Retail

Outlet

Figure 2: Pie chart showing the reasons for preference of RO.

Depiction of Figure 2: 35% of the customers prefer the chosen ROs

because of good Service, 32% because of Loyalty Programs, etc.

Inference: “The quality of our work depends on the quality of our people.” This
great saying is very true. Our people are responsible for each good customer and
no customers as well. If we don’t care of our customers someone else will do. That
is what is happening. Bharat Petroleum has taken our weaknesses as their
opportunity to serve the customers better. None can have a product or price
advantage. They can be easily duplicated and copied, but a strong customer
service culture can never be copied.

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We all know the story... it costs 5 times as much to bring in a new customer,
than to keep an existing one. When people become your customer, they
want to be loyal. So, why do they leave? Most of the time, they leave
because of small oversights and lack of attention to plain, old customer
service.

It is of immense importance for Indian Oil that they take good care of their
dealers and in return make them understand that customer service is
something which is priceless. The benefit and reward of excellent customer
service can be recognized. Indian oil has many opportunities over others,
but only a good customer service with some added facility can fetch them
great success.

Stage 4:
Highway Samples Collected from IOCL Retail
Outlets
The highway Retail Outlets covered has totally different characteristics from
City outlets. The 4 wheelers and 2 wheelers are the major customers in city
but in highways the major customers are 4 wheeler (heavy vehicle), 6
wheeler, 10 wheeler and 14 wheelers.

Type of wheeler No. of Vehicles Percentage

4 wheeler 42 14%

6 wheeler 202 67.33%

10 wheeler 49 16.33%

14 wheeler 7 2.33%

Total 300 100%

Analysis to find out the mode of payments by the customers

on highways

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 Figure 1: Pie Chart showing the mode of payments by the customers on
highways.

Depiction of Figure 1: Majority of 61.33% customer uses fleet cards as

their payment options. Only 38.67% does not use any card and pay in cash.

Inference: It can be clearly stated that 61.33% are loyal customers on

highways and majority of the cash payers are permanent customers but
some wish to enroll in loyalty program available and some other finds this
loyalty program not so suitable for them.

Analysis to find out the reason for using fleet card as their
payment option

Figure 2: Bar Graph showing the reasons for using the fleet cards as the
payment option

Depiction of Figure 2: The graph shows that the customers prefer fleet
card mostly because of safety. Rewards and other facilities are of secondary
importance to them.

Inference: The graph again shows that the customers are not dependent on
getting gifts. Their primary importance is the road safety that is why the
maximum customers prefer the reason “no need to carry cash”. The heavy
vehicles which run 100s and 1000s Kilometers, the road robberies and thefts
are real threat to them. That is why they prefer to use the fleet card. Safety
is the major concern for the customers. Secondarily, they accept the extra
facilities available with it. But it is also found that the system of fleet card
transaction is not user friendly. Many a times a common problem has been
found of server. IOCL should look into these matters very crucially because
the customers are loyal and once they get disappoint then it would be a very
hard job to pull them again.

Analysis to find out the overall fuel requirement on

highways by heavy vehicles

Figure 3: Pie chart showing the demand of fuel on highways

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Depiction of Figure 3: 59% of the customers has a demand of fuel of
above Rs. 40000 per month, 24.33% have a demand of Rs. 25000 –
Rs.40000 per month.

Inference: It can be said that the customers on highways are more often
potential customers with high demand for fuel. If these customers can be
retained in IOCL, a good business could come out of it. It should be in the
mind of the staffs and the dealers that these customers are potent
customers and they are the basic business sources of IOCL. These
customers should be treated well. Many ROs have a tendency that the heavy
vehicles are driven by the drivers and owner very rarely comes, so as the
drivers are not so up to the class person, the RO staffs do not treat them
well. Here the problem lies. The driver is the bridge between owner and the
RO. If we behave well and treat him well one day, he will insist his owner to
be a permanent customer of this RO. Not only this, he may also spread the
good words to different other drivers and they may come to your outlet.
Never miss an opportunity to satisfy a single customer.

