Hindustan Petroleum stands as one of the leading oil and gas companies in India with around 25% market share in terms of public-sector companies. HPCL was established in 1974 named Standard Value Refining Company. Being in business for nearly 50 years, the company has withstood multiple ups and downs.
Today, in the HPCL case study, we are going to deep dive into the marketing strategies the company has been implementing to stay ahead of the curve.
Let us start with a brief introduction and see what Hindustan Petroleum Corporation Limited is all about.
Hindustan Petroleum Corporation Limited (HPCL) is one of the most valuable public sector undertakings with the title of Maharatna. Most of its profit comes from metros around India. Today Hindustan Petroleum is a subsidiary of the Oil and Gas Corporation (ONGC).
As of June 2020, 51.11% of the total stocks of HPCL are owned by ONGC, 16.07% are owned by Foreign Institutional Investor (FII), whereas 23.61% are owned by Domestic Institutional Investor (DII), and the remaining 9.21% are shared among the public. The market capitalization of HPCL is around 32 crores.
So, HPCL is one of ten Maharatna companies in India with a strong history and status. Let’s start by looking into the marketing mix of HPCL.
HPCL’s Marketing Mix
A marketing mix is a combination of the primary areas of focus for any company as their marketing strategy. The Marketing mix generally includes the 4Ps of marketing i.e. Product, Pricing, Place, and Promotion.
In this section, we will talk about the marketing mix of Hindustan Petroleum Corporation Limited.
Being a petroleum giant, HPCL dominates seven different product and service categories. These products and services have enabled HPCL to make a profit of 6,029 crores alone in the fiscal year of 2019-2020. These products are:
- Refineries: HPCL operates refineries around Visakhapatnam and Mumbai and altogether these refineries are capable of refining fuels of nearly 15 million metric tons per annum
- Aviation: Alongside refineries, HPCL runs an aviation refueling service at various airports in India
- HPCL is also able to capitalize on the need for fuels of huge power plants, fertilizers, airlines, and chemicals through its production and catering of Bulk Fuels.
- The company is capable of producing 3610 trillion metric tons per annum of LPG gas under the name HP Gas in India.
- HPCL also provides various lubricants used by renowned car and equipment companies.
- Retailing is another service provided by the company where the products retailed are LPG, petrol, diesel, lubricants, and many more.
- HPCL has also successfully laid pipelines for the transportation of petroleum products around different parts of India.
Since HPCL is a state-owned enterprise, prominent decisions regarding the price of the products and services are derived by the state/government. Despite all adversaries, HPCL is researching the strategies for dynamic pricing of their product to improve their revenue. This is believed to change the price by 40 to 50 paisa with a promise to be implemented throughout India.
Place and Distribution Strategies
HPCL operates through more than 13,800 retail outlets across India. The placement of two refineries in Mumbai and Visakhapatnam is very fitting as this allows them to maintain a wide geographical reach. HPCL also has the second-longest pipeline network for secure transportation of their products.
All of these impressive statistics aren’t the mere achievement of product, pricing, and placement of the company, rather they are a combination of precise promotion and marketing strategies. The promotion strategies include creative advertisements, loyalty programs, giveaway campaigns, lucky draw campaigns, and festive discounts.
But naturally, no market giant can exist without its fair share of competitors, let’s get to know HPCL’s.
Competitor Analysis of HPCL
The major competitors of HPCL are Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Limited (IOCL). A competitive analysis of these three companies can be seen below:
|Market Capitalization (in Crores)||89,568||32,190||83,127|
|Current Price-to-Earning Ratio||18.75||6.42||9.34|
|Promoter||Gov. of India||ONGC Ltd.||Gov. of India|
|Historical Median Price-to-Earning||13.1||9.02||10.1|
The above table thus shows the competitors’ analysis in terms of major parameters, under all of which HPCL fairs exceptionally well. Now, we shall finally head onto the marketing strategy of the company after having understood its position and business quite well.
Marketing Strategy of HPCL
This section will contain a brief description of the marketing strategies used by HPCL. The company has been intensively utilizing traditional means of marketing while partnering with Leo Burnett for advertising. Recently, HPCL has been seen using video content as a marketing strategy to reach the target customer and create awareness about the uses of different petroleum products.
The market segments of HPCL include corporates, industries, countries, and individuals looking to fulfill their energy needs. Whereas the target market includes enterprises that require huge energy resources for production and those people who need petrol, diesel, and LPG for their vehicles and domestic necessities. Let’s further grasp the company’s marketing efforts with the help of some of its campaigns.
HPCL’s Marketing Campaigns
Marketing Campaigns are an important marketing tool that help in positioning a company and communicating to its audience. Let’s take a look at some of HPCL’s marketing campaigns.
- Since 2009, HPCL has operated the Surakshya Sachetana Abhiyan for generating public awareness about the safe usage of LPG, targeting the population of rural and urban areas.
You can also see other campaigns by HPCL in the picture below:
- Alongside these awareness campaigns, HPCL has been giving away gifts, discount coupons, and sometimes free fuel coupons to customers at their outlets.
- In a major move, the company has launched loyalty cards to the members of its branded retail stores like Club HP and Club HP stars. They also run a Good Fuel Promise program under which HPCL commits to provide contamination-free and adulteration-free products to the customer.
- The company is also trying to cope up with the changing world of technology. To support this statement, they have implemented a retail automation system. This system has automated the majority of operations and business processes of its retail outlets.
In a nutshell, HPCL is doing its best to serve the people, which will eventually convert regular customers into loyal customers. And these loyal customers will then provide word-of-mouth marketing for the company.
These were traditional marketing tools used by the company, let us now analyse their presence in the digital world.
HPCL’S Digital Presence
Having an active digital presence is extremely important in today’s world for any company. In this section, we shall discuss HPCL’s. HPCL has official pages and handles on major social media platforms like Facebook, Instagram, Linked In, Youtube, and Twitter.
They have a decent presence on all of their social networking platforms:
Joined Date: May 10, 2015
Employees on LinkedIn: 9,460
Their LinkedIn page doesn’t seem very active as there is an average of 1 post per month which is very scant for a company like HPCL.
Created: September 19, 2014
Post per day on average: 4
They try their best to post engaging content while trying to keep up with the trends.
As per their posting trends, we can see that they have the same posts for both Instagram and Facebook.
Joined: February 2010
HPCL is pretty active with tweets and retweets on Twitter.
HPCL is clearly trying to keep up with technological and digital shifts. But it seems like they need to rethink their digital strategies and maintain a more current presence.
In a nutshell, HPCL is strong on its financial and capital fronts. All while capturing a large market share and maintaining its product quality. With a long operation history, HPCL has been able to perform well and make a mark for itself in the industry. But as the world has entered the digital era, not being able to capitalize on the digital front can cost the company enormously. It is hence absolutely imperative for the company to invest in its digital presence.
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