BPCL's Petrol Pump Retail Revolution

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Themes : Retailing
Period : 1995-2001
Organization : BPCL, IOC
Pub Date : 2001
Countries : India
Industry : Energy & Utilities

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Case Code : MKTG016
Case Length : 6 Pages
Price: Rs. 200;

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The Retail Initiatives - Phase I Contd...

BPCL gave the cardholders pre-embossed slips so that the pump attendant did not have to run the card and slips through the embossing machine. The company made arrangements to collect the charge slips of the day the same evening, and depositing them at the BoB cards office - where the cheque for each dealer was prepared immediately for delivery the next morning.

During 1998-2000, BPCL took the help of consultants Arthur D. Little to make itself more 'market savvy.' BPCL CEO, U Sundararajan, said, "If our staff had to be geared to satisfy the customers, we needed to change our organizational structure."

The company was split into six strategic business units (SBUs) and efforts were taken to reduce bureaucracy and increase interaction between senior managers and the customers. The six SBUs thus identified were retail outlets, commercial users, lubricants, LPG, aviation, and refinery.

This classification helped the managers focus on specific customers and cut bureaucratic layers, speeding up decision-making. For instance, while earlier a sales officer typically serviced customers from 30 retail outlets, 12 LPG distributors, six kerosene dealers, and 10 bulk customers, now he talked to customers from a specific SBU. Earlier, only General Managers had the right to decide on discounts offered to BPCL customers. Under the new regime, even sales officers were authorized to take such decisions.

BPCL also set up cross-business councils that functioned across the six SBUs in areas like strategy, human resources, and brand building. This restructuring gave special emphasis to marketing: BPCL initiated a series of steps for taking the company closer to its customers. The 22 divisional offices were replaced by 61 branches in smaller territories, based on smaller geographical areas, resulting in closer interaction with the customers. For instance, earlier a division office at Jaipur looked after the entire state of Rajasthan. Now, four territory managers in the state managed the smaller geographical areas.

The most important change on the marketing front was the renewed focus on retail outlets. In the early 1990s, BPCL identified 1,234 new outlets that would be strategically critical after deregulation of the industry. The company then appointed a 'site procurement team' to acquire these outlets. The team had the authority to talk to the owners of the sites and take decisions on their own. Within a short period, the sites were acquired.

BPCL then started modernizing individual petrol pumps throughout the country and launched the 'Bazaar' range of stores on the lines of Shell's 'C' stores. To complement the launch of the first few 'Bazaar' outlets, BPCL released an advertising campaign as well. The five advertisement press campaign carried the baseline: 'Each pump has a story to tell - a story of care & commitment.'

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. The outlet was expected to pull in foreign and domestic tourists headed to and from Agra, besides the residents of surrounding areas.

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