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A PROJECT REPORT ON

A Study Of Important Issues In Allied Petro Retailing In India At Selected Bpcl

Petrol Pumps

S!B"ITTE# B$

SHAHBAZ KHAN

%"AR&ETIN'(RO)) NO * B+,-Batc. /,-- + /,-0

!N#ER T1E '!I#ANCE O2DR. SANDEEP SAWANT

CORE 2AC!)T$ + "AR&ETIN'

!NI3ERSIT$ O2 "!"BAI&O1INOOR B!SINESS SC1OO)4

&!R)A4 "!"BAI5

DECLARATION

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I .ere6y declare t.at t.e pro7ect report entitled A Study Of Important Issus In A!!"d Ptro Rta"!"n# I

Ind"a At S!$td BPCL Ptro! Pumps%carried out at &B'arat Ptro!"um% is my 8or9 su6mitted in partia

fulfillment of t.e re:uirement for #egree of "ASTER O2 "ANA'E"ENT ST!#IES %""S(

!NI3ERSIT$ O2 "!"BAI from &O1INOOR B!SINESS SC1OO)4 &!R)A4 "!"BAI and no

su6mitted for t.e a8ard of any degree4 diploma4 fello8s.ip or any similar titles or pri;es5

#ate< Signature< ===============

Place< "um6ai Student Name< ===========

CERTI(ICATE

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T.is is to certify t.at t.e pro7ect entitled A Study Of Important Issus In A!!"d Ptro Rta"!"n# In Ind"

At S!$td BPCL Ptro! Pumps% is successfully completed 6y &A)'"*"t P +a"tap,ar%during t.e secon

year of .er course4 in partial fulfillment of t.e "asters #egree in "anagement Studies4 under t.e -n"rs"t

of /um)a"4 t.roug. KOHINOOR B-SINESS SCHOOL0 &urla4 "um6ai+>,,,?,5

#ate

6 PRO(ILE O( THE OR1ANISATION

B1ARAT PETRO)I!" -

7 ANAL8SIS O( DATA />

9 CONCL-SION 0>

: APPENDICESF!ESTIONNAIRE 0BIB)IO'RAP1$ 0G

E3EC-TI;E S-//AR8

T.e pro7ect title 8as A Study Of Important Issues In Allied Petro Retailing In India At Selected Bpcl Petro

PumpsT.e researc. 8or9 8as di@ided into t8o p.ases for reporting D analy;ing t.e factors respecti@ely

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Eac. p.ase is 6eing descri6ed as follo8s 8as t.e starting point of researc. 8or9 D its duration 8as a6out /

8ee9s5 Before going out for primary researc. 8or94 I studied t.e CN' lu6e oil industry 8it. t.e .elp o

internet D collected some useful insig.t a6out t.e industry5 In t.e primary researc. 8or94 I first of al

decided on t.e different category of persons %sta9e.olders( 8.o are lin9ed 8it. t.e engine oil5 T.ese

personsHsta9e.olders 8ere as follo8s( "ec.anic Personnel

T.en I .ad carried an eploratory sur@ey for eac. sta9e.older 8it.out dra8ing any :uestionnaire5 T.i

random sample .elps me to understand t.e @arious factors affecting t.e 6uying decision of engine oil5 Bu

t.e information 8.ic. I get 8as :uite ra8 D .ence I mo@ed on to t.e second p.ase for a systematic re@ie8

of t.e enlisted factors gat.ered from t.e eploratory sur@ey5 After understanding t.e enlisted factors4

formed t.e :uestionnaire4 co@ering eac. D e@ery aspect a6out 6uying 6e.a@ior of engine oil5 I form differen

:uestionnaire for all sta9e .olders from t.e point of @ie8 of t.at segment of people5 T.e sample dat

collection from all t.e sta9e.olders .ad ta9en duration of around 8ee9s5 In t.e first 8ee9 I co@ered t.

auto ric9s.a8s dri@ers5 I .ad ta9en a sample of -, auto dri@ers from all t.e ma7or part of #el.i5 In t.e

second 8ee9 I co@ered t.e sur@ey of Tai o8ners 8.ic. constitutes a sample of --G people5 T.e t.ird 8ee9

8as de@oted to co@er t.e s.op9eepers5 In t.e fourt. 8ea9 I co@ered t.e mec.anic personnel5 I also co@ered

sur@ey on t.e social D economic demograp.ics of t.e life style of dri@ers5 2rom t.is sur@ey I try to figure ou

t.e relations.ip 6et8een t.e 6uying 6e.a@ior of dri@ers D t.eir educational D economic 6ac9ground5 T.i

sur@ey 8as co@ered in t.e fift. 8ee95 T.e remaining days of my researc. 8or9 8ere used to draft out t.

