BPCL's Petrol Pump Retail Revolution

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Themes : Retailing
Period : 1995-2001
Organization : BPCL, IOC
Pub Date : 2001
Countries : India
Industry : Energy & Utilities

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Case Code : MKTG016
Case Length : 6 Pages
Price: Rs. 200;

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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.

BPCL's Petrol Pump Retail Revolution: 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 21^st 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 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. However, BPCL was reported to be much better positioned than its competitors, Indian Oil Corporation (IOC) and Hindustan Petroleum (HP) to meet the MNC onslaught after deregulation. BPCL was also reported to be fine-tuning its marketing and retailing strategy.

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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.