INDIAN OIL CORPORATION LIMITED

SUMMER TRAINING PROJECT REPORT ON

“THE COMPARITIVE ANALYSIS OF SALES OF LUBRICANTS OF IOCL FOR THE YEARS 2008 AND 2009.” INDIAN OIL CORPORATION LIMITED.

FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF POST GRADUATE DIPLOMA IN BUSINESS MANAGEMENT

UNDER THE GUIDANCE OF: UNDER THE SUPERVISION OF:Mr./Dr. (Name of the Faculty Member) RAJKARAN Mr. RAJKARAN SUBMITTED BY(NAME OF STUDENT) SEEMI HALIMPGDM 2009-11

GALGATIAS BUSINESS SCHOOL, APPROVED BY AICTE, MİNİSTRY OF HRD, GOVT. OF INDİA) 1, KNOWLEDGE PARK, phase II, GREATER NOİDA. (U.P.)

CERTIFICATE

This is to certify that the project work done on “COMPARITIVE STUDY OF

SALES REPORT FOR THE YEAR 2008 AND 2009” is a bonafide work carried

out by Mr./Ms. SEEMI HALIM under my supervision and guidance. The

project report is submitted towards the partial fulfillment of 2 – year, full time

Post Graduate Diploma in Management.

This work has not been submitted anywhere else for any other degree/diploma.

The original work was carried during 15 APRIL to 15 JUNE in INDIAN OIL

CORPORATION LIMITED

Name & Sign of Faculty

Date:

ACKNOWLEDGEMENT

Success is any endeavor for co-operations & guidance from all, especially dear ones,

seniors, colleagues and environment. This was amply brought to me while undergoing

this project. I grateful acknowledge the inspiration; encouragement, guidance help and

valuable suggestion received from .my faculty members.

I would like to give my heartiest thanks to SHWETA GUPTA , UP State

Office II, NOIDA, Indian Oil Corporation Ltd. For providing me an opportunity to

undertake this project with IOCL. I owe a deep sense of gratitude to her, for her

valuable help and cooperation from time to time. She was always there to help me

through his valuable guidance, s uggestion and constant encouragement throughout

my summer training..

DECLARATION

I,Seemi Halim, Roll no 09PGDM085, student of PGDM of Galgotias Business

School,,Greater Noida , hereby declare that the project report on “COMPARITIVE

ANALYSIS OF SALES OF LUBRICANTS FOR THE YEAR 2008 AND 2009 at

INDIAN OIL CORPORATION LIMITED.” is an original and authenticated work

done by me.

I further declare that it has not been submitted else where by any other person in any

of the institutes for the

award of any degree or diploma.

Name of the student: SEEMI HALIM

Date:20th JUNE 2010

CONTENTS:

1a.INTRODUCTION

Indian oil corporation Ltd- Introduction

IOCL Group

Vision of IOCL

Mission of IOCL

Values followed at IOCL

Objectives of IOCL

Major divisions at IOCL

Business chart of IOCL

Products offered by IOCL

Financial highlights

Lubes industry

Indian oil lubricants

1b. OBJECTIVE OF THE STUDY

1c.HYPOTHESIS

2.LITERATURE REVIEW

Marketing strategies

3.RESEARCH METHODOLOGY

I. Research Design.

a) Exploratory Research (flexible) – involving survey of the concerning

literature, experience survey, etc.

b) Descriptive – describing characteristics of a particular group or

individuals.

II. Sampling Design, (Simple Random Sampling, Cluster Sampling,

Systematic Sampling, Stratified Sampling, Convenience Sampling,

Judgmental Sampling)

III. Sources of data (Primary or/and Secondary data).

IV. Data Collection tools/instruments.

V. Methods of data collection.

VI. Tools and techniques of analysis of Data. (Statistical analysis must be

supported by relevant tables, charts, graphs etc. as required.)

VII. Findings and Conclusions (Outcome/ Result). Implication of the study.

VIII. Suggestion/ Recommendation

IX. Limitation

INDIAN OIL CORPORATION LIMITED

IOC (Indian Oil Corporation) was formed in 1964 as the result of merger of Indian Oil

Company Ltd. (Estd. 1959) and Indian Refineries Ltd. (Estd. 1958).

COMPANY OVERVIEW

Indian Oil Corporation Ltd. is currently India's largest company by sales with a

turnover of Rs. 271,073 crore and profit of Rs. 10,220.55 crore for fiscal 2009-10. 

Indian Oil Corporation Ltd. is the highest ranked Indian company in the prestigious

Fortune ‘Global 500’. It was ranked at 116th position in 2008. It is also the 20th

largest petroleum company in the world.

Indian Oil and its subsidiaries today accounts for 49% petroleum products market

share in India.

Indian Oil group has sold 59.29mn tonnes of Petroleum including 1.74mn tonnes of

Natural gas in the domestic market and exported 3.33mn tonnes in the yr 2007-08.

CHAIRMAN OF IOCL

Mr. Brij Mohan Bansal, is Chairman and Director (Planning & Business

Development) of Indian Oil Corporation Ltd., India’s largest commercial enterprise

with a turnover of over US$ 62 billion for the year 2008-2009.

Mr. Bansal is also Chairman of Green Gas Limited, a JV of IndianOil and GAIL

(India) Ltd. for city gas business; and IndianOil Petronas Private Ltd., a JV of

IndianOil and Petroliam Nasional Berhad (Petronas), Malaysia, for LPG import &

marketing business in India.

Mr. Bansal’s expertise in the oil & gas sector has been sought at many international

forums. He is the first Chairman of India Chapter of the International DME

Association (IDA), USA, that works to promote Di-Methyl Ether across the world. He

is also Chairman Emeritus of the Bio-Diesel Association of India. Mr. Bansal is a

B.Tech in Chemical Engineering and D.I.I.T in Process Plant Engineering from the

prestigious Indian Institute of Technology, Delhi. With over 35 years of extensive

work experience in the oil & gas sector in areas spanning business development,

R&D, refining and technical services, Mr. Bansal has been a member of the IndianOil

Board since the year 2005. Mr. Bansal is guiding IndianOil’s transformation into the

‘Energy of India’. Besides consolidation in the core areas of refining and marketing,

he is pursuing a string of strategic initiatives across the hydrocarbon value chain for

upstream integration into oil exploration & production, downstream integration into

petrochemicals, and diversification into natural gas business, besides globalisation of

marketing operations.

