Published by MBA Skool Team, Last Updated: March 20, 2017
Marketing Strategy of HPCL (Hindustan Petroleum) analyses the brand with the marketing mix framework which covers the 4Ps (Product, Price, Place, Promotion). There are several marketing strategies like product innovation, pricing approach, promotion planning etc. These business strategies, based on HPCL (Hindustan Petroleum) marketing mix, help the brand succeed in the market.
HPCL (Hindustan Petroleum) marketing strategy helps the brand/company to position itself competitively in the market and achieve its business goals & objectives.
Let us start the HPCL (Hindustan Petroleum) Marketing Strategy & Mix to understand its product, pricing, advertising & distribution strategies:
The product strategy and mix in HPCL (Hindustan Petroleum) marketing strategy can be explained as follows:
HPCL or Hindustan Petroleum Corporation Ltd is one the leading oil & gas company in India. The different products and services provided by HPCL can be broadly classified into following business units. All these offerings are a part of its marketing mix. Refineries – HPCL owns refineries with a capacity of 14.8 MMTPA in Mumbai and Vishakhapatnam, producing a wide range of products like LPG, MS, SKO, ATF and Bitumen from crude oil; Aviation – HPCL provides aviation refuelling service with Aviation Turbine Fuel at several airports in India; Bulk Fuels – this business unit caters to the needs of bulk fuels and petroleum products to industries ranging from power plants, chemicals, airlines and fertilisers; LPG – HPCL markets a brand of LPG called HP Gas having a capacity of 3610 TMTPA filled into cylinders at 44 bottling plants; Lubes – HP Lubes provides customized services with a range of lubricants for cars to industrial equipment’s; Retail – it markets and provides automotive fuels and value added services across the country by delivering products like Petrol, Diesel, Power, Auto LPG and lubricants; Product Pipelines – HPCL lays pipelines for transportation of petroleum products for safe and effective transportation.
Below is the pricing strategy in HPCL (Hindustan Petroleum) marketing strategy:
HPCL is a state owned enterprise and hence some of the pricing decisions are taken by the union government.
The price breakup includes several elements to consider like – cost and freight of diesel, monetary exchange rate, refinery transfer price, excise duty, dealer commission and VAT. Adding all these elements gives the retail price of petroleum products. As the prices of these products vary across the different places in India, we can say a geographical pricing mechanism is followed. In a bid to improve the revenues HPCL is now testing the dynamic pricing a first player to do that in India. HPCL is testing this new dynamic pricing in few selected outlets where the prices vary instantly within a range of 40 to 50 paise per litre. If found a successful model it will be replicated throughout India. This gives an overview in the pricing strategy in the company’s marketing mix.
HPCL (Hindustan Petroleum) Place & Distribution Strategy:
Following is the distribution strategy in the HPCL (Hindustan Petroleum) marketing mix:
HPCL provides its products and services in nearly 13,800+ retail outlets across India. Out of these HPCL owns 2300 Club HP and 250 Club HP Star outlets which are selling a branded fuel by HPCL. In LPG distribution network it is second largest in the country with 4100+ dealers. Also in product pipeline network it is again second largest in the country with 3000+ kms. It has the refinery plants at Mumbai and Vishakhapatnam and to transfer the products to different locations it uses these pipelines for safe and effective transfer.
It is also aggressively planning and investing to improve the capacity.
The promotional and advertising strategy in the HPCL (Hindustan Petroleum) marketing strategy is as follows:
HPCL uses several ways to communicate to its customers both retail and industrial. It uses sales promotions like lucky draws and gift coupons. It uses promotional draws for customers and dealers also during festive seasons and give away gifts and sometime coupons for free fuel at HPCL retail outlets. It also has a loyalty cards for its members at branded retail stores like Club HP. It also uses print ads. HPCL uses ad agency Leo Burnett as its partner for all the creative content.
Since this is a service marketing brand, here are the other three Ps to make it the 7Ps marketing mix of HPCL (Hindustan Petroleum Corporation).
HPCL employs nearly 13000 people in its varied business operations and takes a great deal of efforts to manage these employees to help them work efficiently. HPCL is created a program called Project ACE targeted to enable its employees to learn continuously and acquire multiple skills. Also the appraisal and performance management process used is very conducive to growth and achieve business results. This process involves a Balanced Score Card which is helpful in setting targets to the employees and include different parameters like – financial, customer, internal process. Balanced score card also include another important parameter called learning and growth. And this learning and development is taken care by another HR initiative called Competency Mapping and Development which helps the management to set both the technical and behavioural requirement structure.
HPCL embraces and uses technology in every operation to increase efficiency of business process. For setting up new outlets it uses Network Planning Tool a scientific approach to find a potential new location and also increase sales at existing locations. ODMT is another tool HPCL employs to achieve outlet specific growth. It uses modern IT/IS application infrastructure across its supply chain like online inventory management and vehicle tracking for operational efficiency. HPCL also empowers its stakeholders digitally so that they can optimize their business process. All the finance, HR and procurement process are digitalized. It uses a new technology called H2 PSA for purification of CCR and as a result hydrogen gas of purity more than 99.5% is obtained.
HPCL has a logo with ‘HP’ written in English in middle of a circle in red colour and in a red strip Hindustan petroleum is written in Devanagari script. HPCL uses a tagline ‘future full of energy’ in its promotions. It releases financial reports, its future plans and current projects related presentations for investors and bankers. Its registered office is at Petroleum House in Jamshedji Tata Road, Mumbai. Hence, this covers the entire HPCL marketing mix.
About HPCL (Hindustan Petroleum Corporation):
HPCL or Hindustan Petroleum Corporation, founded in 1974 is an Indian state owned enterprise having its headquarters at Mumbai, Maharashtra. Government of India owns nearly 51% equity in HPCL. It’s field of operations are in Oil and Natural gas. HPCL is listed in both Bombay stock exchange and National stock exchange in India. It has Maharatna status among the public sector organizations in India and also features in Forbes global fortune 500 list. HPCL nearly has a market share of 25% in India. In terms of turnover it is India’s 6th largest company.
HPCL owns two refineries one in Mumbai and the other in Vishakhapatnam with a combined capacity of nearly 14.8 million metric tonnes per annum. HPCL also owns a largest lube refining plant in India which produces nearly 40% of the lube base oil produces in India.
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