Measuring Consumers’ Preferences and Attitudes Towards Branded Petrol: An Initial Investigation of the Branded Petrol Market

Abstract

Petrol was sold as a ‘commodity’ through ‘mass marketing’ in India for over four decades and generations of Indian consumers got so used to this that when ‘segmented marketing’ arrived and brands were launched in 2002, a paradigm shift was expected in marketing practices and also in consumer behaviour. The changes occurred, as expected.

Before 2002, Indian consumers purchased petrol which came in only one variant, from government regulated companies with similar sounding names and logos, at one price from one type of outlet. Even the promotion campaigns reached consumers through identical media (hoardings) and conveyed identical messages (‘save petrol’). This was the result of tight regulations posed by the government on the marketing of petrol. Also, offering subsidies to petroleum marketing companies and setting different prices of petrol and diesel were also a part of government’s overall strategy.

Over a period of time, the sharp rise in demand made the government realize that it could not manage the exploration, refining and marketing of petrol on its own. After a lot of deliberation, in 2002, government allowed private sector players to market petrol, with a promise of providing a level playing field to them. As a result, the Indian market saw the entry of multinational (Royal Dutch Shell Plc.) and private Indian players (Reliance Industries, Essar Oil Limited, etc.) setting up shop to market petrol. Brands were launched, celebrities were hired to promote the brands, outlets were refurbished and pricing was revisited and different variants of petrol were offered at different prices. The whole scenario changed very quickly and companies went out all guns blazing and all the players launched a marketing blitzkrieg.

Objective of the study: Now, after a decade of high-decibel marketing action and after millions having been spent in brand building and educating consumers about the new avatars of petrol and ways of petroleum marketing, it was felt that it would be interesting and useful to take stock of the outcome of these marketing activities. To be precise, this research is aimed at measuring the changes, if any, in consumers’ preferences and attitudes towards branded petrol.

Methodology: To achieve the above, an empirical study was undertaken and data was collected from 900 MBA students who drive their own vehicles and hence are consumers of petrol. Hence, it was a fairly large homogenous set of respondents to whom the questionnaire was administered.

Findings: The results of the study present interesting findings for academicians as well as marketers. It was found that although consumers see value in branded petrol they consider different brands of petrol as ‘very similar’. It may be concluded that the marketing strategies have made the consumers sit up and take notice of petrol brands and also the strategies have been successful in the sense that consumers see value in branded petrol. Another interesting insight as a result of analysis was that consumers perceive that they are price sensitive as far as petrol is concerned, but actually they are not.

Implications: The above suggests that companies would have to think of creative ways to position their brands as ‘different’ because until that is achieved, the companies will not be able to reap the real benefits of marketing and marketers of petrol need not lose their sleep on the price sensitivity of the consumers (at least up to an extent); rather, they should focus on adding value and creating meaningful differentiation.