BPCL's Petrol Pump Retail Revolution

            
 
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Case Details:

Case Code : MKTG016
Case Length : 6 Pages
Period : 1995-2001
Pub Date : 2001
Teaching Note : Available
Organization : BPCL, IOC
Industry : Energy & Utilities
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"We have always been a proactive company and envisaged that in the future, with decontrol, it is going to be important how the retail outlet looks and the kind of facilities it offers."

- A BPCL spokesperson, in 2000.

The Pioneer

Petrol pumps in India have come a long way from being dusty, poorly lit places manned by shabbily clothed and indifferent personnel, to the shopping malls of the early 21st century. Bharat Petroleum Corporation Ltd. (BPCL), a leading player in the Indian petroleum industry, received wide acclaim for having brought about this change in the Indian fuel retailing business.

In the mid 1990s, the oil industry felt the need to establish strong brand identities; until then, the industry seemed to have adopted an indifferent approach towards customer service. With the deregulation of the oil industry due in April, 2002, Indian players realized that they needed to become more customer focussed.1

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

BPCL's pioneering efforts in creating brand awareness for its products were thus a welcome change. Till the mid 1990s, a typical petrol pump owner seldom interacted with the oil company whose franchise he held.

However, with the new found retail focus of the late 1990s, companies started taking immense interest in the retail outlets.

BPCL's first foray into petrol pump retailing was through Bharat Shell Ltd. (Shell), its joint venture with Shell Overseas Investments of Netherlands. Shell launched the first convenience store (C-Store)2 stocking over 1,000 different items.

The store, offering eatables, soft drinks, stationery, newspapers, magazines, frozen foods, light bulbs audio cassettes and CDs, came as a pleasant surprise for Indian consumers. By mid 2001, petrol pumps at almost all major locations in the metros had set up retail outlets...

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1] Before deregulation, only PSUs could carry on the oil business in India. However, after April, 2002, the oil industry would be fully decontrolled and the market would be open for anybody to set up a network of retail outlets. Instead of adhering to a basic, pre-determined price, companies would be free to sell at their own prices. The restrictions on the number of outlets would also be removed and the PSUs would have to deal with global majors such as Exxon and BP.

2] Convenience or C-stores, a term which originated in the US, refers to retail outlets established at petrol pumps.

 

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