Marketing Strategy of Indian Oil Corporation Limited (IOCL)

Indian Oil Corporation Limited or Indian Oil is one of the largest Indian government-owned Oil and Gas Companies. The company was founded in 1959 and is currently the largest commercial oil and petroleum enterprise in India. IOCL ranks 151st position in Fortune Global 500 list and 2nd in Fortune India 500 list for the year 2020.

IOCL has so far been successful in meeting the fuel demands put up by the world's second most populated country. Let's see what they're doing differently from their competitors to improve their brand image. In this article, we will try to shift the focus towards the marketing strategy of Indian Oil Corporation Limited.

IOCL - Company Highlights

Overview of Indian Oil Corporation Limited (IOCL)
IOCL Marketing Mix
IOCL - Product Strategy
IOCL - Pricing Strategy
IOCL - Place & Distribution Strategy
IOCL - Promotion Strategy
IOCL - Conclusion
IOCL - FAQs

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Overview of Indian Oil Corporation Limited (IOCL)

Indian Oil Corporation Limited was founded in 1959 and since then handled the responsibility of meeting the fuel demands of India. The company is under the control of the Government of India & the Ministry of Petroleum and Natural Gas. As of 2020, the oil and gas company earned a net profit of ₹43,242 crores (US$6.1 billion) in sales turnover among India's most profitable state-owned companies.

The company is an expert in the production of crude oil, natural gas, petrochemicals, refining, pipeline transportation and marketing of these products. The IOCL holds nearly 35% of national refining capacity together with its subsidiary Chennai Petroleum Corporation Limited (CPCL) and 65% downstream sector pipelines through capacity.

The Indian Oil Corporation is known to have over 33,500 employees along with its subsidiaries in countries like Sri Lanka, Mauritius, the UAE, Singapore, Sweden, the USA and the Netherlands. The company is currently setting up over 20 joint ventures with reputed business partners from India and abroad to explore global opportunities. Some of the International Indian oil corporation subsidiaries are Lanka IOC in Sri Lanka, IndianOil Mauritius, and the IOC Middle East FZE.

In January 2021, IOCL overall sales were at an all-time high of 4,10,000 barrels of oil. Some of the main competitors of Indian Oil Corporation Limited are:

• Hindustan Petroleum
• Bharat Petroleum
• Essar Oil & Shell
• Reliance Industries
• Mangalore Refinery and Petrochemicals Limited

So how does a company like Indian Oil Corporation Limited markets its product effectively and efficiently that it beats all its competitors to scale up in the oil and gas sector? Let's see their unique marketing strategies.

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IOCL Marketing Mix

The marketing mix usually refers to the set of actions, or tactics, that a company uses to promote its brand or product in a particular market. The marketing mix is the best business strategy of Indian Oil Corporation as it is centered around the product, price, place, promotion and nowadays also includes Packaging, Positioning, People and even Politics.

The IOCL's business model is based on the Indian Oil Corporation (IOCL) marketing mix that helps the brand to succeed. The marketing mix of Indian Oil Corporation also analyses and explains the marketing strategy for petroleum products. There are different types of marketing strategies such as product innovation, pricing approach, promotion planning, etc.

The company's marketing mix explains the importance of the product, pricing, advertising and distribution strategies used by the Indian Oil Corporation (IOCL). Indian Oil Corporation's marketing strategy has so far successfully helped the company to position itself competitively in the market, and achieve its business goals and objectives effectively and efficiently. Let us start the Indian Oil Corporation's (IOCL) Marketing Strategy & Mix to understand its product, pricing, advertising and distribution strategies.

IOCL Product Strategy

Indian Oil Corporation is one of the leading oil and gas companies not only in India but worldwide. Indian Oil Corporation is present across the hydrocarbon value chain and accounts for over half of the country’s petroleum products market. IOCL also has over 35% share in refining and 65% share in the downstream sector pipelines. Out of the total 23 Indian refineries, the company owns and operates 11 of them.

Indian Oil Corporation’s product portfolio in its marketing mix includes Indane gas, Autogas, Natural gas, petrol, diesel, jet fuel, lubricants & greases, kerosene, industrial fuels, Bitumen, petrochemicals, crude oil and some other special products. While its other businesses include refineries, pipeline transportation, distribution & marketing and Research & Development.

The company is also known for the popular brands under it, which are Indane LPG, SERVO Lubricants, Autogas LPG, XtraPremium Petrol, XtraMile Diesel and PROPEL petrochemicals. These brands have the added advantage of established customer awareness. The marketing strategy for petroleum products has made it possible for the company to become a leader in various sectors.