Analysis to find the most used fuel by heavy vehicles on

highways

Figure 4: Pie Chart showing the analysis of type of fuel mostly used by
vehicles on highways.

Depiction of Figure 4: It has been observed that majority of the heavy

vehicles on highways mainly prefer HSD (normal Diesel). A concrete reason
behind this may be because of the vehicles incapability to support the
branded fuels. Mainly the old heavy vehicles which are 2005-2006 made
engine generally do not support branded fuel. The service centers also
recommend these old engine vehicles to use normal fuel. So, this may be a
cause for this high percentage of 87.33% for type of fuel used. Few new 4
wheelers like TATA 407, 409, and other goods carriage vehicles do use
branded diesel. The sale of petrol and branded petrol is very less because
the no. of petrol cars on highways are rare.

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Inference: At this point of time, the no. of old heavy vehicles is much more
in no. than that of new ones. It is very important that these vehicles are
treated very well and can be converted into loyal customers if not. The new
heavy vehicles coming to the RO should be treated specially because they
may be retained by some loyalty programs and can be promoted to use the
branded diesel, Xtra Mile. We need to demonstrate and make them
understand the advantages of using Xtra Mile.

Analysis to find out the basis of choosing a RO by vehicles running

on Highways

Figure 5: Bar graph showing the factors upon which highway customers
mostly depends for choosing a RO.

Depiction of Figure 5: The Bar Graph shows that the basis of choosing a
RO is depending upon Quality and Quantity to the maximum of 90.67% and
Customer Service to 83.33%.

Inference: It can be inferred that the customers come to a RO on the basis

of the fuel quality and its measurement accuracy. They also give customer
service almost an equal importance. It is a common complaint from the
drivers and the owners on highways that they are not treated equally well as
that of the small cars. It should be kept in mind that these heavy vehicles
are the major loyal and can be loyal customers, not the small cars on
highways. On the basis of that we should be much focused on the needs and
expectations of the heavy vehicles customers. Along with quality products
and good customer service, few more necessary facilities should be provided
to them like Dhaba, PCO, Cold Drinking water and Neat and Clean
washrooms.
Basic Expectations of the Highway Customers from the
Retail Outlet

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Figure 6: Bar Graph showing the basic expectations of the highway
customers.

Depiction of Figure 6: The basic expectations of the highway customers

are all concentrated along Customer Service and Q&Q. This proves that
besides all the non fuel services and expectations, the main reason for
choosing a RO is Q&Q and Customer Service. 94% of the customers expect
customer service and 93% of the customer expects Quality and Quantity.

Inference: The needs, wants, and preconceived ideas of a customer about

a product or service are the customer expectation. Customer expectation
will be influenced by a customer's perception of the product or service and
can be created by previous experience, advertising, hearsay, awareness of
competitors, and brand image. The level of customer service is also a factor,
and a customer might expect to encounter efficiency, helpfulness, reliability,
confidence in the staff, and a personal interest in his or her patronage. If
customer expectations are met, then customer satisfaction results.

Extra Facilities that a Highway Customer wants in a Retail

Out

Figure 6: Bar Graph showing the most wanted extra facilities by highway
customers.

Depiction of Figure 6: On highways, among 300 customers 66.33% wants

neat and clean washrooms and 63.67% customer wants spare part shop in
outlets.

Inference: As Indian Oil has tied up with Future Group to set up

SERVOXpress shops, the SERVOXpress outlets will offer services such as
battery/oil check, oil and coolant change, tyre pressure check, A/C service,
vacuum cleaning, perfuming, upholstery cleaning and polishing. But along
with all these strategies, the basic commodities which a customer wants
should be taken into consideration. Indian Oil is making lots of strategies for
customer retention, satisfying customer and providing them non fuel

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benefits too by setting many big brand shops, convenience stores, etc. But
the basic amenities which are there in the RO, those should be provided to
the customer first in absolute manner. It has been noticed while the survey
that these basic amenities like Washrooms, Cold Drinking Water, Air
Checking, etc., are not in proper usable conditions. We should keep in mind
that the city or the metropolis is not the only potential market. Highway
covers a major portion of the country and majority of the RO are situated on
highway. So, we should give emphasis on the highway customers.