VISION OF IOCL

A major diversified, transnational, integrated energy company, with national

leadership and a strong environment conscience, playing a national role in oil security

& public distribution.

MISSION OF IOCL

IOCL has the following mission:

To achieve international standards of excellence in all aspects of energy and

diversified business with focus on customer delight through value of products

and services and cost reduction.

To maximize creation of wealth, value and satisfaction for the stakeholders.

To attain leadership in developing, adopting and assimilating state-of- the-art

technology for competitive advantage.

To provide technology and services through sustained Research and

Development.

To foster a culture of participation and innovation for employee growth and

contribution.

To cultivate high standards of business ethics and Total Quality Management

for a strong corporate identity and brand equity.

To help enrich the quality of life of the community and preserve ecological

balance and heritage through a strong environment conscience.

VALUES OF IOCL

Values exist in all organizations and are an integral part of any it. Indian Oil nurtures a

set of core values:

CARE

INNOVATION

PASSION

TRUST

OBJECTIVES OF INDIAN OIL

IOCL has defined its objectives for succeeding in its mission. These objectives are:

To serve the national interests in oil and related sectors in accordance and

consistent with Government policies.

To ensure maintenance of continuous and smooth supplies of petroleum

products by way of crude oil refining, transportation and marketing activities

and to provide appropriate assistance to consumers to conserve and use

petroleum products efficiently.

To enhance the country's self-sufficiency in crude oil refining and build

expertise in laying of crude oil and petroleum product pipelines.

To further enhance marketing infrastructure and reseller network for providing

assured service to customers throughout the country.

To create a strong research & development base in refinery processes, product

formulations, pipeline transportation and alternative fuels with a view to

minimizing/eliminating imports and to have next generation products.

To optimise utilisation of refining capacity and maximize distillate yield and

gross refining margin.

To maximise utilisation of the existing facilities for improving efficiency and

increasing productivity.

To minimise fuel consumption and hydrocarbon loss in refineries and stock loss

in marketing operations to effect energy conservation.

To earn a reasonable rate of return on investment.

To avail of all viable opportunities, both national and global, arising out of the

Government of India’s policy of liberalisation and reforms.

To achieve higher growth through mergers, acquisitions, integration and

diversification by harnessing new business opportunities in oil exploration &

production, petrochemicals, natural gas and downstream opportunities overseas.

To inculcate strong ‘core values’ among the employees and continuously

update skill sets for full exploitation of the new business opportunities.

To develop operational synergies with subsidiaries and joint ventures and

continuously engage across the hydrocarbon value chain for the benefit of

society at large.

To develop operational synergies with subsidiaries and joint ventures and

continuously engage across the hydrocarbon value chain for the benefit of

society at large.

OBLIGATIONS

Towards customers and dealers:- To provide prompt, courteous and efficient

service and quality products at competitive prices.

Towards suppliers:- To ensure prompt dealings with integrity, impartiality and

courtesy and help promote ancillary industries.

Towards employees:- To develop their capabilities and facilitate their

advancement through appropriate training and career planning. To have fair

dealings with recognised representatives of employees in pursuance of healthy

industrial relations practices and sound personnel policies.

Towards community:- To develop techno-economically viable and

environment-friendly products. To maintain the highest standards in respect of

safety, environment protection and occupational health at all production units.

Towards Defence Services:- To maintain adequate supplies to Defence and

other para-military services during normal as well as emergency situations.

FINANCIAL OBJECTIVES

To ensure adequate return on the capital employed and maintain a reasonable

annual dividend on equity capital.

To ensure maximum economy in expenditure.

To manage and operate all facilities in an efficient manner so as to generate

adequate internal resources to meet revenue cost and requirements for project

investment, without budgetary support.

To develop long-term corporate plans to provide for adequate growth of the

Corporation’s business.

To reduce the cost of production of petroleum products by means of systematic

cost control measures and thereby sustain market leadership through cost

competitive.

BUSINESS CHART OF IOCL

IOCL has its presence in all spheres of downstream operations.

REFINING

Born from the vision of achieving self-

reliance in oil refining and marketing for the nation, IndianOil has gathered a

luminous legacy of more than 100 years of accumulated experiences in all areas of

petroleum refining by taking into its fold, the Digboi Refinery commissioned in 1901.

At present, IndianOil controls 10 of India’s 20 refineries.

The strength of IndianOil springs from its experience of operating the largest number

of refineries in India and adapting to a variety of refining processes along the

way. The Corporation has commissioned several grassroot refineries and modern

process units. Procedures for commissioning and start-up of individual units and the

refinery have been well laid-out and enshrined in various customised operating

manuals, which are continually updated. IndianOil also offers the specialised services

of its experts for commissioning/start-up assistance depending on the client’s need. Its

team is also well-equipped to prepare operation manuals with clear instructions for

plant start-up, operation, shutdown, emergency handling, etc.

PIPELINE

In India’s infrastructure, the petroleum pipelines form a crucial part enabling sustained

availability of petroleum products in all parts of the country for economic growth. The

pipelines transport petroleum products from refineries to demand areas and crude oil

from import terminals as well as domestic sources to the inland refineries. India being

a vast country, a wide network of pipelines becomes the paramount IndianOil, the

pioneer in cross-country petroleum product pipeline in the Indian sub-continent

constructed and commissioned its first petroleum product pipeline, Guwahati-Siliguri

Pipeline in the year 1964. Since then IndianOil has mastered the art and technology of

pipeline engineering. Over the last four decades the pipeline network of IndianOil has

grown to 10,000 km with a capacity of about 62 million metric tonnes per year.

Commissioning of new projects worth about Rs. 2,300 crore including LPG and R-

LNG pipelines will reach the capacity to 75 million metric tonnes per annum with a

network of over 10,000 km. 

IndianOil’s sustained pursuit and implementation of proven safety and environmental

management systems have brought rich results. All operating pipeline units have been

accredited with ISO 9000 and ISO 14001 certificates. 

requirement of transporting petroleum products to interiors from refineries and crude

oil to the land locked refineries.

