A Project Report

On

“Marketing and Promotion of XtraPower Fleet Card

Loyalty Program”

Submitted to

Indian Oil Corporation Limited

By

Rakesh Sharma

IITTM
(An organization of Ministry of Tourism, Govt. of India)

Gwalior.

2009
A Project Report
1
 On

“Marketing and Promotion of XtraPower Fleet Card

Loyalty Program”

Submitted By

Kishor Kunal
Enrollment No: 1084019
Session: 2008-2010

Under the guidance of

Shri. J.K.Ghosal

Senior Manager Regional Coordinator

At
Indian Oil Corporation Limited.
(Barauni Refinery)

A Project Undertaken towards the partial fulfillment of the degree

“Post-Graduate Diploma in Management”
International Business (I.B) 2008-10

IITTM
(An organization of Ministry of Tourism, Govt. of India)

Gwalior.

2009

2
 Certificate of Approval

The following Summer Project Report titled “Marketing and Promotion of

XtraPower Fleet Card Loyalty Program” is hereby approved as a certified
study in management carried out and presented in a manner satisfactory to
warrant its acceptance as a prerequisite for the award of Post-Graduate
Diploma in Management in International Business and Marketing for which
it has been submitted. It is understood that by this approval the undersigned do
not necessarily endorse or approve any statement made, opinion expressed or
conclusion drawn therein but approve the Summer Project Report only for the
purpose it is submitted.

Summer Project Report Examination Committee for evaluation of

Summer Project Report

Name Signature

1. Faculty Examiner
_______________________ ___________________

2. PG Summer Project Co-coordinator

_______________________ ___________________

3
 Certificate from Summer Project Guides

This is to certify that Mr. Kishor Kunal, a student of the Post-Graduate

Diploma in Management in International Business and Marketing, has
worked under our guidance and supervision. This Summer Project Report has
the requisite standard and to the best of our knowledge no part of it has been
reproduced from any other summer project, monograph, report or book.

Dr Nimit Chowdhary Shri. J.K.Ghosal

Course Coordinator Senior Manager (R.C)
I.I.T.TM Marketing Division
Gwalior Indian Oil Corp. Ltd.
Barauni Refinery
Barauni, Bihar
Date:
Date:

4
 PREFACE
In the broader sense training is necessary to make the students of professional
institutions familiar with industrial environment .This not only helps
professionals to speedily accommodate themselves in industries but also to have
better usage of their studies.

To be dynamic, strategic and work aggressively they need to know the policies ,
procedures and trends going in the present industrial environment apart from
their studies The training fulfils all these needs . Whether it is the question of
demonstrating a modernized procedure, step by step to an old production hand
or guiding a new division head through the intricacies of preparing his own
budget, the responsible supervisor or manager must make the trainee learn and
communicate.

The purpose and objective of the study is to analyze the different aspect of
financial and marketing position of the organization and list out the suggestions,
recommendations based on the studies.

The main source of study is primary and secondary data collected from
the annual end and other public reports and other information received from
Barauni Refinery and Indian Oil Corporation Limited and market survey.

The various modern and standard tools to achieve the objectives of the study
carry out the analysis of the data.

IOCL BARAUNI REFINERY – THE JEWEL OF BIHAR

5
Barauni Refinery is the second public sector refinery of the Indian Oil
Corporation Limited which was set-up under the collaboration of erstwhile
USSR and limited participation of Romania. It is located near the northern bank
of the river Ganga at Begusarai District town of Bihar state. The refinery is
strategically located on the crossroads of two important national highways , NH-
30 and NH-31 and two important railways, Eastern Railways and North Eastern
Railways. The river Ganga flows around 8 km from the refinery.
The Barauni Refinery takes its crude oil from foreign countries through Barauni
–Haldia Crude Pipeline (BHCPL).Barauni Refinery is one of the biggest size oil
refinery owned and managed by IOCL. The refinery is located about 8km from
the town Begusarai and is surrounded by villages.

The construction activity of the refinery commenced in 1962 and it went on

stream in the year 1964 facing insurmountable hurdels, heavy equipment ,men
and machinery was moved into a predominantly agrarian district of Begusarai.

Barauni Refinery was formally inaugarated by Prof. Humayun Kabir, the then
Union Minister of Petroleum and Chemicals, Government of India on January
15, 1965. It started with a refining capacity of processing two 2 Million Metric
Tones Per Annum of Assam Crude through the Nahar-Katiya-Barauni pipeline.
The capacity was subsequently enhanced to 3 million metric tones per annum.

The refinery consists of three crude oil Distillation unit, two Coker unit, CRU,
LRU and BXP. The oilmovement and storage section of refinery does the
storage and dispatch of all the products. An LPG bottling plants has also been
provided which is able to fill 3500 to 4000 cylinders per day.A captive power
plant has been provided to meet the steam and power requirements of the
refinery. Under the expansion program following process units and facilities are
put up:
 The Resid Fludised Bed Catalytic Cracking Unit (RFCCU) yielding
LPG, Diesel and Petrol.
 Diesel Hydro Treater (DHDT) for improving Cetone no. and to meet the
euro emmissions norms.

Primarily, the refining technology was sourced from eastern countries like
Russia. Later as the refinery grew over the years, it drew upon technologies
from rest of the world . In February 16, 1999 the 498 km long Haldia-Barauni
Crude OilPipeline commenced its crude supply position of the refinery, which
was dependent on Assam crude alone. At the begining of the new millennieum ,
Barauni Refinery is poised to touch stellar heights in mordernizing its refining
technology.Barauni refinery is among the few refineries in the world to have
scored the coveted ISO 9002 Certification.

