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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The Background

BPCL's history dates back to 1951, when the Government of India entered into an agreement with the UK based Burmah Oil Company and Shell Petroleum Co. (Burmah-Shell) for establishing an oil refinery in Bombay. In 1952, this agreement led to the incorporation of Burmah Shell Oil Refineries Ltd...

The Retail Initiatives - Phase I

The petroleum business can broadly be divided into three parts: the production of crude, the refining the crude into saleable products like petrol, diesel, kerosene etc., and retailing.

Though margins were usually high in crude production, it was a high-risk, long-gestation business.

As far as refining was concerned, there was excess capacity worldwide and margins were rather low.

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

It was only in marketing was that companies could get the maximum margins, and hence the rush to renovate the retail outlets. Also, add-on services were expected to help the oil companies increase the extent of non-fuel businesses around their outlets...

The Retail Initiatives - Phase II

By July, 1999, 35 of BPCL's retail outlets across the country had the 'Bazaar'stores running successfully.

In October, 2000, BPCL pioneered another revolutionary concept by launching a McDonald's fast food outlet at a petrol pump near Mathura (UP) on the Delhi-Agra highway.

The 4,000 sq.ft., 180 seat outlet was set up at a cost of Rs 40 million. McDonald's paid a fixed rent, besides a percentage of its sales to BPCL, for using the facility...

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