MARKETING

IndianOil provides a wide range of marketing services and consultancy in fuel

handling, distribution, storage and fuel/lube technical services. With a formidable

bank of technical and engineering talent, IndianOil is fully equipped to handle small

to large-scale infrastructural projects in the petroleum downstream sector anywhere in

the country. Our project teams have independently or jointly as a consortium, have set

up depots, terminals, pipelines, aviation fuel stations, filling plants, LPG bottling

plants, amongst others. IndianOil's fuel management system to bulk customers offer

customized solutions that deliver least cost supplies keeping in mind usage patterns

and inventory levels. A wide network of lubricant and fuel testing laboratories are

available at major installations which is further backed by sector-wise expertise in the

core sectors of power, steel, fertiliser, gas plants, textile mills, etc. Cutting edge

systems and processes are designed around one simple belief-to provide valuable

customers with an unbeatable edge in their business. IndianOil's supply and

distribution network is strategically located across the country linked through a

customized supply chain system backed by front offices located in conceivably every

single town of consequence.

PETROCHEMICALS

IndianOil is continuously striving for growth through integration of its core business

with opportunities available in the petrochemicals sector. 

The LAB unit (Linear Alkyl Benzene, used in the manufacture of detergents) at

Gujarat Refinery achieved over 100% capacity utilisation in the year 2007-2008.

The product has been successfully marketed within India, attaining a significant

market share, and has also been exported.

An integrated PX/PTA plant at Panipat Refinery has commenced commercial

production since June 2006.

IndianOil is close to commissioning a world scale Naphtha Crackerproject along with

downstream polymer units at Panipat. In addition, activities for setting up integrated

complex of refinery and petrochemicals at Paradip in Orissa have also progressed

significantly.

E & P

To enhance upstream integration, IndianOil has been pursuing exploration &

production activities both within and outside the country in collaboration with

consortium partners. Recently, IndianOil was associated with two successful

discoveries in oil exploration blocks, one each in India and Iran. Commercial

appraisal of these blocks is underway. IndianOil also farmed into an exploration block

in Gabon along with Oil India Ltd. (OIL) as the operator. In addition, the IndianOil-

OIL combine acquired participating interest in a block in Nigeria. The Corporation, in

consortium with OIL, Kuwait Energy and Medco Energi of Indonesia also succeeded

in acquiring participating interest in two exploration blocks in Yemen, awarded

through international bidding. 

At home, IndianOil and its consortium partners were awarded two exploration blocks

in Mumbai offshore in Round-VI of bidding under the New Exploration Licencing

Policy (NELP). With this, IndianOil now has an upstream portfolio consisting of

participatory interest in eight blocks under NELP and two blocks under CBM, in

addition to two farm-in blocks in northeast India and seven blocks overseas.

Oil & gas will continue to be the principal energy source in the growing economy.

The years ahead, therefore, hold great opportunities and challenges. Guided by its

experience and inherent spirit, IndianOil shall overcome all the challenges as it has

been consistently doing in the past, and scale up its operations to capitalise on all

opportunities and realise its corporate vision.

TRAINING

The IndianOil Institute of Petroleum Management- a centre of excellence for

nurturing future leadership, situated on the outskirts of New Delhi, conducts advanced

management education programmes in collaboration with premier business schools

and topline professionals. IndianOil operates 18 training centres across the country for

up-skilling, re-skilling and mult-skilling of employees in its pursuit of corporate

excellence.

IndianOil has been serving as a source of technical support and expertise to petroleum

companies of carious countries across the globe. Some of these countries, which have

partnered for excellence, include Sri Lanka, Kuwait, Bahrain Iraq, Abu Dhabi,

Tanzania, Ethiopia, Algeria, Nigeria, Nepal, Bhutan, Maldives, Malaysia and

Zambia. 

RESEARCH AND DEVELOPMENT

IndianOil's worldclass R&D Centre, established in 1972, has state-of –the art facilities

and has delivered pioneering results in lubricants technology, refining process,

pipeline transportation, bio-fuels and fuel-efficient appliances. 

Over the past three decades, IndianOil R&D Centre has developed over thousands of

formulations of lubricating oils and greases responding to the needs of Indian industry

and consuming sectors like Defence, Railways, Public Utilities and Transportation.

The Centre has also developed and introduced many new lubricant products to the

Indian market like multigrade railroad oils. 

Focussed research in the areas of lubricants and grease formulations, fuels, refining

processes, biotechnology, additives, pipeline transportations, engine evaluation,

tribiological and emission studies, and applied metallurgy has won several awards.

The R&D Centre's activities in refining technology are targeted in the areas of fluid

catalytic cracking (FCC), hydroprocessing, catalysis, resid upgradation, distillation

simulation and modeling, lube processing, crude evaluation, process optimization,

material failure analysis and remaining life assessment and technical services to

operating units.  With a vision of evolving into a leader as technology provider

through excellence in management of knowledge, technology and innovation,

IndianOil has launched IndianOil Technology Ltd. The new subsidiary markets the

intellectual properties developed by IndianOil R&D Centre. 

AUTO GAS

AutoGas (LPG) is a clean, high octane, abundant and eco-friendly fuel. It is obtained

from natural gas through fractionation and from crude oil through refining. It is a

mixture of petroleum gases like propane and butane. The higher energy content in this

fuel results in a 10% reduction of CO2 emission as compared to MS. The fuel is

marketed by IndianOil under the brand name ‘AutoGas’

"IndianOil has setup 274 Auto LPG Dispensing Stations (ALDS) covering 150 cities

across India." 

AutoGas impacts greenhouse emissions less than any other fossil fuel when measured

through the total fuel cycle. Conversion of petrol to AutoGas helps substantially

reduce air pollution caused by vehicular emissions.

The saving on account of conversion to AutoGas in comparison to petrol is about 35-

40%. Low filling times and the 35-40% saving is a reason enough for a consumer to

convert his vehicle to AutoGas.

IOCL GROUP

IOCL Group consists of Indian Oil Corporation Ltd. and the following subsidiaries:

• Lanka IOC Ltd

• Indian Oil (Mauritius) Ltd.

• IOCL Middle East FZE

• Indian Oil Technologies Ltd.

