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Bindu D Menon Richa Mishra

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New Delhi, May 11 Notwithstanding the everyday oil-price shock, branded auto fuels are seeing a steady growth in demand. With consumers willing to pay more for premium petrol and diesel, public-sector Indian Oil Corporation Ltd (IOC) is going ahead full steam to promote its branded fuel.

There is a leaning towards branded fuel, Mr G.C. Daga, Director Marketing, IOC told Business Line. The move is also seen as an attempt to bring down the heavy under-recoveries that the company suffers from selling petroleum products at a subsidised rate.

“We will be spending Rs 800 crore towards our retail segment, which includes setting up new outlets, upgrading and automating existing ones. On branding and promotional activities, the company spends about Rs 35 crore annually for the two products,” he said.

IOC has notched up a market share of over 48 per cent for its branded petrol — XtraPremium — with 38 per cent of its 17,700 retail outlets offering it. In fact, the company has found 28.5 per cent of its existing customers shifting to the branded category.

In the case of its branded diesel — XtraMile — the company has posted 65 per cent growth, with a market share of 58 per cent and 17.3 per cent of regular customers opting for it. Branded diesel is being sold at 58 per cent of the retail outlets.

Interestingly, even rural retail channels like the Kisan Seva Kendras (KSK) were showing a demand for branded fuel. “KSKs currently contribute 4 per cent of our total retail diesel sales and 2.7 per cent of retail petrol sales. IOC has 2,050 KSK outlets across the country,” he said.

Outlining the strategy for promoting branded fuels, Mr Daga said that besides increasing the product reach at retail outlets, the company has taken up a branding and communications exercise which includes incentivising seller networks and making use of local campaigns.

Currently, depending on customer preference, the company sells branded fuels through select outlets in metro and major cities. “These outlets have been picked because of consumer demand. In most of the outlets both regular and branded fuels are available,” he said.

IOC is spending 30 per cent more this fiscal on below-the-line-activities. “There will be structured training for pump attendants and increased consumer awareness. Every stakeholder will be involved in the process of creating brand equity,” Mr Daga added.

More Stories on : Petroleum | Brands | Outlook

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