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Non Fuel Retailing

Till a few years ago, petroleum retailing in India was a staid and dreary
business. Cars, buses and two wheelers drove in, got the vehicles fuelled,
paid cash, and drove out. The environment started changing when Shell did
a makeover of some petrol pumps as part of the economic reform process.
Improved signage, use of credit cards, and car washes soon became an
integral part of the petroleum retail outlets. Earlier petrol stations were
merely used for selling fuel; now they are quickly getting converted into
multi-facility joints. The idea, common enough in countries like Singapore
and
Malaysia —is to buy fuel, and shop alongside. However, these pumps are
either owned by state-owned petroleum product companies like Indian oil,
Bharat Petroleum and Hindustan Petroleum or are run as franchises by
private entrepreneurs with limited capital.

Indian Petroleum Industry has been witnessing a steady growth but the
margin pressure has increased. There has been a steady growth of 2.8% in
the last five years (2002-07). The desired impetus would be provided by
enhanced economic activity. To overcome margin pressure, Indian PSU Oil
companies have started their Non Fuel Effort, similar to their global
counterparts. Even losses of over Rs 300 crore (Rs 3 billion) per day from
selling automobile fuels have not stopped government-owned oil marketing
companies from expanding their retail network across the country. The three
government-owned companies -- Indian Oil Corporation (IOC), Bharat
Petroleum Corporation (BPCL) and
Hindustan Petroleum Corporation (HPCL) -- are together planning to expand
their non fuel business on existing outlets and provide the same on existing
outlets to boost profitability. The marketing businesses of oil retailers are
suffering losses as they are forced to sell petrol, diesel, LPG and kerosene at

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subsidized prices. Demand for these products is growing at a healthy rate of
about 8 per cent per year. It is perhaps a blessing in disguise. In last few
years, opportunities in petro retailing have risen in two key areas:
• Sale of Value Added Fuels – Branded Fuels
• Value added products and services – Non Fuel products and services

India as a Non Fuel Retailing Destination

The Indian Petro retailing industry is now poised to make huge tread
both in terms of new forecourt retailing opportunities and better offerings for
the customer at the retail outlet. With the onset of the deregulated scenario,
the character of competitiveness among the petroleum companies augur
well for the consumer with each of the companies espousing innovative
ways to capture larger part of the consumer’s mind.
The emergence of organized retailing and a growing demand from
consumers for a superior shopping experience has made Convenience
Retailing a key business area for petroleum companies due to their wider
presence at strategically located sites and the existing mammoth customer
base.
Convenience need gaps have been felt in various fields and research
shows that the urban consumer today seeks convenience in shopping for
their basic requirements so that their precious time is reserved for more
productive activities. Petrol retail outlets provide an excellent framework for
setting up convenience retail chains. Here, the consumer enjoys dual
occasion of, opportunity of combining shopping with the fuelling.
Hence, along with the strategic locations, the number of footfall in the
petrol retail outlets gives petroleum retail companies the competitive
advantage. Worldwide, petrol station convenience stores have developed
into a serious business in itself with companies like BP, Shell, and Exxon
running their convenience store chains profitably. All of them have deployed
best retail practices in their stores and offer a wide range of services
including laundry, postal services, courier services, fast food etc.
Here are some of the reasons so as to why non fuel petroleum
retailing offers immense scope as far as India as a destination is considered.