studied factors on t.e 8ord file D gi@e it t.e s.ape of a pro7ect report5 T.e o@erall ependiture from t.

starting day of researc. D upto t.e end day of su6mission of report 8as in 6et8een Rs >,,,+>,,5

RESEARCH OB+ECTI;ES

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To understand t.e @arious c.allenges faced 6y O"C in t.e application of t.e concept of Allied Petr

Retailing5

To identify t.e @arious segments of t.e consumers5

To identify @arious strategies of Allied Petro Retailing5

To list t.e different practices carried out 6y O"Cs in order to promote co+mar9eting5

To understand t.e 6asic idea 6e.ind t.e practice of creation of a different 6rand identity 6y differen

O"Cs in respect to application of t.e Allied Petro Retailing concept5

RESEARCH DESI1N AND /ETHODOLO18

T.e formida6le pro6lem t.at follo8s t.e tas9 of defining t.e researc. pro6lem is t.e preparation of t.e

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design of t.e researc. pro7ect4 popularly 9no8n as researc. design5

#ifferent researc. designs can 6e con@eniently descri6ed if 8e categori;e t.em as,( consumption

8itnessed a decline of >5-5 #iesel consumption gro8t. 8as under pressure despite a positi@e gro8t. in t.

'#P5 T.e possi6le reasons for t.is unepected trend 8ere< rise in CN' consumption in t.e transportation

sector4 su6stitution of diesel 8it. natural gas in industries and4 t.e possi6ility of 9erosene adulteration in

diesel5 A study 6y t.e petroleum "inistry 'o@ernment s.o8ed t.at t.e slide 8as locational and no

sector+specific5 Accordingly4 t.e 'o@ernment on No@em6er /M4 /,,0 decided to 6an import of 9erosene 6

pri@ate companies in a mo@e to cur6 adulteration of diesel5 !nder t.e ne8 dispensation4 9erosene can 6

imported only t.roug. state trading companies * IOC4 BPC)4 1PC and IBP )td5 Nap.t.a and &erosen

consumption gro8t. .a@e also s.o8n decline at +-,5 and 050 respecti@ely5 Products 8itnessing positi@

demand gro8t. include )P' %-,5/(4 AT2 %5,( and "S %/5(5

Ky Su$$ss (a$torsand Out!oo,

K.ile t.e Indian #o8nstream Refining D "ar9eting sector .as 6een t.eoretically decontrolled4 t.ere are sti

some areas 8.ere actual decontrol .as not yet .appened5 2or eample4 retail prices of automoti@e fuel arc stil

fied 6y t.e oil companies in consultation 8it. t.e go@ernment and price competition .as not .appened5 Similarly

for )P' and S&O4 t.e retail prices .a@e 6een 9ept unc.anged for :uite some time and t.e su6sidies .a@e no8 6ee

slas.ed 6y lH0rd5 Accordingly4 during /,,0+/,,>4 t.e oil companies .a@e accounted for su6sidy receipt on )P'

and S&O @ /H0rd of t.e amount claimed during /,,/+/,,04 as per t.e go@ernment directi@es5 T.is .a

curtailed profita6ility gro8t.5 1o8e@er in /,,0+,>4 t.e ot.er t8o ma7or Oil PS!s %i5e5 ON'C and 'AI)( 8er

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as9ed to s.are t.e su6sidy 6urden of )P' and S&O5 ON'C is reported to .a@e 6een .it 6y a su6sidy 6urden o

Rs /, crore due to t.is5

K.ile it .as 6een so for t.e PS! players4 t.e 'o@ernment .as decided to pro@ide pri@ate companies su6sidy o

)P' e:ui@alent to t.at gi@en to state retailing firms5 Also4 t.e 'o@ernment is planning to allo8 sale of surpludomestic )P' 6y pri@ate sector parallel mar9eting companies5

T.e do8nstream refining and mar9eting sector ot.er8ise offers immense gro8t. opportunities for t.

different players5 In t.e refining segment4 8.ile t.e surplus situation in most products may not initiate interest i

greenfield pro7ects4 t.e current duty structure protects t.e Indian refining margins5 Accordingly4 ne8 entrant

may s.o8 positi@e interest in ta9ing t.e eisting refining assets of t.e oil companies + 8.ene@er t.ey ar

offered for pri@atisation5 T.ese refining assets may in turn mitigate t.e product sourcing ris9 Dr t.e mar9e

operations + 8.ere t.e 6ul9 of t.e profit margins in t.e do8nstream segment lie5 Accordingly t.e mar9etin

segment is epected to see ongoing initiati@es 6y t.e oil companies5 T.ese initiati@es are epected to 6e centered

around t.e interests of t.e consumers and may in@ol@e steps suc. as impro@ing product range4 refur6is.ing t.

