BPCL's Petrol Pump Retail Revolution
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Case Details:
Case Code : MKTG016
Case Length : 6 Pages
Period : 1995-2001
Pub Date : 2001
Teaching Note : Available
Organization : BPCL, IOC
Industry : Energy & Utilities
Countries : India
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
The Background
BPCL's history dates back to 1951, when the Government of India entered into an agreement with the UK based Burmah Oil Company and Shell Petroleum Co. (Burmah-Shell) for establishing an oil refinery in Bombay. In 1952, this agreement led to the incorporation of Burmah Shell Oil Refineries Ltd...
The Retail Initiatives - Phase I
The petroleum business can broadly be divided into three parts: the production of crude, the refining the crude into saleable products like petrol, diesel, kerosene etc., and retailing.
Though margins were usually high in crude production, it was a high-risk, long-gestation business.
As far as refining was concerned, there was excess capacity worldwide and
margins were rather low.
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It was only in marketing was that companies could get the maximum margins, and hence the rush to renovate the retail outlets. Also, add-on services were expected to help the oil companies increase the extent of non-fuel businesses around their outlets...
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The Retail Initiatives - Phase II
By July, 1999, 35 of BPCL's retail outlets across the country had the 'Bazaar'stores running successfully.
In October, 2000, BPCL pioneered another revolutionary concept by launching a McDonald's fast food outlet at a petrol pump near Mathura (UP) on the Delhi-Agra highway.
The 4,000 sq.ft., 180 seat outlet was set up at a cost of Rs 40 million. McDonald's paid a fixed rent, besides a percentage of its sales to BPCL,
for using the facility... |
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