• 2nd most attractive developing market

• 4th largest economy after USA, China & Japan.
• 2nd fastest growing economy in the world

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• Would be 3rd largest economy in next 15 years
• 5th among the 30 emerging markets for retailers
• Largest young population in the world
• 300+ million middle class - the Real consumers
• Increased disposable Income
• Among top 10 FDI destinations
• Major tax reforms including implementation of VAT in progress
• Massive investment planned in infrastructure development in next 5 years
• Exponential growth is taking place in Retailing in India
• Organized Retail Only 3% but growing at 30%
Recommendations for Non-Fuel Offerings
To deliver the many conveniences and services, various oil marketing
companies have associated with leading brands and companies like ICICI
Bank, Coca Cola India, Fed Ex, Cafe Coffee Day, Western Union Money
Transfer, US Pizza, Barista, Domino’s Pizza, Skypak, etc.

The facilities on a particular outlet would depend upon the purchasing

power of the people. The facilities like Cafe Coffee Day, Barista, Domino’s
Pizza, US pizza, Crossword, Skypak, etc and other expensive outlets may not
work everywhere. Apart from them there are many other facilities which can
be offered to draw more and more customers, thereby increasing
profitability and level of customer satisfaction.
Here, we will have a glimpse of some of the facilities which are
expected by a customer and can be offered to them on an outlet:

•ATM (Automated Teller Machine or Any Time Money):

An ATM is the most expected facility at an outlet. Almost every
customer now has a debit/credit card and he/she expects an ATM at the
outlet.
• Benefits from implementing an ATM:
a) Customer will get an additional facility along with fuel and it will
help to draw more customers.
b) Increase in revenues due to the lease rent from the bank. A room
120 square feet is required to install an ATM which is a nominal expense.
The company may get rent in the range of Rs 8000 to Rs12, 000 per month
depending upon the location.

•Quick care point:

A mechanic who can quickly give a service to the concern vehicle and
also he can do the air check. In the quick care point, various lubricants and
coolant can be displayed with the purpose of advertisements as well as
enhancing customer awareness. The facility of tyre puncture should also be
offered. This will further enhance the revenue of company.

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 • Windscreen cleaning facility:
A cleaning man can wipe the windscreen of four wheelers and front or body
of the two wheelers while customer is getting his/her vehicle fuelled. This
will augment the customer’s perception of brand as well as organization. An
extra attendant can serve for the role of cleaner.

• Free health check-up:

In the outlet some free health check up camps can be organized by
the company doctor. This will illustrate the responsibility of the organization
towards the society. Some of the camps which can be organized may
include the Pulse-polio camp and AIDS awareness camps. A citizen reward
program can be conducted during the same camp, which would cater to
honoring of some local people who have made contributions to society.
Auto/taxi drivers segment can be recognized and honored for their
outstanding service to society. On similar approach best employee award
can be given to outstanding employee. It will boost the pump attendants to
give perform best in their jobs. Their performance can be monitored on the
following parameters:
1) Punctuality: - Time of arrival and departure.
2) Discipline in the job.
3) How well an individual is prompting for branded fuel and other allied
services.
4) Behavior with the customers.
5) Neatness.

• INDE-PAY:
It is e- recharge machine which will provide a recharge of six different
telecommunications companies along with the railway reservations. The
facilities offered by Inde - pay machine are as follows:
∗ Recharge Vouchers (mobile top-ups)
∗ Flight tickets
∗ Rail tickets
∗ Utility Bill-Pay
∗ Cinema tickets
∗ Budget Hotels
∗ Contests
The benefits of Inde - pay machine to the end user are:
∗ Alternate revenue stream
∗ High ROI
∗ Major Value added services under one single terminal

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 ∗ With the purchase of the terminal in addition to the value added
services, PCO and POS the retailer gets the following:
○ IRCTC authorized e-ticketing agent certificate
○ Airline ticketing (IATA sub-agent license)
∗ Wireless POS working over IP – saves per transaction dial out cost
∗ Wireless POS – could be used in exhibitions/trade shows where
merchants are deprived of a phone line to connect their traditional
POS
∗ The end user will be able to accept payments in cash, credit card and
cash card.

