HINDUSTAN PETROLEUM CORPORATION LTD. Future full of energy

PROJECT REPORT ON

“STUDY ON MARKETING COMMUNICATION OF HPCL DIESEL ENGINE

LUBRICANTS IN HYDERABAD/SECUNDERABAD CITY”.

Submitted by Under the guidance of Dharmendra nath PROF. K.V.S. KRISHNAMOHANM3-16 Asst. Prof, GUIDE, SSIMPGDM, (Marketing)SSIM, KOMPALLY

.

SIVA SIVANI INSTITUTE OF MANAGEMENTKOMPALLY, SECUNDERABAD

(2008-10)

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ACKNOWLEDGEMENT

Through this acknowledgement I want to express my sincere gratitude to Mr. P.ABHISEK the LUBRICANT SALES HEAD OF COMPANY for giving me an opportunity to work on this project under his able guidance. He guided me a lot from time to time and without his motivation the project was impossible.

I am also thankful to Mr. MOHAN S.CHAND for his valuable help.

I am also thankful to PROF K.V.S. KRISHNAMOHAN, faculty member of Siva Sivani Institute of Management for his valuable help.

I would also like to express my gratitude towards colleagues who had co-operated a lot while preparing this project.

Dharmendra nath PGDM (Marketing)

M3-16

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DECELARATION

I DHARMENDRA NATH declare that this project report titled “STUDY OF MARKETING

COMMUNICATION OF HPCL DIESEL ENGINE LUBRICANTS IN

HYDERABAD/SECUNDERABAD CITY” is an original work done by me under the guidance of

ASST PROF K.V.S.KRISHNAMOHAN, the faculty guide of Siva Sivani Institute of Management. I

further declare that it is my original work as a part of my academic course.

PLACE: Secunderabad DHARMENDRA NATH

DATE:

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CONTENTS

TABLE OF CONTENT PAGE

ACKNOWLEDGEMENT

DECLARATION

Chapter-1 --- --------------------------------------------------------------------- (5)

Introduction

Industry Profile

Company Profile

Chapter –2 ------------------------------------------------------------------------ (23)

Objectives of the study

Scope of the study

Significance of the Study

Literature Review

Scheme of Dissertation

Chapter -3 ------------------------------------------------------------------------- (29)

Research Methodology

Research Design

Sample Profile

Tools and Methods Data Collection

Data Processing and Analysis

Limitations

Chapter-4 --------------------------------------------------------------------------- (32)

Data Analysis

Chapter-5 ---------------------------------------------------------------------------- (43)

Conclusion and findings

Chapter-6 ----------------------------------------------------------------------------- (45)

Bibliographie

Questionnaire

4

Chapter-1

INTRODUCTION

IDUSTRY PROFILE

COMPANY PROFILE

5

INTRODUCTION

Liberalization has brought a significant change in lubricant market. Earlier the lubricant market was

dominated by a few namely BPCL, IBP & IOCL. But with the arrival of new foreign entities in the

market the entire scenario has changed. Today companies like SHELL, CASTROL, GULF OIL, and

SHELL, etc. are giving Indian PSU’s a tough time.

Foreign companies are busy in making brand image for their product to capture the Indian Lubes

Market. To attract the customers and to strengthen the market demand, several companies have made

plan to enter in Lubes Market with the collaboration of top most players who have good reputation

and experience in world Lubes market. In this way we can say that in the coming years there will be

tremendous change in Indian Lubes market.

Under these new conditions it becomes very necessary to know consumption pattern of various

Authorized Service Stations and Garages and to know the various market strategies adopted by the

competitors, as this will help the company in formulation of future strategies.

The first reason for choosing this industry was out of sheer curiosity to understand the all ready

existing Lubes market in the region of Hyderabad and how the rest management moves from this

point and a more fruitful tomorrow.

Secondly, working with this project we had been given the chance not only to give the suggestions to

improve the market shares of HP MILCY SUPER but also to become a part of promotional

activities, which was a great opportunity to get the exposure and to understand the market strategies

of different companies.

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Industry profile

These are exciting times for the lube industry in India. Each one of the vast contingent of 22

Multinationals and a total of 80 big & small players are vying for a pie of Rs.5, 500 Crore market.

Worldwide established brands, some of them albeit new to India, like Shell, Mobil, Elf, Pennzoil are

fighting it out with established Indian brands like SERVO & others to establish their foothold in the

6th largest lubricant market in the World. Compared to the average World consumption of 35

Million tones per annum & Asia-Pacific region consumption of 7.5 million tones, the Indian lube

industry with annual demand of 1 million tones is just behind Japan and China in Asia having a

demand growth rate of 4% compared to the World growth rate ranging between zero to 2%. That is

the lube industry in India today.

