INDIAN OIL CORPORATION LIMITED

NAME - Siddharth Gupta

ROLL NO - 107

ROOM NO – 13

SPECIALIZATION - Marketing Management 3rd Year B. Com. (Morning)

INTERNAL GUIDE – Prof. T. Sengupta (HOD) Management St. Xavier’s College (Autonomous)

EXTERNAL GUIDE - Mr. S. Paladhi, Chief Manager (PPES) Indian Oil Corporation Limited

INTERNSHIP TOPIC - A case study on the sales of branded Gasoline, Motor spirit (MS) and Xtra Premium (XP)

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Table of Contents:

SL NO. TOPIC PAGE NO. 1 Acknowledgement 4

2 Introduction 5-14

Company Profile 6-10

Objectives and Obligation 11-12

Vision and Values 13-14

3 Objectives of the study 15

4 Limitations of the study 16

5 Research and Methodology 17-20

Tools and Techniques 18

Plan of Analysis 19

Research Design 20

6 Literature Review 21-25

7 Summary Findings 26-33

Findings 26-29

SWOT Analysis 30

Data Interpretation 31-33

8 Conclusion 34

9 Annexure 35-38

10 Bibliography 39

11 Thank You 40

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ACKNOWLEDGEMENT

When I began my journey, I faintly knew what remained in store for me in future.

But today, I feel indebted to PROF. T. SENGUPTA (HOD) MANAGEMENT B.COM

DEPT. ST. XAVIER’S COLLEGE (AUTONOMOUS) for allowing me to undertake my

project and for constantly supervising, guiding and supporting me throughout my

project.

I would like to thank Mr. S. Paladhi, Chief Manager (Pricing, Planning &

Economic Studies) of Indian Oil Corporation Limited Marketing Division for

facilitating this scope to be a part of a prestigious organization and allowing me to

do my project work.

I would also like to thank Mr. Sanjay Kumar Singh, Manager (Hindi

Implementation) and Mr. Sudip Dey, Manager (Retail Sales: 24 Pgs South) for

their able guidance, which facilitated me to gather extensive knowledge, provide

me a scope for learning and accumulate vivid experiences.

I would also like to thank the owners of the different Retail Outlets (RO’s) for

letting me do my survey and answering to all my queries.

Last but not the least I take this opportunity to thank my parents for their

constant support, inspiration and help.

INTRODUCTION

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In the era of competitive business, business or organization strategy may be defined as the attempt by those who control the organization to find ways to position their business or organization objectiveness that they can exploit the planning environment & maximize the future use of capital and human assets.

This project report compromise of company profile, research and methodology, data collection, analysis and findings, recommendation, limitation of the study, etc. For this project, I did a survey with the customers in the Retail Outlets. After collecting the data, it was analyzed and then concluded. According to loopholes and back logs, I was able to give some suggestions to the Office.

INDIAN OIL CORPORATION LIMITED (INDIAN OIL) is the largest public sector unit in India under the Ministry of Petroleum. It is engaged in the business of refining of crude petroleum and marketing of various finished petroleum goods like fuels, lubricants, etc. Being an essential requirement for country’s economic progress, it was given a lot of importance and stress by the Government of India, to expand and cater the needs for various petroleum products of the country and play a leading role in the energy sector. The company has expanded for decades.

History of Oil industry in India

هه In 1866, oil was discovered by Mr. Good Enough of Mckillop In 1866, oil was discovered by Mr. Good Enough of Mckillop Stewart Co. at Naharpung near Digboi.Stewart Co. at Naharpung near Digboi.

هه This was only seven years after Col. Drake discovered oil in This was only seven years after Col. Drake discovered oil in Pennsylvania, USA in 1859.Pennsylvania, USA in 1859.

هه In 1889, the first Oil Well was spotted in Digboi by Assam In 1889, the first Oil Well was spotted in Digboi by Assam Railway & Trading Co.Railway & Trading Co.

هه In 1901, the first Refinery was set up at Digboi.In 1901, the first Refinery was set up at Digboi.هه In 1956, ONGC was set up.In 1956, ONGC was set up.هه In 1958, Indian Refineries Ltd. was formed.In 1958, Indian Refineries Ltd. was formed.هه In 1959, Indian Oil Company was formed.In 1959, Indian Oil Company was formed.ه In 1959, Oil India Ltd. was set up.In 1959, Oil India Ltd. was set up.