6
The refinery processess imports the low sulphur and high sulphur crude oil to
produce the following:

 Motor Spirit (MS) Petrol.

 Liquified Petroleum Gas (LPG).
 Naptha.
 Superior Kerosene Oil (SKO).
 High Speed Diesel (HSD).
 Light Diesel Oil.
 Carbon Black Feed Stock (CBFS).
 Bitumen.
 Low sulphur heavy stock.

Barauni Terminal catering to the needs of the customer of 29 districts of Bihar ,

bridging for Mughalsarai for XtraPremium MS and LDO and other IOC
locations as well as various consumers situated in different part of the country
and OMC by rail loading at refinery premises and OMC situated at Barauni
through dedicated product pipeline.

Barauni terminal, Barauni is committed to comply Corporation’s mission to

achieve standards of excellence in petroleum marketing and transportation with
concerned for customer satisfaction and to adopt sale and environment freindly
practices by :

 Supplying ONSPEC product in correct quantity at administered prices.

 Tendering prompt and courteous service to all customers.
 Emphasizing concern for safety.

7
1) ACKNOWLEDGEMENT.

2) INTRODUCTION TO IOC.

 VISION.
 INDAIN OIL- INDIA’S DOWNSTREAM MAJOR.
 MISSION.

3) INDIAN OIL – A NATIONAL BRAND

 IOC PRODUCTS.
 IOC SERVICES.
 IOC BRANDS.

4) SWOT ANALYSIS FOR IOCL.

5) LOYALTY PROGRAMME – AN INTRODUCTION

6) LOYALTY PROGRAMS AT IOCL.

 XTRAREWARDS LOYALTY PROGRAM.

 XTRAPOWER FLEET CARD PROGRAM.

7) HOW IS XTRAPOWER FLEET CARD BETTER THAN OTHER FLEET CARD?

 POINT SYSTEM
 LIST OF REWARDS.

8) PROJECT SYNOPSIS.

 INTRODUCTION TO THE PROJECT.

 OBJECTIVES OF THE PROJECTS.

9) RESEARCH METHODOLOGY.

 PROBLEM DEFINITION
 RESEARCH DESIGN.
 SAMPLE SIZE AND SAMPLE DESIGN
8
  DATA ANALYSIS AND FINDINGS.

10) RETAIL OUTLET SALES

 FINDINGS.
 CONCLUSION.
 RECOMMENDATION.

11) PROSPECTIVE ALLIANCE FOR XTRAPOWER FLEET CARD PROGRAM.

 ALLIANCE PARTNERS OF IOCL FOR XTRAPOWER FLEET CARD

PROG.
 NEED FOR LOCAL ALLIANCE PARTNERS.
 OBJECTIVES OF THE PROJECT.
 FINDINGS.
 RECOMMENDATIONS.

12) QUESTIONNAIRE.

13) BIBLIOGRAPHY.

9
 Acknowledgement

A formal statement of acknowledgement will hardly meet the ends of the justice
in the matter of expression of my deeply felt sincere and allegiant gratitude to all
those who encouraged me and helped me during my study.

It gives me immense pleasure, to express my unfeigned and sincere thanks and

gratitude to my supervisor Shri. J.K.Ghosal, Senior Manager, Regional
Coordinator IOCL Barauni Refinery, Barauni for his valuable guidance
sustained, encouraged and constructive critic at every stage of work, without
which it would have never been accomplished.

I am thankful to the staff members of Indian Oil Corporation Ltd. Marketing

Terminal, Barauni Refinery who gave me an opportunity to spend these two
months in their organization and enrich my knowledge.

I also extend my heartiest thanks to all the faculty members of Indian Institute of
Tourism and Travel management, Gwalior for gracing me with the knowledge
that I could use in the completion of this training.

I am also very thankful to all my respondents who took time out of their busy
schedules and helped me in carrying out this project.

(KISHOR KUNAL)

10
 Introduction to IOCL
VISION:

“A major diversified, transnational, integrated energy company, with national

leadership and a strong environment conscience, playing a national role in oil
security & public distribution.”

INDIAN OIL: INDIA’S DOWNSTREAM MAJOR:

Indian Oil Corporation is an Indian public-sector petroleum company. It is

India’s largest commercial enterprise, ranking 116th on the Fortune Global 500
listing (2008). It began operation in 1959 as Indian Oil Company Ltd. The
Indian Oil Corporation was formed in 1964, with the merger of Indian
Refineries Ltd. Indian Oil and its subsidiaries account for a 47% share in the
petroleum products market, 40% share in refining capacity and 67% downstream
sector pipelines capacity in India. The Indian Oil Group of companies owns and
operates 10 of India's 19 refineries with a combined refining capacity of 60.2
million metric tonnes per annum (MMTPA, .i.e. 1.2 million barrels per day).
These include two refineries of subsidiary Chennai Petroleum Corporation Ltd.
(CPCL) and one of Bongaigaon Refinery and Petrochemicals Limited (BRPL).

From a fledgling company with a net worth of just Rs. 45.18 crore and sales of
1.38 million tonnes valued at Rs. 78 crore in the year 1965, Indian Oil has since
grown over 3000 times with a sales turnover of Rs. 285,337 crore, the highest–
ever for an Indian company, and a net profit of Rs. 2,950 crore for 2008-09.

Set up with the mandate of achieving self-sufficiency in refining and marketing

operations for a nascent nation set on the path of economic growth and
prosperity, Indian Oil today accounts for nearly half of India’s petroleum
11
consumption, reaching precious petroleum products to millions of people every
day through a countrywide network of around 35,000 sales points. They are
backed for supplies by 167 bulk storage terminals and depots, 101 aviation fuel
stations and 89 Indane LPG bottling plants. For the year 2008-09, Indian Oil
sold 62.6 million tonnes of petroleum products, including 1.7 million tonnes of
natural gas.

