A

PROJECT REPORT

ON

CONSUMER BEHAVIOUR TOWARDS DIFFERENT FUEL

BRANDS: A COMPARATIVE STUDY OF HPCL, IOCL AND
BPCL

MANISH.A.PATIL

(ROLL NO: 096-08-01836)

B.COM (Honors)

INDIAN INISTITUTE OF MANAGEMENT & COMMERCE (IIMC)

(Affiliated to Osmania University)

6-1-91, Adj.Telephone Bhavan,

Khairatabad, Hyderabad-04
 A

PROJECT REPORT

ON

CONSUMER BEHAVIOUR TOWARDS DIFFERENT FUEL

BRANDS: A COMPARATIVE STUDY OF HPCL, IOCL AND
BPCL

Submitted To
OSMANIA UNIVERSITY
In
Partial fulfillment of B.Com (Honors) Degree Course
(2007-2010)
BY

MANISH.A.PATIL

(ROLL NO: 096-08-01836)

B.COM (Honors)

INDIAN INISTITUTE OF MANAGEMENT & COMMERCE (IIMC)

(Affiliated to Osmania University)

6-1-91, Adj.Telephone Bhavan,

Khairatabad, Hyderabad-04
 DECLARATION

I, Manish.A.Patil, student of Indian Institute of management and Commerce (IIMC),

Khairatabad, affiliated to OSMANIA UNIVERSITY pursuing B.Com (Honors), hereby
declare that the project titled

“CONSUMER BEHAVIOUR TOWARDS DIFFERENT FUEL BRANDS: A

COMPARATIVE STUDY OF HPCL, IOCL AND BPCL”

is an original work carried out by me under the invaluable guidance of my supervisor

Mr. A.V. Ayyapu Reddy.

(Manish.A.Patil)
 CERTIFICATE

This is to certify that the project report on “CONSUMER BEHAVIOUR TOWARDS

DIFFERENT FUEL BRANDS: A COMPARATIVE STUDY OF HPCL , IOCL AND

BPCL” is a bonafied work carried out by Manish.A.Patil (096-08-01836) for the

partial fulfillment for the award of Bachelor’s Degree in Commerce

(Honors) affiliated to Osmania University, Hyderabad under our guidance &

supervision.

The results embodied in the project work have not been submitted to any other

institute for the award any degree.

DATE: PROJECT GUIDE

MR.A.V.AYYAPU REDDY
 ACKNOWLEDGEMENT

Without a proper combination of inspection and perspiration, it’s not easy to achieve

anything. There is always a sense of gratitude, which we express to others for the help

and the needy services they render during the different phases of our lives. We too

would like to do it as we really wish to express our gratitude toward all those who have

been helpful to us directly or indirectly during the development of this project.

I extend my profound thanks to Mr.V.V.Ayyapu Reddy- HOD

Who gave full attention and guidance at each & every step which helped me towards

completing this project. I am also grateful to our college principal Mr. K. Raghu Veer.

No words can adequately express my overriding debt of gratitude to my parents

whose support helps me in all the way. Above all I shall thank my friends who

constantly encouraged and blessed me so as to enable me to do this work

successfully

MANISH.A.PATIL
 CONTENTS

Chapter 1 Introduction Pg 1 - 10

Chapter 2 Objectives and methodology Pg 11-14

Chapter 3 Profiles of the three major fuel companies Pg 15-30

Chapter 4 Analysis according to questionnaire Pg 31-54

Chapter 5 Conclusion and Suggestions Pg 55-57

Bibliography

Annexure: 1

Questionnaire
 CHAPTER 1

INTRODUCTION
 INTRODUCTION

Consumer behavior is the study of how people buy, what they buy, when they buy

and why they buy. It is a subcategory of marketing that blends elements from

psychology, sociology, sociopsychology, anthropology and economics. It attempts to

understand the buyer decision making process, both individually and in groups. It

studies characteristics of individual consumers such as demographics,

psychographics, and behavioral variables in an attempt to understand people's wants.

It also tries to assess influences on the consumer from groups such as family, friends,

reference groups, and society in general

The study of consumers helps firms and organizations improve their marketing

strategies by understanding issues such as how

• The psychology of how consumers think, feel, reason, and select between

different alternatives (e.g., brands, products);

• The psychology of how the consumer is influenced by his or her environment

(e.g., culture, family, signs, media);

• How consumer motivation and decision strategies differ between products that

differ in their level of importance or interest that they entail for the consumer.

1
 • Limitations in consumer knowledge or information processing abilities influence

decisions and marketing outcome;

• How marketers can adapt and improve their marketing campaigns and

marketing strategies to more effectively reach the consumer.

Understanding these issues helps us adapt our strategies by taking the consumer into

consideration. For example, by understanding that a number of different messages

compete for our potential customers’ attention, we learn that to be effective,

advertisements must usually be repeated extensively. We also learn that consumers

will sometimes be persuaded more by logical arguments, but at other times will be

persuaded more by emotional or symbolic appeals. By understanding the consumer,

we will be able to make a more informed decision as to which strategy to employ.

One "official" definition of consumer behavior is "The study of individuals, groups, or

organizations and the processes they use to select, secure, use, and dispose of

products, services, experiences, or ideas to satisfy needs and the impacts that these

processes have on the consumer and society." Although it is not necessary to

memorize this definition, it brings up some useful points:

2
 • Behavior occurs either for the individual, or in the context of a group (e.g.,

friends’ influence what kinds of clothes a person wears) or an organization

(people on the job make decisions as to which products the firm should use).

• Consumer behavior involves services and ideas as well as tangible products.

• The impact of consumer behavior on society is also of relevance. For example,

aggressive marketing of high fat foods, or aggressive marketing of easy credit,

may have serious repercussions for the national health and economy.

The behavioral intention is what the consumer plans to do with respect to the object

(e.g., buy or not buy the brand). As with affect, this is sometimes a logical

consequence of beliefs (or affect), but may sometimes reflect other circumstances--

e.g., although a consumer does not really like a restaurant, he or she will go there

because it is a hangout for his or her friends.

