introduction to indian oil sector

7/31/2019 Introduction to Indian Oil Sector

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LOVELY PROFESSIONAL UNIVERSITY

JALANDHAR

GREDOL GREEN CHEMICALS

Submitted In Partial Fulfilment of the Requirement for the Award

of MBA Degree from Lovely Professional University, Jalandhar

Submitted by:

Mohd Tabraiz

11005411DEPARTMENT OF MANAGEMENT

LOVELY PROFESSIONAL UNIVERSITY

JALANDHAR NEW DELHI GT ROAD

PHAGWARA

PUNJAB

ACKNOWLEDGEMENT


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I am very thankful to all those involved who have enabled me to successfully complete my

project on SALES PROMOTION AT GREDOL GREEN CHEMOCALS LUCKNOW

I am heartily thankful to GREDOL GREEN CHEMICALS, LUCKNOW for the warm

response they had given me to complete my summer training. I am also thankful to

Mr.DHEERAJ YADAV (SALES MANAGER) for giving me opportunity to undertake this

project in his reputed organization.

I would also like to express my humble thanks to my guide Dr. Anand Thakur (FACULTY

GUIDE, LPU) for the invaluable time he devoted to me helping me to better understand the

depth of the requirement of the project and elucidating my uncountable doubts.

(MOOHD TABRAIZ)

Regt. No-11005411

Meaning of Sales Promotion:


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Every businessman wants to increase the sale of goods that he deals in. He can adopt several

ways for that purpose. You might have heard about lakhpati bano, win a tour to

Singapore, 30% extra in a pack of one kg, scratch the card and win a prize etc. You

might also have seen gifts like lunch box, pencil box, pen, shampoo pouch etc. offered free

with some products. There are also exchange offers, like in exchange of existing model of

television you can get a new model at a reduced price. You may have also observed in your

neighbouring markets notices of winter sale, summer sale, trade fairs, discount upto

50% and many other schemes to attract customers to buy certain products. All these are

incentives offered by manufacturers or dealers to increase the sale of their goods. These

incentives may be in the form of free samples, gifts, discount coupons, demonstrations,

shows, contests etc. All these measures normally motivate the customers to buy more and

thus, it increases sales of the product. This approach of selling goods is known as Sales

Promotion. You have learnt about advertising and personal selling in the earlier lessons.

Personal selling involves face-to-face contact with specific individuals, while advertising is

directed towards a large number of potential customers. They also help in increasing sales of

goods. Thus, advertising can be used as means of communication to inform potential

customers about the incentives offered for sales promotion. Personal selling can as well

include communication of the incentives to individual customers. But, sales promotion differs

from advertising and personal selling in terms of its approach and technique. Sales promotion

adopts short term, non-recurring methods to boost up sales in different ways. These offers are

not available to the customers throughout the year. During festivals, end of the seasons, year

ending and some other occasions these schemes are generally found in the market. Thus,

sales promotion consists of all activities other than advertising and personal selling that help

to increase sales of a particular commodity.

Objectives of Sales Promotion

You have learnt that the main objective of sales promotion is to increase sales. However,

there are also some other objectives of sales promotion. The objectives are:

To introduce new products. To attract new customers and retain the existing ones. To maintain sales of seasonal products. To meet the challenge of competition

Let us learn about these objectives in details.


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To introduce new products: Have you ever heard about distribution of freesamples? Perhaps you know that many companies distribute free samples

while introducing new products. The consumers after using these free samples

may develop a taste for it and buy the products later for consumption.

To attract new customers and retain the existing ones: Sales promotionmeasures help to attract or create new customers for the products. While

moving in the market, customers are generally attracted towards the product

that offers discount, gift, prize, etc on buying. These are some of the tools used

to encourage the customers to buy the goods. Thus, it helps to retain the

existing customers, and at the same time it also attracts some new customers to

buy the product.

To maintain sales of seasonal products: There are some products like airconditioner, fan, refrigerator, cooler, winter clothes, room heater, sunscreen

lotion, glycerine soap etc., which are used only in particular seasons. To

maintain the sale of these types of products normally the manufacturers and

dealers give off-season discount. For example, you can buy air conditioner in

winter at a reduced price. Similarly you may get discount on winter clothes

during summer.

To meet the challenge of competition: Todays business faces competitionall the time. New products frequently come to the market and at the same time

improvement also takes place. So sales promotion measures have become

essential to retain the market share of the seller or producer in the product-

market.

Tools of Sales Promotion:

To increase the sale of any product manufactures or producers adopt different measures like

sample, gift, bonus, and many more. These are known as tools or techniques or methods of

sales promotion. Let us know more about some of the commonly used tools of sales

promotion.

Free samples: You might have received free samples of shampoo, washingpowder, coffee powder, etc. while purchasing various items from the market.


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Sometimes these free samples are also distributed by the shopkeeper even

without purchasing any item from his shop. These are distributed to attract

consumers to try out a new product and thereby create new customers. Some

businessmen distribute samples among selected persons in order to popularize

the product. For example, in the case of medicine free samples are distributed

among physicians, in the case of textbooks, specimen copies are distributed

among teachers.

Premium or Bonus offer: A milk shaker along with Nescafe, mug withBourn vita, toothbrush with 500 grams of toothpaste, 30% extra in a pack of

one kg. Are the examples of premium or bonus given free with the purchase of

a product? They are effective in inducing consumers to buy a particular

product. This is also useful for encouraging and rewarding existing customers.

Exchange schemes: It refers to offering exchange of old product for a newproduct at a price less than the original price of the product. This is useful for

drawing attention to product improvement. Bring your old mixer-cum-juicer

and exchange it for a new one just by paying Rs.500 or exchange your black

and white television with a colour television are various popular examples of

exchange scheme.

Price-off offer: Under this offer, products are sold at a price lower than theoriginal price. Rs. 2 off on purchase of lifebuoy soap, Rs. 15 off on a pack of

250 grams of Taj Mahal tea, Rs. 1000 off on cooler etc. are some of the

common schemes. This type of scheme is designed to boost up sales in off-

season and sometimes while introducing a new product in the market.

Coupons: Sometimes, coupons are issued by manufacturers either in thepacket of a product or through an advertisement printed in the newspaper or

magazine or through mail. These coupons can be presented to the retailer

while buying the product. The holder of the coupon gets the product at a

discount. For example, you might have come across coupons like, show this

and get Rs. 15 off on purchase of 5 kg. of Annapurna Atta. The reduced price

under this scheme attracts the attention of the prospective customers towards

new or improved products.

Fairs and Exhibitions: Fairs and exhibitions may be organised at local,regional, national or international level to introduce new products,

demonstrate the products and to explain special features and usefulness of the


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products. Goods are displayed and demonstrated and their sale is also

conducted at a reasonable discount. International Trade Fair in New Delhi at

Pragati Maidan, which is held from 14th to 27th November every year, is a

well-known example of Fairs and Exhibitions as a tool of sales promotion.

Trading stamps: In case of some specific products trading stamps aredistributed among the customers according to the value of their purchase. The

customers are required to collect these stamps of sufficient value within a

particular period in order to avail of some benefits. This tool induces

customers to buy that product more frequently to collect the stamps of

required value.

Scratch and win offer: To induce the customer to buy a particular productscratch and win scheme is also offered. Under this scheme a customer

scratch a specific marked area on the package of the product and gets the

benefit according to the message written there. In this way customers may get

some item free as mentioned on the marked area or may avail of price-off, or

sometimes visit different places on special tour arranged by the manufacturers.

Money Back offer: Under this scheme customers are given assurance thatfull value of the product will be returned to them if they are not satisfied after

using the product. This creates confidence among the customers with regard to

the quality of the product. This technique is particularly useful while

introducing new products in the market.