• Chennai Petroleum Corporation Ltd. (CPCL)

Bongaigaon Refinery & Petrochemicals Ltd (BRPL

PRODUCTS OFFERED BY IOCL

Indian Oil is not only the largest commercial enterprise in the country it is the flagship

corporate of the Indian Nation. Besides having a dominant market share, Indian Oil is

widely recognized as India’s dominant energy brand and customers perceive Indian

Oil as a reliable symbol for high quality products and services. Major Products of

IOCL are

Auto LPG

Aviation Turbine Fuel

Bitumen

High Speed Diesel

Industrial Fuels

Liquefied Petroleum Gas

Lubricants & Greases

Marine Fuels

MS/Gasoline

Petrochemicals

Crude oil

Superior Kerosene Oil

COMPETITORS

IndianOil has been ranked at 2nd position amongst the top 50 most valuable

brands of India, assessed by global brand valuation firm, London-head

quartered Brand Finance. Much of this comes from the sheer scale and strength

IndianOil commands in its sector. It stands tall amongst giants like Tata

Consultancy Services, Tata Motors, Wipro Technologies, and state petroleum

companies BPCL&HPCL. IndianOil had also a place of pride in this coveted list

of year 2006-07. 

Indian Oil Corporation has two major domestic competitors, Bharat

Petroleum and Hindustan Petroleum. Both are state-controlled, like Indian Oil

Corporation. There are two private competitors,Reliance Petroleum and Essar

Oil.

FINANCIAL HIGHLIGHTS

IndianOil’s gross turnover (inclusive of excise duty) for the year 2009-10 touched Rs.

2,71,074 crore. The Profit After Tax was Rs 10,221 crore. 

For the year 2009-10, the company’s Earnings Per Share (EPS) stands at Rs 42.10 as

compared to Rs. 12.15 for 2008-09. The total net under-recovery on account of price

under–realisation on PDS Kerosene and domestic LPG in the financial year 2009-10,

is Rs. 3,159 crore. This is in comparison with a net under-realisation of Rs.Nil crore in

2008-09.

For the year 2009-10, IndianOil has accounted for cash compensation of Rs 15,172

crore, out of which Rs. 7,100 crore has been received during the year. In addition, the

company has been granted discount of Rs 7,548 crore received from upstream

companies, as per the under recovery sharing mechanism.

The Board of Directors has recommended a dividend of Rs 13 per share. 

The Gross Refining Margin for April-March 2010 is USD 4.47 per barrel as compared

to USD 3.69 per barrel during the previous year. 

Annual Turnover of IOCL for the last 3 years

Annual Turnover

183172

220779247479

0

50000

100000

150000

200000

250000

300000

2005-06 2006-07 2007-08

in C

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LUBRICANT

Very few vehicle owners know what are lubricants, what is the main function of

lubricants and why we use lubricants. These are the question, which never comes in

our mind. Development of new technology in the auto sector, there are increased

refinement and performance in engine and other parts. advanced lubricants have been

developed by IOC to fulfil to these demands

A lubricant (sometimes referred to as "lube") is a substance (often a liquid)

introduced between two moving surfaces to reduce the friction between them,

improving efficiency and reducing wear. It may also have the function of dissolving

or transporting foreign particles and of distributing heat.

One of the single largest applications for lubricants, in the form of motor oil, is

protecting the internal combustion engines in motor vehicles and powered equipment.

Typically lubricants contain 90% base oil (most often petroleum fractions,

called mineral oils) and less than 10% additives. Vegetable oils or synthetic liquids

such as hydrogenated polyolefins, esters,silicones, fluorocarbons and many others are

sometimes used as base oils. Additives deliver reduced friction and wear,

increased viscosity, improved viscosity index, resistance to corrosion andoxidation,

aging or contamination, etc. Lubricants such as 2-cycle oil are also added to

some fuels. Sulfur impurities in fuels also provide some lubrication properties, which

has to be taken in account when switching to a low-sulfur diesel;biodiesel is a popular

diesel fuel additive providing additional lubricity

Lubricants perform the following key functions.

Keep moving parts apart

Reduce friction

Transfer heat

Carry away contaminants & debris

Transmit power

Protect against wear

Prevent corrosion

Seal for gasses

Stop the risk of smoke and fire of objects

LUBE INDUSTRY

These are exciting times for the lube industry in India. Each one of the vast contingent

of 22 Multinationals and a total of 80 big & small players are vying for a pie of

Rs.5,500 Crore market. Worldwide established brands,some of them albeit new to

India, like Shell, Mobil, Caltex, Elf, Pennzoil are fighting it out with established

Indian brands like SERVO & others to establish their foothold in the 6th largest

lubricant market in the World. Compared to the average World consumption of 35

Million tonnes per annum & Asia-Pacific region consumption of 7.5 million tones, the

Indian lube industry with annual demand of 1 million tonnes is just behind Japan and

China in Asia having a demand growth rate of 4% compared to the World growth rate

ranging between zero to 2%. That is the lube industry in India today. 

Prior to 1992 the lube industry in India was controlled by the 4 major Public Sector

Oil companies namely Indian Oil, HPC,BPC & IBP and a handful of private

companies like Castrol, Gulf, Tidewater & others. With the distribution & canalisation

of base oil import being controlled by the Government of India, the PSU Oil

Companies controlled 90% of the market share. The decanalisation of the lube base

oil imports in 1993 by the Govt. of India followed by reduction of import duty on lube

base oils from 85% to 30% and gradual scrapping of administered pricing observed

the announcement of almost a new lube venture every month during 1994. Most of the

new entrants formed associations with Indian companies both in the Private & Public

sectors. All these new entrants are targeting for a very small share of the market

considering that even 1% market share means a sale of Rs.55 Crores. 

The Indian Oil controlled 54% of the lube market out of total PSU's market share of

more than 90% during 91-92. The Government policy of deregulation followed by

entry of multinationals through JVCs had its effect on the market dominance of PSUs.

This has been followed by sudden entry of lot many players, each one claiming to

have some international collaboration and a `foreign' brand name.This had its initial

impact and illusions in the market and the market became more volatile. During these

phases marketing channels of distribution had drifted from petrol stations to bazaar

trade. 