The Corporation's cross-country network of crude oil and product pipelines,

spanning about 9,300 km and the largest in the country, meets the vital energy
needs of the consumers in an efficient, economical and environment-friendly
manner.

Indian Oil is investing Rs. 43,393 crore (US $10.8 billion) during the period
2007-12 in augmentation of refining and pipeline capacities, expansion of
marketing infrastructure and product quality up gradation as well as in
integration and diversification projects.

As the flagship national oil company in the downstream sector, Indian Oil
reaches precious petroleum products to millions of people every day through a
countrywide network of about 35,000 sales points. They are backed for supplies
by 166 bulk storage terminals and depots, 101 aviation fuel stations and 89
Indane (LPGas) bottling plants. About 7,100 bulk consumer pumps are also in
operation for the convenience of large consumers, ensuring products and
inventory at their doorstep.

Indian Oil operates the largest and the widest network of petrol & diesel stations
in the country, numbering over 17,600. It reaches Indane cooking gas to the
doorsteps of over 50 million households in nearly 2,700 markets through a
network of about 5,000 Indane distributors.

Indian Oil’s ISO-9002 certified Aviation Service commands over 62% market
share in aviation fuel business, meeting the fuel needs of domestic and
international flag carriers, private airlines and the Indian Defence Services. The
Corporation also enjoys a dominant share of the bulk consumer business,
including that of railways, state transport undertakings, and industrial,
agricultural and marine sectors.

12
To safeguard the interest of the valuable customers, interventions like retail
automation, vehicle tracking and marker systems have been introduced to ensure
quality and quantity of petroleum products.

Indian Oil has set up subsidiaries in Sri Lanka, Mauritius and the United Arab
Emirates (UAE), and is simultaneously scouting for new opportunities in the
energy markets of Asia and Africa.

Lanka IOC Ltd. operates about 150 petrol & diesel stations in Sri Lanka, and has
a very efficient lube marketing network. Its oil terminal at Trincomalee is also
Sri Lanka's largest petroleum storage facility. Lanka IOC commissioned an
18,000 tonnes per annum capacity lubricants blending plant and a state-of-the-
art fuel and lubricants testing laboratory at Trincomalee during 2007-08 besides
commencing bunkering business.

Indian Oil (Mauritius) Ltd. has an overall market share of nearly 20% and
commands a 32% market share in aviation fuelling business, apart from its
bunkering business. It operates a modern petroleum bulk storage terminal at Mer
Rouge port, besides 13 petrol & diesel stations. In addition to the ongoing
expansion of retail network, IOML has commissioned the first ISO-9001
product-testing laboratory in Mauritius.

The Corporation's UAE subsidiary, IOC Middle East FZE, which oversees
business expansion in the Middle East, has commenced blending SERVO
lubricants and marketing petroleum products and lubricants in the Middle East,
Africa and CIS countries.

Performance during financial year 2007-2008

Indian Oil’s Gross Turnover (inclusive of excise duty) for the year 2007-08
reached a new high of Rs. 2,47,479 crore, up by 12.1 % as compared to Rs.
2,20,779 crore in the previous year. The Profit After Tax was Rs. 6,963 crore.

The Corporation sold 59.29 million tonnes of petroleum products during the
year 2007-08, as compared to 54.84 million tonnes during the previous year.
This includes sale of natural gas, which has gone up to 1.74 million tonnes in
2007-08 as compared to 1.48 million tonnes in the previous year. In addition,
13
product exports rose to 3.33 million tonnes from 3.13 million tonnes in the
previous year.

The Corporation’s seven refineries surpassed 100% capacity utilization and

clocked the highest ever throughput of 47.4 million tonnes. Its pipelines network
too registered the highest ever operational throughput of 57.12 million tonnes of
crude oil and petroleum products. Among new businesses, Natural

Gas Marketing and Petrochemicals together generated revenues of over Rs 4,600

crore during the year 2007-2008.

As a leading public sector enterprise of India, Indian Oil has successfully

combined its corporate social responsibility agenda with its business offerings,
meeting the energy needs of millions of people everyday across the length and
breadth of the country, traversing a diversity of cultures, difficult terrains and
harsh climatic conditions. The Corporation takes pride in its continuous
investments in innovative technologies and solutions for sustainable energy flow
and economic growth and in developing techno-economically viable and
environment-friendly products & services for the benefit of its consumers.

Mission

• To achieve international standards of excellence in all aspects of energy and

diversified business with focus on customer delight through value of products
and services, and cost reduction.

• To maximize creation of wealth, value and satisfaction for the stakeholders.

• To attain leadership in developing, adopting and assimilating state-of-the-art

technology for competitive advantage.

• To provide technology and services through sustained Research and

Development.

• To foster a culture of participation and innovation for employee growth and

contribution.

• To cultivate high standards of business ethics and Total Quality Management

for a strong corporate identity and brand equity.
14
• To help enrich the quality of life of the community and preserve ecological
balance and heritage through a strong environment conscience.

INDIAN OIL - A NATIONAL BRAND

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.

However, the value of the IndianOil brand is not just limited to its commercial
role as an energy provider but straddles the entire value chain of gamut of
exploration & production, refining, transportation & marketing, petrochemicals
& natural gas and downstream marketing operations abroad. IndianOil is a
national brand owned by over a billion Indians and that is a priceless value.

