SWOT Analysis and Marketing Strategy Case Study of Indian Oil

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Indian Oil Corporation Limited (IOCL) is also commonly known as Indian Oil. It is an Indian government-owned oil and gas company, founded in 1959. Currently, it’s the largest commercial oil and petroleum enterprise in India. IOCL undergoes a huge responsibility to meet the fuel demands of the world’s second-largest country in terms of population and has been successful in fulfilling the product needs

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In this case study, we discuss the digital presence, marketing mix, competitors, marketing campaigns, and SWOT analysis of Indian Oil Corporation.

So let us begin with learning more about Indian Oil.

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About Indian Oil

IOCL is the biggest refining company in India and has a prominent presence in the refining and marketing sector. It has alone earned a place in the oil and gas industry with a net profit of $1,589 million for the financial year 2015-16.

Reputed surveys continue to rate IndianOil as one of the dominant energy brands in the global world. It’s the leading Indian company in Forbes ‘Global 500’. According to its listings, IOCL ranks at first position as Indian corporate and occupies the 161st position in the world for the year 2016.

IOCL is India’s Energy giant in terms of sales, along with its subsidiaries, Chennai Petroleum Corporation Limited (CPCL) and Bongaigaon Refinery and Petrochemicals Limited (BRPL), it owns 10 out of the 18 refineries (43% of the refining capacity in India). IndianOil and its subsidiaries account for 45% of the petroleum products market share among public sector oil companies.

To understand these statistics about the market better, let’s take a look at the major players that are IOCL’s competitors.

 

Indian Oil Competitors

There are several companies that are trying to compete with this giant organization but IOCL has its place intact since it’s an establishment. Some of the rival companies are:

  • Hindustan Petroleum
  • Bharat Petroleum
  • Essar Oil & Shell
  • Reliance Industries
  • Mangalore Refinery and Petrochemicals Limited

Speaking about Indian oil market share is a cumbersome process as it has got numerous shares in the different segments. Indian oil along with its subsidiaries hold more than 46% share in the petroleum-related products market. Whereas in the terms of refining it holds nearly 40% share in this market. Out of some 19 refineries, it holds 10 refineries which are very huge for any company for that matter.

Looking at the downstream it holds nearly 65% share in the market. And it has got the widest network of fuel stations numbering to about 17500 plus. To sum up, the market share of Indian oil in the oil industry of India is large compared with the other companies in the same industry.

So how does a giant like Indian Oil market its products effectively? Let’s start learning about their marketing with the help of their marketing mix first.

 

IOCL Marketing Mix

 

The marketing mix is a method which refers to actions or strategy that an organization uses to promote its product in the market. It is the best business strategy of Indian oil corporations in order to achieve its goal. It helps companies achieve business goals and objectives, it is also widely accepted and uses a framework to define the strategies. It explains the importance and elaborates the product, pricing, advertising & distribution strategies used by Indian Oil Corporation (IOCL)

 

Product Strategy

Almost half of the petroleum products in India are credited to IOCL as it occupies a major share. IOCL is present across the hydrocarbon value chain and nearly operates half of India’s petroleum products market. It also has a 35% share in refining and 71% in downstream-sector pipelines. India has a total of 23 refineries and IOCL owns and operates 11 of them.

Indian Oil Corporation’s product portfolio in its marketing mix includes 

  • Indane gas
  • Autogas
  • Natural gas
  • Petrol
  • Diesel
  • jet fuel
  • lubricants & greases
  • Kerosene
  • industrial fuels
  • Bitumen
  • Petrochemicals
  • crude oil and some other special products.

IOCL is a leading player in petroleum and LPG with the brands like- Indane LPG, SERVO Lubricants, Autogas LPG, XtraPremium Petrol, XtraMile Diesel, and PROPEL petrochemicals. These brands enjoy an established customer awareness. The other businesses include refineries, pipeline transportation, distribution & marketing, and Research & Development.