Prior to 1992 the lube industry in India was controlled by the 4 major Public Sector Oil companies

namely Indian Oil, HPC,BPC & IBP and a handful of private companies like Castrol, Gulf,

Tidewater & others. With the distribution & canalization of base oil import being controlled by the

Government of India, the PSU Oil Companies controlled 90% of the market share.

The Government policy of deregulation followed by entry of multinationals through JVCs had its

effect on the market dominance of PSU’s. This has been followed by sudden entry of lot many

players, each one claiming to have some international collaboration and a `foreign' brand name. This

had its initial impact and illusions in the market and the market became more volatile. During these

phases marketing channels of distribution had drifted from petrol stations to bazaar trade.

The Marketing Channels

The marketing channels for automotive lubricants in India consist of the following,

Petrol Stations

Wholesale Distributors

Lube Oil Shops

Auto Spare Shops

Authorized Service Stations

Garages

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Lubricant Industry Segmentation

The lubricant industry can be divided into two major categories i.e., Automotive & Industrial brand

of lubricants. The industrial segment basically comprises of Core Sector industries like Defense,

Railways, State Transport Undertakings, Steel Plants, Coal Mines, Fertilizers, Power Houses, and

Chemicals & Heavy Engineering Industries. In the industrial segment, the PSU’s could successfully

maintain their stronghold due to the reasons that the requirement is most end use specific, customer

focused, productivity linked & service oriented. Here, price, quality, performance track record, R&D

infrastructure for technology up gradation and product development for end use specific application

& after sales service play the most significant role & FMCG techniques of promotion and creating

illusions takes a back seat. Indian Oil virtually dominated and continues to dominate this sector

through their proven track record of quality product and vast network of professionalized pre sales &

after sales services. But the automotive segment which accounts for major share i.e., 67% of the

lubricant market became soft target for new entrants and here private sector players could

immediately consolidate their market share by adopting FMCG techniques. PSU oil companies in

general and IOC in particular initially restricted their channel of distribution through their large

infrastructure of marketing network i.e., petrol stations & distributor network. The focus happened to

be on ensuring quality & customer accountability and restrict mushrooming of spurious trade in

bazaar through the marketing channels where some kind of control could be exercised by the

company.

WHAT ARE LUBRICANTS

Lubricating oils are basically made of two components viz., Lube base oil which comes out from

refineries after refining the crude oil and has some inherent lubricating properties like any other

liquid. Greases are mixture of a thickening agent like soap with oil. The soap may be metallic soaps

like lithium, calcium etc. Greases are used where lubrication by oil is not possible. For example

wheel bearings, chassis of vehicles.

IOC is also in the process of establishing certain strategically located modern petrol stations on the

highways where apart from all way side amenities like motel, dhaba, restaurant, amusement parks,

toilets, car parking slots, wash rooms, communication facilities (STD/ISD,E-mail) etc. also service

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& repair shops of major OEMs of the country will be put up to facilitate quality services at right

price.

The coming years will ensure availability of more effective & customer friendly channel of

distribution and will have its impact in the long run on the short terms strategy presently being

practiced in the automotive lubricant market. The strength of a marketing company more so in the

field of specialized lubricants definitely lies in their access to superior technology base. This is more

so because the automotive sector is undergoing a major technology up gradation programmed with

entry of reputed international automobile manufacturers in the market. Moreover, stringent emission

norms & eco-friendly devices are taking over old practices which will necessitate improvement in

performance of lubricating oils. Such challenges can not be encountered with only technological

collaborations but also input resourcing. Consistency of inputs and sound infrastructural base will

play a significant role to combat competition. The thrust in the coming years will be more on

adopting to Indian market & Indian road conditions and thereby it will be essential to develop

indigenous lubricants technology keeping pace with international standards.

Market Size

Total production of automotive lubricants in India is approximately 8 to 10 percent of global lube

production. Unlike other countries where lubricant demand has witnessed stagnation, the Indian

market has been growing at approximately 7 percent per annum for the past 2 years. The public

sector contributes to over 60 percent of the revenues for this market. MNC’s have 5 percent market

share and the remaining share is held by the unorganized sector. Automotive lubricants are further

divided into diesel lubes and petrol lubes. Diesel lubes comprise 70 percent of the market and petrol

based lubricants cover the rest. As diesel lubes are used by commercial vehicles, which have to

cover greater distances, their market share is higher.

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Competitive Analysis

The first seeds of competition were sown in the early 1990’s when following the liberalization of the

Indian economy, the government decided to open the Indian market to foreign competition. Import

of base oil, the key raw material, was de-canalized with IOC losing its status as the sole canalizing

agent .All quantitative restrictions were also removed. These developments naturally encouraged the

entry of foreign players on Indian shores who were already facing a slowdown in demand in their

local markets. The coming in of foreign participants created an excess supply situation in the Indian

automotive lubes market, which made it more difficult for the Indian lube manufacturers to survive.