COMPANY PROFILE

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IOC is the country’s largest commercial enterprise, with a sales turnover of Rs. 1, 30,203 crore (US $29.80 billion and profits of Rs. 7,005 crore (US$ 1.603 million) for fiscal year 2003-2004.

Corporate History

Indian Oil Blending Limited (IOBL) was formed in 1974 for lube blending. It has since been merged with Indian Oil in May, 2006

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Indian Refineries Ltd.

19581958

Indian Oil Corporation Ltd. 19641964

Indian Oil Company Ltd. 19591959

MergerMerger

(

SUBSIDIARIES

Bongaigaon Refinery & Petrochemicals Ltd (Merger process initiated)Bongaigaon Refinery & Petrochemicals Ltd (Merger process initiated)

IBP Co. Ltd. IBP Co. Ltd.

Indian Oil Technologies Ltd. *Indian Oil Technologies Ltd. *

OverseasOverseas

Indian Oil Mauritius Ltd. *Indian Oil Mauritius Ltd. *

IOC Middle East FZE *Lanka IOC Ltd.IOC Middle East FZE *Lanka IOC Ltd.

Upstream Regulatory Framework

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Presently the Government performs regulatory functions of the Upstream through Director General of Hydrocarbon (DGH)

Key Functions of DGH Monitors health of reservoirs and safety aspects and represents

Government in the monitoring of Production Sharing Contracts (PSCs)

Monitors licenses granted by the Government Carves out exploration blocks for licensing rounds Data to gather information about unexplored/poorly explored areas

Downstream Policy

Refining

Administered Pricing Mechanism (APM) dismantled for refineries in April 1998

Setting up of refineries de-licensed in June 1998 Refineries may be set up subject to meeting statutory requirements Petroleum Pipelines Encourage setting up of pipelines No license required Government assists in getting Right of Use (ROU) in land for laying

pipelines

Marketing Refining Research &

Development Pipeline

Transportation

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IOC is the country’s largest commercial enterprise, with a sales turnover of Rs.1, 30,203 crore (US $29.80 billion and profits of Rs. 7,005 crore (US$ 1,603miollion) for fiscal year 2003-2004.

INTERNATIONAL RANKINGS

Indian Oil is the India’s No.1 Company in Fortune’s prestigious listing of the

world’s 500 largest corporations; ranked 135 for the year 2007 based on fiscal

2006 performances. It is also the 20th largest petroleum company in the world.

Indian Oil has been adjudged No.1 in petroleum trading among the 15 national oil

companies in the Asia-Pacific region and IOCL was featured on the Forbes Global

2000 list for 2005 at position 311.

INDIA’S FLAGSHIP NATIONAL OIL COMPANY

Indian Oil Corporation is India’s largest commercial enterprise which began operation in 1959 as Indian Oil Company Ltd. The Indian Oil Corporation was formed in 1964, with the merger of Indian Refineries Ltd. (Estd.1958). Currently its head office/registered office are in Mumbai. At the time of formation of Indian Oil Corporation Ltd., the authorized capital of the Indian Refineries Ltd. was Rs. 60 crore and that of Indian Oil Corporation Ltd. was Rs.12 crore.

Marketing Division

During 2005-06, Indian Oil retained its position as a market leader despite stiff competition. It continued its thrust on several initiatives that were directed to deliver customer delight. Given below is a list of products that are marketed through Marketing Division. Servo is India’s largest selling lubricant brand. It is

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developed exclusively at Indian Oil’s world-class R&D Centre at Faridabad. It is sold through 8,100 Indian Oil petrol/diesel stations and over 1,300 Servo shops.

Aviation Turbine Fuel Indian Oil’s LPG brand Autogas is the leader in the segment Super Kerosene Oil

Indane LPGas – Indian Oil Indane LPGas is used in 40 Million homes as cooking fuel and commands over 48% market share in India.

Premium Fuels- Xtra premium- It was launched in 2002, the premium auto fuels Xtra Premium and Xtra Mile mark a new beginning for Indian Oil and offer a new genre of convenience and enhanced comfort for the customer.

OBJECTIVES AND OBLIGATIONS

OBJECTIVES:

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

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view to minimizing/eliminating imports and to have next generation products.

To optimize utilization of refining capacity and maximize distillate yield and gross refining margin.

To maximize utilization of the existing facilities for improving efficiency and increasing productivity.

To minimize 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 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 venture.

OBLIGATIONS:

Towards customers and dealers - To provide prompt, courteous and efficient service and quality products at competitive prices.

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 recognized 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.

