KARNATAK UNIVERSITY

DHARWAD
KOUSALI INSTITUTE OF MANAGEMENT STUDIES
PROJECT REPORT ON
“To Find the Market Potential for ‘Relstar’ Lubricant a Reliance Product in Bagalkot d
istrict”

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS

FOR THE AWARD OF
MASTER DEGREE IN BUSINESS ADMINISTRATION
DURING THE YEAR 2007-2009
Submitted by
SHANKREPPA.S.ATALATTI
MBA II SEM
MBA07001049
INTERNAL GUIDE: EXTERNAL GUIDE:

Dr.N.Maruti Rao Mr.Basavaraj.S.Hanagandi

FACULTY IN MANAGEMENT AREA MANAGER

KARNATAK UNIVERSITY, DHARWAD

KOUSALI INSTITUTE OF MANAGEMENT STUDIES

Dr.N.Maruti Rao
Faculty in Management,
K.I.M.S.

Ref... No. KU/KIMS/

Date: -

CERTIFICATE

This is to certify that Mr.Shankreppa.S.Atalatti is a bonafide student o

f Kousali Institute of Management Studies, Karnataka University, Dharwad. Has c
ompleted his summer project at Reliance Petro Marketing Pvt.Limited Bijapur. H
e had undertaken a project titled “To find the market potential for ‘Relstar nova’ lub
ricant a reliance product in Bagalkot district” under my guidance and submitted a
report for the same.
 Dr.N.Maruti Rao

(Faculty in KIMS)

ACKNOWLEDGEMENT
The successful completion of any task could be incomplete without
complementing those who made it possible and under whose guidance and encouragem
ent made our effort successful.
I would like to thank Mr.Basavaraj.S.Han
agandi Area manager of Reliance petro marketing Ltd Bijapur. For giving me an op
portunity to do a project in Reliance petro marketing Ltd Bijapur.
I am very much beholden to my organizati
on guide
Mr.Basavaraj.S.Hanagandi Area manager under his sincere guidance, valuable sugge
stion and benevolent directions from time to time right from the beginning up to
the end of project.
I am very much thankful to Dr.N.Maruti Ra
o Faculty Guide-KIMS, Karnataka University, Dharwad, who helped me a lot during
the progress of my work and to overcome all my difficulties.
I could also extend my thanks to all my fr
iends who have helped me directly or indirectly.
And I also express my heart full gratitude t
o Almighty, my Parents for their love and blessing to complete the project succe
ssfully.
Shankreppa.S.Atalatti
DECLARATION
I here by declare that the project entitled “The market potential for Rels
tar lubricant a reliance product in Bagalkot district” is submitted in Partial ful
fillment of MBA as prescribed by Karnataka University Dharwad for the academic y
ear 2007-2009.the report also has been submitted to Kousali Institute of Managem
ent Studies Dharwad.
I also declare that this result is of my own effort and this report
is not been submitted to any other University or Institute for the award of any
other degree.

Yours sincerely,
(Shankrepp
a.S.Atalatti)

Place: __________
Date: __________

CHAPTER NO. TOPIC PAGE NO.

I EXECUTIVE SUMMARY 6
II INDUSTRY OVERVIEW 10
III COMPANY OVERVEIW 21
IV PRODUCT PROFILE 31
V COMPETITORS 43
VI METHODOLOGY 46
VII ANALYSIS AND INTERPRETATION 47
VIII FINDINGS 69
IX
RECOMMENDATION 71
X CONCLUSION 72
XI BIBILOGRAPY 75
XII ANNEXURE 76
INDEX

PART 1

EXECUTIVE SUMMARY

Executive Summary
Introduction of the company
 Started in the Dec 1999 this is the world largest refinery plant in
Jamnagar with the capacity of 27 million tones per year. The area covered is abo
ut 7500 acres of Jamnagar. This is the largest investment ever made at a single
location on a single plant. The investment is about US $ 6 Billion (i.e. about R
s 24000 crores). The construction was started in Nov 1996 with a work force of 7
5000 people and project management by world leader Bechtel.
The main purpose of this study is to find out the potential market f
or Relstar in Bagalkot district. This is the newly entering lubricant product of
reliance Petroleum Company. It will most probably enter to the market in Septem
ber. So that I have surveyed whole Bagalkot district to find out how many shoppe
rs are ready to sale Relstar nova lubricant. The potential market of relstar nov
a in Bagalkot district is 78% that means that much percent of shoppers are ready
to sell newly entering reliance lubricant product relstar. And also I got the i
nformation about major players, major customers, in fluency of mechanic, shopper
s influence while purchasing the lubricants.
Objective of the study
Main objective
To know the potential market for RELSTAR a lubricant product of reliance in whol
e Bagalkot district.

Sub objective
To know the awareness about RELSTAR in Bagalkot district.
To know about who are the major players
To Know the Market condition for new Players
To know the total Quantity of oil sold by shops in Bagalkot district.
To know about who are the major customers for lubricants.
To know the customer preference while purchasing the lubricants.
To know about shoppers on which factor they concentrate more while selling the l
ubricants.
To know the how many shoppers are ready to sale a new reliance lubricant product
.

Scope of the study

The study will help the company to know the awareness of Relstar in Bagalkot dis
trict.
The study will help to know the potential market for Relstar in Bagalkot distric
t.
The company can find out where their competitors and they stand
The study will help the company to know the customer profile.

Limitations of the study

No work is exception to the limitations. Every work has its own l
imitations, so due to time constraint my study is confined only to Bagalkot dist
rict and it is not possible to make extensive study. It is assumed that the samp
le selected represents entire population.
1. Project study is not an exact science, so one cant’ accept 100% result, on
ly justified solutions are given.
2. The sample size is 86
3. Response of the respondent might be biased which might have affected the
findings of the survey.

Research methodology
Data source: Primary data (field survey)
Area of Research: Bagalkot district.
Research instrument: Questionnaire.
Sample Plan: Personal Interview.
Sample Unit: Automobile Shops
Sampling method: Convenience
Sampling method.
Sample Size: 86 respondents.

PART 2

INDUSTRY OVERVIEW

Lubricant Industry overview

India is the sixth largest consumer of lubricants in the world. The c
urrent lubricants market is estimated to be of $1222 million (Rs. 55 billion). T
he automotive lubricants market in India was controlled by the four major public
sector oil companies such as major public sector oil companies such as Indian O
il Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL), B
harat Petroleum Corporation Limited (BPCL) and a handful of private companies su
ch as Castrol, Tidewater, and others until 1992. Following liberalization, major
policy initiatives were taken and which, encouraged foreign companies to invest
 in India.

