Summer Internship Project

“Promotional and Marketing strategies of HYLUBE HDXMULTIGRADE 20W 40 Diesel Engine Oil Lubricant andto arrest the decline in sales of HP LAAL GHODA 20W40 Diesel Engine Oil Lubricant of Hindustan PetroleumCorporation Limited”

Presented by --Pranay GuhaMBA Marketing Techno India, Salt Lake

Company Profile

The Company was incorporated in the name of Standard Vacuum RefiningCompany of India Limited on July 5, 1952.

Hindustan Petroleum Corporation Limited comes into being after the takeover andmerger of erstwhile ESSO Standard and Lube India Limited in 1974.

HPCL operates two major refineries – Mumbai (West Coast). Vishakhapatnam (East Coast).

Largest lube refinery in India producing Lube Base Oils of International Standards.This lube refinery accounts for over 40% of India's total lube base oil production.

The marketing network of HPCL consists of 13 zonal offices in major cities and101 regional offices.

HPCL has state of art information technology infrastructure to support its corebusiness. (Source:- www.hindustanpetroleum.com)

Company Products

HP LUBRICANTS

Automotive Grades Industrial Grades Industrial Specialties Greases

Automotive Grades

Engine Oils Gear Oils Transmission Oils Defense Grades Auto Specialties

Engine Oils

Diesel Engine Oils Petrol Engine Oils Natural Gas Engine Oils

HP LAAL GHODA 20W40 HP GASENOL 20W50

HP MILCY SYNTHETIC 15W40 FOUR WHEELER FOUR STROKE HP AUTO SHAKTI

HYLUBE HDX MG 20W 40 HP CRUISE -- HP RACER 2 LOW SMOKE

HP MILCY SUPER 20W 40 1) CLASSIC 20W 40 HP RACER 4 20W40

HP X-3 10W KLT 2) 15w 40 HP BAJAJ GENUINE OIL

HP MILCY TURBO 15W 40 3) CLASSIC TATA 20W40, 20W50

GENUINE OIL

20W 40

(Source:- www.hindustanpetroleum.com)

Research Objectives

To study the decline in sales of HP LAAL GHODA 20W 40 DieselEngine Oil lubricant for last 5 years.

To provide marketing strategies to the company so that they canarrest this decline in sales of HP LAAL GHODA 20W 40 DieselEngine Oil lubricant.

To study the current market scenario of HYLUBE HDX MULTIGRADE20W 40 Diesel Engine Oil lubricant and to provide promotional andmarketing strategies to the company in order to boost its marketshare.

Research Methodology

Research Problem Formulation

Choice of Research Design

Data Source Determination

Data Collection Form Design(Survey Method only)

Sampling Design and Sample Size

Field Survey

Data Analysis

Research Report Preparation

Research Methodology (Contd.)

Research Problem Formulation :- The research problem was about “to studythe decline in sales of HP LAAL GHODA 20W 40 diesel engine oil lubricant and tostudy the current market scenario of HYLUBE HDX MULTIGRADE 20W 40 dieselengine oil lubricant of Hindustan Petroleum Corporation Limited ”.

Choice of Research Design :- 1) Exploratory Research –Advertisement and Promotional analysis.

2) Descriptive Research –Bazaar shops, retail outlets and mechanic analysis.

Data Source Determination :-1)Primary data collection – Interviewing the dealers, distributors, bazaar shopkeepers,

retailers and mechanics.

2)Secondary data collection – Collected from company official websites, books andnewspapers.

Research Methodology (Contd.)

Data collection form design :- Preparation of questionnaire. The questionnairewas constructed using Likert scale. At first, an expert opinion was taken from Mr.Beladhi Mukhejee [Deputy Manager(Lubes)] (External Guide) to get an insight ofthe problem and then the parameters obtained from Prof. (Dr.) Amit Kundu(Internal Guide) helped in preparing the questionnaire for field survey.

Sampling design and Sampling size :-Sample Design – The target population for this project is defined as follows:- Element :- Bazaar shopkeepers, retailers and mechanics. Sampling Units :- Bazaar shops, retail outlets and garages. Extent :- Kolkata (South). Time :- The survey was conducted in the month of July.