retail outlets4 selling non+fuel items4 pro@iding @alue added ser@ices4 etc5

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Pr"$"n#

By a ga;ette notification in No@em6er -GG?4 'o@ernment set a timeta6le for a p.ased transition

from an administered price regime to a mar9et+determined system 8it. continued su6sidi;ation

of P#S 9erosene and )P'4 6ut on a gradually reducing scale5 Su6sidies on 9erosene and )P' for

.ouse.old use 8ere to 6e p.ased do8n o@er time to smaller price su6sidies of 0050 per cent and -

per cent4 respecti@ely4 6y end+"arc. /,,/5 As part of t.e energy sector reforms4 t.e prices of many

petroleum products4 for eample4 nap.t.a4 furnace oil4 lo8+sulp.ur .ea@y stoc9 %)S1S(4 lig.t

diesel oil %)#O( and 6itumen4 .a@e 6een li6erali;ed since April4 -GGM5 One important

ac.ie@ement 8as t.e lin9ing of .ig. speed diesel prices to international prices and an elimination

of su6sidy since Septem6er -GG? for some time5 1o8e@er4 )P' and 9erosene4 consumed mainly

6y t.e domestic sector4 continue to 6e .ea@ily su6sidi;ed5 T.e p.ased reduction in su6sidies .as

fallen 6e.ind sc.edule5 In "arc. /,,/4 'o@ernment decided t.at t.e su6sidy on domestic )P'

and P#S 9erosene 8ould 6e pro@ided on a specified flat+rate 6asis from t.e Consolidated 2und

from April -4 /,,/5 In t.is situation4 'o@ernment reim6urses t.e firms for t.e cost of t.e su6sidy4

8.ic. is carried as a line item in t.e 6udget and called t.e petroleum su6sidy5

R"s"n# ptro!um pr"$s and su)s"dy )urdn

T.e unprecedented and steep rise in t.e international prices of crude and petroleum products .as led

to an increase in t.e eplicit su6sidy 6ill in t.e Central 'o@ernments 6udget from Rs54 // crores

in /,,/+,0 to Rs5 4?0 crores m /,,0+,>5 "oreo@er4 t.ere 8ere reports of under reco@eries 6y

pu6lic sector oil mar9eting companies leading to demand for greater su6sidies5 Retail selling

prices of motor spirit and .ig. speed diesel for t.e consumers are calculated 6y ta9ing into

account> acres of land at @illage "a.ul 8ent on+stream on 0,t. January -G4 one

year a.ead of sc.edule5 #r5 S5 Rada9ris.nan4 3ice President of India4 declared t.e /5/ ""TPA

%"illion "etric Tonnes Per Annum( Refinery open on -?t. "arc. -G5 It 8as t.en t.e largest

refinery in India t.en5

Kit. t.is infrastructure4 free India mo@ed one step closer to self+reliance5

(rom Burma' S'!! to B'arat Ptro!um

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On />t. January -G?4 t.e Burma. S.ell 'roup of Companies 8as ta9en o@er 6y t.e

'o@ernment of India to form B.arat Refineries )imited5 On -st August -G??4 it 8as renamed

B.arat Petroleum Corporation )imited5 It 8as also t.e first refinery to process ne8ly found

indigenous crude %Bom6ay 1ig.(4 in t.e country5

S.aping t.e 2uture

T.e core strengt. of B.arat Petroleum Corporation )imited .as al8ays 6een t.e ardent pursuit of

:ualitati@e ecellence for maimisation of customer satisfaction5 T.us B.arat Petroleum4 t.e

erst8.ile Burma. S.ell4 .as today 6ecome one of t.e most formida6le names in t.e petroleum

industry5

B.arat Petroleum produces a di@erse range of products4 from petroc.emicals and sol@ents to

aircraft fuel and speciality lu6ricants and mar9ets t.em t.roug. its 8ide net8or9 of Petrol

Stations4 &erosene #ealers4 )P' #istri6utors4 )u6e S.oppes4 6esides supplying fuel directly to

.undreds of industries4 and se@eral international and domestic airlines5

Dynam"$ 1ro2t' Post Nat"ona!"sat"on

2ollo8ing Nationalisation in -G?4 B.arat Petroleum c.anged gears and em6ar9ed upon a rapid

gro8t. pat.5 Turno@er4 profita6ility and financial reser@es gre8 6y leaps and 6ounds5 "assi@e

epansion and modernisation pro@ided a tremendous 6oost to t.e companys performance5 )arge+

scale recruitment and training 6ecame critically important to meet t.e demands of epansion5