Due to innovative initiatives, strong brand communications and sales

promotion campaigns conducted during the year, Indian Oil's branded fuels -
XTRAPREMIUM petrol and XTRAMILE diesel - maintained their firm
leadership status, with a market share of 48.6% and 59.6% respectively among
branded fuels in the market. XTRAPREMIUM and XTRAMILE are now
available at 6,446 and 9,256 retail outlets of Indian Oil respectively.

Indian Oil is a heritage and iconic brand at one level and a contemporary, global
brand at another level. While quality, reliability and service remains the core
benefits to our customers, our stringent checks are built into operating systems,
at every level ensuring the trust of over a billion Indians over the last four
decades.

IOC- Products

15
Indian Oil is not only the largest commercial enterprise in the country it is the
flagship corporate of the Indian Nation. Besides having a dominant market
share, Indian Oil is widely recognized as India’s dominant energy brand and
customers perceive Indian Oil as a reliable symbol for high quality products and
services.

Benchmarking Quality, Quantity and Service to world-class standards is a

philosophy that Indian Oil adheres to so as to ensure that customers get a truly
global experience in India. Our continued emphasis is on providing fuel
management solutions to customers who can then benefit from our expertise in
efficient sourcing and least cost supplies keeping in mind their usage patterns
and inventory management.

Indian Oil is a heritage and iconic brand at one level and a contemporary, global
brand at another level. While quality, reliability and service remains the core
benefits to our customers, our stringent checks are built into operating systems,
at every level ensuring the trust of over a billion Indians over the last four
decades.

The Retail Brand template of IOC consists of XtraCare (Urban), Swagat

(Highway) and Kisan Seva Kendra’s (Rural). These brands are widely
recognized as pioneering brands in the petroleum retail segment. Indian Oil’s
leadership extends to its energy brands - Indane LPG, SERVO Lubricants, Auto
gas LPG, XtraPremium Branded Petrol, XtraMile Branded Diesel, XtraPower
Fleet Card, Indian Oil Aviation and XtraRewards cash customer loyalty
programme.

IOCL PRODUCTS IN THE MARKET

SERVO

16
Indian Oil's SERVO range of lubricants reigns as the undisputed market leader
in the Indian lubricants market. Known for its cutting-edge technology and high-
quality products, SERVO backed by Indian Oil's pioneering R&D, extensive
blending and distribution network, sustained brand enhancement and new
generation packaging is a one-stop shop for complete lubrication solutions in the
automotive, industrial and marine segments.

In the retailing segment, besides Indian Oil petrol stations, SERVO range of
lubricants is available through a network of SERVOXpress stations, bazaar
outlets and thousands of auto spare parts shops across the country. The SERVO
range includes over 500 lubricants and 1200 formulations encompassing literally
every lubricant requirement.

The SERVOXpress is a one-stop shop for quick, easy and convenient auto care,
providing customers with a refreshing experience. The SERVOXpress stations
have facilities for oil change, tyre/battery checkups, A/C service, vacuum
cleaning, perfuming, and upholstery cleaning, polishing and lamination
installation too.

INDANE LPG GAS

Indane is today one of the largest packed-LPG brands in the world. Indian Oil
pioneered the launch of LPG in India in the 1970s and transformed the lives of
millions of people with the introduction of the clean, efficient and safe cooking
fuel. LPG also led to a substantial improvement in the health of women in rural
areas by replacing smoky and unhealthy chullahs with Indane. It is today a fuel
synonymous with safety, reliability and convenience. Indian Oil’s Indane LPG
gas is used in 40 million homes as cooking fuel and commands over48% market
share in India.

INDIAN OIL AVIATION SERVICES

Indian Oil Aviation Service is a leading aviation fuel solution provider in India
and the most-preferred supplier of jet fuel to major international and domestic
airlines. Between one sunrise and the next, Indian Oil Aviation Service refuels
over 1500 flights – from the bustling metros to the remote airports linking the
17
vast Indian landscape, from the icy heights of Leh (the highest airport in the
world at 10,682 ft) to the distant islands of Andaman & Nicobar.

Indian Oil Aviation services have a market share of 65% with a network of 101
Aviation Fuel Stations (AFS) meets complete aviation fuel requirement of the
Defense services.

AUTO GAS

AutoGas (LPG) is a clean, high octane, abundant and eco-friendly fuel. It is

obtained from natural gas through fractionation and from crude oil through
refining. It is a mixture of petroleum gases like propane and butane. The higher
energy content in this fuel results in a 10% reduction of CO2 emission as
compared to MS.

XTRAPREMIUM PETROL

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

XTRAMILE SUPER DIESEL

Indian Oil’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.

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XTRAPOWER FLEET CARD

The XTRAPOWER Fleet Card program is a complete smart card-based fleet

management solution for fleet operators and Corporate for cashless purchase of
fuel & lubes from designated retail outlets of Indian Oil through flexible pre-
paid and credit facilities

The fleet card program 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, Indian Oil’s XTRAPOWER Fleet Card has
emerged as the largest fleet card in the country with the widest retail outlet
coverage.

SUPERIOR KEROSENE OIL

Kerosene is distillate fractions of crude oil in the boiling range of 150-

250°C. They are treated mainly for reducing aromatic content to increase
their smoke point (height of a smokeless flame) and hydro fining to reduce
sulphur content and to improve odour, colour & burning qualities (char
value).

Kerosene is used as a domestic fuel for heating / lighting and also for
manufacture of insecticides/herbicides/fungicides to control pest, weeds and
fungi. Since kerosene is less volatile than gasoline, increase in its
evaporation rate in domestic burners is achieved by increasing surface area
of the oil to be burned and by increasing its temperature. The two types of
burners which achieve this fall into two categories namely vaporisers &
atomisers.

