Understanding the marketing communication strategies of petroleum retailing and similar commodity firms

Abstract

The Indian petroleum sector is one of the biggest behemoths and forerunners of the nation's economy. Nearly all other sectors are directly or indirectly dependent on the fluctuations in the oil and gas sector. With India's economic growth closely related to its energy demand, the petroleum sector's demand is expected to rise steadily for the coming decade. The government has also supported the industry and has allowed an FDI of up to 100%. It is also attracting new technologies and investments by approving fiscal incentives for the same. A year ago, the central government eased the entry barriers and allowed companies with a net worth of ₹ 250 crores. This has paved the way for many national and international fuel retailing companies eyeing the Indian market for years. They have already started looking for synergies and partnerships with local players to gain a strong foothold in the local ecosystem. With a virtually indistinct product and a somewhat similar price for all the players in the segment bringing a customer to an outlet becomes a daunting task. With similar offerings, companies tend to differentiate with the marketing communications they convey to their customers. In the petroleum retailing space, companies use various offerings and services apart from the quality of fuel to create a distinctive image in the consumer's mind. The physical structure, cleanliness, staff, prompt service, and ease of payment are primary services that these companies offer. Additionally, OMCs provide aircheck, free windshield cleaning, and complimentary newspapers in the morning to create a warm environment for the customers. Many fuel pumps also have small convenience stores to cater to the basic needs of these customers. They also provide basic amenities such as toilets and drinking water at nearly every fuel outlet. These companies frequently offer cashback and rewards to their volume customers. For customers who visit a specific outlet often, companies provide loyalty rewards. On highways, where diesel sales are more prevalent, companies give fuel on credit to boost their sales. OMCs also commission new outlets actively in unexplored areas to increase their market presence and boost their top line.