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FINANCIAL OBJECTIVES:

To ensure adequate return on the capital employed and maintain a reasonable annual dividend on equity capital.

To ensure maximum economy in expenditure. To manage and operate all facilities in an efficient manner so as to generate

adequate internal resources to meet revenue cost and requirements for project investment, without budgetary support.

To develop long-term corporate plans to provide for adequate growth of the Corporation’s business.

To reduce the cost of production of petroleum products by means of systematic cost control measures and thereby sustain market leadership through cost competitiveness.

VISION AND VALUES

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VISION

A major, diversified, transactional, integrated energy company, with national leadership and a strong environment conscience, playing a national role in oil security and public distribution

VALUES

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Indian Oil nurtures the core values of Care, Innovation, Passion and Trust across

the organization in order to deliver value to its stakeholders.

OBJECTIVES OF THE STUDY14 | P a g e

In the year 1996, Indian Oil Corporation became the first Indian company to debut to the ‘Fortune 500’ listing. Ranked 257 then, it has since moved up to 105 in 2009. India's single largest commercial enterprise with turnover of Rs. 2, 20, 779 crore (US$ 51 Billion) for 2006-2007. It covers the entire petroleum value chain from exploration, refining, marketing, pipelines, petrochemicals, gas to global operations.Such a success stands as a proof of its highly productive work force. But in order to retain this position in the future, every employee has to be kept enthusiastic, motivated and excited about their job. Thus, this study is conducted in IOC (Marketing Division), Eastern Region, to get an insight about how effective is the company in dealing with its people and keeping them satisfied.

The main objectives of this study are:This project report compromise of

CUSTOMERS VIEWS ON PRESENT PRICE DIFFERENCE BETWEEN MS AND XP. STRENGTH IN THE BRANDED MS WHICH MAKES THE CUSTOMER USE THE

SAME. STUDY ON THE POSITIONING OF XP IN RO’S. PROFILE OF XP USERS. THE INCENTIVE STRATEGY FOR XP USERS. SYNERGY BETWEEN XTRAPREMIUM AND XTRAREWARD PROGRAMME.

For this project, I had personally interviewed the customers in different Retail Outlets (RO’s) across Kolkata. After collecting the data, I had analyzed all these and then concluded.

LIMITATIONS:-

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Though much effort was made to make this project work a success, some limiting

factors always remained in the way.

The main limitations that were found are as follows:

The project covered various retail outlets across the city. Hence, I had to go

to every retail outlet given to me for doing the survey.

Time being major constraints, all the retail outlets could not be targeted

and sampling technique had to be used.

Some customers refused to answer and give views to fill the questionnaire.

I had to introduce myself and ask the customers for their feedback within

the stipulated time in which their vehicles were getting filled which was a

major drawback.

There was only very few open ended questions but due to work pressure

and reluctance, many customers did not give proper suggestion and

feedback.

The answers received were based on respondents perception or

understanding of the question.

Some of the respondents were far from being specific and gave very

general answers.

Some customers thought of me being a salesman of a product and did not

even care to listen.

RESEARCH AND METHODOLOGYRESEARCH

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Research means analyzing, gathering, processing and interpreting data. The process of systematically acquiring data to answer a question or to

solve a problem. It also means intelligent and cogently communicating the results in a report

that discovers what was discovered from the research.

METHODOLOGY

Methodology means selecting research method, sample and procedures

Various steps involved in research methodology:

Research objective and question should be known. Planning a research design Selecting research method Selection of sampling procedure Data collection Coding and editing of data Generation and interpretation Report writing

RESEARCH TYPE: -

Quantitative- Quantitative research is descriptive and provides hard data on the numbers of people exhibiting certain behaviors, attitude, etc. Gathering numerical information that can be analyzed statistically through surveys. The aim is to classify features, count them, and construct statistical models in an attempt to explain what is observed. Data is in the form of numbers and statistics. Quantitative data is more efficient, able to test hypothesis, but may miss contextual detail.

Qualitative- Gathering descriptive information, usually representing verbal or narrative data through open-ended interviews or focus groups. The aim

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is complete detailed description. Data collected is in the form of words, pictures or objects. Qualitative data is more rich, time consuming, and less generalized in nature.

Basic research- Here I expanded the boundaries or knowledge itself to verify the acceptability of a given theory.

Field work- I went to the Retail Outlets and personally met the concerned persons to gather the information through questionnaires and personal discussion with the customers.