Importance of Sales PromotionThe business world today is a world of competition. A business cannot survive if its products

do not sell in the market. Thus, all marketing activities are undertaken to increase sales.

Producers may spend a lot on advertising and personal selling. Still the product may not sell.

So incentives need to be offered to attract customers to buy the product. Thus, sales

promotion is important to increase the sale of any product. Let us discuss the importance of

sales promotion from the point of view of manufacturers and consumers.

From the point of view of manufacturers


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Sales promotion is important for manufacturers because

It helps to increase sales in a competitive market and thus, increases profits; It helps to introduce new products in the market by drawing the attention of

Potential customers;

When a new product is introduced or there is a change of fashion or taste ofconsumers, existing stocks can be quickly disposed off

It stabilizes sales volume by keeping its customers with them. In the age ofcompetition it is quite much possible that a customer may change his/her mind

and try other brands. Various incentives under sales promotion schemes help

to retain the customers.

From the point of view of consumers

Sales promotion is important for consumers because

The consumer gets the product at a cheaper rate; It gives financial benefit to the customers by way of providing prizes and

sending them to visit different places;

The consumer gets all information about the quality, features and uses ofdifferent products;

Certain schemes like money back offer creates confidence in the mind ofcustomers about the quality of goods;

It helps to raise the standard of living of people. By exchanging their old itemsthey can use latest items available in the market. Use of such goods improves

their image in society.

Oil and Lubricants overview

Overview


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The Indian Petroleum industry is one of the oldest in the world, with oil being struck at

Makum near Margherita in Assam in 1867 nine years after Col. Drake's discovery in

Titusville. The industry has come a long way since then. For nearly fifty years after

independence, the oil sector in India has seen the growth of giant national oil companies in a

sheltered environment. A process of transition of the sector has begun since the mid nineties,

from a state of complete protection to the phase of open competition. The move was

inevitable if India had to attract funds and technology from abroad into our petroleum sector.

The sector in recent years has been characterized by rising consumption of oil products,

declining crude production and low reserve accretion. India remains one of the least-explored

countries in the world, with a well density among the lowest in the world.

The years since independence have, however, seen the rapid growth of the upstream anddownstream oil sectors. There has been optimal use of resources for exploration activities and

increasing refining capacity as well as the creation of a vast marketing infrastructure and a

pool of highly trained and skilled manpower. Indigenous crude production has risen to 35

million tonnes per year, an addition of fourteen refineries, an installed capacity of 69 million

tonnes per year and a network of 5000 km of pipelines. But with the consumption of

hydrocarbons said to increase manifold in the coming decades (155mmtpa by the end of the

10th plan) the liberalisation, deregulation and reforms in the petroleum sector is essential for

the health and overall growth of our economy.

Exploration

India remains one of the least explored regions in the world with a well density of 20 per

10000km2. Of the 26 sedimentary basins, only 6 have been explored so far. The Oil and

Natural Gas Corporation (ONGC) and the Oil India Limited (OIL)- the two upstream public

sector oil companies- in 1981/82 had taken their search to previously unexplored areas.

Number of wells drilled as well as the meter age increased. However current reserve

accretion continues to be low.

NELP (New Exploration Licensing Policy)


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The government in order to increase exploration activity approved the New Exploration

Licensing Policy (NELP) in March 1997 which would level the playing field in the upstream

sector between private and public sector companies in all fiscal, financial and contractual

matters. Salient features of the NELP

1) There will be no mandatory state participation through ONGC/OIL nor there did any carry

interest of the government.

2) The two public sector upstream companies would compete for petroleum exploration

licences, instead of the existing system of granting of licences on nomination basis. The

public sector companies will also be able to avail of the fiscal and contract benefits available

to private companies.

3) Open availability of exploration acreage to provide a continuous window of opportunity to

companies. The acreages will be demarcated on grid system and pending preperation of the

grid, blocks will be carved out for offer.

4) Freedom to the contractors for the marketing of crude oil and gas in the domestic market.

5) Royalty payments at the rate of 12.5% for the on land areas and 10%for the offshore. Half

the royalty of the offshore area will be credited to a hydrocarbon development fund to fund

and promote exploration related study and activity. 6) To encourage exploration in deepwater

and frontier areas royalty will be charged at half the prevailing rate for normal offshore area,

for deep water areas beyond 400m bathymetry for the first seven years after commencement

of commercial production.

7) Prompt action by the Ministry of Petroleum and Natural Gas to sign the PSC's for

exploration blocks.

The government to attract private investment in the upstream sector has conducted regular

rounds of bidding, with seven of them conducted since 1991.

Refining

The total installed refining capacity of the 15 refineries in the country at the end of March

1998 was 69.140 million tonnes per annum and the total is expected to go up to 131 mtpa by

the year 2001/02. The expected increase in refining capacity should be sufficient to meet the

growth in petroleum product demand (112 mtpa by the end of the ninth plan) with minimum

level of imports.


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The Sub-group on refining has suggested certain financial incentives for the efficient

functioning of the refining sector and enhancing private sector participation during the Ninth

five year plan period. In order to increase capacity utilisation of the existing refineries, 11

new crude pipelines have been proposed by the Sub-group.

In addition, there is an urgent need to reduce fuel loss in refineries, which reached a level of

7.1% in 1985/86 and declining marginally to 6.1% in 1996/97. To reduce energy

consumption, projects amounting to Rs 7200 million have been identified, which on

implementation, will achieve a saving of 186000 tonnes per annum (tpa).

Demand and Supply

The aggregate consumption of petroleum products during 1997/98 was 90mt. In the period

1992-98, LPG and HSD registered the largest demand growth rate of 9.2% and 8.6%

respectively. The Transport (38%) , residential (26%)and industrial(24%) sectors are the

largest consumers of petroleum products. The total production of petroleum products during

1997/98 was 61mt (MoPNG 1998). India's self sufficiency in petroleum products has

declined to 34% in 1997/98 from 60% in 1985/86 resulting in a substantial growth in the

import bill.

Natural Gas

Natural Gas currently accounts for 8% of the energy consumption in the country. The current

demand is 89 mcmd with domestic availability lagging behind at 63mcmd. The total gas

consumption in 1996/97 was 19bcm with power and fertilizer sectors accounting for more

than 80% of the consumption.

The gap between demand and supply is set to widen unless major gas discoveries are made.

India is also looking at pipeline gas and LNG imports from neighbouring countries as well as

countries from Iran, Oman, Central and South East Asia.

The growth of the gas/ LNG imports is very closely intertwined with the power sector, and

the competition, and perhaps to an extent the replacement of coal as the preferred fuel. The

setting up of Natural Gas import infrastructure would depend to a large extent on the ability

of the power sector to pay for gas as against the cheaper coal, or an alternative fuel.


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Transportation

The Railways handle the bulk of petroleum product movement in the country, followed by

the pipeline. The use of pipelines, provide for more reliablity, safety, greater capacity and

efficiency in delivery of the product. There are 5000km of pipiline in the country. At present

there are two crude pipelines, one belonging to OIL bringing northeastern crude to Barauni

refinery and the other owned by IOC taking crude from the gulf of Kutchh to Koyali and

Mathura refineries. The IOC pipeline is being extended to bring crude to their Panipat

refinery. Another new pipline is being layed from the Gulf of Kutchh to Bina to meet the

crude requirements of the new joint venture refinery at the place.

The Sub-group on refining has proposed 11 new pipelines for the increased capacity

utilisation of the existing refineries. The cost of constructing these new pipelines is to the

tune of Rs 5000 crore. Inorder to generate funds of this magnitude joint ventures would be

essential. To meet these huge costs as well as to ensure equitable utilisation of these

pipelines, the government has approved of a holding company and subsidiary jointventure

companies for the implementation of these pipeline projects. IOC, BPCL, HPCLand IBP

have recently formed a holding company 'Petronet' which will work on the laying down of

new product pipelines.