Recent deregulations in the lubricant market have promised many new opportunities for the private

lube manufacturers. With the dismantling of Administered Price Mechanism (APM) the burden of

subsidies is now being passed on to the government. Private participants will also gain a presence in

the Indian oil and gas sector and hence there will be competition between participants that will

ensure the growth of the sector. In the next couple of years, the industry is going to witness sea

changes. Retail networks, logistics management, and risk management are going to be the crucial

factors. The stand-alone refineries will have to be merged with the marketing companies, as they do

not have the distribution infrastructure to sell their products in a deregulated market. Companies like

Reliance are already selling their products through petrol pumps. The monopoly of the public sector

holdings will no longer exist. MNC’s will be able to sell their products through petrol pumps. Lubes

manufactured by Castrol, Gulf Oil etc, which are now sold at petrol pumps.

Outlook

In the future, growth in the automotive lubricants industry will largely depend on the overall

performance of the economy. In the past one and a half years, the scenario has improved with higher

sales of commercial vehicles and two-wheelers. However, in the future volume growth will be

affected because of use of better quality, long drain lubes. This will increase the replacement cycle

for lubes. In the shorter term, one will witness intense competition in a slow growing market marked

by a consolidation activity, which has the potential to change the face of the lubricant industry.

Given the rising competition, success of a product would largely depend how well it is branded and

distributed.

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Company Profile

Board of Directors:-

Mr.Arun Balakrishnan

Chairman & Managing Director

Mr.S.Roy Choudhury

Director-Marketing

Mr.V. Vizia Saradhi

Director- Human Resources

Mr.B.Mukherjee

Director- Finance

HPCL is a Fortune 500 company, with an annual turnover of over Rs 1,03,837 Crores ($

25,142 Millions) during FY 2007-08, 16% Refining & Marketing share in India and a strong market

infrastructure. Corresponding figures for FY 2006-07 are: Rs 91,448 crores ($20,892 Million).

Hindustan Petroleum Corporation Limited (HPCL) is the result of a successful

convergence of four established companies. Today the second largest integrated oil refining and

marketing company in India, HPCL was born of the merger of ESSO, Lube India Ltd.

The Corporation operates 2 major refineries producing a wide variety of petroleum fuels &

specialties, one in Mumbai (West Coast) of 5.5 MMTPA capacities 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 Mangalore

with a capacity of 9 MMTPA.

HPCL also owns and operates the largest Lube Refinery in the country producing Lube Base Oils.

The vast marketing network of the Corporation consists of Zonal offices in major cities and over 91

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Regional offices facilitated by a Supply & Distribution infrastructure comprising Terminals,

Aviation Service Stations, LPG Bottling Plants, and Inland Relay Depots & Retail Outlets. The

Corporation over the years has moved from strength to strength on all fronts. The refining capacity

steadily increased from 5.5 million tones in 1984/85 to 13.70 million metric tones (MMT) presently.

On the financial front, the turnover grew from Rs. 2687 crores in 1984-85 to an impressive Rs 1,

03,837 Crores in FY 2007-08. HPCL is a Mega Public Sector Undertaking (PSU) with Navaratna

status. HPCL has achieved its market leadership through efficiency in production and management.

HPCL accounts for about 16% of the market share and 10.3% of the nation's refining capacity with

two coastal refineries, one at Mumbai (West Coast) having a capacity of 5.5 MMTPA and the other

in Vishakapatnam (East Coast) with a capacity of 7.5 MMTPA. HPCL also holds an equity stake of

16.95% in Mangalore Refinery & Petrochemicals Limited (MRPL), a state-of-the-art refinery.

HPCL owns the country's largest Lube Refinery with a capacity of 335,000 metric Tones which

amounts to 40% of the national capacity of Lube Oil production.

HPCL has returned "Excellent" performance for fifteen Consecutive years upto 2005-06, since

signing of the first MOU with the Ministry of Petroleum & Natural Gas. HPCL won the prestigious

MOU Award for the year 2006-07 for Excellent Overall Performance, and for being one of the Top

Ten Public Sector Enterprises who fall under the 'Excellent' category. HPCL performance for the

year 2007-08 also qualifies for "Excellent" rating.

Consistent excellent performance has been made possible by highly motivated workforce of over10,

800 employees working all over India at its various refining and marketing locations.

HPCL continually invests in innovative technologies to enhance the effectiveness of employees and

bring qualitative changes in service. Business Process Re-Engineering exercise, creation of Strategic

Business Units, ERP implementation, Organizational Transformation, Balanced Score Card,

Competency Mapping, benchmarking of refineries and terminals for product specifications.

HPCL has successfully integrated Information Technology in its activities at different levels. The

Enterprise Resource Planning (ERP) system is now operational on J.D.Edwards, an Oracle product,

across the Company.