TOOLS & TECHNIQUES:-

Research Instrument

Data collection method- Interview and Questionnaire Survey

Sources of data-

Primary Research-Primary Research is the process of gathering information directly from individuals who have access to it .Questionnaire, Interviews, Survey Methods.

Secondary Research- A secondary data research project involves the gathering and/or use of existing data for purposes other than those for which they were originally collected. These secondary data may be obtained from many sources, including literature, industry surveys, compilations from computerized databases and information systems, and computerized or mathematical models of environmental processes .Books, Journals, Manuals, Magazines, Websites, and HR Hand Book.

The information about the profile of the company has been collected through internet from the website.viz. www.iocl.co.in

PLAN OF ANALYSIS

The data obtained from questionnaire and interviews were summed up.

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Quantitative analysis was carried out for each of the questions asked. Percentage distributions of absolute values were also done at the same time. The results were represented by pie charts and column charts for comparisons and further understanding. Next followed Qualitative analysis, which was derived out of the quantified results. This was also done with the help of observations, experts’ view, etc. and finally conclusions and recommendation are made for further betterment of the company.

Discussion-I got the information through personal discussion.

Pilot survey- I collected information by asking a set of questions in a proper sequence in a questionnaire to a sample of individuals drawn so as to represent the whole population.

QESTIONNAIRES: - Both open and closed ended questionnaires had been circulated to the customers.

a) Open Ended Questions - Open-ended questions are those questions that will solicit additional information from the inquirer. Sometimes called infinite response or unsaturated type questions. By definition, they are broad and require more than one or two word responses.

b) Close Ended Questions - Closed ended questions are those questions, which can be answered finitely by either ‘yes’ or ‘no’ also known as dichotomous or saturated type questions. Closed-ended questions can include presuming, probing or leading questions. By definition, these questions are restrictive and can be answered in a few words. 

RESEARCH DESIGN

Sampling Design:

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o Total strength of customers: - 152

o Sampling Size- 100

o Sampling Types- Customers coming to different RO’s (Retail Outlets)

METHODOLOGY PROCESS MAP

Purpose of Study

Literature Review

Environmental Scan

Preparation of Questionnaire

Questionnaire Survey

Analysis

Suggestions

LITERATURE REVIEW:-

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A literature review is an account of what has been published on a topic by accredited scholars and researchers, but more often it is part of the introduction to an essay, research report, or thesis. In writing the literature review, the main purpose is to convey to your reader what knowledge and ideas have been established on a topic, and what their strengths and weaknesses are. As a piece of writing, the literature review must be defined by a guiding concept (e.g. research objective, the problem or issue you are discussing or your argumentative thesis). It is not just a descriptive list of the material available or a set of summaries.

PRESS RELEASES ON MOTOR SPIRIT (MS) PRICES:-

I. New Delhi, March 15, 2013

Indian Oil Corporation Ltd. has decided to reduce the retail selling prices of Petrol w.e.f. midnight of 15th/16th March'13 by Rs. 2.00/ litre (excluding VAT).

The Prices of Petrol were increased by Rs.1.40/litre (excl VAT) w.e.f. 2nd March'13. Since last price change, international prices of crude oil have slid from USD 112.73/bbl to USD 107.41/bbl leading to consequential fall in international prices of MS. On the other hand, Rupee has depreciated marginally. Following this trend, it has been decided to pass on the benefit to the customers and accordingly the aforesaid reduction in the retail selling price of Petrol is being affected. It may be noted that the Corporation has already lost over Rs. 500 Crore (OMCs Rs. 1130 Crore) on sale of petrol so far during the current financial year.

In addition to losses on sale of petrol, OMCs are suffering under-recovery on sale of HSD (Retail) of Rs. 8.64, SKO (PDS) of Rs.33.43/litre & LPG (Dom) of Rs.439.00/cyl. Projected under-recovery of the Corporation on three sensitive products is expected to be around Rs.86500 crore and of the Industry around Rs.163000 crore during current year.

The movement in international oil prices and INR-USD exchange rate is being monitored and decision on future price changes shall be taken accordingly.

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The details of existing and revised selling prices of Petrol for metros are given below:

New Delhi Mumbai Chennai Kolkata Hyderabad BengaluruProposed RSP Rs/litre 68.34 75.14 71.41 75.84 74.59 75.26Current RSP Rs/litre 70.74 77.66 73.95 78.34 77.21 77.88Decrease Rs/litre -2.40 -2.52 -2.54 -2.50 -2.62 -2.62

II. New Delhi, November 15, 2012

Presently, the international oil prices are relatively stable. However, there has been significant volatility in the INR-USD exchange rate and is currently very weak with uncertainty about its future direction. The trends in the international oil market and INR-USD exchange rate are being closely monitored and the same shall be reflected in future price changes.