Pricing for Oil and Natural Gas

The Administered Price Mechanism, which has been a feature of the oil industry in the last

fifty years, has been phased out. The dismantling of this mechanism began on 1 April 1998

and eneded in 2002.

The APM was made up of a cost-plus pricing system for the producing companies, and cross-

subsidisation for the consumers. The Oil -Pool Account was to see to the interests of both

producers and consumers. Subsidies have contributed to the severe liquidity crunch faced by

the oil companies. The new package accompanying the dismantling of prices is directed

towards bringing greater transparency in subsidies, moving prices towards their real costs ,

sending right market signals, at the same time not throwing the small consumer to the wolves.

Studies have shown, the dismantling of the APM will result in an overall wholsale price-

index inflation of 1.57% in five years on a cumulative basis.


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The de-regulation of Natural Gas prices also began in a phased manner starting 1st October

199. The consumer price of gas at landfall points would be linked to the price of a basket of

LSHS/FO prices. Domestic gas prices are to move closer towards the inter-fuel market

determining pricing regime. The de-regulation of prices is to accompany those of crude oil

and petroleum products, to provide a rational market- related pricing framework for end

users.

Key developments in the recent past

In November, 1997 the government approved a phased dismantling of the APM. Thecost-plus formula for Indian crude oil producer has been abolished, and so has the

retention of pricing for all refineries. However, refinery gate prices of controlled products

are still fixed. Custom duties on crude oil are reduced from 27 to 22%, furnace oil and

naphtha exports have been decimalised and the refining sector was delicenced on June 8th

1998.

The Oilfields Amendment bill ,1998 was passed by the LokSabha in December of thesame year.. The purpose of the bill was, to increase FDI in the oil sector.

To cancel the oil pool deficit, the government issued special onetime government bonds.The oil companies were required to invest in these bonds issued by the RBI.

In January, 1999 the government under NELP, invited bidding for 48 blocks- 10 onshore,26 shallow water and 12 deepwater. The terms offered were better than the earlier rounds.

A new petroleum tax guide was also put into place.

Promotional presentations and road shows, in India and abroad, were organised topublicize the new terms and incentives.

A committee was set up under Nitish Sengupta to recommend further deregulation of thesector. The recommendations, which included suggestions on a series of mergers,

strategic alliances, cross holding of equity for four stand alone refineries, was not well

received by the Indian oil companies.

In December, 1998 the government decided to allow 100% private investment in oilproduct pipelines, and allow private equity participation in Petronet India. Some private

companies like Reliance Petroleum, and Enron Development Corporation are now

planning their own pipeline networks.


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The government has also announced a new policy on the exploitation of new energyresources specifically Coal bed Methane, in the states of Bihar, West Bengal and Madhya

Pradesh.

The Directorate General of Hydrocarbons is to be transformed into a regulatory bodycalled the Hydrocarbons Regulatory and Development Authority. The government has

also decided on the setting up of an LNG regulatory authority.

In April 2000, Prime Minister Vajpayee set up a high powered committee to formulate ahydrocarbon plan for the next 20 years. The report suggested a continued government

intervention, limited leeway for foreign investment, integration of the oil majors. Entry of

MNCs, under certain conditions like the following of social objectives and capacity

creation and also the setting up of more independent regulatory authorities in upstream,

downstream and natural gas sectors.

Major discoveries announced by Reliance, Cairn etcThe Petroleum industry is still riddled with problems. The NELP did not accompany a tax

code for more than a year and a half and hence the bids could not come in. The ONGC still

having the pick of the best blocks was not very encouraging to the private companies. The

APM process has been uneven and whether the government will be able to stick to the time

table, is not certain. Foreign participation in the downstream sector has been kept to a

minimum, and even the continuing subsidies on LPG by the NOCs, have throttled the private

competition under the parallel marketing scheme. Pipelines, despite its immense importance

have not yet received infrastructure status, and the role of private investors in pipeline

projects is far from clear. Also lack of adequate port, storage and handling infrastructure is

another big handicap the sector faces.

There are mixed signals being sent to industry here and abroad. Despite the setting up of

numerous committees and the revamping of old ones, the process of unshackling the

petroleum industry is still slow and far from nearing completion.

Introduction to Lubricants

The substance used between contact surfaces of moving parts to reduce friction and to

dissipate heat is termed as lubricant. A lubricant may be oil, grease, graphite, or any

substancegas, liquid, semisolid, or solidthat permits free action of mechanical devices

and prevents damage by abrasion and seizing of metal or other components through


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unequal expansion caused by heat. In machining processes (e.g. GREDOL automotive lubes)

lubricants may also function as coolants to forestall heat-caused deformities.

Lubricant is a material that reduces the friction arising due to the sliding / gliding / rolling /

moving of two different components in machinery. Friction is an undesirable process that

results in (i) wear and tear of the surfaces of the moving parts (ii) loss of enormous energy as

heat dissipation (iii) lowered efficiency of the moving parts and (iv) damage of machine parts

as seizure etc. The purpose of lubricant is to reduce the friction and minimize the frictional

effects such as overheating / seizure of the components thereby reducing the losses. Also, the

lubricant enables the smooth, flawless ejection of the moulded articles from the basic mould

structure. The process of reducing the friction and wear between the two relatively moving

components of the machinery is termed as lubrication.

Function of lubricants: The important functions of a lubricant are (i) to reduce wear and tear

of the surfaces of the moving parts (ii) to reduce the loss of enormous energy as heat

dissipation (iii) to increase the efficiency of the moving parts and (iv) to reduce damage of

machine parts as seizure, surface deformation etc (v) to prevent the expansion of metal due to

local frictional heat (vi) to minimize the possibility of corrosion, as the direct contact of

metals is avoided by the formation of the lubricant film and (vii) to enhance smooth motion

of the moving parts.

Mechanism of lubrication

Three important types / modes of lubrication are (i) thick film lubrication or hydrodynamic

lubrication (ii) thin film or boundary lubrication and (iii) extreme pressure lubrication.

Hydrodynamic lubrication: In this, the two moving parts are separated by a thick film of

lubricant, about 1000A thick. This type of lubrication occurs in machine parts of low load

and high speed such as in clocks, sewing machines (delicate instruments). The coefficient offriction is low, 0.01 to 0.003.

Boundary lubrication: It occurs in machine parts of high load and low speed. Here thick film

of lubricant cannot be maintained between the moving surfaces but the lubricants are

adsorbed physically / chemically on the metal surfaces. The lubricant film thickness is as low

as 2-3-molecule thickness with the frictional coefficient being 0.05 to 0.15.

Extreme pressure lubrication: This mechanism occurs under conditions of high load and highspeed. Under these conditions, the lubricant may vaporize / decompose due to local heat.
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Special additives called extreme pressure additives are used with lubricants to overcome this

difficulty. Organic compounds containing active groups such as chlorine, phosphorous,

sulphur are used as extreme pressure additives. At high temperatures, the additives react with

metals giving metallic chlorides / sulphides / phosphides possessing high melting points.

Types of Lubricants

GREDOL brand Lubricants can be classified into two main types:

Automotive Lubricants Industrial Lubricants

In todays world, most lubricants are derived from mineral oils, such as petroleum and shale

oil, which can be distilled and condensed without decomposition. Synthetic lubricants,

like GREDOL Ultrasynt Brand lubricants are of great value in automotive applications

involving extreme temperatures. In certain types of high-speed machinery films of gas under

pressure have been successfully used as lubricants.

