brandits amby iim bangalore

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BRANDITSPrerana by NITIE

suman

10/15/2010



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Contents

TARGET CUSTOMER & BUYING BEHAVIOUR ................................................................................ 3

NEEDS OF THE RURAL CUSTOMER .................................................................................................. 3

COMPETITOR ANALYSIS.................................................................................................................... 4

COMPANY ANALYSIS ......................................................................................................................... 5

POSITIONING OF BPCL ....................................................................................................................... 5

LEVERAGING THE EXISTING NETWORK ........................................................................................ 6

BUSINESS MODEL ............................................................................................................................... 6

BRANDING............................................................................................................................................ 9

GLOSSARY.......................................................................................................................................... 11



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Bharat Petroleum Corporation Limited wants to expand its distribution network to rural areas to

capitalize on the high growth potential in rural India. To decide on the initiatives by the

company, some major influencing factors have been analyzed to suggest recommendations.

TARGET CUSTOMER & BUYING BEHAVIOUR

To come up with the target customer for BPCL the Indian rural customers have been segmented

according to their demographic, geographic and psychographic profiles and on the basis of

parameters like their financial conditions, living conditions and purchase habits. The target

customer profile is shown in the Fig1. A typical rural customer does not see a high difference

among brands as long as they get what they want to fulfill their needs (Brand-insensitive, price-

sensitive). They also do not take a lot of efforts to determine the product type and quality (Low

Involvement), so the target customers¶ behaviour will be habitual-buying behaviour as suggested

in Fig2.

NEEDS OF THE RURAL CUSTOMER

With urban markets getting saturated and rising rural incomes the focus of marketers has shifted

to large untapped rural markets. Understanding the needs of the rural customer and designing

products and services tailor-made for them is a must for making a significant impact on rural

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COMPANY ANALYSIS

Having dealt with the initiatives by the competitors in rural segment, we are in a position to

analyze the company BPCL to decide whether its foray into the rural markets is profitable or not.

STRENGTHS WEAKNESSES

Strong Market Position

Strong product portfolio :: Gas, petro products,aviation, fleet

In house plant and R&D capabilities Growth Rate Navratna PSU

Not much experience in Rural markets

No existing network of distributors/ tie-ups with fertilizers, seed producers

No experience of merchandising

Penetration of LPG 20% compared to 83% in

urban areas. Rajiv Gandhi Gramin LPG Vitrak- can tie-up with

the vision 2015 of 75% Requirement for Agri-equipments

Diesel for tractors

Green revolution

Competition by HPCL and IOCL

Lacking first mover advantage

OPPORTUNITIES THREATS

From Fig4 it is clear that BPCL has substantial strengths as compared to its weaknesses in the

rural domain. There are huge opportunities in the rural markets and negligible external threats or

regulations. Hence we suggest BPCL to go forward into this attractive domain. A business model

is explained in the later part by utilizing its existing network and taking care of the issues

discussed above.

POSITIONING OF BPCL

P i t f P it Provision of non-fuel retail services along with diesel and petrol

P i t f iff Multiple new services like Prepaid card and use of Kisan Credit Cards

with one contact, On-time quicker service, Reliability, Convenience

V l P iti Organization the delivers one stop solution for all needs at doorstep

Fig 5. SWOT Analysis of BPCL

Fig 6. Positioning of BPCL



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U iq S lli P iti

The major selling proposition of the initiative would be that the outlets would cater t ll th

f th vill . This ensures that the relationship established with customers is not just

transactional or one time sales but l t m t hi .

LEVERAGING THE EXISTING NETWORK

BPCL has existing mobile retail outlets in the north ² in the interiors of Panipat and Barailley

which are basically an extension of petrol pumps but less expensive. The existing network of fuel

stations in rural areas would be t m tl t which cater to the non-fuel needs

of the rural people as well.

The augmented products and services available at the retail outlets would encompass:

The i of outlets would be done by nation-wide and local level marketing as well as

promotions.