Current scenario of Indian Lubricant Industry

The Lubricant Industry in India Is at its Peak stage as the Market c
ondition is good because of Massive increase in the income of people and growing
economy the standard of living of the people is improving and the people are ab
le and willing to buy vehicles and many new players are entering in to the India
n market with the segments of vehicles which are perfectly suitable for Indian c
onditions, and of course the various companies are joining hand to establish the
mselves into the Indian market. And the massive infrastructure development pro
jects which are going on in country like building of Golden Quadrilateral Highwa
ys joining all the major cities of the country , Up gradation of Highways , Boom
in Mining sector , Improvement in the Roads in the City, Building of Flyovers ,
And Many more development processes have added feathers to the Automobile Secto
r and lead to massive demand for vehicles irrespective of their category i.e. T
wo Wheelers, Three wheelers, Four Wheelers and Heavy Vehicles.
The Life in the city has become fast and every person is need of vehi
cles according to their income. That time has gone when only the persons who had
more income would own a Two wheeler or four wheeler with development in Banking
sector has given opportunity to every common man to purchase vehicle by getting
loan. The development in industrial sector has raised demand for Heavy transpor
tation vehicles.
This all Factor have led to massive growth in automobile sector which
is base for Lubricant Industry as Every Vehicle needs lubricant for smooth runni
ng and increase in vehicles means increase in Demand for Lubricants. The Lubrica
nt industry in India has been dominated by International Player Castrol followed
by Servo, Gulf and many other companies. The major players in Indian Market are
as follows
• Castrol India
• Bharat Petroleum
• Apar Industries
• Gulf Oil
• Hindustan Petroleum
• Indian Oil
• Savita Chemicals
• Tide Water
As Mentioned earlier the Indian Lubricant Market is in booming stage th
ere is lot of scope for new players entering in the market unless they are able
to over come the competition from the fully established players like Castrol who
have been ruling the market from decades.
Strong growth in the Indian automotive, power and engineering sectors
is creating new market opportunities for lubricants’ manufacturers, according
to a new study from the research and advisory firm, India Analysis. In the autom
otive sector, consumers are migrating to better quality vehicles and motorbikes
and as a result, using higher grade lubricants; this is benefiting multi-grade l
ubricant products with strong brand recognition and wide distribution. In the in
dustrials’ segment, high levels of investment in the power, manufacturing and tran
sport sectors should drive very strong growth for transformer oils, marine and a
viation lubricants. There are no restrictions on foreign lubricant manufacturers
from establishing 100%-owned operations in India; many have chosen to partner w
ith local companies.
This new research study provides a comprehensive overview of the Indian
lubricants’ industry. It covers: market size and structure; competitive analysis,
distribution structure, etc. The study covers both the automotive and industria
l lubricants sectors. .
The report is targeted at lubricant manufacturers and distributors who
are keen to build an understanding of the Indian lubricants industry and the opp
ortunities it presents. In addition to this, it will be extremely useful for fin
ancial investors pursuing investment opportunities in India, consultants and oth
er industry analysts.
Commenting on the research, Harjinder Singh-Heer, Managing Director of
India Analysis said “lubricant manufacturers who produce premium products and inv
est in marketing and distribution can expect to benefit from the growing opportu
nities in the Indian lubricants market.”
The Indian automotive lubricants market is largely price sensitive and
volume growth is stagnating due to longer lasting lubricants. The market is frag
mented with over 22 big and small manufacturers and with the spate of mergers an
d acquisitions (M&A), only a handful of big companies enjoy a major market share
.
Companies are adopting a more customer-oriented approach where they are likely t
o focus on creating brand awareness through print and visual media. For example
promotional campaigns and trade shows offering gifts to their customers are meth
ods of driving sales of automotive lubricants.
The original equipment segment and retail trade are the two major mar
keting channels in the Indian automotive lubricants market. Due to the growing c
ompetition, tie-ups with original equipment manufacturers (OEM) are becoming imp
ortant as they reinforce the value proposition of a particular brand.
Petrol pumps form a major distribution channel in retail trade, howev
er sales of lubricants through retail outlets (also called ‘the bazaar trade’) has t
ransformed the Indian automotive lubricants market into a fast moving consumer g
oods (FMCG) sector. The other marketing channels are authorized service stations
, garages, rural and agricultural dealers, super markets, and wholesale distribu
tors
Public sector unit (PSU) companies, that manufacture their own base o
il, follow different distribution strategies as compared to private participants
that solely dependent on imports. While PSUs sell through their own wide spread
network of petrol stations private manufacturers prefer retail outlets.
Engine oil, which accounted for over 70.0 percent market share in 2004
in the Indian automotive lubricants market, plays the most crucial role in deci
ding the market share of manufacturers. Increase in demand for four stroke motor
cycles, tie ups with original equipment manufacturers, and implementation of new
pollution norms are just some of the key drivers of the engine oil segment.
The brake oil and coolant is the next largest segment in the Indian au
tomotive lubricants market. Demand for coolants is increasing due to continuous
growth in heavy commercial vehicles, increasing awareness among the customers, n
ew cooling system technologies, and OEM tie-ups.
In brake oil segment, increasing growth in light commercial vehicles, introducti
on of new brake systems, and consumption of lubes by commercial passenger vehicl
es, and changing customer mindset regarding specialty lubricants are expected to
push demand further.
The market for gear oils is also growing rapidly and has a high potenti
al due to the increasing number of vehicles on the road. New generation vehicles
with advanced gear system technologies and automatic transmission systems requi
re special type of lubricants resulting in greater demand for multi axel gear oi
l and API synthetic gear oil, API GL-5, API MT-1, and ultra-Matic, which reduce
the oil changing intervals.
In the long term, the overall outlook for the automotive lubricants market is ex
pected to be positive due to the growing Indian economy along with the increased
purchasing power of consumers.
Introduction
The Indian automotive lubricant market is the sixth largest market in
the world with revenues of approximately $1.30 billion in 2002. It is also one
of the fastest growing retail markets in India. Until 1993, it was a highly regu
lated market with a clear dominance of the public sector. Companies like Bharat
Petroleum (BPCL), Hindustan Petroleum (HPCL), and Indian Oil Corporation (IOC) h
eld more than 75 percent of the market share. In recent years, with the advent o
f the increasing number of multinationals in the Indian market there is a growin
g presence of private companies. Companies like Castrol, Elf Total-Fina, Gulf, a
nd Shell Oil have made their presence felt in the market.
Market Size
Total production of automotive lubricants in India is approximately 8
to 10 percent of global lube production. Unlike other countries where lubricant
demand has witnessed stagnation, the Indian market has been growing at approxim
ately 7 percent per annum for the past 2 years. The public sector contributes to
over 60 percent of the revenues for this market. MNC’s have 5 percent market shar
e and the remaining share is held by the unorganized sector. Automotive lubrican
ts are further divided into diesel lubes and petrol lubes. Diesel lubes comprise
70 percent of the market and petrol based lubricants cover the rest. As diesel
lubes are used by commercial vehicles, which have to cover greater distances, th
eir market share is higher. Engine oil constitutes around 83 percent of total sa
les volumes. Gear oils, transmission fluids, hydraulic brake fluids, and engine
coolants contribute to the balance.

