Effectiveness of Branding Petrol What Do Branded Fuels Do?

The term branded fuel essentially refers to fuel that has b e e n m o d i f i e d b y 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. In a new vehicle, the carburettor, fuel injectors, fuel intake valve and ports, and the combustion chamber are free from deposits. However, overtime, carbon deposits tend to accumulate on these parts, impeding the vehicles performance. M o r e o v e r , a s a l l n e w g e n e r a t i o n c a r s a r e f i t t e d w i t h M P F I ( M u l t i P o r t F u e l Injectorsto accurately deliver petrol in the form of fine droplets for clean b u r n i n g ) , MPFI deposits are formed when the engine is turned off. This i s because the trapped fuel in the injector is exposed to higher temperature for longer time than the flowing fuel. Because of narrow fuel passages, injectors become highly sensitive to the smallest amount of deposits in the critical regions, where the fuel is metered. Heat degrades the fuel and initiates the deposit formation. Intake valves and ports are subject to m o r e d e p o s i t s t h a n f u e l injectors, as they operate at higher temperatures. These deposits can alter the spray pattern and reduce the fuel flow, reducing drivability, decreasing power and fuel economy, and increasing emission levels. The additives in branded fuels effectively remove harmful deposits from all components. They clean up fuel injectors, valves and combus tion chambers a l o n g w i t h t h e f u e l t a n k a n d f u e l l i n e s . T h e a d d i t i v e s a l s o c o n s t a n t l y c l e a n deposits and prevent gum formation in the engine. Branded fuel, thus, help restore the original engine performance, ensures easy start-ups and increase fuel efficiency, leading to lower emissions. Traditionally, these additives were added separately to the fuel. Branded fuels eliminate the need for purchasing additive sat the time of every filling. NLDIMSR 9 --------------------------------------------------------------------Effectiveness of Branding Petrol Building New Fuel Brands Having realized the need for brand building, oil companies invested heavily in p r o d u c t d e v e l o p m e n t a n d R & D t o c o m e o u t w i t h f u e l s t h a t w o u l d s u i t t h e requirements of Indian roads as well as comply with the emission norms. BPCLsSpeed was blended with multifunction additives sourced from Chevron OroniteCompany LLC, a Cheron Texaco Company. Commenting on this, S RameshGeneral Manager (Brand Management), BPCL, said, With more cars running onthe MPFI technology, the new variant will help remove carbon deposits from thefuel tanks and cleanse the engine, thereby giving the consumers better mileageand protection to cars.HPCLs Power was

also blended with a specially imported multi function aladditives package that was formulated to remove deposits from the engine,thereby, ensuring optimum burning of petrol. While Power benefited the newgeneration of MPFI engines, it also helped in getting optimum performance int r a d i t i o n a l c a r b u r e t e d e n g i n e s a s w e l l a s t w o w h e e l e r s . A n i n t e r n a t i o n a l l y accredited fuel testing laboratory in Gremany ranked power among the worldstop petrol brands.IOCs Premium was reportedly Indias first and only high octane petrol that wasreinforced with world class anti knocking additives. Its engine cleansing qualitiesreportedly improved mileage and lowered emissions. According to companysources, adding an extra dosage of this additive over and above the normaldosage helped removed gummy deposits already formed in the system. Bykeeping the intake system and the injectors in MPFI engines clean, Premiumensured a proper air fuel mixture and therefore, better combustion and reducedemission level. IBPs Josh claimed to have special additives that improved fuelefficiency. NLDIMSR 10 --------------------------------------------------------------------Effectiveness of Branding Petrol Speed was initially made available exclusively through 16 Pure for Sure retailoutlets located in different parts of Delhi.BPCLs retail base was gradually expanded to cover the rest of the country, emphasizing on penetrations in rural markets and convenience retailing in semiurban markets. IOC also test marketed its fuel in Delhi for three months in mid2002, and in Hyderabad (Andhra Pradesh), before launching them on nationallevel.HPCL also decided to retail its fuels from the Club HP outlets. IBP marketed itsfuel in six major cities at 34 retail outlets. By March 2003, all the companies werea t v a r i o u s stages of increasing the availa bility of their respective brands i n different parts of the country. Promotional Efforts The maximum action in the industry was seen on the promotional front. All thecompanies were adopting various media mix tools to promote their brands. BPCLlaunched a promotional scheme for Speed, under which anyone buying fuelworth Rs. 600 or more got a free BPCL PetroCard. The company also gave itsdealers better incentives to sell the new fuel. A survey conducted by BPCLrevealed that 44% of customers were influenced by people at the petrol pumps,who convinced them to use Speed. Keeping the importance of the dealers role inpromoting the product, the company gave a significantly higher commission of around 80 paise per liter against the usual norm of 45 paise per liter for normalpetrol.To promote Speed, BPCL also entered into an association with the website,www.hungama.com. A website (speed.hungama.com)