• Vending Machine of Coffee and Coca-Cola:-

Vending machine of coffee and coca-cola will help in enhancing the
revenues. It will also augment the customer satisfaction level. Along with
them, beverages items like mineral water bottles, snacks etc. can be display
in a stand near the dispenser for sale.
• Pay Phone:-
This is another facility which can be provided to the customers. It
requires very less space and has low initial investment as well as zero
maintenance cost. The pay phone will help in drawing the customers.
• Other Necessary Amenities
○ Toilets:-
Neat and clean toilets facilities should be available for the
customers.
○ Drinking Water:-
Purified drinking water facilities should be available to the
customers. Depending upon the climate hot or cold water can be
provided.

It is expected that if these above mentioned amenities could be added to

the Retail Outlets depending upon their potentiality, customer expectations
and non fuel revenues could be earn. This will promote the sales of the RO
as well as IOCL.

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Branded Fuels and its Promotion

Brand: A brand is the identity of a specific product, service, or business. A

brand can take many forms, including a name, sign, symbol, color
combination or slogan. The word brand began simply as a way to tell one
person's cattle from another by means of a hot iron stamp. The word brand
has continued to evolve to encompass identity - it affects the personality of
a product, company or service.

Brand Management: Brand management is the application of marketing

techniques to a specific product, product line, or brand. It seeks to increase
a product's perceived value to the customer and thereby increase brand
franchise and brand equity. Marketers see a brand as an implied promise
that the level of quality people have come to expect from a brand will
continue with future purchases of the same product. This may increase sales
by making a comparison with competing products more favorable. It may
also enable the manufacturer to charge more for the product. The value of
the brand is determined by the amount of profit it generates for the
manufacturer.

Recommendation for Promotion of XTRA Mile and XTRA

Premium: It has been found during the whole survey that a large
percentage of vehicles prefer to choose normal petrol and diesel. Demand
for branded fuels are very less that is only because of high rate and
differences in price with normal fuels. It is also found that a good number of
customers are not at all aware of the branded fuels and how to use it.

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Here is a list of some promotional tips for branded fuels which, if done,
regularly and in a sincere way, must fetch some good results.

1. Awareness Program:
a. Leaflets and Brochures: Leaflets and brochures of branded
fuels of IOCL can be distributed among the customers in retail
outlets who are coming to fuel their vehicles. It should be kept in
mind that majority of the commercial vehicle drivers are not
much familiar with English language and thus, must be printed
in Bengali and Hindi too. Leaflets will contain all the advantages
details of the branded fuels and it will also contain the list of
applicable vehicles that can use it as per their manufacturing
age. It will also say about the offers and value added services
provided with branded fuels in time to time basis. It is because a
common feedback was found that car service centre has
recommended not to use branded fuels.

b. LCDs and CFTs in ROs: Use of LCDs and CFT screens on Retail
Outlets will help to demonstrate the advantage of using branded
fuels. It will promote the sales of branded products and also
create an attractive ambience for the customers to come in.

c. Advertisements: Advertisements in print medias and local

medias are of great importance which will boost the sale of
branded fuels. It will promote about the offers and promotions
too.

d. Brand Ambassador: Hiring a brand ambassador is of great

importance and here in this case of branded fuels, common man
is the best option for the brand ambassador.

e. Arranging a common meet like Rallies or Marathon Walk

on Sundays or Official Holidays: Invite some of the
celebrities, players, economists or industrialists and can
organize a rally or marathon walk mainly highlighting the
branded fuels.

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 f. Tie ups: Tie ups with different Car manufacturers major can
promote the sale of branded fuels by recommending the car
purchaser to use branded fuels of IOCL.