Competitive Analysis
The first seeds of competition were sown in the early 1990’s when follo
wing the liberalization of the Indian economy, the government decided to open th
e Indian market to foreign competition. Import of base oil, the key raw material
, was de-canalized with IOC losing its status as the sole canalizing agent. Pric
ing of base oil was deregulated in a phased manner and currently it is market de
termined. Basic custom duty on base oil stock was also reduced from a peak of 85
percent to a level of 25 percent. All quantitative restrictions were also remov
ed. These developments naturally encouraged the entry of foreign players on Indi
an shores who were already facing a slowdown in demand in their local markets. T
he coming in of foreign participants created an excess supply situation in the I
ndian automotive lubes market, which made it more difficult for the Indian lube
manufacturers to survive.
Recent deregulations in the lubricant market have promised many new
opportunities for the private lube manufacturers. With the dismantling of Admin
istered Price Mechanism (APM) the burden of subsidies is now being passed on to
the government. Private participants will also gain a presence in the Indian oil
and gas sector and hence there will be competition between participants that wi
ll ensure the growth of the sector. In the next couple of years, the industry is
going to witness sea changes. Retail networks, logistics management, and risk m
anagement are going to be the crucial factors. The stand-alone refineries will h
ave to be merged with the marketing companies, as they do not have the distribut
ion infrastructure to sell their products in a deregulated market. Companies lik
e Reliance are already selling their products through petrol pumps. The monopoly
of the public sector holdings will no longer exist. MNC’s will be able to sell th
eir products through petrol pumps. Lubes manufactured by Reliance Petroleum, Cas
trol, Elf, Gulf Oil etc, which are now sold at petrol pumps. In medium to long t
erm, Frost & Sullivan expects private sector companies to have a market share of
around 25 percent.
Distribution Structure
There are two key markets for lubricants in India. Given high level
s of competition original equipment, linkages are gaining importance. The origin
al equipment market contributes almost 70 percent and 30 percent of the market i
s comprised by the retail sales segment. The channel for replacement market or t
he retail segment is petrol pumps or retail stores. Almost 70 percent of the lub
ricants in India are sold through petrol pumps. Most of the MNC’s have tied up wit
h oil majors for marketing their lubricants like Castrol with Escorts and Tata B
P with Telco. After the deregulation of the petrol pumps companies are keenly wa
tching the developments in the lubes market.
 The distribution channel adopted by public sector units is through
the petrol pumps. Other private participants have had to set up an independent i
nfrastructure comprising of distributors, stockiest and retailers through out In
dia. MNC’s and private companies sell through retail stores. To compete with domin
ant public sector distribution, concepts like "Bazaars" and "Super Stores" have
also been developed. Castrol developed the concept of "Bazaars." These are outle
ts meant only for lubricant sales.
The concept of "User Outlet" is another new concept developed by Castrol. In thi
s, the consumer selects his own brand of lube after giving his vehicle for servi
ce in the same outlet. Convenient stores and highway stops for vehicles are bein
g built from where the vehicle owners can get their vehicles repaired and get th
eir supply of lubricants. In the lube market, Indian Oil Corporation Limited is
leading the market with 30 percent market share. Castrol is next with 25 percent
of the share and HPCL and BPCL are next with about 20 percent and 15 percent sh
ares respectively. Other private companies hold the remaining market share.
Diesel Engine Lubricants for Automobiles
The main function of a lubricant for diesel engine is equivalent to a
gasoline engine. As the load in diesel engine is much higher it should have ade
quate anti-wear properties. Diesel fuel contains a high level of sulphur which,
burns to form oxides of sulphur, which in turn in the presence of water, form su
lphur acids resting in high corrosion of car engine parts. Hence the need of alk
alinity reserve in the oil, which is represented by its TBN or Total Base Number
. Generally, the higher TBN value more the alkalinity reserve or acid neutralizi
ng capacity the oil contains.
Synthetic Oil
The start of synthetic oil more than fifty years back opened up vast
ly improved and new alternative lubricant to mineral oil. But being very expensi
ve, it is confirmed to the arcane world of car sports and used for high performa
nce cars. They are also widely used in developing countries for a number of reas
ons like improved overall engine performance, low oil consumption; long drain pe
riods, less engine wear, improved engine cleanliness and faster starting. Taking
into consideration the price tag and its efficacy, the option is left for consu
mer s discretion.
Additives
Plain mineral oils cannot provide all the necessary functional proper
ties that an engine requires. These plain mineral oils need fortification with c
hemicals/additives which when used in small quantities, import or enhance the de
sirable functional properties. Some of the types and reasons for their use are a
s follows:
Dispersants:
Keeps sludge, carbon and other deposit- precursors suspended in oil.
Detergents:
Keeps the automobile engine parts clean from deposits.
Rust/Corrosion Inhibitors:
Prevents or controls oxidation of oil, formation of varnish, sludge an
d corrosive compounds, limit viscosity increase.
Extreme Pressure (EP),
Anti wear and friction modifiers: These form protective film on the en
gine parts and reduce wear and tear of the automobile.
Metal deactivators:
Forms surface films so that metal surface does not catalyze oil oxida
tion.
Pour Point Depressant:
Lowers freezing point of oils assuring free flow at lower temperatures
.
Anti-foamants:
Reduces foam in crankcase and blending
The main purpose of lubricants in cars is to smoothen the moving parts
of the automobile to reduce friction and wear and tear by providing trouble free
performance for a longer span of time. A lubricant is a blend of base oils and
performance-enhancing additives as required by car engine, gear box and other fu
nctional areas.
Engine oil is the most important of the all the lubricants .Lubricants
for gasoline and diesel engine are different as the load cycles and fuels are di
fferent. Other than reducing friction, the oil in a car engine
Helps to:
• Seal the high-pressure combustion gases inside the cylinders,
• Impede the corrosion of metal parts,
• Absorb some of the harmful by-products of combustion,
• Transfer heat from one part of the engine to another.
Combustion of rich air-fuel mixture during starting, idling and warm u
p form deposits. These deposits in the form of varnish, sludge, soot and carbon,
interfere with proper engine operation.
The engine oil keeps all the deposit forming material in suspension an
d gets rid of them by oil filter, or draining out at proper intervals.
Engine oil is stored in the oil pan at the bottom of the automobile en
gine. A pump forces the oil through a filter and then through a series of passag
es and galleries to lubricate the engine s moving parts. The oil also cools thes
e car parts. Rapidly moving engine parts actually float on a thin film of oil an
d never make contact with one another. This is called hydrodynamic lubrication a
nd usually begins when an engine reaches the idle speed. Most engine wear and te
ar occurs when a car is first started, before the oil reaches its normal operati
ng pressure and flow.
PART 3