 

 

Price Strategy

IOCL follows a geographical pricing strategy. The prices of the products are declared and regulated by the government. They have to follow them according to the state rules. The pricing decisions are taken after taking into consideration the taxes and subsidies. The prices of IOCL are different in different cities in India. The prices are divided into geographical locations like metro cities, State capitals, National Capital Region. These prices are available on the company’s website. Indian Oil Corporation prices are also decided by crude oil prices in the world.

 

Place and Distribution Strategy

Indian Oil Corporation has got a vast geographic presence. As far as the availability is concerned IOCL is predominant with its reach much higher than any other nearest competitor. Indian Oil Corporation controls 10 refineries across the country, over 10,900 Km of pipeline connecting to high demand places and 132 Km of gas pipeline. There are 20,575 retail outlets. IOCL has an outlet in the world’s highest point. Indian Oil’s distribution channel is top-notch. It has nearly 6000 LPG distribution stations, 6,218 bulk consumer pumps and nearly 100 aviation fuel stations.

 

Promotion Strategy

IOCL is the most trusted and valued brand in India. It was ranked 243rd in Forbes Global 2000. It has a strong workforce including 34,659 employees. IOCL believes that a good promotional plan and periodic incentives will help in maintaining a customer base. To increase brand visibility it also has taken help from advertising like hoardings, TV ads etc. 

The company organized a loyalty program for large fleet operators called XTRAPOWER Fleet Card Program. Other loyalty programs are Rural Card, XTRAREWARDS, and Easy Fuel. 

Now that we thoroughly understand the company’s marketing mix, let’s finally look at its marketing strategy.

 

Marketing Strategy of Indian Oil Corporation

 

We shall understand Indian Oil Corporation’s marketing strategy by way of its differentiation methods and strategic alliances in this section.

 

Differentiation

The way it operates is different to that of others because all the packaging activities have been outsourced to others through tenders helping Indian oil to concentrate on its operational activities. By doing this it is able to work efficiently.

 

Strategic Alliances

IOCL has many strategic alliances under its bag. Recently it made a ratio of 50:50 alliances with the Gulf of Sudan and Iran for its out-of-country projects. This gives IOCL the opportunity to explore the market and increase its production and has made IOCL make a good synergy with its operations sector. It has made many strategic alliances with the local distributor in every city to ease the supply of its products to its customers. 

Recently in the year, 2009 IOCL made a strategic alliance with “Petro Algae ltd”. This was done by signing an MOU to license the agreement for supplying microchips technology for its future expansion to large-scale production in the field of renewable fuels. For its Indane product (LPG) it has made several alliances with the best companies to market its product throughout the country. Some of the other Strategic alliances by IOCL are as follows:

  • AVI-Oil India ltd: To make synthetic lubricating oil for aviation and defense purposes.
  • Indo Cat ltd: To manufacture addictives.
  • Lubrizol India Pvt Ltd: To manufacture chemicals and market them for use as additives in Greases and diesel.
  • Petro net India Ltd: To implement petroleum projects through Special purpose vehicles.

Conducting SWOT analyses is also an important part of devising and improving marketing strategies. 

Let us, thus, look at Indian Oil Corporation’s SWOT analysis.

 

SWOT Analysis of Indian Oil Corporation

 

Understanding the internal factors of the company will help you influence your ability to take advantage of an opportunity. SWOT Analysis is a simple but useful framework for analyzing your organization’s strengths, weaknesses, opportunities, and threats. Let’s dive right into it.

 

Strengths of Indian Oil

  • Strong brand name
  • Wide variety of products
  • Several refineries
  • Vast distribution network
  • Has acquired a large chunk of the market share
  • Over 3500 employees
  • Loyalty programs
  • Has one of the largest pipeline 
  • Strong branding and marketing exercises
  • Good R&D

 

Weaknesses of Indian Oil

  • High competition = limited market share
  • Bureaucracy 

 

Opportunities for Indian Oil

  • Industry growth 
  • Increasing natural gas market
  • Global expansion 
  • Acquisition of smaller companies

 

Threats to Indian Oil

  • Government regulations
  • High competition
  • NGOs and environment focused companies can act as an obstacle
  • Macro-economical conditions

Indian Oil evidently has many advantages but it needs to leverage its strengths more in order to minimize its threats. 

