Economic Downturn Effects On The Uk Hotel Industry Economics Essay

Economic Downturn Effects On The Uk Hotel Industry Economics EssayThe UK hotel fabrication, as well as the hotel effort world wide, has been hit hard by the ecological niche which started at the discontinue of 2007 and is predicted by umpteen to utmost until at least 2010. In the flesh of a few months the UKs thriftiness has gone from windfall to crisis and by be epochs 2009 the attitudes and beliefs of consumers and businesses in the tradeplace had altered radi announcey from previous optimism (Mintel Reforecasts 2009 online).Prior to the ascribe crunch which commenced in August 2007 when the European Central Bank and the US Federal Reserve put 45bn into the financial marts (Elliott 2008 online), Europe, the USA and the UK were enjoying an scotch exposit with rising house prices and high consumer confidence (Budworth 2008 online). Gross Domestic harvest-home (GDP) rose to 381,565 Million in 2007, and household disposable income per capita to 14,321 in the same year (K ey brand 2008, p. 18). During these boom geezerhood, adding was high and borrowers able to dress down large sums of money due to relaxed l shuttinging restrictions by banks. Individuals whose circumstances would suck at one snip barred them from borrowing were digested to price of admission umteen times their salary (Budworth 2008 online). Debts secured upon property were sold on to investors. Property prices frankincense became abundantly inf deeplyd creating a blether which burst when borrowers started to default on their loans and the cheer of the investments thitherfore fell heavily. The huge losses by the banks lead-in to the collapse of Lehman Br beforehand(predicate)(a)wises in the US and the near collapse of Northern stone in the UK meant that lending became much much difficult and banks stricter ab come forward who they lend money to. (Budworth 2008 online). The coreing obliviousage of funds due to fears almost lending and all oerlook of loans has di rect to a downturn in the economy, falling house prices and change magnitude unemployment with many firms going out of business alto deriveher and many to a greater extent making drastic savings (Budworth 2008 online). Further consequences include a vast affix in public spending which is predicted to take years to reconcile off, a predicted rise in unemployment (by the British Chamber of Commerce) to 3.2 zillion, wage freezes or cuts and massive job losses (The Economy News 2009 online). The collapse in available credit started in the USA but in these geezerhood of global trading the implications were soon felt around the world with the UK cursorily facing problems. Germany, France and Italy the three largest economies in the Eurozone were officially in turning point by late 2008, and others rapidly followed suit. Both Spain and Ireland project witnessed a housing bubble burst and contraction in wider economic natural process (Foresight 2008, p. 7).2.2 The Pound Against th e Euro and vaulting horseOne circumstanceor that complicates the situation well-nighwhat is the pounds weak status against the Euro and Dollar. greatest has lost cheer rapidly over the last year or so. In July 2008, one pound would mollify buy $2, but by November 2008 it was worth only $1.48, the lowest point for 6 years. Similarly at one point 1 was near equal in value to 1 Euro. firearm this is bad impertinents for citizenry buying hots or leading outside the UK, it overly means that UK goods and services become more than irresistiblely priced from the point of view of Eurozone or USA travellers (OGrady 2008 Online). limitedally, hotels in the UK give appear relatively gildeder since this fall in the value of sterling, and hence more attractive to inward travellers and tourists. At the same time, it means it is less attractive for the UK spendmaker to travel to the Eurzone or USA, and more attractive to inhabit at home.3. Hotel Industry Background3.1 Introduction The Growth Years to 2007Hotel operators in the UK allow for both to the corpo tell sphere and consumer sector. Both argon material move of their operations and both includes not just accommodation but withal facilities such as meeting and conference entourage in the matter of the corporate sector and add-on services like food and beverages for both sectors. The UK has been historically an measurable business destination with the growing importance of the capital of the United Kingdom stock market and financial sector (Key disgrace 2008, p. 11). In the consumer sector most practise is accounted for by spends and short breaks with a significant minority for wedding or party venues.The UK hotel market grew in 2008 to a value of 11.5 billion, which is an add-on of nearly 20% since 2002. This return took place against the backdrop of a healthy worldwide economy with the global travel market recovering after the 2001 terrorist attacks (BMRC 2009, p.1). Factors influencing t his development were varied and included an increase in the offspring of tourists coming in to the UK in the years since 2002 and a diversification in the hotel market with increases in the calculate sector as well as luxury brands. There was an increased call for upmarket brands as capital of the United Kingdom in particular saw an increase in the ultra pissed market sector for which money was no object (BMRC 2009, p.1). Other factors private road growth include the growth in internationalisation and global business, rises in disposable income, and the development of tourism from emerging economies such as author East Europe and India. The growth of the internet and online booking alike nonrecreational a part as well as increased merchandise by hoteliers (Key assembly line 2008 pp. 19-21).During 2008 this boom came to an end. The hotel assiduity was hit relatively late by the depression, and even during 2008 industry experts were proclaiming that the previous 12 months ha d been a time of overall growth (Cater hotelkeeper 2009, p. 6). Occupancy rank were static in the first part of 2008, but then hotel transactions started to tumble and during folk 2008 moving in fell steeply as did revenue per room (Cater Hotelkeeper 2009, p. 6). Further, developments for new hotels and improvements were cancelled and cyphers reduced.3.2 Strengths and Weaknesses of the UK Hotel marketplaceA Key annotating get over identifies aspects of the UK hotel market influencing the vulnerablity or resilience to recession. On a positive note, the UK hotel market is a strong and sophisticated one with a wide roll of different plectrons to appeal to a range of different types of customer and including internationally recognised brands as well as little individual operators. Developments in technology and the increase of internet use over the last 10 years mean selecting and booking a trip is easier than ever forrader. The fact that most UK residents do not use hot els further convolutions an opportunity for growth, as does the potential for further increase in internet use. Restaurants attached to hotels and other such add on services provide further blowup potential. Finally, the UK is experiencing a growth in its older population, who choose more time to travel.On the negative side, the hotel market is curiously vulnerable to an economic downturn as travel and trips argon often seen as an bea in which spending can be cut back. (Key Note 2008, pp. 48-50). Research as well as suggests that despite the app atomic number 18ntly rosy outlook of the years immediately prior(prenominal) to 2008, the market had other copes to contend with even without recession. The long-stay leisure market (defined as those travellers staying away for five nights or more) has been in decline since 2004 the fleck of long-stay hotel board booked in 2008 was half that in 2006, at 11 million (BMRC 2009, p. 1).4 The feign of the Recession on the Hotel Indust ry in the UK Specific Factors4.1 IntroductionThis section looks at around of the factors which impact upon the Hotel industry, and why they are important. The messages are mixed. Some of the factors are detrimental to the industry while others absorb more positive impact.4.1 Air Travel in DeclineAlthough semipermanent growth in solicit for air transport is projected, growth rates in the short to medium-term are presumable to be change by the everyday slowdown in the economy and by the rising approach of air travel. A market-wide study indicates that although long-term growth in demand for travel by air is expected, short to medium term projections are for negative growth in 2009 with the beginnings of recovery in 2010 (Key Note 2009, p. 10). This leave alone have an impact upon the UK hotel market as there will be fewer travellers into the country. However, it should be bourne in mind that fewer UK holiday makers will want to holiday abroad due to financial considerations, thence boosting demand for hotels.4.2 Collapse of the Property MarketOne of the hardest-hit sectors of the economy in the recession has been construct as house prices have crashed and loans to finance building projects have dried up together with the market for the finished product. The UK enjoyed nearly of the highest periods of growth of house and other building prices, and the construction industry has been peculiarly badly hit by the latest recession. Developers are unable to access credit to fund large scale building final causes, so many hotel projects have been stalled (Blitz 2009 online). Aside from new developments, hotel owners who are unable to access further credit are also decision things more difficult. While bigger operators and branded chain are able to look to the medium and long-term, over which a boom for hotel and travel are predicted due to emerging markets, smaller operators have less access to the resources which will see them through the following coup le of years (Blitz 2009 online).The domestic travel area offers some potential positives for the industry as a whole. It is arguably the case that tourism and the hotel industry in the UK are better placed to withstand the results of a recession than either other industries or other holiday destinations. The reputation of the UK as a whole is very strong as a destination, as is that of England in particular.A 2008 mickle by Visit Britain of 614 respondents based in the UK who on a regular basis take short breaks reported that 9 out of 10 people consider England when choosing a short break. The branding of England has improved over the cut across of this tracker study, 58% of respondents say it is their favourite holiday destination considered. It is considered easy to get around and seen as having beautiful scenery (Visit Britain 2008, p.2). Short breaks account for almost 2/3 of breaks taken in the UK, so these findings are significant for the industry as a whole. (Bainbridge 200 9, p. 1).Another consideration is the rising equal with being green and the impact of frequent air travel on the milieu (Bainbridge 2009, p. 1). Consumers who want to reduce their carbon footprint and impact upon the environment are increasingly opting to stay within the UK (Bainbridge 2009, p. 1). What Bainbridge does not highlight, still, is that the new anxiety for green issues is not completely beneficial. Tourists from overseas will be evenly concerned to cut their travel abroad, so this could also reduce inbound tourism into the UK. Research is conflicting with some showing that interest in saving the environment is fairly low priority for the majority of consumers and other studies confirming the idea that green issues will become increasingly important (Key Note 2009, p. 49). Hoseasons, the self-catering leader, also take this view, claiming that more people are choosing to holiday in the UK because of a demand for a green and alternative to brief abroad. Similarly, th e ferry lines entered 2008 assuming that demand would increase for their services as a greener alternative (Key Note 2009, p. 49).The UK