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

GALGATIAS BUSINESS SCHOOL, APPROVED BY AICTE, MNSTRY OF HRD, GOVT. OF INDA) 1, KNOWLEDGE PARK, phase II, GREATER NODA. (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) b) II. Exploratory Research (flexible) involving survey of the concerning literature, experience survey, etc. Descriptive describing characteristics of a particular group or individuals. Sampling Systematic III. IV. V. VI. VII. VIII. IX. Design, (Simple Random Sampling, Cluster Sampling, Sampling, Sampling, Stratified Sampling, Convenience

Judgmental Sampling) Sources of data (Primary or/and Secondary data). Data Collection tools/instruments. Methods of data collection. Tools and techniques of analysis of Data. (Statistical analysis must be supported by relevant tables, charts, graphs etc. as required.) Findings and Conclusions (Outcome/ Result). Implication of the study. Suggestion/ Recommendation 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., Indias 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. Bansals 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 IndianOils 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 Indias 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 Corporations 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 selfreliance 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 Indias 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 clients 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 Indias 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 RLNG pipelines will reach the capacity to 75 million metric tonnes per annum with a network of over 10,000 km.

IndianOils 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 production share, and since has also June been exported. 2006. An integrated PX/PTA plant at Panipat Refinery has commenced commercial 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.

&

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 IndianOilOIL 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 across by IndianOil under the brand name AutoGas India." "IndianOil has setup 274 Auto LPG Dispensing Stations (ALDS) covering 150 cities 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 3540%. 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 Indias 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 Oil Corporation has There two are major two domestic private competitors, Bharat competitors,Reliance

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

FINANCIAL HIGHLIGHTS
IndianOils 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 companys 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 underrealisation 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
300000 250000 in Crores 200000 150000 100000 50000 0 2005-06 2006-07 2007-08 183172 247479 220779

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. MNCs 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.
MARKET SHARE IN INDIA

1.5 2.5 3 7 2 2 1 1 42

22 16

IOCL HPCL CASTROL BPCL GULF OIL TIDE WATER OIL ELF SHELL IBP PENNZOIL OTHERS

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 1990s 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 decanalized 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 Fortunes 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 companys 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 companys 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 Indias 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 Asias most advanced, is also Indias 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 Indias largest selling lubricants brand and enjoys approvals from major Original Equipment Manufacturers (OEMs) 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. Servos 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 Servos 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 companys 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 checkups,air-conditioner service, vacuum cleaning, four-wheeler perfuming,upholstery cleaning, vehicles. polishing, lamination installation, etc., besides replacement of minor parts for two and 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 twostroke 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 oils state of the art R&D center t Faridabad, one and only of ts kind, keeps pace with international standards. This is also Indias 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
SERVOs 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. MNCs 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 products and supplies products in the market

SWOT ANALYSIS

STRENGTH
Indian Oil Corporation (IOC), Indias 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. Indias 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 (PCMOs) and Multi Utility Vehicle (MUV) segments and rapid shift to 4stroke 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 PSUs, 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 OEMs 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, Bivariate statistics: Means, t-test, ANOVA, Correlation (bivariate, partial,

Descriptive Ratio Statistics

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 Indias 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