Future of fuel retailing in india Essays

Future of fuel retailing in india Essays Future of fuel retailing in india Paper Future of fuel retailing in india Paper Deregulation In the asss Is the first major steps Initiated by the then government for a tectonic shift in the sales and marketing of fuel retail business. The major retail verticals are being forced to plunge In for promotion with vigor and to partner with tech leaders to upgrade their age old facade and services at their petrol dispensing outlets to provide a new retailing experience to their end customers. Personal and commercial mobility continues to grow: Key factors are economic growth of large middle class, increasing arbitration of satellites like Oneida, Nava mumble and extremely slow or naught development of public transport Infrastructure Total personnel vehicles on road expected to grow by near 9%, over the next 10 years Demand for retail fuels to grow, increasing pressure on majors like COIL to deliver Retail fuel demand (mostly petrol Weasel) expected to grow at near 7% per annum Indians concern on energy security, import dependence for crude is around 75%, will expected Upton 80-85% by 2020 Access to import crude and the volatile pricing mechanism(existing pricing Regime) pose significant threat to national energy securely/sufficiency. Indian Fuel Retail sphere lags in few areas More focused on volume enhancement and pipeline network(distribution) than control over pricing/margins and return on asset Dependent Mainly liquid fuel based with alternative fuels (e. G. CNN) at e arly stage Innovative types of retailing (e. G. Manned, hypermarkets, integrated retail) yet to be Introduced Next 5-10 years may see some game changers in fuel Retailing Three crucial factors f change anticipated International Market based pricing of fuels in Retail Majors Stricter emissions and efficiency norms, e. G. Euro 4 (2005), Euro 5 (2008/9) Growth and storage of alternative energy and efficient electric vehicles Winning In the future will require a deferent set of capableness and partnerships Moving forward, Indian fuel retail sector will experience certain game changers which may eventually reshape the fuel retail market landscape 1 OFF fuel offering, new capabilities, technology, proactive customer relationship, partnerships/collaborations etc. : Need to offer a wider range of fuels including CNN and electric More focus on CNN, to form it part of multi-fuel based outlets in urban areas, given the fact urban real estate is costly. Retailing and marketing of LONG as a fuel can be adopted for trucks along highways and freight corridors Construction of electric vehicle (EVE) charging infrastructure EVE infrastructure development requires planning at macro level to identify right distribution of charging stations across cities. Collaborate with Auto industry and enhance end customer knowledge Industry majors could develop differentiated products through collaboration with Auto original equipment manufacturers(Memos) Marketing for end customer awareness, should be used for promoting premium products and to educate customers about the need for fuel efficiency lower emissions. Comprehensive and viable methods could be adopted to reduce carbon footprint manage green regulations models Develop capabilities in dynamic pricing, branding and technology Retail Majors should develop capabilities in dynamic pricing, earning margin branding and Prepare for entry of non traditional competitors(Foreign retailers like shell,BP) and higher technology investments Disinvestment and deregulation period 2002-05, though short-lived, had tremendous impact on the market sphere, customer attitude outlet infrastructure Impact of Deregulation Customers tried to find outlets offering better value service Several initiatives, e. G. Loyalty programs, quality quantity assurance etc. Became must-haves New technologies being used in modernization of Fuel retail outlets Creating Multi- product automated dispensing units, free car washes etc. New players, e. G. Reliance, Cesar Shell entered market, making the retail sphere more competitive With far fewer outlets, new entrants captured about 17% of diesel 10% of petrol sales, even with regulated pricing. New entrants incumbent fuel retailers can position themselves in the market based on specific differentiation levers Restaurants, Truck shops in highway outlets Uniform price positioning by all fuel retailers No differentiation in products sold Box formats with proper service attendants Customer segments could be intensified with research, and tailor made products and service be offered to the these segments Customer preferences in India are not homogeneous, Truck driver Customers are concerned about pricing, fuel quality and outlet facilities Urban customers look for convenience, experience and access to other services (e. G. ATM) Fuel retailers can offer tailored made value to specific customer segments, for e. G. Apart from fuel dispensing, Retailers can also provides drivers lounges, s howers and restrooms Fuel Price Deregulation Deregulation of fuel prices in India is inevitable in the narrow long term given Indians over-dependence on crude imports. Subsidies given in the fuel retail is unsustainable. In the free-market capitalism, fuel retailers will experience a strong and widespread impact in their environment. There would be escalating pressure on pricing, margins and customer retention. Emissions Sustainability The industry majors should focus on product innovations in fuels and lubricants. Product development should be taken up through collaboration with Auto Memos Tough emission standards have led to the development of premium products in developed countries; there has been low acceptability of the same in India Future Scenario( snippets) Smart customers with real-time information of prices across outlets, customers being price sensitive Forward pricing standards, international standards could be raised Collaborative relationships among the major verticals Non-outlet based fuel retailing, alternative fuel based Multi-fuel retailing fuel retail market landscape. Capabilities Required: Develop Wider range of products (in type and specifications) and the infrastructure to support it. Pricing ability without government ministerial interventions. Innovate and operating new outlet formats. Investment in technology RD . Collaborate with industry leaders for new product infrastructure development Marketing campaigns and awareness programs tailored to the Indian customers nee ds and high outlet service standards