Sample Size - Sample size consists of 34 respondents.Table showing the number of respondents segment wise :

BAZAAR SHOPKEEPERS RETAIL OUTLETS MECHANICS

16 14 4

Research Methodology (Contd.)

Field survey :- Having prepared the questionnaire and selected the sampledesign and size of sample, the next step is to conduct the field survey whichincludes two most important aspects :- Interviewing. Supervision of field work.

Data Analysis:- In order to derive meaningful results from the feedbackscollected via questionnaire through field survey, the data has been analyzedby factor and regression analysis.

Research report preparation:- Once the data have been tabulated,interpreted and analyzed, the final report is prepared embodying thefindings of the research study and recommendations or policy prescriptionfor the organization.

QUESTIONNAIRE

Questionnaire

1. Which diesel engine oil lubricant customers are preferring most currently?

-

2. Who influence the customer to buy the lubes?

4. MECHANICS 3.SHOPKEEPER 2.CUSTOMER HIMSELF 1.OTHERS

3. What do you look into a lubricant?

4. MARKET DEMAND 3.PROFIT 2.BRAND POPULARITY 1.QUALITY

4. Comparative Study of HP LAAL GHODA 20W 40 API CF and HP HDX MULTIGRADE API CF 20W 40 with other competitive brands?

I. BRAND NAME

RATINGS HP LAAL GHODA

CLOSE COMPETITORS(NAME)

HP HDX MULTIGRADE

CLOSE COMPETITORS(NAME)

5 (Excellent)

4 (Good)

3 (Average)

2 (Satisfactory)

1 (Poor)

II. QUALITY

RATINGS HP LAAL GHODA

CLOSE COMPETITORS(NAME)

HP HDX MULTIGRADE

CLOSE COMPETITORS(NAME)

5 (Excellent)

4 (Good)

3 (Average)

2 (Satisfactory)

1 (Poor)

I. PRICING

RATINGS HP LAAL GHODA

CLOSE COMPETITORS(NAME)

HP HDX MULTIGRADE

CLOSE COMPETITORS(NAME)

5 (Excellent)

4 (Good)

3 (Average)

2 (Satisfactory)

1 (Poor)

IV. AVAILABILITY

RATINGS HP LAAL GHODA

CLOSE COMPETITORS(NAME)

HP HDX MULTIGRADE

CLOSE COMPETITORS(NAME)

5 (Excellent)

4 (Good)

3 (Average)

2 (Satisfactory)

1 (Poor)

V. PACKAGING

RATINGS HP LAAL GHODA

CLOSE COMPETITORS(NAME)

HP HDX MULTIGRADE

CLOSE COMPETITORS(NAME)

5 (Excellent)

4 (Good)

3 (Average)

2 (Satisfactory)

1 (Poor)

VI. PROMOTION

RATINGS HP LAAL GHODA

CLOSE COMPETITORS(NAME)

HP HDX MULTIGRADE

CLOSE COMPETITORS(NAME)

5 (Excellent)

4 (Good)

3 (Average)

2 (Satisfactory)

1 (Poor)

VII. FREQUENCY OF PURCHASE

RATINGS HP LAAL GHODA

CLOSE COMPETITORS(NAME)

HP HDX MULTIGRADE

CLOSE COMPETITORS(NAME)

5 (Excellent)

4 (Good)

3 (Average)

2 (Satisfactory)

1 (Poor)

VIII. BRAND SWITCHER (Customers are doing on frequent basis)

RATINGS CLOSE COMPETITORS(NAME)

5

4

3

2

1

IX. MAXIMUM OFFER

RATINGS HPCL CLOSE COMPETITORS(NAME)

5 (Excellent)

4 (Good)

3 (Average)

2 (Satisfactory)

1 (Poor)

X. Relevant schemes available in the market for HDX MG API CF 20W 40

RATINGS HP HDX MULTIGRADE

5 (Strongly Agreed)

4 (Moderately Agreed)

3 (Agreed)

2 (Moderately Disagreed)

1 (Not agreeing)

XI. Market Operating Price (MOP) of HP HDX MG API CF 20W 40 can be of which

range to attract the customers vision and preference

RATINGS HP HDX MULTIGRADE PRICE RANGE

5 (Excellent)

4 (Good)

3 (Average)

2 (Satisfactory)

1 (Poor)

XII. HP LAAL GHODA 20W 40 API CF and HP HDX MULTIGRADE API CF 20W 40 is

known to everyone

RATINGS HP LAAL GHODA HDX MULTIGRADE

5 (Strongly Agreed)

4 (Moderately Agreed)

3 (Agreed)

2 (Moderately Disagreed)

1 (Not agreeing)

Data Analysis

The collected data has been analyzed by using two statistical tools :- Factor Analysis. Regression Analysis.

