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Comprehensive Marketing Strategy of ONGC

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ONGC, which is Oil and Natural Gas Corporation Limited, is associated with the oil and gas industry and deals with the energy sector. It was founded on 14 August 1956. It is said to be the largest crude oil and natural gas company in India. This company is owned by the Government of India and is operated under The Ministry of Petroleum and Natural Gas.  

In this article, we will discuss the marketing mix, SWOT analysis and marketing strategy of ONGC.

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About ONGC

 

ONGC Brand Logo - Marketing Strategy of ONGC | IIDE

 

ONGC, Oil and Natural Gas Corporation Limited is said to be the largest crude oil and natural gas company in India. It contributes around 71% to Indian domestic production. ONGC has a unique distinction with in-house service capabilities in areas of Exploration and Production of oil and gas and related oil-field services.

Its subsidiaries include ONGC Videsh and ONGC Sports. The oil and exploration and extraction in the foreign sector is looked at by ONGC Videsh while ONGC Sports owns and sponsors many sports teams in the various sports category.

Tripura Power Company and Petro Additions Ltd. have a joint venture with ONGC. It was awarded as Best Employer. It has a dedicated team of around 28,500 professionals who work around challenging locations. It is the 2nd largest public sector unit in India. In 2015 it was ranked at the 449th position as the biggest corporate combat-related government-manidation in the world in Fortune Global 500 List.

Its headquarters is at Dehradun, Uttarakhand. It is headed by chairman Dinesh Kumar Saraf, having annual revenue of Rs 77993 crores. freshwater

 

Now as you have got enough idea about ONGC, let’s read about its marketing mix: 

 

Marketing Mix of ONGC

 

The marketing mix of a company refers to the strategy or action plan that is taken by an organisation to promote its product in the market. The Marketing mix consists of 4 P’s- Product, Price, Place and Promotion and explains the Marketing strategy of the company. It helps companies to achieve their goals, and objectives. This framework is a widely used strategy worldwide.

Let’s dive into the 4Ps of ONGC:

 

  •  Product Strategy of ONGC

 

As we know ONGC is one of the largest companies in India related to the production,  development, and exploration of oil and gas. It deals in various oil and gas products/

The ONGC’s product mix includes-

 

  1. Crude Oil 
  2. Natural Gas 
  3. Liquified Petroleum Gas 
  4. Naphtha 
  5. Methane Propane rich gas 
  6. Kerosene and other by-products.

ONGC meets nearly 30% of the country’s total demand because it produces 77% of crude oil and 62% of natural gas in India. It sells crude oils to refiners who further use them to produce gasoline, kerosene, diesel, cooking gas, and products for domestic consumption. The natural gas excavated are further processed to process hydrocarbons like Methane, Butane, Propane, Ethane, Pentane, etc. ONGC is involved in exploiting and exploring hydrocarbons and is the owner and operator of a pipeline that is extended 11,000 km in India.

Approximately, 50% of crude oil is excavated by Oil and Natural Gas Corporation are processed to make Gasoline, because of its great demand, 40% is used to produce jet fuel and heating fuel. Naphtha is used widely in industrial applications to produce other products. 

ONGC is the largest mining leaseholder and exploration property in India with twenty-two discoveries by the end of the fiscal year 2015. By the end of the fiscal year, 2014  product portfolio of ONGC included 151 gas wells and 1184 oil wells offshore and 606 gas wells and 4735 oil wells in an onshore set-up. 

 

  • Pricing Strategy of ONGC

 

Although ONGC faces tough competition from other oil companies like Hindustan Petroleum, Bharat Petroleum, Indian Oil Corporation Limited, and Reliance Industries Limited, yet they tend to make a fixed amount of profit through a controlled level of production. 

The price of crude oil depends on the International price since India heavily depends on importing it. Currently, the price of crude oil is around $70+ per barrel. ONGC prices natural gas at a very cheap price instead of the government policies of making households run on eco-friendly fuels. LPG which is primarily used by households in cooking is priced at ₹600 per cylinder. The Central Government has highly subsidised the price of Kerosene oil as it is widely used for cooking in rural areas. So the Kerosene price is around ₹15 per litre.

