Indian Oil Corporation Limited (IOCL) is also commonly known as Indian Oil. It is an Indian government-owned oil and gas company, founded in 1959. Currently, it's the largest commercial oil and petroleum enterprise in India. IOCL undergoes a huge responsibility to meet the fuel demands of the world’s second-largest country in terms of population and has been successful in fulfilling the product needs. So, In this article, we've brought the marketing strategy of Indian oil corporation.
Overview of Indian Oil Corporation Limited (IOCL)
IOCL is the biggest refining company in India and has a prominent presence in the refining and marketing sector. It has alone earned a place in the oil and gas industry with a net profit of $1,589 million for the financial year 2015-16. Reputed surveys continue to rate IndianOil as one of the dominant energy brands in the global world. It's the leading Indian company in Forbes ‘Global 500’. According to its's listings, IOCL ranks at first position as Indian corporate and occupies the 161st position in the world for the year 2016.
IOCL is India's Energy giant in terms of sales, along with its subsidiaries, Chennai Petroleum Corporation Limited (CPCL) and Bongaigaon Refinery and Petrochemicals Limited (BRPL), it owns 10 out of the 18 refineries (43% of the refining capacity in India). IndianOil and its subsidiaries account for 45% of the petroleum products market share among public sector oil companies.
There are a number of companies which are trying to compete with this giant organisation but IOCL has it's placed intact since it's an establishment. Some of the rival companies are:
- Hindustan Petroleum.
- Bharat Petroleum.
- Essar Oil & Shell.
- Reliance Industries.
- Mangalore Refinery and Petrochemicals Limited.
IOCL Marketing Mix
The marketing mix is a method which refers to actions or strategy that an organisation uses to promote its product in the market. It is the best business strategy of Indian oil corporation in order to achieve its goal. It functions in 4Ps that are- Price, Product, Promotion and Place. However, these days the marketing mix has been upgraded to several other Ps like Packaging, Positioning, People, Process and even Politics as vital mix elements.
Marketing Mix of Indian Oil Corporation (IOCL) analyses and explains it's product the Indian Oil Corporation (IOCL) marketing strategy. There are several marketing strategies like innovation, marketing investment, customer experience etc. It helps companies achieve business goals and objectives, it is also widely accepted and used a framework to define the strategies. It explains the importance and elaborates the product, pricing, advertising & distribution strategies used by Indian Oil Corporation (IOCL).
IOCL Product Strategy
Almost half of the petroleum products in India are credited to IOCL as it occupies a major share. IOCL is present across the hydrocarbon value chain and nearly operates half of India’s petroleum products market. It also has a 35% share in refining and 71% in downstream-sector-pipelines. India has a total of 23 refineries and IOCL 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.
IOCL is a leading player in petroleum and LPG with the brands like- Indane LPG, SERVO Lubricants, Autogas LPG, XtraPremium Petrol, XtraMile Diesel and PROPEL petrochemicals. These brands enjoy an established customer awareness. The other businesses include refineries, pipeline transportation, distribution & marketing and Research & Development.
IOCL Pricing Strategy
The revenues of IOCL have been estimated at rupees 4.45 trillion at the end of the financial year 2015. It runs on the idea and principle of profit-making. Like any other government companies, prices of products are regulated and declared by the Government of India and every oil company has to follow them in accordance with state rules. IndianOil has to adopt the price regulations set by the ministry.
As the pricing decisions are taken by the central government after taking into consideration of all the taxes and subsidies available in its initiatives. The prices set by IOCL are different at different cities in India. So, a geographical pricing mechanism is followed in this marketing mix. The prices are divided into geographical locations like metro cities, State capitals, National Capital Region. These prices are available on the company’s website. The prices in each product category are-
- Petrol price varies between Rs.66 - 77 per litre according to the locations.
- Diesel prices between Rs.56 - 64 per litre.
- Autogas at Rs.35 - 40.
- ATF at Rs.54000 - 58000 per KL for domestic airlines and $557 -602 per KL for international airlines.
- Indane Gas is priced at Rs.434- 467 for the subsidised and non-subsidised prices are between Rs.651-672 per 14.2 Kg Cylinder.
- Indian Oil Corporation prices are also decided by crude oil prices in the world.
IOCL Place & Distribution Strategy
As IOCL has got a wide geographic presence, it is omnipresent with its reach much higher than any other nearest competitor. It faces no issue of availability. IOCL holds and controls 10 refineries across the country, over 10,900 km of pipeline connecting to high demand places, 132 Km of gas pipeline and nearly 45000 customer touchpoints. Out of these touchpoints – 20575 are the retail outlets, it has an outlet in the world’s highest point. Nearly 6000 LPG distribution stations, 6,218 bulk consumer pumps and 100 aviation fuel stations. IOCL is present internationally with subsidiaries in Sri Lanka, Mauritius and UAE. Its refineries are located at Paradip, Panipat, Mathura, Haldia, Gujarat, Barauni, Bongaigaon, Guwahati.
IOCL Promotion Strategy
The promotional and advertising strategy has helped the industry to grow. IOCL is a Maharatna company and is actively involved in advertising. Being a government-led company and not in a heavily competitive environment the promotions done by IOCL are not aggressive or heavily mass media targeted.
On the other hand, it does promotional activities including collaborating with other companies and promoting IOCL in their campaigns, like once IOCL associated with Honda Motors and did some sales promotion campaigns in selected outlets. This is done to promote servo 4T oil. In this promotion, winners had received vehicles from Honda. It also has some loyalty programs like fleet cards and customers can earn points and during festive seasons some gifts would be given to consumers through a lucky draw.
Indian Oil Corporation also prints advertisements and uses hoardings at its retail outlets. IOCL realizes the impact of a good promotional plan and offers periodic incentives to maintain its customer base. It has also taken help of advertising tools to market its consumer products and these include hoardings and ads on television to increase its brand visibility.
IOCL has a strong workforce of 33,000 employees working in its various business process. The recruitment is done through advertisements and the company’s website. Building and developing human resources competence and motivated employees are the biggest strength of IOCL. It invests in the training of employees to help them perform outstandingly and facilitate Career progression. Its promotion policy and dealings with employees are motivating and transparent. IndianOil employees also hold equity in the company of nearly 65 lakh shares.
Indian Oil Corporation 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 its operational efficiency. In marines, it has developed OEM approved marine technology. It's one of the few companies to do that in the world. The best technology to make the needle coke of highest value is to use DHDT and light naphtha isomers units to produce BS-IV compliant fuel.
IOCL has felt its physical presence wide on the geographical locations of petrol pumps and gas stations. It has a tagline ‘The Energy of India’ representing it is a provider of energy resources to India. It releases financial statements every year for the information to investors which include its future plans and development objectives. IOCL has its registered office in Mumbai and corporate office in Delhi.