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CORPORATION LTD.
COMPANY PROFILE
Indian Oil Corporation Ltd. is a public sector undertaking under Government of India and formed on the 1st of September 1964 through the merger of Indian Oil Company Ltd. (Estd. 1959) and Indian Refineries Ltd. (Estd. 1958). Indian Oil Corporation Ltd. was born on 1st September 1964 with the merger of Indian Refineries Ltd. with Indian Oil Company Ltd.
IndianOil is Indias flagship national oil company with business interests straddling the entire hydrocarbon value chain from refining, pipeline transportation and marketing of petroleum products to exploration & production of crude oil & gas, marketing of natural gas and petrochemicals. IndianOil and its subsidiary (CPCL) account for over 48% petroleum products market share, 34.8% national refining capacity and 71% downstream sector pipelines capacity in India.
OBJECTIVES OF STUDY
The focus of the study was to find out market potential of Non Domestic Non Exempted (NDNE) LPG in Guwahati Region. The study aims to find out the marketing strategies adopted by the competitors in NDNE marketing. The study aimed to find out the existing problems faced by Indian Oil in marketing NDNE LPG. To study the effect of appointing NDNE LPG Retailers by Indian Oil to maximize volume and profit in NDNE LPG.
RESEARCH METHODOLOGY
TYPE OF RESEARCH :
EXPLORATORY based on the secondary data and primary data collected through personal unstructured probe so as to gather data to prepare the questionnaire.
SAMPLE AREA :
The Sample area in which the research was done is the city GUWAHATI and adjacent area in Assam.
SAMPLING METHOD: Convenience Sampling was done as it contains homogeneity. It is also cost effective and faster
SAMPLE SIZE: The sample size used in this project was 100 of which 30 were LPG Distributors, 50 were Hotels and Restaurants and 20 others were Fabrication units. These targets were given a questionnaire to fill and the research was done on the basis of that data.
94%
DOMESTIC LPG
95 %
NDNE LPG
DATA ANALYSIS
Market Share of NDNE LPG of Leading Gas Sales Companies
INDANE BHARAT GAS HP GAS
3% 6%
91%
90 80 70 60 50 40 30 20 10 0 Canteens Column1 5
CATEGORY
Fabrication units 2
15%
80%
FINDINGS
All respondents have responded that they use 19.0 Kg cylinders for commercial purpose. No discounts are given to the customers of NDNE LPG cylinders.
The price of a 14.2 Kg LPG cylinder meant for domestic use in Guwahati is Rs 393 ( Rs 27.67 per Kg) and that of a 19 Kg NDNE LPG cylinder is Rs 1417.50 (Rs 74.60 per Kg) during the period of study. This price difference of Rs 46.93 per Kg. There is a huge demand for subsiderized cylinders and therefore relative demand supply gap always remains.
Due to this mismatch in rates there is a strong inclination by even commercial users to use domestic LPG cylinders in 14.2 Kgs.Hence strict vigil has to be maintained by companies,distributors, government agencies to ensure that diversion of 14.2 Kg cylinder to commercial usage do not take place. This is required also to ensure availability of domestic cylinders to domestic consumers in time without backlog.
FINDINGS
IndianOil has developed sufficient storage and bottling capacity in the last year and LPG availability should not be a problem now in NE India. LPG distributors get a commission of Rs 21.94 per 14.2 Kgs cylinder and Rs 50.00 per cylinder for selling a 19 Kg cylinder. The per Kg difference is not lucrative enough for the distributor to wholeheartedly erasure selling of NDNE LPG cylinders. To sell a 14.2 Kg cylinder no marketing effort is required to be put by the distributor as only supply has to be made by them. The share of NDNE in the LPG sales is 5%. The NDNE retailers need to make more efforts to push the sales. For the domestic LPG(95% market share) the key focus is- Ensure supply in time. For the NDNE LPG(5% market share) the key focus is- Expiration of the Market.
SWOT ANALYSIS
STRENGTH:
1.
2. 3.
The LPG infrastructure of IndianOil in NE India as regards to production, storage and bottling capacity. IndianOil reach at every nook and corner of NE India through its vast LPG distributor network. Brand image of Indane is acceptable.
WEAKNESS : 1. 2. 3. Monitoring- in terms of usage of domestic LPG. Renewal of NDNE LPG cylinders Booking patterns. Sales target of NDNE LPG is not given to the distributors.
1. 2. 3.
OPPORTUNITY Boom in hotel and restaurant business in NE India. Fabrication shops potential. Boom is tea stall and sweet shop business.
THREAT
1. All other players like BCPL and HPCL are government firms. Hence it is expected that they will survive the competition which in term can create loss in marketing share. 2. Piped gas of Assam Gas Company Limited is a major threat as it is very cheap and convenient.
FUTURE SCOPE
Will it be cost effective to create a separate distribution channel for NDNE LPG. Requirement of setting a sales target for NDNE LPG distributors. To create monitoring which is dedicated only to NDNE.
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