Factor Analysis :- There are two objectives of Factor Analysis :-1) It simplifies the data by reducing a large number of variables to a set of

small number of variables.2) It analyses the interdependence of interrelationships among a total set of

variables.

Regression Analysis :- Regression analysis is widely used for prediction andforecasting. It is also used to understand which among the independentvariables are related to the dependent variable, and to explore the forms ofthese relationships.

(Source:- Internal Guide - Prof. (Dr.) Amit Kundu)

DATA ANALYSIS

Factor Analysis

KMO and Bartlett's Tes t

.533

63.555

36

.003

Kaiser-Meyer-Olkin Measure of Sampling

Adequacy.

Approx. Chi-Square

df

Sig.

Bartlett's Test of

Spheric ity

Total Variance Explained

2.375 26.389 26.389 2.375 26.389 26.389 2.025 22.505 22.505

1.794 19.933 46.322 1.794 19.933 46.322 1.817 20.185 42.690

1.304 14.492 60.814 1.304 14.492 60.814 1.410 15.670 58.359

1.074 11.936 72.751 1.074 11.936 72.751 1.295 14.391 72.751

.776 8.620 81.371

.618 6.867 88.238

.475 5.280 93.518

.335 3.725 97.243

.248 2.757 100.000

Component1

2

3

4

5

6

7

8

9

Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %

Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Extraction Method: Princ ipal Component Analysis.

Factor Analysis

REGRESSION ANALYSIS

Rotated Component Matrixa

.825 2.913E-04 -3.80E-02 9.226E-02

.697 .144 .287 -5.25E-02

.663 -.237 -.178 -.361

-.156 .905 -2.51E-02 -6.73E-02

.138 .897 -6.79E-02 -3.93E-02

-8.87E-02 -1.74E-02 .905 -3.94E-02

.473 -.132 .561 4.668E-02

-.209 1.515E-02 -.182 .831

.317 -.314 .349 .674

pricing of the product

Distribution netw ork

Packaging/ Quality &

Promotion

Qualty

Brand Name

Satis faction-Frequency

of Purchase

Aw arness-Brand &

Product

Sales Promotional Tools

Integration Marketing

Communication

1 2 3 4

Component

Extraction Method: Princ ipal Component Analysis .

Rotation Method: Varimax w ith Kaiser Normalization.

Rotation converged in 7 iterations.a.

Model Summ aryb

1.000a 1.000 .999 5.1057 2.120

Model

1

R R Square

Adjusted

R Square

Std. Error of

the Estimate

Durbin-W

atson

Predictors: (Constant), REGR factor score 3 for analysis 1 ,

REGR factor score 1 for analysis 1 , REGR factor score 2 for

analysis 1

a.

Dependent Variable: Sleas data HP LAL GHODA in KLb.

Coefficientsa

1190.754 5.519 215.739 .003

167.513 2.399 1.337 69.824 .009

-247.863 6.109 -1.083 -40.573 .016

-41.802 4.704 -.193 -8.887 .071

(Constant)

REGR factor score

1 for analysis 1

REGR factor score

2 for analysis 1

REGR factor score

3 for analysis 1

Model

1

B Std. Error

Unstandardized

Coef f icients

Beta

Standardi

zed

Coef f icien

ts

t Sig.

Dependent Variable: Sleas data HP LAL GHODA in KLa.

Regression Analysis

Interpretation Of The Results

From the questionnaire we have chalked out 9 parameters:-1) Pricing of the product.2) Distribution network.3) Packaging/Quality and Promotion.4) Quality.5) Brand name.6) Satisfaction- frequency of purchase.7) Awareness- Brand and Product.8) Sales promotional tools.9) Integrated Marketing Communication.

