KARNATAK UNIVERSITY DHARWAD

KOUSALI INSTITUTE OF MANAGEMENT STUDIES
PROJECT REPORT ON “To

Find the Market Potential for ‘Relstar’ Lubricant a Reliance Product in Bagalkot district”

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF MASTER DEGREE IN BUSINESS ADMINISTRATION DURING THE YEAR 2007-2009

Submitted by SHANKREPPA.S.ATALATTI MBA II SEM

MBA07001049
INTERNAL GUIDE: EXTERNAL GUIDE:

Dr.N.Maruti Rao FACULTY IN MANAGEMENT

Mr.Basavaraj.S.Hanagandi
AREA MANAGER

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KARNATAK UNIVERSITY, DHARWAD
KOUSALI INSTITUTE OF MANAGEMENT STUDIES
Email: maruti-mn@rediffmail.com Mobile: +91-9880587205

Dr.N.Maruti Rao
Faculty in Management, K.I.M.S.

Ref... No. KU/KIMS/

Date: -

CERTIFICATE
This is to certify that Mr.Shankreppa.S.Atalatti is a bonafide student of Kousali Institute of Management Studies, Karnataka University, Dharwad. Has completed his summer project at Reliance Petro Marketing Pvt.Limited Bijapur. He had undertaken a project titled “To find the market potential for ‘Relstar nova’ lubricant a reliance product in Bagalkot district” under my guidance and submitted a report for the same.

Dr.N.Maruti Rao
(Faculty

in KIMS)

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ACKNOWLEDGEMENT

The successful completion of any task could be incomplete without complementing those who made it possible and under whose guidance and encouragement made our effort successful. I would like to thank Mr.Basavaraj.S.Hanagandi Area manager of Reliance petro marketing Ltd Bijapur. For giving me an opportunity to do a project in Reliance petro marketing Ltd Bijapur. I am very much beholden to my organization guide Mr.Basavaraj.S.Hanagandi Area manager under his sincere guidance, valuable suggestion and benevolent directions from time to time right from the beginning up to the end of project. I am very much thankful to Dr.N.Maruti Rao Faculty Guide-KIMS, Karnataka University, Dharwad, who helped me a lot during the progress of my work and to overcome all my difficulties. I could also extend my thanks to all my friends who have helped me directly or indirectly. And I also express my heart full gratitude to Almighty, my Parents for their love and blessing to complete the project successfully. Shankreppa.S.Atalatti

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DECLARATION

I here by declare that the project entitled “The market potential for Relstar lubricant a reliance product in Bagalkot district” is submitted in Partial fulfillment of MBA as prescribed by Karnataka University Dharwad for the academic year 2007-2009.the report also has been submitted to Kousali Institute of Management Studies Dharwad. I also declare that this result is of my own effort and this report is not been submitted to any other University or Institute for the award of any other degree.

Yours sincerely, (Shankreppa.S.Atalatti)

Place: __________ Date: __________

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INDEX CHAPTER NO. I II III IV V VI VII VIII IX X XI XII RECOMMENDATION CONCLUSION BIBILOGRAPY ANNEXURE PAGE NO. 6 10 21 31 43 46 47 69 71 72 75 76

TOPIC EXECUTIVE SUMMARY INDUSTRY OVERVIEW COMPANY OVERVEIW PRODUCT PROFILE COMPETITORS METHODOLOGY ANALYSIS AND INTERPRETATION FINDINGS

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PART 1

EXECUTIVE SUMMARY

Executive Summary Introduction of the company

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Started in the Dec 1999 this is the world largest refinery plant in Jamnagar with the capacity of 27 million tones per year. The area covered is about 7500 acres of Jamnagar. This is the largest investment ever made at a single location on a single plant. The investment is about US $ 6 Billion (i.e. about Rs 24000 crores). The construction was started in Nov 1996 with a work force of 75000 people and project management by world leader Bechtel. The main purpose of this study is to find out the potential market for Relstar in Bagalkot district. This is the newly entering lubricant product of reliance Petroleum Company. It will most probably enter to the market in September. So that I have surveyed whole Bagalkot district to find out how many shoppers are ready to sale Relstar nova lubricant. The potential market of relstar nova in Bagalkot district is 78% that means that much percent of shoppers are ready to sell newly entering reliance lubricant product relstar. And also I got the information about major players, major customers, in fluency of mechanic, shoppers influence while purchasing the lubricants.

Objective of the study Main objective
 To know the potential market for RELSTAR a lubricant product of

reliance in whole Bagalkot district.

Sub objective
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 To know the awareness about RELSTAR in Bagalkot district.

 To know about who are the major players  To Know the Market condition for new Players  To know the total Quantity of oil sold by shops in Bagalkot district.  To know about who are the major customers for lubricants.  To know the customer preference while purchasing the lubricants.  To know about shoppers on which factor they concentrate more while selling the lubricants.
 To know the how many shoppers are ready to sale a new reliance

lubricant product.

Scope of the study
 The study will help the company to know the awareness of Relstar in

Bagalkot district.
 The study will help to know the potential market for Relstar in

Bagalkot district.  The company can find out where their competitors and they stand  The study will help the company to know the customer profile.

Limitations of the study
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No work is exception to the limitations. Every work has its own limitations, so due to time constraint my study is confined only to Bagalkot district and it is not possible to make extensive study. It is assumed that the sample selected represents entire population. 1. Project study is not an exact science, so one cant’ accept 100% result, only justified solutions are given.
2. The sample size is 86

3. Response of the respondent might be biased which might have affected the findings of the survey.

Research methodology
Data source: Area of Research: Research instrument: Sample Plan: Sample Unit: Sampling method: Sample Size: Primary data (field survey) Bagalkot district. Questionnaire. Personal Interview. Automobile Shops Convenience Sampling method. 86 respondents.

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PART 2

INDUSTRY OVERVIEW

Lubricant Industry overview

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India is the sixth largest consumer of lubricants in the world. The current lubricants market is estimated to be of $1222 million (Rs. 55 billion). The automotive lubricants market in India was controlled by the four major public sector oil companies such as major public sector oil companies such as Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL) and a handful of private companies such as Castrol, Tidewater, and others until 1992. Following liberalization, major policy initiatives were taken and which, encouraged foreign companies to invest in India.

Current scenario of Indian Lubricant Industry The Lubricant Industry in India Is at its Peak stage as the Market condition is good because of Massive increase in the income of people and growing economy the standard of living of the people is improving and the people are able and willing to buy vehicles and many new players are entering in to the Indian market with the segments of vehicles which are perfectly suitable for Indian conditions, and of course the various companies are joining hand to establish themselves into the Indian market. And the massive infrastructure development projects which are going on in country like building of Golden Quadrilateral Highways joining all the major cities of the country , Up gradation of Highways , Boom in Mining sector , Improvement in the Roads in the City, Building of Flyovers , And Many more development processes have added feathers to the Automobile Sector and lead to massive demand for vehicles irrespective of their category i.e. Two Wheelers, Three wheelers, Four Wheelers and Heavy Vehicles. The Life in the city has become fast and every person is need of vehicles according to their income. That time has gone when only the persons who had more income would own a Two wheeler or four wheeler with development in Banking sector has given opportunity to every common man to purchase vehicle by getting loan. The development in industrial sector has raised demand for Heavy transportation vehicles. This all Factor have led to massive growth in automobile sector which is base for Lubricant Industry as Every Vehicle needs lubricant for smooth running and increase in vehicles means increase in Demand for Lubricants. The Lubricant industry in India has been dominated by International Player Castrol followed by Servo, Gulf and many other companies. The major players in Indian Market are as follows • Castrol India
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Bharat Petroleum Apar Industries Gulf Oil Hindustan Petroleum Indian Oil Savita Chemicals Tide Water As Mentioned earlier the Indian Lubricant Market is in booming stage there is lot of scope for new players entering in the market unless they are able to over come the competition from the fully established players like Castrol who have been ruling the market from decades. Strong growth in the Indian automotive, power and engineering sectors is creating new market opportunities for lubricants’ manufacturers, according to a new study from the research and advisory firm, India Analysis. In the automotive sector, consumers are migrating to better quality vehicles and motorbikes and as a result, using higher grade lubricants; this is benefiting multi-grade lubricant products with strong brand recognition and wide distribution. In the industrials’ segment, high levels of investment in the power, manufacturing and transport sectors should drive very strong growth for transformer oils, marine and aviation lubricants. There are no restrictions on foreign lubricant manufacturers from establishing 100%owned operations in India; many have chosen to partner with local companies. This new research study provides a comprehensive overview of the Indian lubricants’ industry. It covers: market size and structure; competitive analysis, distribution structure, etc. The study covers both the automotive and industrial lubricants sectors. . The report is targeted at lubricant manufacturers and distributors who are keen to build an understanding of the Indian lubricants industry and the opportunities it presents. In addition to this, it will be extremely useful for financial investors pursuing investment opportunities in India, consultants and other industry analysts. Commenting on the research, Harjinder Singh-Heer, Managing Director of India Analysis said “lubricant manufacturers who produce premium products and invest in marketing and distribution can expect to benefit from the growing opportunities in the Indian lubricants market.”