It may be noted that Oil Marketing Companies are bearing the burden of a loss of over Rs 2000 crore approximately on sale of MS during April-September12 due to inability to change retail selling prices to the desired extent in line with market conditions.

As is known, in addition to loss on sale of MS, OMCs are also suffering under-recovery on sale of three sensitive petroleum products, namely HSD (Rs.9.84/litre), SKO(PDS) (Rs.31.30/litre) & LPG (Dom) (Rs.478.50/cyl). Projected under-recovery on these products is expected to cross Rs.160000 crore for the current year.

New Delhi Mumbai Chennai Kolkata Hyderabad BengaluruProposed RSP ' /litre 67.24 73.53 70.57 74.55 73.73 74.22Current RSP ' /litre 68.19 74.73 71.77 75.74 74.98 75.47Decrease ' /litre (0.95) (1.20) (1.20) (1.19) (1.25) (1.25)

III. New Delhi, October 08, 2012

It has been decided to revise the MS prices downward by Rs. 0.56 per litre (excluding State levies in Delhi) w.e.f. 9th Oct’12.

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Presently, the INR-USD exchange rate has shown an appreciating trend. The international oil prices, however, continue to remain firm casting their shadow on MS prices. There has been significant volatility in International Oil prices and INR-USD exchange rate. The trends in the international oil market and INR-USD exchange rate shall be closely monitored and the same shall be reflected in future price changes.

It may be noted that Oil Marketing Companies have incurred a loss of Rs 2600 crore approximately on sale of MS during April-September’12 due to inability to change retail selling prices to the desired extent in line with market conditions.

As is known, in addition to loss on sale of MS, OMCs are also suffering under-recovery on sale of three sensitive petroleum products, namely HSD (Rs.11.65/litre), SKO(PDS) (Rs.33.93/litre) & LPG (Dom) (Rs.468.50/cyl). Projected under-recovery on these products is expected to cross Rs.160000 crore for the current year.

IV. New Delhi, July 25, 2012

The Government of India vide its notification No.P-20029/18/2001-PP dated 16th January , 2003, notified "The Irrecoverable Taxes Compensation Scheme", 2002 to compensate the oil companies for irrecoverable state taxes to facilitate smooth transition from the administered pricing regime to the market determined pricing scheme.

The scheme provided for compensation to Oil marketing and Refining companies in respect of irrecoverable state taxes levied by the States/ local authorities such as Entry Tax on Crude, Surcharge on sales tax, CST/Purchase tax on intercompany sales of petroleum products and any other irrecoverable taxes. The compensation was set off with the amount being collected by OMCs through the consumer selling price under the head 'State Surcharge' for the period 2002-03. The 'state surcharge' element in the price build up ensured that the incidence of any irrecoverable tax of the particular state was recovered from the respective state. The rate of 'State Surcharge' has remained unchanged since then.

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Over the last several years, oil companies have been suffering increasing level of under-recoveries on account of irrecoverable taxes because of following reasons:

New irrecoverable levies by State Governments Changes in State tax structures, etc Steep increase in the prices of crude oil and petroleum products in the

international markets and consequential increase on the taxes Increase in Retail Selling Prices of the petroleum Products and

consequential increase of the taxes

As a result of the above mentioned factors, the irrecoverable taxes have undergone reduction in some states and increase in others. Thus, there was a need to review the said scheme to make the levy rational on a state-to-state basis to reflect reduction in prices in states where the irrecoverable taxes have undergone decrease and effect increase in prices in states where the said taxes have been increased as well as to reduce the burden of the OMCs on account of irrecoverable taxes. Accordingly it has been decided to implement the revised structure of 'state specific cost (SSC)' to cover the irrecoverable taxes w.e.f. midnight of 24/25 July, 2012. As a result of the said revision MS Prices shall stand reduced in 11 State and shall stand increased in 7 States. The Impact of the revision (excluding state levies) in some of the states is given in the table below:

Price Decrease: Price Increase:

V. New Delhi, November 15, 2011

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State MS Rs/ litreKarnataka 1.06 Goa 0.82Gujarat 0.81Jharkhand 0.55Tamil Nadu 0.76West Bengal

-

Odisha 0.52

State MS Rs/ litre

Assam 2.13

Bihar 0.80

West Bengal 2.02

Maharashtra 0.72

The Motor Spirit (MS) prices were de-regulated by Government of India w.e.f. 25.06.2010. Since then, OMCs including Indian Oil have the freedom to fix the MS prices. In the current year (2011-12), as a result of rising international MS prices, IndianOil has revised MS prices upward by Rs.4.17 per litre on 15th May’11, Rs.2.62 per litre on 16th Sept’11 and Rs.1.50 per litre on 4th Nov’11.