“SWAGAT” HIGHWAYS FLAGSHIP RETAIL OITLETS

There are number of such retail outlets planned across the country out of
which many have been commissioned with a complement if fuel and non-
19
fuel. Non-fueling offering through ‘Best-in-class’ alliance on exclusive basis
wherever possible communication, food, rest, healthcare, parking vehicle
care etc.

XTRA CARE

The launch of Xtra Care was the culmination of a series of plans in retail
design, product and service up gradation, capability training, automation,
loyalty programme, retail site management techniques all benchmark to
global standards. While the industry standard is to take samples on a
quarterly basis, Indian Oil has moved several steps ahead by introducing
fortnightly random sampling with specific importance given to Research
Octane Number (RON) sampling which is truly the definitive test for quality
and quantity. So far over 400 Xtra care retail outlets have been set up, around
1500 Xtra Care retail outlets will be ready soon.

XTRAREWARDS LOYALTY PROGRAM

Indian Oil XTRAREWARDS is India's first on-line rewards program that

seeks to inculcate the habit of redeeming points. The loyalty program
rewards customers paying by cash, credit and debit cards.

Each transaction is confirmed on-line through a charge slip and customers

can earn points on fuel/lube purchases at participating Indian Oil Retail
Outlets. Additional points can also be earned outside the Indian Oil network,
covering prominent FMCG, Food, Automobile, Travel, Entertainment,
Apparel and Hospitality sectors.

IOC Services

Indian Oil provides a wide range of marketing services and consultancy in

20
fuel handling, distribution, storage and fuel/lube technical services. With a
formidable bank of technical and engineering talent, Indian Oil is fully
equipped to handle small to large-scale infrastructural projects in the
petroleum downstream sector anywhere in the country. Our project teams
have independently or jointly as a consortium, have set up depots, terminals,
pipelines, aviation fuel stations, filling plants, LPG bottling plants, amongst
others. Indian Oil’s fuel management system to bulk customers offer
customized solutions that deliver least cost supplies keeping in mind usage
patterns and inventory levels. A wide network of lubricant and fuel testing
laboratories are available at major installations which is further backed by
sector-wise expertise in the core sectors of power, steel, fertilizer, gas plants,
textile mills, etc. Cutting edge systems and processes are designed around
one simple belief-to provide valuable customers with an unbeatable edge in
their business. Indian Oil’s supply and distribution network is strategically
located across the country linked through a customized supply chain system
backed by front offices located in conceivably every single town of
consequence.

The wide network of services offered by Indian Oil, Marketing Division is

well maintained, which includes; commercial/reticulated LPG; total fuel
management/ consumer pumps; Indian Oil Aviation Service; LPG Business
(non-fuel alliances); loyalty programs; retail business (non-fuel alliances)
and SERVO technical services.

IOC Brands:

21
SWOT Analysis for IOCL

22
External environment

Opportunity:

The IOCL has much opportunity in the present market conditions. This is
because the petroleum products have become a need for everyone and still
contains a lot of scope for customization. The various opportunities are listed
below.

• Since the company has the maximum number of outlets and also the maximum
number of refineries in India, it can very easily go for extension at any point of
time, and can introduce any new products, which will get support from its huge
market network.

• The company can make the buying process easier for the customers, by
implying many more schemes in the range of XTRAPOWER Fleet Card AND
XTRAREWARD.

• The company can think over the issue to build its own pipelines, so that it will
be an independent player and it will also support its aviation fuel supply.

• Company has a great scope in E&P. It is already involved in E&P but only in a
very limited scale.

Threats:

23
Since the company is the market leader in the field, so have maximum threats
from the other players and many other issues. The lists of threats are given
below.

• The foreign players with more advanced technology are the biggest threat

for the company.

• The crude oil supply is also a big issue in front of the company, because the
company cannot fix its price and so, some time had operated in loss also.

It is the biggest problem because the maximum part of their crude is been
imported.

• In future the market will welcome more private players, which will eat up

its market share.

• If the Govt. Policies allow the private players to set their own price, the private
player can seriously harm the market share of IOCL.

Internal environment

24
Strengths:

• IOC controls 10 refineries, by virtue of which it has a total share of around

40% of India’s overall refining capacity. IOC has also acquired equity stakes in
CPCL and BRPL, and in 2001, these refineries became subsidiaries of IOC.

• 58% of IOC’s refining capacity is located in the Northern and Western regions,
which are high demand and high growth areas

• Although its refineries are located the interior of the country and not near the
major ports IOC has a very strong distribution network by virtue of having a
share of 48% in the country’s product pipelines. The total capacity of these
product pipelines is 49.79 MMT.

• IOC also acquired management control of the marketing company IBP, thereby
strengthening its position in these activities. It also has a dominant share in all
segments in terms marketing infrastructure. Its network includes 19830 retail
outlets, 8000 LPG distributors, and 6492 kerosene/LDO dealers.

• By virtue of entering into extensive joint venture agreements, and of its own
initiative as well, the company has a presence in various other related activities
such as petroleum storage, pipelines, lube additives, exploration,
petrochemicals, gas, training and consultancy, etc.

• The company has already entered overseas markets such as Sri Lanka,
Maldives, and Oman and is presently considering entering Turkey through a JV.
The company is in talks with Caliak of Turkey to set up a 10 million TPA grass
root refinery with an investment of $2 billion and establish retail business. IOC
is also weighing the possibility of entering Indonesia.IOC has also started
exploring the overseas markets for increasing its scope of operations. Its
interests include downstream activities in Sri Lanka, Maldives, Oman, and
25
Nepal; interest in the lubes business in Maldives, Dubai, Bangladesh, Sri Lanka,
etc; among others.