• • • • • • •

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The Indian automotive lubricants market is largely price sensitive and volume growth is stagnating due to longer lasting lubricants. The market is fragmented with over 22 big and small manufacturers and with the spate of mergers and acquisitions (M&A), only a handful of big companies enjoy a major market share. Companies are adopting a more customer-oriented approach where they are likely to focus on creating brand awareness through print and visual media. For example promotional campaigns and trade shows offering gifts to their customers are methods of driving sales of automotive lubricants. The original equipment segment and retail trade are the two major marketing channels in the Indian automotive lubricants market. Due to the growing competition, tie-ups with original equipment manufacturers (OEM) are becoming important as they reinforce the value proposition of a particular brand. Petrol pumps form a major distribution channel in retail trade, however sales of lubricants through retail outlets (also called ‘the bazaar trade’) has transformed the Indian automotive lubricants market into a fast moving consumer goods (FMCG) sector. The other marketing channels are authorized service stations, garages, rural and agricultural dealers, super markets, and wholesale distributors Public sector unit (PSU) companies, that manufacture their own base oil, follow different distribution strategies as compared to private participants that solely dependent on imports. While PSUs sell through their own wide spread network of petrol stations private manufacturers prefer retail outlets. Engine oil, which accounted for over 70.0 percent market share in 2004 in the Indian automotive lubricants market, plays the most crucial role in deciding the market share of manufacturers. Increase in demand for four stroke motorcycles, tie ups with original equipment manufacturers, and implementation of new pollution norms are just some of the key drivers of the engine oil segment. The brake oil and coolant is the next largest segment in the Indian automotive lubricants market. Demand for coolants is increasing due to continuous growth in heavy commercial vehicles, increasing awareness among the customers, new cooling system technologies, and OEM tie-ups. In brake oil segment, increasing growth in light commercial vehicles, introduction of new brake systems, and consumption of lubes by commercial passenger vehicles, and changing customer mindset regarding specialty lubricants are expected to push demand further.

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The market for gear oils is also growing rapidly and has a high potential due to the increasing number of vehicles on the road. New generation vehicles with advanced gear system technologies and automatic transmission systems require special type of lubricants resulting in greater demand for multi axel gear oil and API synthetic gear oil, API GL-5, API MT-1, and ultra-Matic, which reduce the oil changing intervals. In the long term, the overall outlook for the automotive lubricants market is expected to be positive due to the growing Indian economy along with the increased purchasing power of consumers. Introduction The Indian automotive lubricant market is the sixth largest market in the world with revenues of approximately $1.30 billion in 2002. It is also one of the fastest growing retail markets in India. Until 1993, it was a highly regulated market with a clear dominance of the public sector. Companies like Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL), and Indian Oil Corporation (IOC) held more than 75 percent of the market share. In recent years, with the advent of the increasing number of multinationals in the Indian market there is a growing presence of private companies. Companies like Castrol, Elf Total-Fina, Gulf, and Shell Oil have made their presence felt in the market. Market Size Total production of automotive lubricants in India is approximately 8 to 10 percent of global lube production. Unlike other countries where lubricant demand has witnessed stagnation, the Indian market has been growing at approximately 7 percent per annum for the past 2 years. The public sector contributes to over 60 percent of the revenues for this market. MNC’s have 5 percent market share and the remaining share is held by the unorganized sector. Automotive lubricants are further divided into diesel lubes and petrol lubes. Diesel lubes comprise 70 percent of the market and petrol based lubricants cover the rest. As diesel lubes are used by commercial vehicles, which have to cover greater distances, their market share is higher. Engine oil constitutes around 83 percent of total sales volumes. Gear oils, transmission fluids, hydraulic brake fluids, and engine coolants contribute to the balance. Competitive Analysis

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The first seeds of competition were sown in the early 1990’s when following the liberalization of the Indian economy, the government decided to open the Indian market to foreign competition. Import of base oil, the key raw material, was de-canalized with IOC losing its status as the sole canalizing agent. Pricing of base oil was deregulated in a phased manner and currently it is market determined. Basic custom duty on base oil stock was also reduced from a peak of 85 percent to a level of 25 percent. All quantitative restrictions were also removed. These developments naturally encouraged the entry of foreign players on Indian shores who were already facing a slowdown in demand in their local markets. The coming in of foreign participants created an excess supply situation in the Indian automotive lubes market, which made it more difficult for the Indian lube manufacturers to survive. Recent deregulations in the lubricant market have promised many new opportunities for the private lube manufacturers. With the dismantling of Administered Price Mechanism (APM) the burden of subsidies is now being passed on to the government. Private participants will also gain a presence in the Indian oil and gas sector and hence there will be competition between participants that will ensure the growth of the sector. In the next couple of years, the industry is going to witness sea changes. Retail networks, logistics management, and risk management are going to be the crucial factors. The stand-alone refineries will have to be merged with the marketing companies, as they do not have the distribution infrastructure to sell their products in a deregulated market. Companies like Reliance are already selling their products through petrol pumps. The monopoly of the public sector holdings will no longer exist. MNC’s will be able to sell their products through petrol pumps. Lubes manufactured by Reliance Petroleum, Castrol, Elf, Gulf Oil etc, which are now sold at petrol pumps. In medium to long term, Frost & Sullivan expects private sector companies to have a market share of around 25 percent. Distribution Structure There are two key markets for lubricants in India. Given high levels of competition original equipment, linkages are gaining importance. The original equipment market contributes almost 70 percent and 30 percent of the market is comprised by the retail sales segment. The channel for replacement market or the retail segment is petrol pumps or retail stores. Almost 70 percent of the lubricants in India are sold through petrol pumps. Most of the MNC’s have tied up with oil majors for marketing their lubricants like Castrol with Escorts and Tata BP with Telco. After the
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deregulation of the petrol pumps companies are keenly watching the developments in the lubes market. The distribution channel adopted by public sector units is through the petrol pumps. Other private participants have had to set up an independent infrastructure comprising of distributors, stockiest and retailers through out India. MNC’s and private companies sell through retail stores. To compete with dominant public sector distribution, concepts like "Bazaars" and "Super Stores" have also been developed. Castrol developed the concept of "Bazaars." These are outlets meant only for lubricant sales. The concept of "User Outlet" is another new concept developed by Castrol. In this, the consumer selects his own brand of lube after giving his vehicle for service in the same outlet. Convenient stores and highway stops for vehicles are being built from where the vehicle owners can get their vehicles repaired and get their supply of lubricants. In the lube market, Indian Oil Corporation Limited is leading the market with 30 percent market share. Castrol is next with 25 percent of the share and HPCL and BPCL are next with about 20 percent and 15 percent shares respectively. Other private companies hold the remaining market share. Diesel Engine Lubricants for Automobiles The main function of a lubricant for diesel engine is equivalent to a gasoline engine. As the load in diesel engine is much higher it should have adequate anti-wear properties. Diesel fuel contains a high level of sulphur which, burns to form oxides of sulphur, which in turn in the presence of water, form sulphur acids resting in high corrosion of car engine parts. Hence the need of alkalinity reserve in the oil, which is represented by its TBN or Total Base Number. Generally, the higher TBN value more the alkalinity reserve or acid neutralizing capacity the oil contains. Synthetic Oil The start of synthetic oil more than fifty years back opened up vastly improved and new alternative lubricant to mineral oil. But being very expensive, it is confirmed to the arcane world of car sports and used for high performance cars. They are also widely used in developing countries for a number of reasons like improved overall engine performance, low oil consumption; long drain periods, less engine wear, improved engine cleanliness and faster starting. Taking into consideration the price tag and its efficacy, the option is left for consumer's discretion. Additives
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Plain mineral oils cannot provide all the necessary functional properties that an engine requires. These plain mineral oils need fortification with chemicals/additives which when used in small quantities, import or enhance the desirable functional properties. Some of the types and reasons for their use are as follows: Dispersants: Keeps sludge, carbon and other deposit- precursors suspended in oil. Detergents: Keeps the automobile engine parts clean from deposits. Rust/Corrosion Inhibitors: Prevents or controls oxidation of oil, formation of varnish, sludge and corrosive compounds, limit viscosity increase. Extreme Pressure (EP), Anti wear and friction modifiers: These form protective film on the engine parts and reduce wear and tear of the automobile. Metal deactivators: Forms surface films so that metal surface does not catalyze oil oxidation. Pour Point Depressant: Lowers freezing point of oils assuring free flow at lower temperatures. Anti-foamants: Reduces foam in crankcase and blending The main purpose of lubricants in cars is to smoothen the moving parts of the automobile to reduce friction and wear and tear by providing trouble free performance for a longer span of time. A lubricant is a blend of base oils and performance-enhancing additives as required by car engine, gear box and other functional areas. Engine oil is the most important of the all the lubricants .Lubricants for gasoline and diesel engine are different as the load cycles and fuels are different. Other than reducing friction, the oil in a car engine

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Helps to: • • • • Seal the high-pressure combustion gases inside the cylinders, Impede the corrosion of metal parts, Absorb some of the harmful by-products of combustion, Transfer heat from one part of the engine to another.