has the most expensive rates for hotels in Europe, and middling prices rose by 12% in 2007 to an average of just over 100 per night. Londons exceptionally expensive rates influence this figure (Key Note 2009, p. 50). Against this background, and bearing in mind the recession, a move towards increasing the number of calculate hotels seems inevitable. Previous expansion in the hotel industry has concentrated on the luxury end of the market with the growth of boutique hotels and the interest in catering to the super-rich. While this seems unfortunate given the recession, it is not obviously a bad scheme as historically the luxury market has been shown to theorize the economy more slowly than the rest of the market. (Key Note 2009, p. 92) In October 2007, Marriott estimated the growth in revenue per available room at between 5% and 7% in 2008 yet, by May 2008, this had been rewrite to between 3% and 5%. As clients reduce their spending, it is likely that over-supply will be seen in the market and this will lead to some brand rationalisation (Key Note 2009, p. 92).One predicable result of the recession is to increase interest in cypher holidays and cheaper hotels. The Visit Britain survey of UK residents who take short breaks reported in prove 2008 that price had now overtaken other factors in choosing where to stay (Visit Britain 2008, p.2). This is likely to increase as the UK moves deeper into recession.The budget hotel market was under development even before the recession set in. Established brands such as Travelodge and Premier hostel expanded their operations, and they were joined by the Purple Hotels from the Real Hotel Group. Hilton also real plans for a budget hotel chain, and CitizenM, a design-led brand, was developed. Other brands include Nitenite and Yotel, built at low cost using prefabrication techniques. The growth in the market has led to further segmentation in the sector with introduction of upmarket tiers to the budget range (for framework Holiday Inns Express brand (Key Note 2008, p. 16)A Key Note report written at the beginning of the recession predicted that the mid-range hotels would be the main casualty of melt offing demand. The problems with the economy were exacerbated in the hotel industry by the recent increase in energy and food cost ( Key Note 2008, p. 11)5.4.2 Business Budget HotelsAs Bainbridge points out, budget hotels have benefited by both business and holiday customers downgrading in the recession. Some budget hotels have increased the range of facilities they offer to includes free wi-fi, breakfast and same to accommodate a new business clientele. Whitbreads budget chain, Premier Inn, for example (the UKs biggest hotel brand) is upgrading its rooms with flat screen TV, air-conditioning and Freeview, and has seen sales for its business account scheme increas e 36% over the previous year to February 2008. (Bainbridge, 2009, p. 1).This increase in the number of business travellers using budget hotels since the start of the recession in 2008 is corroborated by research by BDRC in 2009. They report that budget brands are consciously aiming to compete with mid-market brands by strategies such as the ones mentioned above. This drive has been rewarded by better standing in business advertising awareness for the budget hotel brands. (BDRC 2009 online) Key Note also report that mid-market business hotels are likely to suffer as they are positioned between the value and luxury hotel options, and what they call tiering, or introducing of levels in to the budget range, will also affect the mid-market brands (Key Note 2009, p. 92).5.4.3 Consumer Budget HotelsFor the non-business traveller, accommodation quality is very important in UK breaks. While travellers abroad endure less than perfect accommodation because costs are low and the weather good, w ithin the UK they demand better quality. One issue is that bed-and-breakfasts and guest houses are notoriously prone to poorly-run individual establishments, leading to calls for the market to be tightened. However the budget hotel sector has grown and has mopped up some of the non-business market as well. The fact that there are many chains available in this sector means travellers can be tranquillise regarding expectations and quality as they are buying into a brand name. This is particularly true in London a popular choice for consumer short breaks where hotels are notoriously expensive (Key Note 2009, p. 50).5.5 Staff and Recruitment ImpactThe recession has had a severe impact on the hotel recruitment market, and it is marvelous to recover before 2010. Job cuts look set to reach 600,000 as businesses and consumers cut spending. The Chartered Institute of Personnel and Development warned of the toughest year in more than 2 decades, and their predictions were backed up by a sur vey of 150+ senior management in the hotel industry carried out by the recruitment specialists Admiral Group which revealed that over 2/3rds of those surveyed were going to cargo deck recruitment decisions, and put fast-track graduate programmes had on hold (Sharkey 2009, p. 7). These findings are reiterated by the results of a study by Deloitte in 2008 which predicted that the downturn could cut new jobs in the sector by 100,000 with a corresponding dramatic shrink in the UK tourism industry. A recession could see a 11b decrease in the economic input by visitors to the UK, currently worth 114b or 8.2% of the UKs GDP. The British Hospitality Association also criticised the lack of help from the organization (Thomas 2008, p. 9)One less gloomy prediction is that the recession will have less impact as the hospitality market in general and the hotel market in particular is more diverse than in the past, with some opportunities actually being created particularly in the casual and bud get eat and contract catering sectors. This is reinforced by a survey carried out by the British Hospitality Association which shows that the contract catering sector has grown and will continue to do so in the recession (Druce 2009, p. 7)5.6 Room Occupancy and PricesRoom occupancy rates the percentage of nights that hotel rooms are in active use have been increasing since 2005. This is good for hotel operators as it allows them to repay investments and reap more return for their money. In 2007 there was a 1% point rise in domestic occupancy (61% in 2006, with the 2003 rate being 59%). This pre-dated the recession and was a result of the strength of sterling at this time (Key Note 2008, p. 14)Returns in equipment casualty of paid accommodation in the UK show a surprising result. Gains were still made in 2008, and a report by Deloitte showed that in the early part of the year revenue per room grew strongly (Caterer Hotelkeeper 2009, p. 6), which is ludicrous as the recession st arted to set in during this year for most split of the UK economy. However, this seems to be a function of gains made at either end of the booking season. Early bookings would have been made before worries about the economy set in, and late bookings made might have been as a result of last-minute demand and hence prices paid were higher (Key Note 2008, p. 15)5.7. Smaller and Specialist SectorsThe result of the recession can also be traced in the smaller and specialist areas of the UK hotel market. For hotel operators, boom areas in these sectors are not inescapably a good thing, as will be shown.5.7.1 natural process HolidaysActivity holidays overseas were enjoying a boom in recent years, however for the next few years the market is predicted to grow less rapidly, whereas activity holidays in the UK are predicted to rise. In 2010 for example the total no of activity holidays in Millions taken by UK residents was predicted before the recession at 11.5 this was revise to 10.8, with 2011, originally predicted to total 12 million was revised to 11.4. By contrast, predictions about UK activity holidays have been revised upwards the 2011 level was predicted at 5.0 million, and this was revised to 5.3 million. (Mintel Market Reforecasts 2009 online). The impact for hoteliers is mixed. If the holiday involves hotel stay, then the news is good however if the accommodation is self-catering the hotel operator will lose out.5.7.2 All-Inclusive HolidaysAll comprehensive holidays, a sector which has been in decline in recent years due apparently to the increasing ease of online booking and ease of finding information, are now predicted to rise over the short-term as they allow all holiday costs to be known in attack and paid for up front. Both Thomas Cook and TUI are aiming to increase their all-inclusive capacity (Mintel Market Reforecasts 2009 online)5.7.3 Camping and Caravaning HolidaysThis sector enjoyed a boom in the 1960s and early 1970s but with the advent of che ap overseas package holidays has been in decline. However, Mintel predict that these holidays are an attractive option for the budget conscious consumer, and will benefit from the increase of families who elect to stay in the UK in 2009 and 2010 for financial reasons. They point out that the Camping and Caravanning baseball club had their best ever year for recruitment of new members in 2008 (Mintel Market Reforecast, 2009 online). Domestic camping holidays are predicted to do rather better over the next couple of years before the long-term trend towards decline reinstates itself. The growth in this area is not good news for the hotelier, as by definition a stay in a hotel is control out for this holiday type.5.7.4 OthersOther sectors, for example boating holidays, have also been affect. Even where the market remains buoyant boating and luxury holidays growth prediction has been downgraded and is expected to occur at a slower rate than predicted (Mintel Market Reforecasts 2009 online).Sectors of the UK market which are predicted to do well include managing director holidays within the UK which are seen as a budget option and so are fairly resilient to an economic downturn, and heritage tourism as well as holiday centres like Centre Parcs. Mintel see the last mentioned as particularly resilient as they are both percieved as a budget option and are attractive to the UK consumer as they offer pay in advance all-in-one packages. An increase in coach holidays is also good to some extent for the hotelier, although the bulk of coach holiday operators chose low-priced hotels where price margins are cut very low, as the coach holiday is seen as a price-conscious alternative to the consumer.6. Lessons Learned from Previous Economic DownturnsThe last time a recession occurred in the hotel industry was in the provoke of the 2001 family lineember 11th terrorist attacks on the Twin Towers in New York. The Sept 11th attacks and anthrax scare which followed cause un certainty about the short and medium-term economic futures and had an impact upon travel and tourism plans leading to a reduction in hotel use and travel. In the US these areas, along with airlines were significantly affected in the aftermath of the terrorist attack. (Mintel Market Reforecasts, 2009 online). In the recession of the early years of the twenty-first century, the response to the challenge was to discount room rates heavily, however this strategy was of questionable use. The heavy discounting was intended to boost occupancy level, however this necessarily led to less profitability and income it took years to recover from this as consumers became used to the lower prices. As Bloss (2009) points out, the tactic is also very easy to transcript by competitors and hence a risky one.7. Conclusion.The UK hotel market has certainly been affected by the economic downturn. The above looked at the background to the recession and how it has affected the corporate and consumer sector . While the sector has certainly been impacted with job cuts, slower, stagnating or declining predictions and less building projects, there are some positives for the UK market as holiday makers elect to stay at home rather than travel abroad.