For many products, consumers frequently have numerous choices as to where they

are going to actually obtain the product. Although we are used to thinking of buying

automobiles only from dealerships, for example, it is today possible to buy them

through brokers or fleet sales organizations that may both (1) offer a lower price

and/or (2) provide the help of a neutral third party which does not have a vested

interest in the sales of one make over the other.

The Means-End chain. Consumers often buy products not because of their attributes

per se but rather because of the ultimate benefits that these attributes provide, in turn

3
leading to the satisfaction of ultimate values.

The important thing in a means-end chain is to start with an attribute, a concrete

characteristic of the product, and then logically progress to a series of consequences

(which tend to become progressively more abstract) that end with a value being

satisfied. Thus, each chain must start with an attribute and end with a value.

For many products, consumers frequently have numerous choices as to where they

are going to actually obtain the product. Although we are used to thinking of buying

automobiles only from dealerships, for example, it is today possible to buy them

through brokers or fleet sales organizations that may both (1) offer a lower price

and/or (2) provide the help of a neutral third party which does not have a vested

interest in the sales of one make over the other.

The consumers behave in the exactly same manner as explained above in their

consumption of petroleum too.

Gasoline or petrol is a petroleum-derived liquid mixture consisting mostly of aliphatic

hydrocarbons and enhanced with aromatic hydrocarbons toluene, benzene or iso-

octane to increase octane ratings, primarily used as fuel in internal combustion

engines. Most Commonwealth countries or former Commonwealth countries, with the

exception of Canada, use the term "petrol" (abbreviated from petroleum spirit). The

term "gasoline" is commonly used in North America where it is often shortened in

colloquial usage to "gas". This should be distinguished in usage from genuinely

4
gaseous fuels used in internal combustion engines such as liquefied petroleum gas

(which is stored pressurized as a liquid but is allowed to return naturally to a gaseous

state before combustion). The term mogas, short for motor gasoline, distinguishes

automobile fuel from aviation gasoline, or avgas. The word "gasoline" can also be

used in British English to refer to a different petroleum derivative historically used in

lamps; however, this use is now uncommon.

Diesel or diesel fuel is a specific fractional distillate of petroleum fuel oil or a washed

form of vegetable oil that is used as fuel in a diesel engine invented by German

engineer Rudolf Diesel in cooperation with the German conglomerate MAN AG. The

term typically refers to fuel that has been processed from petroleum, but increasingly,

alternatives such as biodiesel or biomass to liquid (BTL) or gas to liquid (GTL) diesel

that are not derived from petroleum are being developed and adopted. For clarity,

petroleum-derived diesel is increasingly called petrodiesel.

Although Rudolf Diesel's name has become attached to the compression combustion

engine and the fuel that it consumes, he was not first to invent the diesel engine. His

patent was filed in 1893. However, Herbert Akroyd Stuart built the first compression-

ignition oil engine in Bletchley, England, in 1891. He leased the rights to Richard

Hornsby & Sons in July 1892, five years before Diesel's prototype was built.

5
Lubricant (sometimes referred to "Lube") is a substance (often a liquid) introduced

between two moving surfaces to reduce the friction and wear between them. A

lubricant provides a protective film which allows for two touching surfaces to be

separated and "smoothed," thus lessening the friction between them. Lubricants

chemically interact with all surfaces so that contact only occurs with the smooth and

free lubricant. By this process, abrasive particles are dissolved into the lubricant, thus

making them also very good solvents and cleaners. Petroleum-based lubricants like

Vaseline tend to dissolve petroleum products such as rubber and plastic, while water-

based lubricants tend to dissolve polar chemicals (like water and dirt); hence the

additives. The lubricant must be replaced when it has dissolved to saturation, because

the inability to dissolve additional abrasive debris allows abrasive particles to scrape

against or become lodge in the working surfaces, thus introducing a margin for

physical contact between them. Lubricants which dissolve working surfaces (like the

petroleum products Vaseline with rubber) defeat their purpose by corroding the

smooth surfaces by their own dissolving power, thus compromising structural integrity,

surface smoothness, and system-wide contamination.

Petroleum as we all know is a necessity nowadays and we are rapidly exausting our

resources. Petroleum, in one form or another, has been used since ancient times, and

is now important across society, including in economy, politics and technology. The

rise in importance was mostly due to the invention of the internal combustion

6
engine and the rise in commercial aviation.

Today, about 90% of vehicular fuel needs are met by oil. Petroleum's worth as a

portable, dense energy source powering the vast majority of vehicles and as the base

of many industrial chemicals makes it one of the world's most important commodities.

The top three oil producing countries are Saudi Arabia, Russia, and the United States.

About 80% of the world's readily accessible reserves are located in the Middle East,

with 62.5% coming from the Arab 5: Saudi Arabia, UAE, Iraq, Qatar and Kuwait.

Moving on to our own country the three largest oil companies are Indian Oil

Corporation limited, Hindustan petroleum corporation limited and Bharat petroleum

corporation limited.

Gone are the days when simply making the best quality products and services were

enough. Now something is required in addition to this to hold a customer that a

company attracts through its expensive marketing efforts. One such thing is customer

loyalty cards and oil marketing companies have been quick to understand the need to

retain their customers. Companies like Hindustan Petroleum, Bharat Petroleum and

Indian Oil Corporation have launched their loyalty cards which have very attractive

features. Basically these cards are prepaid cards for making purchases at petrol

pumps. One can buy any thing from fuel, lubricants and grocery items. Further, these

cards provide services like insurance, vehicle tracking system, reports, etc.

7
The customer is benefited in various ways. He need not carry cash with him while

visiting petrol pumps.

Whatever he purchases can get him incentives like discounts, cash back, and gifts.

There are many things that go through a customers mind when he chooses a

particular company. So it is very imperative to understand the factors that play a

determinant role. Companies need to properly market their loyalty programs and they

should be appropriately targeted. There are many problems which customers face

while using the cards, some of which are psychological and others are operational.