Application ofGREDOL Brand Lubricants

For the increasingly varied modern industrial requirements, GREDOL offers a wide range of

selection for lubricants, differing widely in viscosity, specific gravity, vapor pressure, boiling

point, and other properties. GREDOL brand lubricants efficiently replace dry friction with

either thin-film or fluid-film friction, depending on the load, speed, or intermittent action of

the moving parts. Thin-film lubrication, in which there is some contact between the moving

parts, usually is specified where heavy loads are a factor. In the case of our fluid or thick-film

lubrication, a pressure film is formed between moving surfaces and keeps them completely

apart. But this type of lubrication cannot easily be maintained in high-speed machinery and

therefore is recommended for use where reciprocating or oscillating conditions are moderate.

Application method is highly significant for efficient operation of machinery. For most

machinery, different methods of lubrication and types of lubricants must be employed for

different parts. For example, in an automobile the chassis is lubricated with grease, the


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manual transmission and rear-axle housings are filled with heavy oil, the automatic

transmission is lubricated with special-grade light oil, wheel bearings are packed with a

grease that has a thickener composed of long fibbers, and the crankcase oil that lubricates

engine parts is a lightweight, free-flowing oil.

Grease lubricants are semisolid and have several important advantages: They resist being

squeezed out; they are useful under heavy load conditions and in inaccessible parts where the

supply of lubricant cannot easily be renewed, and they tend to form a crust that prevents the

entry of dirt or grit between contact surfaces. It may be applied in various ways: by packing

enclosed parts with it, by pressing it onto moving parts from an adjacent well, by forcing it

through grease cups by a spring device, and by pumping it through pressure guns. Solid

lubricants are especially useful at high and low temperatures, in high vacuums, and in other

applications where oil is not suitable; common solid lubricants are graphite and molybdenum

disulfide.

INDIAN LUBE INDUSTRY

The lubricant industry in general has three broad segments, namely, automobile, industrial,

and marine. As per the global trends, the automobile segment dominates the industry, and,

within the automobile industry, the diesel engine lubricants form the major part of the market.

Lubricants function as friction inhibitors by forming a viscous layer between mechanical

links of machines. This viscous layer reduces friction by ensuring that the mechanical links

do not come in direct contact with each other. Thus, in the current era of mechanized

economy, lubricants find extensive usage not only in terms of reducing friction but also in

providing extra durability to the machine. Lubricants are obtained as lower order distillates

from the fractional distillation of crude petroleum. They are characterized by high wax

content which provides the necessary viscosity. Since they are expected to function at

extreme and varied conditions of temperature, they are provided with the required properties

by adding various additives. Before the liberalization of the Indian economy, the public

sector oil companies dominated the Indian lubricant industry with a market share of 90 per

cent. The lubricants produced were simple blends based on low and medium level

technologies. More sophisticated lubricants were imported and these accounted for a

relatively small market share. The liberalization of the Indian economy in general and the oil


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sector in particular led to decimalization of base oil imports which used to be canalized

through Indian Oil Corporation earlier. There has been substantial reduction in the level of

import duties. Free pricing has been permitted and administered pricing regime has been

abolished. Deregulation has encouraged all the major MNCs which include Shell, Mobil,

Gulf Oil, BP, Exxon, and Caltex to set up their plants in India. The entry of MNCs has led to

increased competition and substantial reduction in the market share of public sector oil

companies. The total market size and production of the lubricant industry in India in the year

2009-10 were Rs 101.034 billion and 13,898 thousand tonnes respectively. The lubricant

industry witnessed a cumulative annual growth rate of 27 per cent during the period 2006-06

to 2010-11. The major players are Indian Oil Corporation, CIL, Hindustan Petroleum

Corporation, Bharat Petroleum, Bharat Shell, and IBP Co. CIL has grown by 12 per cent on a

cumulative annual basis.

INDIAN LUBE INDUSTRY ANALYSIS IN THE FIVE FORCES FRAMEWORK

The lubricant industry is now a global business and major international players are

ExxonMobil, Shell, BP, and ChevronTexaco. Economies of scale are an advantage that these

leading players are achieving in this very competitive market. Industry consolidation

continues to have a major impact on company market share and ranking, on the

manufacturing and business economics, on base oil supply positions, and on the competitive

environment. The market share (in quantity terms) of CIL during the year 2003 - 2004 was

18.2% as against 33.4% of IOCL, 28.7% of HPCL, 9.6% of BPCL, 4.4% of Gulf Oil, 2.8% of

IBP and 3% of Tide Water Oil. 1 The Indian lube industry analysis in terms of Michael E.

Porter (1985)s Five Forces framework is as under:

Force 1: The Degree of Rivalry

The intensity of rivalry will determine the value lost in industry through cutthroat

competition. It is only one of the five that determine the industry attractiveness. The Indian

lube industry is profitable, as all the players have realized higher gross sales value per litre

during the period 20082009 to 20102011 and have passed on the incidence of base oil

price increase to the ultimate consumer. It is more concentrated industry and competitors

appear to have realized their mutual interdependence and have restrained themselves from

price rivalry. The competition is based more on brand identification with respect to

performance rather than on price. The major components of costs are base oil cost;


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marketing, sales & distribution costs; and an after-tax operating margin of Castrol India is in

the range of 8% to 12%. The employee cost is 5% of sales revenue. The Indian lube industry

neither has excess capacity nor is characterised as capital intensive. The switching costs are

low.

Force 2: The Threat of Entry

The average industry profitability expressed in terms of economic value added (return on

assets greater than cost of capital) determines the interest of potential new entrants. Castrol

India all through the last decade has positive economic value added.2 the lube industry

average profitability rather provides entry threat. The major entry barriers are rather strong

distribution system of existing players, brand loyalty, and economies of scale in sourcing the

base oil. Castrol CRB plus brand tag line Mehanti itna, aap jitna has struck a chord with

farmers. IOCL Servo brand tag line is 100% Performance Every time. HP Laal Ghoda

Plus 20W 40 claims all round performance through excellent engine cleanliness and

efficient lubrication. BPCL MAK makes it possible ensures prolonged and trouble free

vehicle operation. The IOCL, BPCL and HPCL distribute their lube products through their

own petrol pumps situated all over the country. Castrol India has access to over 70,000 retail

outlets in the country.

Force 3: The Threat of Substitutes

The petroleum-based lube industry may face possible threat of demand-side substitutes such

as synthetic motor oils in the foreseeable future. The future of threat is dependent of price-to-

performance ratio of synthetic oils vis--vis petroleum based lubes. The supply-side

substitutability, if any, will influence suppliers willingness to provide the base oil.

Force 4: Buyer Power

The customers awareness of brands in the lube industry is high. The customers look at price

performance and value propositions of different brands in the lube industry and make

informed decisions. All the players in the lube industry are seeking low-cost position through

investment in cost- minimizing facilities and equipments. The majority of sales in the lube

industry are retail sales. The fuel-efficient and emission compliant engines have resulted in

lower lubricant consumption. The lube demand is derived demand and depends on sales

growth in the automotive transportation and the agricultural sector. The industrial lubricant


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demand is reflective of the industrial production and growth trend in the economy, which has

declined during the years 2004- 2005 to 2005-2006.

Force 5: Supplier Power

The considerations of supplier power such as relative size and concentration of base oil

suppliers and degree of differentiation in base oil are present in the lube industry to a greater

extent. The base oil is generally procured globally. Base oil slates are changing. These oils

require different types of pour point depressant (PPDs). The development of PPDs as a part

of total lubricant formulation differentiates one brand of lube from another. Lubrizol is

leading supplier of PPDs. The ExxonMobil, worlds leading producer of polyalphaolefins

(PAO), alkylated Naphthalenes (AN), blendstocks and esters provide synthetic lubricant

base-stocks. ChevronTexaco base oils are 100% hydro-processed for maximum quality and

purity. The oil price increase in the past had an adverse impact on the profitability margins of

the lube industry.