T' W"nds of C'an# = A Transformd Or#an"sat"on Emr#s

Opening up of t.e Indian economy in t.e nineties 6roug.t 8it. it more competition andc.allenges4 9indled 6y t.e p.ased dismantling of t.e Administered Pricing "ec.anism %AP"(

and emergence of additional capacities in t.e region in refining and mar9eting5

In -GG4 B.arat Petroleum 8ent t.roug. a process of @isioning4 in@ol@ing people at all le@els4

8.ic. e@ol@ed a s.ared @ision and a set of s.ared @alues5 Based on t.is4 t.e company

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restructured itself4 in a proacti@e mo@e to adapt to t.e emerging competiti@e scenario5 T.e

function+6ased structure 8as carefully dismantled and replaced 8it. a process+6ased one5 T.is

made t.e company more responsi@e to its customer needs5

B.arat Petroleum realises t.at4 in t.e long run4 success can only come 8it. a total reorientation

and c.ange in approac. 8it. t.e customer as t.e focal point5 Today4 B.arat Petroleum is

restructured into a Corporate Centre4 Strategic Business !nits %SB!s( and S.ared Ser@ices and

Entities5 T.e organisational design comprising of fi@e customers facing SB!s4 @i;5 A@iation4

Industrial and Commercial4 )P'4 )u6ricants and Retail and one asset 6ased SB!4 @i;5 Refinery4

is 6ased on t.e p.ilosop.y of greater customer focus5

T' P!annd Approa$'

Increasing glo6alisation4 ne8 products and ser@ices4 and inno@ati@e mar9eting .a@e resulted in a

@ery mar9et sa@@y consumer5 T.e production+6ased success p.ilosop.y of mar9eters .as no8

6een replaced 6y a customer+oriented p.ilosop.y5 B.arat Petroleum .as ta9en cognisance of t.is

situation 8ell in time and .as 6een ta9ing radical steps to 9eep itself attuned to t.e c.anging

times4 realising t.at t.e future 6elongs to t.ose 8.o listen and adapt to t.eir customers5

Strat#y D!opmnt

B.arat Petroleum recognises t.at all strategic initiati@es must conform to t.e o@erall @ision oft.e

Corporation and [email protected] economic @alue5 T.e Strategy #e@elopment effort at t.e corporate

le@el ac.ie@es 6etter focus in t.e ne8 organisational structure4 6esides facilitating t.e SB!s in

de@eloping t.eir respecti@e strategies t.at lead to an integrated Corporate Strategy5 A Business

Planning process .as 6een put in place t.at not only pro@ides opportunities for t.e SB!s to

pursue t.eir @isionary goals in consonance 8it. t.e Corporate 3ision4 6ut also continuously

monitors trends and identifies strategic opportunities for t.e Corporation5

Brand /ana#mnt

In t.e .ig.ly competiti@e scenario4 it .as 6ecome imperati@e to o8n dominant 6rands5 T.e Brand

"anagement team at B.arat Petroleum endea@ours to 6uild and manage a strong 6rand image

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reflecting B.arat Petroleums core @alues of 6eing INCARE4 @i;5 INno@ati@e4 CAring and

RElia6le5 Emp.asis is laid on continuously understanding customer 6e.a@iour4 trac9ing t.eir

c.anging needs and epectations4 and meeting t.ese needs in t.e most cost+effecti@e manner5

Rsar$' and D!opmnt

Researc. and de@elopment CentreAl8ays on t.e forefront to inno@ate4 B.arat Petroleum is

ma9ing distinct efforts to8ards Researc. and #e@elopment %R and #(5 Besides t.e R and #

facilities at t.e Refinery and t.e Product Application #e@elopment Centre in Se8ree in "um6ai4

a ne8 state+of+t.e+art Rand# Centre is 6eing set up near #el.i5 T.e R and # Centre is 6eing

organised around t.ree core groups + Process and Tec.nology #e@elopment4 Product Application

#e@elopment and En@ironmental Engineering5 A total outlay of Rs504,,, million .as 6een

planned to 6e spent in t.ree p.ases up to t.e year /,,0+,> on

t.is pro7ect5

T$'no!o#"$a! Ed#

B.arat Petroleum .as al8ays 6een on t.e forefront of

.arnessing tec.nology initiati@es for BPC) .as 6een on forefront in .arnessing tec.nology5

maimising efficiency and ac.ie@ing greater customer satisfaction5

B.arat Petroleum is t.e first Pu6lic Sector Oil Company to implement Enterprise8ide Resource

Planning %ERP( solutions + SAP5 T.e implementation pro7ect 9no8n as ENTRANS

%Enterprise8ide Transformation( .as 6een a8arded t.e SAP Star Implementation A8ard4 8it.