Companies should try to do away with these problems in order to attract more

customers. In today’s competitive world, companies don’t leave even a single stone

unturned to make sure that they retain the customer, once they get him. That means

they try to make their customers loyal to their brands. Customer loyalty describes the

tendency of a customer to choose one business or product over another for a

particular need. In the packaged goods industry, customers may be described as

being "brand loyal" because they tend to choose a certain brand of soap more often

than others. It is due to intense competition that all the companies have more or less

same strategies for their loyalty programs and moreover, the features of the loyalty

cards issued by them are also similar with a little variation. An attempt has been made

here to understand those subtle differentiators that can help companies to make a

difference. Numerous customer loyalty programs have resulted from the efforts of

countless companies, institutions and non-profit organizations to retain customers.

8
Each of these programs has some characteristics that distinguish it from the others.

The title of the customer loyalty program is irrelevant. What matters is that it achieves

the goals of increasing customer loyalty by offering true value.

Branded petrol:

In 2002, Bharat Petroleum Corporation limited launched premium grade petrol under

name-SPEED. Soon the other two leading oil corporations launched their new

generation fuels.

While IOC’s branded petrol was called EXTRA-PREMIUM, HPCL called it POWER.

Within a short span of time the country had seen the emergence of an entirely new

market category. The new brands were extensively promoted through the print,

electronic and outdoor media. Since this new fuels were priced higher than the

conventional fuels the companies worked hard to communicate the benefits of using

their products and justify the higher prices.

However, analysts expressed their reservations as to whether the extremely price

conscious Indian customer would be willing to pay more even though these brands

were supposed to be technically superior.

9
What branded fuels do?

The term branded fuel essentially refers to fuel that has been modified by adding

certain multi functional performance additives. The additives in these branded fuels

play the role of detergent for the fuel feed system of a vehicle.

The additives in branded fuels effectively remove harmful deposits from all

components. They clean up fuel injectors, valves and combustion chambers along

with the fuel tank and fuel lines. The additives also constantly clean deposits and

prevent gum formation in the engine.

Branded fuels thus help restore the original engine performance, ensures easy

startups and increase in fuel efficiency leading to lower emissions. traditionally these

additives were added separately to the fuel. Branded fuels eliminate the need for

purchasing additives at the time of every filling.

10
 CHAPTER 2

OBJECTIVES AND RESEARCH METHODOLOGY

This chapter describes the various objectives for undertaking the comparative study

and the methodology for attaining data pertaining to the subject. This project is based

on information collected from primary sources. After the detailed study, an attempt has

been made to present comprehensive analysis of consumption of fuel consumed by

the people. The data had been used to cover various aspects like consumption,

consumer’s preference and customer’s satisfaction regarding fuel.

OBJECTIVES OF THE STUDY

• To explore the origin and usage of branded fuel in India.

• To find out the fuel consumption levels of the respondents.

• To determine the preference of respondents over a particular company against

others.

• To know the reasons for preferring regular fuel over branded fuel.

11
 RESEARCH METHODOLOGY

Survey design:

The study is a cross sectional study because the data were collected at a single point

of time. For the purpose of present study a related sample of population was selected

on the basis of convenience.

Sample Size and Design:

A sample of 100 people was taken on the basis of convenience. The actual

consumers were contacted on the basis of random sampling.

Research Period:

Research work is only carried for 4 or 5 weeks.

Design instrument:

This work was carried out through a self-administered questionnaire. The questions

included were open ended and offered multiple choices.

12
Data Collection:

The data, which is collected for the purpose of study, is divided into 2 bases:

 Primary Source: The primary data comprises information survey of

“Comparative study of consumer behavior towards different fuel providers”.

The data has been collected directly from respondent with the help of

structured questionnaires.

 Secondary Source: The secondary data was collected from journals,

news paper & References from Library.

LIMITATIONS:

• The survey was a limited sample survey (100).

• Limited period of survey.

• Survey was constrained to a small area.

• Survey contains only directly specific questions. Demographics of the

respondents were not taken into consideration.

13
 IMPLICATIONS

The present study is a small attempt to elicit the opinions about petrol and related

product Users over a limited sample with respect to only three companies. But this

study may pave the way for wider research and investigation covering other

uncovered dimensions of the customer behavior and satisfaction with the other

organizations that are in the fray.

14
 CHAPTER 3

PROFILE OF HPCL , IOCL AND BPCL

 HINDUSTAN PETROLEUM CORPORATION LIMITED

Hindustan Petroleum is India's second-largest oil refiner (Indian Oil is #1, Bharat

Petroleum is #3) and accounts for more than 20% of the country's total refining

requirements. The company has two major refineries -- one in Mumbai (formerly

Bombay), the other in the southern Indian city of Vishakapatnam -- and produces

lubricants, aviation fuel, liquefied petroleum gas, and light diesel oil. Hindustan

Petroleum also holds a 17% stake in a refinery at Mangalore and is establishing

another refinery in the state of Punjab. Other businesses include pipelines, a lube

refinery, and a national network of service stations. The Indian government owns 51%

of the company, which was established in 1974.

HPCL is a Fortune 500 company, with an annual turnover of Rs. 1,16,428 Crores

and sales/income from operations of Rs 1,31,802 Crores (US$ 25,618 Millions) during

FY 2008-09, having about 20% Marketing share in India and a strong market

infrastructure

15
HPCL's vast marketing network consists of 13 Zonal offices in major cities and 90

Regional Offices facilitated by a Supply & Distribution infrastructure comprising

Terminals, Aviation Service Stations, LPG Bottling Plants, and Inland Relay Depots &

Retail Outlets, Lube and LPG Distributorships. HPCL, over the years, has moved from

strength to strength on all fronts. The refining capacity steadily increased from 5.5

MMTPA in 1984/85 to 13 MMTPA presently. On the financial front, the turnover grew

from Rs. 2687 Crores in 1984-85 to an impressive Rs 1, 16,428 Crores in FY 2008-09.

CLUB HP:

The new retail brand, ‘Club HP’ seeks to redefined the way fuel are retailed in India.

