BPCL Casestudy Solution - Launchpad 2010


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BPCL Casestudy Solution - Launchpad 2010

  1. 1. Launchpad (PRER2010_103319, PRER2010_103321) Prerana 2010 LAUNCHPAD Creating Differentiation in Rural Markets BPCL Case Study Team- ActiveY NITIE, Mumbai Rakesh Sahu (PRER2010_103321), rksahu.83@gmail.com, 9757308086 Shanu Singh (PRER2010_103319), shanuchaudhery@gmail.com, 9702018520 1
  2. 2. Launchpad (PRER2010_103319, PRER2010_103321)Executive summaryRural India today, with increased income range and better living standards has tremendouspotential market which is still quite untapped. We have tried to provide rational strategies totarget these consumers. Surveys were carried out to analyze and evaluate the consumer behaviorand we were successfully able to correlate the factors that influence the purchase of petroleumproducts in the rural sector. Based on the data collected, we proposed various consumer centricmarketing strategies which tries to encompass the needs and fulfills the expectation of a ruralcustomer in an effective manner. Strategy includes harnessing the power of information for thebetterment of rural consumers in the form of i-mandi. Concepts of Virtual Transport Agency andSuvidha are proposed specifically with farmers and drivers of truck/tempo in mind. Also we havetried to leverage upon the ever increasing mobile density of country, prachar marketing initiativea perfect platform for marketing BPCL brand has been proposed. Being a cheap and effectivesource, we can reach target market directly. 2
  3. 3. Launchpad (PRER2010_103319, PRER2010_103321)IntroductionIndian economy has been growing at unprecedented rate for last few years; this has lead togrowth of both living standard and purchasing power of major part of our population. Till now,focus of all consumer centric firms has been restricted to urban market but now because ofsaturation and intensely competitive low margin operating environment, corporations havestarted looking towards untapped rural market.Rural marketing has been a cliché for some time but still many of the firms failed to market theirbrands since they simply overlooked Maslow’s hierarchy of needs pyramid and applied urbanstrategies to cater rural consumers.Through our study we tried to understand the consumer behavior and vis-à-vis designedstrategies to develop prospective customers and their loyalty for long term, towards brand BPCL. Quantify and understand the rural physcology through survey Strategies to serve rural demand and development of cutomer Insuring BPCL market share for long term in rural India Fig.1 Driving Algorithm 3
  4. 4. Launchpad (PRER2010_103319, PRER2010_103321)SurveyArea surveyed comes under the Gram Panchayat Khadavali, Nadgaon and Padghe, tehsil/mandalPanvel, district Raigad, state Maharashtra. Nearest mandi to padghe is either Kalyan or Shahpurwhich are 20 and 8 kilometers respectively.Data was collected from the 70 respondents across categories such as tempo, tractor, pick-uptruck, tractor drivers/owners and tube well users. Average age of tempo driver and pick-up truckwas 29 years and while that of tractor driver was 30(rounded) years. Fig. 2 Geographical location of surveyFirst survey (Appendix 1, 2) was conducted with the aim of understanding the psychology ofthe villager (farmers, tempo, small truck drivers) towards the buying pattern of the petroleumrelated products. The consumer behavior was understood in terms of decision making criterionwith the help of different predictors. Predictors which are proposed as the factors affecting thebehavior and decision are as follows: 1. How often a criteria helps you choose a particular petrol station. 2. Distance of petrol station from village/habitation 3. Brand/Advertisement of petrol/oil brand 4. Word of mouth publicity of oil company by mechanics 5. Proximity of petrol station to Bazaar/Mandi 4
  5. 5. Launchpad (PRER2010_103319, PRER2010_103321) 6. Proximity of petrol station to Mechanics 7. Proximity of petrol station to Banking service 8. Railway e-ticket booking counter.Second survey (Appendix 2) was conducted with the aim of understanding the factors whichcould develop loyalty of the rural customers (farmers) towards the brand. Since majority of thecustomer here are involved in agricultural activity therefore information such as previous yearsgrain/fruit production information, rates of grain/fruit across the major mandis’ in country,information about transportation and bank loan rates are of immense importance to them. Inorder to understand their behavior with respect to value of information we carried out surveywith following predictors: 1. Always go to mandi for