MARKETING

CHANNEL

The marketing channels for automotive lubricants in India consist of the following,

Petrol Stations

Wholesale Distributors

Lube Oil Shops

Auto Spare Shops

Authorised Service Stations

Garages

Rural & Agricultural dealers

Super Markets

Till recently, the Indian consumers linked filling of lubricants to that of petrol &

diesel in petrol stations. With the advent of deregulated market scenario & fierce

competition, efforts are being made to position lubricant as a high involvement

consumer goods. Hence, the resultant drift towards the bazaar trade i.e., outside the

petrol stations. The sales of automotive lubricants through bazaar trade increased from

a mere 10% prior to 1993 to a handsome present level of 40% compared to

Worldwide Trend of more than 70%.In the developed World, because of high degree

of customer sensitivity & awareness, D0-it-Yourself (DIY) concept has evolved for

filling of engine oil. People buy from super markets & fill it themselves. In India, this

job is still left to the mechanics & service stations.During these years this shift in trade

had the following effects:

Decline in Market Share of PSU oil companies.

Market became heavily crowded & the industry got transformed into FMCG.

Dumping of products in the bazaar.

War of trade discounts resulting in rice war & lesser margins for de

Entry of spurious lubricants.

MARKET SIZE

Total production of automotive lubricants in India is approximately 8 to 10 percent

of global lube production. Unlike other countries where lubricant demand has

witnessed stagnation, the Indian market has been growing at approximately 7

percent per annum for the past 2 years. The public sector contributes to over 60

percent of the revenues for this market. MNC’s have 5 percent market share and

the remaining share is held by the unorganized sector. Automotive lubricants are

further divided into diesel lubes and petrol lubes. Diesel lubes comprise 70 percent

of the market and petrol based lubricants cover the rest. As diesel lubes are used by

commercial vehicles, which have to cover greater distances, their market share is

higher. Engine oil constitutes around 83 percent of total sales volumes. Gear oils,

transmission fluids, hydraulic brake fluids, and engine coolants contribute to the

balance.

Tie Up with OEMs 

Among the PSU Oil Companies Indian Oil is one company who has all along given

utmost importance on tie ups with Original Equipment Manufactures (OEMs) after

signing agreements with major OEMs like Maruti Udyog Ltd,TELCO, Bajaj Auto,

Kinetic Engineering,SKODA etc. Even initial fill & warranty fill agreements were

also signed with TELCO & Hindustan Motors. In fact, the Japanese vehicle.

COMPETITIVE ANALYSIS

The first seeds of competition were sown in the early 1990’s when following the

liberalization of the Indian economy, the government decided to open the Indian

market to foreign competition. Import of base oil, the key raw material, was de-

canalized with IOC losing its status as the sole canalizing agent. Pricing of base oil

was deregulated in a phased manner and currently it is market determined. Basic

custom duty on base oil stock was also reduced from a peak of 85 percent to a level of

25 percent. All quantitative restrictions were also removed. These developments

naturally encouraged the entry of foreign players on Indian shores who were already

facing a slowdown in demand in their local markets. The coming in of foreign

participants created an excess supply situation in the Indian automotive lubes market,

which made it more difficult for the Indian lube manufacturers to survive.

Recent deregulations in the lubricant market have promised many new opportunities

for the private lube manufacturers. With the dismantling of Administered Price

Mechanism (APM) the burden of subsidies is now being passed on to the government.

Private participants will also gain a presence in the Indian oil and gas sector and hence

there will be competition between participants that will ensure the growth of the

sector. In the next c

OUTLOOK

In the future, growth in the automotive lubricants industry will largely depend on the

overall performance of the economy. In the past one and a half years, the scenario has

improved with higher sales of commercial vehicles and two-wheelers. However, in the

future volume growth will be affected because of use of better quality, long drain

lubes. This will increase the replacement cycle for lubes. In the shorter term, one will

witness intense competition in a slow growing market marked by a consolidation

activity, which has the potential to change the face of the lubricant industry. Given the

rising competition, success of a product would largely depend how well it is branded

and distributed

INDIAN LUBRICANT MARKET

INDIAN OIL CORPORATION

Market Share: 42%

Indian Oil Corporation is the largest manufacturer of lubricants in India and is also the

only Indian company to figure in Fortune’s Global 500 list. Its Servo brand is the most

recognized brand in the country. The company operates six refineries, with a total

capacity of 24.55 t. and enjoys a market share of 42 per cent in the industry.

Incidentally, it is one of the three companies, which has a refining capacity for lube oil

base, an input in the manufacture of lubricants. In order to increase its presence IOC

has aimed at improving the image of the retail outlets. Despite making a loss with

superior industry network and superior backing of infrastructure the company sees no

problem in maintaining its status as the leader in the lubricant industry.

TIE UPS:

Hyundai Santro, Mitsubishi Lancer, Opel Astra, Daewoo Cielo, Fiat Uno or the

Maruti family.

CASTROL INDIA

Market Share: 22%

Castrol India is the largest player in the lubricants segment. The company has

achieved an overall market share of 22 per cent in the lubricants market. The company

has seven plants in the country with a capacity of 3 lakh KL and on the financial front

too the company’s performance has been impressive. The company has set up a new

unit in Silvassa, which manufactures 150 different types of products. The company is

also modernizing its other plants.

TIE UPS:

Company has partnership with leaders like mahindra and Mahindra, Tatas, JCB,

Escorts. For the marketing of its lubricants it has tied up with the petrol pump chain of

Reliance and Essar, thereby gaining access to a new channel of distribution.

HINDUSTAN PETROLEUM CORPORATION LIMITED

Market share:16 %

HPCL is the largest player in the lubricants segment. The company has achieved an

overall market share of 22 per cent in the lubricants market The HP engine oil product

rang covers 300 brands of lubricants, grease and specialties catering to the automotive

as well as the industrial sector. The brand names are Milcy and Lal Ghoda. HPCL

market now extends to countries like Nepal, Sri Lanka, Bangladesh, and Malaysia.

BHARAT PETROLEUM CORPORATION LIMITED

Market Share: 7%

BPCL another strong competitors in the lube industry. At present, BPCL sell 125

thousand tones and aims to increase its sale volume to 250 TMT within the next two

years. The company offers its lubricants under the brand name “MAK”

GULF OIL

Market share: 3%

Gulf Oil International was the first multinational to enter the lubricants market in

India. In collaboration with the Hinduja group, Gulf Oil India created a significant

presence in a short time; Gulf Oil has grown to be one of the largest corporations in

the world, with operations ranging from oil exploration to retailing. On the financial

front, the company’s performance has been satisfactory. The company has setup its

own 75000 tonne blending plant has Silvassa which blends 200 quality lubricants with

international formulations. It believes that product and packaging development to be

its area of strength. The Gulf Oil plans to tap the market in the east and north-east, and

for this it has entered into an exclusive contract with the private blender.