Combustion of rich air-fuel mixture during starting, idling and warm up form deposits. These deposits in the form of varnish, sludge, soot and carbon, interfere with proper engine operation. The engine oil keeps all the deposit forming material in suspension and gets rid of them by oil filter, or draining out at proper intervals. Engine oil is stored in the oil pan at the bottom of the automobile engine. A pump forces the oil through a filter and then through a series of passages and galleries to lubricate the engine's moving parts. The oil also cools these car parts. Rapidly moving engine parts actually float on a thin film of oil and never make contact with one another. This is called hydrodynamic lubrication and usually begins when an engine reaches the idle speed. Most engine wear and tear occurs when a car is first started, before the oil reaches its normal operating pressure and flow.

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PART 3

COMPANY OVERVIEW

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Company Overview
History of reliance refineries at Jamnagar. Started in the Dec 1999 this is the world’s largest refinery plant in Jamnagar with the capacity of 27 million tones per year. The area covered is about 7500 acres of Jamnagar. This is the largest investment ever made at a single location on a single plant. The investment is about US $ 6 Billion (i.e. about Rs 24000 crores). The construction was started in Nov 1996 with a work force of 75000 people and project management by world leader Bechtel. Technology adopted by Global Giants like Linde, Foster Wheeler USA etc. The Jamnagar plant has made up with help of giants like world’s biggest onshore crane of 1600 MT capacity, 14000 kms of cabling, 5000 kms of pipeline, 10000 meters of structural steel, 170 kms of road, 1.7 million cubic meters of concrete, 55 sub stations, 33 blast proof buildings, 43 chimneys and flares, Housing facilities for 75000 families, 4 bounded were houses, And India’s largest IT network constructed it contains 50servers, thousands of PC’s, 200 kms of cabling. The plant is fully computerized and automated to respond to real time business and to respond to the changes immediately, to produce different grades of crude and according to the different customer demands, quality control is uncompromising, meeting the Californian standards, designed in such a way that it is able to make profits under any conditions like regulated or deregulated refine scenario of India, changing rules and specifications of the government, so the refinery is build in such a way that it can swing any way as per the marketing conditions, and to adjusted to changing product prices up or down. So they call it as “The Giant which dance according to their tunes” Reliance Petro Marketing background Reliance petro Marketing is engaged in marketing the fuel produced by the Reliance Petroleum it has set up around 2500 outlets all over the country, these outlets are engaged in the work of retail sale of the fuel. For the purpose of ownership company has divided the ownership of these outlets in to three types based on the ownership of fuel and management of the outlet Viz COCO, CODO, DODO.

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COCO (Company Owned & Company Operated): The outlet is company owned and company operated. These Outlets were setup in the first stage of the setting up of the Reliance Fuel outlets. These outlets were completely owned and managed by the reliance company i.e. both ownership of the fuel and management of the outlet are with the Reliance petroleum. Company will appoint a person in charge to maintain the operations of the outlet and he will be paid a fixed remuneration for managing the outlet, this remuneration is irrespective of the sales made by him. CODO (Company owned & Dealers Operated): The outlets were owned by the company but are operated by the Local Dealers Selected and appointed by the Reliance Officials. The Company will provide the fuel to sell but all the operations of the outlets were managed by the dealer appointed. Here in this type the Ownership of the fuel and outlet is with the Reliance petroleum and management is by the dealer appointed. Dealers will be paid commission based on the sales made by them. These were started in the second phase of the setting up of the Reliance outlets. The commission pattern of the dealers is as follows:

Commission pattern for CODO outlets Fuel MS HSD Quantity Up to 125 KL Up to 125 KL Rate Rs 550/KL Rs 875/KL Above 125 KL 250/KL 250/KL

DODO (Dealers Owned & Dealer Operated): These are the outlets which were owned by the Dealers and Were Managed by the Dealers. The company will provide its design for the outlet according to which the dealer has to build the outlet bearing all the expenses and in future the company will supply fuel which the dealer will sell, here
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both the ownerships i.e. ownership of fuel and ownership of outlet are with the dealer company gives only its brand name. The dealers are entitled to get a commission on the sales made by them. These outlets were started in the last phase of the setting up of the Reliance outlets. Ownership chart Type Outlet ownership COCO RIL CODO RIL DODO Dealer

Stock Ownership

RIL

Dealer 300-500

Dealer 100-300

Sales Expected 500+ (KL/Month)

Refining activities of Reliance Industries Limited are carried out at the Jamnagar refinery. The refinery is able to process a wide variety of crude’s- from very light to very heavy (from 18 to 45 degree API) and from sweet to very heavy (with sulphur content from 0 to 4.5 %). With an annual crude processing capacity of 580,000 barrels (92,000 m³) per stream day (BPSD), RPL will be the sixth largest refinery in the world. It will have a complexity of 14.0, using the Nelson Complexity Index, ranking it amongst the highest in the sector. The polypropylene plant will have a capacity to produce 0.9 million metric tones per annum. The refinery project is being implemented at a capital cost of Rs 27,000 crore being funded through a mix of equity and debt. This represents a capital cost of less than US $10,000 per barrel per day and compares very favorably with the average capital cost of new refineries announced in recent years. The International Energy Agency (IEA) estimates the average capital cost of new refinery in the OECD nations to be in the region of US $15,000 to 20,000 per barrel per day. The low capital cost of RPL becomes even
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more attractive when adjusted for high complexity of the refinery. RPL's low capital cost is a result of the benefits of 'intelligent repeat' of design and engineering aspects of RIL's existing refinery, proactive procurement strategy and faster implementation of the refinery project. This is expected to provide sustainable competitive advantage in the market place and enable RPL to deliver superior value in the coming years. RPL also benefits from a strategic alliance with Chevron India Holdings Pvt.Limited, Singapore, a wholly owned subsidiary of Chevron Corporation USA (Chevron), which currently holds a 5% equity stake in the Company. RPL achieves overall project progress of 65% Refinery on track for timely completion JAMNAGAR (Gujarat), 16th July 2007: Reliance Petroleum Limited (“RPL”) continues to make rapid progress in implementation of its large, complex refinery, coming up in a SEZ at Jamnagar. Reflecting rapid strides made on all implementation fronts, RPL has achieved overall project progress of 65% - in just 19 months since commencement of the Project. With engineering and procurement activities nearing completion and required site infrastructure mobilized to sustain the fast pace of construction, RPL refinery is well on track for completion by December 2008.RPL has achieved project completion of 94% according to Contractor as of 23 July 2008 as published in Article in DNA Money. Before Reliance Industries Ltd forayed into the business of petroleum retailing, the four public sector companies had reconciled to the above myth that had been guiding the petroleum retail sector for decades. The entry of Reliance petrol stations not only broke this long standing myth, it created new theories that shocked the staid public sector. For long everyone had believed that it you had 40 per cent of outlet share, you would get 40 per cent of market share of total volume(s) of product sold. The theory was built around the fact that all stations were built alike, managed alike and, hence, would sell alike. It is not strange that till the late nineties, if a company had around 19 per cent outlet share, then it also had the market share in the 19-20 per cent range.