information/selling 2. How important is the Information about various bank loan rates 3. Importance of current and previous year buyer market information 4. Would you like to sell your product in a place far off if given better prices 5. Would you like to have goods transport office nearby.Findings and discussionsFirst SurveyThe randomly selected sample’s main characteristics were male (95 per cent), 30-40 years old,carried (90 per cent) weight while primary school educated comprises of 70 per cent of sample.All the respondents indicated that they always use a criterion in choosing a particular petrolstation. Strength of these criteria does vary from person to person and hence on basis of collecteddata we have tried to understand the correlation between different criterions with respect toselection of petrol station.In table 1 we can see this relationship, petrol selection criterion is highly correlated (corr. >0.5)to the predictor 2, 4, 6 and 8 i.e distance, Word of mouth publicity, proximity to Mechanics and 5
  6. 6. Launchpad (PRER2010_103319, PRER2010_103321)proximity to Railway e-ticket booking facility respectively. Hence our strategy will be based onthese highly correlated predictors. Table 1: Multiple Correlations between predictors used in Survey 1Second SurveyThe randomly selected sample’s main characteristics were both male (65 percent) and female (35percent), 16-50 years old, carried (90 per cent) weight while primary school educated comprisesof 65 per cent of sample.All the respondents indicated that information is critical for them in making day to dayselling/buying activity. Table2 data reinforces this belief and clearly shows that information andfacilities holds high importance. Hence it can be leveraged to attract new customer base, hencedeveloping customer loyalty. Table 2: Average score for information valuation for different parameter, survey 2Other highlights from surveys: 1. It was found that rural areas seriously lack the availability of authorized service station. If given opportunity, villagers would like try using service station even if the cost is 15- 20% higher. 6
  7. 7. Launchpad (PRER2010_103319, PRER2010_103321) 2. Small farmers are always in need of money/finance hence they take loan from commission agents in mandi and hence get restricted to sell their produce to them at predefined price. Here lies a opportunity to introduce microfinance/financing to farmers through collaboration, it will be covered under strategy section. 3. Service level provided by the LPG gas cylinder agents is very critical. 7
  8. 8. Launchpad (PRER2010_103319, PRER2010_103321)StrategyMarketing strategies are devised to cater to the behavior factors studied and analyzed in theabove analysis. On the basis of these studies we propose to establish the following new facilitiesnear or in compound of the petrol pump hence. 1) Information Mandi (i-mandi): Currently most farmers rely on nearby local mandi for market rate their produce. Information-mandi is designed to tackle this issue and to get maximum benefit to the farmers .This information centre would have a computer with internet connection and a dedicated employee. The prime function of the information centre shall be: a. To provide information about the rates of the different crop produces, fruits and vegetables grown by the farmers in the all regional and national mandis’ b. Weather forecast c. Prices of seeds and fertilizers in light of related government policies along with available best deals etc d. New Government plan/policies/schemes related to rural/agriculture sector e. New advancement/technology in the field of agriculture/any other rural business f. Financial Inclusion: i-mandi platform can be leveraged by collaboration with bank and microfinance institutes. It will help in disseminating the financial knowledge about savings, loan, microcredit etc. Our information centre can provide some basic information about the same and help arranging a gathering for such social causes. This facility should be available with the petrol pumps in the village with population more than 5000 and which are surrounded by other small villages. This effort will be in sync with the government commitment of financial inclusion of all the major part of country. A further study is required for the optimized decision for locating these facilities. g. It can also facilitate railway e-ticket booking leveraging on the developed infrastructure (internet/computer). 8
