A PROJECT REPORT ON MARKETING AND PROMOTION OF XTRAREWARD CARD LOYALTY PROGRAM

BY SARATH KUMAR.S

DECLARATION

We here by declare that the project entitled MARKETING AND PROMOTION OF X T R A R E W A R D C A R D L O Y A L T Y P R O G R A M s u b m i t t e d f o r t h e D e g r e e o f Master of Business Administration is our original work and the project has not formed the basis for the award of any degree, diploma, associate ship, fellowship or similar other titles. It has not been submitted to any other university or Institution for the award of any degree or diploma.

ACKNOWLEDGEMENT:

We would like to thank our project guides Mrs. Beatrice antopriya (Asst mgr XTRAREWARD Program) and Mr.Seetharaman (Chief Training Officer). We shall always be grateful to them for spending their valuable time on our project and their inputs and constant encouragement during our internship at Indian Oil Corporation Limited. Finally, we thank Divisional office of Indian oil corporation, Regional office of IOCL for giving us this wonderful opportunity to pursue internship at IOC.The stint at IOC was very useful in terms of gaining valuable hands on marketing experience and understanding consumer behavior. Thank You

IOCL- INTRODUCTION

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. 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 Continuous 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. 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

Beginning in 1959 as Indian Oil Company Ltd., Indian Oil Corporation Ltd. was formed in 1964 with the merger of Indian Refineries Ltd. (established 1958).Indian Oil Corporation Ltd. (Indian Oil) is India's largest commercial enterprise, with a sales turnover of Rs. 70823 crore and profits of Rs. 7976.48 for the year 2010-11. Indian Oil is also the highest ranked Indian company in the prestigious Fortune 'Global 500' listing, having moved up 11TH places to the105TH position in 2009. It is also the 20th largest petroleum company in the world. 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 tones 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 a n d P e t r o c h e m i c a l s L i m i t e d ( B R P ) . I n d i a n O i l a n d i t s s u b s i d i a r i e s a c c o u n t f o r a 4 7 % s h a r e i n t h e p e t r o l e u m pr o d u c t s m a r k e t , 4 0 % s h a r e i n r ef i n i n g c a p a c i t y a n d 6 7 % d o w n s t r e a m sector pipe lines capacity in India. The Indian Oil operates the l a r g e s t a n d t h e w i d e s t n e t w o r k of f u e l s t a t i o n s i n t h e country, numbering about 17606 (15557 regular ROs & 2049 Kissan Sewa Kendra). It has also started Auto LPG Dispensing Stations (ALDS). It supplies Indane cooking gas to over 47.5 million households through a network of 4,990 Indian distributors. In addition, Indian Oils Research and Development Center (R&D) at Faridabad supports, develops and provides the necessary technology solutions to the operating divisions of the corporation and its customers within the country and abroad.

Subsequently, I n d i a n O i l T e c h n o l o g i e s L i m i t e d - a w h o l l y o w n e d subsidiary, was set up in 2003, with a vision to market the technologies developed at Indian Oils Research and Development C e n t e r . I t h a s b e e n m o d e l e d o n t h e R & D m ar k e t i n g a r m s of R o y a l D u t c h S h e l l a n d B r i t i s h P e t r o l e u m . I n d i a n O i l i s 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 project.

OBJECTIVES OF THE PROJECT

The major objectives of the project are: 1. To study the IOCL loyalty program in CHENNAI. 2. To study the loyalty between the local customers and the company. 3. To study the benefits provided by IOCL to the local customers. 4. To study how IOCL tap local alliance partners for XTRA REWARD Card program. 5. To obtain customer opinions and suggestions at IOC retail outlets and give recommendations to IOC to improve the implementation of XTRA REWARD CARD loyalty program. 6. To analyse the loyalty card benefits of other marketing company. 7. To gain real experience of market that how corporate persons work. How we have to behave, how to present you, how to make deals with clients etc.

8. To check our theoretical knowledge with comparison to the practical market demands. 9. It gives us an opportunity to apply our thinking, idea, knowledge in real market 10. To enhance our skill and gain experience to be a true professional. 11. To check our interpersonal skills. 12. To learn necessary managerial skills and positive attitude towards your work. 13. To get a flavor of Teamwork, Organizational culture, Team dynamics, result orientation, organizational pressure, complexities in achieving desire result. 14. To understand the day to day functioning of a department within the organization. 15. And at last but not the least for sharpen our career goals for a bright career. LOYALTY PROGRAMME In the present world where there is intense competition, it becomes very necessary to retain loyal customers. The commercial benefits of loyal customers are well-known by the brand managers. The cost of acquiring new customers is always more than retaining an old customer. Loyalty programmes are structured marketing efforts that reward, and therefore encourage, loyal buying behavior (behavior which is potentially of benefit to the firm). Loyalty cards are a system of the loyalty business card. Loyalty cards are promotional marketing tools used by many businesses across several industries. In marketing generally and in retailing more specifically, a loyalty card, rewards card, points card, advantage card , or club card is a plastic or paper card, visually similar to a credit card or debit card, that identifies the cardholder as a member in a loyalty program. Businesses usually distribute them in stores, online or through the mail. The main purpose of loyalty cards is to encourage repeat