Offering the promise of outstanding care for the costumer and the vehicle, Club HP

intends to create a large base of loyal consumers who will look for the distinct red and

blue logo whenever they need fuel for their vehicle. Club HP outlets offer one stop

convenience so that one can do many things in same window of time - pay his bills,

shop for groceries, visit the ATM, get a quick check done on their vehicle and even

arrange servicing and repairs if need arises HPCL has introduced e-purse cum loyalty

card - CLUB HP Smart1 for the benefit of prestigious customers at select Retail

Outlets in Metros and Major cities. This Card gets convenience in addition to rewards.

16
HPCL, a Fortune 500 company, is one of the major integrated refining and marketing

oil company in India. It is a mega Public Sector Undertaking (PSU) with Navratna

status.

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 at Mangalore with a

capacity of 9 MMTPA.

HPCL also owns and operates the country’s largest Lube Refinery, producing Lube

Base Oils of international standards. With a capacity of 335,000 Metric Tones. This

refinery accounts for over 40% of the country’s total Lube Base Oil production.

HPCL has returned “Excellent” performance for fifteen Consecutive year’s up to 2005-

06, since signing of the first MOU with the Ministry of Petroleum & Natural Gas. HPCL

won the prestigious MOU Award for Excellent Overall Performance and for being one

of the Top Ten Public Sector Enterprises who fall under the ‘Excellent’ category.

17
Club HP Smart:

1. Club HP Smart1 is e-purse cum loyalty card with an attractive rewards program.

‘Club HP Smart 1’ Card gives value up to 5% rewards on spends - for petrol/diesel

fills, lubricants, car servicing, for tires, batteries & accessories and for grocery

purchased at HP Speed mart.

2. CLUB HP Smart 1 is the only card in India, which offers free fuel, that too, on the

spot.

3. The Club HP Smart1 Card is e-purse cum loyalty smart card. The card stores

information about the amount in rupees that one has loaded in card. One earn points

every time one transact on this card. These points can be exchanged for free fuel on

the spot.

4. One can load the card for a minimum load amount of Rs.250 and above in multiples

of Rs.50, such as Rs.300, Rs.350, etc. The card can be loaded at select HP Retail

outlets. The card gets automatically debited according to spends.

5. Advantages of becoming a Club HP Smart 1 member:

• Convenience. No need to carry cash

• Get more from your regular day-to-day fuel expenses

Every time one makes purchases at select HP Retail outlets, one earns up to 5%

rewards in the form of Smart miles. Accumulate these Smart miles and redeem them

at any participating HP Retail outlet for petrol, diesel, premix fuel, lubricants, servicing,

tyres, batteries and accessories.

18
 INDIAN OIL CORPORATION LIMITED

Indian Oil Corporation Ltd. is currently India's largest company by sales with a

turnover of Rs. 305527 crore (US $51 billion), the highest-ever for an Indian company.

IndianOil is also the highest ranked Indian company in the prestigious Fortune 'Global

500' listing, having moved up to the 105th position this year. It is also the 20th largest

petroleum company in the world. IndianOil's vision is driven by a group of dynamic

leaders who have made it a name to reckon with.

Indian Oil Corporation Ltd. was formed in 1964 with the merger of Indian Refineries

Ltd. (Estd. 1958). IndianOil and its subsidiaries account for 47% petroleum products

market share, 40.4% refining capacity and 67% downstream sector pipelines capacity

in India.

IndianOil has one of the largest petroleum marketing and distribution networks in Asia,

with over 35,000 marketing touch points. Its ubiquitous petrol/diesel stations are

located across different terrains and regions of the Indian sub-continent others. The

countrywide marketing operations are coordinated by 16 State Offices and over 100

decentralized administrative offices.

19
IndianOil has been adjudged India's No. 1 brand by UK-based Brand Finance, an

independent consultancy that deals with valuation of brands. It was also listed as

India's 'Most Trusted Brand' in the 'Gasoline' category in a Readers' Digest - AC

Nielsen survey. In addition, IndianOil topped The Hindu Businessline's "India's Most

Valuable Brands" list.

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

a combined refining capacity of 60.2 million metric tones per annum (MMTPA, i.e., 1.2

million barrels per day).

IndianOil is investing Rs. 43,400 crore (US $10.80 billion) during the XI Plan period

(2007-12) in augmentation of refining and pipeline capacities, expansion of marketing

infrastructure and product quality upgradation as well as in integration and

diversification projects.

IndianOil's ISO-9002 certified Aviation Service commands a 63% market share in

aviation fuel business, meeting the fuel needs of domestic and international flag

carriers, private airlines and the Indian Defense Services. IndianOil also enjoys a

dominant share of the bulk consumer business, including that of railways, state

transport undertakings, and industrial, agricultural and marine sectors.

20
IndianOil's world class R&D Centre is perhaps Asia's finest. Besides its pioneering

work in lubricants formulation, refinery processes, pipeline transportation and

alternative fuels such as bio-diesel, the Centre is also the nodal agency of the Indian

hydrocarbon sector for ushering in Hydrogen fuel economy in the country.

XTRAcare:

IndianOil's XTRAcare E branded full service petrol stations is a result of a series of

processes in retail design, product and service upgradation, capability training,

automation, loyalty programs, retail site management techniques all benchmarked to

global standards. Today XTRAcare petrol stations are synonymous in India with world-

class petroleum retailing.

Complete vehicle care begins at an IndianOil XTRAcare petrol pump. From branded

auto fuels, to speedy windshield wipes to quick oil checks and snappy air service, you

will experience the superior services that will leave your vehicle feeling special.

IndianOil's XTRAcare pump is a revolutionary initiative in petroleum retailing that

combines the best bouquet of quality, quantity and warm service, with a guarantee to

make your every visit a truly rejuvenating experience. It is benchmarked to

international standards of quality & quantity, housekeeping, maintenance and

customer service certified to globally renowned benchmarks certified by the globally

renowned agency - M/s Bureau Veritas (BV), amongst others.

21
The maintenance of the equipment at the XTRAcare outlets is undertaken by Original

Equipment Manufacturers under a unique 'Equipment Quality Outsourcing' system.