IndianOil reviews the MS prices on fortnightly basis and based on the review, fixes the MS prices for the next fortnight. In keeping with this practice, IndianOil has reviewed the pricing cycle as prevalent in the last fortnight. The review reveals that at the current prices, there will be an over-recovery of Rs.1.85 per litre. It has, therefore, been decided to revise the MS prices downward by Rs.1.85 (excluding State taxes and levies) w.e.f. 16th Nov.’11.

The reduction has been possible as a result of favorable impact of slide down both in the international prices of MS and in the Rupee / Dollar parity. The Rupee / Dollar exchange rate which had moved high in the second fortnight of Oct’11 came down marginally and remained more or less stable in the vicinity of Rs.49.30 per USD in the relevant first fortnight of Nov’11. It may be noted that the rupee has suffered significant depreciation yesterday and today. If the Rupee / Dollar parity remains at this level or moves further away, its impact would get reflected in the next pricing cycle. The relevant pricing cycle applicable for the fortnight beginning 16th Nov’11 has therefore remained free from any major disturbance in the Rupee /Dollar parity.

With the above revision, there will be no under / over recovery on MS prices during the fortnight beginning 16th Nov’11.The projected total under-recovery of IndianOil for 2011-12 (excluding MS) is estimated to be over Rs.71, 000 crore and for OMCs together at a level of Rs.1, 30,000 crore.

The information about the Press Release of the company has been collected from the official website of Indian Oil Corp. viz.www.iocl.co.in

SUMMARY FINDINGS:

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The most common point of contact of customers with Oil Industry is Petrol Pump.

In Oil Industry parlance, Petrol Pumps are referred to as Retail Outlets (ROs).

As per the existing Government policy, Petrol Pumps can be set up by Public

Sector Oil Companies dealing in storage and distribution of petroleum products as

per guidelines. Presently the Oil Companies engaged in retail business of

automotive are IOC, HPC, BPC, MRPL, ONGC, RIL, ESSAR and SHELL.

MOTOR SPIRIT (MS)

Petrol in technical language is called Motor Spirit. It is mainly used in passenger

vehicles such as Two/Three Wheelers and Cars. At present, two types of petrol

are being marketed across the country i.e. Normal Petrol and Branded Petrol.

Normal Petrol- Normally used as a fuel for spark ignition internal

combustion engines such as Passenger Cars, Two Wheelers, Three

Wheelers, etc.

Branded Petrol- This is preferred by new generation vehicles. It is slightly

costlier than normal petrol. It has additives for optimizing performance of

vehicles. It is sold by IOCL with the brand name “Xtra Premium”. Xtra

Premium provides benefits like cleaning and prevention of carbon deposits,

smooth drivability and reduced smoke/emissions.

XTRA PREMIUM

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Xtra Premium petrol is a much sought-after fuel among discerning motorists who are in many ways emotionally attached to their wheels.

The “Clean and Keep Clean” function of the super cleanser additive in Xtra Premium reduces deposits to maintain “like new” performance of the vehicle. Regular use of Xtra Premium gives the vehicle a superior pick-up, smoother drive, better mileage and lower emission. Xtra Premium is designed not only to optimize performance of new generation vehicles but also rejuvenate old vehicle to perform better.

Little wonder, Indian Oil’s Xtra Premium petrol is the largest selling branded petrol in India.

CUSTOMERS VIEWS ON PRESENT PRICE DIFFERENCE BETWEEN MS AND XP:- The price difference between MS and XP causes the main

difference in the opinion of the mass to choose any of the two gasolines.

According to the customers as the price of XP is more, people tend to buy more of MS than XP.

But as for the new generation vehicles, XP is more preferred than MS because it gives a lot of benefits which is not provided by MS.

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STRENGTH IN THE BRANDED MS WHICH MAKES THE CUSTOMER USE THE SAME:- The main reason for the use of MS by the mass is that it is less in

price than XP. Due to less price of MS the customers prefer MS more than XP. Previously MS was the only petrol available to the customers so

most of the customers have an attachment to that.