ONGC has been projected as the future of India and has become a high-profit making enterprise. In the year 2002-03, it became the first corporate that registered a figure of five digits. As it is Government oriented it has undertaken reasonable pricing and also works for the betterment of the country and its people.

 

  • Place Strategy of ONGC

 

ONGC does not sell their products directly to the final consumer but there is a hierarchy through which the product reaches its final customer. They sell the natural gas via bulk marketing channels through the Gas Authority of India Limited under strict regulation policies of the central government. 

The pipelines which are set up by the company in alliance with the regional gas pipeline caters to natural gas in the states of Tripura, Andhra Pradesh, Maharashtra, Tamil-Nadu, Gujarat, and Assam. In some states like Andhra-Pradesh, Tripura and Pondicherry they sell natural gas directly to their final consumer. ONGC in association with GAIL, IOCL and MRPL sells gasoline, diesel and jet fuel.

They have an extensive distribution pipeline network. If we look at the process of crude oil, firstly, the extracted crude oil is sent to refiners maintained by the company, who then sell it to the final consumer. Naphtha has a wide industrial application and is usually sold to prospective buyers in bulk for business to business sales. 

ONGC has been able to expand its operations in seventeen international platforms like Myanmar, Brazil, Venezuela, Colombia, Syria, Sudan, Nigeria, Mozambique, Iraq, Libya, Iran, and Russia with the help of ONGC Videsh. The company has also discovered new resources including oil and gas at Vasai west in the western offshore of Maharashtra, Chinnewala Tibba in Rajasthan, oil at Banamali and oil and gas at Leapling-Gaon in Assam and oil and gas at GS-KW and gas at GS-49 in Krishan-Godavari offshore. 

 

  • Promotion Strategy of ONGC

 

ONGC’s promotional activity primarily includes print media. ONGC advertisements are always featured in every national and regional daily across India. They also advertise on Television but it is less frequent. Advertisements by billboards are done on rare occasions. 

They spend most of their energy and money on sustainability and Corporate Social Responsibility (CSR) activities. Carbon Neutral mission particularly targets achieving and minimising the carbon footprint and reducing greenhouse gas emissions. The National Star Program strives to reduce methane emission due to its daily operations because Methane is a very poisonous gas for the environment.

Also, Sustainable Water management techniques target the reduction of freshwater usage and reduce the wastage of freshwater. ONGC endeavours to carry out the protection of our environment and it has set up the Institute of Petroleum Safety, Health and Environment Management or IPSHEM in the year 1989 for government-mandated issues.

They offer safe and healthy working conditions to all its staff as part of this initiative to incorporate environmental safeguards.

 

The marketing mix of ONGC is hence complete, now let’s discuss the marketing strategy of ONGC.

 

MARKETING STRATEGY OF ONGC



In this segment, we will discuss the STP (i.e Segmentation, Target, and Positioning) and the Marketing Campaigns of ONGC. Now, we shall start the discussion with ONGC’s STP. This plays an important role to reach the right customer. 

 

– Segmentation of ONGC

Segmentation classifies the customers demographically, geographically and behaviorally. Here, demographically, ONGC is segmented for Corporates as it sells oil and gas to companies that then sell it to the consumer. This firm is geographically segmented to all countries across the globe. It has not only expanded its roots to India but also to different parts of the country. It is segmented to individuals who are individuals and who are looking to fulfil energy needs.

 

– Targeting of ONGC

Targeting is to determine which customer group to focus on. Here, the main target group of ONGC focuses on Enterprises that are seeking for production of energy. It also includes people who for petrol, diesel who opt for vehicles and other domestic uses.

 

– Positioning of ONGC

This means positioning your product in the market. In this case, ONGC excels and has been recognized as the future of India’s energy.  One of the most effective ways to communicate to the target audience is through marketing campaigns. In the next section, we will see some of the marketing campaigns undertaken by ONGC. 

