2. Research Objective –
• Feasibility study of New Project for Refueling Station
• Demand Estimation
• Business Potential measurement of Auxiliary outlets within the Refueling
Station
3. Research Methodology
Research Design-
o Exploratory Research
Sample Design-
o City chosen is Kanpur
Data Collection tools
Secondary data
o Journals
o Magazines
o Articles
o Official websites
o Observations
Data Analysis Tool
o Huff Gravity Model
4. Research Plan
I have started my research for identifying the new retail outlet for refueling station within the
radius of 50km of Kanpur; I have visited major National Highways which are connecting to
the major cities of our state. I.e.
Lucknow highway (NH 25)
Allahabad highway (NH 2)
Delhi highway (NH91)
Hamirpur highway (NH 86)
Out of above mention, I have taken Hamirpur Highway (NH -86) as this Highway is been
considered as National Highway in the year 2010, which will connect Kanpur to Dewas (M.P)
664 km long. The major supply of coarse sand of Northern Eastern U.P is supplied by the
Hamirpur, daily more than 2000 trucks passes by this highway, which gives an opportunity for
a installation of new refueling station.
5.
6. The major cities which receive coarse sand From
Hamirpur are
Kanpur Ramabai
Nagar
Orai Jalaun Lucknow Barabanki Faizabad Sitapur
Kannuj Fatehgarh Unnao Aurayia Hardoi Gonda Sultanpur Rai
Bareily
Allahabad Balrampur Shahajanpur Mainpuri Pratapgarh Banda Jaunpur Banaras
7. Hamirpur has 175 coarse sand mines and more than 2000 trucks carry out
the coarse sand from them and supplies to various cities.
So therefore total demand for diesel on the route will be
2000 trucks with maximum fuel tank capacity 150 liters per trucks =
2000*150= 300000 liters diesel per day.
8. Huff Gravity Model
This model helps in estimating the sales of a retail store which is based on the concept of
gravity: consumers are attracted to a store location just like Newton’s falling apple was
attracted to the Earth. In this model, the force of the attraction is based on the two factors:
The size of the store (larger stores have more pulling power )
The time it takes to travel in the store (stores that takes more time to get to have less pulling
power).
The Mathematical formula to predict the probability of a consumer going to a specific store
locations is as follows:
9. The formula indicates that the larger the size (Sj) of the store compared with compared with
the competing stores, the greater the probability that a customer will shop at the location. A
larger size is generally more attractive in consumer’s eyes because it means more merchandise
assortment and variety. Travel time or Distance (Tij) has the opposite effect on the probability
that a consumer will shop at a location.
The greater the Travel time or Distance from the consumer, compared with that of competing
locations, the lower the probability that the consumer will shop at the location.
The expected sale will be estimated by multiplying the calculated Probability with the average
sales of two locations.
Consumers will shop more to the closer shop rather than distant one.
10. The Shambhua is located between Bidhnu & Patara
Distance is 7.2km from Bidhnu and 5.5 km from Patara
Due to the miserable conditions of the road, time taken is 10 minutes
from Patara to Shambhua and 20 minutes from Bidhnu.
12. The land which will be required for the refueling station is 2400 square meters, to open a new refueling
station we can have 4800 square meters to gain the competitive advantage of location.
The cost of land (9 lakhs per 2400 square metres) i.e. Rs. 1800000 + 10%
Registration charges = Rs. 1980000
Power (Solar Energy) = Rs. 180000+ Rs. 20000transpiration+installation
fees Quotation
= Rs. 200000
Security fees (for rural) = Rs. 10000
General expenses (including legal expenses) = Rs.100000
Advertisement and marketing expenses = Rs. 250000
Total -----------------------
=Rs.2540000
13. Applying the equation in the formula
4800/202 =.40
2400 +2400
202 102
4800/302 = .60
2400 + 2400
302 202
The expected sales (Probability of support time’s market size) for the new location would be
.40*115500+.61*156000= Rs. 142,515
14. Analysis
• The sale of new refueling station will be feasible at the location (Shambhua) at National highway 86
which is 29km south from Kanpur.
• With the help of Huff Gravity Model the site potential sales has been estimated which is the expected
sales (Probability of support time’s market size) for the new location would be
.40*115500+.61*156000= Rs. 142,515
• This is more than of Jain Automobiles which is at Bidhnu, Kanpur.
SWOT analysis for the location (National Highway 86)
Strength
Main roads which supplies coarse sand to the northern & eastern U.P
Shorter routes, which saves fuel and time
Weakness
Roads are miserable; it takes more than 2 hours to cover a distance of 60km
Passengers often avoid this route.
Opportunity
Only 5 refueling station in this route
Heavy Demand of HSD (High Speed Diesel)
Land for refueling station is available at reasonable rates.
Threat
Tough competitions with existing refuel station
15. Suggestions and Recommendations
As during my research I found that most of the refueling station use electric generators which
is increasing the working capital, the solar power pack of 5kilowatt** will help the owners to
reduce their cost, as the plant of solar power pack is of Rs. 180000+ Rs.10000 each on
transportation and installation = Rs. 200000.
Mobile Refuel station (bus) will be more profitable and will be pioneer idea in our nation. A
Chinese firm supplies this bus to many nations across the globe. Quotation
Only 2 food centers are present on the highway, so the feasibility of DHABHA at the refueling
station will be profitable as drivers who goes for a long distances, prefer every facilities under
one stop.
