Experiential marketing in fuel retailing

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: Either when travelling abroad or at least through the world of Hollywood movies, most of you have seen how different the experience of filling fuel can be in India vis-a-vis elsewhere in the world. And if one had to look for a single word that explains this difference, it’s automation. Changes can no doubt already be seen in the petrol stations that dot the Indian urban landscape.

As competition has increased in the world of fuel retailing, oil companies are reaching out more than ever to the end-user. Branded petrol and diesel products, loyalty programs and smart cards, convenience stores, increased amenities such as vending machines or ATMs—these are gradually changing the drab petrol stations of old into interesting brand entities. Nonetheless, the basic issues in fuel retailing in India—issues of quality and quantity, of adulteration, shrinkages and pilfering and of creating brand identities in a commoditised market, remain.

With the retail network of an oil company often based on the franchisee system, the oil company exercises inadequate control over the actual fuel dispensation. The claims to purity notwithstanding, oil companies have limited control on interference between the stored petrol and that actually dispensed from the pumps. Nor can it always exercise control over the price changes. For instance, the levy of extra one rupee for one day by a single petrol pump owner can mean significant losses to the oil company. A single integrated system of automation can address most of these issues. While there has been a substantial amount of automation at the refinery and for transport, fuel station automation remains largely ad hoc. The absence of such an automation system can often mean lack of real quality control as well as underutilisation of loyalty programs.

Retail management

Let’s take a simple example. An acquaintance living in one of the northern-most suburbs of Mumbai was given a Rs 100 voucher as a loyalty program reward, to be used at the oil company’s convenience store. However, most of the good convenience stores for that oil company existed in South Mumbai, way off from his daily travel route.