STUDY ON THE POSITIONING OF XP IN RO’S:- According to the Managers of the RO’s, XP is the most suitable

petrol for the new generation vehicles. As it comes with various types of benefits, people are now more

interested in buying XP. It has additives for optimizing performance of vehicles.

PROFILE OF XP USERS:- The users of XP are mostly the people who have a new generation

vehicles. The new generation vehicles owners opt for XP than MS due to a

number of benefits given by XP.

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THE INCENTIVE STRATEGY FOR XP USERS:-

Indian Oil XTRAPOWER Fleet Card Program -A complete fleet management solution for Fleet Owners / Operators and Corporate. XTRAPOWER is a Smart Card based Fleet Card Program, which facilitates cashless purchase of fuel & lubes from designated retail outlets of Indian Oil through flexible prepaid and credit facilities. The fleet card program also offers an exciting Rewards Program and unique benefits like personal accident insurance cover and vehicle tracking facilities.

SYNERGY BETWEEN XTRAPREMIUM AND XTRAREWARD PROGRAMME:-Every time the customers fill their fleet with fuel & lubes using XTRAPOWER fleet cards at designated retail outlets of Indian Oil, customers earn XTRA Points. They can exchange the accumulated XTRA Points for attractive gifts from XTRAPOWER Rewards Catalogue including free fuel & lubes. In short, the XTRAPOWER Fleet Card Program offers not just amazing convenience & security but also an opportunity to translate all your dreams into a reality.

SWOT ANALYSIS:-29 | P a g e

SWOTStrength 1. India’s largest commercial enterprise with a strong brand name

2. Has around 50% petroleum products 

3. Operates 10 refineries in India 

4. Huge distribution network through retailing 

5. Accounts for a 47% share in the petroleum products market,

34.8% share in refining capacity and 67% downstream sector

pipelines capacity in India

6. Has over 35,000 employees

7. Loyalty programs like XTRAPOWER Fleet Card Program is aimed at

Large Fleet Operators

Weakness 1 .Legal issues 

2. Employee management 

3. Bureaucracy

4. Volatility in the crude market & subsidy burden

Opportunity 1. Increasing fuel/oil prices 

2. Increasing natural gas market 

3. More oil well discoveries 

4. Expand export market

Threats 1. Government regulations 

2. High Competition

DATA INTERPRETATION:-

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1) TYPE OF VEHICLE

45

45

10

2 Wheeler

4 Wheeler

6 Wheeler

2) AMONG THE FOLLOWING COMPANIES WHO’S PETROL HAVE YOU TRIED BEFORE

85%

80%

15%

75%

5%IOCL

HP

RELIANCE

BHARAT PETRO.

PARAS

3) HOW SATISFIED ARE YOU FROM THE PRODUCT OF INDIAN OIL

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0 5 10 15 20 25 30 35 40 45 50

3

5

7

40

45

Extremely Satisfied

Very Satisfied

neutral

Very Dissatisfied

Extremely Dissatisfied

4) ADVANTAGES OF USING XTRA PREMIUM

Mileage/Average

quality

Smooth running

low in price

majority uses it

using it for long

better engine

eco friendly

others

0 5 10 15 20 25 30

25

12

10

7

5

9

15

10

7

5) RECOMMENDATION TO OTHER FRIENDS

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0 5 10 15 20 25 30 35

30

35

20

10

5

Definitely Not

Probably Not

Might/Might Not

Probably

Definitely

6) HOW SATISFIED ARE YOU FROM THE PROMOTIONAL STRATEGY ADOPTED BY INDIAN OIL FOR MARKETING XTRA PREMIUM

Extrem

ely Sa

tisfied

Very Sa

tisfied

Neutra

l

Very Diss

atisfi

ed

Extrem

ely Diss

atisfied

05

1015202530354045

5

15

45

20

15

CONCLUSION

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To conclude my project, I would like to briefly analyze all the different chapters.

The introductory chapter mainly stress on the Corporate History, Company Profile

and Objectives of the Company. The Objectives of the study mainly deals with the

purpose of doing my internship at Indian Oil Corporation. The next important

chapter is the limitation of my study which shows the difficulty that I had to face

while conducting the survey in different Retail Outlets across the city. The next

chapter would relate to the Research Methodology which stresses on the method

I took up to undertake the survey. The method which I used is mainly primary in

nature and it consists of questionnaires by visiting the various Retail Outlets. The

Summary Finding chapter is basically concerned with the key findings, SWOT

Analysis and Data Interpretation of the survey which I undertook for several Retail

Outlets.