Human Resource Planning and Development: Tesco

gentle election home excogitate and education TescoIntroduction of TescoJack Cohen founded Tesco in 1919 when he began to look at surplus groceries from a st each in the east pull through on London. The Tesco brand offset printing appe bed in 1924. Jack Cohen made new-sprung(prenominal) strike out using the first triad letters of suppliers name (TES) and the first induce letter of his surname (Co), forming the word TESCO. The first Tesco store was opened in 1992 in Burnt oak, Edgw are, Middlesex. Tesco was floated in London stock exchange in 1947 as Tesco Stores (Holding) Limited. The first self service store opened in St. Albans in 1951 and the first supermarket in Maldon in 1956.Tesco is one of the worlds jumper lead world(prenominal) retailers. Nowadays it deals in several(predicate) sectors uniform telecom, on contrast function, clothing, insurance, electronics, fuel etc, but the maven activity of the Tesco group is food retailing and it has over 2,500 stores w orldwide.Tesco is public own company its major shareholders as of 2004 were 1Barclays Global Investors (3.82%)Legal and general (2.79%)Schroder investiture Mgt Ltd (2.87%)State street global Advisors (2.73%)Axa Investment Manager (2.63%)Threadneedle Investments (2.63%)Scottish windows (2.08%)M G Investment Mgt Ltd (1.99%)Morley fund Management (1.88%)USB Global Asset caller ProfileIt is one of the biggest retailer companies in the world which has 702 stores in UK and employee 240,000 people. It earlier caters in food but expanded it scope of services to clothing, pay services, electronic, etc. Company strategy is to focus on long limit business. Tesco start self service supermarket in US in 1930s. after(prenominal) 20 days Tesco has be interject a familiar name not only for groceries but in any case for fresh food, clothing and hundreds of household safe(p)s in 1940s. Tesco has built its 100th superstore by 1985 and in 1987. By 1991 the victory of its flatulence filling s tation earned for the company Britishs biggest independent petrol retailer. It skint new level in food retailer in 1995 the first client loyalty card, which offer benefit to rule-governed customer and opposite different kinds of offers was devoted to customer like Tesco Baby club for new parents.Tesco acquire the HIT chain of hypermarkets in Poland in July 2002. By the end of 2002/2003 Tesco had 45 percent of its space overseas. Tesco has reared various kinds of Tesco stores like Tesco Extra, vacuum tube Tesco, and Tesco Express. The grocery store is also offer club card for the customer from which a signifi crowd outt 80% of the sales are transacted.after certain points Tesco gives coupon to the customer to met with a similar success as over a billion vouchers are already precondition away. The market share is forthwith 16.2%. Tesco operate 4 store formats in the UK.Introduction to Human pickfulness ManagementHuman resources are the people that wreak for an organisation, and Human option Management is concerned with how these people are managed. However, the term Human option Management (HRM) has come to mean much than this because people are different from the other resources that work for an organisation. People defecate ends and feelings, aspirations and beseech. The term HRM has thus come to partake to an approach, which takes into accountThe need of agreementThe need of its peopleunlike psyches establish their own needs and aspirations. HRM therefore involves finding out active the needs and aspirations of exclusive employees, for example through the appraisal movement and indeed creating the opportunities within the organisation (e.g. through job enlargement) and out facial expression the organisation for employees to meliorate themselves. HRM therefore relates to every aspect of the way in which the organisation interacts with its people, e.g. by providing readying and reading opportunities, appraisal to find out about individual needs, training and development needs analysis, etc.Three key activities of HRM in TESCO custody preparationPlanning supply levels requires that an assessment of present and emerging day needs of the organization be compared with present resources and future predicted resources. Appropriate go whence be planned to bring demand and supply into balance. frankincense the first step is to take a rough sketch of the alive workforce profile ( round, skills, ages etc) of existing employees and thence audit for 1,3 and 10 years ahead by amendments for normal turnover, planned staff movements, retirements etc in gillyflower with the business plan for the corresponding clock frames. What future demands leave alone be is only exploitd in part by the visualise of the force out manager, whose important task whitethorn well be to scrutinize and modify the fossil oil predictions of other managers. Future staff needs result derive fromgross revenue and returnion forecas tsThe establishs of technological change on task needs noveltys in the efficiency, productiveness, flexibility of wear as a result of training, work study, organisational change, new pauperizations, etc.Changes in employment practiceVariation which respond to new legislation, eg. Pay be sick taxes or their abolition, new health and guard requirementsChanges in government policies.What should emerge from this blue sky gazing is a thought out and logical staffing demand schedule for variable dates in the future which arouse then be compared with the crude supply schedules. The comparisons will then indicates what steps must be interpreted to achieve a balance.That in turn will involve the further formulation of such enlisting, training, retrain and labour reductions or change in workforce utilization as will bring supply and demand into equilibrium, not just as a one off but as a keep workforce planning exercise the inputs to which will need constant neutering to reflect exi sting as against predicted arrive on the supply side and changes in production actually achieved as against forecast on the demand side.Recruitment and selectionThe overall become of the enlisting and selection fulfill should be to obtain at minimum cost the number and theatrical role of employees required to satisfy the gentleman resource needs of Tesco. The three items of recruitment and selections areDefining recruitmentsAttracting candidatesSelecting candidatesThe number and categories of people required should be condition in the recruitment programme, which is derived from human resource plan. In addition there will be demands for replacements or for new jobs to be filled, and these demands should be hold back to ensure that they are justified. It may be particularly necessary to check on the need for a replacement of the level of grapheme of employee that is specified. These nominate the basic information required to draft advertisements, brief agencies or recruit ment consultants, and assess candidates. A role profile listing competences skill, educational and experience requirements produces the job criteria against which candidates will be assessed at the interview of by agent of psychological tests.Attracting candidatesAttracting candidates is primarily a matter of identifying, evaluating and using the most permit sources of applicants. However in cases where difficulties in perpetrateing or protecting candidates are world met or anticipated, it may be necessary to carry out a anterior study of the factors that are likely to attract or repel candidates the strengths and impuissance of the organization as an employer.Advertising is the most obvious method of attracting candidates. Tesco basically advertise its vacancy on its web site. This means looking at the alternative sources mentioned above and confirming p confer withably on the basis of experience, that they will not do. Consideration should be given as to whether it might be better to use an agency of a selection consultant. When making the choice, refer to the three criteria of cost, speed and the likelihood of providing good candidates. The objectives of an advertisement should be to attract attention, create and principal(prenominal)tain interest and stimulate action.Employee MotivationTesco employees are encourage to ask themselves strategic questions in order to assess their skills and ability to progress. Employee penury is important for the organisation. It is one of the basic activities needed for the smooth running of an organization. To retain good staff and to encourage them to give of their best season at work requires attention to the financial and psychological and even physiological rewards offered by the organization as a continuous exercise.Basic financial rewards and conditions of services are determined externally in many occupations but as much as 50 % of the gross pay of manual workers is ofttimes the result of local negotiatio ns and details of conditions of services are often much important than the basics. Hence there is scope for financial and other motivations to be use at local levels. As staff needs vary will vary with productivity of the workforce so good personnel policies are desirable. The latter can depends uponOther factor but unless the betroth packet is accepted as fair and just there will be no motivation.Following are the motivation techniquesCelebrating annual holidays the regular celebration of annual events servicing form the company shade, the environment you deliver for people at work. Tesco gives pay holiday for its employee which will motivate its employee. If the workers are involved in creative work by which they share their ideas and culture with for apiece one other which helps keep the culture of an organization well. Tesco provides different kinds of bonuses and voucher to its employee which helps to motivate them.Ranking the workers and giving them the rewards which he lp employee to spend all their time at work place and company gain good meshing from this. Providing benefit, medical treatment and basic requirement facilities to the workers motivate workers to give good output to an organizationHuman Resource Management Models of TescoThis company has introduced a high commitment dumbfound which offers training and development to all employees. They have veritable their culture through extending their logo every little helps to rise up commitment. This organisation was chosen, through their introduction of strategies which has led to an increase in business. This has present they are a first class provider of training to their employments, and has given opportunity to expand into new markets.The matching ModelThe early HRM model developed by Fombrun emphasizes the interrelatedness and the coherence of human resource vigilance activities. The human resource vigilance cycle in their model incorporate of four constituent components pickax, appraisal, development and reward these four human resource activities aim to increase organizational execution.RewardsPerformancePerformance ManagementSelectionHuman Resource DevelopmentThis model also ignores different stakeholder interests, situational factors and the stamp of managements strategies choice. The strength of the model however is that it express the coherence of internal HRM polices and the grandness of matching internal HRM policies and practices to the organizations external business strategy. The HRM cycle is also a simple model that serves as a pedagogical framework for explaining the disposition and significance of key HR practices and the interactions among the factors making up the intricate field of human resource management. As we progress through the book, we will refer to the HRM cycle to explain the relationship of each individual HRM function to other HRM practices.The Harvard model of HRMThe analytical framework of the Harvard model offered by Bee t consists of hexad basic componentsSituational factorsStakeholder interestsHuman resource management policy choicesHR outcomes long consequencesA feedback loop through which the outputs flow directly into the organization and to the stakeholdersThe situational factors influence managements choice of HR strategy. This normative model incorporates workforce characteristics, management ism, labour market regulations, societal values and patterns of unionization, and suggests a meshing of both product market and socio-cultural . The framework is based on the belief that the problems of historical personnel management can only be solved when general managers develop a viewpoint of how they wish to see employees involved in and developed by the enterprise, and of what HRM policies and practices may achieve those goals. Without either a central philosophy or a strategic vision- which can be provided only by general manager- HRM is likely to remain a set of independent activities, each g uided by its own practice tradition. Beer and his colleagues believed that today many pressures are demanding a broader, more comprehensive and more strategic post with cypher to the organizations human resources. These pressures have created a need for a longer- term perspective in managing people and consideration of people as potential assets sort of than merely a variable cost. They were the first to underline the HRM tenet that HRM belongs to line managers. They also state that Human resource management involves all management decisions and action that affect the nature of the relationship between the organization and its employees- its human resources. They suggest two characteristic features one is line managers accept more responsibility for ensuring the alignment of competitive policies that govern how personnel activities are developed and implemented in ways that make them more mutually reinforcing.Human Resource Planning and Development for TescoEvery organisation has its own HR planning and development ferment under consideration. Human resource planning is indeed concerned with broader issues about the employment of people than the traditional qualitative approaches of manpower planning. estimate of HR PlanningTraining and Development computer programmeSelection ProcessRecruitment PlanDetermine Job exigencyWork Study Demand forecastingInventory of HR skills (Findings Gaps) verifiable of HR PlanningFig The Process of Human Resource PlanningObjectives of manpower Planning- The persons concerned with manpower planning must be clear about goals of manpower planning because once the wrong forecast of future requirement of human resources are made, it may not be doable to rectify the errors in short-run.Inventory of Skills Assessment of demand for run personnel presents less problems of uncertainty current manpower supply can be adjusted accordingly. But for supervisory and managerial levels projection is complex problem because required ta lents are not available at a short notice. This will also help in drawing recruitment development plans to meet the needs of certain skills future.Demand Forecasting A proper forecast of manpower required in future say, after one year, two years so on must be attempted. The factors relevant for manpower forecasting are as follows.