Introduction to GREDOL GREEN CHEMICALS

GREDOL GREEN CHEMICALS was found in 2005, the company had an idea of gaining thelocal market with lubricant and bio diesel. The major area of concentration and business is

the lubricants. The bio diesel is being manufactured by the third party and is being sold by

under the name of the company. GREDOL offer large variants of lubricant to the customers

both for the diesel and the petrol engines, further the lubricants are divided into two forms i.e.

1. Retail sales. (For individual customers)

2. Industrial sales. (For industrial uses)

Both the retail and industrial sales are driven by the head office employees, the sales agents

are sent to visit the industry and make the deal with authorized authorities for the orders. We

have tapped the untapped market of LUCKNOW and are trying to expand the business by

developing dealers near to the district. The unique feature of our product is the quality we

deliver at a competitive price. GREDOL has been regularly looking for delivering the best

quality product direct to our customers. The reason for the success of Gredol is we are

tapping the untapped market and removing the middle men, we act as a retailer to the dealers


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and that is the reason that we offer the product at a very competitive prices apart from that we

even have our own logistics so the delay and extra cost is not occurred.

Today we have 27 dealers outside of the district who are operating with us and the product is

being recognized by the industries and even between the individual.

VISION

Market leader in growth and profitability. Most preferred supplier of quality products at right price and time. Delighting the customers by value added services. Professional and empowered team for quick response to customers

GREDOL GREEN CHEMICALS

Type: Private

Founded:2005

Headquarters:Lucknow

Industry:Petroleum

Products:Bio-diesel, Lubricants

Revenue:not available

Employees:154

Website:http://gredolgreen.com

Product Mix


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1. Bio-diesel2. Lubricants.

Product line

1. GREDOL EXTRA SUPER ENGINE OILSAE GRADE 20W/40

API Service Classification CD/SF

US Military Specification MIL-L-2104C

Colour And Appearance Red Clear

GREDOL Extra Super engine oil is multi grade diesel engine oil

blended high viscosity index paraffinic base stock with an excellent additive package. It has a

natural high VI giving good start ability at low temperature while maintaining viscosity at

high operating temperatures. It has a built in quality of good alkalinity reserve to neutralise

the acid effect of high sulphur fuel. The special detergent dispersant additive controls

deposits formation keeps the engine clean. The added property of anti-wear, anti corrosion

and rust assures long engine life resulting in reduced maintenance expenditure.

GREDOL EXTRA SUPER ENGINE OIL FORMULATED FOR THE USE IN

HEAVILY LOADED NATRUALLY ASPIRATED AND TORBO CHARGED DIESEL

AND PETROL ENGINES.

Typical Characteristics

Specific Gravity @60/60F D-1298 0.886

Viscosity Kinematic

@40C,cSt

D-445

110


22/45

@100C,cSt 14.5

Viscosity Index D-2270 135

Flash Point, COCC D-92 240

Pour Point D-97 -18TBN mg KOH/g D-2896 9-10

Sulphated Ash, %wt D-874 0.9

2. GREDOL SUPER MUKTIGRADE ENGINE OILSAE Grade 20W/40

API Service Classification CC/SD

US Military Specification MIL-L-21048 (EXCEEDS)

Colour & Appearance Red Clear

GREDOL super multi grade engine oil is a blend of fine quality

natural viscosity index base and a balance additive package. It has an anti wear, rust and

corrosion inhibitor to protect against engine metal wear, excellent detergent properties,

controls sludge formation, prevents hard carbon deposits and lacquer-build up at elevated

temperatures.

GREDOL SUPER MULTI GRADE ENGINE OIL IS SUITABLE FOR USE IN

OLDER NATURALLY ASPIRATED MEDIUM AND HEAVY DUTY DIESEL AS

WELL AS GASOLINE, POWERING TRUCKS, BUSES, TRACTORS, PASSENGER

CARS, JEEPS & TWO WHEELERS.


Specific Gravity D-1298 0.884


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@60/60F

Viscosity Kinetic

@40C.cSt

@100C,cSt

D-445

140

14.5


Flash Point COCC D-92 238

Pour point C D-97 -11

TBN mg KOH/g D-2896 6-8

Sulphated Ash, %wt D -874 0.8

3. GREDOL EXTRA PREMIUM ENGINE OILSAE Grade 20W/50

API Service Classification SF/CC

US Military Specification MIL-L-46152C


GREDOL extra premium engine oil is superior quality multi grade

automotive engine oil and it is a fine blend of high quality base stock and an excellent

additive package.

GREDOL EXTRA PREMIUM ENGINE OIL IS FORMULATED FOR USE IN

NATURALLY ASPIRATED OR TURBO CHARGED & ALL TYPES OF FOUR

STROKE PETROL ENGINES FOR PASSENGERS CARS & LIGHT DUTY

VEHICLES.

GREDOL extra premium engine oil gives good start ability at low temperature and provides

outstanding protection against rust and corrosion. It maintain oxidation resistance and light


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thermal stability in wide temperature range and gives excellent performance round the year

even under severe driving conditions.


Specific Gravity

@60/60F

D-1298 0.879

Viscosity Kinetic

@40C.cSt

@100C,cSt

D-445

125.98

17.15






4. GREDOL TURBO SPECIAL ENGINE OILSAE Grade 15W/40

API Service Classification CD-4/SF

US Military Specification MIL-L-2104E

Colour & Appearance Golden Clear

GREDOL turbo super engine oil is multi grade diesel oil. It is blend of

super quality paraffinic base stock and additive package with viscosity index improver and

pour point.


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GREDOL turbo super engine oil is recommended for use in turbo charged and naturally

aspirated diesel engine for cars, pick-ups, vans and trucks. It is also suitable for gasoline

engines where API SF is recommended.

GREDOL turbo super engine oil has excellent detergentdispersant ability to keep

engine clean and give extended drain. It has excellent VI improver and pour point

depressant to operate in extreme conditions. It contains effective package of anti wear,

anti rust and anti corrosion which gives longer engine life. It has good start ability at

low temperature and excellent control over sludge formation.


Specific Gravity

@60/60F

D-1298 0.886

Viscosity Kinetic

@40C.cSt

@100C,cSt

D-445

110

14.5



Pour point C D-97 -18TBN mg KOH/g D-2896 9-10


5. GREDOL EXTRA SUPER ENGINE OILSAE Grade 40

API Service Classification CD/SFUS Military Specification MIL-L-2104C



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GREDOL extra super engine oil is a monograde diesel engine oil blended high

viscosity index paraffinic base stock with an excellent additive package. It has a natural high

VI giving good start ability at low temperature while maintaining viscosity at high operating

temperatures. It has a built in quality of good alkalinity reserve to neutralize the acid effect of

high sulphur fuel. The special detergentdispersant additive controls deposits formation and

keeps the engine clean. The added properties of anti-wear, anti-corrosion and rust inhibitors

assure long engine life resulting in reduced maintenance expenditure.

GREDOL extra super engine oil formulated for use in heavily loaded naturally

aspirated and turbo charged diesel & petrol engines.


Specific Gravity

@60/60F

D-1298 0.889

Viscosity Kinetic

@40C.cSt

@100C,cSt

D-445

160

15.5






6. GREDOL MULTI GRADE GEAR OILSAE Grade 80W/90

API Service Classification GL-2

Colour & Appearance Golden Green


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GREDOL multi grade gear oil is a high quality straight mineral lubricant for

lightly loaded manual transmission and spiral bevel, rear axle assemblies and worm gear

drives. It can be used in enclosed gear boxes of any equipment where manufacture permits

use of API GL-2 level oil.

GREDOL multi grade gear oil is a blend of high VI solvent refined paraffinic base stock

and excellent anti form of additive package. It maintains its viscosity during light

operation parameters. It has a good resistance to oxidation, rust and corrosion and has

good demulsibility.