As one of the leading companies in its segment, Indian Oil has conducted many marketing campaigns over the years. Let’s take a look at a few.

 

Marketing campaigns of Indian Oil

 

Marketing Campaigns are one of the most important and efficient tools of communicating to an audience and developing the brand image. In this section, we briefly discuss two of Indian Oil’s major marketing campaigns.

 

 

XtraPremium Petrol 

Two ads were launched for the XtraPremium Petrol. The ad was conceptualized by the Grey Group. 

The story unfolds in an IndianOil petrol pump, where the brand loyalist tries to explain to his cynical friend the feeling of driving with XTRAPREMIUM petrol. He takes his friend through a magical journey, to make him understand the feeling. He does this to make him realize that it’s not possible to explain the feeling, it needs to be experienced, which highlights the tagline, “jo delta hai wohi jaanta hai”. 

 

Unsung heroes

The Unsung Heroes campaign aims to inspire and fuel the nation with stories of countless, nameless and faceless heroes who have impacted the lives of others around them. 

IndianOil is not only the leading petroleum company, taking care of the energy needs of the nation, but also at its core is the philosophy of placing India first and then business, which translates appropriately in its tagline “Pehle Indian Phir Oil”. Passion and Care are also highlighted in the works of the unsung heroes. 

It can thus be seen that the company focuses on connecting with the consumers while also generating brand awareness. Let’s see how they achieve this aim via their digital presence now.

 

Indian Oil’s Digital Presence

 

Digital presence is as important as a marketing strategy. In today’s time, each one of us is hooked up with different social media and to be active on each platform is a  must. The following table breaks down Indian Oil’s digital presence:

 

INSTAGRAM

ID: @indianoilcorp

No. of followers: 109k

No. of posts: 2822

FACEBOOK

ID: @indianoilcorporationltd

No. of followers: 1,029,951

No. of posts: over 1100

TWITTER

ID: @IndianOilcl

No. of followers: 338k

No. of tweets: 28.9K Tweets

LINKEDIN

 

 

ID: Indian Oil Corporation Limited

No. of followers: 208,233

 

On Instagram, Twitter and Facebook,

  • They promote #sustainablesaturday
  • New features like contactless and cashless transactions
  • Festive and special day posts
  • Retweets chairman’s tweets 
  • Updates about the construction activities
  • How to go digital guide
  • Safety awareness
  • Conference updates
  • Their advertisements
  • Their engagement is not even 1%
  • Inauguration updates

There are no posts on LinkedIn. Insights and job vacancies are updated by the company.

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Conclusion

Indian Oil is India’s flagship national oil company with business interests straddling the entire hydrocarbon value chain. The company is amongst the leading Indian corporates. The brand has leveraged its strengths such as its accessibility and widespread presence to continue to capture the interests of new customers and retain the old ones, especially with its loyalty programs that we discussed. Overall, Indian Oil has done well for itself in all the expected areas of marketing in its industry.

The importance of digital media has expanded dramatically during the last few decades. Businesses have become more conscious about their branding, advertising, and social media presence. A brand’s exceptional digital marketing gives it an edge over the competition. IIDE helps you improve your digital marketing skills by offering a variety of courses. All you have to do now is sign up and develop a desire to learn. Before you make a decision, sign up for IIDE’s 100% free masterclass to learn the fundamentals of digital marketing from an expert, and then make your choice.

Thank you for taking out time and reading the case study. Comment down your suggestions and recommendations for IOCL’s Marketing Strategy. Share and educate your friends with the same.

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]

Aditya Shastri

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