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In the petroleum industry, there exists a measure of a company's effectiveness in a particular market. It is measured in terms of marketing effectiveness (ME).An ME of '1' means that if a company's outlet share is X per cent and if it's market share is also X per cent, then its ME = X/X = 1. For long, IOC, HPCL, BPCL and IBP were content with achieving a ME of 1. It was only in late the late nineties; BPCL thought about breaking free from the shackles of this myth and started thinking about going beyond the ME of 1. It started with its ambitious programmed called, 'Pure For Sure' which paid rich dividends and it is this out-of-box thinking of BPC that led to it’s per station monthly throughput grow at least 20,000 liters more than the industry average. Reliance, from day one, challenged the myth of market share being dependent upon the Retail outlet share. It patterned its thought-process on 'Flying J' -- a diesel retailer that with just around 200 stations had become the Number 1 diesel retailer in North America, beating the likes of Exxon Mobil, Shell, BP and Chevron. Reliance thought that it was possible to have the least number of petrol stations in the country and yet be the leader in terms of volume of petroleum products sold across the nation. It challenged its managers to look beyond the ME of 1 and try and capture the ME of 3 or even 4. This means that Reliance felt that it was possible to have just 3 per cent of outlet share and yet have more than 12 per cent of market share. This dream was achieved by Reliance during the financial year 2005-2006. Reliance achieved a market share of 12 per cent with just 3 per cent station share in 2005-2006. On the other hand the public sector companies held a market share of 88 per cent while holding the retail outlet share of 96 per cent. This shows that whereas Reliance achieved a market effectiveness of nearly 4; the combined ME of PSUs was less than 1! Growth through Energy Products Petroleum Refining and retailing is the second link in Reliance's drive for growth and global leadership in the core energy and materials value
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chain. Reliance operates the third largest refinery in the world at any single location; the refinery is fully integrated and consists of more than 50 processing units. The Reliance petroleum refinery, first in the private sector in India, has now completed ten years of successful operations. In January 2005, With the Jamnagar Refinery significantly improving domestic product availability, India has become a net exporter of petroleum products. Our aggregate export volumes of refined products grew by over 63% to 17.7 million tones from 10.8 million tones in the previous year. Reliance is in the process of doubling the petroleum refinery at Jamnagar, which will make it the largest petroleum refinery in the world. Reliance is also rolling out a state-of-the-art, pan-India petroleum retail network aimed at providing the Indian consumer with world-class retail experience. We at Reliance are committed to total customer satisfaction in terms of Quality & services for entire range of our products. Our continued commitment to excellence and innovative efforts help us stay ahead as market leaders. Reliance Industries Ltd. is India's largest private-sector company, generating revenues of $19.97 billion, or more than 3 percent of India's total gross domestic product. Founded as a textiles company, Reliance has successfully completed a backward integration strategy that has transformed it into India's largest private-sector petrochemicals company, and number two overall (behind state-owned India Oil). Reliance's petrochemicals division is fully integrated and includes exploration and production; refining (the company has built one of the world's largest and most modern refinery complexes at Jamnagar in Gujarat); marketing, through a chain of more than 1,000 service stations; and the production of petrochemicals, including polymers, polyester, polyester intermediates, and others. These chemicals are used to support Reliance's continued textile operations, which focus particularly on the production of polyester fabrics. Following the 2004 acquisition of Trevira, the company has become the world's leading polyester manufacturer, with production levels topping 25 million meters per year. The company's textile range includes other fabrics, such as acrylics, and finished garments.

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Reliance Industries represents the continuation of India's greatest corporate success story since the country's independence. Founded by Dhirubhai H. Ambani in 1958, Reliance grew to include holdings in energy production and distribution, telecommunications, and capital finance. After a public feud between Mukesh D. Ambani and younger brother Anil, these operations were split off into a new company controlled by Anil Ambani. Reliance Industries is listed on the Mumbai Stock Exchange. Mukesh Ambani is company chairman and managing director. Indian Petroleum Giant at the Start of the 21st Century Reliance's vertical integration strategy naturally led to an interest in extending its operations to petroleum refining, and even to exploration and production. Yet these sectors remained tightly under state control, following the nationalization of the Indian oil industry in 1976 amid the global oil crisis. Although the state-owned oil companies were able to meet domestic demand through the 1980s, by the early 1990s, the country's existing oilfields were showing signs of depletion. At the same time, demand had been rising steadily, yet the oil companies, propped up by state subsidies, were too strapped for cash to invest in further exploration efforts. An initial attempt to liberalize the production and refining sectors failed, however, amid strong union protests. In the meantime, Reliance made preparations for its move into the petroleum industry. In 1991, the company set up a new subsidiary, Reliance Refineries Private Ltd., clearly signaling its objectives. The subsidiary later changed its name to Reliance Petroleum Limited, and in 1993 launched a public offering, which at that time was India's largest ever IPO. While Reliance affirmed its plans to construct India's largest oil refinery, the company began developing its petroleum products marketing and distribution operations, including a network of some 1,000 service stations. Reliance continued to pioneer financing channels in India. In 1993, for example, the company became the first Indian company to raise capital on the foreign market, through a Global Depositary Receipt (GDR) issue in Luxembourg. The company completed a second successful GDR issue in 1994. The company used the new capital in part to expand its petrochemicals wing, building the world's largest multi-feed cracker at the Hazira site. The company also added production plants for monoethylene glycol,

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polyethylene, and purified terephthalic acid. The new units launched production in 1998. Reliance's opportunity for entry into petroleum refining came in 1997, when the Indian oil industry reached a state of near collapse. Unable to fund further exploration operations, and lacking the capital to expand its existing production, the government was forced to liberalize the sector. In that year, Reliance announced a plan to build one of the world's largest and most modern petroleum refining complexes in Jamnagar, Gujarat, at a cost of some $6 billion. The government agreed to the plan, and granted the company the right to import petroleum directly, rather than going through Indian Oil, which helped Reliance greatly drive down operating costs. Constructed in record time, the Jamnagar site was commissioned in 1999. The site's production capacity was double that of any other Indian refinery and ranked among the top five in the world. The addition of the new facility also placed Reliance at the top rank of the country's private-sector companies. In 2002, Reliance Petroleum was merged into Reliance Industries, which then became one of the country's top three companies, including state-owned entities. Petroleum is used mostly, by volume, for producing fuel oil and gasoline (petrol), both important "primary energy" sources. 84% by volume of the hydrocarbons present in petroleum is converted into energy-rich fuels (petroleum-based fuels), including gasoline, diesel, jet, heating, and other fuel oils, and liquefied petroleum gas. Due to its high energy density, easy transportability and relative abundance, it has become the world's most important source of energy since the mid-1950s. Petroleum is also the raw material for many chemical products, including pharmaceuticals, solvents, fertilizers, pesticides, and plastics; the 16% not used for energy production is converted into these other materials. Petroleum is found in porous rock formations in the upper strata of some areas of the Earth's crust. There is also petroleum in oil sands (tar sands). Known reserves of petroleum are typically estimated at around 190 km3 (1.2 trillion (short scale) barrels) without oil sands, or 595 km3 (3.74 trillion barrels) with oil sands. Consumption is currently around 84 million barrels (13.4×106 m3) per day, or 4.9 km3 per year. Because the energy return

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over energy invested (EROEI) ratio of oil is constantly falling as petroleum recovery gets more difficult, recoverable oil reserves are significantly less than total oil-in-place. At current consumption levels, and assuming that oil will be consumed only from reservoirs, known recoverable reserves would be gone around 2039, potentially leading to a global energy crisis. However, there are factors which may extend or reduce this estimate, including the rapidly increasing demand for petroleum in China, India, and other developing nations; new discoveries; energy conservation and use of alternative energy sources; and new economically viable exploitation of nonconventional oil sources.

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PART 4

PRODUCT PROFILE AND COMPETITORS

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Relstar product profile
Relstar is the new lubricant product of reliance petroleum industry. The company already planned to launch this product most probably in September. The profile containing meaning of lubricant, purpose of this lubricant, Advantages, etc. Relstar Lubricant (sometimes referred to "Lube") is a substance (often a liquid) introduced between two moving surfaces to reduce the friction and wear between them. A lubricant provides a protective film which allows for two touching surfaces to be separated and "smoothed," thus lessening the friction between them. Lubricants chemically interact with all surfaces so that contact only occurs with the smooth and free lubricant. By this process, abrasive particles are dissolved into the lubricant, thus making them also very good solvents and cleaners. Petroleum-based lubricants like Vaseline tend to dissolve petroleum products such as rubber and plastic, while water-based lubricants tend to dissolve polar chemicals (like water and dirt); hence the additives. The lubricant must be replaced when it has dissolved to saturation, because the inability to dissolve additional abrasive debris allows abrasive particles to scrape against or become lodged in the working surfaces, thus introducing a margin for physical contact between them. Lubricants which dissolve working surfaces (such as Vaseline with rubber) defeat their purpose by corroding the smooth surfaces by their own dissolving power, thus compromising structural integrity, surface smoothness, and system-wide contamination. It can also help to remove gum from hair. One of the single largest applications for lubricants, in the form of motor oil, is to protect the internal combustion engines in motor vehicles and powered equipment. Typically lubricants contain 90% base oil (most often petroleum fractions, called mineral oils) and less than 10% additives. Vegetable oils or synthetic liquids such as hydrogenated polyolefin’s, esters, silicone, fluorocarbons and many others are sometimes used as base oils. Additives deliver reduced friction and wear, increased viscosity, improved viscosity index, resistance to corrosion and oxidation, aging or contamination, etc. Lubricants such as 2-cycle oil are also added to some fuels. Sulfur impurities in fuels also provide some lubrication properties, which have to

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be taken in account when switching to a low-sulfur diesel; biodiesel is a popular diesel fuel additive providing additional lubricity. Non-liquid lubricants include grease, powders (dry graphite, PTFE, Molybdenum disulfide, tungsten disulfide, etc.), Teflon tape used in plumbing, air cushion and others. Dry lubricants such as graphite, molybdenum disulfide and tungsten disulfide also offer lubrication at temperatures (up to 350 °C) higher than liquid and oil-based lubricants are able to operate. Limited interest has been shown in low friction properties of compacted oxide glaze layers formed at several hundred degrees Celsius in metallic sliding systems, however, practical use is still many years away due to their physically unstable nature. Another approach to reducing friction and wear is to use bearings such as ball bearings, roller bearings or air bearings, which in turn require internal lubrication themselves, or to use sound, in the case of acoustic lubrication. In addition to automotive and industrial applications, lubricants are used for many other purposes, including as a personal lubricant, bio-medical applications (e.g. lubricants for artificial joints) and others. Main Purpose of Relstar lubricant

