UNIVERSITY OF PETROLEUM & ENERGY STUDIES

Dehradun

Harnessing Energy through Knowledge

A STUDY

ON

Non Fuel Business at retail outlets in

allowances with the Fuel Business

Under Supervision Of:

Mrs. Surbhi Arora
Lecturer
CMES, UPES

Submitted By:
Divyanshu (R250207012)
Intg.BBA+MBA (Oil & Gas) VIth SEM
2007-11
COLLEGE OF MANAGEMENT & ECONOMICS STUDIES, UPES, DEHRADUN.

CERTIFICATE OF ORIGINALITY
This is to certify that the dissertation work titled “Non Fuel Business at retail outlets in

allowances with the Fuel Business” is a work of the students and is being submitted in
partial fulfillment for the award of the Int. BBA+MBA (Oil & Gas) Degree from the
University of Petroleum and Energy Studies for the fulfillment of the requirement of
course of study.
This report has not been submitted earlier in this University or any other
university/institution for the requirement of a course of study.

(Divyanshu)

SIGNATURE OT THE STUDENT

Date:

Place:

CERTIFICATE FROM THE SUPERVISOR

This is to certify that MR. Divyanshu has completed his dissertation titled: “Non Fuel
Business at retail outlets in allowances with the Fuel Business” under my guidance
and supervision. This project has not been submitted earlier to University of Petroleum and
Energy Studies or to any other university/institution for the requirement or a course of study.
To the best of my knowledge, he has made an earnest and dedicated effort
to accomplish this project.

I wish him all the best his future endeavors.

(Mrs. Surbhi Arora)

Lecturer
CMES, UPES

Place: DEHRADUN

Date:

ACKNOWLEDGEMENT
I acknowledge my gratitude with sense of veneration to the almighty God and various people
who helped me during the course of my dissertation work. Their valuable guidance and wise
direction has enabled us to complete my dissertation in systematic and smooth manner.

I would like to put my sincere acknowledgement to my academic mentor Mrs. Surbhi

Arora Asst. Professor CMES, UPES for his path finding guidance & strong academic
support. Without their support it would have been a difficult task to accomplish this dissertation.

I would like to thank MR .Nipun Jain (MBA O&G) CMES, University of Petroleum & Energy
Studies for his tremendous efforts in suggesting various innovative ideas which helped me at
various stages in this project.

Finally I would like to thank all those who were directly and indirectly concerned in making my
dissertation successful. To put it in a nutshell a difficult and arduous journey was made simple
and quiet enjoyable due to their support.

…………………

Date:
(DIVYANSHU)

Place: DEHRADUN
 EXECUTIVE SUMMARY
The traditional utility today finds itself facing the most challenging market conditions that it has
ever experienced. Deregulation is bringing in new competition, not only from other utilities but
potentially from competitors with very different backgrounds. These new market entrants can
utilize a variety of different strengths to threaten the traditional business model. Petrol pumps are
no longer just fuel dispensing outlets. Sporting all new look and a retailer friendly approach, they
now out smart some of the best retail chains in the country offering grocery, medicines, flowers,
fruits, fast food, pollution check points, services like insurance, courier, banking and the list is
endless.

The project titled - “Non fuel business at retail outlets in allowances with the Fuel Business” is
an earnest attempt to study the performance of non-fuel business.

Globally, retailing is customer centric with an emphasis on innovation in products, processes and
services. In short, the customer is the King!
Because of the increasing number of nuclear families, working women, greater work pressure
and increased commuting time, convenience has become priority for Indian consumers. They
want everything under one roof for easy access and multiplicity of choice.

The growth and development of organized retailing in India is driven by two main factors –
lower prices and the benefits the customers can’t resist. According to experts, economies of scale
drive down the cost of the supply chain, allowing retailers to offer more benefits to the
customers.

The growth of the retail sector will make the retailers powerful intermediaries in the marketing
channel, bridging the gap between the manufacturers and consumers. Many manufacturers and
marketers may hence take to retailing themselves to be closer to the consumers. Therefore it will
be the power of the consumer as well as the retailer in the marketing channel that will spearhead
the growth of retailing in India.

With the emergence of organized retailing in the country and a growing demand from consumers
for a superior shopping experience, Convenience Retailing has emerged as a key business area
for petroleum companies given their wide retail presence, existing customer base and
strategically located sites. With an aim to address this, Bharat Petroleum launched its
convenience retailing initiative under the “In&Out” brand.
 Contents

Contents Page No.

Chapter 1
1. Introduction (Retailing) 1-9

1.1 Wheel of Retailing.

1.2 Brand Building Methodology
1.3 Retail Positioning Map
1.4 knowing your consumer
1.5 Building the Offer

Chapter 2

2. The Indian Petroleum Sector – An Overview 10-16

2.1 Oil and Natural Gas Sector – Introduction Value chain

2.2 Indian Energy Scenario
2.3 Industry Sector
2.4 Current Scenario

Chapter 3

3. Fuel Retailing Sector 17-21

3.1 Passing on the price Increase

3.2 Retail SBU
3.3 Fuel retail Milestones in India

Chapter 4

4. Research Methodology 21-23

Chapter 5

5. Emerging Trends in Fuel Retailing Sector 24-44

5.1. Deregulation of Petroleum Sector
5.2. Increasing Vehicle sales
5.3. Changing Infrastructure
5.4. Upgrading Technologies
5.5. Branded Fuels
5.6. Non Fuel Initiatives
5.7. Changing Consumer Expectation
5.8. Government Initiatives

Chapter 6

6. Options available to Oil Marketing companies 45-64

6.1 Fuel based Differentiation

6.2 Value added Products and Service Differentiation
6.3 Price based Differentiation
6.4 Consumer Experience based Differentiation
6.5 Quality and Quantity based Differentiation
6.6 Network planning
6.7 Supply Chain optimization
6.8 Using Information Technology as Key Enabler

Chapter 7

7. Challenges faced by Oil Marketing Companies 65-72

7.1 Profitability of Retail Outlets

7.2 Regulatory Environment
7.3 Managing Technology
7.4 Threat of the Supermarkets

Chapter 8

8. Comparison of Indian OMC’s 73-77

Chapter 9
9. Case Study 78-86
9.1 Efkon in Nationwide Fuel Payment & Loyalty Project of Hindustan Petroleum Corporation
in India.
9.2 Classifying Sites as Volume or Profit Drivers
Chapter 10

10. Conclusions and Recommendations 87-91

Chapter 11

11. References 92-94

11.1 Books and Research Papers
11.2 Internet Links
Objective

1. To identify the key elements of (Retail) marketing strategy aimed at

a. Enlargement of customer base of non-fuel business
b. Improvement in customer delight of the total offering at Retail Outlets at the
In&Out stores of non-fuel business of BPCL
c. Improvement in the profitability of non-fuel business of Retail Outlets of various
companies in general and network of dealers in particular.

2. To identify the key target segments of non- fuel business and buying motives of target
segment customers.
3. To recommend strategies for attracting and retaining target segment customer.

Scope

The geographical region covered by the project was limited to Western Region of India,
comprising the states of Maharashtra, Gujarat, and Madhya Pradesh.