2. Offers and Promotional Services:

a. Loyalty card exclusively for Branded Fuel users: Loyalty
cards can be introduce for the customers using branded fuel
which will give some extra benefits like reward points, free car
servicing in specific service centres, free car accessories and
decors, etc.
b. Seasonal gifts: Seasonal gifts during Durga Puja or New Year
or Xmas can be provided to the branded fuel users.
c. Lucky Draw: Lucky Draw coupons can be given to the users
and 1st prizes like a Maruti Alto, or of similar value can be
provided.
d. Ensured gifts: Gifts ensured in every purchase of branded fuels
like cooking utensils, car accessories, toiletries, gift vouchers
and hampers from shopping malls and restaurants, cash back,
discounts, etc can be provided.
The main intention to do all these promotions is to increase the branded fuel
sale and also to pull customer and meet their expectations and satisfy them
and retain them.

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Recommendations to improve Xtra Power Fleet Card
Service:

Fleet card users are one of the loyal customers of Indian Oil. It was found
that there were many reasons of dissatisfaction among the users of fleet
card. While the survey it was a fact that customers of fleet card was really
annoyed and at times blasted with agonies and problems. It was quite
challenging to make them understand the real situations and regain the
faith on Indian Oil.
The major feedback was regarding the fleet machines which get disrupted
very frequently and the concern authorities take a large span of time to visit
and repair it. Server problem is another common problem and is a major
issue because the fleet card users come and fuel and the only mode of
payment is fleet card. They do not have enough money with them to pay in
cash if the server is down or something happens. At that case dealers have
to give them fuel either in credit or the drivers has to keep their cards with
the RO. Redemption of point is a great issue. Many have given the feedback
that points are not redeemed at time and the gifts are not of good
conditions.

Here are some suggestions to overcome the loop holes of the Fleet
Management in Indian Oil.

1. Fleet machines should be more users friendly and its operations

should be much handier.
2. Automation, if possible, should be in such manner that all the billing
and transactions starting from cash payments to all types of card
payments like debit card, credit card, co-branded cards, fleet cards,

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 etc, can be done from the automation enabled machine from the POS
(point of sale). This will reduce the error and time of the transactions
making it more transparent to the customers.
3. Concern authority should take prompt actions for resolving the fleet
machine related problems. If call centers and customer service centers
are required for online solving of the problem, IOCL should go for it.
4. Vehicle Tracking System which is now available by internet is a
difficult task for all the class of customers who are using fleet cards.
Vehicle Tracking System should be like Money withdrawal and
deposition information of the phone banking facilities of the bank. As
soon as a transaction has taken place, the enrolled mobile number of
the customer will receive a SMS about the place, RO and litre of fuel
filled by the respective vehicle no. Total amount of XTRA points should
be intimated to the customer by SMS too.
5. More alliance partners should be there to redeem their points and take
necessary commodities as required. Alliance could be there with TATA
motors for spare parts, Car Insurance with Oriental Insurance or
National Insurance or any other insurance sector players.
6. Application for the new cards should be delivered within stipulated
time period mentioned in the brochure. Card renewal should be much
faster.
7. Daily limit should be increased which is now Rs.70000.
8. Special gifts like fertilizers, pesticides, insecticides can be provided to
the agricultural fleet card users.
9. Some monthly or quarterly discounts can be given to the corporate
customers.
10.Gifts for the drivers like T-shirts with IOCL logo will promote the brand.
11.Both fuel and non fuel gifts should be there for the fleet card users.
12. During festive season the drivers those who are using fleet card for
fueling their vehicle from IOCL should be provided some gifts for their
family.
13.Free parking Space should be provided for fleet card users wherever
possible.
14.Nominal vehicle checking should be provided to the fleet card users
free of cost.

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Recommendations for Customer Retention:

When a customer gets into your outlet, a new relationship starts. But
starting a relationship is very easy but to maintain it is the toughest part. To
maintain a lifetime customer relationship needs excellent customer service
and meeting the customer expectations as much as possible. Satisfying and
delighting them with newer services.
Here are some lists by which all these parameters can be easily solved.