B.arat Petroleum .a@ing t.e distinction of eecuting t.e largest and t.e most am6itious SAP

pro7ect in India5 T.e c.allenge of SAP implementation 8as to ensure t.at all t.e integrated

elements %of t.e comple multi+modular integrated solutions t.at impact t.e entire 8or9flo8 of

t.e organisation( 8or9 seamlessly across t.e lengt. and 6readt. of t.e country4 including t.e

remote locations5 Pro@iding online connecti@ity in t.ese remote locations4 gi@en t.e full+fledged

IT net8or9 infrastructure4 8as in itself a daunting tas95

B.arat Petroleum is reaping t.e 6enefits of t.e integrated system in many areas of its operations5

T.e early gains of implementation are in t.e areas of trac9ing customer+recei@a6les4 monitoring

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credit+management4 in@entory management4 6esides easing t.e operations in a large num6er of

areas5

2urt.ermore4 B.arat Petroleum .as also set up one of t.e 6iggest Centres of Ecellence in Asia

to pro@ide online support to t.e end users and also 8or9 to8ards continuous impro@ement in

6usiness processes and .andle product upgrades and ne8 generation products5

Kit. SAP as t.e IT 6ac96one4 B.arat Petroleum plans to ta9e ad@antage of t.e Internet 6ased

capa6ilities along t.e entire @alue c.ain 8it. a Customer Relations.ip "anagement solution5 A

large data 8are.ouse pro7ect .as also 6een implemented4 8.ic. facilitates access to real+time

accurate information on 9ey performance indicators at all B.arat Petroleum locations5 T.is

ena6les t.e management to ta9e strategic and 6usiness decisions4 t.us ensuring @alue+added

ser@ices4 6etter customer satisfaction and en.anced s.are.older @alue5

Pop! A)o O"!

O@er t.e years4 B.arat Petroleum continues to meet t.e c.allenges of t.e rapidly c.anging

en@ironment4 leading to c.anges in t.e mar9eting of products and ser@ices5 In all t.ese c.anges4

only one factor .as remained constant and .as 6een t.e source of B.arat Petroleums strengt.

and inspiration for any future inno@ations + B.arat Petroleums People5 T.e feeling of o8ners.ip

.as facilitated all employees to understand t.e compleity of t.e mar9et and needs of t.e

customers4 and respond to t.ese needs 8it. inno@ati@e initiati@es and offerings5

2or B.arat Petroleum4 commitment of its employees is a critical resource5 2ully realising t.at

only a .appy employee 8ill put .is 6est foot for8ard 8it. t.e customers4 B.arat Petroleum .as

ta9en many steps to ma9e t.e organisation a great place to 8or95 In a sur@ey conducted 6y

1e8itt Associates for t.e January /,,- issue of Business Today maga;ine to identify t.e 6est

employers4 B.arat Petroleum 8as ran9ed among t.e top ten employers in India5 T.e o67ecti@e of

t.e study 8as to find out 8.ic. companies .ad really c.arged t.e emotional and intellectual

energy of t.eir employees5 T.e ot.er companies 8.o 8ere selected 8ere Infosys4 1e8lett+

Pac9ard4 P and '4 ICICI4 1ug.es4 )'4 1))4 Compa: and Asian Paints5

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B.arat Petroleum fosters effecti@e @alue+6ased 1R processes for de@elopment of people and

t.eir organisational capa6ilities 8it. a @ie8 to pro@ide t.em 8it. a competiti@e edge and also to

realise t.eir personal @ision in tandem 8it. t.e corporate @ision5 T.e t.rust areas include5 #o $ou 2eel T.at Because Of In And Out $ou 3isit BPC)

f( 1ig.ly Agreeg( Agree.( Neit.er Agree Nor #isagreei( #isagree7( 1ig.ly #isagree

F5 Paying A 3isit To BPC) Stands Con@enient 2or $ou Or Not

f( 1ig.ly Agreeg( Agree.( Neit.er Agree Nor #isagreei( #isagree7( 1ig.ly #isagree

F5 K.at Are T.e T.ings $ou 'enerally Transact Kit. At A BPC)%In And Out(Store

e( 'roceryf( A5T5"g( Boo9store.( Air c.ec9

F?5 Paying A 3isit To BPC)%In And Out(Store Stands Con@enient 2or $ou Because Of

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