 

Marketing Campaigns of ONGC



ONGC doesn’t engage in marketing itself. It is currently using the traditional means of marketing for advertising. Some of ONGC’s marketing campaigns include:

 

  • Right to Education Campaign

    ONGC through its print medium form has undertaken a campaign for the Right to Education as there are many villages where children are not allowed to study or cannot study due to financial crisis. Where ONGC has taken initiative where they installed 31 RO Plants.

Marketing Campaigns of ONGC - Marketing Strategy of ONGC | IIDE 

 

  • Stop Using Plastic

    This advertising campaign aimed to create awareness amongst people about not using plastic since it is harmful to the environment. They made people aware that how over the years people had used plastic and how it has harmed our environment.

Marketing Campaigns of ONGC - Marketing Strategy of ONGC | IIDE

 

  • Precautionary measures to be taken to ensure safety from Covid-19

ONGC has currently undertaken the initiative of how to take safety measures from Covid-19. They made people aware of how to sanitize their hands regularly. How to maintain social distancing etc.

Marketing Campaigns of ONGC - Marketing Strategy of ONGC | IIDE

 

Conducting a SWOT analysis is also an important part of devising and improving the marketing strategies. Further, we will see the SWOT Analysis of ONGC. 

 

SWOT Analysis of ONGC



Swot analysis stands for Strengths, Weakness, Opportunities and Threats, It is a technique for assessing these four aspects of any business. By using SWOT Analysis the company or business can get the best advantage which can reduce the chance of failure, by understanding what the company is lacking in. 

 

1. Strengths of ONGC 

 

  • Brand Equity– They have invested in building a strong brand portfolio and have also ensured to create an environment conducive to the growth of the Indian economy.
  • Focus on Sustainability– ONGC has ensured that it protects and cares for the environment and has an integrated Health, Safety and Environment (HSE) program which has protectively managed the environment.
  • Strong Dealer Community– ONGC has a strong dealer community that builds a culture among the dealers and distributors by asking them to promote the company’s products but also invest in educating and training the sales team.

 

2. Weaknesses of ONGC 

 

  • The inability of having multiple-segment products – Even though ONGC is dominating its industry, with its present culture, It is difficult for it to move to other product segments.
  • Low-investment in Technologies: With Ongc’s plan of expanding its business geographically on a large scale, It needs to invest in better technologies. Currently, their investment in technologies is not at par with what’s needed.
  • High Attrition rate: ONGC needs to work on the most important internal resource of the company that is the workforce. The high attrition rate of this company is a red signal and suggests that the company needs to invest more in the training and development of its employees.

 

3. Opportunities for ONGC 

 

  • Updated Environmental Policies: New environmental policy will open the doors of having a new product segment for ONGC. It will also help them gain market share in the new product category.
  • Lower Inflation rate: This can enable ONGC to provide credits to its customers for lower interest rates making it the preferable company in the market.
  • New Technologies: It can be a big boon for ONGC if they adopt new technologies in the market. It will provide an opportunity to practising differentiated pricing strategies and help them retain their customers and have new ones by giving a better customer experience to its customers through better technology.

 

4. Threats to ONGC 

 

  • New environment regulations under the Paris agreement (2016) is a red flag for ONGC’s existent product line.
  • The shortage of trained workforce or the ineffectiveness in the proper training to the workforce by the company suggests a threat to its steady growth.
  • ONGC might be held subjected to various liability claims in different countries as and when their policies get updated or changed.

 


So, with this brief about the SWOT analysis of ONGC, we come to our conclusion.

 

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Conclusion

 

ONGC is the leading producer of oil and gas in India. A lot of Indians are dependent on this company and it is recognized as the future of India’s energy. Although there are several factors like the new environmental regulation policy, that can potentially thwart the growth of this company, there are several opportunities taking the advantage of which, ONGC can continue leading the industry.

Thank you for reading this blog. Let us know your thoughts on the marketing strategy of ONGC in the comment section below. And If you enjoyed this case study, share it with your friends.

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Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

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