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Corporate Governance in HPCL

Implementation

HPCL has taken necessary steps to comply with the requirement and spirit of Corporate

Governance .HPCL lays special emphasis on conducting its affairs within the framework policies,

internal and external regulations and in a transparent manner.ÿ Being a Government Company, its

activities are subject to review by several external agencies like the Comptroller & Auditor General

of India (CAG), the Central Vigilance Commission (CVC), Parliamentary Committees, Statutory

Auditors etc.

Advisory Council :

In the context of a highly competitive and dynamic environment of the Oil and Gas Sector, the

Corporation felt that an external Committee comprising of eminent people could be constituted to

seek their views and guidance, not only on the various ongoing activities, but also on its strategic

initiatives aimed towards growth and development. With this background, the Committee called as

Advisory Council was constituted in July, 2005 with the approval of the Board.

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The Committee comprises of the following members:

Shri V.K. Shunglu

Ex-CAG

Shri N.R. Narayana Murthy

Chairman and Cheif Mentor

Infosys Technologies Limited

Ms. Shailaja Chandra

Chairperson

Public Grievance Commission

Shri Manab Bose

Managing Director

Connectivity Consulting (P) Ltd

Shri Naresh Narad

Member

Public Enterprise Selection Board

Ms. Rama Bijapurkar

Marketing Consultant

Strategic Marketing Consulting

This Council has met twice so far on October, 01, 2005 and February 20, 2006. Aspects related to

performance of the Corporation, HPCL’s Endeavour for global standards for various operations,

initiatives under the areas of Corporate Governance, Corporate Social Responsibilities etc. were

placed before this council. The suggestions/ observations made by the Council is being progressed

further by the Corporation. The advice from this highly eminent group would immensely benefit the

Corporation in the time to come

Departmental details:-

HPCL is at par with that of the best global corporations in the hydrocarbons sector. For over a

quarter century now, HPCL has been consistently breaking new grounds

in production and marketing. A glimpse of the vast network already

developed is given below in a table.

14

2007-

08

2006-

07

2005-

06

2004-

05

Regional Offices 91 86 85 85

Terminals/Installations/

TOPs42 37 36 36

Depots 93 93 92 100

LPG Bottling Plants 43 42 41 40

ASFs 16 13 13 10

Retail Outlets 8329 7909 7313 6667

SKO/LDO Dealers 1648 1648 1648 1648

LPG Distributors 2232 2238 2202 2153

LPG Customers (in crores) 2.52 2.39 2.28 2.17

From the table it can be easily noticed how the marketing network has been strengthened over the

years. The dominance that is reflected in numbers is equally translated through the best quality of

service.

HPCL presently owns and operates two coastal refineries at Mumbai and Visakhapatnam along with

a joint venture refinery at Mangalore. A massive infrastructure comprising two cross country

pipelines and an extensive network of terminals, depots, bottling plants and aviation servicing

facilities contributes to India's growth every year.

Major Ongoing Projects  

New FCCU at Mumbai Refinery:

Lube Oil Base Stock (LOBS) Up gradation project at Mumbai Refinery:

Diesel Hydro Treating (DHT) at Mumbai & Visakhapatnam refineries:

New Integrated Effluent Treatment Plant at Mumbai Refinery:

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Mission:-

"HPCL, along with its joint ventures, will be a fully integrated company in the hydrocarbons sector

of exploration and production, refining and marketing; focusing on enhancement of productivity,

quality and profitability; caring for customers and employees; caring for environment protection.

It will also attain scale dimensions by diversifying into other energy related fields and by taking up

transnational operations."

Vision:-

To be a World Class Energy Company known for caring and delighting the customers with high

quality products and innovative services across domestic and international markets with aggressive

growth and delivering superior financial performance. The Company will be a model of excellence

in meeting social commitment, environment, health and safety norms and in employee welfare and

relations.

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4 P’s of Marketing for diesel engine lubricants:-

The 4 P’s of marketing that are considered to analyze any market when applied to the diesel engine

oil market. The observations are :-

Product: The product quality is likely same with some differences in the grades that are marketed

by some of the companies like Castrol, IOCL. The companies are differentiating their products as

per the grade of the oil for example; HP Milcy super is superior to HP Milcy turbo. Castrol market

their brand CRB in the market to get the additional mileage over the other brands.

Price: The products in the market being more or less of the same quality; the price is an important

factor that drives the sales of the product in bazaar. However, when one considers the demographics

of the area and the customer’s profile it has been observed that location s where the customers are

very brand conscious the price of the product looses the significance. The customers attribute quality

to price and hence assume that a higher priced product is of higher quality. Brand image is directly

related to the price of the product in a highly brand conscious market.