Weakness:

The company is the market leader in the industry, but still it had many
weaknesses.

The list is given below.

• The major weakness for the company is the R&D. The company starts working
on it.

• The petrochemical product development technology is another weakness for

the company.

• The technological drawback, as compared to some major foreign player is

another weakness for the company

26
 LOYALTY PROGRAMS- AN INTRODUCTION:

Loyalty programs are structured marketing efforts that reward, and therefore
encourage, loyal buying behavior — behavior which is potentially of benefit to
the firm.

Earning customer loyalty goes beyond gaining customer satisfaction. Loyal

customers evangelize the brand by sharing their satisfactory experience with
their friends and colleagues. A great product or service is the starting point for
customer loyalty. Great marketers architect loyalty programs from day one.

Loyalty programs are initiated by businesses with two main goals. The primary
goal for most loyalty programs is the acquisition of information relating to their
customers' spending habits, while the secondary goal is to actively cultivate
loyalty amongst customers to ensure they continue patronizing the business.
While some companies do reverse these priorities, the above hierarchy holds
true for most.

Loyalty programs may offer benefits in a number of different ways. Many

loyalty programs offer a sustained discount (such as 10%) for a period of time -
perhaps a year, perhaps for the life of the business. Others offer a discount once
certain criteria have been met — for example, a 20% discount on a single
purchase once a customer has spent Rs 2000 at the business. Still others offer
points which may then be redeemed for products which may or may not be
directly related to the business.

Loyalty cards are the most common form of loyalty programs found throughout
the world today. Some of the first loyalty programs were instituted by airlines in
the 1970s in the form of frequent flyer miles. In these loyalty programs, one
accrues points by flying on the airline and then 'cashes in' the points in exchange
for tickets, upgrades, or even third-party benefits. In the past decade, many non-
airline businesses have combined their own loyalty programs with those of the
airlines, offering frequent flyer miles in exchange for everything from telephone
usage to purchasing gasoline.

Loyalty programs have gained in popularity immensely in the past fifteen years,
in no small part due to the development of a culture of entitlement, in which
27
consumers feel that they deserve special treatment. Businesses have capitalized
on this when designing their loyalty programs, often offering benefits that cost
little, but carry with them an assumed prestige, such as access to faster-moving
lines or special parking spaces.

Ultimately, the success of loyalty programs depends on how well the business
uses the data it gathers to further refine its policies and loyalty programs. Many
businesses find little profit in the use of loyalty programs, while others, such as
eBay, attribute much of their financial success to a well-executed use of such
programs.

Loyalty programs an integral part

The immense competition will make loyalty programs an integral program of

the day-to-day functioning of petro-retailing. Of course, right now many such
loyalty programs are being run by the petro-retailers like Smart Fleet (BPCL),
XtraPower (IOCL), Drivetrack (HPCL), Transconnect (Reliance), Petrocard
(BPCL) and others. However, these programs are mainly focused at the bulk
consumers and the small consumers are left unnoticed more or less. But in
future, there won’t be such differentiation and loyalty programs will be there for
every segment of consumers.

Customer Relationship Management and Loyalty program

28
Customer Relationship Management (CRM) can be widely defined as
company activities related to developing and retaining customers. It is a blend of
internal business processes: sales, marketing and customer support with
technology and data capturing techniques. Customer Relationship
Management is all about building long-term business relationships with
customers.

Most CRM initiatives begin with a strategic need to manage the process of
handling customer related information more effectively. For beginners it could
simply mean better lead management capabilities or sales pipeline visibility.
However, as organizations mature in their CRM initiatives, they begin to look at
CRM as tool to acquire strategic differentiators. Despite the immense benefits
that the CRM solutions can deliver, they are not entirely without their share of
problems.

Loyal customers are more profitable. Any company will like its mindshare status
to improve from being a suspect to being an advocate. Company has to invest in
terms of its product and service offerings to its customers. It has to innovate and
meet the very needs of its clients/ customers so that they remain as advocates on
the loyalty curve

An important facet of CRM is “customer selectivity”. As several research

studies have shown not all customers are equally profitable (In fact in some
cases 80% of the sales come through 20% of the customers). The company must
therefore be selective and tailor its program and marketing efforts by segmenting
and selecting appropriate customers for individual marketing programs. In some
cases, it could even lead to “outsourcing of some customers” so that a company
better utilize its resources on those customers it can serve better and create
mutual value

With growing competition in the petro-retailing sector, today’s consumer is

becoming more and more demanding. The emergence of new psychographic
segments in petro retail market bears the testimony to this fact. A closer look at
these segments tells us what exactly a consumer is looking for whenever he

goes to a fuel station to purchase fuel. He looks for-

29
  Quality & Quantity assurance

 Quick filling and efficient forecourt service

 Rewarding loyalty

 Premium fuels

 Cashless transactions

 Non-fuel services

The immense competition will make loyalty programs an integral program of

the day-to-day functioning of petro-retailing. Of course, right now many such
loyalty programs are being run by the petro-retailers like Smart Fleet (BPCL),
XtraPower (IOCL), Drivetrack (HPCL), Transconnect (Reliance), Petrocard
(BPCL) and others. However, these programs are mainly focused at the bulk
consumers and the small consumers are left unnoticed more or less. But in
future, there won’t be such differentiation and loyalty programs will be there for
every segment of consumers

Loyalty programs at Indian Oil

Indian Oil’s loyalty programs are designed exclusively to benefit customers who
have been patronizing the brand for over four decades.

