POTENTIAL OF HAVING NON-FUEL

RETAILING OUTLET AT HPCL OUTLETS

Under guidance of : Dr A K Jain

Submitted by : Nikhil N Warkar
August 21, 2015

Content
Background
Business problem
Literature Review, Research gaps and Need for the
research
Research problem
Research objectives
Proposed Research Methodology

Background
The Indian petroleum retailing sector is
witnessing significant changes that is
altering the nature of competition faced
in this sector. Major drivers for these
changes are:
Growth in Demand
Deregulation of Market
New Customer Expectations

Non-fuel retailing (NFR)/Allied Retail

Business (ARB)
Non-fuel retailing/Allied Retail Business
refers to selling of non-fuel products
and services along with fuel at the retail
outlets (filling stations).
Non-fuel retail feature includes retail
stores, food joint, coffee shops, auto
service stations, pay telephones, ATMs
etc.
Globally, non-fuel retailing plays a
crucial role in overall revenue and
profitability of a filling station.

HPCL is a Government of India Enterprise with a Navratna Status, and a Forbes

2000 and Global Fortune 500 company.
13233 no of Retail Outlets as of 31/03/2015.

Advantages of Non Fuel Retailing

Retail outlets with non-fuel products and services help oil retailers to
strengthen their brand image and also help them in providing superior
experience to customers. This enhances retention of customers as
well adds new customers.

Generates additional stream of revenue for oil companies as they

receive revenue in the form of rental income by leasing space for retail
outlets and via profit-sharing arrangement with dealers.

Helps push fuel sales (fuel rub-off) of the fuel as the buyers who come
to buy products from convenient store are likely to opt for fuel purchase
as well. Average Ticket size of a fuel sale in an ARB Outlet is usually
higher than in an Only Fuel Outlet.

Attracting & retaining customers as customers may prefer some other

brand but walk in to a particular retail outlet just because of the NFR
offering.

Better site value utilization (Using the free space available).

Business Problem

How to enhance profitability of HPCL through

Non-Fuel Retailing activities.

Literature Review, Research Gaps and Need for Research

Two types of Literature used
1.

Research reports by Individuals

in Journals

2.

Articles in Journals and World

Bank paper on the subject

Two themes emerge from literature

review pointing to the research
gaps and leading to need for
research
1.

Literature provides factors which has

led to development of NFR but its
applicability in HPCL is not discussed.

2.

Literature/reports
acknowledge the
importance of Non Fuel Retailing for
India,
but
the
solutions
not
comprehensively mapped or identified
for PSU oil company like HPCL.

No comprehensive research work on

profitability of HPCL through NFR activities
7

Literature review, Research Gap

Organization/
Researcher

Key Output From The Literature survey

Sandhya Rai,
Dr Atul Razdan,
Dr. M.S. Pahwa
(IJMS 2012)

Consumer attitude and Behaviour towards Non

Fuel Retailing.

Kaushal Kishore, Importance of NFR to retain existing customer,

R. P. Patel
attract new consumer & sustain competition.
(JBRMR 2012)
Anurag Dugar
(Innovative
Marketing 2007)

Research Gap

What
is
the
impact of Non
Fuel Retailing on
OMCs
profitability.

Effect of change in government policy in Indian

Fuel Retail market and impact of these
changes on the marketing strategies of OMC in
India.
8

Research Problem

Determine the Non Fuel Retail activities

profitability for HPCL with respect to current
Indian Fuel-Oil Retail Market.

Research Questions

10

Research Objective

11

Proposed Research methodology

Objective 1/3

To identify Non Fuel

Retail
potential
in
Current Indian Market
scenario.

Research Design
Exploratory
Research

Observational Design
Conduct survey
Structured interviews
Preparation of Questionnaire, open ended

and close ended -5 point likert type scale

to be used for close end.
Reliability of the questionnaire to be tested
thru pilot study
Finalize the questionnaire after the pilot
study

Identify set of
variables
respect to
business
problem

Sampling Design
Non probabilistic design
Judgmental sampling.
No of respondents :

Customer, Transporter, TT
Crew, Dealers & other
Consumers.

12

Proposed Research methodology

Objective 2/3

To identify suitable Non

Fuel Retail activity as
per the demography &
type of market.
Observational Design

Secondary Data.
Conduct expert Interviews.
Surveys.
Panel for comparison.

Research Design
Descriptive
Research

Identify market
characteristic of
variables
respect to
business
problem

Sampling Design
Probabilistic design
Cluster sampling due to

limited expertise in the

sector
No of respondents : Top
Management, Head Office,
Regional Team, other
experts (20+)

13

Proposed Research methodology

Objective 3/3

Research Design

To identify the effect of

NFR on Fuel retailing
in HPCL with respect to
profitability.

Causal Research

Observational Design

Available data.
Weekly/Monthly MIS reports.
Finance Reports.
ARB reports.

Identify effect of
variables
respect to
business
problem

Sampling Design
Experiment

14

Research Flow chart

Initiate literature survey to
identify the research gap
and establish the need for
the research

Establish a potential for a

NFR market of HPCL
based on literature survey
and plug gaps identified
on factor analysis

Conduct structured
interview to validate the
above potential along
with gaps

Identify variables required

for NFR market
development through
literature survey and
expert opinion

Develop a questionaries'
and test its reliability
through a pilot study, make
changes, finalize and mail
the questionnaire

Establish gap based on

benchmarking HPCL
against competitor and
results of factor analysis

Analyse the data using

factor analysis. Interpret
the results

Compilation and reporting

of results

Development of
recommendation and
writing of dissertation

15

THANK YOU

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