Place: The product needs to be placed or sold from a large number of places for the product to gain

acceptance and popularity. The trick would be to place and sell the product from the maximum

possible number of retailers. The network development incentive on offer for HP Milcy super is

helping the product gain better position in the market. For the product to gain acceptance more

number of activities need to be organized so that the consumers at large notice the brand . Jo dikhta

hai wo bikta hai is the main mantra in the bazaar trade.

Promotion: The brand image of the product should be built in the mind of the customer. Consistent

availability, visibility and activity on the brand should be maintained in the bazaar to improvise the

image. The product promotions that have been undertaken are display a contest in the bazaar with a

part of scheme to the retailer is given to display the product on shelves. This insures that the product

gains good visibility in the market. Getting some boards of the product Milcy super should fixed at

prominent places in the market.

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Marketing Strategy:

The objectives of any and all marketing are not only to increase sales but also certain other

parameters.

There is some of the marketing strategy:-

Increase market share: The most necessary and easier ways of increasing the sales of the

product are to increase the market share in current and existing markets. This can be achieved

by increasing constant promotional activities to both the retailers and also to the mechanics.

By increasing the market share in important and highly influential markets the advantages are

that the other markets usually have a tendency to imitate the important markets.

Increase customer acquisition: New customers ensure that the reach and also the popularity

of the product are on the rise. The targets for the number of new customers added should be.

Sufficient care should be taken to new customer to insure that the new customers are

supported well so as to increase the retention as the cost of acquiring new customers is

considerably high.

Develop new customers: The importance of developing new customers will be helpfull for

both the customer and also the sales for the company grow together. Moreover, it ensures

that more customers are interested in getting associated with the company for the support that

will enable the customer to grow and also that will be healpfull to grow the company.

Develop new markets: For any company to increase the market size will be beneficial. The

advantage of developing new markets is the first mover advantage of setting up and

captivating the customers over a longer period of time so as to increase the entry barriers for

competitors.

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HP – PRODUCT INFORMATION

Though HP as a brand consist of varieties of products. But in the survey following

products were considered.

Two Stroke Engine Oil

1. Racer 2.

Four Stroke Engine Oil

1. Racer 4.

Four Wheelers & Other Heavy Vehicle

1. MILCY TURBO

2. LAL GHODA

3. MILCY TOOFAN [Newly Launched]

4. MILCY SUPER

5. MILCY POWER

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Chapter-2

Objectives of the study

Scope of the study

Significance of the Study

Literature Review

Scheme of Dissertation

Objectives of the study:-

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To Study about the perception of the customer for HP MILCY SUPER.

To Study about the dealer perception regarding automotive lubricant HP MILCY SUPER.

To Study about mechanic perception regarding HP MILCY SUPER.

To get an idea about the types of outlets and their selling capacity of HP MILCY SUPER oil.

To know about various marketing strategies, schemes, promotional campaigns etc of the

competitors.

To know about the expectations of retailers especially from the company in the form of

different schemes etc.

To have proper understanding about HP Diesel engine lubricants.

Scope of the study:-

Study is restricted to different areas of Hyderabad and Secunderabad city.

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It is related to HPCL and its competitor’s servo, Indian oil, BP, ELF,

Castrol, and Exon Mobil.

The study is confined to retailers, mechanics and customers only. Finally

to know these people perception regarding the product.

The survey was conducted on 150 samples.

Significance of the study: -

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Through this study Researcher came to know about HPCL and its growth compared to its

competitors.

This study will also help to me to know about company and their new concepts position in the

market.

Through this study Researcher know about the availability of its products in the market.

This study directly deals with interaction of different kinds of people in the organization and in

market which helps me to understand the marketing communication system.

Literature Review

23

In 9 Feb 2006 a research paper published from the research and advisory firm, India Analysis.

This research study provided a comprehensive overview of the Indian lubricants' industry.

Study about market position is the key issue in this study. .Its competitors Castrol, IOCL, BP, e.t.c.

are trying to gain market share in the Lubricant market. . Just how this is done in such a competitive

market is the underlying issue. The major facts are that each company is coming up with new

products and ideas in order to increase their market share. The creativity and effectiveness of each

company's marketing strategy will ultimately determine the winner with respect to sales, profits, and

customer loyalty. In this they are also thinking of ways in which to increase market share in the

lubricant market. Although the goal of these companies is exactly the same, these companies rely on

somewhat different marketing strategies. Companies must be willing to accommodate their “target

markets”.

In 13 Apr, 2003 according to an article, HPCL is going to equip its Mumbai and Visakhapatnam

refineries with HPCL is currently reviewing the scope and cost of its nine million tonnes per

annum (mtpa) Guru Gobind Singh Refinery Limited (GGSRL) project, which was originally

projected to cost Rs 120 billion and which, due to its size, would be critical for its future financial

profile. The decision is also crucially linked to the Government of India’s (GoI) divestment of

management control along with part of its stake in the company to strategic partner.Diesel Hydro

Treating (DHT) facilities.