COMPANY OVERVIEW

Company Overview
History of reliance refineries at Jamnagar.
Started in the Dec 1999 this is the world’s largest refinery plant in
Jamnagar with the capacity of 27 million tones per year. The area covered is abo
ut 7500 acres of Jamnagar. This is the largest investment ever made at a single
location on a single plant. The investment is about US $ 6 Billion (i.e. about R
s 24000 crores). The construction was started in Nov 1996 with a work force of 7
5000 people and project management by world leader Bechtel. Technology adopted b
y Global Giants like Linde, Foster Wheeler USA etc. The Jamnagar plant has made
up with help of giants like world’s biggest onshore crane of 1600 MT capacity, 140
00 kms of cabling, 5000 kms of pipeline, 10000 meters of structural steel, 170 k
ms of road, 1.7 million cubic meters of concrete, 55 sub stations, 33 blast proo
f buildings, 43 chimneys and flares, Housing facilities for 75000 families, 4 bo
unded were houses, And India’s largest IT network constructed it contains 50server
s, thousands of PC’s, 200 kms of cabling.
The plant is fully computerized and automated to respond to real ti
me business and to respond to the changes immediately, to produce different grad
es of crude and according to the different customer demands, quality control is
uncompromising, meeting the Californian standards, designed in such a way that i
t is able to make profits under any conditions like regulated or deregulated ref
ine scenario of India, changing rules and specifications of the government, so t
he refinery is build in such a way that it can swing any way as per the marketin
g conditions, and to adjusted to changing product prices up or down. So they cal
l it as “The Giant which dance according to their tunes”
Reliance Petro Marketing background
Reliance petro Marketing is engaged in marketing the fuel produced
by the Reliance Petroleum it has set up around 2500 outlets all over the countr
y, these outlets are engaged in the work of retail sale of the fuel. For the pur
pose of ownership company has divided the ownership of these outlets in to three
types based on the ownership of fuel and management of the outlet Viz COCO, COD
O, DODO.
COCO (Company Owned & Company Operated):
The outlet is company owned and company operated. These Outlets wer
e setup in the first stage of the setting up of the Reliance Fuel outlets. These
 outlets were completely owned and managed by the reliance company i.e. both own
ership of the fuel and management of the outlet are with the Reliance petroleum.
Company will appoint a person in charge to maintain the operations of the outle
t and he will be paid a fixed remuneration for managing the outlet, this remuner
ation is irrespective of the sales made by him.
CODO (Company owned & Dealers Operated):
The outlets were owned by the company but are operated by the Loca
l Dealers Selected and appointed by the Reliance Officials. The Company will pro
vide the fuel to sell but all the operations of the outlets were managed by the
dealer appointed. Here in this type the Ownership of the fuel and outlet is with
the Reliance petroleum and management is by the dealer appointed. Dealers will
be paid commission based on the sales made by them. These were started in the se
cond phase of the setting up of the Reliance outlets. The commission pattern of
the dealers is as follows:
Commission pattern for CODO outlets
Fuel Quantity Rate Above 125 KL
MS Up to 125 KL Rs 550/KL 250/KL
HSD Up to 125 KL Rs 875/KL 250/KL
DODO (Dealers Owned & Dealer Operated):
These are the outlets which were owned by the Dealers and Were Manag
ed by the Dealers. The company will provide its design for the outlet according
to which the dealer has to build the outlet bearing all the expenses and in futu
re the company will supply fuel which the dealer will sell, here both the owners
hips i.e. ownership of fuel and ownership of outlet are with the dealer company
gives only its brand name. The dealers are entitled to get a commission on the s
ales made by them. These outlets were started in the last phase of the setting u
p of the Reliance outlets.
Ownership chart
Type COCO CODO DODO
Outlet ownership RIL RIL Dealer
Stock Ownership RIL Dealer Dealer
Sales Expected (KL/Month) 500+ 300-500 100-300
Refining activities of Reliance Industries Limited are carried out
at the Jamnagar refinery.
The refinery is able to process a wide variety of crude’s- from very l
ight to very heavy (from 18 to 45 degree API) and from sweet to very heavy (with
sulphur content from 0 to 4.5 %).
With an annual crude processing capacity of 580,000 barrels (92,000
m³) 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 a
mongst the highest in the sector. The polypropylene plant will have a capacity t
o produce 0.9 million metric tones per annum.
The refinery project is being implemented at a capital cost of Rs 27,
000 crore being funded through a mix of equity and debt. This represents a capit
al cost of less than US $10,000 per barrel per day and compares very favorably w
ith the average capital cost of new refineries announced in recent years. The In
ternational Energy Agency (IEA) estimates the average capital cost of new refine
ry in the OECD nations to be in the region of US $15,000 to 20,000 per barrel pe
r day. The low capital cost of RPL becomes even more attractive when adjusted fo
r high complexity of the refinery. RPL s low capital cost is a result of the ben
efits of intelligent repeat of design and engineering aspects of RIL s existin
g refinery, proactive procurement strategy and faster implementation of the refi
nery project. This is expected to provide sustainable competitive advantage in t
he market place and enable RPL to deliver superior value in the coming years.
RPL also benefits from a strategic alliance with Chevron India Holdi
ngs Pvt.Limited, Singapore, a wholly owned subsidiary of Chevron Corporation USA
(Chevron), which currently holds a 5% equity stake in the Company.
 RPL achieves overall project progress of 65% Refinery on track for t
imely completion JAMNAGAR (Gujarat), 16th July 2007: Reliance Petroleum Limited
(“RPL”) continues to make rapid progress in implementation of its large, complex ref
inery, coming up in a SEZ at Jamnagar. Reflecting rapid strides made on all impl
ementation fronts, RPL has achieved overall project progress of 65% - in just 19
months since commencement of the Project. With engineering and procurement acti
vities nearing completion and required site infrastructure mobilized to sustain
the fast pace of construction, RPL refinery is well on track for completion by D
ecember 2008.RPL has achieved project completion of 94% according to Contractor
as of 23 July 2008 as published in Article in DNA Money.
Before Reliance Industries Ltd forayed into the business of petroleum
retailing, the four public sector companies had reconciled to the above myth th
at had been guiding the petroleum retail sector for decades.
The entry of Reliance petrol stations not only broke this long standi
ng myth, it created new theories that shocked the staid public sector.
For long everyone had believed that it you had 40 per cent of outlet
share, you would get 40 per cent of market share of total volume(s) of product
sold. The theory was built around the fact that all stations were built alike,
managed alike and, hence, would sell alike.
It is not strange that till the late nineties, if a company had aroun
d 19 per cent outlet share, then it also had the market share in the 19-20 per c
ent range.
In the petroleum industry, there exists a measure of a company s eff
ectiveness in a particular market. It is measured in terms of marketing effectiv
eness (ME).An ME of 1 means that if a company s outlet share is X per cent and
if it s market share is also X per cent, then its ME = X/X = 1. For long, IOC,
HPCL, BPCL and IBP were content with achieving a ME of 1.
It was only in late the late nineties; BPCL thought about breaking f
ree from the shackles of this myth and started thinking about going beyond the M
E of 1. It started with its ambitious programmed called, Pure For Sure which p
aid rich dividends and it is this out-of-box thinking of BPC that led to it’s per
station monthly throughput grow at least 20,000
liters more than the industry average.
Reliance, from day one, challenged the myth of market share being d
ependent upon the Retail outlet share. It patterned its thought-process on Flyi
ng J -- a diesel retailer that with just around 200 stations had become the Num
ber 1 diesel retailer in North America, beating the likes of Exxon Mobil, Shell,
BP and Chevron.
Reliance thought that it was possible to have the least number of pe
trol stations in the country and yet be the leader in terms of volume of petrole