  9. 9. Launchpad (PRER2010_103319, PRER2010_103321) i-mandi will target the majority of rural population which comprises mainly of farmers. Since i-mandi provides a platform to address different needs, this ideal platform can be utilized to advertise the BPCL as a brand. This will be a multi pronged approach since it will build loyalty and add to the BPCL’s CSR activity. Fig. 3 i-mandi initiative logo i-mandi concept itself can be marketed in haats/melas (fairs) in and around villages, where importance of using i-mandi service could be showcased along with advantage of using BPCL products. i-mandi implementation can be done in collaborative model by going for partnership with CSO, IMD, NCAER and other third party knowledge partners. Apart from it BPCL can develop its own web platform to make all the information available across petrol stations. 2) Authorized service station (Suvidha): It was found that rural areas seriously lack the availability of authorized service station. If given opportunity, villagers would like try using service station even if the cost is 10-15% higher. BPCL can go for rollout of Suvidha stations in collaboration with major automotive player such as M&M (tractor, Jeep), Escorts, Bajaj and Piaggio. Opening of Suvidha should be distributed such that in a region all BPCL retail outlets should have a different type of service station so that in totality it could cater to all categories – tractor, jeep, motor bikes and tempo (three- wheeler shared taxi). Here stakeholders will benefit from each other since suvidha will get BPCL customer while suvidha will help in developing BPCL brand and customer loyalty. 9
  10. 10. Launchpad (PRER2010_103319, PRER2010_103321) 3) Virtual transport Agency (VTA): We suggest implementing a virtual transport agency which will not have vehicles of its own but rather have collaboration with both the regional and national level transport agencies. VTA can act as a facilitator between farmer and agencies and help farmers to transport their produce to a location which would get them better prices. VTA can also facilitate the shared transport since small farmers generally don’t require full truck load hence reducing the cost. This will help in making the both ends meet and also it would ensure a twin benefit for the petrol pump in establishing huge customer base including both farmers and transporters. 4) Prachar regional advertisement (LBS marketing): Since most of the petrol stations in villages are situated on highways therefore we can have a share of revenue from transporters/travelers passing through that region. Almost all the travelers have mobile phones with them, leveraging on this fact we can make use of Location Based SMS, B2C marketing strategy. When ever a vehicle enters particular location then on basis of triangulation technique a SMS regarding the services offered in that area would be sent. Format of the SMS can be : 10
  11. 11. Launchpad (PRER2010_103319, PRER2010_103321) Discount code provided above can be used up by the consumer if the he refill oil in order of 10 litres and discount can be a small free gift or bumper prize scratch card. Free gift can be in form of small flashy stickers advertising both BPCL and its collaborating advertisement partner which can be FMCG, film industry, it will provide them platform to advertise their product and also solve our purpose. Example: 1. ROBOs photo sticker with Rajnikant signature impression. This product will vary with regional characteristics - collaborate with movie production houses. 2. Free newspaper distribution – collaborate with newspaper companies. Triangulation method works on basis of distance from 3 nearby BTS hence it can be highly focused advertising strategy as it would directly market the petrol station in that location. Service partner can be BSNL. 5) Distance and customer service level: Surveyed area is almost captured by competitor LPG supplier because of fast delivery service. Therefore it is very important for LPG agent to have intact backend supply, properly trained task force and fleet of delivery vehicles. Ensuring prompt service shall help in capturing burgeoning rural LPG market. 11
  12. 12. Launchpad (PRER2010_103319, PRER2010_103321) While in case of petrol/diesel, distance from retail outlet plays very critical role in deciding petrol station. Therefore idea of mobile retail outlet needs to be implemented with following checks: a. Small mobile retail tanker must be tamper proof to avoid the slightest possibility of adulteration. b. Schedule of retail tanker should be shared with the village Panchayat, broadcasted over radio, local cable TV so that rural consumer would know in advance about the availability. 12
  13. 13. Launchpad (PRER2010_103319, PRER2010_103321)Appendix 1 13
  14. 14. Launchpad (PRER2010_103319, PRER2010_103321)Appendix 2 14
  15. 15. Launchpad (PRER2010_103319, PRER2010_103321)Appendix 2 Continued. 15