1. IOCL have cobranded card of Citi Bank. But Citi Bank, generally,
represents a posh bank with above middle class customers. But today
in the age of TATA Nano, having a private car is of no big bowl food.
Majority of the customers are middle class or upper middle class
people who does not have account with citi bank or so. Middle class
customers prefer SBI. So, making Co- Branded cards with some
nationalised banks such SBI –IOCL or Axis Bank-IOCL,which will help
to increase loyal customer.
2. IOCL can step into another loyalty program. For example, if a customer
fuels more than Rs. 1500 petrol at a time, he will be getting a offer of
a loyalty card. This card is not like any debit card or credit card or
petro card. The customer can fuel as per his choice by cash, debit or

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 credit card. But whenever he purchases each Rs. 10 equals to 1 point
which is equal to a rupee. This point can be redeemed at allied shops
like West Side, Pantaloons, Café Coffee Day, KFC, Spencers, More, Big
Bazaar, etc. and can purchase any thing they like.
3. IOCL should give some rewards or incentives to the dealers on the
basis of which they will take interest to do sale promotion of fleet
cards and converting the parmanent and other customer into loyal
customer.

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 Conclusion

“We can believe that we know where the world should go. But unless we're
in touch with our customers, our model of the world can diverge from reality.
There's no substitute for innovation, of course, but innovation is no
substitute for being in touch, either”. –Steve Ballmer.

“A customer is the most important visitor on our premises, he is not

dependent on us. We are dependent on him. He is not an interruption in our
work. He is the purpose of it. He is not an outsider in our business. He is part
of it. We are not doing him a favor by serving him. He is doing us a favor by
giving us an opportunity to do so”. –Mahatma Gandhi.

The whole survey report dealt with the different aspects of customers in
Indian Oil. But the crude essence of this research report is one –“CUSTOMER
RELATIONSHIP”.
Unless and until we made the customers understood that we can go a long
away with them to serve them the best we can, customer relationship does
not make any sense.

We have got so many complaints regarding so many things at Indian Oil. But
the most interesting part of it is that statistics suggest that when customers
complain, business owners and managers ought to get excited about it. The
complaining customer represents a huge opportunity for more business.

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It is indeed a great opportunity for Indian Oil that they have customers who
are complaining and that suggest they want much more from Indian Oil.
They have the trust and faith on IOCL. We should really look forward to fill
up all the loop holes with our intense customer service and offerings.

With these I end my project here and wish to see IOCL implementing these
suggestions after evaluating the pros and cons and creating an example for
the world about their service, offerings and relations with the customer.

“Satya Mewa Jayate”

Annexure A

Questionnaire to evaluate the customer satisfaction in city retail

outlets of IOCL

Vehicle no:
Type of Vehicle:

1. How much you pay on an average on fuelling your vehicle per month?
a. Less than Rs. 500
b. Rs. 500 –Rs. 1500
c. Rs. 1500 – Rs. 3000
d. Rs. 3000 and above

2. Which fuel do you use generally and why?

a. Unleaded Petrol
b. High Speed Diesel
c. Xtra Mile
d. Xtra Premium

3. What is the basis for choosing a Retail Outlet?

a. Quality and quantity
b. Service
c. Convenient stopping and filling
d. Housekeeping and ambience is attractive
e. Air checking facility is available
f. Garage is available
g. Others

4. What are your expectations from a RO as customer?

a. Customer Service
b. Quality & Quantity

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 c. Parking Space
d. Others

5. What are the facilities that you would like to have in a RO?
a. ATM
b. Washrooms
c. Restaurants and Bars
d. Multipurpose Stores
e. Spare parts stores
f. Others

6. How frequent you visit the IOCL Retail Outlet?

a. Daily
b. Once in a week
c. More than once in a week
d. Once in a month
e. More than once in a month
f. Never

i. If frequent, then Why? _____________________________________________

ii. If Not, Why? ______________________________________________________

7. Do you know the name of the branded fuels of IOCL?

a. If Yes, What benefits are you getting from it?

b. If No, Why are you not using it?