By using these 9 parameters and their corresponding data available, factoranalysis and regression analysis have been performed.

Interpretation Of The Results (Contd.)

After undergoing the calculation of data, we have got only 4 components whichdescribe the rest of the 9 components.

The four components are :-1) F1- Overall marketing strategy.2) F2- Brand associated with equity.3) F3- Customer satisfaction.4) F4- Communication strategy.

F1 comprises of pricing of the product, distribution network and packaging/qualityand promotion.

F2 comprises of quality and brand name. F3 comprises of frequency of purchase. F4 comprises of sales promotional tools and integrated marketing communication.

F1 – 0.825, 0.697 and 0.663. F2 – 0.905 and 0.897. F3 – 0.905. F4 – 0.831 and 0.674.

Interpretation Of The Results (Contd.)

Adjusted R Square value is about 0.999 which states that the analysis done isgood.

In the co-efficient table, we have got four predictors or p-values for fourcomponents. These values are 0.003, 0.009, 0.016 and 0.071.

The general form of each hypothesis test is:H0 :This independent variable is not a significant predictor of the

dependent variables.H1 : This independent variable is a significant predictor of the dependent

variables.The decision rule is:If p < 0.05, reject the null hypothesis and accept the alternative

hypothesis.

Therefore, we choose the component F4 whose value is 0.071 according tothe above stated rule.

Conclusion

The component F4 (sales promotional tools and integrated marketingcommunication) contribute significantly in arresting the sales of HPLAAL GHODA 20W 40.

Therefore, the above mentioned component is essential in boostingup its sales.

In a more simpler way, we could say that the brand associated withadequate sales promotional techniques and proper integratedmarketing communication strategy in place will help in satisfying thecustomers in broader perspective.

Research Findings

Service Stations are playing the key role in influencing the customer to buy or to useselective lubricant products for their vehicles.

New vehicles are coming up with turbo charged engines where HP LAAL GHODA isfalling behind on their requirements.

Vehicles with engine specifications are locking up the consumer’s view.

There are no offers or discounts for consumers on HP LAAL GHODA and HP HDXMULTIGRADE currently available in the market.

HP LAAL GHODA costs Rs. 170 in retail outlets whereas it costs only Rs. 130/140 inbazaar shops.

Distribution channel conflict between the retailers and distributors is killing theseproducts.

Policy Prescription For The Organization

HP LAAL GHODA 20W 40

1) Packaging - Better outlook for the containers.

2) Advertising - Cost effective one.

3) Distribution Channel - Distributors should play an active role as a part ofpushing the product in the market.

4) Sales Promotion - Trade coupons for the consumers . Discount with 1 liter or bigger packs in order to boost up the seasonal

sales. Providing incentives to the bazaar shopkeepers.

Policy Prescription For The Organization (Contd.)

HP HDX MULTIGRADE 20W 40

1)Budget Allocation - The first major step before promoting this product.

2)Hiring an agency - To provide some quality manpower assistance to the company for promotional activities.

3)Leaflet distribution - HP retail outlets and in office areas.

4)Mobile hoardings - Target market areas.

5)Market Survey - In places where the promotional activities will be carried on.

6)Retail Promotion - Putting up flex uni-pole hoardings carrying an overall description of the product along with its hidden or noticeable qualities.

7)Sales Promotion - Trade coupons for the customers.

Scope For Future Research

To convert more mechanics, retailers and fleet owners into dedicated HPCL customers.

Analyze the requirements of HP HDX MULTIGRADE 20W 40 and HP LAAL GHODA 20W 40 diesel engine oil lubricants and devise strategies for market penetration.

To resolve the issues regarding the distribution channel between the retailers and DSRO which will ultimately lead to the growth of these products in the lube market.

This study will help the company to accelerate their reach towards those mechanics working in the service stations and impart them with the adequate knowledge about their products.

To start the promotional activities in target areas or regions for HP HDX MULTIGRADE 20W 40 with an additional knowledge of how their competitor’s are on the rise with their promotions in this regions.

The company can also develop a more useful push strategy for their products rather than dumping them into the retail outlets.