um products sold across the nation.
It challenged its managers to look beyond the ME of 1 and try and ca
pture the ME of 3 or even 4. This means that Reliance felt that it was possible
to have just 3 per cent of outlet share and yet have more than 12 per cent of ma
rket share. This dream was achieved by Reliance during the financial year 2005-2
006.
Reliance achieved a market share of 12 per cent with just 3 per cent
station share in 2005-2006. On the other hand the public sector companies held
a market share of 88 per cent while holding the retail outlet share of 96 per ce
nt. This shows that whereas Reliance achieved a market effectiveness of nearly
4; the combined ME of PSUs was less than 1!
Growth through Energy Products
Petroleum Refining and retailing is the second link in Reliance s d
rive for growth and global leadership in the core energy and materials value cha
in. Reliance operates the third largest refinery in the world at any single loca
tion; the refinery is fully integrated and consists of more than 50 processing u
nits.
The Reliance petroleum refinery, first in the private sector in Ind
ia, has now completed ten years of successful operations. In January 2005, With
the Jamnagar Refinery significantly improving domestic product availability, Ind
ia has become a net exporter of petroleum products. Our aggregate export volumes
of refined products grew by over 63% to 17.7 million tones from 10.8 million to
nes in the previous year.
Reliance is in the process of doubling the petroleum refinery at Ja
mnagar, which will make it the largest petroleum refinery in the world. Reliance
is also rolling out a state-of-the-art, pan-India petroleum retail network aime
d at providing the Indian consumer with world-class retail experience.
We at Reliance are committed to total customer satisfaction in term
s of Quality & services for entire range of our products. Our continued commitme
nt to excellence and innovative efforts help us stay ahead as market leaders.
Reliance Industries Ltd. is India s largest private-sector company,
generating revenues of $19.97 billion, or more than 3 percent of India s total
gross domestic product. Founded as a textiles company, Reliance has successfully
completed a backward integration strategy that has transformed it into India s
largest private-sector petrochemicals company, and number two overall (behind st
ate-owned India Oil). Reliance s petrochemicals division is fully integrated and
includes exploration and production; refining (the company has built one of the
world s largest and most modern refinery complexes at Jamnagar in Gujarat); mar
keting, through a chain of more than 1,000 service stations; and the production
of petrochemicals, including polymers, polyester, polyester intermediates, and o
thers. These chemicals are used to support Reliance s continued textile operatio
ns, which focus particularly on the production of polyester fabrics. Following t
he 2004 acquisition of Trevira, the company has become the world s leading polye
ster manufacturer, with production levels topping 25 million meters per year. Th
e company s textile range includes other fabrics, such as acrylics, and finished
garments.
Reliance Industries represents the continuation of India s greatest
corporate success story since the country s independence. Founded by Dhirubhai
H. Ambani in 1958, Reliance grew to include holdings in energy production and di
stribution, telecommunications, and capital finance. After a public feud between
Mukesh D. Ambani and younger brother Anil, these operations were split off into
a new company controlled by Anil Ambani. Reliance Industries is listed on the M
umbai Stock Exchange. Mukesh Ambani is company chairman and managing director.
Indian Petroleum Giant at the Start of the 21st Century
Reliance s vertical integration strategy naturally led to an intere
st in extending its operations to petroleum refining, and even to exploration an
d production. Yet these sectors remained tightly under state control, following
the nationalization of the Indian oil industry in 1976 amid the global oil crisi
s. Although the state-owned oil companies were able to meet domestic demand thro
ugh the 1980s, by the early 1990s, the country s existing oilfields were showing
signs of depletion. At the same time, demand had been rising steadily, yet the
oil companies, propped up by state subsidies, were too strapped for cash to inve
st in further exploration efforts. An initial attempt to liberalize the producti
on and refining sectors failed, however, amid strong union protests.
In the meantime, Reliance made preparations for its move into the p
etroleum industry. In 1991, the company set up a new subsidiary, Reliance Refine
ries Private Ltd., clearly signaling its objectives. The subsidiary later change
d its name to Reliance Petroleum Limited, and in 1993 launched a public offering
, which at that time was India s largest ever IPO. While Reliance affirmed its p
lans to construct India s largest oil refinery, the company began developing its
petroleum products marketing and distribution operations, including a network o
f some 1,000 service stations.
Reliance continued to pioneer financing channels in India. In 1993,
for example, the company became the first Indian company to raise capital on th
e foreign market, through a Global Depositary Receipt (GDR) issue in Luxembourg.
The company completed a second successful GDR issue in 1994. The company used t
he new capital in part to expand its petrochemicals wing, building the world s l
argest multi-feed cracker at the Hazira site. The company also added production
plants for monoethylene glycol, polyethylene, and purified terephthalic acid. Th
e new units launched production in 1998.
Reliance s opportunity for entry into petroleum refining came in 19
97, when the Indian oil industry reached a state of near collapse. Unable to fun
d further exploration operations, and lacking the capital to expand its existing
production, the government was forced to liberalize the sector. In that year, R
eliance announced a plan to build one of the world s largest and most modern pet
roleum refining complexes in Jamnagar, Gujarat, at a cost of some $6 billion. Th
e government agreed to the plan, and granted the company the right to import pet
roleum directly, rather than going through Indian Oil, which helped Reliance gre
atly drive down operating costs.
Constructed in record time, the Jamnagar site was commissioned in
1999. The site s production capacity was double that of any other Indian refiner
y and ranked among the top five in the world. The addition of the new facility a
lso placed Reliance at the top rank of the country s private-sector companies. I
n 2002, Reliance Petroleum was merged into Reliance Industries, which then becam
e one of the country s top three companies, including state-owned entities.
Petroleum is used mostly, by volume, for producing fuel oil and ga
soline (petrol), both important "primary energy" sources. 84% by volume of the h
ydrocarbons present in petroleum is converted into energy-rich fuels (petroleum-
based fuels), including gasoline, diesel, jet, heating, and other fuel oils, and
liquefied petroleum gas.
Due to its high energy density, easy transportability and relative
abundance, it has become the world s most important source of energy since the m
id-1950s. Petroleum is also the raw material for many chemical products, includi
ng pharmaceuticals, solvents, fertilizers, pesticides, and plastics; the 16% not
used for energy production is converted into these other materials.
Petroleum is found in porous rock formations in the upper strata of
some areas of the Earth s crust. There is also petroleum in oil sands (tar sand
s). Known reserves of petroleum are typically estimated at around 190 km3 (1.2 t
rillion (short scale) barrels) without oil sands, or 595 km3 (3.74 trillion barr
els) with oil sands. Consumption is currently around 84 million barrels (13.4×106
m3) per day, or 4.9 km3 per year. Because the energy return over energy invested
(EROEI) ratio of oil is constantly falling as petroleum recovery gets more diff
icult, recoverable oil reserves are significantly less than total oil-in-place.
At current consumption levels, and assuming that oil will be consumed only from
reservoirs, known recoverable reserves would be gone around 2039, potentially le
ading to a global energy crisis. However, there are factors which may extend or
reduce this estimate, including the rapidly increasing demand for petroleum in C
hina, India, and other developing nations; new discoveries; energy conservation
and use of alternative energy sources; and new economically viable exploitation
of non-conventional oil sources.
•