BUSINESS MODEL

Based on the different needs like value-for-money, functionality, local distribution derived from

the secondary research of Indian Rural population the Business attributes and service domains

can be designed below:

Fig 7. Product and services at Retail Outlets



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The t t m t would be:

1. Farmers ± Male, Fuel purchase, Agriculture Products, Financing Schemes

2. Housewives ± Female, Daily need products, Lamps, Burners, stationery

F t f th i iti tiv

y The enhanced product and service portfolio ensures that the outlets become a one top

ol tion provi er for whole f mil needs.

y The rollout needs to be in a ph sed m nner to ensure that implementation issues are sorted

out at initial stages itself. The initiative should start from P njab and Haryana states with

most prosperous rural areas.

y Many of the services would be provided through tie ups with service providers thus reducing

the upfront investment from the dealer.

Feat res of the off erings

The offerings from the outlets will be such that they meet the basic points of parity in the

industry as well as differentiate Bharat Petroleum¶s outlets from the competitors. The Fig7

explains the business model taking these points into consideration. The blue box in the figure

explains the differentiators provided by BPCL. They offer value to the customers and also have

potential for revenue growth.

Products/Services R ationale Tie- ups

Fuel: Diesel and Petrol y Core product

y Higher sale

y Selection of dealer from thelocal area

Seeds, pesticides, f ertili ers

and agro needs y Rural market size of agro

products: Rs. 45000 crore

y Basic need of farmers

y Government organizationslike National Seeds

organization, Godrej Aadhar

Tools, Auto spares y Rural market size of 2/4 wheelers:Rs. 8000 crore

y Automobile companies likeMaruti, Hero Honda

Daily needs li e grocery

and personal care y FMCG Rural market size: Rs.

65000 crore

y Caters to aspirational values

y Increases footfall

y Tata Kisan Sansar, GodrejAadhar, FMCG & commodity

companies

Cook ing stoves and lamps y Electricity issues in rural areas

y Transition from Kerosene to LPG

for cooking1

y Local and national suppliers

Stationery f or children y Literacy level: 59% y National retailers like

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y Increased focus on µSarva Shiksha

Abhiyan¶

Navneet, Classmate, Camlin

Air f or vehicles y Complements core activity

Internet y Usage growth rate: 30% p.a.2 y ITC echoupal, sify

Financing Schemes y Huge investment in farming

equipment

y Major banks or financing

groupsR echarge: Telephone

DIFFERENTIATOR y Annually 18% growth in rural

subscribers3

y Major telecom players in rural

space like BSNL, Airtel,

Vodafone, etc.

Bank ing Services

DIFFERENTIATOR y 42 million rural households avail

of banking services

y ATMs or extension counters

y Major banks keen on rural

expansion like SBI, Bank of Baroda

Credit Card Transactions y 41 million Kisan credit cards

issued

y Kisan Credit Cards, Payment

Gateways

Water and Toilets y Basic convenience y Sulabh (optional)

Grameen Card

Farmers generally have seasonal income. They have money generally after the harvesting season.

To ensure that they can easily spread out their purchases throughout the year, Bharat Petroleum

needs to provide a µGramin Card¶ . This will act as a prepaid card which can be recharged with

some amount. This card can then be used by the customer to make transactions at the outlet

throughout the year.

Events

These can include various camps which enable knowledge transfer to the rural customers and

provide convenience to them.