While the industry standard is to take samples on a quarterly basis, IndianOil has

moved several steps ahead by introducing fortnightly random sampling with specific

importance given to RON (Research Octane Number) sampling which is truly the

definitive test for quality and quantity. The surveillance audits by BV are being done on

a more comprehensive basis. The scale and spread of XTRAcare pumps is also an

industry record.

XTRAREMIUM:

XTRAPREMIUM Petrol is India’s leading branded petrol boosted with new generation

multifunctional additives known as friction busters that prevents combustion chamber

deposits. XTRAPREMIUM is custom designed to deliver higher mileage, more power,

better pick up, faster acceleration, enhanced engine cleanliness and lower emissions.

XTRAPREMIUM is a sought after fuel among discerning customers who own new

generation, high-performance cars who have endorsed its unmatched performance.

22
In terms of fuel system cleanliness XTRAPREMIUM is hugely superior to any other

alternative fuel in this segment, with the additional benefit of fuel efficiency through the

friction modifier.

The additive package contains proprietary components including a detergent

dispersant, a friction modifier and a corrosion inhibitor, as a perfectly optimized

formulation in synthetic carrier oil. The detergent dispersant cleans the fuel system

and the friction modifier drastically reduces friction in the non-lubricated engine area

contributing to fuel economy.

XTRAMILE:

IndianOil’s XTRAMILE Super Diesel, the leader in the branded diesel segment is

blended with world-class ‘Multi Functional Fuel Additives (MFA). Commercial vehicle

owners choose XTRAMILE because they see a clear value benefit in terms of superior

mileage, lower maintenance costs and improved engine protection. A growing section

of customers who own diesel automobiles, both in the ‘lifestyle’ and ‘passenger’

category, prefer XTRAMILE as a fuel for its added and enhanced performance.

XTRAMILE has brought in a huge savings in the high mileage commercial vehicle

segment. Transport fleets that operate a large number of trucks crisscrossing the

country are using XTRAMILE to not only obtain a higher mileage but also for low

maintenance costs.

23
Xtra Power Fleet Card:

The IndianOil XTRAPOWER Fleet Card Program is 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 IndianOil thru' flexible prepaid and credit* facilities.

Xtra Rewards:

Xtra Rewards is the country’s first and only cash customer loyalty reward programme

for customer's paying cash. It is commonly assumed that plastic money or credit and

debit cards are the most popular means of purchase. But even today about 90% of the

people who drive into petrol pumps pay in cash. With Xtra Rewards, such cash

customers can add value to their purchases by piling up loyalty points. These loyalty

points are accrued even for customers paying through credit and debit cards.

24
 BHARAT PETROLEUM CORPORATION LIMITED

Bharat Petroleum Corporation (BPCL) traces its history to 1928 when the Burmah

Shell Oil Storage & Distribution Company of India was incorporated in England to

enter the petroleum products business in India. The business of the Company grew

substantially given the international backing of Shell and it achieved the leadership

position in India. In 1952, Shell and Burmah Oil Company set up Burmah Shell

Refineries to set up a refinery in Mumbai. The entire operations of Burmah Shell in

India were nationalised in 1976 and the Refinery and Marketing Companies were

merged to form BPCL.

BPCL is India's second largest oil company in terms of market share and processes

about 9 million metric tons of crude per year. Today the company produces a diverse

range of products, from Petrochemicals and Solvents to aircraft fuel and speciality

lubricants. It manufactures petroleum and petroleum products, asphalt, bituminous

substances, carbon, carbon black, hydrocarbons, mineral substances and the

products/by-products derived there from.

The organization structure of BPCL was revamped and six new Strategic Business

Units (SBU's) have been created. They are Refinery, Retail, Industrial& Commercial,

25
Lubricants, Aviation. LPG. The new structure is based on business processes, is

flexible, more responsive to external changes, has fewer layers, and above all,

ensures a much higher customer focus.

Government has a 66% stake in the company, which it plans to divest in due course of

time. The contenders for the same include MNCs like Shell along with domestic

companies like Reliance Industries. A possible cross holding between BPCL and

HPCL is also proposed.

Refinery Modernization Project is being implemented at a cost of Rs.18,310 million .

This project besides improve distillate yield and energy efficiency, will enhance the

crude oil capacity to 12 MMTPA. The project is expected to be commissioned

October,2004. Gas Turbine and Heat Recovery Steam Generator project was

commissioned during 2001-02 at a cost of Rs.1750 million. The long term plan of

setting up a 7 MMTPA capacity grassroots refinery project in Allahabad District of UP

is under final stage of approval. The forestland of 450 acres has been approved and

the estimated cost of the Refinery project amounts to 61,800 million. This project is

planned in such a way it should be mechanically completed within 48 months from the

date of receipt of all statutory approvals.

26
PURE FOR SURE:

Bharat Petroleum has launched an 'Enhanced Fuel Proposition' (EFP) programme - A

nation-wide effort a dispensing pure quality and correct quantity of fuel, and at the

same time delivering courteous, fast and efficient service.

The retail outlets covered under this program display the 'Pure for Sure' sign - an

outturned palm forming a circle with the thumb and the first finger - also imprinted on

the dispensing units and on the back of the blue uniform sported by DSMs, and TUV's

certificate displayed at the outlet. At such Retail Outlets, Bharat Petroleum guarantees

that the correct quality and quantity are dispensed. In order to be able to do so, strict

quality control and tracking measures have been put in place at every point from the

Supply Point (Depot) to the customer's fuel tank.

Special locks have been provided in tank lorries and comprehensive sealing has been

undertaken at the dispensing units. Before certification, the Retail Outlets are

subjected to stringent tests by TUV SUDDEUTSCHLAND - INDIA, a renowned

international agency, to ensure that all parameters of the program are complied with.

Mystery audits and extensive inspections are carried out at these Retail Outlets to

ensure that they continue to comply with the requirements of the EFP program.

27
SPEED:

Bharat Petroleum has successfully initiated the concept of branding to a trade that

was, until now, largely a commodity business.