SERVO LUBRICANTS AND GREASES

SERVO has completed 30 years serving

the lubrication needs of the Indian industry. SERVO is India’s No.1 lubricants brand

not only in terms of sales but also in terms of quality and range. Servo has a range of

over 470 grades of lubricants-oil and greases. Our well-equipped R&D center at

Faridabad, perhaps one of Asia’s most advanced, is also India’s first in the petroleum

industry to have received the ISO ())! Accreditation. This together with the fact that

our lube blending plants at Mumbai, Calcutta, Chennai and grease plant at Vashi

which produce SERVO, are also ISO 9002 certified ensures that SERVO lubricants

meet international standards Servo has an excellent spread to meet the requirement of

various automotive, industrial, marine, aviation and railroad applications .It is India’s

largest selling lubricants brand and enjoys approvals from major Original Equipment

Manufacturers (OEM’s) including new generation cars. In India, SERVO is the

unquestioned leader, with a 42% share in a market estimated at Rs. 55 billion

comprising approximately one million metric tones of lubricants. Servo’s fundamental

strength is its extensive spread of production units and distribution bases across the

country. These include six lubricant blending plants and a grease manufacturing plant

– all of which are ISO accredited. SERVO also has a formidable marketing reach,

thanks to its exclusive network of nearly 16,600 outlets/stockists and thousands of

other multi-brand Lube Bazaar shops.

SERVO offers a staggering range of lubricants for the automobile, industrial and

marine industries. It is the lubricant of choice for most of the latest international

automobiles that have been launched on the Indian roads. Another testimony to

Servo’s reliability and quality is its extensive use by heavy-duty trucks, battle tanks of

the Indian Army and the latest guided missile destroyers of the Indian Navy. SERVO

has a notable presence in the highly competitive markets of the UAE, Nepal,

Malaysia, Sri Lanka, Bangladesh and Mauritius. The company’s aggressive marketing

and advertising thrust together with state-of the-art packaging has enabled SERVO to

emerge as a truly global brand from India.

Indian Oil's SERVO is the brand leader among lubricants and greases in India and has

been conferred the “Consumer Super brand” status by the Super brands Council of

India.

With over 500 commercial grades and 1,500 formulations encompassing literally

every conceivable application, SERVOserves as a one-stop shop for complete

lubrication solutions in the automotive, industrial and marine segments. Recognised

for cutting-edge technology and high-quality products, SERVO is backed by

IndianOil's world-class R&D and an extensive blending and distribution network. In

the retailing segment, besides IndianOil petrol stations, SERVO range of lubricants is

available through a network of SERVOXPRESS stations, bazaar outlets and thousands

of auto spare parts shops across the country.

SERVOXPRESS vehicle servicing centres are one-stop shops for quick, easy and

convenient auto care, offering a refreshing experience to motorists. Opened in

convenient locations like malls, petrol pumps or as stand-alone units,

SERVOXPRESS stations have facilities for engine oil change, tyre & battery check-

ups,air-conditioner service, vacuum cleaning, perfuming,upholstery cleaning,

polishing, lamination installation, etc., besides replacement of minor parts for two and

four-wheeler vehicles.

Lubrication is the art of reducing friction between rubbing or rolling surfaces. In the

recent past two terminologies have gained currency - Tribology, the science of

Rubbing; Rheology, the study of stream or flow. The earliest knowledge of lubrication

is evident from grease lubricated chariot wheels excavated from the ruins. The rapid

development of this science can be said to have started from the 18th century, with

significant technological progress in commercial usage in the 20th century. Most

lubricants are liquids. Water is a natural lubricant but has extremely limited

application due to its very low viscosity and very low boiling point, besides its

contribution to rusting and corrosion. Vegetable oils have excellent lubrication

properties but have very poor oxidation stability, high pour point, rapid thickening and

may even let out foul odours in time. Most of the liquid lubricants used at present all

over the world are petroleum-based mineral oils.

PRODUCT

SERVO primarily caters to three segments: automotive, industrial and marine. There

are more than 450 different grades of lubes and oils, which cater to these sectors. The

products for the automotive sector include 2T/4T oils, gasoline engine oils, diesel

engine oils, gear and transmission oils, coolants and brake fluids and automotive

greases. IOC is a major supplier to auto original equipment manufacturers (OEMs)

like Tata Motors, Hyundai, Mahindra & Mahindra, Maruti and state transport

undertaking like BEST, APSRTC, and RSRTC etc.

SERVO provides more than 350 lubricants and greases to the industrial segment. The

marine sector, too, has a broad range of products to choose from. This includes marine

engine oils, hydraulic oils, gear oils, turbine oils, compressor oils and stern tube oils.

SERVO is also meeting the lubricants requirements of the Indian defence forces.

Notable among automobile products, SERVO 2T Supreme, is a new generation two-

stroke engine oil recommended for two-stroke engines in motorbikes, scooters,

mopeds and outboard engines. Others in the category are Kinetic Ultra 2T, Bajaj

SERVO Gen. 2T Zoom. SERVO 4T is a new generation four-stroke2T, Bajaj SERVO

Gen. 2T Zoom. SERVO 4T is a new generation four-stroke engine oil specially

recommended for four-stroke engines in motorbikes and scooters.

Indian oil’s state of the art R&D center t Faridabad, one and only of ts kind, keeps

pace with international standards. This is also India’s first in the petroleum industry to

have received the ISO 9002 certified lube- blending plants at Mumbai,

Calcuttta,Chennai and Grease and at vashi of IOC ensure that SERVO lubricant

produced there meet international standards

ACHIEVEMENTS

SERVO’s striking achievement is a steadily rising customer approval for its products

in India. The widespread popularity cuts across various customer segments and

automobile user communities. Whether it is Hyundai Santro, Mitsubishi Lancer, Opel

Astra, Daewoo Cielo, Fiat Uno or the Maruti family, SERVO serves them all. On its

part, SERVO woos and wins its retail customers with a seductive combination of

vehicle service, grocery shops and engine oil tie-ups with leading international

automobile manufacturers.