purchases from new or existing customers. Cards typically have a barcode or magstripe that can be easily scanned and some are even chip cards. Small key ring cards (also known as key tags) which serve asked fobs are often used for convenience in carrying and ease of access. It enhances customer loyalty directly by offering rewards as an incentive to shop regularly at a particular supermarket group. Most loyalty cards also generate considerable information for supermarkets, including a customers name, address and purchase preferences. Multiples can use this information to tailor product offerings, promotions, investment and advertising to the needs of their customers, thereby indirectly enhancing loyalty.

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 day continued patronizing the businesses. While some companies do reserves the priorities, the above hierarchy holds true for most.

XTRA REWARD CARD PROGRAMME

T h e X T R A R E W A R D C A R D pr o g r a m i s a c o m p l e t e s m a r t c a r db a s e d f l e e t m a n a g e m e n t 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. In just under two years of its launch, Indian Oils XTRA REWARD 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 XTRA REWARD C A R D p r o gr a m a t a n o m i n a l a n n u a l c h a r g e .

E a c h c a r d o w n e r i s i s s u e d a F l e e t C o n t r o l C a r d a n d 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. L o y a l t y p r o g r a m w o r k s o n l y w h e n t h e c u s t o m e r i s emotionally attached to the brand. P o s i t i o n i n g o f t h e l o y a l t y p r o g r a m i s v e r y c r i t i c a l s o t h a t these benefits do not appear to be a just discount under the garb o f l o y a l t y t h i s g r e a t l y a f f e c t s t h e c u s t o m e r r et a i l e r r e l a t i o n s h i p a n d g r e a t l y 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 w a y t o r e w a r d t h e l o y a l c u s t o m e r s a n d r e t a i n t h e m f o r t h e life time. Activities like sweepstakes checking and so on. point Such balances online, responding to targeted offers, using kiosks, bidding on auction items, entering participation is a sure sign of increasing value to the customers.

BENEFITS Better credit proposition. Higher value of reward points. Attractive rewards program. Lost card liability cover. Special discounts from our alliance partners Round the clock Customer Helpline Number 1800 22 8888 (Toll Free) or STD no. 022-28449733.Lost Card Liability subjected to misuse of the card within 24 hours from lodging the loss complaint with XTRA REWARD ( 24 HOUR CUSTOMER HELPLINE) CLAIM ENTITLEMENT Only ACTIVE CARDS as on date of lost/stolen/damaged you should notify us for blocking the card through web site www.xtrarewards.com or IVRS Help line or SMS to 9223052305 . You should convey the card number, your unique identifier and PIN. The SMS format is <BCARD> <Card Number> <Date Of Birth DD/MM/YYYY> <PIN>. Corporate should replace the date of birth with <date of formation of company/MM/YYYY> in the said SMS format. All the three option will generate and convey a reference note to you.

QUESTIONNAIRE FOR CUSTOMERS

1. Name of the Customer; 2. Age; Mob;

3. Do you visit the IOCL fuel station regularly? a) YES. b) NO. c) Sometimes 4. Do You Have XR Card? 5. If No, Reason?
____________________________________________________________________________________

Card no;

6. If Yes, Complaints And Suggestions?

________________________________________________________________________________

7. From where did you come to know about the Xtra Reward card program? a) Advertisement. b) Newspapers. c) Journal/Magazines. d) IOCL Retail Outlets 8. From Where You Bought The Card? 9. Do you use your Xtra Reward Card regularly? a) YES b) NO C) SOMETIMES 10. How would you rate the overall quality of the program? Excellent Good Fair Poor

11. How would you rate the knowledge of the staff? Excellent Good Fair Poor

12. How willing are you to recommend this card to others? Willing unwilling

13. What improvements do you want in the Xtra Reward card loyalty program? a) Better services to the card holders. b) More attractive offers. c) Others

DATA FROM CUSTOMERS

3.Whatim prov entsdo youwant in the em X Rewardcard loyaltyprog ? tra ram

Better services More offers others

10%0% 37%

53%

4. D you useyour X o traRewardCard reg ularly?

0% Som etim es 11% Yes 38%

No 51%

7. How willing are you to recommend this card to others?

FINDINGS
1. Most of the customers were very supporting and welcoming .They had Good will for IOC.
2.

