Marketing strategies and recommendations

GAIL India Limited

y State- owned enterprise, public sector . y Oil and Gas industry. y It is founded in 1984 y Headquarter is in New Delhi. y B.C. Tripathi is chairman and MD y Revenue is $5.702 billion (2010) y Employees are 3,703 ( 2010 )

Mission and vision

Mission y To accelerate and optimize the effective and economic use of natural gas and its fractions to the benefit of national economy. Vision y Be the leading company in natural gas and beyond with global focus, committed to customer care, value creation for all stakeholders and environmental responsibility.

Major business segments of GAIL

y Natural Gas y Petrochemicals y City gas distribution y Exploration and production y LPG and other liquid hydrocarbons y Telecommunication

GAIL petrochemical
y No. 4 company in petrochemical sector. y Capacity share is 23% and market share is 17% y Production plant is at PATA, Uttar Pradesh. y GAIL is the only HDPE/LLDPE plant operating in

Northern India and has a dominant market share in North India.

Marketing strategies
Products y High Density Polyethylene (HDPE) y Linear Low-Density Polyethylene( LLDPE) Pricing :y competitive

Marketing strategies cont

Place y Sale in all over India but they are not in export. y 11 branch and zonal offices. y 29 consignment stockiest.

Cont .
Promotion

y Pre-excise Discount
y Location Discount y Cash Discount

y Monthly product wise quantity discount

(HDPE/LLDPE) y Free sampling y Participation in seminars and exhibitions,

SWAT analysis of GAIL

Strengths
 Good financial strength  Feedstock availability  Strong support of gas business  Trained manpower  Early project completion at Pata  Good image with the customer. Received Avavya award for Cost Company in customer satisfaction.

Weaknesses
 Lean organization. Need for manpower.  Consignment stockiest network.  Prompt decision making.  Competitors strategy of hidden discount to customer cannot be combated due to PSUs transparent policy.  Has to maintain all India presence being PUS co.

SWAT cont .
Opportunities Threats
 New capacity coming up in 4-5 years.  Export potential to be explored due to higher product availability in domestic market.  Better coordination and optimizing will result in higher sales.  Delay in project like BCPL due to geographical location.  Cheaper imports availability.  Higher supply in domestic market and higher competition.

Customer added services

y GAIL provides price change information to major customers by SMS, and customers are very happy with this value added service. y GAIL provides every information about dispatch of Quality control report by e-mail y GAIL always try to add value to their products by providing new bag design and specification y Modified CS evaluation and reward scheme always motivate consignment stockiest to provide better service to their customers.

Recommendations
y GAIL needs to start export to show the presence in other countries. y GAIL should start focusing on south and west region because they do not have good command in south and west region. y They should increase the number of consignment stockiest in East because they have only one consignment stockiest and that s why they are not able capture market in east.

Recommendation cont .
y GAIL should create new customers (who buy products in bulk) which will help in reducing the cost as the commission of consignment stockiest which is ultimately charged by the customers. This will also help in creating loyal customers. y They should create pocket in west by increasing their marketing activities because west zone is the most potential area in India, and consumption of petrochemical products are large in this west zone.

Thank you

Movement of materials 1). Ex-Works Sales:

customer

Consignment stockiest

Zonal office

MSG Pata

Transport

order

Indent Order/invoice

sales order

delivery

Movement of materials
2) Ex-Stock point sales (consignment stockiest warehouse)
Part - 1

Consignment stockiest

Zonal office

MSG Pata

Transport

Indent for stock point Stock point order

Invoice

2) Ex-Stock point sales (consignment stockiest warehouse) Part-2

customer

consignment stockiest

With own transport

Invoice

Payment cycle
1). Payment cycle ex-works
E-Banking

Customer
Order

Consignment stockiest
Indent

GAIL

Invoice

Payment cycle cont

2) -stock oi t s le P
Payment

e t cycle

Cust

er
Indent

Consign ent stockiest

E-Banking Invoice

Per Capita Consumption of Plastics

CHINA 18 Kg INDIA 6 Kg

GLOBE 28 Kg

A huge deficit in per capita consumption (22 Kg) of plastic in India will witness major expansion in capacity and consumption of plastic in next four-five years.

Petrochemical consumption in advance countries

Country Population (Millions) United states of America Europe Japan Canada South Korea Australia Malaysia Argentina TOTAL 397 127 33 48 21 26 41 1000 13 3 1.3 2.0 0.6 1 0.7 34 32 22 38 41 30 39 16 34 307 Consumption (Million) 12.3 Per Capita Consumption 40