sant-07-01-10-13

A Report on Marketing of Indian Oils Loyalty Program- XTRAPOWER FLEET CARD

Santanu Roy Student, Department of Management, University of North Bengal

Introduction: ustomers are the ever strong asset of every organization. In the present era most of the organizations are customer centric. The products or services are provided according to the customer preference. As per as the present scenario there exists intense competition between the several

organizations, so it becomes very necessary to maintain a strong customer relationship to survive and grow in the market. The new customers as well as the existing customers form the demand and supply base of any organization. It becomes very necessary to retain loyal customers. And also the cost of creating a new customer base is more than retaining existing loyal customers.

Loyal customers are important because they provide the consistency of business. If any organization is able to create the feel good factor for the existing loyal customers then automatically the customer base will be improved and new customers will be knocking for deal.

With increasing oil prices and huge competition the oil companies are implementing different strategies to strengthen the customer base and improve the business policy. Indian Oil Corporation is also developing new ideas for succeeding in the competition. To retain the existing loyal customers, many new initiatives have been adopted by I.O.C.L. One such big idea is XTRA POWER FLEET CARD LOYALTY PROGRAM.

During this project we have been assigned to IOCL Retail Outlets as well as Private Outlets which are having XTRA POWER facility, to market the XTRA POWER LOYALTY CARD to the existing IOCL customers as well as new potential customers and at the same time to obtain customers feedbacks and suggestions about the Loyalty Program. We have also visited many other places like Truck Terminuses, Road side dhabas, Weigh Bridges, Check posts etc. for marketing the Loyalty Card.

OBJECTIVES OF THE PROJECT The major objectives of the project are:

To study the loyalty relation between the customers and the organization.

To study the benefits provided by IOCL to their loyal customers.

To collect customer feedback and suggestions about the XTRA POWER Loyalty

Program.

To study the comparative analysis between the loyalty card benefits of other oil

companies.

C

To check our theoretical knowledge with comparison to the practical market

situation.

IOCL MAJOR OBJECTIVS To serve the national interests in oil and related sectors in accordance and consistent

with Government policies.

To ensure maintenance of continuous and smooth supplies of petroleum products

by the way of crude oil refining, transportation and marketing activities.

To provide appropriate assistance to consumers to conserve and use petroleum

products efficiently.

To create a strong research & development base in refinery processes, product

formulations, pipeline transportation and alternative fuels.

To further enhance marketing infrastructure.

LOYALTY PROGRAM Loyalty programs are structured marketing efforts that reward, and therefore encourage loyal buying behaviour the behaviour which is potentially beneficial for the organizations.

Earning customer loyalty goes beyond gaining customer satisfaction. Loyal customers evangelize the brand by sharing their satisfactory experience with their surroundings.

The organizations, in terms of Loyalty Program, may offer benefits in a number of different ways. Many loyalty programs offer a sustained discount for a period of time (e.g. 10% for 1 year) or a onetime discount with certain criteria (e.g. 10% on a single purchase of Rs. 10000). Many offers reward points which may be redeemed for products which may or may not be directly related to business.

Loyalty cards are the most common form of loyalty programs found throughout the world today. Some of the first loyalty programs instituted by airlines were in the 1970s in the form of frequent flyer miles. In those loyalty programs, one accrues points by flying on the airline and then redeems the points into tickets, upgrades, or even third-party benefits.

Loyalty programs have gained popularity immensely from the time when the organizations became customer centric. Now a days Organizations thinking is that the customers feel good factor is the most valuable wealth for any organization and for this reason the customers are gaining special treatments in the form of loyalty programs. An Integral part The immense competition is making the loyalty programs an integral program of business of day to day functioning of petro-retailing. Right now many such loyalty programs are run by the petro-retailers like XTRAPOWER (IOCL), EXTRAREWARDS (IOCL), SMART FLEET (BPCL), PETRO CARD (BPCL), and DRIVE TRACK (HPCL). However, these programs are mainly focused at the bulk consumers. But the small consumers are being also provided these types of facilities.

XTRA POWER FLEET CARD LOYALTY PROGRAM IOCLs XTRAPOWER Fleet Card program is a most sound step towards building the loyalty among the existing customers and creating a new pool of customers.

XTRAPOWER Fleet Card program is a complete smart card-based fleet management solution for fleet operators and corporate for cashless purchase of fuel and lubricants from designated retail outlets through flexible pre-paid and credit facilities. The fleet card also offers an exciting rewards program and unique benefits like personal accident insurance cover and vehicle tracking facilities. In just under two years of its launch, it has emerged as the largest fleet card in the country with the widest retail outlet coverage. Any business entity owning or operating a vehicle fleet can become a member of the XTRAPOWER fleet card program at a nominal annual charge. Each fleet owner is issued a Fleet Control Card and vehicle-specific Fleet Cards for every vehicle enrolled under the program. For enhanced security, the fleet card transactions are authorised through a unique Personal Identification Number (PIN).

Moreover, the card can help track each vehicle's movement across remote corners of the country, leading to an improvement in vehicle utilisation and route compliance. XTRAPOWER is also backed by IndianOil's vast infrastructure network and web-based support services.