Specific Gravity

@60/60F

D-1298 0.894

Viscosity Kinetic

@40C.cSt

@100C,cSt

D-445

187

17.15




7. GREDOL EXTRA SUPER EP GEAR OILSAE Grade EP-90,140

API Service Classification GL-4

US Military Specification MIL-L-2105

Colour & Appearance Golden Green


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GREDOL extra super EP gear oil is an automotive gear lubricant, and is

recommended for manual transmission drive axel and final drive of automobile, heavy duty

earth moving, agriculture and construction equipment. It is formulated to use in bevel, spiral

bevel, helical and hypoid enclosed gear boxes operating under mild and normal operating

conditions.

GREDOL extra super EP gear oil is formulated with solvent refined paraffinic base

stock and sulphur phosphorus based additive package. It has good resistance to

oxidation, rust and corrosion, and contains highly effective defoament. GREDOL extra

super EP gear oil maintains fluid film on moving parts which provides excellent

protection against metal wear.


SAE Grade EP-90 EP-140

Specific Gravity

@60/60F

D-1298 0.901 0.914

Viscosity Kinetic

@40C.cSt

@100C,cSt D-445

187

17.15

410

28.5

Viscosity Index D-2270 99 97

Flash Point COCC D-92 240 240

Pour point C D-97 -9 -6

Tinkan OK Load kg. 27 27

Objective:

To understand the sales techniques and how the company is penetrating in the marketwith the presence of the giant companies in oil sector.

To find the effect of sales promotion on sales. To find the behavior of consumer towards promotion.


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Review of Literature:

1. Title: Changes in supermarket sales during and after a staged health promotioncampaign.

Abstract

Purpose Communication between supply chain partners is critical for replenishment

decision making. Decision support systems still require significant human decision making

with regard to replenishment when promotions are involved. The purpose of this paper is to

study the impact of the sharing of information about the magnitude and timing of retail

promotions on cost efficiency in the supply chain. The authors compare performance against

theoretical benchmarks and draw conclusions significant to managers.

Design/methodology/approach The subjects in Study 1, 30 undergraduate students at a

large, US university, completed the experiment in a single session lasting approximately 60

minutes. The experiment involved a simple, multi-period replenishment task, played as

individuals, that was somewhat like the newsvendor game. Subjects in the experiment

employed in Study 2 were senior-level members of multiple departments from a large

consumer products manufacturer in the USA. Participating departments included sales,

operations, and supply chain. Self-reported questionnaires revealed that the average subject

had 15 years of experience with supply chain issues and seven years of experience with

replenishment. The study was conducted in a single session, lasting approximately two hours,

at the corporate headquarters of the participating company. In this experiment, 76 unique

subjects participated.

FindingsResults from the single-echelon study reveal the cost-reducing effect of knowing

the magnitude and timing of demand generated by a promotion. However, the poor

performance, compared with the theoretical benchmarks, by respondents in the multi-echelon

study, even when the lead time per node is half that of the single-echelon case and the

subjects were experienced managers, highlights the complexity of the task that results from a

lack of coordination.


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Practical implications Billions of dollars are spent on retail promotions each year. The

management of the forecasting and replenishment of inventory for such promotions is

difficult to automate and requires significant human decision making. The paper explores

some key issues that are important in the replenishment decision-making scenario when a

promotion is involved.

Originality/valueAlthough the most obvious managerial recommendation for reducing the

coordination and planning problems associated with promotions is simply to communicate

more, the authors' research also suggests it may not be enough to alter performance. The

results suggest that while communication is helpful, coordination may represent a more

serious challenge.

2. Title: Consumer evaluations of sales promotion: the effect on brand choice.

Abstract:

Purpose This study evidences the influence that sales promotion has on brand choice

behaviour. Establishments wish to influence consumers' buying behaviour, and thus they

launch strong promotional campaigns or introduce changes in their price policies, among

other actions. However, they are not always capable of achieving their goal, since, although

they may reach their objective in the short term, when the longer term is considered there are

undesirable consumer actions.

Design/methodology/approachThe problem of consumer brand choice can be adequately

described with logic models that allow the use of discrete dependent variables. The

probability that the consumer chooses a brand depends directly on the capacity of satisfaction

that the brand holds for him/her. In this case, the dependent variable is the brand, and the

independent variables are price, reference price, losses and gains, and the different types or

techniques of sales promotion. With the aim of obtaining the necessary information for the

present study, a regional consumer panel was used.

FindingsThe results show that it is necessary to consider the product's promotional state at

the moment of purchase as an explanatory element of the process. Promotion is a tool that

can help manufacturers and/or retailers in the achievement of their objectives (try the brand,


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help to decide what brand to buy, etc.). Immediate price reduction is the technique that exerts

greatest influence on the brand choice process. It is possible that the consumer perceives a

promotion, for example, coupons or rebates, but does not modify his or her behaviour. In this

case, manufacturers and/or retailers will be investing their resources in promotional actions

that do not have any effect on the consumer.

Originality/valuePresents a regional consumer panel that has been elaborated and planned

by the authors. Because of this, the information collected is just what was necessary for this

study. On the other hand, the paper shows that is very important to know the consumer's

preferences and the actions that influence his or her behaviour. Considering the results, it

seems that promotions based on price have the greatest effectiveness.

3. Title:Sales promotion effectiveness: the impact of consumer differences at an ethnic-group level.

Abstract:

Purpose Aims to examine the proposition that consumer sales promotions are more

effective when they provide benefits that are congruent with those of the promoted product.

This proposition is considered at the ethnic-group level (i.e. do differences in cultural values

at this level have an impact on sales promotion effectiveness?).

Design/methodology/approach A quasi-experimental design is used to test a series of

hypotheses based on a sample of Anglo-Australians and Chinese-Australians. The main

experiment is informed by the results of two pretests.

Findings First, there are significant differences in consumer cultural values at an ethnic-

group level. Second, despite these differences, ethnicity does not have a significant impact on

responses to sales promotions. Third, the expected congruency effects between products and

promotion types are not found.

Research limitations/implications Some of the detailed results match those reported in

previous studies, but there are important differences too.

Practical implicationsThere is a need to be aware of differing cultural values at an ethnic-group level. Notwithstanding this inference, the second finding suggests that there continues


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to be scope for using standardised strategies when promoting to different ethnic groups.

Finally, considerable caution should be exercised when planning promotion strategies around

hoped-for congruency effects.

Originality/valueNew light is cast on the relationship between consumer differences at an

ethnic-group level and the effectiveness of various types of sales promotion for utilitarian and

hedonic products.

4. Title: Changes in supermarket sales during and after a staged health promotioncampaign

Abstract:

To test the feasibility of the use of supermarket sales data in evaluating a local point of

purchase intervention and to assess the impact of the intervention six and 12 months later.

Staged point of purchase intervention pilot study followed by a longitudinal observational

study. The study was carried out in one supermarket in Mikkeli, Finland. Foods were

classified as healthier or reference products based on their labelled content of salt and

saturated fat. The sales of packaged foods containing reduced amounts of salt and/or

saturated fat were promoted with a stepwise increasing intervention culminating in a heart

week. In addition all unplanned promotional activities during the intervention were

surveyed. Information on the sales of both the promoted products and reference products was

collected daily from the supermarkets computer system. Direct and proportional sales of

both single products and whole food groups were analysed during the intervention and at

follow-up. In addition the supermarket environment and the supermarkets advertising in the

local newspaper were checked. Short-term variations in the sales could be seen related to the

promotion activities. During the heart week the sales of actively promoted healthier products

increased by 37-49 per cent. Variations in the sales of reference products could also be seen;

the proportional sales of some healthier products declined significantly when the reference

products were actively promoted. The supermarket environment was still affected by the

intervention at both follow-ups. The mean percentage salt content of the weekly sales had


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declined in all food groups and the mean percentage fat content had either declined or

remained unchanged. Computerised sales data provide a useful and rapid means of evaluating

supermarket based interventions. The intervention had an impact on the supermarket

environment which was visible at follow-up.