With the help of this research, I was able to determine the consumer’s

perception about Motor Spirit and Xtra Premium petrol. This research also

enables us to understand the mind of the consumer with regard to their choice of

petrol or preferences for other companies. Thus, the interactions with the

customer have made me realize how important it is to have a close touch with the

clients.

To conclude this project, I would like to say that it is this work experience that I

would carry along with me in every walk of life. I am confident that the lessons

that I have learned through this internship will be a guiding light for my career

ahead.

ANNEXURE

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SURVEY QUESTIONNAIRE

NAME-

ADDRESS-

PHONE NO-

GENDER

MALE FEMALE

1) WHICH INCOME LEVEL BEST DESCRIBES YOUR TOTAL ANNUAL HOUSEHOLD INCOME (RS)

Under 25,000

25,000-34,999

35,000-49,999

50,000-74,999

75,000-99,999

1, 00,000-1, 19,999

Over 1, 20,000

2) WHICH OF THE FOLLOWING AGE GROUPS DO YOU FALL IN

18-24

25-34

35-44

45-49

50-54

55-64

64 OR OLD

3) TYPE OF VEHICLE YOU HAVE

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2 Wheeler (scooter / motorcycle)

4 Wheeler (car)

6 Wheeler (truck)

4) DO YOU KNOW THE NAMES OF THE FOLLOWING COMPANIES

Indian Oil Corporation

Hindustan Petroleum

Reliance Petroleum Limited

Bharat Petroleum

Paras Lubricants

5) AMONG THE FOLLOWING COMPANIES WHO’S PETROL HAVE YOU TRIED BEFORE

Indian Oil Corporation

Hindustan Petroleum

Reliance Petroleum Limited

Bharat Petroleum

Paras Lubricants

6) ARE YOU AWARE THAT INDIAN OIL CORP. IS MARKETING XTRA PREMIUM (XP) PETROL OTHER THAN ITS MOTOR SPIRIT (MS)

Yes No

7) ARE YOU USING ANY OF THE ABOVE PETROL (BETWEEN XP & MS)

Yes No

8) IF YES THEN HOW SATISFIED ARE YOU FROM THE PRODUCT OF INDIAN OIL

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CORPORATION

Extremely Satisfied

Very Satisfied

Neutral

Very Dissatisfied

Extremely Dissatisfied

9) IF NO THEN WHY NOT.STATE YOUR REASONS

10) WHAT ARE THE ADVANTAGES OF USING XTRA PREMIUM (XP)

Gives better Mileage & Average

Good in Quality

Smooth Running

Cheap from other companies petrol

A large segment of people uses it

Using it from a very long time

Keeps engine working better

Environmental Friendly

Other

11) WOULD YOU RECOMMEND IT TO YOUR OTHER FRIENDS?

Definitely

Probably

Might or Might Not

Probably Not

Definitely Not

12) IF NO THEN WHY NOT.STATE YOUR REASONS

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13) ON A SCALE OF 1-5, WHERE WOULD YOU LIKE TO PLACE XTRA PREMIUM? [1-WORST 5-EXCELLENT]

1 2 3 4 5

14) DO YOU KNOW ABOUT ANY OF THE PROMOTIONAL STRATEGIES ADOPTED BY INDIAN OIL CORPORATION FOR MARKETING XTRA PREMIUM (XP)

Yes No

15) IF YES THEN AMONG THE FOLLOWING WHICH ARE THE ONE YOU HAVE HEARD

Xtra Premium Fleet Card Program

Xtra Premium Easy Fuel Card

16) ARE YOU SATISFIED WITH THE PROMOTIONAL STRATEGIES ADOPTED BY INDIAN OIL CORPORATION.

Extremely Satisfied

Very Satisfied

Neutral

Very Dissatisfied

Extremely Dissatisfied

17) ANY FURTHER SUGGESTIONS FOR IMPROVING THE PROMOTIONAL STRATEGY

BIBLIOGRAPHY38 | P a g e

PRIMARY DATA:

Questionnaire MethodSurvey MethodInterview Method

SECONDARY DATA:

BOOKS

ه Marketing Management – Philip Kotler.

ه Marketing Research – G.C Beri; Nigel Bradley.

WEB CONSULTED ه http://www.authorstream.com/Research-Methodology

contentsه www.hubpages.com ه www.iocl.co.in

PRESS RELEASE ه www.iocl.co.in

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