COMPARISON OF XTRA POWER WITH DIFFERENT LOYALTY CARDS Loyalty Cards Benefits

XTRAPOWER (IOCL)

SMART FLEET (BPCL)

DRIVE TRACK (HPCL)

Reward point system 5 XTRA Points on purchase of Rs. 100

15 Petromiles on purchase of Rs. 150

500 Drivestars on purchase of Rs. 100

Cash Loading system Manual or by Central Cash Management System

Manual or by Central Cash Management System

Manual or by Central Cash Management System

Online pin unlocking facility

Yes Yes Yes

Fuel Redemption facility Yes Yes Yes

Insurance for owner Rs. 10000/- per card, maximum up to Rs. 2000000/-

No insurance for owner No insurance for owner

Insurance for driver and cleaner

Driver: Rs. 50000/- , Co-driver: Rs. 25000/- and Cleaner: Rs. 25000/-

No insurance for driver and cleaner

Rs. 100000/- for Driver and Cleaner separately

Medical Insurance Rs. 10000/- per card Owner: Rs. 2500/-, maximum Rs. 50000/- Driver: Rs. 2500/- Co-driver: Rs. 2500/- Cleaner: Rs. 2500/-

No Medical Insurance No Medical Insurance

Lost Card Liability Insurance

Maximum up to Rs.16,000/- per card subjected to misuse of the card within 24 hours from lodging the loss complain with XTRAPOWER 24 HOUR CUSTOMER HELPLINE

No such benefit No such benefit

Prepaid and Credit facility Yes Yes Yes

FINDINGS Most of the existing customers were very supporting and interesting. They have a

very strong will for IOCL.

Most of the customers who showed interest were ready to go for XTRAPOWER Fleet

Card or to continue the service actively.

Initially a large number of potential customers were frightened of giving the copies

of their vehicles R.C. Book. It was for the probable chance of misuse of the

documents. But later most of them were convinced.

Making of new XTRAPOWER Fleet Cards were not so difficult. The customers were

being well understood by us and were ready to make new cards.

A widely visible range of potential customers were not well aware about IndianOils

XTRAPOWER Fleet Card Loyalty Program. It is due to lack of effective promotion in

this region.

Most of the existing Fleet Card Users suggested IOCL for implementing the SMS

Balance Enquiry Service.

Some of the customers facing technical difficulties while using the cards. But the

Outlet staffs are managing this type of problems as much as possible.

IOCL has a huge number of Private Retail Outlets compared to the Company Owned

Retail Outlets, so it is somehow lowering the customer base.

IOCL is losing some portion of the potential customers for providing fewer parking

spaces to the fleet operators by the Private Retail Outlets.

Some of the fleet owners/operators suggested for updating the website of

XTRAPOWER on a regular basis.

The customers suggested for implementing XTRAPOWER Control System in the retail

outlets as much as possible. This will result in increased customer pool and customer

satisfaction.

CONCLUSION XTRAPOWER is a sound step of IOCL towards building loyalty among the existing customers.

Loyalty program works effectively when the customer is emotionally attached with the

brand.

The best way to keep customers

loyal is to provide quality product or service that provides good value for money. Branding

alone will not be completely able to make the customers loyal. But backing up a quality

product or service with branding and loyalty programs will develop quicker.

Offers and loyalty schemes can

increase loyalty, but they are no substitute for (and will not work without) a quality product,

good customer service, and friendly customer relationships.

IOCL should have to promote

XTRAPOWER Fleet Card Loyalty Program in such a strategic way, so that the Program

reaches to the every corner of the country. For this to happen IOCL should give more effort

in the promotional and marketing activities of XTRAPOWER. All these will result in

tremendous success of the Loyalty Program.

Also the customers should be

involved in the program by constant communication to understand the extreme details and

benefits of the program.

RECOMMENDATIONS A huge number of customers are not aware regarding the XTRAPOWER Fleet Card

Loyalty Program and its features. More promotional and marketing practices are

necessary.

There remains a huge unexplored market for implementing the Loyalty Program. So

continuous Market Study and Analysis is required.

There remains a great requirement of Balance Check Facility through SMS. So IOCL

should introduce the service as soon as possible.

Customers prefer to fill oil from Company Owned Retail Outlets compared to the

Private Retail Outlets. So if it is possible to establish more Company Retail Outlets,

then IOCL should go on.

The long vehicle staffs require proper Parking Places in the Retail Outlets. IOCL

should try to provide flexible parking places to the vehicle staffs for the purpose of

increasing customer loyalty and satisfaction.

XTRAPOWER Fleet Card Swiping Kits should be installed in maximum number of

Retail Outlets and the swiping machines should be properly maintained.

Reference A. Websites URLs 1. (http://www.iocl.com/aboutus.aspx) 2. (http://www.iocl.com/products.aspx 3. (http://www.iocl.com/services.aspx) 4. (http://www.iocxtrapower.com/programe_details.php)

5. (http://www.iocxtrapower.com/credit_partners.php 6. (http://www.iocxtrapower.com/rewards_program.php) 7. (http://www.iocxtrapower.com/xtrafeature_ins_scheme.php) 8. (http://www.iocxtrapower.com/iocl_xtra_easyfuel/programe_details.php)

Last access date: 18th August,2013

B. Company Presentations and URLs 1. Investor_Presentation_2013 (www.iocl.com/downloads/Investor_Presentation_2013.pdf ) 2. Investor_Presentation_June_2011 (www.iocl.com/downloads/Investor_Presentation_June_2011.pdf

C. Books 1. N. G. Das, Statistical Methods: McGraw Hill 2. P. Kotler, Marketing Management: PEARSON Education- 13th Edition