(i) Employment Trends Manpower planning committee examine number of employees on pay roll during past 5 year to know trend within each group to determine whether particular group has been stable or unstable.(ii) surrogate Needs if staffs leave the job due to death, retirement, resignation termination of employees. It may relate to supervisory, skilled, clerical groups and must be anticipated in advance. In this case the HR planner set a develop plan to replace staff.(iii) Productivity Gain in productivity will also influence requirements of manpower. Planning for productivity has several aspects. The first aspect relates to legal utilisation of man power. The second aspect relates to installation of more productive tools, equipments. The last aspect relates to matching of skills with requirements of jobs.(v) Absenteeism Means a situation when a person fails to come for work when he is scheduled to work. Due to absenteeism work rifle upset leading to overtime work which in turn leads to increase cost of production. The management should go into cause of absenteeism attempt to reduce absentism as far as possible.(vi) Work Study Can be utilize when it is possible to apply work measurement to know how long trading operations should take amount of labour required. This is also known as workload analysis.Job Requirements Job assessment is do to find out the requirements of the worker, like if employee needs any help from the managerial side, if they need any type of benefits and swear from other. If they need to transfer form one department to another, whether the number of staff is low or high and so on.Employment Plans This conformation deals with planning how organisation can obtain required number of ripe(p) type of personnel as reflected by personnel forecasts.Training Development Programme Training is essential not only for new employees but also for old employees for improving their work. Similarly executive development programmes have to be devised for development of managerial personnel. The talent of employees are not fully productive without a systematic programme of training development. judgement of Manpower Planning After training programmes have been implemented, an appraisal must be made of effectiveness of manpower planning. Deficiencies in programs should be pointed out enumeration of manpower inventory should be updated periodically. Connective actions should also be taken whenever it is necessary to remove deficiencies in manpower planning.Evaluation of HRM planning and development methods of TescoAccording to the method described is one of the best methods for HR plan ning and development method. By following the above method an HR department of an organization is good at organizing the manpower. It covers the methods form the beginning of the recruitment process to management level. It first evaluate whether the employee is needed or not then after is set up a plan for the recruitment process and goes on to the recruitment process. After that it analyse whether employee needs any training, transfer, motivation etc. So this method is effective development method.Performance AppraisalTesco measures the abilities of its employees to check it has the correct skills for the future. After reviewing and distributeer discussion if staffs need training then they can apply for training. Tesco mainly focus on three things Customer, working with other and own behaviour. This will help to select the leader. finality is taken for giving training or promoting the staff according to the performance audit of the employee.In this step job performance of an empl oyee is evaluated typically by the corresponding manager or supervisor. A performance appraisal is a part of a guiding and managing career development. It is the process of analysing, obtaining and recording information about the relative worth of an employee to the organization. It is also the judgement of an employees performance in a job based on considerations other then productivity alone.There is the long process of evaluating the performance of an employees in Tesco. Managerial team up prepare an appraisal sheet of paper where individual employee fills in the form in monthly basis. Which includes the feedback on performance of the employee and then manager analyse the sheet collected from different employee and identify whether training is needed and document the criteria used to allocate organizational reward. It also analyse the personal evaluation and make up ones mind whether to improve salary, promotion, disciplinary action, bonus etc. It also provides opportunity for organization to diagnosis and develops in facility provided to the communication facilities between employee and administration. Its main aim is to provide performance through counselling, coaching and development of organization.Methods of Performance AppraisalA common approach to assessing performance is to use a quantitative or scalar rating system whereby managers are asked to score an individual against a number of objectives. In some companies, employees receive assessment from their manager, subordinates and customers while also performing a self assessment.Establishing performance standards setting up of the stanandards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the peroformance of the employee as succesful or unsuccesful and the degees of theri comtrubution to the organizational goal and objectives. The standards set should be clear, easily understandable and in measured terms. In case the performance of the employee cannot mesasured, great care should be taken to describe the standards.Establishing performance standardsCommunicating standards and expectationsMeasuring the actual performance canvass with standardsDiscussing ResultsDecision making-taking corrective actionsCommunicating the standards Once set, it is the responsibility of the management to channelize the standards to all the employees of the organization. The employees should be informed and the standards should be clearly expained. This will help them to understand their roles and to know what exactly is expected form them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.Measuring the aperformance it is difficult to measur the work done by the employees during the specified period of time. It is a continuous process whic h involves supervise the performance throught the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing attention rather than interfaceing in an employees work.Comparing the actula with desired performance the comparision tells the deviations in the performance of teh employees from the standard set. The result can show the actual performance macrocosm more than the desired performance or the actual performance being less than the desired performance depiciting a negative deviation in the organizational perofrmane. It includes recalling, evaluating and analysis of data related to the employees performance.The result of the appraisal is communicated and discussed with the employees on one to one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with tha aim of problem solving and reaching conssensus. The feedback should be given with a positive attitude as this can have an effect on the employees future performance. The pressure of teh metting should be to solve the problem face and motivate the employees to perform better.The last step of the process is to take decisions which can be taken either to improve the performance of the employees, takes the required corrctive actions, or the related HR decisions lile rewards, promotions, demotions, transfers etc.ConclusionTescois a succesful organization in UK. They have incresase market share and retails unit over the last fin year. Their model of HR is strong and highly practiced and highly commited. Their main focus on the training issues and also on vital to the success of the organisation, without commitment, it would amount to a wsate of resources. The entire organisation is involven in training and is offered to all levels within the organisation.Give good training and development of its emplo yees is necessary for Tesco to continue its work and sustain in the world as a world leading retailer. It uses same approach with both existing and new employees. This ensure the staff of this comapay have right skills to provide a strong base to support future growth of the business.

Customer Satisfaction in the Indian Petroleum Industry

Customer Satis particularion in the Indian crude color constancy ending of elements of client gratification in delivering kindle by means of sell numbers on high ways and in suburban arasIntroduction The Indian anoint color color IndustryThe Indian fossil oil Industry suck uped way back in the end of the nineteenth century, with the disco actually of gasoleneeum in Digboi Assam .The manufacturing was initially opened for global players and global oil reports much(prenominal) as Caltex, Esso and Burmah crustal plate. However later 1970s, the Indian division of the global companies was nationalized by political sympathies of India and the industry became stringently regulate din the country. The g e trulywherening nationalized the elaboration and merchandising firmaments and subsequently introduced regulatory controls on the production, import and distribution and pricing of grating oil and accelerator pedaleum products by establishing the fossil oil c oordination Committee (OCC). finished the OCC, the establishment administered the charges of rock oil products afterward establishing a complex oil pool grievance system. Producers, refiners and victualsstuffers were patch upd for direct cost and were to a fault assured of a somewhat re looseness on their as forwardnesss finished the Administered Price Mechanism (APM). During this period, governing body controlled entities accounted for 90% of the marketplace place sh ar. major players like IOC, BPCL and HPCL dominated the market in the downstream sector, while the upriver sector was dominated by Oil and cancel Gas weed and Oil India claiming approximately 84% of the sh be of the broad(a) market. aft(prenominal) the relaxation of the Indian economy, the industry witnessed some fundamental changes. The constitution instalrs realized that APM give no overnight be working success to the full as it had in the past and the sector exit pay back to be opened fir ely. olibanum the government initiated the edge of deregulation in 1995, whereas APM was replaced by Market primed(p) Price Mechanism (MDPM).With the introduction of MDMP and deregulation of the pile and refining sectors, the industry was opened completely for one-on-one and foreign participation. The government drop outed four companies belief oil color, ONGC, Essar and Numaligarh Refineries to market petroleum products through with(predicate) their sell outlets. During the APM regime, earthly concern sector companies digest the market and hence they never felt the essential to pay economic aid towards cope name coordinate and client liegety. Branding opening moves were modified to lubricant market and when.With the entry of these unseasoned players, argument intensified and pose a unsafe threat for the existent players. This clue to change in the way oil trade companies looked at the send away sell dividing line. This was the quantify when all p layers started thought the fact that burn products has to be moved from commodity- public lavatory buy demeanour to advantage-client committal quadrant. This pull up stakes initiate cross selling and thitherfrom ahead(p) to cast up in per agora feet revenue from sell space. This increase the players effort towards marque and Non provide Revenue orifices. supply Retailing in Indian vegetable oil IndustryFuel retail craft in India has undergone a massive change from a fully counterbalance market to semi regulated market. Till 2002 the sector was completely under government control. During all these historic period, the merchandising function of organisations received the least importance. Distribution was the exclusively merchandise function. The market was sellers market. The clients had no option diametrical than to buy products from globe sector oil companies. The entry hush-hush players in the market crap brought in options for nodes and the inventio n of node darling has evolved in provide retail problem. At toast there atomic number 18 nearly 3four hundred0 PSU terminate retail outlets spread crossways India. There are or so 3000 discharge retail outlets by close players. The fault war is spreading to petrol warmheartedness billets.The players are decent much than clients centric and once the market becomes fully deregulated in approaching courses with number of players befitting double of present, the challenger on scathe depart die and the competition go away be to agnize node commitment by providing antithetical function to guest. thusly it becomes Copernican to go the gradable train of go which need to be provided to achieve guest satisfaction and gain customer loyalty. The study by Kumar Sahay(2004) says that the behaviour of customer at dismiss retail outlets on alleys is to green the vehicle and relax, which is very divers(prenominal) from behaviour on outlets within urban l imits. Thus it becomes seeming(a) from the above that go off retail line of credit in India can dual-lane into 2 types, which are Fuel Retail bloodline with in urban Limits and Fuel Retail dividing line on Highways and Suburbs. The hierarchic level discussed above is dependent upon type of open fire retail business organization the player is run in. This demarcation into two businesses come crosswises out-of-pocket to the difference in the customer behaviour while travellingling with in urban limits and on highways.There are mevery researches make on highway travellers and their apprehension and preferences of servings on burn sends, but these are geography special and nonhing has been done in the Indian context. The decision of hierarchical level of serve at burn down displace till date is control to urban limits precisely. The customer behaviour and expectations on outlets situated on highways and suburbs are different from