5. Title:Advertising vs sales promotion: a brand management perspective.Abstract:

Brand managers in packaged goods firms are under pressure to increase or maintain high

sales promotion spending at the expense of media advertising. This study investigates the

antecedents and outcomes of brand managers advertising and sales promotion budget

allocations by adopting a bounded rationality perspective. Based on survey data collected

from 165 brand managers in the USA, higher advertising (vs sales promotion) allocations are

associated with: single, relatively high priced brands in the early phases of the product life

cycle; and more experienced brand managers who are subject to less retail influence. Also,

brands with higher budget allocations to advertising, relative to sales promotion, tend to have

more favourable consumer attitudes, stronger brand equity, and higher market share increases

and profits. Managerial implications and areas for future study are discussed.

6. Title: Sales Promotion in a World EconomyAbstract:

Investigates how sales promotion relates to the product base of a given country; gives factors

to be considered by international companies in the world economy; believes political realities

are most often the product of a country's cultural heritage and assesses the differing

government practices in socialist states and democratic states, Continues to describe the four

types of existing economies: first world; second world; third world; and fourth world in

relation to the world production market.

7. Title: Electronic Coupons: A Double-Barreled Sales Promotion Technique.


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Abstract:

The use of coupons as a sales promotion technique is not new; manufacturers have been

offering cents-off coupons to customers for over a century. Now, electronic coupons may

become the leading edge of a new wave of sales promotion techniques for the 1990s. How

much of an impact that wave will make when it hits the American marketplace can only be

estimated, but it may indeed be very big.

8. Title: An Exploratory Report of Sales Promotion Management.

Abstract:

It investigates the role and management of sales promotion in US companies. Reports on a

study intended to identify factors that influence sales promotion management. It concludes

that the product category and the firm's position within the category are related to sales

promotion behaviour, with similarity in sales promotion behaviour among firms in similar

product marketing environments.

9. Title: Evaluation Cross - National sales promotional strategy: an audit approach.

Abstract:

Sales promotion is an important element of marketing communication strategy which

accounts for more promotional expenditures than advertising in some countries. However,

sales promotion has been generally ignored by researchers. This article briefly reviews the

criteria used in the US to evaluate sales promotions and these criteria are found inadequate to

guide the formulation of sales promotion internationally. Environmental sensitivity factors

are identified which are overlooked in domestic sales promotions and an audit approach to

planning and evaluating cross-national sales promotion strategy is presented.


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10.Title: How sales promotion can work for and against you. Abstract:

Expenditures for sales promotion activities have increased dramatically during the past

decade. Along with this added emphasis, however, have come some undesirable effects. This

article considers some of the key issues that influence sales promotion decisions. It describes

current sales promotion activities, identifies some of the negative consequences of these

activities, introduces a cost-benefit philosophy for sales promotion decisions, and proposes a

specific method for making those decisions

Research Methodology

The study: The study was descriptive in nature with survey method being used to complete

the study.

Sampling Design:

Population: Population included was the dealers and retailers.

Sample Frame:

Since the data was collected through survey, the sample frames were the individuals those

were running business in lubricant.

Sampling Elements:

Individual respondents were the sampling elements.

Sampling Techniques:

Convenience as well as simple random sampling technique was used to select the samples.

Sample size:

Sample size was 30 respondents.


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Hypothesis:

A hypothesis is proportion which the researcher wants to verify. The researcher is interested

in collecting and analyzing data, indicating the main characteristics without a hypothesis

excepting the one which the researcher may suggest incidentally during the course of his

study. However, in a problem-oriented research, it is necessary to formulate a hypothesis or

hypotheses in as clear terms as possible. In such research, hypotheses are generally concerned

with the causes to certain phenomenon or relationship between two or more variables under

investigation.

Hypothesis formulation

i. Null hypothesis:- The Null hypothesis isH0 = =All the variable are equally important.

ii. Alternative hypothesis:- The alternative hypothesis isHA = = All the variable are not equally important.

Data Collection and Analysis

Tools used for Data Collection:

Self designed questionnaire was used for the evaluation for factor affecting the exceed of

credit period or delay in payment. Data was collected on Likets type scale, where 1 stood for

strongly agree and 5 stand for strongly disagree.

Tools used for Data Analysis:

Factor analysis was applied to identify the factors which lead in delay in payment from

Wholesaler and Dealer.

Results and Discussions:

Reliability

Reliability test was carried out using SPSS software and reliability of the items wasmeasured.


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Factor Analysis

Factor analysis can be applied in order to explore a content area, structure a domain, map

unknown concepts, classify or reduce data, illuminate causal nexuses, screen or transform

data, define relationships, test hypotheses, formulate theories, control variables, or make

inferences. Our consideration of these various overlapping usages will be related to several

aspects of scientific method: induction and deduction; description and inference; causation,

explanation, and classification; and theory.

KMO and Bartlett's Test

We have applied Kaiser-Meyer-Olkin and Bartletts Test to check the adequacy of data and

we find the value is 0.510 which is more than ideal value 0.5 hence data is adequate (from

table 1.1).

Communalities Table

We assume Eigen value 1 for all variables which refers that all variables are equally

important for our research but we found that some lies below than 0.5 and some lies above

the 0.5. Those variables which are above then 0.5 are only considered for our research. So

that, all the 17 variables are take for our research (from table 1.2).

Total Variance Table

The last column in the table (Cumulative %) shows that the 6 factors extracted together

account for 79% of the total variance. This is good deal content because with only 6 factors

(reducing them from 17) we have lost 21% of the information content, while 79% is retained

by the 6 factors extracted out of the 14 original variables (from table 1.3).

Scree Plot

The Scree Plot graphical representation which shows that all the factors which lie above than

1 make the slip-slope (from graph 2.1).

Component Matrix and Rotated Component Matrix Table

The six extracted factors represent, we can take help from the two tables that is ComponentMatrix and Rotated Component Matrix table (from table 1.4).


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Looking at the rotated component matrix we notice that the variable number 3, 4, 5, 6,7, 10, 14 and 15 loadings of 0.619, 0.628, 0.525, 527, 0.545, 0.627, 0.684 and 0.732

respectively. This suggest that factors 1 is a combination of these 8 original variables

which are :

During festive season, sales and promotion play a very significant role. It will also lead to increase in the sales performance of an organization. Sale promotion acts as a competitive weapon. Effective in encouraging product trial and unplanned purchases. It encourages off season. It helps to increase the profits of the organization. Sales promotion can enhance the organization relationship with its customers. It is an initiative taken by an organization to promote an increase in sales, usage or

trial of a product or service.

Even the dealers look for the promotion which increases their sales and they getoffers.

At this point our task is to find a suitable phrase, which captures the essence of the original

variable, which continues to form the underlying concept, or factor. In this case factor 1

could be named as promotional activities.

We now attempt to interpret factor 2, looking at the rotated component matrix wenotice that the variable number 5, 6, 12, 13 and 17 loadings of 0.554, 0,568, 0.549,

0.681 and 0.638 respectively. This suggests that factors 2 is a combination of these 5

original variables which are:

Sale promotion acts as a competitive weapon. Effective in encouraging product trial and unplanned purchases. Degree of competition determines the sales promotion of the organization. Sales promotion helps in increase sales volumes and the market share of the company. There should be a sales and promotion department in an organization.