Lubricants perform the following key functions.
• • • • • • • •

Keep moving parts apart Reduce friction Transfer heat Carry away contaminants & debris Transmit power Protect against wear Prevent corrosion Stop the risk of smoke and fire of objects

Keep moving parts apart Lubricants are typically used to separate moving parts in a system. This has the benefit of reducing friction and surface fatigue together with reduced heat generation, operating noise and vibrations. Lubricants achieve this by several ways. The most common is by forming a physical barrier i.e.
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a thin layer of lubricant separates the moving parts. This is termed hydrodynamic lubrication. In cases of high surface pressures or temperatures the fluid film is much thinner and some of the forces are transmitted between the surfaces through the lubricant. This is termed elasto-hydrodynamic lubrication. Reduce friction Typically the lubricant-to-surface friction is much less than surface-to-surface friction in a system without any lubrication. Thus use of a lubricant reduces the overall system friction. Reduced friction has the benefit of reducing heat generation and reduced formation of wear particles as well as improved efficiency. Lubricants may contain additives known as friction modifiers that chemically bind to metal surfaces to reduce surface friction even when there is insufficient bulk lubricant present for hydrodynamic lubrication, e.g. protecting the valve train in a car engine at startup. Transfer heat Both gas and liquid lubricants can transfer heat. However, liquid lubricants are much more effective on account of their high specific heat capacity. Typically the liquid lubricant is constantly circulated to a cooler part of the system, although lubricants may be used to warm as well as to cool when a regulated temperature is required. This circulating flow also determines the amount of heat that is carried away in any given unit of time. High flow systems can carry away a lot of heat and have the additional benefit of reducing the thermal stress on the lubricant. Thus lower cost liquid lubricants may be used. The primary drawback is that high flows typically require larger sumps and bigger cooling units. A secondary drawback is that a high flow system that relies on the flow rate to protect the lubricant from thermal stress is susceptible to catastrophic failure during sudden system shut downs. An automotive oil-cooled turbocharger is a typical example. Turbochargers get red hot during operation and the oil that is cooling them only survives as its residence time in the system is very short i.e. high flow rate. If the system is shut down suddenly (pulling into a service area after a high speed drive and stopping the engine) the oil that is in the turbo charger immediately oxidizes and will clog the oil ways with deposits. Over time these deposits can completely block the oil ways, reducing the cooling with the result that the turbo charger experiences total failure typically with seized bearings. Non-flowing lubricants such as greases & pastes are not effective

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at heat transfer although they do contribute by reducing the generation of heat in the first place. Carry away contaminants and debris Lubricant circulation systems have the benefit of carrying away internally generated debris and external contaminants that get introduced into the system to a filter where they can be removed. Lubricants for machines that regularly generate debris or contaminants such as automotive engines typically contain detergent and dispersant additives to assist in debris and contaminant transport to the filter and removal. Over time the filter will get clogged and require cleaning or replacement, hence the recommendation to change a car's oil filter at the same time as changing the oil. In closed systems such as gear boxes the filter may be supplemented by a magnet to attract any iron fines that get created. It is apparent that in a circulatory system the oil will only be as clean as the filter can make it, thus it is unfortunate that there are no industry standards by which consumers can readily assess the filtering ability of various automotive filters. Poor filtration significantly reduces the life of the machine (engine) as well as making the system inefficient. Transmit power Pascal's law is at the heart of hydrostatic power transmission. Hydraulic fluids comprise a large portion of all lubricants produced in the world. Protect against wear Lubricants prevent wear by keeping the moving parts apart. Lubricants may also contain anti-wear or extreme pressure additives to boost their performance against wear and fatigue. Prevent corrosion Good quality lubricants are typically formulated with additives that form chemical bonds with surfaces to prevent corrosion and rust.

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History Romans used rags dipped in animal fat to lubricate wagon wheels; however the science of lubrication (tribology) really only took off with the industrial revolution in the nineteenth century. General composition Lubricants are generally composed of a majority of base oil and a minority of additives to impart desirable characteristics. Marketing The global lubricant market is generally competitive with numerous manufacturers and marketers. Overall the western market may be considered mature with a flat to declining overall volumes while there is strong growth in the emerging economies. The lubricant marketers generally--- pursue one or more of the following strategies when pursuing business.

Specification:

The lubricant is said to meet a certain specification. In the consumer market, this is often supported by a logo, symbol or words that inform the consumer that the lubricant marketer has obtained independent verification of conformance to the specification. Examples of these include the API’s donut logo or the NSF tick mark. The most widely perceived is SAE viscosity specification, like SAE 10W-40. Lubricity specifications are institute and manufacturer based. In the U.S. institute: API S for petrol engines, API C for diesel engines. For 2007 the current specs are API SM and API CJ. Higher second letter marks better oil properties, like lower engine wear supported by tests. In EU the ACEA specifications are used. There are classes A, B, C, and E with number following the letter. Japan introduced the JASO specification for motorbike engines. In the industrial market place the specification may take the form of a legal contract to supply a conforming fluid or purchasers may choose to buy on the basis of a manufacturers own published specification.

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Original equipment manufacturer (OEM) approval:

Specifications often denote a minimum acceptable performance levels. Thus many equipment manufacturers add on their own particular requirements or tighten the tolerance on a general specification to meet their particular needs (or doing a different set of tests or using different/own test bed engine). This gives the lubricant marketer an avenue to differentiate their product by designing it to meet an OEM specification. Often, the OEM carries out extensive testing and maintains an active list of approved products. This is a powerful marketing tool in the lubricant marketplace. Text on the back of the motor oil label usually has a list of conformity to some OEM specifications, such as MB, MAN, Volvo, Cummins, VW, BMW or others. Manufactures may have vastly different specifications for the range of engines they make; one may not be completely suitable for some other.

Performance:

The lubricant marketer claims benefits for the customer based on the superior performance of the lubricant. Such marketing is supported by glamorous advertising, sponsorships of typically sporting events and endorsements. Unfortunately broad performance claims are common in the consumer marketplace, which are difficult or impossible for a typical consumer to verify. In the B2B market place the marketer is normally expected to show data that supports the claims, hence reducing the use of broad claims. Increasing performance, reducing wear and fuel consumption is also aim of the later API, ACEA and car manufacturer oil specifications, so lubricant marketers can back their claims by doing extensive (and expensive) testing.

Longevity:

The marketer claims that their lubricant maintains its performance over a longer period of time. For example in the consumer market, a typical motor oil change interval is around the 3000-6000 miles (7500-15000 km). The lubricant marketer may offer a lubricant that lasts for 12000 (30000km) miles or more to convince a user to pay a premium. Typically, the consumer would need to check or balance the longer life and any warranties offered by the lubricant manufacturer with the possible loss of equipment manufacturer warranties by not following its schedule. Many car and engine manufacturers

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support extended drain intervals, but request extended drain interval certified oil used in that case; and sometimes a special oil filter. Example: In older Mercedes-Benz engines and in truck engines one can use engine oil MB 228.1 for basic drain interval. Engine oils conforming to higher specification MB 228.3 may be used twice as long, oil of MB 228.5 specification 3 xs longer. Note that the oil drain interval is valid for new engine with fuel conforming car manufacturer specification. When using lower grade fuel or worn engine the oil change interval has to shorten accordingly. In general oils approved for extended use are of higher specification and reduce wear. In the industrial market place the longevity is generally measured in time units and the lubricant marketer can suffer large financial penalties if their claims are not substantiated.

Efficiency:

The lubricant marketer claims improved equipment efficiency when compared to rival products or technologies, the claim is usually valid when comparing lubricant of higher specification with previous grade. Typically the efficiency is proved by showing a reduction in energy costs to operate the system. Guaranteeing improved efficiency is the goal of some oil test specifications such as API CI-4 Plus for diesel engines. Some car/engine manufacturers also specifically request certain higher efficiency level for lubricants for extended drain intervals.

Operational tolerance:

The lubricant is claimed to cope with specific operational environment needs. Some common environments include dry, wet, cold, hot, fire risk, high load, high or low speed, chemical compatibility, atmospheric compatibility, pressure or vacuum and various combinations. The usual thermal characteristics are outlined with SAE viscosity given for 100°C, like SAE 30, SAE 40. For low temperature viscosity the SAE xxW mark is used. Both markings can be combined together to form a SAE 0W-60 for example. Viscosity index (VI) marks viscosity change with temperature, with higher VI numbers being more temperature stable.