1. Service camps from automobile and consumer durable companies

2. Health camps to impart knowledge about hygiene or various diseases

3. Knowledge sessions for farmers to aid better agriculture practices

Benefits to the company

Agriculture is a seasonal business opportunity for sale of fuel, with major sales in harvesting

season. Addition of other agricultural products reduces the seasonality and ensures f ootf alls in

the outlets throughout the year. The benefits to the company include:

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Fig 8. Business Model for Retail Outlets



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y Higher revenue from fuel sales

y Tapping rural markets at a faster rate

y Long term relationship building with customers

y High motivation level of channel members

Benefits to the dealer

The addition of non-fuelproducts and services provides more revenue generation opportunities

to the dealer. This motivates them to perform better.

y The revenue from non-fuel retail remains with the dealer leading to higher revenues

y Reputation of working with a Fortune 500 company

y Lower investment costs

y Assistance from experienced company people

BRANDING

y Choice of Brand elements

o Name ± Sarva-Seva-Grah stands for µA house where all the necessities are met¶. The

outlet provides a host of items like fertilizers, seeds and general merchandizing such as

FMCG goods for the rural customers and hence the name goes with the concept.

o Logos & symbols ± The logo of the service would show a

hut (a typical rural residence) under which a villager will

be sitting. It implies that the rural customer is safe with the

centre. Two hands holding a growing plant shows

happiness and prosperity and signifies the agricultural

linkedness. The logo of BPCL will be there at the bottom.

o Slogans ± The tag line µSampann Gram Ki Nayi Pehchaan¶ further establishes the

connect with rural customers. It communicates the idea that the outlet would help the

villagers achieve high growth.



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o Endorsers ± BPCL should tie up with the likes of Aamir Khan & Sachin Tendulkar who

are famous in villages for endorsement. Talking about a normal Indian who takes pride in

using it would ensure awareness among rural masses

o Brand Associations- The brand associations of the company BPCL could be utilized for

Sarva-Seva-Grah in the following manner:

y Appropriate Communication

Once proper branding has been done the message has to be communicated to the target

customers. Following table specifies the communication objectives and vehicles used to

achieve these objectives.

Communication

Objective

Communication Vehicles/ Advertisements Promotions

y To maxi mise

reach

y To create

Brand

awareness

y To increase

i mpact of

advertising

y Presence in Weekly and yearly (melas) fairs

y Road shows and µnataks¶

y Through Pamphlets & WOM marketing

y Print Media such as local and regional

magazines

y Flyers, classified column in newspaper

y TV and Radio Advertisements at local

channels

y Prepaid cards issued

to customers

y Discount on bulk

purchase

Fig 9. Linkages between BPCL brand and favourable entities



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y To create long

ter m

associati ons

with rural

cust omers &

Distribut ors

y Maintaining high standard of product &

Service Quality-Continuous innovation in the

platform & maintaining contacts with

servicemen

y Engagement ith and bet een Customers-

We propose µSarva-Seva-grah¶ to manage a

community of local villagers where customers

would know about the updates of the SKUs

present at the centres.

y Financial option f or easy credit- Easy credit

schemes by tying up with financing institutions

to help the needy villagers

y Joint or cooperative promotion- By

establishing partnership between BPCL and the

local distributors.

y Gold and silver cards

to privileged

customers and

membership status

y On-time and doorstep

delivery on call to

privileged members

GLOSSARY

Abbreviations

BPCL -Bhara(

Pe( r

) leum

0 )

rp)

ra( 1 )

n2 1

m1 (

ed

HPCL- H 1 ndus ( an Pe ( r ) leum0 )

rp ) ra( 1 )

n2 1

m1 (

ed

IOCL- Ind1 an O

1 l

0 )

rp)

ra( 1 )

n2 1

m1 (

ed

WOM- W ) rd-) 3

-M ) u ( h

PSU- Publ1 c Sec

( )

r Un1 (

SWOT- S ( ren4 (

h Weaknesses Opp) r ( un1 ( 1

es Threa( s

T erms Used

Habitual Buying Behaviour: Habitual buying behaviour 5

ccurs when6 nv

5 lvemen

7

6 s l

5 w and d

6 8 8

erences

be 7 ween brands are small.

Footfall: A measure9 @

A he number

9 @

pe9

ple wh9

walk pasA

a sA 9

re

Phased Manner: T 9 plan 9 r carry 9 u A sys A emaA B

cally by separaA e B n A ervals.

Fig 10. Brand Promotion vehicles



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