8. Tell me one thing you like about IOCL:

_______________________________________________________

Tell me one thing you dislike about IOCL:

_____________________________________________________

9. Please list the top three reasons for which you would like to become a loyal
customer of IOCL, that is, you would like to come again and again to IOCL rather
than going to any other company’s RO, in order of importance?

a. __________________________________________________________

b. _________________________________________________________

c. __________________________________________________________

10. Any Suggestions

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 Annexure B
Questionnaire to evaluate the customer satisfaction in Highway
Outlets of IOCL

Vehicle no:
Type of Vehicle:

1. How much you pay on an average on fuelling your vehicle per month?
a. Less than Rs. 10000
b. Rs. 10000 –Rs. 25000
c. Rs. 25000 – Rs. 40000
d. Rs. 40000 and above

2. Which fuel do you use generally and why?

a. Unleaded Petrol
b. High Speed Diesel
c. Xtra Mile
d. Xtra Premium

3. What is the basis for choosing a Retail Outlet?

a. Quality and quantity
b. Service
c. Convenient stopping and filling
d. Housekeeping and ambience is attractive
e. Air checking facility is available
f. Garage is available
g. Others

4. What are your expectations from a RO as customer?

a. Customer Service
b. Quality & Quantity
c. Parking Space
d. Others

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5. What are the facilities that you would like to have in a RO?
a. ATM
b. Washrooms
c. Restaurants and Bars
d. Multipurpose Stores
e. Spare parts stores
f. Others

6. How frequent you visit the IOCL Retail Outlet?

a. Daily
b. Once in a week
c. More than once in a week
d. Once in a month
e. More than once in a month
f. Never
i. If frequent, then Why? ____________________________________________

ii.If Not, Why? ______________________________________________________

7. What is your mode of payment?

a. Cash
b. Card
c. Others
8. Do you know the benefits of Fleet Card?
a. Yes
b. No

9. If yes, what benefit are you getting from using Fleet card?
a. Safe
b. Don’t have to carry cash
c. Rewards available
d. Redeemable Points available
e. Others

10.Tell me one thing you like about IOCL:

___________________________________________

Tell me one thing you dislike about IOCL:

_________________________________________

11.Please list the top three reasons for which you would like to become a loyal
customer of IOCL, that is, you would like to come again and again to IOCL
rather than going to any other company’s RO, in order of importance?

a. __________________________________________________________

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 b. __________________________________________________________

c. __________________________________________________________

12.Any suggestions.

Bibliography and References

1. http://www.scribd.com/doc/14142204/Non-Fuel-RetailingReportArvind-
Dwivedi
2. http://www.scribd.com/doc/3942812/Project-Report
3. http://www.scribd.com/doc/18945057/Internship-Indian-Oil
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5. http://www.iimcal.ac.in/community/consclub/reports/petroleum.doc
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data/corpfiling/AttachHis/Essar_Oil_Ltd1_230110.pdf
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inwash_people_to.html?cat=46
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18. http://www.wisegeek.com/what-is-customer-loyalty.htm
19. http://en.wikipedia.org/wiki/Customer_retention
20. http://en.wikipedia.org/wiki/Customer_relationship_management
21. http://en.wikipedia.org/wiki/Customer_satisfaction
22. http://en.wikipedia.org/wiki/Customer_retention
23. http://quotations.about.com/od/businessquotes/a/customerservice.htm
24. http://www.icelebz.com/quotes/steve_ballmer/
25. http://www.woopidoo.com/business_quotes/innovation-quotes.htm
26. http://en.wikipedia.org/wiki/Brand_management

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27. http://en.wikipedia.org/wiki/Brand
28.Business standard – 28/06/2010

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