PART 4

PRODUCT PROFILE AND COMPETITORS

Relstar product profile

Relstar is the new lubricant product of reliance petroleum indu
stry. The company already planned to launch this product most probably in Septe
mber. The profile containing meaning of lubricant, purpose of this lubricant, Ad
vantages, etc.
Relstar Lubricant (sometimes referred to "Lube") is a substanc
e (often a liquid) introduced between two moving surfaces to reduce the friction
and wear between them. A lubricant provides a protective film which allows for
two touching surfaces to be separated and "smoothed," thus lessening the frictio
n between them. Lubricants chemically interact with all surfaces so that contact
only occurs with the smooth and free lubricant. By this process, abrasive parti
cles are dissolved into the lubricant, thus making them also very good solvents
and cleaners. Petroleum-based lubricants like Vaseline tend to dissolve petroleu
m products such as rubber and plastic, while water-based lubricants tend to diss
olve polar chemicals (like water and dirt); hence the additives. The lubricant m
ust be replaced when it has dissolved to saturation, because the inability to di
ssolve additional abrasive debris allows abrasive particles to scrape against or
become lodged in the working surfaces, thus introducing a margin for physical c
ontact between them. Lubricants which dissolve working surfaces (such as Vaselin
e with rubber) defeat their purpose by corroding the smooth surfaces by their ow
n dissolving power, thus compromising structural integrity, surface smoothness,
and system-wide contamination. It can also help to remove gum from hair.
One of the single largest applications for lubricants, in the fo
rm of motor oil, is to protect the internal combustion engines in motor vehicles
and powered equipment.
Typically lubricants contain 90% base oil (most often petroleum
 fractions, called mineral oils) and less than 10% additives. Vegetable oils or
synthetic liquids such as hydrogenated polyolefin’s, esters, silicone, fluorocarbo
ns and many others are sometimes used as base oils. Additives deliver reduced fr
iction and wear, increased viscosity, improved viscosity index, resistance to co
rrosion and oxidation, aging or contamination, etc.
Lubricants such as 2-cycle oil are also added to some fuels. Su
lfur impurities in fuels also provide some lubrication properties, which have to
be taken in account when switching to a low-sulfur diesel; biodiesel is a popul
ar diesel fuel additive providing additional lubricity.
Non-liquid lubricants include grease, powders (dry graphite, PTF
E, Molybdenum disulfide, tungsten disulfide, etc.), Teflon tape used in plumbing
, air cushion and others. Dry lubricants such as graphite, molybdenum disulfide
and tungsten disulfide also offer lubrication at temperatures (up to 350 °C) highe
r than liquid and oil-based lubricants are able to operate. Limited interest has
been shown in low friction properties of compacted oxide glaze layers formed at
several hundred degrees Celsius in metallic sliding systems, however, practical
use is still many years away due to their physically unstable nature.
Another approach to reducing friction and wear is to use bearings
such as ball bearings, roller bearings or air bearings, which in turn require i
nternal lubrication themselves, or to use sound, in the case of acoustic lubrica
tion.
In addition to automotive and industrial applications, lubricants
are used for many other purposes, including as a personal lubricant, bio-medica
l applications (e.g. lubricants for artificial joints) and others.
Main Purpose of Relstar lubricant
Lubricants perform the following key functions.
• Keep moving parts apart
• Reduce friction
• Transfer heat
• Carry away contaminants & debris
• Transmit power
• Protect against wear
• Prevent corrosion
• Stop the risk of smoke and fire of objects
Keep moving parts apart
Lubricants are typically used to separate moving parts in a sys
tem. This has the benefit of reducing friction and surface fatigue together with
reduced heat generation, operating noise and vibrations. Lubricants achieve thi
s by several ways. The most common is by forming a physical barrier i.e. a thin
layer of lubricant separates the moving parts. This is termed hydrodynamic lubri
cation. In cases of high surface pressures or temperatures the fluid film is muc
h thinner and some of the forces are transmitted between the surfaces through th
e lubricant. This is termed elasto-hydrodynamic lubrication.
Reduce friction
Typically the lubricant-to-surface friction is much less than su
rface-to-surface friction in a system without any lubrication. Thus use of a lub
ricant reduces the overall system friction. Reduced friction has the benefit of
reducing heat generation and reduced formation of wear particles as well as impr
oved efficiency. Lubricants may contain additives known as friction modifiers th
at chemically bind to metal surfaces to reduce surface friction even when there
is insufficient bulk lubricant present for hydrodynamic lubrication, e.g. protec
ting the valve train in a car engine at startup.
Transfer heat
Both gas and liquid lubricants can transfer heat. However, liqui
d lubricants are much more effective on account of their high specific heat capa
city. Typically the liquid lubricant is constantly circulated to a cooler part o
f the system, although lubricants may be used to warm as well as to cool when a
regulated temperature is required. This circulating flow also determines the amo
unt of heat that is carried away in any given unit of time. High flow systems ca
n carry away a lot of heat and have the additional benefit of reducing the therm
al stress on the lubricant. Thus lower cost liquid lubricants may be used. The p
rimary drawback is that high flows typically require larger sumps and bigger coo
ling units. A secondary drawback is that a high flow system that relies on the f
low rate to protect the lubricant from thermal stress is susceptible to catastro
phic failure during sudden system shut downs. An automotive oil-cooled turbochar
ger is a typical example. Turbochargers get red hot during operation and the oil
that is cooling them only survives as its residence time in the system is very
short i.e. high flow rate. If the system is shut down suddenly (pulling into a s
ervice area after a high speed drive and stopping the engine) the oil that is in
the turbo charger immediately oxidizes and will clog the oil ways with deposits
. Over time these deposits can completely block the oil ways, reducing the cooli
ng with the result that the turbo charger experiences total failure typically wi
th seized bearings. Non-flowing lubricants such as greases & pastes are not effe
ctive at heat transfer although they do contribute by reducing the generation of
heat in the first place.
Carry away contaminants and debris
Lubricant circulation systems have the benefit of carrying away i
nternally generated debris and external contaminants that get introduced into th
e system to a filter where they can be removed. Lubricants for machines that reg
ularly generate debris or contaminants such as automotive engines typically cont
ain detergent and dispersant additives to assist in debris and contaminant trans
port to the filter and removal. Over time the filter will get clogged and requir
e cleaning or replacement, hence the recommendation to change a car s oil filter
at the same time as changing the oil. In closed systems such as gear boxes the
filter may be supplemented by a magnet to attract any iron fines that get create
d.
It is apparent that in a circulatory system the oil will only be as clean as the
filter can make it, thus it is unfortunate that there are no industry standards
by which consumers can readily assess the filtering ability of various automoti
ve filters. Poor filtration significantly reduces the life of the machine (engin
e) as well as making the system inefficient.
Transmit power
Pascal s law is at the heart of hydrostatic power transmission.
Hydraulic fluids comprise a large portion of all lubricants produced in the worl
d.
Protect against wear
Lubricants prevent wear by keeping the moving parts apart. Lubric
ants may also contain anti-wear or extreme pressure additives to boost their per
formance against wear and fatigue.
Prevent corrosion
Good quality lubricants are typically formulated with additives th
at form chemical bonds with surfaces to prevent corrosion and rust.
History
Romans used rags dipped in animal fat to lubricate wagon wheels;
however the science of lubrication (tribology) really only took off with the ind
ustrial revolution in the nineteenth century.
General composition
Lubricants are generally composed of a majority of base oil and a
minority of additives to impart desirable characteristics.
Marketing
The global lubricant market is generally competitive with numerous manufacturers
and marketers. Overall the western market may be considered mature with a flat
to declining overall volumes while there is strong growth in the emerging econom
ies. The lubricant marketers generally--- pursue one or more of the following st
rategies when pursuing business.