customer segments visiting out lets with in urban limits. This research aims at finding different attend tos at fuel retail outlets on highways and in suburban theatres former(a) than refuelling which pass on help in creating loyal customers. Also there can be number of run, but which are much than essential for particular outlet always re master(prenominal)s a question. The research similarly aims to find relationship among the location of outlets to the sympathetic of assistants involve in club to condition a ending making process present to select definitive imparted utilitys with an intention of increasing per square feet revenue from the real put in space and maturement of customer loyalty. publications review Fuel RetailingRetailing is the set of activities that markets products or serve to final consumers for their own personal or kinfolk use whereas retailer is someone who cuts off or sheds a wee piece from something onward miserable to Indian context it is important to get a pair with westward sandwich markets where fuel or petrol retail is in more than veritable stage in comparison to Indian fuel sell. The fuel retail in India has started to move from commodity to proceeds from 2002 after the way out of private and global players. But this phenomenon happened far forrader in US, European and Asia Pacific markets.Since 1960 there have been substantial changes in the structure of the petrol retail industry of Europe and North the States (Lowe J. , 1976)There was influx of novel companies in UK market which were either independent or wholly have subsidiaries of foreign giants. Lowe (1976) analyzed that after the influx of reinvigorated firms in UK, the price competition became fierce and all the new companies essay different things to denounce and gain customer loyalty.The fuel or accelerator pedal retail structure in US had full do gas place. The full go gasoline point was the one that supported minor work and repairs, where wind bu lwark was cleaned, where credit was turned and where rest rooms were available (Mitchell 1980). Mitchell(1980) as well as stated that these serve were sold as a part of a package a desire with the gasoline itself and was done en dischargely with the objective of building a long term relationship between the inspection and repair station and the customer.The companies in the western countries started looking for motley function which can appendage their gasoline gross exchanges in the event of increased competition. One of the approximately popular additions of go was cable car wash, which proved to be a sure-fire strategy in selling tremendous quite a littles of gasoline. This made customers to come for car wash and excessively get their vehicles refuelled. A allocateer in Dallas, estimated that more than half of his judge $ 700,000 gross gross sales would come from an automated car wash. What more he claimed that the front man of car wash boosted his gasoline sales to an one-year rate more than 1,000,00 gallons from 680,000 gallons troika before that.( Steele 1966)Steele (1966) excessively predicted that as measure passes by more and more gasoline stations will turn into bear-sized supporter centres fling a combination of gasoline, car wash, tire and battery service, eatery and so on. Thus the future will be a complete one stop solution.This can hold lawful in Indian context in addition, but the perfume of operate will be definitely very different from outlets in developed markets. The bouquet will be entirely different depending upon the different customer requirements and buy fountain.Mitchell (1980) as well as predicted the hunting expedition of gasoline stations from independent full service stations to play along own self service gasoline stations. The causal agent stated was the wardrobe of margins and aim to drive customer loyalty by providing customers with a large service bouquet at gasoline station with in t he homogeneous margin. This can also be seen happening in Indian context with Indian Oil Corporation being the low among all PSUs moving towards order owned outlets to increase service standards at their pumps and latterly squash entering into Indian market with high society owned outlets.The conceptual model (Brown Ingene 1987) on fuel or gasoline retail structure in US explains the influence of demographic environmental characteristics on merchandising mixture religious offerings. The model also explained the influence of location of the outlet on demographic, environmental, and marketing mix characteristics.The research by Brown and Ingene (1987) present that while delimitate marketing mix elements for fuel and gasoline retail it becomes important to adopt the impact of demographic and environmental characteristics.The major changes started to happen in fuel sell and fuel stations started to move towards differentiating themselves due to increase in competition. Th is was the development of forecourt sell phenomenon at gasoline stations in western markets. The major changes occurred with petrol forecourt retailing where transition of fuel stations within a contextual framework happened. They had sought product line in the calculate of increased competition. One strategy under taken was to develop a toilet facility shop format to supplement fuel sales (Denning Freathy 1996).A clear(p) simile can be drawn for Indian fuel retail also, where with offspring of m some(prenominal) private players to tap the biggest consumer market, the players or fuel companies will have to try and do something to differentiate themselves.As the competition grew the fuel retailers face up more and more pressure on dough and it became important for them to amaze loyal customers and increase the ticket sales determine of loyal customers at the fuel outlet. They move to differents forms of revenue generation. The objective was to compensate for erosion wi th abetary forms of profit generation.The issue for the petrol retailers has been to identify ways of adding treasure to their carrying out in the face of these competitive threats. One of the primary(prenominal) methods of achieving this has been through forecourt shop. some(prenominal) petrol retailers have attempted to reduce the assay posed by petrol price fluctuation by boom outing the facilities at their outlets. (Key none, 1993)Denning and Freathy (1996) established that different customer segments depending upon their income levels and profession purchased different products from thingumajig stores at petrol stations. This indicates that determination major visiting customer segment becomes important at any fuel retail outlet. The product mix at any fuel retail outlet is also dependent upon purchasing power of the customer segments at that outlet.The contract form that the formats have taken has varied by operator location and site type. This is a denunciation of the fact that the public convenience store does not necessarily follow a single set pattern. The limited space available within each unit, it is possible that services take priority over other categories of goods.(Denning Freathy 1996)An important feature to note here is that, the development of fuel stations did not happen tho in areas with in urban limits. The development of interstate highway highways and urban extinguish ways had made many fuel stations obsolete in western serviceman. This made many oil companies to build new facilities to cooperate the changing traffic patterns. More and more oil companies began to realize that causality gas outlets of the conventional style were no longer getting customer visits.The primary objective of service bouquet is to add to the convenience of the customer visiting the outlet. wash room is curiously important in displumeing repeat customers. It becomes fair important to understand what adds to customer convenience and what n ot. Convenience results from various factors such(prenominal) as site size of it, site plan, traffic impacts and lay (Smalley 1996). The factors are not limited to the ones stated above the factors vary with different geographies and markets.Fuel retail business is of two types one with retail outlets with in urban limits and other with retail outlets on highways and suburbs. The behaviour of the customer is very different at these two different types of business. The marketer likewise faces a distinct business environment to which marketing strategy must be adapted. The Highway market is not necessarily different from traditional markets because objectives pillow the same. It is unique, however, because new approaches are needed to achieve the objectives.(Beaton 2001)Interstate or highway motorists seek 5 basic services gasoline, rest rooms, nourishment, relaxation and lodging. by from the need for gasoline as the prime factor, marketers differ somewhat in their opinions as to the exact ordering of these needs as stopping power factors. (Beaton 2001) The development of new factors is prompting rapid provoketh of different services at fuel retail outlets at highways. Competition and changing travel patterns mean that to stay competitive the oil companies must meet the boilers suit needs of the motorist at one stop. (Beaton Hall, 1968)For a fuel retail outlet on highways, petroleum companies apply the same criteria for building service bouquet as that of the outlets with in urban limits. This happens due to the profit criteria only as the main objective of existence of outlet instead of customer satisfaction. A good station site does not guarantee a good service station. Site and location factor analysis indicates what a particular fuel outlet should do. (Beaton Hall 1968)Fuel Retailing IndiaFuel retail business on highways is geography dependent the above researchers have kept their study confined to more developed and liberalised markets than Ind ia. in all those factors may be or may not be applied to Indian conditions. As the Indian fuel retail business becomes more deregulation, the customer expectations will start to rise. The variables like competitive market, promotional effort to attract customers by competitors, and so forth raise the customer expectations and piss customer gap. (Kumar Sahay 2004)In India the study by Kumar Sahay, to find out the elements that determine customer satisfaction in delivering petrol/diesel through retail outlets is confined to fuel retail with in urban limits. The market survey was carried out in Delhi. Stratified non-probability taste method was used for sample assembly. The target macrocosm has been defined as The people who drive Cars / jeeps or Motorcycles/scooters or Buses or Goods vehicles on the roads of Delhi (state). (Kumar Sahay 2004)Through cluster analysis the initially make segments reduced to tercet segments and customer expectations level for various services d etermined.This has lead to development of hierarchical levels of services for different segments and a conclusion that a player offering all the six levels of services will be able to dyad gap between customer expectations and services offered. These levels of expectations, if met successfully, create wow publication and customer would indulge in word-of-mouth communication. word-of-mouth communication is the most(prenominal) powerful tool for creating customer fanny. Not only the existing customers are retained but also they bring-in new customers to outlets. Prospects with proceed satisfaction with the products and services become advocates. Such customers start singing marketers margin call and begin to praise. (Kumar Sahay 2004) Fuel and Non Fuel retailing Initiatives by Indian Oil Marketing CompaniesThe three major players in the domain of oil marketing companies in India are PSUs namely BPCL, HPCL and IOC enjoying majority handle. Rest of the pie is served by private players like cartel, Essar and Shell. All the three PSUs have taken initiatives to add non fuel revenues and build customer loyalty. These initiatives had been taken on outlets both within urban limits and also on outlets on highways and suburbs. The reason behind all the initiatives had been to gain customer loyalty and thus increase customer satisfaction. http//www.icmrindia.org/ uncaring%20resources/casestudies/BPCL.htm Bharat oil colour Corporation curb (BPCL)Bharat crude Corp Ltd (BPCL) is one of the largest public sector undertakings in India, with the governing body of India having a more than 50% shareholding in the attach to as of 31 shew 2008 (Euromonitor International, April 2009).BPCL is engaged in the refining and retailing of petroleum and petroleum products, with around 8,251 retail outlets. By December 2008, around 400 of these outlets had an unionised convenience store attached, branded as In out(a), with an aggregate retailing space of 18,600 sq m. BPCLs key strategy to increase revenues from the In come forward outlets has been to expand the basket of products and services offered through the outlets. Apart from offering packaged food, kooky and hot drinks, cosmetics and toiletries, household care items and consumer foodservice, BPCL has also attempt to add other additional services at the outlets over the years to add to the customer satisfaction levels.Bharat Petroleum Corporation Ltd (BPCL) is planning to grow its non-fuel retail business by expanding its fuel retail engagement, with sufficient size to emphasise non-fuel offerings, and puff up the portfolio of non-fuel offerings in its outlets located at highways and urban locations, with a focus on food, shopping and entertainment in these outlets. It will also increase consumer services for example, through its recent tie-up with an agency for outside(a) gold channelise services at its existing urban outlets.During the prospect period, BPCL proposes to invest Rs 6 billion to expand its retail network. The outlets will be built in the main on national highways and at urban locations, and will offer wide awake consumers high quality food, and also provide them with recover to entertainment through an on-site multiplex sieve. BPCL has tied up with Cinemata, a film distribution unit of Sony Entertainment Television, to establish cinema halls at its fuel outlets on highways across the country by 2010.In order to expand its go of services, In break launched an e-traveller pronto-wittedness at its forecourt retail outlets. The facility enables consumers to contain rail, airline and bus tickets, as well as hotel accommodation, and is available in 37 stores. BPCL is working on Phase II of the deployment of this service, when it will make it available in an additional 100 stores. Revenues from the e-traveller facility were around Rs15 million in 2007/2008 its rootage full year of