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POTENTIAL OF HAVING NON-FUEL RETAILING OUTLET AT HPCL OUTLETS
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POTENTIAL OF HAVING NON-FUEL RETAILING OUTLET AT HPCL OUTLETS
Under guidance of : Dr A K Jain
Submitted by : Nikhil N Warkar
August 21, 2015
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Content
• Background
• Business problem
• Literature Review, Research gaps and Need for the
research
• Research problem
• Research objectives
• Proposed Research Methodology
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Background• The Indian petroleum retailing sector is
witnessing significant changes that is altering the nature of competition faced in this sector. Major drivers for these changes are:
• Growth in Demand
• Deregulation of Market
• New Customer Expectations
Non-fuel retailing (NFR)/Allied Retail Business (ARB)
• Non-fuel retailing/Allied Retail Business refers to selling of non-fuel products and services along with fuel at the retail outlets (filling stations).
• Non-fuel retail feature includes retail stores, food joint, coffee shops, auto service stations, pay telephones, ATMs etc.
• Globally, non-fuel retailing plays a crucial role in overall revenue and profitability of a filling station.
HPCL is a Government of India Enterprise with a Navratna Status, and a Forbes 2000 and Global Fortune 500 company.
13233 no of Retail Outlets as of 31/03/2015.
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Advantages of Non Fuel Retailing – Retail outlets with non-fuel products and services help oil retailers to
strengthen their brand image and also help them in providing superior experience to customers. This enhances retention of customers as well adds new customers.
– Generates additional stream of revenue for oil companies as they receive revenue in the form of rental income by leasing space for retail outlets and via profit-sharing arrangement with dealers.
– Helps push fuel sales (fuel rub-off) of the fuel as the buyers who come to buy products from convenient store are likely to opt for fuel purchase as well. Average Ticket size of a fuel sale in an ARB Outlet is usually higher than in an Only Fuel Outlet.
– Attracting & retaining customers as customers may prefer some other brand but walk in to a particular retail outlet just because of the NFR offering.
– Better site value utilization (Using the free space available).
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Business Problem
How to enhance profitability of HPCL through
Non-Fuel Retailing activities.
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Literature Review, Research Gaps and Need for ResearchTwo themes emerge from literature
review pointing to the research gaps and leading to need for
research
1. Literature provides factors which has led to development of NFR but its applicability in HPCL is not discussed.
2. Literature/reports acknowledge the importance of Non Fuel Retailing for India, but the solutions not comprehensively mapped or identified for PSU oil company like HPCL.
Two types of Literature used
1. Research reports by Individuals in Journals
2. Articles in Journals and World Bank paper on the subject
No comprehensive research work on profitability of HPCL through NFR activities
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Literature review, Research GapOrganization/ Researcher
Key Output From The Literature survey Research Gap
Sandhya Rai,Dr Atul Razdan,Dr. M.S. Pahwa(IJMS 2012)
Consumer attitude and Behaviour towards Non Fuel Retailing.
What is the impact of Non Fuel Retailing on OMC’s profitability.
Kaushal Kishore, R. P. Patel(JBRMR 2012)
Importance of NFR to retain existing customer, attract new consumer & sustain competition.
Anurag Dugar(Innovative Marketing 2007)
Effect of change in government policy in Indian Fuel Retail market and impact of these changes on the marketing strategies of OMC in India.
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Research Problem
Determine the Non Fuel Retail activities
profitability for HPCL with respect to current
Indian Fuel-Oil Retail Market.
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Research Questions
Q1 • What is the potential of NFR in current Indian Market scenario?
Q2 • Which type of NFR activities will suit which type of outlet/market?
Q3 • What is the percentage share of NFR activities in HPCL profitability?
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Research Objective
Objective 1• To identify Non Fuel Retail potential in
Current Indian Market scenario.
Objective 2
• To identify suitable Non Fuel Retail activity as per the demography & type of market.
Objective 3
• To identify the effect of NFR on Fuel retailing in HPCL with respect to profitability.
Proposed Research methodology
Observational Design– Conduct survey
– Structured interviews
– Preparation of Questionnaire, open ended and close ended -5 point likert type scale to be used for close end.
– Reliability of the questionnaire to be tested thru pilot study
– Finalize the questionnaire after the pilot study
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Sampling Design– Non probabilistic design
– Judgmental sampling.
– No of respondents : Customer, Transporter, TT Crew, Dealers & other Consumers.
Objective 1/3 – To identify Non Fuel Retail potential in Current Indian Market scenario.
Exploratory Research
Identify set of variablesrespect to business problem
Research Design
Proposed Research methodology
Observational Design– Secondary Data.
– Conduct expert Interviews.
– Surveys.
– Panel for comparison.
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Sampling Design– Probabilistic design
– Cluster sampling due to limited expertise in the sector
– No of respondents : Top Management, Head Office, Regional Team, other experts (20+)
Objective 2/3 – To identify suitable Non Fuel Retail activity as per the demography & type of market.
Descriptive Research
Identify market characteristic of
variablesrespect to business problem
Research Design
Proposed Research methodology
Observational Design– Available data.
– Weekly/Monthly MIS reports.
– Finance Reports.
– ARB reports.
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Sampling Design– Experiment
Objective 3/3 – To identify the effect of NFR on Fuel retailing in HPCL with respect to profitability.
Causal Research
Identify effect of variablesrespect to business problem
Research Design
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Research Flow chart
Initiate literature survey to identify the research gap and establish the need for the research
Identify variables required for NFR market development through literature survey and expert opinion
Develop a questionaries' and test its reliability through a pilot study, make changes, finalize and mail the questionnaire
Establish gap based on benchmarking HPCL against competitor and results of factor analysis
Analyse the data using factor analysis. Interpret the results
Establish a potential for a NFR market of HPCL based on literature survey and plug gaps identified on factor analysis
Conduct structured interview to validate the above potential along with gaps
Compilation and reporting of results
Development of recommendation and writing of dissertation
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THANK YOU
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