"Speed" is a blend of petrol and world-class multi-functional additives, sourced from

Chevron Oronite Company LLC, a ChevronTexaco company, which complies with

EPA 97 (Environment Protection Agency, USA) requirements. "Speed" contains

unique deposit control additives that effectively remove harmful deposits from all fuel

metering systems and components resulting in enhanced overall engine performance

- easy starting / smooth idling, maximum power and acceleration, reduced emission,

and no engine knocking - improved mileage and reduced maintenance costs.

HIGH SPEED DIESEL:

Considering the need for a premium quality diesel to complement technology

enhancements in diesel vehicles, Bharat Petroleum have introduced hi performance

diesel with brand name Hi speed Diesel.

Hi-Speed Diesel is the new high performance, eco-friendly diesel from Bharat

Petroleum. It works on the patented Greenburn Combustion Technology and contains

special cleansing additives sourced from Ethyl Corporation, USA. Hi-Speed Diesel

cleans your engine as you drive, giving you peak performance, green performance.

28
SMART FLEET CARD:

Consumers can enjoy the freedom of paying for fuel,lubricants and In&Out items with

this card instead of cash.

All Smart Fleet outlets are ‘Pure for Sure’, so all card holders can be assured the

advantage of pure, unadulterated fuel.

The smart fleet programme makes it possible to have total control over the fleet of

vehicles through monthly vehicle reports where details are given about transactions

done by each vehicle in the fleet.

For every transaction done with the smart fleet card Petro miles are earned in

exchange of which gifts can be earned.

Petro bonus card:

In an effort to build lifetime relationships with its retail customers, Bharat Petroleum,

on September 29, 1999, launched the PetroBonus Programme – the first of its kind in

India. With this launch, BPCL leapfrogged into the next stage of providing consumer

convenience, using the-state-of-the-art Smart Card techology. Petro Card is a plastic

card, with a embedded microprocessor chip that accepts, stores and send information.

29
PetroBonus is a unique programme offering convenience as well as security of paying

for fuel and convenience store purchases at its 'In&Out' stores through an electronic

purse, with the added opportunity to collect valuable rewards and exclusive benefits.

Bharat Petroleum Corporation Limited introduced "PetroBonus" Programme to meet

the changing needs and desires of the customer. The Programme offers its members

the convenience and rewards while purchasing the fuel using the “Petro Card”.

The proposition of “Earn while you spend” articulates BPCL’s desire to deliver more

value to its customers. For customers the key benefits of the Petro Card are: cashless

convenience, acceptance at over 4300 outlets across the country, Quality assurance

at Pure for Sure outlets, managing and tracking of fuel spends.

30
 CHAPTER 4

ANALYSIS OF CONSUMER BEHAVIOUR TOWARDS

HPCL , IOCL AND BPCL

Table no 1: TYPE OF VEHICLE USED (n = 100)

f %
TWO WHEELER 59 59
FOUR WHEELER 41 41

60

50

40

Two wheelers
30
Four wheelers

20

10

According to the survey of 100 samples: 59 % of the respondents used two wheelers

and 41 % used four wheelers.

31

Table no 2: Type of fuel used in the vehicle (n = 100)

 f %
PETROL 57 57
DIESEL 43 43

60

50

40
Petrol
30
Diesel
20

10

According to the above graph there were 57% of the respondents used petrol and

43% respondents used diesel.

32

Table no 3: FREQUENCY OF REFUELLING (n = 100)

f %
 1-2 times 25 25%

2-3 times 43 43%

More than 3 times 32 32%

45
40
35
30
1-2 times
25
2-3 times
20
More than 3 times
15
10
5
0
 From the above analysis 43% consumers refueled their vehicle 2-3 times

25% consumers refueled their vehicle 1-2 times and 32% consumers refueled more

than 3 times as. Consumers in the 2-3 times bracket had a better income than the

other two groups.

33

Table no 4: Consumption quantity per visit (n = 100)

f %
1-2 Lts 25 25

2-5 Lts 33 33

More than 5 Lts 25 25

Depend upon 17 17

traveling

35

30
1-2 lts
25
2-5 lts
20

15 More than 5 lts

10 Depend upon
traveling
5

0
 According to the analysis 25% respondents buy 1-2 lts fuel per visit

33% respondents buy 2-5 lts, 25% respondents buy more than 5 lts and 17%

respondents buy fuel as per requirement.

34

Table no 5: Preference of fuel companies by consumers (n = 100)

f %
HPCL 18 18%

IOCL 52 52%

BPCL 30 30%

60

50

40
HPCL
30 IOCL
BPCL
20

10

0
 According to the diagram 52% respondents preferred IOCL, 18% respondents

preferred HPCL and 30% respondents preferred BPCL.

35

Table no 6: Reasons for preference of particular companies (n = 100)

f %
Friends/relatives 12 12%

Advertisements 08 08%

Quality & trust 13 13%

Services offered 12 12%

convenience 55 55%

60

50
Friends/relatives
40
Advertisements
30 Quality & trust
Services offered
20
Convenience
10

From the diagram we can infer that 55% of the respondents prefer an outlet on the

basis of convenience, 12% took the opinion of their friends, 8% said they used
 advertisements as basis of preference, 13% gave importance to quality & trust, 12%

gave importance to services offered.

36

Table no 7: Satisfaction with the quality and quantity of fuel (n = 100)

f %
YES 89 89%
NO 11 11%

90
80
70
60
50 Yes
40 No
30
20
10
0

According to the above analysis it is concluded that 89 respondents are satisfied with

the Q & Q. and only 11 respondents are not satisfied with quality trust.
 37

Table no 8: Consumer opinion on which services have to be offered

(n = 100)

f %
Free services 30 30%

Loyalty 17 17%

Credit facility 08 08%

Availability of 15 15%

products
Complaint handling 30 30%
 30

25

20 Free services
Loyalty programme
15 Credit facility
Availability of products
10
Complaint handling
5

According to the most consumers, free services and complaints handling

Should be offered by a corporation.

38

Table no 9: Best services (n = 100)

f %
 HPCL 22 18%

IOCL 48 52%

BPCL 30 30%

60

50

40
HPCL
30 IOCL
BPCL
20

10

According to the graph 48%, 30%, 22% respondents feel IOCL, HPCL& BPCL offer

the best services respectively.