Towards development of a distinct Brand image, HPCL has launched ‘Club HP’ which

symbolizes customer and convenience to its customers when they drive in for their fuel needs in

outlets. Automation for monitoring the Retail Outlet activities, introduction of Market System and

special locking devices to curb mal-practices are other steps that have been taken towards providing

quality products.

24

Scheme of Dissertation:- This study has been carried out “STUDY OF MARKETING

COMMUNICATION OF HPCL DIESEL ENGINE LUBRICANTS IN

HYDERABAD/SECUNDERAD CITY. The lay out of dissertation is as follows;-

Introduction:- Introduction gives a brief idea about beverage industry, scope of study,

significance of study, objectives of study, MARKETING COMMUNICATION OF HPCL

DIESEL ENGINE LUBRICANT and literature review part.

Organization Profile:- This part comprises of industry profile and company profile. This

part gives a brief idea about current trends in industry and company.

Research methodology: This part give an idea about research design, sample size/design and

method of data collection.

Analysis and Interpretations: This part tells about data analysis, method carried out for data

analysis and interpretations from the analysis part.

Discussions and Recommendations: This part gives an idea about some inputs to explore

some other parts of research for further studies and tells about which part is necessary for more

focused research.

Bibliography and Annexure:- This part comprises of references taken for this study and

questionnaire which was framed for this study.

25

Chapter-3

Research Methodology

Research Design

Sample Profile

Tools and Methods Data Collection

Data Processing and Analysis

Limitations

26

Research Methodology:-

This research involved a study, which was descriptive as well as explorative in nature. It basically

aims at gathering data about how the HPCL Ltd is communicating their brand in the mind of

retailers, mechanic & customers.

Sample Profile: - Sampling plan consists of:

a) Sampling Unit: - The retailer of lubricant shop, garage mechanic,customers will be

selected from different places of Secunderabad/Hyderabad.

b) Sampling Procedure: - Simple Random sampling procedure was followed.

c) Sampling Method: - Data will be collected by retailer survey. The retailers are

directly contacted and interviewed at their retail counter.

d) Sample Size: Sample size of the project was 150. 50 for retailers, 50 for customer,

50 for garage mechanic.

Research Design:-

The primary data was collected through the surveys. For the survey the personal interview retailers

and mechanics and customers were targeted in various regions of Hyderabad/Secunderabad. Survey

was undertaken to find out the information that was needed for the study.

The research instruments used for collecting the primary data were the questionnaires prepared.

27

Tools and Methods Data Collection:-

There are mainly two types of data:

1- Primary Data

2- Secondary Data

1. Primary Data Collection: - Primary data collected by Surveys:

Survey method of data collection is preferred which is very suitable to reach the researchers motto.

Research instrument:- Printed questionnaire had used as a research instrument to collect the

required information from respondent.

Area of Survey: - The survey was conducted in different location of Hyderabad/Secunderabad

city.

2. Secondary data collection:- secondary data was not available with retailers and garage

mechanics ,so these are collected from company records, books ,websites , e.t.c.

LIMITATIONS OF THE SURVEY

There was a sincere attempt to conduct the survey in the most efficient and scientific possible

manner. But the survey does have some limitations. The limitations of this survey were as follows.

1. It Biased opinion of retailers, customers and mechanics.

2. I found some difficulty in getting full attention of customers.

3. Limited available time appox two month for IIP available for conducting the survey.

28

Chapter-4

Data Analysis

1. Market Penetration of Lubricants in the market.

29

Market penetration

Castrol CRB Plus36%

Servo super28%

HP Milcy super24%

BP Mak8%

others4%

Castrol CRB Plus Servo super HP Milcy super BP Mak others

In this researcher got that Castrol CRB Plus, Servo super having highest penetration in the

market .Penetration of HP Milcy is slightly less than servo and better than other brand.

30

2. Highest selling product in retail shops

percentage selling in retail shop

castrol crb plus 66%

hp milcy super14%

servo super20%

castrol crb plus

hp milcy super

servo super

1- Castrol crb (66%) 2- Servo (20%) 3- Hp Milcy super (14%)

From the above data we conclude that Castrol crb plus is the highest selling product in the market

out of 100% Castrol CRB 66% got no1 in sells then Servo super 20% got no2 and HP Milcy super

14% no3 in highest selling according to retailers.

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3. Reason for being the highest selling product

Reason for highest selling

availability24%

branding28%

promotion16%

quality20%

packeging12%

availability

branding

promotion

quality

packeging

From the above data Researcher can conclude that availability and branding of the product are the

main factors for being an highest selling in the market.