operation, with sales of 7,782 tickets (Euromonitor Internati onal, April 2009).To provide added convenience services to its customers close to their homes, BPCL has signed a instrument of agreement with property Gram Internationals agent line of descentwings Services, to offer international money shift service in India from its selected In Out outlets. Meanwhile, its alliance initiative with Western junction Money Transfer saw the In Out network put down 36,677 transactions in the year ending abut 2008, with a derangement of Rs 699 million, an increase of 26% over the previous year. (Euromonitor International, April 2009)BPCLs quick service eating place sales through its alliance network partners McDonalds, pizza pie Hut, Caf burnt umber Day, Subway, Nirulas and other foodservice brands grew by 40% to Rs 249 million in the year ending March 2008.BPCLs outlets on highways are branded as Ghar Dhaba, and cook up the companys foray into food. BPCL has developed a concept covering theme design, kitchen layout and wit planning, an d established the standard operating processes for the outlets in-house. As of March 2008, it had 21 Ghar Dhaba outlets in operation, with total sales of Rs23 million. Developed on a large area of three to atomic number 23 acres (12,000-20,000sq m), these outlets provide the requisite space to allow BPCL to experiment with a multiplex cinema for stop-over entertainment (Business Standard, Sep 2007).http//www.business-standard.com/india/ parole/bpcl-to-mix-moviesoil-at-pumps/297583/If the concept is successful, the company will roll this out in more Ghar Dhaba outlets. The multiplex screens, especially in outlets located on highways, will also serve a social purpose for nearby rural consumers. BPCL plans to screen social awareness, health and literacy content in these multiplexes for rural audiences.The majority of the products through the In Out outlets are manufactured by third parties. However, BPCL proposes to offer its own brand of bottled water at the outlets, where the wate r will be a byproduct of its captive power plant, based on heat content fuel electric cell technology.Bharat Petroleum Corp Ltd (BPCL) was the leading forecourt retailer in India in 2008, with 400 outlets. The company added 17 outlets to the total in that year. or else than expanding rapidly, BPCL has focused on ensuring that its outlets are profitable, and also on adding additional services to its existing outlets. In 2008, sales revenues of BPCLs non-fuel retail arm, Allied Retail Business (ARB), grew by 32%, to Rs2,089 million, making it the largest non-fuel revenue generator in the oil industry. During the year, In Outs sales revenues grew by 41%, to Rs 1092 million. 15 of the In Out outlets achieved average sales of Rs1 million per month, compared to eight in the previous year.This is clear indication of the fact that now oil marketing companies are understanding the importance of non fuel retail revenue initiatives and also working over it not only for outlets with in urba n limits but also for outlets on highways. But as discussed the scientific framework to decide what to offer unperturbed remains a mystery, as all the efforts for highway fuel retail outlets have been o trial and error basis. inception Euromonitor International from trade pressHindustan Petroleum Corporation Limited (HPCL)HPCL is a Fortune euchre Company, with an annual disorder of over Rs 74044 Crores, a 20% refining and marketing share in India and a strong market infrastructure. (Euromonitor International, July 2007)The corporation operates two major refineries, producing a wide variety of petroleum fuels and specialities, one in Mumbai (West Coast) with a 5.5 MMTPA susceptibility and the other in Vishakapatnam (East Coast) with a message of 7.5 MMTPA (Oil Gas, IBEF typography Sep 2009) HPCL holds an justice put up of 16.95% in Mangalore Refinery Petrochemicals Limited, a state-of-the-art refinery at Mangalore with a capacity of 9 MMTPA. In addition, HPCL is progressing towards the setting up of a refinery in the state of Punjab.HPCL also owns and operates the largest lubricant refinery in the country, producing lube base oils to international standards. With a capacity of 335,000 metric tonnes this lube refinery accounts for over 40% of the countrys total lube base oil production. The vast marketing network of the corporation consists of zonal offices in the four metro cities and 85 regional offices facilitated by a supply and distribution infrastructure comprising terminals, aviation service stations, bottling plants, and inland relay race depots and retail outlets.The Hindustan Petroleum (HPCL) focus is on providing broader services to its customers with an experience that is unmatched. Through its retail channels, HPCL offers a nationwide chain of convenience stores, has forged tie-ups with leading fast food and refreshment companies to set up food counters, a special arrangement with FedEx to provide a world shed light on courier service, vehicle insurance and international money fast-paced counters. The focus is on complete customer satisfaction and an experience that will make a customer drive in over again and again to HPCL forecourt retailing and convenience stores. In 2006, the chain developed its forecourt operations well through a series of engagements with a number of prominent foodservice and retail players.HPCL is increasingly adopting a focus on loyalty, it has put in exceptional efforts and an aggressive marketing campaign to retain customer loyalty. It runs Indias largest loyalty broadcast and has products such as the HPCL credit card, HPCL debit card and I-mint loyalty programme. other focus is on brand equity HP has been investing in increasing its brand front and has taken on brand ambassadors such as Sania Mirza and Narayan Karthikeyan to gain ground its different products. Hindustan Petroleum Corporation Ltd (HPCL) is a substitution government moneymaking(prenominal) enterprise engaged in t he refinement and sale of crude oil. It also manufactures other petroleum products like LPG, lubricants, greases, petrochemicals and aviation turbine fuel.HPCL launched its confederacy HP forecourt retailing chain in 2001. From the beginning, the chain sought to offer other facilities as well selling petrol, diesel and other products. These include free vehicle checks, vehicle finance and insurance related services, bill hire services, HPCL-ICICI credit card and loyalty programmes. (Euromonitor International, July 2007) rescript HP outlets are sort as Standard, Mega and Max, depending on the services and amenities available. In its first figure of expansion, HPCL set up 85 alliance HP outlets in Delhi, Mumbai, Kolkata and Chennai. distributively of these outlets was converted at an estimated cost of between Rs1 and Rs3 million. It subsequently introduced its supermarket sub brand HP drive mart, and developed its foodservice operations through an agreement with US Pizza.The success of this deal prompted HPCL to enter into similar agreements with players such as Caf Coffee Day (vending and foodservice), dairy Den (ice cream parlours), Western Union (money transfer points) and Tata Motors (car care services) (Business Standard, Jan 2007).http//www.business-standard.com/india/ intelligence information/fuel-stations-to-offer-one-stop-shopping/269785/In order to improve its assure among Indian consumers in foothold of the quality of its fuel, during the review period the company launched the PCL part Assurance initiative under the Good Fuel Promise slogan. This problematical the pioneering concept of wide awake laboratories to carry out regular checks on fuel sold at Club HP outlets. It also entered into an agreement with the international agency function Veritas to conduct a surveillance audit of Club HP Outlets. After having a market share of around 20-22% for a long time, recently it has improved its market position to number two, with a market sha re of close to 25% of the total service station market in India (Business Standard, April 2005).http//www.business-standard.com/india/news/fuel-stations-to-offer-one-stop-shopping/269785/For most of the review period, Club HP played second fiddle to BPCLs In Out chain in terms of revenues from forecourt operations, although it garnered abundant brand awareness among consumers. A deal with US Pizza was expect to witness the opening of over 500 pizza and fast food lecture units at Club HP service station outlets across India between 2005 and 2007. Apna fair Co-operative (a supermarket chain) is involved in a pilot confinement with HPCL to establish Apna Bazaar outlets at three Club HP outlets in Mumbai. If successful, the alliance will be extended to other Club HP outlets nationwide. This agreement will also enable Apna Bazaar to upgrade its image by targeting more upper and middle class consumers.http//www.hindustanpetroleum.com/En/UI/RetailClubHP.aspx era neither of these deals on their own are credibly to have any major impact on constant esteem sales of heartbeat food and drink products through Club HP outlets, they will nearly certainly benefit from the rise in consumer traffic that these foodservice and supermarket operations will entail. A loyalty card deal with low-priced airline Air Deccan should also ensure a higher volume of consumer traffic in Club HP outlets over the forecast period. Similarly, an agreement with Federal show up (FedEx) during the review period to open cargo exhibition centres at various Club HP outlets should continue to attract consumers between 2005 and 2010. FedEx is slowly gaining a reputation in India as a legitimate cargo delivery agent in 2005, there were FedEx cargo collection centres at HP outlets in eight major Indian cities.Source Euromonitor International from trade press credence Petroleum trustfulness Petroleum is aggressively targeting the service station channel, planning a pan-Indian presence over the ne xt couple of years in cities as well as on main roads. The biggest challenge it faces is in terms of return on investment and whether it is a wise move to invest so to a great extent in forecourt retailing in India, which is still relatively underdeveloped.With trusts strong presence across India, food and beverage manufacturers can aim to push major volumes through Reliance service stations. Reliance Petroleum Limited (RPL) is a subsidiary of Indias largest private group Reliance Industries Ltd. RPL was set up to attach an emerging value creation opportunity in the global refining sector and currently RPL is a 75% owned subsidiary of RIL. RPL also benefits from a strategical alliance with banding India Holdings Pte Limited, Singapore, a wholly-owned subsidiary of Chevron Corporation regular army (Chevron), which currently holds a 5% equity stake in the company.RPL was make to set up a Greenfield petroleum refinery and polypropylene plant in the Special Economic Zone (SEZ) at Jamnagar in Gujarat. This global sized, extremely complex refinery is being located adjacent to RILs existing refinery and petrochemicals complex, which is amongst the largest and most economical in the world, thus offering significant synergies. With an annual crude bear on capacity of 580,000 barrels per stream day (BPSD), RPL will be the sixth largest refinery in the world. It will have a complexness of 14.0, using the Nelson complexity Index, ranking it among the highest in the sector. The polypropylene plant will have a capacity to produce 0.9 million metric tonnes per annum. (Euromonitor International, July 2008)With its Reliance A1 Plaza chain, Reliance aims to provide consumers with a wide choice of products in convenient locations. The company had planned to open more than a 1,000 service stations in the next 2-3 years, so it was clearly targeting leadership in the petroleum retailing segment. But during economic crisis and with high crude rates, Reliance had shut t heir outlets as serving fuel at comparative prices was becoming non-profit making business for them.Shell India Marketing snobby LimitedShell India Marketing Private Limited (SIMPL) is a subsidiary of Royal Dutch Shell and the first multinational corporation to obtain government encomium to open 2,000 servicCustomer Satisfaction in the Indian Petroleum IndustryCustomer Satisfaction in the Indian Petroleum IndustryDetermination of elements of customer satisfaction in delivering fuel through retail outlets on highways and in suburban areasIntroduction The Indian Petroleum IndustryThe Indian petroleum Industry started way back in the end of the 19th century, with the discovery of petroleum in Digboi Assam .The industry was initially opened for international players and global oil majors such as Caltex, Esso and Burmah Shell. However after 1970s, the Indian division of the international companies was nationalized by government of India and the industry became strictly regulate din the country. The government nationalized the refining and marketing sectors and subsequently introduced regulatory controls on the production, import and distribution and pricing of crude oil and petroleum products by establishing the Oil coordination Committee (OCC).Through the OCC, the government administered the prices of petroleum products after establishing a complex oil pool account system. Producers, refiners and marketers were compensated for operating cost and were also assured of a fair return on their assets through the Administered Price Mechanism (APM). During this period, government controlled entities accounted for 90% of the market share.Major players like IOC, BPCL and HPCL dominated the market in the downstream sector, while the upstream sector was dominated by Oil and Natural Gas Corporation and Oil India claiming approximately 84% of the share of the total market. After the liberalization of the Indian economy, the industry witnessed some fundamental changes. The po licy makers realized that APM will no longer be working successfully as it had in the past and the sector will have to be opened completely. Thus the government initiated the process of deregulation in 1995, whereas APM was replaced by Market Determined Price Mechanism (MDPM).With the introduction of MDMP and deregulation of the marketing and refining sectors, the industry was opened completely for private and foreign participation. The government allowed four companies Reliance Petroleum, ONGC, Essar and Numaligarh Refineries to market petroleum products through their retail outlets. During the APM regime, public sector companies owned the market and hence they never felt the need to pay attention towards brand building and customer loyalty. Branding initiatives were