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IOCL Pricing Strategy

The IOCL pricing strategy runs on the idea of profit-making. In 2020, the profit of IOCL was estimated to be $6.1 billion. Since the Indian Oil Corporation is a government-owned company, some of the pricing decisions are made by the Central Government of India after considering the taxes and subsidies. The IOCL prices are different in different states and cities as geographical pricing mechanism is followed in its marketing mix.

The prices are commonly divided on the basis of metro cities, state capitals and National Capital Region (NCR). The prices in each product category (2021) are:

• Petrol prices vary between Rs.101.84 to Rs.130.23 per liter depending on location.
• Diesel prices have crossed Rs.90 per liter in most major cities.
• Autogas price ranges from Rs.55 to Rs.57.
• ATF price ranges from Rs.59400 to Rs.74000 per KL for domestic airlines and $602-800 per KL for international airlines.
• Indane Gas's price range is between Rs.834-944 per 14.2 Kg Cylinder.

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IOCL Place & Distribution Strategy

The IOCL's marketing mix is based on its wide geographic presence, as it holds and controls 10 refineries (Paradip, Panipat, Mathura, Haldia, Gujarat, Barauni, Bongaigaon, Guwahati, etc) across the country. Besides that, the company also controls over 10,900 km of pipeline connecting to high-demand places, 132 Km of gas pipeline and 37,000+ customer touchpoints. The company also has its subsidiaries in countries like Sri Lanka, Mauritius and UAE.

It also has 20 joint ventures with reputed firms in India and abroad; 25,000 diesel and petrol stations and also one outlet in the world highest point. IOCL also has 6000 LPG distribution stations, 6,218 bulk consumer pumps and 100 aviation fuel stations. Another interesting fact about IOCL is that it has more than 9,400 fully automated fuel stations situated in nearly 55 cities providing products and services to its customers.

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IOCL Promotion Strategy

Promotion is the most important part of Indian oil corporation limited as it led the company to become one of the most valued and trusted brands in India. IOCL realizes the impact of a good promotional plan, offers and periodic incentives to maintain its customer base. The promotion in IOCL includes advertising tools like hoardings, print advertisements and commercials on television in order to increase its brand visibility.

Indian Oil Corporation limited marketing also includes loyalty programs like fleet cards where customers can earn points and during festive seasons some gifts would be given to consumers through a lucky draw.

Since we have covered the 4Ps of the marketing mix, here are the other 3Ps to make it the 7Ps of the marketing mix of Indian Oil Corporation.

People

People play a vital role in the marketing mix of Indian oil marketing, as the company has around 33,000 employees that work in various business processes. The company recruits mainly through advertisements in newspapers and the company’s website. IOCL also spends a lot in training and development of its employees to develop their capabilities. The employees also hold equity of nearly 65 lakh shares in the company.

Process

The company deals in many business, distribution and people processes to serve customers and corporate clients. To remain profitable in a business, the processes used to run should be working at an optimal rate. IOCL has taken every measure to improve operational efficiency, as it maximizes the LPG extracts for a refinery that uses the INDMAX technology.

Physical Evidence

Indian Oil Corporation has its physical presence because of petrol pumps and gas stations not only in India but worldwide. The Indian oil logo is a saffron circle with the blue color outer ring and a blue color band in the middle of the circle with ‘Indian Oil’ written in the Devanagari script. It also has an iconic tagline known as ‘The Energy of India’ which is a rightful representation of the Company.

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IOCL - Conclusion

With over 10 refineries and pipelines network span of over 9,300 km, IOCL is the leader in the Indian market. IOCL is the 20th largest petroleum company in the world and also has a foothold in the international markets. With an excellent marketing mix, the company's future looks bright.

IOCL - FAQs

What is Indian Oil Corporation Limited?

Indian Oil Corporation Limited or Indian Oil is one of the largest Indian government-owned Oil and Gas Companies that cater to the fuel need of people across the world.

Where is the headquarters of Indian Oil Corporation Limited?

The headquarters of Indian Oil Corporation Ltd is New Delhi whereas its registered office is located in Mumbai, Maharashtra.

What is the distribution channel of the Indian Oil Corporation?

There are 20,575 retail outlets. IOCL has an outlet in the world's highest point. The company also has 6000 LPG distribution stations, 6,218 bulk consumer pumps and nearly 100 aviation fuel stations.

Who is the owner of the Indian Oil Corporation?

Indian Oil Corporation is a government-owned company having its ownership under the Ministry of Petroleum and Natural Gas.

Where is Indian Oil Corporation's biggest refinery located?

The Indian Oil Corporation's biggest refinery is located in Jamnagar, Gujarat.

What is the salary of Indian Oil Corporation employees?

The gross salary of IOCL employees is between Rs.60,000 to Rs.1,80,000 depending on the post of the employee.