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Reliance Petroleum RetailReliance Petroleum Retail

Rajesh S. Bhujbal

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Introduction to Reliance Industries

RIL is the largest & one of the fastest growing private sector companies in India. It’s founder Late Dhirubhai Ambani started with a small textile mill in 1966.

After the government of India deregulated the petroleum sector on April 1, 2002 the private players got an entry in the retailing business of petrol & petroleum products which implies competition & the creation of a level playing field for all players the existing public sector companies as well as the new ones both private & foreign.

Reliance has received government approvals for establishing about 5,849 Retail Outlets for transportation and marketing fuels across India. Till 28th December 2005 RIL has completed setting of 1000 Retail Outlet in all over the country.

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Introduction to Retail Outlet

CLASSIFICATION OF RETAIL OUTLETS: -

1. COCO (Company owned Company Operated): - Reliance owned & operated-Ownership of the property & infrastructures. Company personnel for operation.

2. CODO (Company Owned Dealer Operated): - Reliance owned property & infrastructure & third party operated.

3. DODO (Dealer Owned & Dealer Operated): - Third party owned & operated franchisee.

 TYPES OF RETAIL OUTLETS: -

1. Truck stops2. Fill & Fly3. City Retail outlets

 

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Purpose

Refining margins are very low i.e. Companies earn very less if they exist only in refining sector and do not retail petro products. They can earn more by way of Retail Marketing of petrol products, as margins are very high in this segment.

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Main Products

Motor Spirit (MS)

High Speed Diesel (HSD)

Liquefied Petroleum Gas (LPG)

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Additional Facilities

TransConnect A-1 Dhaba Infocom

Quick Mart Towing

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Current Market Dynamics Petro-Sector

With growing competition and deregulation, the rules of the game in the

petrol retailing industry will undergo some major changes.

The revolution in the Indian Telecom industry is a good example of the impact of the free market dynamics on the structure and strategies of the players in the industry.

Ultimately “ It is the customer who will emerge as the winner. The company who identifies his customers and his needs will emerge as the Leader

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Only improving the quality of product & giving better service will not help to the company to increase sale. Company needs some advertising program. This will create awareness in minds of customer about Reliance retail outlet.Example: -

HINDUSTAN Petroleum Corporation Ltd, India's second largest oil marketing company, has signed tennis sensation Sania Mirza to

endorse its retail brands. INDIAN Oil has signed Irfan Pathan so as to endorse their new

“Extra Premium product”.

Building Strong Brand Awareness

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Building Strong Brand Equity

Brand Recognition and Differentiation of existing is currently low.

Brand value of the product is still not established in India, a person buying petrol or diesel is still not much concerned about whether he is buying it from Reliance or BPCL or Indian Oil. Reliance needs to create brand value in minds of customer.

This is changing and will evolve in times to come Club HP “Accha Lagta Hai”“Pure for sure”

Still there is lot of opportunity to new players as well as existing companies to build a strong petroleum retail brand.

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Co-Branding

Co-branding petrol with a complementary product in that market. For e.g. Reliance collaborates with Bajaj – a reputed bike manufacturer and makes promotional campaigns wherein target audience gets the message "When you use Reliance petrol with Bajaj bikes, you get better mileage and longer Engine Life. Similar pattern can be followed in target market segment of "Passenger cars" with Maruti, Hyundai etc for building solid Brand image. Initiatives should be taken for collaborating with different market leaders in different Regions e.g. Tata Motors is a major player in North whereas Ashok Leyland has

majority control in South India.

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Value added service and products

Other than a basis for differentiation, Non fuel products and services can contribute significantly to revenue and profitability.

Non Fuel revenues of petroleum retailers contribute as much as 38.6% in the US & 28% in France, and their higher profitability makes them particularly attractive.

Average Profit contribution of non fuel products and services is 65.8% in US & 40 % in France.

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Thank You