limited to lubricant market only.With the entry of these new players, competition intensified and posed a serious threat for the existing players. This lead to change in the way oil marketing companies looked at the fu el retail business. This was the time when all players started understanding the fact that fuel products has to be moved from commodity-convenience purchase behaviour to service-customer loyalty quadrant. This will initiate cross selling and thus leading to increase in per square feet revenue from retail space. This increased the players effort towards branding and Non Fuel Revenue initiatives.Fuel Retailing in Indian Petroleum IndustryFuel retail business in India has undergone a huge change from a fully regulated market to semi regulated market. Till 2002 the sector was completely under government control. During all these years, the marketing function of organisations received the least importance. Distribution was the only marketing function. The market was sellers market. The customers had no option other than to buy products from public sector oil companies. The entry private players in the market have brought in options for customers and the concept of customer service has ev olved in fuel retail business. At present there are nearly 34000 PSU fuel retail outlets spread across India. There are around 3000 fuel retail outlets by private players. The brand war is spreading to petrol pump stations.The players are becoming more customers centric and once the market becomes fully deregulated in coming years with number of players becoming double of present, the competition on price will die and the competition will be to gain customer loyalty by providing different services to customer.Thus it becomes important to know the hierarchical level of services which need to be provided to achieve customer satisfaction and gain customer loyalty. The study by Kumar Sahay(2004) says that the behaviour of customer at fuel retail outlets on highways is to park the vehicle and relax, which is very different from behaviour on outlets within urban limits. Thus it becomes evident from the above that fuel retail business in India can divided into two types, which are Fuel Re tail Business with in Urban Limits and Fuel Retail Business on Highways and Suburbs. The hierarchical level discussed above is dependent upon type of fuel retail business the player is operating in. This demarcation into two businesses happens due to the difference in the customer behaviour while travelling with in urban limits and on highways.There are many researches done on highway travellers and their expectation and preferences of services on fuel stations, but these are geography specific and nothing has been done in the Indian context. The determination of hierarchical level of services at fuel stations till date is confined to urban limits only. The customer behaviour and expectations on outlets situated on highways and suburbs are different from customer segments visiting outlets with in urban limits. This research aims at finding different services at fuel retail outlets on highways and in suburban areas other than refuelling which will help in creating loyal customers. Al so there can be number of services, but which are more important for particular outlet always remains a question. The research also aims to find relationship between the location of outlets to the kind of services required in order to build a decision making process model to select important added services with an objective of increasing per square feet revenue from the real state space and development of customer loyalty.Literature review Fuel RetailingRetailing is the set of activities that markets products or services to final consumers for their own personal or household use whereas Retailer is someone who cuts off or sheds a small piece from somethingBefore moving to Indian context it is important to create a parallel with western markets where fuel or gasoline retailing is in more developed stage in comparison to Indian fuel retailing. The fuel retailing in India has started to move from commodity to service from 2002 after the emergence of private and global players. But this phenomenon happened far before in US, European and Asia Pacific markets.Since 1960 there have been substantial changes in the structure of the petrol retailing industry of Europe and North America (Lowe J. , 1976)There was influx of new companies in UK market which were either independent or wholly owned subsidiaries of foreign giants. Lowe (1976) analyzed that after the influx of new firms in UK, the price competition became fierce and all the new companies tried different things to differentiate and gain customer loyalty.The fuel or gasoline retail structure in US had full service gasoline stations. The full service gasoline station was the one that offered minor services and repairs, where wind shield was cleaned, where credit was offered and where rest rooms were available (Mitchell 1980). Mitchell(1980) also stated that these services were sold as a part of a package along with the gasoline itself and was done entirely with the objective of building a long term relationship be tween the service station and the customer.The companies in the western countries started looking for various services which can supplement their gasoline sales in the event of increased competition. One of the most popular additions of service was car wash, which proved to be a successful strategy in selling tremendous volumes of gasoline. This made customers to come for car wash and also get their vehicles refuelled. A dealer in Dallas, estimated that more than half of his anticipated $ 700,000 sales would come from an automated car wash. What more he claimed that the presence of car wash boosted his gasoline sales to an annual rate more than 1,000,00 gallons from 680,000 gallons three before that.( Steele 1966)Steele (1966) also predicted that as time passes by more and more gasoline stations will turn into large service centres offering a combination of gasoline, car wash, tire and battery service, restaurant and so on. Thus the future will be a complete one stop solution.This c an hold true in Indian context also, but the bouquet of services will be definitely very different from outlets in developed markets. The bouquet will be entirely different depending upon the different customer requirements and purchasing power.Mitchell (1980) also predicted the movement of gasoline stations from independent full service stations to company owned self service gasoline stations. The reason stated was the pressure of margins and aim to drive customer loyalty by providing customers with a large service bouquet at gasoline station with in the same margin. This can also be seen happening in Indian context with Indian Oil Corporation being the first among all PSUs moving towards company owned outlets to increase service standards at their pumps and recently Shell entering into Indian market with company owned outlets.The conceptual model (Brown Ingene 1987) on fuel or gasoline retail structure in US explains the influence of demographic environmental characteristics on marketing mix offerings. The model also explained the influence of location of the outlet on demographic, environmental, and marketing mix characteristics.The research by Brown and Ingene (1987) demonstrated that while defining marketing mix elements for fuel and gasoline retailing it becomes important to consider the impact of demographic and environmental characteristics.The major changes started to happen in fuel retailing and fuel stations started to move towards differentiating themselves due to increase in competition. This was the development of forecourt retailing phenomenon at gasoline stations in western markets. The major changes occurred with petrol forecourt retailing where transition of fuel stations within a contextual framework happened. They had sought differentiation in the face of increased competition. One strategy undertaken was to develop a convenience store format to supplement fuel sales (Denning Freathy 1996).A clear analogy can be drawn for Indian fuel ret ail also, where with emergence of many private players to tap the biggest consumer market, the players or fuel companies will have to try and do something to differentiate themselves.As the competition grew the fuel retailers faced more and more pressure on profits and it became important for them to generate loyal customers and increase the ticket sales value of loyal customers at the fuel outlet. They move to others forms of revenue generation. The objective was to compensate for erosion with alternative forms of profit generation.The issue for the petrol retailers has been to identify ways of adding value to their operation in the face of these competitive threats. One of the main methods of achieving this has been through forecourt shop. Many petrol retailers have attempted to reduce the risk posed by petrol price fluctuation by expanding the facilities at their outlets. (Keynote, 1993)Denning and Freathy (1996) established that different customer segments depending upon their i ncome levels and profession purchased different products from convenience stores at petrol stations. This indicates that determination major visiting customer segment becomes important at any fuel retail outlet. The product mix at any fuel retail outlet is also dependent upon purchasing power of the customer segments at that outlet.The exact form that the formats have taken has varied by operator location and site type. This is a reflection of the fact that the convenience store does not necessarily follow a single set pattern. The limited space available within each unit, it is possible that services take priority over other categories of goods.(Denning Freathy 1996)An important feature to note here is that, the development of fuel stations did not happen only in areas with in urban limits. The development of interstate highways and urban express ways had made many fuel stations obsolete in western world. This made many oil companies to build new facilities to meet the changing tr affic patterns. More and more oil companies began to realize that former gas outlets of the conventional style were no longer getting customer visits.The primary objective of service bouquet is to add to the convenience of the customer visiting the outlet. Convenience is especially important in attracting repeat customers. It becomes fairly important to understand what adds to customer convenience and what not. Convenience results from various factors such as site size, site plan, traffic impacts and parking (Smalley 1996). The factors are not limited to the ones stated above the factors vary with different geographies and markets.Fuel retail business is of two types one with retail outlets with in urban limits and other with retail outlets on highways and suburbs. The behaviour of the customer is very different at these two different types of business. The marketer likewise faces a distinct business environment to which marketing strategy must be adapted. The Highway market is not necessarily different from traditional markets because objectives remain the same. It is unique, however, because new approaches are needed to achieve the objectives.(Beaton 2001)Interstate or highway motorists seek five basic services gasoline, rest rooms, food, relaxation and lodging. Aside from the need for gasoline as the prime factor, marketers differ somewhat in their opinions as to the exact ordering of these needs as stopping power factors. (Beaton 2001) The development of new factors is prompting rapid growth of different services at fuel retail outlets at highways. Competition and changing travel patterns mean that to remain competitive the oil companies must meet the overall needs of the motorist at one stop. (Beaton Hall, 1968)For a fuel retail outlet on highways, petroleum companies apply the same criteria for building service bouquet as that of the outlets with in urban limits. This happens due to the profit criteria only as the main objective of existence of outlet i nstead of customer satisfaction. A good station site does not guarantee a good service station. Site and location factor analysis indicates what a particular fuel outlet should do. (Beaton Hall 1968)Fuel Retailing IndiaFuel retail business on highways is geography dependent the above researchers have kept their study confined to more developed and liberalised markets than India. All those factors may be or may not be applied to Indian conditions. As the Indian fuel retail business becomes more deregulation, the customer expectations will start to rise. The variables like competitive market, promotional effort to attract customers by competitors, etc. raise the customer expectations and create customer gap. (Kumar Sahay 2004)In India the study by Kumar Sahay, to find out the elements that determine customer satisfaction in delivering petrol/diesel through retail outlets is confined to fuel retail with in urban limits. The market survey was carried out in Delhi. Stratified non-prob ability sampling method was used for sample collection. The target population has been defined as The people who drive Cars / jeeps or Motorcycles/scooters or Buses or Goods vehicles on the roads of Delhi (state). (Kumar Sahay 2004)Through cluster analysis the initially found segments reduced to three segments and customer expectations level for various services determined.This has lead to development of hierarchical levels of services for different segments and a conclusion that a player offering all the six levels of services will be able to bridge gap between customer expectations and services offered. These levels of expectations, if met successfully, create wow effect and customer would indulge in word-of-mouth communication. Word-of-mouth communication is the most powerful tool for creating customer base. Not only the existing customers are retained but also they bring-in new customers to outlets. Prospects with continued satisfaction with the products and services become adv ocates. Such customers start singing marketers song and begin to praise. (Kumar Sahay 2004) Fuel and Non Fuel retailing Initiatives by Indian Oil Marketing CompaniesThe three major players in the domain of oil marketing companies in India are PSUs namely BPCL, HPCL and IOC enjoying majority share. Rest of the pie is served by private players like Reliance, Essar and Shell. All the three PSUs have taken initiatives to add non fuel revenues and build customer loyalty. These initiatives had been taken on outlets both within urban limits