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Economy:

The marketer offers a lubricant at a lower cost than rivals either in the same grade or a similar one that will fill the purpose for lesser price. (Stationary installations with short drain intervals.) Alternative may be offering a more expensive lubricant and promise return in lower wear, specific fuel consumption or longer drain intervals. (Expensive machinery, un-affordable downtimes.)

Environment friendly:

The lubricant is said to be environmentally friendly. Typically this is supported by qualifying statements or conformance to generally accepted approvals. Several organizations, typically government sponsored, exist globally to qualify and approve such lubricants by evaluating their potential for environmental harm. Typically, the lubricant manufacturer is allowed to indicate such approval by showing some special mark. Examples include the German “Blue Angel”, European “Daisy” Eco label, Global Eco-Label “GEN mark”, Nordic, “White Swan”, Japanese “Earth friendly mark”; USA “Green Seal”, Canadian “Environmental Choice”, Chinese “Huan”, Singapore “Green Label” and the French “NF Environment mark”.

Composition:

The marketer claims novel composition of the lubricant which improves some tangible performance over its rivals. Typically the technology is protected via formal patents or other intellectual property protection mechanism to prevent rivals from copying. Lot of claims in this area are simple marketing buzzwords, since most of them are related to a manufacturer specific process naming (which achieves similar results than other ones) but the competition is prohibited from using a trademark.

Quality:

The marketer claims broad superior quality of its lubricant with no factual evidence. The quality is “proven” by references to famous brand, sporting figure, racing team, some professional endorsement or some similar subjective claim. All motor oil labels wear mark similar to "of outstanding quality" or "quality additives", the actual comparative evidence is always lacking.

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Disposal and environmental issues It is estimated that 40% of all lubricants are released into the environment. Disposal: Recycling, burning, landfill and discharge into water may achieve disposal of used lubricant. There are typically strict regulations in most countries regarding disposal in landfill and discharge into water as even small amount of lubricant can contaminate a large amount of water. Most regulations permit a threshold level of lubricant that may be present in waste streams and companies spend hundreds of millions of dollars annually in treating their waste waters to get to acceptable levels. Burning the lubricant as fuel, typically to generate electricity is also governed by regulations mainly on account of the relatively high level of additives present. Burning generates both airborne pollutants and ash rich in toxic materials, mainly heavy metal compounds. Thus lubricant burning takes place in specialized facilities that have incorporated special scrubbers to remove airborne pollutants and have access to landfill sites with permits to handle the toxic ash. Unfortunately, most lubricant that ends up directly in the environment is due to general public discharging it onto the ground, into drains and directly into landfills as trash. Other direct contamination sources include runoff from roadways, accidental spillages, natural or man-made disasters and pipeline leakages. Improvement in filtration technologies and processes has now made recycling a viable option (with rising price of base stock and crude oil). Typically various filtration systems remove particulates, additives and oxidation products and recover the base oil. The oil may get refined during the process. This base oil is then treated much the same as virgin base oil however there is considerable reluctance to use recycled oils as they are generally considered inferior. Base stock fractionally vacuum distilled from used lubricants has superior properties to all natural oils, but cost effectiveness depends on many factors. Used lubricant may also be used as refinery feedstock to become part of crude oil. Again there is considerable reluctance to this use as the additives, soot and wear metals will seriously poison/deactivate the critical catalysts in the process. Cost prohibits carrying out both filtration (soot, additives removal) and re-refining (distilling, isomerisation, hydrocrack, etc.) however the primary hindrance to recycling still remains the collection of fluids as refineries need continuous supply in amounts measured in cisterns, rail tanks. Occasionally, unused lubricant requires disposal. The best course of action in such situations is to return it to the manufacturer where it can be processed as a part of fresh batches. Environment: Lubricants both fresh and used can cause considerable damage to the environment mainly due to their high potential of serious water
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pollution. Further the additives typically contained in lubricant can be toxic to flora and fauna. In used fluids the oxidation products can be toxic as well. Lubricant persistence in the environment largely depends upon the base fluid, however if very toxic additives are used they may negatively affect the persistence. Lanolin lubricants are non-toxic making them the environmental alternative which is safe for both users and the environment. Advantages of Relstar Ultra 15W40

Engine Durability: 1. Improved viscosity control of soot-laden oil 2. Shorter oiling times to critical areas during start-up at low temperature 3. Extra safety in crosshead wear control 4. Enhanced bearing protection 5. Longer seal life

• Longer Drain Interval  protection Greater oxidation stability at higher temperatures  Better oil consumption  Improved against premature oil filter exhaustion • 4 stroke engine systems • • • •

oil

Fuel system- Supply clean fuel Air system- Supply clean air for combustion Lubrication system- Lubricate all moving components Cooling system- Take away heat to prevent mechanical breakdown

• Lubricant performance specifications across the world are influenced by 3 bodies and OEMs o API- American Petroleum Institute o ACEA- Association of Constructer European Automobile o JASO-Japan Automobile Standards Organization o Others-OEM specifications Mercedes Benz, Cummins, Mack, Volvo et
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• Cooled EGR o EGR Lowers O2 and Reduces Peak Temperatures and Pressures o EGR Gasses Are Cooled to Improve Volumetric Efficiency o Result Is Lower NO2 Emissions • Cooled EGR Impact on Lubricant • Increased Corrosion o Cooled EGR leads to condensation and formation of higher acid levels. • Increased Soot o Increased levels of soot due to EGR • Increased Engine Temperatures o Engine coolant also used for EGR cooler

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Competitors
There are many competitors are their to lubricants in the market. And also competition becomes very much between them. Each are having their own strategies and promotional activities for existence of their product in the competitive market place. And also all are advertise their product effectively by advertisement media in their also they will use different strategies. The competitors are listed as below. • Castrol • Gulf • Servo • Veedol • Pennzoil • Lalghoda • Elf • Ipol • Volvo line Among above competitors castrol and gulf are the major players and these players are already set up in the customer mind. Now they are acquired most of the lubricant market. Castrol Castrol India Limited is a Public Limited Company with 70.92% of the equity held by Castrol Limited UK (part of BP Group). In 2003 the company's turnover was Rs.1360.51 crores and Profit after Tax was Rs. 137.38 crores. From a minor oil company, with a share of about 6% in 1991, Castrol India has grown to become the second largest lubricant company in India with a market share of around 22%.Castrol India manufactures and markets a range of automotive and industrial lubricants. It markets its automotive lubricants under two brands - Castrol and BP. The company has leadership positions in most of the segments in which it operates including passenger car engine oils, premium 2-stroke and 4-stroke oils and multigrade diesel engine oils. Castrol India has the largest manufacturing and marketing network amongst the lubricant companies in India. The company has 5

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manufacturing Plants across the country, including a state-of-the-art plant in Silvassa.The company reaches its consumers through a distribution network of 270 distributors, servicing over 70,000.retail outlets.Castrol India has clearly demonstrated its commitment to Indian consumers for over 80 years, by offering its international range of high performance products backed by the highest level of customer service. The company has managed to gain sustainable competitive advantage through:
 

Distinctiveness driven by continuous innovation in all areas of business Winning culture and a desire to excel Strong meaningful relationships with all stakeholders Castrol produce oils for the whole arena of automotive lubrication, including motorcycle 2-stroke and 4-stroke engines, car petrol and diesel engines, an extensive range of manual and automatic transmission fluids, chain lubricants and waxes, coolants, suspension fluids, brake fluids, greases, cleaners and maintenance products. Castrol also produce products for agricultural machinery, plant, general industry and marine engineering uses. Castrol products were voted best/most trusted products in Switzerland Gulf GOI continues to sell Gulf-branded lubricants worldwide through a network of country subsidiary companies. Some of these subsidiaries franchise use of the Gulf brand to local independent petroleum retailers ("affiliates"). Hence, Gulf-branded products and filling stations can still be found in many countries. Several former GOC subsidiaries were sold to local owners (e.g. Gulf Oil India to a partnership including GOI, Ashok Leyland and the Hinduja group) who continue to use the Gulf name and insignia. Gulf Oil India (GOIn) has raised the market profile of the Gulf brand in recent years. It has introduced the whole range of Gulf international products into South Asia through toll blending arrangements. In 1995, GOIn set up its first blending plant at Silvassa (with technical assistance from GOI) to produce Gulf-branded lubricants locally. These local lubricants are produced to Gulf specifications and sell at a premium to the products of wholly-local competitors. In 2002, GOIn merged with the explosives manufacturer IDL to
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form Gulf Oil Corporation Ltd, an Indian Company described as a member of the Hinduja Group. The direct GOI interest in this company is limited to 20 percent of GOCL's equity held by Gulf Oil International (Mauritius) Inc. GOCL claims to have gained a six-percent share of the Indian automotive lubricant market and a three-percent share of the industrial market. GOCL exports to South Asian countries including Bangladesh, Nepal, Indonesia, the Philippines, and Taiwan. It also provides Gulf product licensing and technical support to local affiliates in the region including a major manufacturing operation in China. GOI still produces and sells a wide range of branded oil based products including lubricants and greases of all kinds. These include products for a variety of applications ranging from metal working oils to refrigeration oils. Car engine oils include the Gulf Formula, Gulf MAX, and Gulf TEC ranges. Heavy duty diesel engine lubricants include the Gulf Supreme and Gulf Super fleet ranges. The sale of lubricants is one area where product specification and quality assurance are vital elements. Therefore, brand differentiation remains a feature of the marketplace. Gulf's product catalog includes a well-developed portfolio of 400 distinctive products.