39

Table no: 10 Best quality and satisfaction (n = 100)

f %
 HPCL 31 31%

IOCL 47 47%

BPCL 22 22%

50
45
40
35
30 HPCL
25 IOCL
20 BPCL
15
10
5
0

According to the graph 47% respondents feel IOCL, 31% feel HPCL and 22% feel

BPCL offered the best services.

40

Table no: 11 Best product line and lubricants (n = 100)

f %
 HPCL 32 32%

IOCL 37 37%

BPCL 31 31%

38
37
36
35
34 HPCL
33 IOCL
32 BPCL
31
30
29
28

In this graph again 37% respondents feel IOCL,32% feel HPCL and 31% feel BPCL

provided the best products and lubricants.

41

Reasons f %

Power 05 5

Performance 16 16

Mileage 49 49

High cost of petrol 30 30

Table no: 12 Main reasons for increase in diesel vehicles (n = 100)

50
45
40 Power
35
30 Performance
25
Mileage
20
15
High cost of
10 petrol
5
0

The graph indicates that the rise in demand for diesel vehicles is mainly because of

high petrol cost and high mileage from diesel.

42

Table no: 13 Consumer reliability (n = 100)

Reasons f %

Vendor 45 45%

Self 25 25%

Advertisements 30 30%
 45
40
35
30
Vendor
25
Self
20
Ads
15
10
5
0

The above graph interprets that 45% respondents rely on the vendor, 25% rely upon

themselves and 30% rely on advertisements when it comes to buying fuel.

43

Table no: 14 Best outlet etiquette (n = 100)

Corporation f %

HPCL 30 30%

IOCL 36 36%

BPCL 34 34%
 36
35
34
33
HPCL
32
IOCL
31
BPCL
30
29
28
27

As per the diagram above we can infer that 30% respondents feel HPCL, 36% feel

IOCL and 34% respondents feel BPCL have the best outlet etiquette.

44

Table no: 15 Best safety adequacies (n = 100)

Corporation f %

HPCL 26 26%

IOCL 39 39%

BPCL 35 35%
 40
35
30
25 HPCL
20 IOCL
15 BPCL

10
5
0

We can infer from the above diagram that IOCL at 39% maintains the best safety

adequacies when compared to HPCL at 26%

and BPCL at 35%.

45

Table no: 16 Awareness about branded fuel (n = 100)

Reasons f %
YES 84 84%
NO 16 16%
 90
80
70
60
50 YES
40 NO
30
20
10
0

From the above figure we can determine that 84% correspondents are aware of

branded fuel and 16% respondents are not aware of branded fuel.

46

Table no: 17 Consumption of fuel at present (n = 100)

Reason f %
BRANDED 33 33%
UNBRANDED 48 48%
SHIFTED FROM BRANDED FUEL 19 19%
 50

40
BRANDED
30
UNBRANDED
20
SHIFTED FROM
BRANDED FUEL
10

From the above depiction we can infer that out of 100 respondents only 33% use

branded petrol and 19% shifted from branded fuel, the remaining used unbranded

fuel.

47

Table no: 18 Reason for not using branded fuel (n = 100)

f %
Expensive 4 4
Unavailability 7 7
Lack of knowledge 16 16
Never felt needed 6 6
Missing 67 67
 70
Expensive
60

50 Unavailability

40 Lack of
30 knowledge
Never felt
20 needed
10 Missing

This graph shows various reasons for which 37% respondents were not ready to shift

to branded fuel. The missing bar indicates respondents who are using branded fuel.

48

Table no: 19 Opinion about branded fuel (n = 100)

f %
EXCELLENT 18 18
GOOD 24 24
AVERAGE 46 46
POOR 6 6
 50

40
Excellent
30
Good
20 Average
Poor
10

According to the above chart 18% respondents rated branded fuels as excellent, 24%

as good, 46% as average and 6% rated it as poor.

49

Table no: 20 Buying pattern of branded fuel (n = 100)

 Definitely May buy Not sure Will not missing Total

Buy it it buy it

Unbranded - - - - 48 48

fuel

Branded 32 1 - - - 33

fuel

Shifted - - 3 16 - 19

from

branded to

unbranded
Total 32 1 3 16 48 100

The above table implicates the rebuying opinion of fuel users.

Out of 19 respondents who shifted from branded to unbranded fuel-16 say they will

never buy branded fuel again and 3 were not sure. Out of 33 respondents using

branded fuel 32 said that they will definitely buy branded petrol. The missing column

represents respondents who are users of unbranded petrol and hence they did not

express their views on rebuying.

50

Table no: 21

RANKING FOR NORMAL FUEL

 FACTORS AVERAGE RANK
Mileage 3.56
Smooth running 3.08
Easy starting 2.64
Maintenance cost 4.20
Power 3.50
Acceleration 3.25

RANKING FOR BRANDED FUEL

FACTORS AVERAGE RANK

Mileage 2.75
Smooth running 3.55
Easy starting 3.64
Maintenance cost 4.51
Power 4.46
Acceleration 3.89

51

The ranking are given by respondents who are currently using branded fuel and those

who shifted again to normal fuel. The ranking shows that there is improvement in the

factors that improve the performance of engine when consumers shifted from normal

to branded fuel.
 52

Table no: 22 Type of fuel used by respondents of different

income groups. (n = 100)

 5000 10000 20000 Missing Total

to To And above

10000 20000
Unbranded 26 6 1 15 48

fuel
Branded fuel 4 19 9 1 33

Shifted from 2 5 12 - 19

branded to

unbranded

fuel
Total 32 30 22 16 100

53
 30

25

20

15 5000 to 10000
10000 to 20000
20000 and above
10
Missing

0
Unbranded Branded fuel Shifted from
fuel branded to un
branded fuel

The above diagram shows the income levels of respondents and the type of fuel used

by them. Missing bar represents respondents who were not willing to reveal their

income category.

54
 CONCLUSION

• majority of respondents fill 2-3 times in a weak and rest of them fill 1-2 times of

fuel in a weak.