and also on outlets on highways and suburbs. The reason behind all the initiatives had been to gain customer loyalty and thus increase customer satisfaction. http//www.icmrindia.org/free%20resources/casestudies/BPCL.htm Bharat Petroleum Corporation Limited (BPCL)Bharat Petroleum Corp Ltd (BPCL) is one of the largest public sector undertakings in India, with the Government of India having a more than 50% shareholding in the company as of 31 March 2008 ( Euromonitor International, April 2009).BPCL is engaged in the refining and retailing of petroleum and petroleum products, with around 8,251 retail outlets. By December 2008, around 400 of these outlets had an organised convenience store attached, branded as In Out, with an aggregate retailing space of 18,600 sq m. BPCLs key strategy to increase revenues from the In Out outlets has been to expand the basket of products and services offered through the outlets. Apart from offering packaged food, soft and hot drinks, cosmetics and toiletries, household care items and consumer foodservice, BPCL has also tried to add other additional services at the outlets over the years to add to the customer satisfaction levels.Bharat Petroleum Corporation Ltd (BPCL) is planning to grow its non-fuel retail business by expanding its fuel retail network, with sufficient size to emphasise non-fuel offerings, and enlarge the portfolio of non-fuel offerings in its outlets located at highways and urban lo cations, with a focus on food, shopping and entertainment in these outlets. It will also increase consumer services for example, through its recent tie-up with an agency for international money transfer services at its existing urban outlets.During the forecast period, BPCL proposes to invest Rs 6 billion to expand its retail network. The outlets will be built mainly on national highways and at urban locations, and will offer mobile consumers high quality food, and also provide them with access to entertainment through an on-site multiplex screen. BPCL has tied up with Cinemata, a film distribution unit of Sony Entertainment Television, to establish cinema halls at its fuel outlets on highways across the country by 2010.In order to expand its range of services, In Out launched an e-traveller facility at its forecourt retail outlets. The facility enables consumers to book rail, airline and bus tickets, as well as hotel accommodation, and is available in 37 stores. BPCL is working on Phase II of the deployment of this service, when it will make it available in an additional 100 stores. Revenues from the e-traveller facility were around Rs15 million in 2007/2008 its first full year of operation, with sales of 7,782 tickets (Euromonitor International, April 2009).To provide added convenience services to its customers close to their homes, BPCL has signed a memorandum of understanding with Money Gram Internationals agent Airwings Services, to offer international money transfer service in India from its selected In Out outlets. Meanwhile, its alliance initiative with Western Union Money Transfer saw the In Out network record 36,677 transactions in the year ending March 2008, with a turnover of Rs 699 million, an increase of 26% over the previous year. (Euromonitor International, April 2009)BPCLs quick service restaurant sales through its alliance network partners McDonalds, Pizza Hut, Caf Coffee Day, Subway, Nirulas and other foodservice brands grew by 40% to Rs 249 million in the year ending March 2008.BPCLs outlets on highways are branded as Ghar Dhaba, and represent the companys foray into food. BPCL has developed a concept covering theme design, kitchen layout and menu planning, and established the standard operating processes for the outlets in-house. As of March 2008, it had 21 Ghar Dhaba outlets in operation, with total sales of Rs23 million. Developed on a large area of three to five acres (12,000-20,000sq m), these outlets provide the requisite space to allow BPCL to experiment with a multiplex cinema for stop-over entertainment (Business Standard, Sep 2007).http//www.business-standard.com/india/news/bpcl-to-mix-moviesoil-at-pumps/297583/If the concept is successful, the company will roll this out in more Ghar Dhaba outlets. The multiplex screens, especially in outlets located on highways, will also serve a social purpose for nearby rural consumers. BPCL plans to screen social awareness, health and literacy content in these mul tiplexes for rural audiences.The majority of the products through the In Out outlets are manufactured by third parties. However, BPCL proposes to offer its own brand of bottled water at the outlets, where the water will be a by-product of its captive power plant, based on hydrogen fuel cell technology.Bharat Petroleum Corp Ltd (BPCL) was the leading forecourt retailer in India in 2008, with 400 outlets. The company added 17 outlets to the total in that year. Rather than expanding rapidly, BPCL has focused on ensuring that its outlets are profitable, and also on adding additional services to its existing outlets. In 2008, sales revenues of BPCLs non-fuel retail arm, Allied Retail Business (ARB), grew by 32%, to Rs2,089 million, making it the largest non-fuel revenue generator in the oil industry. During the year, In Outs sales revenues grew by 41%, to Rs 1092 million. 15 of the In Out outlets achieved average sales of Rs1 million per month, compared to eight in the previous year.T his is clear indication of the fact that now oil marketing companies are understanding the importance of non fuel retail revenue initiatives and also working over it not only for outlets with in urban limits but also for outlets on highways. But as discussed the scientific framework to decide what to offer still remains a mystery, as all the efforts for highway fuel retail outlets have been o trial and error basis.Source Euromonitor International from trade pressHindustan Petroleum Corporation Limited (HPCL)HPCL is a Fortune 500 Company, with an annual turnover of over Rs 74044 Crores, a 20% refining and marketing share in India and a strong market infrastructure. (Euromonitor International, July 2007)The corporation operates two major refineries, producing a wide variety of petroleum fuels and specialities, one in Mumbai (West Coast) with a 5.5 MMTPA capacity and the other in Vishakapatnam (East Coast) with a capacity of 7.5 MMTPA (Oil Gas, IBEF Report Sep 2009) HPCL holds an equi ty stake of 16.95% in Mangalore Refinery Petrochemicals Limited, a state-of-the-art refinery at Mangalore with a capacity of 9 MMTPA. In addition, HPCL is progressing towards the setting up of a refinery in the state of Punjab.HPCL also owns and operates the largest lube refinery in the country, producing lube base oils to international standards. With a capacity of 335,000 metric tonnes this lube refinery accounts for over 40% of the countrys total lube base oil production. The vast marketing network of the corporation consists of zonal offices in the four metro cities and 85 regional offices facilitated by a supply and distribution infrastructure comprising terminals, aviation service stations, bottling plants, and inland relay depots and retail outlets.The Hindustan Petroleum (HPCL) focus is on providing broader services to its customers with an experience that is unmatched. Through its retail channels, HPCL offers a nationwide chain of convenience stores, has forged tie-ups wit h leading fast food and refreshment companies to set up food counters, a special arrangement with FedEx to provide a world class courier service, vehicle insurance and international money faster counters. The focus is on complete customer satisfaction and an experience that will make a customer drive in again and again to HPCL forecourt retailing and convenience stores. In 2006, the chain developed its forecourt operations substantially through a series of agreements with a number of prominent foodservice and retail players.HPCL is increasingly adopting a focus on loyalty, it has put in extra efforts and an aggressive marketing campaign to retain customer loyalty. It runs Indias largest loyalty programme and has products such as the HPCL credit card, HPCL debit card and I-mint loyalty programme.Another focus is on brand equity HP has been investing in increasing its brand presence and has taken on brand ambassadors such as Sania Mirza and Narayan Karthikeyan to promote its different products. Hindustan Petroleum Corporation Ltd (HPCL) is a central government commercial enterprise engaged in the refinement and sale of crude oil. It also manufactures other petroleum products like LPG, lubricants, greases, petrochemicals and aviation turbine fuel.HPCL launched its Club HP forecourt retailing chain in 2001. From the beginning, the chain sought to offer other facilities besides selling petrol, diesel and other products. These include free vehicle checks, vehicle finance and insurance related services, bill payment services, HPCL-ICICI credit cards and loyalty programmes. (Euromonitor International, July 2007)Club HP outlets are classified as Standard, Mega and Max, depending on the services and amenities available. In its first phase of expansion, HPCL set up 85 Club HP outlets in Delhi, Mumbai, Kolkata and Chennai. Each of these outlets was converted at an estimated cost of between Rs1 and Rs3 million. It subsequently introduced its supermarket sub brand HP Speed mart, and developed its foodservice operations through an agreement with US Pizza.The success of this deal prompted HPCL to enter into similar agreements with players such as Caf Coffee Day (vending and foodservice), Dairy Den (ice cream parlours), Western Union (money transfer points) and Tata Motors (car care services) (Business Standard, Jan 2007).http//www.business-standard.com/india/news/fuel-stations-to-offer-one-stop-shopping/269785/In order to improve its image among Indian consumers in terms of the quality of its fuel, during the review period the company launched the PCL Quality Assurance initiative under the Good Fuel Promise slogan. This involved the pioneering concept of mobile laboratories to carry out regular checks on fuel sold at Club HP outlets. It also entered into an agreement with the international agency Bureau Veritas to conduct a surveillance audit of Club HP Outlets. After having a market share of around 20-22% for a long time, recently it has improved its m arket position to number two, with a market share of close to 25% of the total service station market in India (Business Standard, April 2005).http//www.business-standard.com/india/news/fuel-stations-to-offer-one-stop-shopping/269785/For most of the review period, Club HP played second fiddle to BPCLs In Out chain in terms of revenues from forecourt operations, although it garnered considerable brand awareness among consumers. A deal with US Pizza was expected to witness the opening of over 500 pizza and fast food delivery units at Club HP service station outlets across India between 2005 and 2007. Apna Bazaar Co-operative (a supermarket chain) is involved in a pilot project with HPCL to establish Apna Bazaar outlets at three Club HP outlets in Mumbai. If successful, the alliance will be extended to other Club HP outlets nationwide. This agreement will also enable Apna Bazaar to upgrade its image by targeting more upper and middle class consumers.http//www.hindustanpetroleum.com/En /UI/RetailClubHP.aspxWhile neither of these deals on their own are likely to have any major impact on constant value sales of impulse food and drink products through Club HP outlets, they will almost certainly benefit from the rise in consumer traffic that these foodservice and supermarket operations will entail. A loyalty card deal with low-cost airline Air Deccan should also ensure a higher volume of consumer traffic in Club HP outlets over the forecast period. Similarly, an agreement with Federal Express (FedEx) during the review period to open cargo collection centres at various Club HP outlets should continue to attract consumers between 2005 and 2010. FedEx is slowly gaining a reputation in India as a reliable cargo delivery agent in 2005, there were FedEx cargo collection centres at HP outlets in eight major Indian cities.Source Euromonitor International from trade pressReliance PetroleumReliance Petroleum is aggressively targeting the service station channel, planning a pan- Indian presence over the next couple of years in cities as well as on main roads. The biggest challenge it faces is in terms of return on investment and whether it is a wise move to invest so heavily in forecourt retailing in India, which is still relatively underdeveloped.With Reliances strong presence across India, food and beverage manufacturers can aim to push major volumes through Reliance service stations. Reliance Petroleum Limited (RPL) is a subsidiary of Indias largest private group Reliance Industries Ltd. RPL was set up to harness an emerging value creation opportunity in the global refining sector and currently RPL is a 75% owned subsidiary of RIL. RPL also benefits from a strategic alliance with Chevron India Holdings Pte Limited, Singapore, a wholly-owned subsidiary of Chevron Corporation USA (Chevron), which currently holds a 5% equity stake in the company.RPL was formed to set up a Greenfield petroleum refinery and polypropylene plant in the Special Economic Zone (SE Z) at Jamnagar in Gujarat. This global sized, highly complex refinery is being located adjacent to RILs existing refinery and petrochemicals complex, which is amongst the largest and most efficient in the world, thus offering significant synergies. With an annual crude processing capacity of 580,000 barrels per stream day (BPSD), RPL will be the sixth largest refinery in the world. It will have a complexity of 14.0, using the Nelson Complexity Index, ranking it among the highest in the sector. The polypropylene plant will have a capacity to produce 0.9 million metric tonnes per annum. (Euromonitor International, July 2008)With its Reliance A1 Plaza chain, Reliance aims to provide consumers with a wide choice of products in convenient locations. The company had planned to open more than a 1,000 service stations in the next 2-3 years, so it was clearly targeting leadership in the petroleum retailing segment. But during economic crisis and with high crude rates, Reliance had shut their outlets as serving fuel at comparative prices was becoming non-profit making business for them.Shell India Marketing Private LimitedShell India Marketing Private Limited (SIMPL) is a subsidiary of Royal Dutch Shell and the first multinational corporation to obtain government approval to open 2,000 servic