4. Perception of retailers regarding the price of HP MILCY SUPER

32

percieved price by retailers

high4%

medium66%

low30%

high

medium

low

According to 66% respondent respond price of HP milcy super is medium instead of that 30% said it

is low and only 4% believe that it is high price that is negligible in consideration.

5. Promotional schemes affect the sales on lubes?

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5.factors affect

yes70%

no30%

yes

no

According to this 70% respondent respond that schemes given by company for retailers ,mechanic

and customer is affect sales, only 30% are not agree .

34

6. Complain against quality of HP products.

quality complain

yes18%

no82%

yes

no

Here Researcher found that 82% of Respondent are saying that there is not any quality complain in

HPCL Products.

35

7. Percentage of customer taking suggestions from mechanics about oils.

percentage of customers taking suggestion

0-20%4%

21-40%8%

41-60%16%

61-80%20%

more than52%

0-20%

21-40%

41-60%

61-80%

more than

From the above data researcher can conclude that more than 52%customer are taking suggestion from mechanics.

8. Reason behind brand recommended by mechanics.

36

mechanic scheme10%

Longer drain period52%

customer demand30%

Any other reason8%

mechanic scheme Longer drain period customer demand Any other reason

Here we can found that 52% of them are recommending because of longer drain and 30% are for

customer demand and rest of them other factors are also influencing.

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9. Reason for using any brand by customer?

Here researcher found that most of them are using lubricant oil due to mechanic recommendation.

NOTE: Here researcher found that Low ended customers like lorry, truck drivers, autoriksaw drivers

those who are not careless are taking any suggestion.

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10.kind of scheme expected by customer

kind of scheme like by customer

Discount52%cash coupon

38%

no idea10%

Discount

cash coupon

no idea

Here we found that out of 50 respondents 52% respondents like discount on pack while 38% are

cash coupon and those who do not know about scheme or do not have their own vehicle are very

less.

39

Chapter-5

Findings

Market Position of HP milcy super is comparatively good with respect to its competitors in

this segment, it is not much lower than its strongest competitor like Castrol, IOCL and it is

better in position than others.

40

In this research researcher found that Distribution channel of HP lubricants in Koti ,

Moosapet and Ameerpet is poor that’s why company is lacking in these areas and some other

areas.

Schemes for retailers garage mechanic and end consumer plays an important role for

deciding sales so schemes like cash coupon , discount , free issue on pack coins and other gift

items should given to mechanics and end consumers.

Margin is an important factor which plays an important role to sales in retails shops and it

will be beneficial to attract more no of mechanics towards the product.

Mou or recommendation plays an important role to increase the market share like IOCL –

maruti genuine oil elf recommended by Ashoak Leyland.

In research researcher found that there is 82% respondent are not having any quality

complain against HP Milcy super in diesel engine segment.

Longer drain period of lubricant was main factor for which garage mechanics are

recommending any particular oil.

HPCL is not focus about in shop branding where as its strongest competitors IOCL , Castrol

and others are doing this activity.

Castrol visibility was seen maximum in market. One reason behind this is that Castrol gives

money and gift to the retailers for the display of their product especially during the launch of

a new product.

Packaging of HP in diesel engine segment is not good in comparison to its competitors.

41

Chapter-6

Conclusion and Suggestion Bibliography Annexure Questionnaire

CONCLUSION

Working on this project was an enriching experience for us. Not only did Researcher get to know the

working of the lubricants industry researcher also got to know the major players in the industry,

different market strategies and the various distribution channels adopted. In this project researcher

42

had been given the chance to implement the suggestions, which had been suggested by researcher

and also had opportunities to see what was the result or impact of the promotional activities. In this

highly competitive industry it is very difficult to maintain leading position. Researcher found out

that there was scope for improvement. Though HPCL was the leading brand the distribution channel

left a lot to be desired. Also being the leading brand advertising was few and for between researchers

found out that there was a constant hammering needed for the ultimate customers to recognize the

brand.

It is imperative that HINDUSTAN PETROLEUM CORPORATION LTD. fill this little chinks in its

armor so that it can maintain its leadership in the coming years when the competition is set to hot up

with many new private players set to enter the market.

Recommendations and Suggestion:-

43

HP should give focus to aware its product HP Milcy super to the mechanics because 78%

customer is taking mechanics suggestion or recommendation.

HP should give schemes for mechanics and end consumer. This factor plays an important

role in maintaining the mechanics and end consumer to opt for a particular brand.

HP should take some steps for in shop branding and out shop branding so that it can also

compete with its competitors.

HP should also focus about distribution of its product in this segment because in some of the

areas researcher found that many new players are dominating like (vedool, Exon Mobil,

Volvo line).

HP official try to take appropriate step to short out the problems of Dealers, Shopkeepers and

Mechanics. For this purpose officers should keep in touch with them.

HP try to focus about their brand awareness’ to its end consumer because some of them are

not aware about brand name of lubricants oil, reason is they are not much educated like:-

Truck drivers , Lorry’s driver , Autoriksaw driver .