• The majority of respondents fill 1-2 litres of fuel in a visit in two wheeler and

majority of them fill more than 5 litres in a visit in four wheeler.

• In two-wheeler & four-wheeler many of respondents didn’t expect any additional

facility/incentives from any corporations.

• Most of the respondents belong to the age group of 20-30 years and they

prefer IOCL.

• Out of the hundred respondents, the majorities of them are students using two-

wheeler.

• Most of the respondents prefer an outlet based on vicinity rather depending

upon opinion of friends, advertisements, quality and trust.

• Most of the respondents were satisfied with the quality ant quantity provided by

the companies.

55
• Many of the respondents wanted companies to handle their complaints in a

more effective manner.

• Most respondents felt IOCL offered the best services when compared to the

other two corporations.

• Majority of consumers relied on the vendor for suggestions pertaining to fuel.

• Most of the respondents were aware of branded fuel.

• Many of the respondents cited unavailability as a factor for not using branded

fuel.

• Majority of the respondents rated branded fuel was average.

• Respondents already using branded fuel felt they would definitely buy it again.

• Most of the respondents felt that the engine performance increased when they

shifted from normal to branded fuel.

56
Petroleum Corporation is introducing varieties of schemes to attract the people as well

as to fulfill the expectations of the people towards fuel consumption. it makes more

competition among the petroleum corporation to retain the consumers.

From the analysis it was found that the majority of the consumers prefer outlets on

basis of vicinity. According to the analysis we can determine that IOCL was the most

desired fuel company.

If petroleum corporations want to attract the consumer they must provide facilities as

high lighted in the survey.

Out of respondents who are aware of branded fuel many of them are not willing to shift

because they feel that branded petrol is expensive, some say they never felt a need.

A major number of respondents rely on suggestion given by the petrol pump vendors.

Hence these people have to be targeted for better service.

Suggestions;

• Retail outlets must provide refreshment rooms and medical shop.

• Swift and hassle free service if provided will keep consumers satisfied

• Details pertaining to reward schemes, branded petrol and various other

features must be conveyed in a more simplified manner to the consumer.

57
 BIBLIOIGRAPHY

Books:

• Marketing Management , 13th Edition-Philip Kotler, Kevin Lane Keller-

Prentice hall of India.

• Marketing Management-Rajan Saxena-McGraw hill.

• Fundamentals of Statistics – S.C. Gupta – Himalaya Publishers.

• The psychology of consumer behavior-Brian Muller, Craig Johnson- Lawrence

Erlbaum Associates.

Newspapers & magazines:

• The economic times.

• The times of India.

• Business world.

Websites:

• www.hpcl.com

• www.bpcl.com

• www.iocl.com

• www.indiainfoonline.com
Annexure: 1

QUESTIONNAIRE

NOTE:-

(1) Place a heavy “X” in the box, which best reflects your answer & mark only one

opinion for each statement.

Q 1.Which type of vehicle you own?

Two wheeler

Four wheeler
Q 2.Which type of fuel you used in your vehicle?

Petrol Diesel

Q 3.In a week, how many times you refuel your vehicle?

1-2 times 2-3 times

More than 3 times

Q 4.How much quantity you buy in a single visit?

1-2 Lts 2-5 Lts

More than 5 Lts depend upon traveling

Q 5.Which is the preferred corporation for getting your vehicle refueled?

HPCL BPCL

IOCL

Q 6.Why do you prefer this particular corporation?

(1) Recommended by friends/relatives

(2) Advertisement

(3) Quality/Trust

(4) Services offered

(5) Convenience

Q 7.Are you satisfied with the quality & quantity of the fuel?

Yes No

Q 8.In your opinion which services should be offered by an corporation?

(Rate on a scale of 1-5,5 being most important)

(a) Free services like:-Air, Water, and Toilet.

(b) Loyalty programmes.

(c) Credit facility / credit cards

(d) Availability of other lubricants

(e) Complaints handling /responsiveness

Q 9.Who offers the best services?

(a) IOCL

(b) HPCL

(c) BPCL

Q 10.Who provides the best satisfaction and quality?

(a) IOCL

(b) HPCL

(c) BPCL

Q 11.Who provides the best product line and lubricants?

(a) IOCL

(b) HPCL

(c) BPCL

Q 12.In your opinion what is the underlying reason for increase in demand of diesel

vehicle?
(a) High cost of petrol

(b) Better mileage with diesel

(c) Performance

(d) Power

Q 13.On whom do you rely the most on matters pertaining to fuel?

(a) Vendor

(b) Self

(c) Advertisements

Q 14.Retail outlets of which oil corporation maintains the best etiquette?

(a) IOCL

(b) HPCL

(c) BPCL

Q 15.Which company’s retail outlets maintain the best safety adequacies?

(a) IOCL

(b) HPCL

(c) BPCL

Q 16.Are you aware of branded fuel?

(a) Yes

(b) No

Q 17.Which type of fuel do you consume at present?

(a) Branded fuel

(b) Unbranded fuel

(c) Shifted from branded to unbranded fuel

Q 18.What is the reason for not using branded fuel?

(a) Expensive

(b) Unavailability

(c) Lack of knowledge

(d) Never felt needed

Q 19.How do you rate branded fuel?

(a) Excellent

(b) Good

(c) Average

(d) Poor

Q 20.Will you buy or continue to buy branded fuel?

(a) Definitely buy it

(b) May buy it

(c) Not sure

(d) Will not buy it

Q 21.Please rate the following factors of branded and regular fuel on a scale of 1-5.

FACTORS BRANDED REGULAR

Mileage
Smooth running
Easy starting
Maintenance cost
 Power
Acceleration

Q 22.Please mark the corresponding income group.

5000-10000 [ ] 10000-20000 [ ] Above 20000 [ ]

Personal Information:

Name: - ______________________________________

Age: - 15-20 [ ] 20-30 [ ] 30-40 [ ] Above 40 [ ]

Occupation: - Student [ ] employed [ ] businessman [ ]

Thank you for your cooperation

Manish.A.Patil
IIMC