SERVO Lubricants – MARKETING AND PROMOTION

TECNIQUE

SERVO continues to be the dominant player in the Indian lubricant sector backed by

cutting edge product development, high quality customization and extensive blending

and distribution network. For customers, the SERVO range is a one-stop shop for

providing complete lubrication solutions in the automotive, industrial, agricultural and

marine sectors. In the retailing segment, besides IndianOil petrol stations, SERVO

lubricants are marketed through exclusive SERVO shops, SERVOXpress centres, auto

spare parts and bazaar shops across the country. IndianOil's technical service

Engineers are available on call to provide on site Tribology consultancy and value

added services. Backed by incisive knowledge of equipment, processes and

machinery, IndianOil team can provide solutions to just about anything - automotive

or industrial. You name it, SERVO will tame it. 

Margins and Discount Schemes

The company mostly sell their products through stockiest, dealers, distributors,

mechanics, and retail stores. Maximum sales are achieved through mechanics and

retail stores. Margins and discount schemes offered to the storeowners and mechanics

prompt them to sell and promote a particular brand.

Prices and Promotion

The transformation from the administered pricing mechanism to free pricing has

increased the importance of providing cost effective product to the users. Thus

product costing and competitive pricing are key factors affecting the market.

ouple of years, the industry is going to witness sea changes. Retail networks, logistics

management, and risk management are going to be the crucial factors. The stand-alone

refineries will have to be merged with the marketing companies, as they do not have

the distribution infrastructure to sell their products in a deregulated market.

Companies like Reliance are already selling their products through petrol pumps. The

monopoly of the public sector holdings will no longer exist. MNC’s will be able to

sell their products through petrol pumps. Lubes manufactured by Reliance Petroleum,

Castrol, Elf, Gulf Oil etc, which are now sold at petrol pumps. In medium to long

term, Frost & Sullivan expects private sector companies to have a market share of

around 25 percent.

DISTRIBUTION NETWORK OF SERVO

Indian Oil Blending Ltd (IOBL) is a fully owned subsidiary of Indian Oil, engaged

in the manufacturing of lubricants and greases and catering to the defense,

railways, state transport among others.

Where blending of lubricants (mixing of base oil with additives) is done at

blending plants.

After blending of lubricants, then filling of barrel, bulks work has to be

done. And dispatched to SCFP.

SCFP then moves the lube to Dealer Operated Godowns (DFOLG) and

carrying and Forwarding Agent (CFA) .

After that, product has dispatched to the following:

Servo Stockist automotive (SSA)

Servo Stockist Industrial (SSI)

Direct Institutional Customers (such as Defence, Railways, Govt.

customers and large industrial customer

SSA deals with sales and promotion of product’s and supplies products in

the market

SWOT ANALYSIS

STRENGTH

Indian Oil Corporation (IOC), India’s largest commercial enterprise and the

only global Fortune 500 Company, ranked 189 by revenue in the year 2004,

owns SERVO.

Servo has been designated as a Super Brand.

India’s no. 1 lubricant brand in term of Sales (42% market shares)

Servo oil has wide range of over 400 grades for automotive, industrial and

marine use.

Distribution network with 204 Servo Stockist all over India.

Strong presence of more than 11,000 retailers, beside a countrywide network of

bazaar traders.

Indian Oil modern and well-equipment R&D center at Faridabad, One of the

most advanced in Asia, keeps pace with international standards.

ISO 9002 certified lube-blending plants of IOC at Asaoti, Mumbai, Calcuttta,

Chennai and grease plant at Vashi (near Mumbai) ensure that SERVO

lubricants produced their meet International Standards.

SERVO range of lubricants is fast emerging as a Global brand with wide

acceptance in UAE, Malaysia, Mauritius, Bangladesh, Bahrain, Sri Lanka,

Nepal, Yemen, Kenya, Kuwait, Burkina Faso, Reunion Island and other

markets.

Genuine Oil tie ups with Hyundai motors, Maruti Udyog Ltd., kinetic Motors

and Equipments Ltd., Mitsubishi Lancer, L&T Kumatsu, CKD Skoda, Elgi Air

compressor etc.

OPPORTUNITY

Overseas market.

Foray into the untapped Rural Market, which constitutes 85% of the market.

Leverage its financial strength for expansion of customer base through strategic

alliance with Original Equipment manufacturers.

Continuous improvement in the technology in the end user industry because of

continued growth of the light commercial vehicle (LCV), Passenger Car Motor

Oil (PCMO’s) and Multi Utility Vehicle (MUV) segments and rapid shift to 4-

stroke engines in the 2-wheeler segments.

Opportunities for growth are likely to result from Foreign Direct Investment

particularly in the Transport Equipment Manufacturing (TEM) and Machinery

manufacturing segments.

WEAKNESS

Lags behind in promotional activities.

Being a PSU’s, decision-making process is slow.

Significant improvements are requirement in packaging of lubes as often there

are complaints of leakage or the quantity being short.

Spurious equivalent of servo on market.

THREAT

An increase in base oil price with no corresponding increase in product price

coupled with additional advertising expenditure is likely to keep margins under

pressure.

Government has already given permission to Reliance, Essar Oil, ONGC, Shell

and Numaligargh Refinery to set up retail marketing stations thereby giving rise

to stiff competition.

Due to lack of promotional activities competitors like BP and Castrol etc. are

gradually taking away the market.

Tie ups of players in the market with automotive companies and OEM’s like the

tie up of Castrol with mahindra & mahindra for supply of the diesel engine oil

for its tractors is gradually eroding the market share of SERVO.

.

LITERATURE REVIEW

IOC to market bio-lubricant next year

Business Standard

Mumbai, April 22, 2010

Indian Oil Corporation (IOC), the nation's biggest oil marketer and refiner, will launch

its first biodegradable lubricant next year. The company is conducting trial runs on the

lubricant and would soon evolve a marketing and branding strategy for the product.

The product would be marketed as a separate brand. "Lab tests for the product are

over. We are doing extensive engine trails at present. In the next one year, the product

should hit the market under a suitable brand name," said a senior executive from IOC.

The research on the product had begun two years earlier.