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Methodology
Data Source: Data Sources are classified into: 1) Primary Data Source 2) Secondary Data Sources 1) Primary Data Sources: Primary data is collected by direct interview with shoppers with the help of Questionnaire. 2) Secondary Data Sources: Classified into Internal Secondary Data and External Secondary Data. i) Internal Secondary Data: Internal source of data represents the data this is already available with the company. Product profile, Information relating to plant locations etc. ii) External Secondary Data: External sources of data include all external information needed for the study. News papers, Business Magazines, Web sites are some important sources of information, which are used in this project work. Sampling Process Sample size - 86 Area covered - Bagalkot district Duration Two months
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PART 5

DATA ANALYSIS & INTERPRETATION

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MOST SOLD BRAND

Brands servo castrol Veedol Gulf Elf Volvo Pennzoi lalghoda Ipol others line l Sales 11 27 5 24 0 0 6 4 2 7 in no of shops Sales 13 31 6 28 0 0 7 5 2 8 in %

MOST SOLD BRAND
2% 5% 7% 0% 0% 31% 28% 6% 8% 13% servo castrol veedol gulf elf volvoline pennzoil lalghoda ipol others

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ANALYSIS: From this survey it was found that amongst 86 respondents, • 31% respondents are told as castrol is the most sold brand in our shop. • 28% respondents are considered as Gulf is the most sold brand • 13% respondents are told as servo lubricant oil is sales more in our shop. • 7% respondents Pennzoil • 6% respondents veedol • 5% respondents lalghoda • 2% respondents ipol • 8% respondents other brands This indicates that in whole Bagalkot district castrol is the most sold brand. Maximum numbers of people are using this brand.

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QUANTITY OF OIL SOLD BY EACH BRAND MONTHLY

Bran ds Sales in liters Sales in %

servo 5525 15

castrol 7992 21

Veedol 3830 10

Gulf 8811 23

Elf 965 3

Volvo line 1245 3

Penn zoil 1957 5

lalghoda 1917 5

Ipol 2495 7

others 3050 8

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QUANTITY OF OIL SOLD BY EACH BRAND MONTHLY
25 QUANTITY IN % 20 15 10 5 0
nn zo il la lg ho da rv o f ro l do l lf e l ve e se vo lv o ca ot he rs gu st lin ip o el

sales in %

BRANDS

ANALYSIS: According to our survey it was found that amongst 86 respondents taking quantity as consideration 23% of Gulf lubricant oil sold from 86 respondents in Bagalkot district. That means 8811 liters of oil sold by them monthly. • 21% of castrol oil is sold monthly that means 7992 liters. • 15% of servo oil sales monthly 5525 liters. • 10% of veedol oil sales monthly 3830 liters. • 7% of ipol oil sales monthly 2495 liters..

• 5% of Pennzoil & lalghoda oil sales monthly that mean 1957&1917 liters. • 3% of elf & Volvo line oil is sold monthly that means 1245 & 965 liters.
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pe

• 8% of other brands that means 3050 liters.

MAJOR CUSTOMERS

Two customers Wheeler in % 12

Thee Wheeler 6

Four Wheeler 7

H.C.W All Type 73 2

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MAJOR CUSTOMER
2%

12% 6% 7% Two Wheeler Thee Wheeler Four Wheeler H.C.W All Type

73%

ANALYSIS: According to our survey it was found that amongst 86 Respondents. • 73% of customers are heavy commercial vehicles like truck, tractor, JCB, Hitachi, these are the major players for lubricants. • 12% of customers are two wheelers. • 7% of customers are four wheelers like car, zeep, etc. • 6% of customers are three wheelers like tumtum, riksa etc. • 2% of customers are all type. From this major customers for lubricants are heavy commercial vehicles.

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INFLUENCY OF SHOPPERS ON CUSTOMERS PURCHASE

Influence no of shoppers in%

Yes 31

No 69

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INFLUENCY OF SHOPPERS ON CUSTOMERS PURCHASE
80 70 60 50 40 30 20 10 0 69

NO OF SHOPPERS IN PERCENTAGE

31

Series1 Series2

Yes INFLUENCE

No

ANALYSIS: According to our survey out of 86 respondents • 69% of shoppers are not influence to the customers purchase. Customers which brand wants that brand only they will give to them. They cannot tell as like you can purchase this brand, that brand. • 31% of shoppers are influence to the customers purchase. In which brand they get more margin they influence more that brand.

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INFLUENCY OF MECHANICS ON CUSTOMERS PURCHASE

Influence no of mechanics in%

Yes 84

No 16

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INFLUENCY OF MECHANIC ON CUSTOMERS PURCHASE
90 80 70 60 50 40 30 20 10 0 84

NO OF MECHANICS IN PERCENTAGE

Series1 16

Yes INFLUENCE

No

ANALYSIS: According to our survey out of 86 respondents • 84% of shoppers are told as mechanic influence more than of us. His influence plays very much important role in market place. Most of the customers are ask mechanic about purchase of particular brand while purchasing the lubricant oil. Which brand he told that brand will be purchased by customers. • 31% of shoppers told as no one can influence the customers purchase. Customers themselves only purchase a particular brand on the basis of their mind set. Most of the customers are keeping single brand from many years so that they can use that brand only.
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CUSTOMERS PREFERENCE AT THE TIME OF PURCHASE

Factors Customer s preference in %

Qualit y

Price

Brand

All

12

31

20

37

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CUSTOMERS PREFERENCE AT THE TIME OFPURCHAGE
40 35 30 25 20 15 10 5 0 Quality Price Brand All FACTORS 12 31 20 37

CUSTOMERS PREFERENCE IN PERCENTAGE

Series1

ANALYSIS: According to our survey out of 86 respondents • 31% of customers are considered more on price while purchasing the lubricant products. Most of the customers will purchase low priced lubricants with quality & they expect good quality lubricant within low price. • 20%of customers are considered brand name only while purchasing the lubricant. Now castrol & gulf are having very good name in the market so customers purchase more these brands. • 12% of customers are considered Quality. If the product quality is good then customers not consider above factors, they will directly purchase with consideration of quality only. • 37% of customers are considered all above factors.
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SHOPPERS PREFERENCE WHILE SELLING THE PRODUCT

Factors in %

Margin 12

Customer satisfaction 70

Both 19

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SHOPPERS PREFERENCE WHILE SELLING THE PRODUCT
80 70 60 50 40 30 20 10 0 70

SHOPPERS IN PERCENTAGE

Series1 12 19

Margin

Customer satisfaction FACTORS

Both

ANALYSIS: According to our survey out of 86 respondents • 70% of shoppers are considered more on customer’s satisfaction while selling the lubricant products. They not much consider on margin, they more concentrate on customer satisfaction. • 12%of shoppers are more concentrate on margin. In which brand they get more margin they keep that brand much in their shop. • 19% shoppers are considered both customer satisfaction as well as margin. According to them product should have good margin with good quality then only we can ready to sale.

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READY TO SELL ANY NEW COMPANIES LUBRICANT OIL

Ready to sell No of shoppers in %

Yes 14

No 86

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READY TO SELL ANY NEW COMPANIES LUBRICANT OIL
100 80 NO OF SHOPPERS IN PERCENTAGE 60 40 20 0 Yes READY TO SELL No 14 Series1 86

ANALYSIS: According to our survey out of 86 respondents • 86% of shoppers are directly not ready to sell newly entering lubricants. First they will see the market situation of that product. If the product position is good in the market then they will ready to sale otherwise not. • 14% of shoppers are directly ready to sell newly entering lubricants. Shoppers told as once we will test that new product along with our daily selling product. Almost These peoples are keeping more varieties in their shops.

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AWARENESS ABOUT RELSTAR

Awareness in %

Yes 6

No 94

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AWARENESS ABOUT RELSTAR LUBRICANT

6%

Yes No

94%

ANALYSIS: According to our survey out of 86 respondents

94% of shoppers are totally unaware about newly coming up of reliance lubricant product relstar. Awareness about this new product is very much less in the Bagalkot district.

6% of shoppers are aware about newly coming up of reliance lubricant product relstar. Awareness about this new product is very much less in Bagalkot district.

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READY TO SELL RELSTAR A RELIENCE LUBRICANT PRODUCT

Ready to sell in %

Yes 78

No 22

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READY TO SELL RELSTAR NOVA A RELIENCE LUBRICANT PRODUCT

22% Yes No 78%

ANALYSIS: According to our survey out of 86 respondents

78% of shoppers are ready to sell newly entering reliance lubricant product relstar. These respondents are told as we are ready to sell your new product but first we will see the market situation of that product. If the product position is good in the market then we will ready to sell.