HP should give focus on packaging on HP Milcy super because the packaging is not good in

comparison of its competitors.

HP should give focus to aware its product HP Milcy super to the mechanics because more

than 80% customer is taking mechanics suggestion or recommendation.

In this research researcher found that there is 82% respondent are not having any quality

complain against HP Milcy super in diesel engine segment.

44

Major areas surveyed:-

Medchal

Bwonpally

Moosapet

Ameerpet

Koti

Santoshnagar

Uppal

Mahaboobganj

Barkatpura

Miyapur

Chandannagar

Bibliography:-

45

www.HPCL.comwww.wikkipedia.comwww. Google.com

Text Book:-

Business Statistics G.C. BeriMarketing Management Kotler and Keller

Marketing Management V. S. Ramaswamy & S. N. Kumar

RESEARCH PAPER:-News Paper & MagazineThe Hindu and Business WorldThe Financial express

Annexure:-

46

QUESTIONNAIRE (FOR RETAILERS)

Name of Retailer :

Address of Shop :

Year of Establishment : _________

1) Which of the following company’s product do you stock in 20w-40?

Castrol CRB PLUS [ ] HP MILCY SUPER [ ]

BP MAK [ ] OTHERS [ ]

SERVO SUPER [ ]

2) Which is the highest selling product of the above?

3) Reasons for being the highest selling product? (Tick whichever applicable)

Sl No Attribute Rank

A Availability

B Branding

C Promotion

D Quality

E Packaging

3) Rate the following companies in terms of attributes given below :-

(On a scale of 5, 1 being the lowest and 5 being the highest)

HP

MILCY

SERVO

SUPER

CASTROL

CRB PLUS

BP MAK OTHERS

Quality

Margin

Availability

Promotion

Additional services

5) Rate the following companies according to your preferences: - Rate (1-5).

47

Sl No Company Rank

A HPCL

B Indian Oil

C BP

D Castrol

E Others

6) How do you perceive the price of HP Milcy Super as compared to its competitors?

a) High b) Medium c) Low

7) Do you feel that buying behavior of customers is affected by promotional schemes on Lubes

a) Yes [ ] b) No [ ]

If yes, what kinds of schemes do you feel most appropriate for

Customers?

___________________________________________________

8) Did the customer ever complain against quality of HP products?

Yes [ ]No [ ]

If Yes, Give the details about the complaints

1.

2.

3.

4.

48

QUESTIONNAIRE(for Garage)

Garage Name and Address :

Year of Establishment : _________

Mechanic Name :

1) Which of the following brand do you refer to customer in 20w 40 series

a. CASTROL CRB PLUS [ ]

b. HP MILCY SUPER [ ]

c. SERVO SUPER [ ]

d. BP [ ]

e. OTHERS [ ]

2) Why do you refer above brands :-

a. quality [ ]

b. performance [ ]

c. price [ ]

d. brand [ ]

3) Which brands are the mechanics presently promoting?

a.

b.

c.

4) Why do you promote that particular brand

a. Mechanic scheme [ ]

b. Longer drain period [ ]

c. Customer demand [ ]

d. Any other reason [ ]

5) Percentage of customer taking suggestions from mechanics about oils

a. 0 – 20% [ ]

b. 21-40% [ ]

c. 41-60% [ ]

d. 61-80% [ ]

e. More [ ]

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6) Which of the following brands’ advertisements the mechanic has ever seen?

a. CRB PLUS [ ]

b. MILCY super [ ]

c. Servo Super [ ]

d. BP [ ]

e. OTHERS [ ]

7) How do you perceive the price of HP MILCY SUPER compared to its competitors?

a) High ( ) b) Medium ( ) c) Low ( )

8) Rate the following companies according to your preferences: - Rate (1-5)

Sl No Company Rank

A HPCL

B Indian Oil

C BP

D Castrol

E Others

QUESTIONNAIRE (FOR CUSTOMERS)

Name of customer :

Contact no : ______________________________

Vehicle: _______________ Year :__________________

Model _________________ Engine (CC) _______________

Make: _________________ Horse Power: ______________

1) Which of the following company’s product do you use in 20w-40?

Castrol CRB PLUS [ ] HP MILCY SUPER [ ]

BP MAK [ ] OTHERS [ ]

SERVO SUPER [ ]

2) why do you use above brand?

a) quality b) performance c) brand d) price e) mechanic recommendation

3) How do you perceive the price of hp milcy super as compared to its competitors?

50

a) High b) Medium c) Low

4) What kinds of schemes would you like?

________________________________________________________

5) Rate the following companies according to your preferences: - Rate (1-5)

Sl No Company Rank

A HPCL

B Indian Oil

C BP

D Castrol

E Others

51