was launched that focusedon motor racing event held in January 2003. BPCL also associated the brandwith latest James Bond movie, Die Another Day by becoming a market partner. NLDIMSR 11

--------------------------------------------------------------------Effectiveness of Branding Petrol The company paid Rs. 7.5 mn for this deal, which involved a m o v i e r e l a t e d television campaign and various promotional activities at petrol pumps. Winnerswere given movie tickets.I O C e a r m a r k e d a n advertising expenditure of around Rs. 50 -70 mn for t h e promotion and brand building of these fuels. The company even planned a set of logos for these fuels. In order to create a synergy between product branding andc o r p o r a t e b r a n d i n g , i t u s e d i t s h o u s e c o l o u r s , b l u e a n d o r a n g e . T h i s w a s expected to enhance the recall value of the IOC mother brand and create agreater association of the new products with the company.Unlike the high profile marketing campaigns of these companies IBP did nota g g r e s s i v e l y p r o m o t e i t s p r o d u c t s a n d s e r v i c e s . T h e c o m p a n y l i m i t e d i t s promotion only to those outlets where the products were available.On the pricing front, all the companies seemed to be following a uniform policy;the prices had to be kept comparatively higher to drive home the point that thefuels were technically superior to normal petrol. However, it was also necessarynot to let the per liter price differential be very high, keeping in mind the novelty of the products as well as the price consciousness of Indian consumers. Thus,Speed was priced only at Rs. 1.25 per liter more than the conventional fuel.The company felt this was justified, since customers using packaged additiveswere incurring a cost of around Rs. 1.25 per liter for petrol. The players also adopted a similar strategy of pricing the branded fuel marginally higher than theconventional fuels. To respond to this similar price move of the competitors, BPCL reduced the price of the Speed, making it around 30 paise cheaper thanthe branded petrol of IOC and HPCL. NLDIMSR 12 --------------------------------------------------------------------Effectiveness of Branding Petrol Speed Speed is new high performance petrol from Bharat Petroleum that enhancesoverall engine performance and ensures smoother drive ability. Speed is blendedwith multi-functional additives that have been sourced from

Chevron OroniteC o m p a n y L L C , a C h e v r o n T e x a c o c o m p a n y , w h i c h c o m p l i e s w i t h E P A 9 7 (Environment Protection Agency, USA) requirements. Why one should use Speed? In a new vehicle, the fuel injectors, carburetor, fuel intake valves and ports, andthe combustion chamber are free from deposits. However, overtime, carbond e p o s i t s t e n d t o a c c u m u l a t e o n t h e a b o v e p a r t s , i m p e d i n g t h e v e h i c l e performance. Use of Speed helps in restoring the original engine performance byremoving existing deposits and further preventing the formation of new deposits.A l l n e w g e n e r a t i o n c a r s a r e f i t t e d w i t h M u l t i - P o r t F u e l I n j e c t o r s ( M P F I ) t o accurately deliver petrol in the form of fine droplets for clean burning. Because of the narrow fuel passages, injectors are highly sensitive to the smallest amount of deposits in the critical regions where the fuel is metered and atomised. Thesedeposits can alter the spray pattern and reduce the fuel flow, affecting driveability,decreasing power & fuel economy, and increasing emission levels. Similar problems can occur in the case of carbureted engines too.MPFI deposits are formed when the engine is turned off, as the trapped fuel inthe injector is exposed to higher temperature for a longer time than the flowingfuel. The heat degrades the fuel and initiates deposit formation. Vehicles used for short trips are more prone to this problem.Intake valves and ports are subject to more deposits than fuel injectors as theyoperate at higher temperatures. These deposits reduce maximum engine power because they restrict airflow. NLDIMSR 13