30
 XTRAREWARDS Loyalty Program

Indian Oil XTRAREWARDS is India's first on-line rewards program that seeks
to inculcate the habit of redeeming points. The loyalty program rewards
customers paying by cash, credit and debit cards.

Each transaction is confirmed on-line through a charge slip and customers can
earn points on fuel/lube purchases at participating Indian Oil Retail Outlets.
Additional points can also be earned outside the Indian Oil network, covering
prominent FMCG, Food, Automobile, Travel, Entertainment, Apparel and
Hospitality sectors.

XTRAREWARDS is currently active in Mumbai, Ahmedabad, Bangalore,

Mysore, Coimbatore and Chennai. It will be shortly available in other markets
like Delhi. Apart from redeeming the accumulated points instantly on fuel /
SERVO Lubes at participating Retail Outlets, the card holder can also redeem
the points to get some exciting gift items from a catalogue.

The redemption on gifts can be registered either from the participating Retail
Outlets or from the comfortable confines of one's home through the 24x7 IVRS
Help Line (022-2880 9030).

The program continuously provides the cardholder with privileges, benefits and
offers from alliance partners like Domino's Pizza, Subhiksha, Rediff Shopping,
Kumaran Silks, Dhabba Express, Chennai Corporate Club and Archana Sweets.

31
 XTRAPOWER Fleet Card program:

Welcome to the World of XTRAPOWER!

Conclusion

The XTRAPOWER Fleet Card program is a complete smart card-based fleet

management solution for fleet operators and Corporate for cashless purchase of
fuel & lubes from designated retail outlets of Indian Oil through flexible pre-paid
and credit facilities.

The fleet card program 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, Indian Oil’s XTRAPOWER Fleet Card 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 authorized through 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 utilization and route compliance. XTRAPOWER is also
backed by Indian Oil’s vast infrastructure network and web-based support
services.

XTRAPOWER is one-of-a-kind fleet card program of Indian Oil, which gives

you XTRA convenience, XTRA security and XTRA opportunity to earn
truckloads of rewards. It is a tailor-made program for Fleet Owners, Operators &
Corporates as well.
32

With XTRAPOWER Fleet Card you now have an easy, convenient and rewarding
XtraPower Fleet Card program is a step of IOC towards building loyalty among
the existing customers. Loyalty program works only when the customer is
emotionally attached to the brand.

Positioning of the loyalty program is very critical so that these benefits do not
appear to be a just discount under the garb of loyalty this greatly affects the
customer retailer relationship and greatly reducing the program to a pure
commercial transaction where the customer constantly looks for deals.

We need to enroll the right customers. We can recognize the highest value
customers to recognize and reward their value to our organization, we can
cultivate high potential customers who currently split their purchases between us
and our competitors or reach out to those most at risk of churning. Knowing
which customer groups are most important to us allows crafting recognition and
rewarding strategy that piques their interest.

Customers should be involved in the program by constant communication to

make them understand what is in for them. Comprehensive surveys should be
conducted to find out what should be the ideal way to reward the loyal
customers and retain them for the life time. Activities like checking point
balances online, responding to targeted offers, using kiosks, bidding on auction
items, entering sweepstakes and so on. Such participation is a sure sign of
increasing value to the customers.

Recommendations

33
Ideas to increase & retain customer base

 Target new vehicle/fleet owner by tie up with the vehicles companies and
give XTRAPOWER FLEET CARD with every new vehicle/truck.

 If any card is not used for more than 30 days by the customer then
automatic message should be generated to remind the user.

 Try to know actual reasons for not using the card for longer period of time
by the customer as retaining one customer is better than acquiring 6 new
customers.

 Bring awareness about the card through media advertising.

 XTRAPOWER FLEET CARD program website should be updated time

to time with details of the new as well as upcoming offers.

At Retail outlets

 Put a digital display on retail outlets (i) To communicate with the

customers about IOC program & brands and (ii) for advertisement of
alliance partners & earning revenue out of it.

 Motivate pump attendants by giving price to “attendant of the month”

which will be the highest card seller of that month.

 XTRAPOWER Fleet Card Banners should be put at proper location in

the pump

 Stock replenishment of the cards should be taken care off.

 XTRAREWARDS program should be started at all other locations as soon

as possible.

 Pump attendants should get training frequently and as most of the staff at
the pump is not educated, a comprehensive training has to be provided to
the pump attendants about XTRAPOWER FLEET CARD program.
34
  The objective of the loyalty program should be made transparent to the
attendants. They should be taught to use the swiping machine carefully
and accurately using different options and also various messages of error
in the machine

For Welcome kit

 Application Form as well as information booklet should be in Hindi and

Urdu.

 Pamphlets should be distributed to all pumps & renewal of pamphlets

should be done as & when new offers from alliance partners come.

Prospective Alliances for XtraPower Fleet Card

Loyalty Program

35
Alliance Partners of IOCL for XtraPower fleet card program

Indian Oil Corporation Ltd has tied with many branded companies to give
variety of benefits to their customers through Xtra Power Fleet card program.
Alliance partner such as Essel World, Water Kingdom, Yoko sizzlers, Subhiksha,
Pizza Hut, Vishal Mega Mart, PVR, are giving Different discounted offers to the
card holders. These alliances are beneficial for both Indian Oil and the alliance
partner. Indian Oil can increase their customer base through these alliance and
these alliance partners can market their brand at Indian Oil petrol Pumps.