22% of shoppers are not ready to sell newly entering reliance lubricant product relstar. Because these respondents are not ready to keep more varieties. They will restrict only few brands so that they sale that brand only.

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PART 6

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FINDINGS, RECOMMENDATION AND CONCLUSION

Findings
From this survey it was found that amongst 86 respondents,  31% respondents are told as castrol is the most sold brand in our shop.  Taking quantity as consideration Gulf has the highest sales i.e. 23% of Gulf lubricant oil sold from 86 respondents in Bagalkot district. That means 8811 liters of oil sold by them monthly  73% of customers are heavy commercial vehicles like truck, tractor, JCB, Hitachi, these are the major players for lubricants.  31% of shoppers are influence to the customers purchase. In which brand they get more margin they influence more that brand.  84% of shoppers are told as mechanic influence more than of us. His influence plays very much important role in market place. Most of the
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customers are ask mechanic about purchase of particular brand while purchasing the lubricant oil. Which brand he told that brand will be purchased by customers.  Most of the customers are price sensitive so that 31% of customers are concentrating more on price while purchasing the lubricant products. Most of the customers will purchase low priced lubricants with quality & they expect good quality lubricant within low price.
 20%of customers are considered brand name only while purchasing

the lubricant. Now castrol & gulf are having very good name in the market so customers purchase is more of these brands.  12% of customers are considered Quality. If the product quality is good then customers not consider above factors, they will directly purchase with consideration of quality only.
 37% of customers are considered all above three factors.

 70% of shoppers are considered more on customer’s satisfaction while selling the lubricant products. They not much consider on margin, they more concentrate on customer satisfaction.  86% of shoppers are directly not ready to sell newly entering lubricants. First they will see the market situation of that product. If the product position is good in the market then they will ready to sale otherwise not.  94% of shoppers are totally unaware about newly coming up of reliance lubricant product relstar nova. Awareness about this new product is very much less in the Bagalkot district.  78% of shoppers are ready to sell newly entering reliance lubricant product relstar nova. These respondents are told as we are ready to sell

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your new product but first we will see the market situation of that product. If the product position is good in the market then we will ready to sell.

Recommendations
 Awareness about Relstar lubricant product is very much less in

Bagalkot district. So better to concentrate more on advertisement of this new lubricant.  Mechanic influence more on customers purchase so that company should attracts him by giving some gifts, coupons, and other different facilities. recently in Jamakhandi ipol distributor given some gifts and party to the mechanics from this now the mechanics are influencing the ipol product and sales becomes also more now in their.

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 In Bagalkot district customers are very price sensitive so that your newly coming product price should be reasonable.
 Most of the shoppers are wants credit facility to sale your new

product. So for that you should provide the credit facility to them. It will help to acquire more market.  With lubricants becoming a fast moving consumer goods and the brand preference of the consumers witnessing a change, brand image plays a key role in affecting the consumer’s decision to buy a lubricant. In a recent study by Frost & Sullivan, it was found that vehicles owners’ decision to buy a certain lubricant is affected by a garage mechanic, retail storeowner, or the advertisements. Hence, it becomes important to have a good brand name in the market, which can affect the customer’s decision to buy a certain brand.  With increasing number of players in the market, it is vital for the companies to reach a wider segment of customers. The lubricants market in India is very highly fragmented and complex. Public limited companies selling primarily through petrol pumps manage to achieve a deeper penetration. Most of the MNC’s have tied up with oil majors to market their brands like Castrol with Escorts, Tata BP with Telco. This will help the private companies to establish a wider access, brand awareness, as well as preference.

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 Private companies mostly sell their products through stockiest, dealers, distributors, mechanics, and retail stores. Maximum sales are achieved through mechanics and retail stores. Margins and discount schemes offered to the storeowners and mechanics prompt them to sell and promote a particular brand.  The transformation from the administered pricing mechanism to free pricing has increased the importance of providing cost effective product to the users. Thus product costing and competitive pricing are key factors affecting the market.  In the recent past, the Indian lubricant market has witnessed a phase of consolidation. Multinationals with better technology, brand name and finances have the power to launch themselves on their own in the market. However, with increasing number of competitors it is not possible for every one to carve a nich in the market. This sector has witnessed considerable amount of mergers and acquisitions. British Petroleum’s not so recent acquisition of Castrol is one example. The Indian lubes market is a combative market place and lubricant companies find themselves fighting a tough battle for survival. In the OE sector also lubricant manufacturing, companies are entering into collaborations with vehicle manufactures. Martin Udyog, Hyundai Motors, Hindustan Motors, TAFE, Toyota, and Skoda have entered into collaboration with IOC and Castrol for some of their models.

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 In the future, growth in the automotive lubricants industry will largely depend on the overall performance of the economy. In the past one and a half years, the scenario has improved with higher sales of commercial vehicles and two-wheelers. However, in the future volume growth will be affected because of use of better quality, long drain lubes. This will increase the replacement cycle for lubes. In the shorter term, one will witness intense competition in a slow growing market marked by a consolidation activity, which has the potential to change the face of the lubricant industry. Given the rising competition, success of a product would largely depend how well it is branded and distributed.

Conclusion
From the survey analysis it was found that in Bagalkot district lubricant oil market is more so that in this regions oil sales is more because of most of the area is covered by industries in Bagalkot district.perticularly Ilkal,Mudhol,Jamakhandi these areas covered by more industries so that here oil sales is more than the other regions.

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Gulf is the major player in Bagalkot district most of the customers are using this brand followed by castrol and it set up in the customer mind from few previous years. Major customers are heavy commercial vehicles like truck, tractor, JCB, Hitachi, etc.these vehicles are consumes more lubricant oil than the other vehicles. Mechanic influence more than the shoppers to the customers purchases of lubricant oil. His influence plays very much important role in market place. Most of the customers are ask mechanic about purchase of particular brand while purchasing the lubricant oil. Which brand he told that brand will be purchased by customers. Most of the customers are price sensitive so that they concentrating more on price while purchasing the lubricant products. So that customers will purchase low priced lubricants with quality & they expect good quality lubricant within low price Shoppers are considered more on customer’s satisfaction while selling the lubricant products. They not much consider on margin, they more concentrate on customer satisfaction Awareness about newly coming up of reliance lubricant product is very much less in Bagalkot district only few respondents are aware of this product. Most of the respondents are ready to sell the newly entering lubricant product of reliance petro marketing Ltd after seeing the market condition of that product. And also few respondents are wants coupons, discounts credit facility, and they told as if these facilities are available to your newly entering lubricant then only we are ready to sale your product otherwise not.

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I

PART 7

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BIBLIOGRAPHY AND ANNEXURE

Bibliography
Text Books 1. Marketing Management: Kotler and Keller
2. Marketing Research

: Aaker,Kumar and Day

News Papers & Magazines 1. Business Line 2. Business Standards
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3. Business India 4. Business world Web Sites
1. www.google.com 2. www.RIL.com 3. www.reportbuyer.com 4. www.wickepedia.com 5. www.indianfoline.com

Questionnaire
Dear respondent. I am Shankreppa.S.Atalatti M.B.A. IInd sem. Student of Kousali Institute of Management Studies, Dharwad. As a curricular part of this course I am undertaking a project to determine the “potential market for relstar nova lubricant a reliance product in Bagalkot district”. This is sincerely meant for academic purpose. The information which is provided by you will be kept strictly confidential & used only for academic purpose.
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NAME: ADDRESS: __________________________________________ __________________________________________ PHONE NO: __________________________________________ Lal Ghoda Valvoline

1) Which Brands do you sell? Castrol Veedol Pennzoil Elf Gulf Servo

Others _______________

2) Which Brand is sold most? ___________________________________________ 3) Quantity of oil sold under each brand in liters per month Castrol Veedol Pennzoil LalGhoda Valvoline Gulf Elf Servo Others

4) Who are your customer’s? Two Wheeler Four wheeler Three Wheeler Heavy Commercial Vehicle

5) Who are Your Major customers? ____________________________________________ 6) Distributor from whom you Purchase? Name and address ______________________________

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_______________________________ 7) Do you influence customers Purchases? Yes No 8) According to you who influence more on customers purchases? _________________________________________________ 9) What do customers prefer at the time of purchases? Quality Price Brand

10) On which factor do you concentrate more while selling the product? ________________________________________________ 11) Are you ready to sell any new Companies Lubricant Oil? Yes No

12) Do you know that Reliance is coming up with new Lubricant Oil under the Brand Name “Relstar” No If yes Mention the source from which you came to know? ______________________________________________________ 14) Are you Ready to sell Reliance Lubricant Oil “Relstar”? Yes , No Yes

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If no state reason ________________________________

THANK YOU

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