• Specification:
The lubricant is said to meet a certain specification. In the c
onsumer market, this is often supported by a logo, symbol or words that inform t
he consumer that the lubricant marketer has obtained independent verification of
conformance to the specification. Examples of these include the API’s donut logo
or the NSF tick mark. The most widely perceived is SAE viscosity specification,
like SAE 10W-40. Lubricity specifications are institute and manufacturer based.
In the U.S. institute: API S for petrol engines, API C for diesel engines. For 2
007 the current specs are API SM and API CJ. Higher second letter marks better o
il properties, like lower engine wear supported by tests. In EU the ACEA specifi
cations are used. There are classes A, B, C, and E with number following the let
ter. Japan introduced the JASO specification for motorbike engines. In the indus
trial market place the specification may take the form of a legal contract to su
pply a conforming fluid or purchasers may choose to buy on the basis of a manufa
cturers own published specification.
• Original equipment manufacturer (OEM) approval:
Specifications often denote a minimum acceptable performance l
evels. Thus many equipment manufacturers add on their own particular requirement
s or tighten the tolerance on a general specification to meet their particular n
eeds (or doing a different set of tests or using different/own test bed engine).
This gives the lubricant marketer an avenue to differentiate their product by d
esigning it to meet an OEM specification. Often, the OEM carries out extensive t
esting and maintains an active list of approved products. This is a powerful mar
keting tool in the lubricant marketplace. Text on the back of the motor oil labe
l usually has a list of conformity to some OEM specifications, such as MB, MAN,
Volvo, Cummins, VW, BMW or others. Manufactures may have vastly different specif
ications for the range of engines they make; one may not be completely suitable
for some other.
• Performance:
The lubricant marketer claims benefits for the customer based o
n the superior performance of the lubricant. Such marketing is supported by glam
orous advertising, sponsorships of typically sporting events and endorsements. U
nfortunately broad performance claims are common in the consumer marketplace, wh
ich are difficult or impossible for a typical consumer to verify. In the B2B mar
ket place the marketer is normally expected to show data that supports the claim
s, hence reducing the use of broad claims. Increasing performance, reducing wear
and fuel consumption is also aim of the later API, ACEA and car manufacturer oi
l specifications, so lubricant marketers can back their claims by doing extensiv
e (and expensive) testing.
• Longevity:
The marketer claims that their lubricant maintains its performan
ce over a longer period of time. For example in the consumer market, a typical m
otor oil change interval is around the 3000-6000 miles (7500-15000 km). The lubr
icant marketer may offer a lubricant that lasts for 12000 (30000km) miles or mor
e to convince a user to pay a premium. Typically, the consumer would need to che
ck or balance the longer life and any warranties offered by the lubricant manufa
cturer with the possible loss of equipment manufacturer warranties by not follow
ing its schedule. Many car and engine manufacturers support extended drain inter
vals, but request extended drain interval certified oil used in that case; and s
ometimes a special oil filter. Example: In older Mercedes-Benz engines and in tr
uck engines one can use engine oil MB 228.1 for basic drain interval. Engine oil
s conforming to higher specification MB 228.3 may be used twice as long, oil of
MB 228.5 specification 3 xs longer. Note that the oil drain interval is valid fo
r new engine with fuel conforming car manufacturer specification. When using low
er grade fuel or worn engine the oil change interval has to shorten accordingly.
In general oils approved for extended use are of higher specification and reduc
e wear. In the industrial market place the longevity is generally measured in ti
me units and the lubricant marketer can suffer large financial penalties if thei
r claims are not substantiated.
• Efficiency:
The lubricant marketer claims improved equipment efficiency when
compared to rival products or technologies, the claim is usually valid when com
paring lubricant of higher specification with previous grade. Typically the effi
ciency is proved by showing a reduction in energy costs to operate the system. G
uaranteeing improved efficiency is the goal of some oil test specifications such
as API CI-4 Plus for diesel engines. Some car/engine manufacturers also specifi
cally request certain higher efficiency level for lubricants for extended drain
intervals.
• Operational tolerance:
The lubricant is claimed to cope with specific operational enviro
nment needs. Some common environments include dry, wet, cold, hot, fire risk, hi
gh load, high or low speed, chemical compatibility, atmospheric compatibility, p
ressure or vacuum and various combinations. The usual thermal characteristics ar
e outlined with SAE viscosity given for 100°C, like SAE 30, SAE 40. For low temper
ature viscosity the SAE xxW mark is used. Both markings can be combined together
to form a SAE 0W-60 for example. Viscosity index (VI) marks viscosity change wi
th temperature, with higher VI numbers being more temperature stable.

• Economy:
The marketer offers a lubricant at a lower cost than rivals eithe
r in the same grade or a similar one that will fill the purpose for lesser price
. (Stationary installations with short drain intervals.) Alternative may be offe
ring a more expensive lubricant and promise return in lower wear, specific fuel
consumption or longer drain intervals. (Expensive machinery, un-affordable downt
imes.)
• Environment friendly:
The lubricant is said to be environmentally friendly. Typically t
his is supported by qualifying statements or conformance to generally accepted a
pprovals. Several organizations, typically government sponsored, exist globally
to qualify and approve such lubricants by evaluating their potential for environ
mental harm. Typically, the lubricant manufacturer is allowed to indicate such a
pproval by showing some special mark. Examples include the German “Blue Angel”, Euro
pean “Daisy” Eco label, Global Eco-Label “GEN mark”, Nordic, “White Swan”, Japanese “Earth
endly mark”; USA “Green Seal”, Canadian “Environmental Choice”, Chinese “Huan”, Singapore “
Label” and the French “NF Environment mark”.
• Composition:
The marketer claims novel composition of the lubricant which improve
s some tangible performance over its rivals. Typically the technology is protect
ed via formal patents or other intellectual property protection mechanism to pre
vent rivals from copying. Lot of claims in this area are simple marketing buzzwo
rds, since most of them are related to a manufacturer specific process naming (w
hich achieves similar results than other ones) but the competition is prohibited
from using a trademark.
• Quality:
The marketer claims broad superior quality of its lubricant with no
factual evidence. The quality is “proven” by references to famous brand, sporting fi
gure, racing team, some professional endorsement or some similar subjective clai
m. All motor oil labels wear mark similar to "of outstanding quality" or "qualit
y additives", the actual comparative evidence is always lacking.
Disposal and environmental issues
It is estimated that 40% of all lubricants are released into the env
ironment. Disposal: Recycling, burning, landfill and discharge into water may ac
hieve disposal of used lubricant. There are typically strict regulations in most
countries regarding disposal in landfill and discharge into water as even small
amount of lubricant can contaminate a large amount of water. Most regulations p
ermit a threshold level of lubricant that may be present in waste streams and co
mpanies spend hundreds of millions of dollars annually in treating their waste w
aters to get to acceptable levels. Burning the lubricant as fuel, typically to g
enerate electricity is also governed by regulations mainly on account of the rel
atively high level of additives present. Burning generates both airborne polluta
nts and ash rich in toxic materials, mainly heavy metal compounds. Thus lubrican
t burning takes place in specialized facilities that have incorporated special s
crubbers to remove airborne pollutants and have access to landfill sites with pe
rmits to handle the toxic ash. Unfortunately, most lubricant that ends up direct
ly in the environment is due to general public discharging it onto the ground, i
nto drains and directly into landfills as trash. Other direct contamination sour
ces include runoff from roadways, accidental spillages, natural or man-made disa
sters and pipeline leakages. Improvement in filtration technologies and processe
s has now made recycling a viable option (with rising price of base stock and cr
ude oil). Typically various filtration systems remove particulates, additives an
d oxidation products and recover the base oil. The oil may get refined during th
e process. This base oil is then treated much the same as virgin base oil howeve
r there is considerable reluctance to use recycled oils as they are generally co
nsidered inferior. Base stock fractionally vacuum distilled from used lubricants
has superior properties to all natural oils, but cost effectiveness depends on
many factors. Used lubricant may also be used as refinery feedstock to become pa
rt of crude oil. Again there is considerable reluctance to this use as the addit
ives, soot and wear metals will seriously poison/deactivate the critical catalys
ts in the process. Cost prohibits carrying out both filtration (soot, additives
removal) and re-refining (distilling, isomerisation, hydrocrack, etc.) however t
he primary hindrance to recycling still remains the collection of fluids as refi
neries need continuous supply in amounts measured in cisterns, rail tanks. Occas
ionally, unused lubricant requires disposal. The best course of action in such s
ituations is to return it to the manufacturer where it can be processed as a par
t of fresh batches. Environment: Lubricants both fresh and used can cause consid
erable damage to the environment mainly due to their high potential of serious w
ater pollution. Further the additives typically contained in lubricant can be to
xic to flora and fauna. In used fluids the oxidation products can be toxic as we
ll. Lubricant persistence in the environment largely depends upon the base fluid
, however if very toxic additives are used they may negatively affect the persis
tence. Lanolin lubricants are non-toxic making them the environmental alternativ
e which is safe for both users and the environment.
Advantages of Relstar Ultra 15W40
• Engine Durability:
1. Improved viscosity control of soot-laden oil
2. Shorter oiling times to critical areas during start-up at low temperatur
e
3. Extra safety in crosshead wear control
4. Enhanced bearing protection
5. Longer seal life
• Longer Drain Interval
protection Greater oxidation stability at higher oil temperatures
Better oil consumption
Improved against premature oil filter exhaustion
• 4 stroke engine systems
• Fuel system- Supply clean fuel
• Air system- Supply clean air for combustion
• Lubrication system- Lubricate all moving components
• Cooling system- Take away heat to prevent mechanical breakdown
• Lubricant performance specifications across the world are influenced by 3 bodies
and OEMs
o API- American Petroleum Institute
o ACEA- Association of Constructer European Automobile
o JASO-Japan Automobile Standards Organization
o Others-OEM specifications Mercedes Benz, Cummins, Mack, Volvo et
• Cooled EGR
o EGR Lowers O2 and Reduces Peak Temperatures and Pressures
o EGR Gasses Are Cooled to Improve Volumetric Efficiency
o Result Is Lower NO2 Emissions
• Cooled EGR Impact on Lubricant
• Increased Corrosion
o Cooled EGR leads to condensation and formation of higher acid levels.
• Increased Soot
o Increased levels of soot due to EGR
• Increased Engine Temperatures
o Engine coolant also used for EGR cooler