Need for Local alliance partners

For a loyalty program to succeed, it is essential that it should have tie-ups with
many alliance partners. This helps members of all socio-economic groups to
access the benefits of a loyalty card program. More specifically, if the outlets
situated nearby to an Indian Oil petrol pump are tapped, then it would help
Indian Oil’s loyal customers to a great extent. Hence we decided to tap the
nearby outlets to convince them to participate in the XtraPower Fleet Card
Loyalty Program.

Objectives of the project:

There are four major objectives for which we need to tie-up with various local
clients.

• To tap local alliance partners for XtraPower Fleet Card program.

• To promote the loyalty between the local customers and the company.

• To provide benefit to the local customers.

• To promote the loyalty program in Barauni and Begusarai region.

Following are some of the potential local alliance partners who

were approached for Tie-ups:

36
Sl.No Potential Alliance Partners Location
1. New Oasis Restaurant Kapasiya
2. Celebrations Restaurant Kapasiya
3. Khadims Main Market
4. Reebok Store Main Market
5. Madhuban Karkuria Sthan Chowk
6. The Raymond shop Main Market
7. Koutons Near Bishnu Cinema Hall
8. Hotel Blue Diamond Kapasia
9. Charlie Outlaw Near Bishnu Cinema Hall
10 Sahara Retail Outlet Karkria Sthan Chowk
.
11 Allen Cooper outlet Mirgunj
.

In order to access the benefit to the local consumer through the loyalty program
it was essential to tap the nearby outlets / store and convince them to be a part of
the XtraPower Fleet Card Loyalty Program. The result was overwhelming and
encouraging as the dealers showed a great interest and appreciated the offer
provided and wanted to be a part of the program.

Findings:
• Prospective alliances were very supporting and welcoming .They had
goodwill for IOC.

37
• Dealers who showed interest appreciated the offer provided and were
eager to continue talks with IOC.They were also ready for a tie up of their
branches with IOC.

• Some of the prospective alliance partners were not aware of India Oil
XtraPower Fleet Card Loyalty Program. Hence they were not interested.
Also due to the increase in the oil prices they were apprehensive of
getting into an alliance with Indian Oil.

Recommendations
• More IOC retail outlets should be covered under the XtraPower Fleet
Card loyalty program so that prospective alliance partners are interested in
joining the program.

• Get in more food, apparel stores as partners. Alliances with shoe stores,
cloth outlets etc would also be beneficial.

• Products for both the genders is needed, there are very less gifts to attract
women.

• Advertise the Loyalty Card more, so the alliances would be willing to join
IOC program.

• Organized follow-up to convert a prospective alliance into an active

alliance.

38
 Questionnaire for Retailers

Personal details

Name……………………………………………

Organization……………………………………

Address…………………………………………

Date of visit…………………………………….

Instructions: Take your time to fill this questionnaire. Please read carefully,
before answering questions.

1. How many liters of fuel do you sell in a week through Xtra Power fleet card?

(a) 1000-20000 lts

(b) 20000-40000 lts.

(c) 40000-60000 lts.

(d) More than 60000 lts.

2. What is the average sale of following brands at your outlet in a week?

Brands XtraMile XtraPremium Servo Unleade Unleaded

d petrol
Super Petrol lubricants diesel
diesel
Maximum
Minimum

39
3. What price do you get the following brands at?

Brands XtraMile XtraPremium Servo Unleade Unleaded

d petrol
Super Petrol lubricants diesel
diesel
Price

4. What is your margin for the following brands?

Brands XtraMile XtraPremium Servo Unleade Unleaded

d petrol
Super Petrol lubricants diesel
diesel
Price

6. What is the average sale of fuel/lubricants through Xtra Power Fleet card
from your outlet?

………………………………………………………………………

40
7. Do you tell the customer/fleet owner/driver about the Xtra Power fleet card
loyalty program of IOCL?

a) YES.

b) NO.

C) SOMETIMES.

8. Do the staff/attendants know how to operate the machine of Xtra Power fleet
card?

a) YES

b) NO

9. What is the usual mode of payment made by the customer?

a) Cash.

b) Credit/Debit Cards.

c) Xtra power fleet card.

10. Is the outlet well equipped with machines of Xtra Power fleet card?

a) YES.

b) NO.

41
 Questionnaire for the Customers

Personal details

Name……………………………………………

Address…………………………………………

Date of visit……………………………

Customer I.D. ………………………………………..

1. Do you visit the IOCL fuel station regularly?

a) YES.

b) NO.

c) Sometimes.

2. What is the usual mode of payment?

a) Cash.

b) Credit/Debit Card.

c) XTRAPOWER fleet card.

3. Do you know about the XtraPower fleet card?

a) YES

b) NO.
42
4. From where did you come to know about the fleet card program?

a) Advertisement.

b) Newspapers.

c) Journal/Magazines.

d) IOCL Retail Outlets.

e) Others……………….

5. How many vehicles/trucks do you have?

…………………….

6. Are you satisfied with the service of fleet card?

a) YES.

b) NO.

c) Partly satisfied.

7. Do you use your fleet card regularly?

a) YES.

b) NO.

c) Sometimes.

8. What improvements do you want in the fleet card loyalty program?

a) Better services to the card holders.

b) More attractive offers.

c) Others……………………………

9. Do you redeem your Xtra points regularly?

a) YES.

b) NO.

43
 c) Sometimes.

10. Any suggestions about the Xtra Power Fleet Card program?

……………………………………………………………..

BIBLIOGRAPHY

WEBSITE:

WWW.IOCL.COM

WWW.GOOGLE.COM

 ANNUAL REPORT OF IOCL.

 S.P.GUPTA, STATISTICAL METHODS

 C.R.KOTHARI, RESEARCH METHODOLOGY.

 MARKETING MANAGEMENT. KOTLER.

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