A biodegradable lubricant can be vegetable oil-based or based on synthetic esters

manufactured from modified renewal oils, from mineral oil-based products. Most

liquid lubricants used at present all over the world are petroleum-based mineral oils.

"Use of biodegradable lubricants which are mainly derived from genetically modified

vegetable oils, would be used in agricultural and forest machinery, and the transport

sector," said a Mumbai-based analyst.

There are 44 lubricant companies in the market including Total, Gulf, Shell and

Vedol, besides brands from the three government-controlled oil companies - IOC,

Bharat Petroleum Corporation and Hindustan Petroleum Corporation - which together

hold over 50 per cent share. IOC, however, is the dominant company in the country's

lubricant market, with its Servo brand of lubricants. The Servo range includes over

500 lubricants and 1,200 formulations.

The total lubricant market in India is 1.6 billion litres, of which automotive use is

about 950 million litres. Castrol India, the other dominant player, claims to have 27

per cent of the market. While analysts say Castrol cannot match public sector units in

coverage due to their 30,000-strong petrol station network, it has strong distribution

presence through workshops and spare parts suppliers-over 70,000 outlets, which

compares well with the 40,000-plus for IOC's Servo.

IOC is also conducting research in areas like oil refining technology and producing

diesel from algae. The company will shortly commission a project at its Faridabad

centre, where it will install technology for coal gassification and production of ethanol

from biomass. The company is also in talks with international energy institutes to tie

up for research and development.

OBJECTIVE OF THE PROJECT

To understand the expenditure part, trends and variations over the years.

To carry out comparative analysis of sales of lubricants for the past two

years.

To see the awareness about the product

To know the major consumers of the product in Greater Noida.

HYPOTHESIS OF THE PROJECT

RESEARCH METHODOLOGY

DATA SOURCE:

Primary as well as secondary

PRIMARY SOURCE: a primary source (also called original source or evidence) is

an artifact, a document, a recording, or other source of information that was created at

the time under study. If created by a human source, then a source with direct personal

knowledge of the events being described. It serves as an original source of

information about the topic .

In our project we have studied the different files of IOCL related to discounts being

offered to the customers of lubricants.

SECONDARY SOURCE:

a secondary source is a document or recording that relates or

discusses information originally presented elsewhere. A secondary source contrasts

with a primary source, which is an original source of the information being discussed.

Secondary sources involve generalization, analysis, synthesis, interpretation, or

evaluation of the original information. Primary and secondary are relative terms, and

some sources may be classified as primary or secondary, depending on how it is used.

In our project we took various information about the company history, its services,

its products..etc everything is being taken by internet from IOCL website.

TYPE OF RESEARCH: Exploratory in nature.

EXPLORATORY RESEARCH:

Exploratory research provides insights into and comprehension of an issue or

situation. It should draw definitive conclusions only with extreme

caution. Exploratory research is a type of research conducted because a problem has

not been clearly defined. Exploratory research helps determine the best research

design, data collection method and selection of subjects. Given its fundamental nature,

exploratory research often concludes that a perceived problem does not actually exist

Our main aim was to find out the percentage increase in sales of IOCL lubricants

for the year 2009 as compared to 2008,with the increase in discounts being offered to

its dealers and customers as compared to the discounts being offered in the year 2008.

RESEARCH INSTRUMENT: Primary data

SAMPLE PLAN: Data for the year 2008 and 2009.

SAMPLING METHOD:

COVENIENCE SAMPLING:

Convenience sampling (sometimes known as grab or opportunity sampling) is a

type of non probability sampling which involves the sample being drawn from that

part of the population which is close to hand. That is, a sample population selected

because it is readily available and convenient

TOOLS AND TECNIQUES OF ANALYSIS FO DATA: SPSS

SPSS (originally, Statistical Package for the Social Sciences) is a computer

program used for statistical analysis. SPSS is among the most widely used programs

for statistical analysisin social science. It is used by market researchers, health

researchers, survey companies, government, education researchers, marketing

organizations and others. The original SPSS manual (Nie, Bent & Hull, 1970) has

been described as one of "sociology's most influential books".[4] In addition to

statistical analysis, data management (case selection, file reshaping, creating derived

data) and data documentation (a metadata dictionary is stored in the datafile) are

features of the base software.

Statistics included in the base software:

Descriptive statistics: Cross tabulation, Frequencies, Descriptives, Explore,

Descriptive Ratio Statistics

Bivariate statistics: Means, t-test, ANOVA, Correlation (bivariate, partial,

distances), Nonparametric tests

Prediction for numerical outcomes: Linear regression

Prediction for identifying groups: Factor analysis, cluster analysis (two-step, K-

means, hierarchical)Discriminant

LEARNING

The organization can utilize the talent of student with the difficulties faced at actual

working environment to prepare them to face the future challenges and provide

practical exposure.

I completed my summer training in the lube department of marketing division of

IOCL, NOIDA. I got great experience in my 8-weeks training period in IOCL. During

training I got opportunity to interact with the people in the top management of the

company. I had learnt a lot during this training and I think these learning experiences

would be great helping me future.

CONCLUSION

.

The lubricants industry in India is one of the few sub-sectors of the petroleum

industry, which was opened out completely to private and foreign companies. SERVO

is India’s No.1 lubricants brand not only in terms of sales but also in terms of quality

and range..

In urban market, whenever a customer goes to the retail shop, he is facing many brand

lubricants, and then customer is confused. Some times he purchase duplicate

lubricant. So company has to spend more on promotional schemes, advertisement

campaign and awareness programs. There is another problem in lube industry is

facing competition from local brands which is easily available in the market, so servo

need to Increase in activities of customer and mechanic awareness through more

advertisement and mechanics meet at regular interval. Which helps customer to

choose original product.

BIBLIOGRAPHY

SECONDARY DATA

www.iocl.com

http://www.frost.com/prod/servlet/market-insight-top.pag?docid=4968520

http://en.wikipedia.org/wiki/Lubricant

http://www.shilpabichitra.com/shilpa2000/indart32.htm

www.google.com

APPENDIX /ANNEXURE

PRIMARY DATA- FROM THE COMPANY

SALES FIGURES FOR THE YEAR 2008 AND 2009.

DISCOUNT DETAILS FOR THE YEAR 2008 AND 2009