For interpreting factor 2 we find that variable 5, 6, 12, 13 and 17 have high loadings. In this

case factors could be names as organizational promotions.

We now attempt to interpret factor 3, looking at the rotated component matrix wenotice that the variable number 2 loading of 0.622 This suggests that factors 3 is a

combination of these 1 original variable which is:


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It is more important at the launch of the new product.At this point our task is to find a suitable phrase, which captures the essence of the

original variable, which continues to form the underlying concept, or factor. In this case

factor 3 could be named as innovative ideas.

We now attempt to interpret factor 5, looking at the rotated component matrix wenotice that the variable number 9 loading of 0.517. This suggests that factors 5 is a

combination of these 1 original variables which is:

Sales and promotion affects company sales volumes.At this point our task is to find a suitable phrase, which captures the essence of the original

variable, which continues to form the underlying concept, or factor. In this case factor 4

could be named as effective promotion.

Conclusion

After collecting data from a number of small and medium dealers and retailers I found that

the sales promotion is an important marketing tool which should be used efficiently and atright time. Some of the points are:-

Consumers are educated they look for the best product. Sales promotion attracts sales, if only done at right time. Sales promotion also makes the dealers and the retailers to gain profit. New business and customer base is built. That effective implementation of sales promotion tools lead to increase in sales

volume and invariably higher profit.

The effectiveness of sales promotion can sustain the life of a failing productsufficiently to enable it recover from its decline.

Sales promotion is important at all level of product life cycle but it is more importantat the introductory and growth stage.

Lastly, the effects of sales promotion on organizational performance have been positive and

have resulted in increased organizations sales volume and profitability in terms of purchase


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of larger size unit of products by consumers which will in turn lead to higher sales and

profitability

Recommendations:

Based on the findings, the research hereby makes the following recommendations.

1. Sunshine Plastic Company should endeavour at all time to have a planned andsystematic sales promotion programme in place as this would help to make

such promotional implementation effective.

2. Sunshine Plastic Company should set up a more and effective sales promotiondepartment with experienced staff with the view to developing more

promotional strategy in line with the companys objectives.

3. The company should be aware of the fact that there are times when theeffective use of sales promotions are needed e.g. during festive periods.

Companies should take full advantage of such peak seasons by developing an

effective and efficient sales promotion campaign that can arouse consumers

awareness, thereby leading to increase in sales.

References:

Travis Tokar, John A. Aloysius, Matthew A. Waller, Brent D. Williams, (2011)"Retail promotions and information sharing in the supply chain: a controlled

experiment", International Journal of Logistics Management, The, Vol. 22 Iss: 1, pp.5

25.

Begoa Alvarez Alvarez, Rodolfo Vzquez Casielles, (2005) "Consumer evaluationsof sales promotion: the effect on brand choice", European Journal of Marketing, Vol.

39 Iss: 1/2, pp.5470.


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Simon Kwok, Mark Uncles, (2005) "Sales promotion effectiveness: the impact ofconsumer differences at an ethnic-group level", Journal of Product & Brand

Management, Vol. 14 Iss: 3, pp.170186.

Maria Nrhinen, Aulikki Nissinen, Pekka Puska, (2000) "Changes in supermarketsales during and after a staged health promotion campaign", British Food Journal,

Vol. 102 Iss: 4, pp.308319.

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42.

List of Table:

Table 1.1 KMO and Bartletts Test Table

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .510

Bartlett's Test of Sphericity Approx. Chi-Square 276.986

Df 136

Sig. .000


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Table 1.2 Communalities Table

Communalities

Initial Extraction

sales and promotion stratties are effective for the organization 1.000 .721

It is more important at the launch of the new product 1.000 .866

During festive season, sales and promotion play a very significant role. 1.000 .774

It will also lead to increase in the sales performance of an organization. 1.000 .864

sale promotion acts as a competitive weapon. 1.000 .794

Effective in encouraging product trial and unplanned purchases. 1.000 .759

It encourages off season. 1.000 .873

The nature of products determines the type of sales promotion techniques to be used in the organization. 1.000 .688

sales and promotion affects company sales volumes. 1.000 .742

It helps to increase the profits of the organization. 1.000 .717

sales promotion enhances the purchase of organization products by the consumer. 1.000 .853

degree of competition determines the sales promotion of the organization. 1.000 .776

sales promotion helps in increase sales volumes and the market share of the company. 1.000 .899

sales promotion can enhance the organization relationship with its customers. 1.000 .818

It is an initiative taken by an organisation to promote an increase in sales, usage or trial of a product or service. 1.000 .774

it can sustain the life of a failing products to enable it recover from its decline. 1.000 .596

there should be a sales and promotion department in an organization. 1.000 .897

Extraction Method: Principal Component Analysis.

Table 1.3 Total Variance Explained Table

Total Variance Explained

Com

pone

nt

Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Total % of Variance Cumulative % Total

% of

Variance Cumulative % Total % of Variance

Cumulative

%

1 4.477 26.336 26.336 4.477 26.336 26.336 2.721 16.008 16.008

2 3.084 18.142 44.478 3.084 18.142 44.478 2.447 14.391 30.400

3 1.852 10.897 55.375 1.852 10.897 55.375 2.392 14.072 44.472

4 1.603 9.429 64.804 1.603 9.429 64.804 2.174 12.790 57.262

5 1.295 7.618 72.423 1.295 7.618 72.423 2.126 12.506 69.767

6 1.098 6.460 78.883 1.098 6.460 78.883 1.550 9.116 78.883


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7 .912 5.362 84.245

8 .688 4.050 88.294

9 .539 3.168 91.462

10 .379 2.229 93.692

11 .297 1.746 95.437

12 .236 1.388 96.825

13 .169 .996 97.821

14 .156 .918 98.739

15 .095 .559 99.298

16 .071 .418 99.716

17 .048 .284 100.000

Extraction Method: Principal ComponentAnalysis.

Table 1.4 Component Matrix and Rotated Transformation Matrix

Component Matrixa

Component

1 2 3 4 5 6

sales and promotion stratties are effective for the organization .369 -.406 .186 .614 .064 .058

It is more important at the launch of the new product .457 -.507 -.622 .073 -.089 .022

During festive season, sales and promotion play a very significant role. .619 -.359 -.023 .483 -.144 -.083

It will also lead to increase in the sales performance of an organization. .628 .085 -.506 .265 -.352 -.111

sale promotion acts as a competitive weapon. .525 .554 -.197 .175 -.132 -.353

Effective in encouraging product trial and unplanned purchases. .527 .568 .108 -.173 .216 -.265

It encourages off season. .545 -.235 .388 -.525 -.123 -.281

The nature of products determines the type of sales promotion techniques to be used

in the organization..489 -.551 -.100 -.226 .233 -.172

sales and promotion affects company sales volumes. .482 -.349 .211 -.004 .517 .276

It helps to increase the profits of the organization. .627 -.076 .321 .054 -.259 .380

sales promotion enhances the purchase of organization products by the consumer. .198 .288 .469 -.090 -.606 .368

degree of competition determines the sales promotion of the organization. .215 .549 .444 .333 -.042 -.346

sales promotion helps in increase sales volumes and the market share of the company. .495 .681 -.259 -.203 .272 .083

sales promotion can enhance the organization relationship with its customers. .684 .094 -.283 -.447 -.191 .153


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It is an initiative taken by an organisation to promote an increase in sales, usage or

trial of a product or service..732 -.346 .229 -.252 .049 -.015

it can sustain the life of a failing products to enable it recover from its decline. .483 .166 .348 .294 .356 .021

there should be a sales and promotion department in an organization. .266 .638 -.278 .127 .248 .514

Extraction Method: Principal Component Analysis.

a. 6 components extracted.

List of Figure

Figure 1.1 Scree Plot Graph


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introduction to indian oil sector

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