Customers who showed interest appreciated the offer provided and were eager to continue talks with IOC. They were also wanted to know more about the program. Some of the prospective customers were not aware of Indian Oil XTRAREWARDCARDLoyaltyP r o g r a m . H e n c e t h e y w e r e n o t interested.Also due to the increase in the oil prices they w e r e apprehensive a little bit.

3.

4. Some of the customers facing technical difficulties while using the card since they are not able to understand its operations clearly. 5. Some customers have no clear idea about its benefit and they are happy to use their old traditional way of purchasing oil and lubricant. 6. Some of the customer considers it as very complex and the benefit is not so high. 7. Customers most of them are small transporter are not very keen for this program some of them have purchase the card but the card remains as idle as they have very less transaction and lack of information about the benefits. 8. Xtra reward card scheme is not available at all the retail outlet of Indian oil in so at a time it creates problem.

9. The card swiping machines are not properly maintained at some places leading to many customer complaints. Some of the machines are very old and they are need replacement with the new one. 10. At some places pump attendants are also not interested in providing this service. 11. There are no pamphlets available at pumps, which could give a brief idea about the loyalty program. 12. There is no dedicated person for collecting the forms. So, there is a large backlog of forms. 13. There is Lack of internet facility at some of the outlets and also problem with poor network service. 14. There is no any benefit for customers with small vehicle. 15. Corporate customers are not very interested as there is no any special benefit for them.

RESULTS AND ANALYSIS

ISSUES AND PROBLEMS During the peek hours the server works slowly which makes customer waiting at the pump. Normally customers dont get time to swipe the card. Forms were not filled appropriately due to this card may not work properly. The cost of the card is high and the returns is not that much attractive. There are no any other benefits for RO attenders. Magnetic strip gets damaged while swiping the card.

OUR RECOMANDATIONS 1. Most of the people are not aware regarding the XTRAREWARDS, IOC should try to create awareness regarding the program by means of more aggressive advertising. 2. The customers facing any kind of difficulties must be assisted promptly and their problem must be considered with due care. 3. XTRAREWARD card banners should be put at proper location with easy visibility. 4. Information centers especially in remote areas must be setup so that people have access to this program and they can have detail information about its benefits. 5. The facilities should be made available to more retail outlet. 6. The card swiping machine must be carefully maintained and provide quick service for any technical difficulties. The old machines must be replaced by the new one without any delay. 7. Most of the pump attendant is not so educated hence a training program for them to provide the use of swiping machine and its various technical aspects. 8. Regular visit to pump should be made and pump owner and attendants are encouraged to provide the service for their own benefit and benefit to the customers. If possible some rewards should be given to the pump with highest sale in month by card transaction. 9. Pamphlets must be available at pump so that customers get a brief idea about the program. 10. All the pamphlets and booklets are in English, hence most of the customer not able to understand. It should be in regional language (Tamil) for easy understanding.

11. The website for XTRAREWARD needs regular update with more user friendly access and details of news as well as upcoming offers. 12. The poor network service at retail outlet need to improve urgently. 13. If a card is not used for a specified period then a message should be given as a reminder and if possible to contact the person as there may be some other reason. 14. XTRAREWARD program should be started at all other locations as early as possible. 15. Facility for vehicle tracking and to know the detail of existing balance by customer should also made available through sms service 16. Need for more credit partner to provide wide credit service to the customers.

WHAT CUSTOMERS SUGGEST? The point system is not useful for the two wheelers or they want card free or in low cost. WHAT PUMP ATTENDERS SUGGEST?

They should be given some benefits in terms of incentives for selling the cards.

When customer comes back to them with some problems, they dont have any one to talk directly.

CONCLUSIONS: It was a great opportunity for us to work with Indian Oil Corporation limited and learn about loyalty programmes and other organizational operations under the observation and guidance of our officers. This report gives a brief review about the Indian oil loyalty programme and its operational process. As per our experience, existing programmes have a good customer base, service and infrastructure, and loyalty programmes have proved a major factor in increasing the sales as well as brand loyalty and preference. To generate more turnovers from loyalty programmes, some modifications are required in terms and conditions and operational structure of existing programmes.

BIBILOGRAPHY

www.iocl.com www.xtrarewards.com www.wikipedia.com