Competitors
There are many competitors are their to lubricants in the market.
And also competition becomes very much between them. Each are having their own
strategies and promotional activities for existence of their product in the com
petitive market place. And also all are advertise their product effectively by a
dvertisement media in their also they will use different strategies. The competi
tors are listed as below.
• Castrol
• Gulf
• Servo
• Veedol
• Pennzoil
• Lalghoda
• Elf
• Ipol
• Volvo line

Among above competitors castrol and gulf are the major players an
d these players are already set up in the customer mind. Now they are acquired m
ost of the lubricant market.
Castrol
 Castrol India Limited is a Public Limited Company with 70.92% of t
he equity held by Castrol Limited UK (part of BP Group). In 2003 the company s t
urnover was Rs.1360.51 crores and Profit after Tax was Rs. 137.38 crores. From a
minor oil company, with a share of about 6% in 1991, Castrol India has grown to
become the second largest lubricant company in India with a market share of aro
und 22%.Castrol India manufactures and markets a range of automotive and industr
ial lubricants. It markets its automotive lubricants under two brands - Castrol
and BP. The company has leadership positions in most of the segments in which it
operates including passenger car engine oils, premium 2-stroke and 4-stroke oil
s and multigrade diesel engine oils. Castrol India has the largest manufacturing
and marketing network amongst the lubricant companies in India. The company has
5 manufacturing Plants across the country, including a state-of-the-art plant i
n Silvassa.The company reaches its consumers through a distribution network of 2
70 distributors, servicing over 70,000.retail outlets.Castrol India has clearly
demonstrated its commitment to Indian consumers for over 80 years, by offering i
ts international range of high performance products backed by the highest level
of customer service. The company has managed to gain sustainable competitive adv
antage through:
Distinctiveness driven by continuous innovation in all areas of business
Winning culture and a desire to excel Strong meaningful relationships with all s
takeholders
Castrol produce oils for the whole arena of automotive lubrication,
including motorcycle 2-stroke and 4-stroke engines, car petrol and diesel engin
es, an extensive range of manual and automatic transmission fluids, chain lubric
ants and waxes, coolants, suspension fluids, brake fluids, greases, cleaners and
maintenance products.
Castrol also produce products for agricultural machinery, plant, ge
neral industry and marine engineering uses.
Castrol products were voted best/most trusted products in Switzerland
Gulf
GOI continues to sell Gulf-branded lubricants worldwide through a
network of country subsidiary companies. Some of these subsidiaries franchise u
se of the Gulf brand to local independent petroleum retailers ("affiliates"). He
nce, Gulf-branded products and filling stations can still be found in many count
ries.
Several former GOC subsidiaries were sold to local owners (e.g. Gu
lf Oil India to a partnership including GOI, Ashok Leyland and the Hinduja group
) who continue to use the Gulf name and insignia. Gulf Oil India (GOIn) has rais
ed the market profile of the Gulf brand in recent years. It has introduced the w
hole range of Gulf international products into South Asia through toll blending
arrangements. In 1995, GOIn set up its first blending plant at Silvassa (with te
chnical assistance from GOI) to produce Gulf-branded lubricants locally. These l
ocal lubricants are produced to Gulf specifications and sell at a premium to the
products of wholly-local competitors. In 2002, GOIn merged with the explosives
manufacturer IDL to form Gulf Oil Corporation Ltd, an Indian Company described a
s a member of the Hinduja Group. The direct GOI interest in this company is limi
ted to 20 percent of GOCL s equity held by Gulf Oil International (Mauritius) In
c. GOCL claims to have gained a six-percent share of the Indian automotive lubri
cant market and a three-percent share of the industrial market. GOCL exports to
South Asian countries including Bangladesh, Nepal, Indonesia, the Philippines, a
nd Taiwan. It also provides Gulf product licensing and technical support to loca
l affiliates in the region including a major manufacturing operation in China.
GOI still produces and sells a wide range of branded oil based pr
oducts including lubricants and greases of all kinds. These include products for
a variety of applications ranging from metal working oils to refrigeration oils
. Car engine oils include the Gulf Formula, Gulf MAX, and Gulf TEC ranges. Heavy
duty diesel engine lubricants include the Gulf Supreme and Gulf Super fleet ran
ges. The sale of lubricants is one area where product specification and quality
assurance are vital elements. Therefore, brand differentiation remains a feature
of the marketplace. Gulf s product catalog includes a well-developed portfolio
of 400 distinctive products.

Methodology
Data Source:
Data Sources are classified into:
1) Primary Data Source
2) Secondary Data Sources
1) Primary Data Sources:
Primary data is collected by direct interview with shoppers with the hel
p of Questionnaire.
2) Secondary Data Sources:
Classified into Internal Secondary Data and External Secondary Data.
i) Internal Secondary Data: Internal source of data represents the data thi
s is already available with the company.
Product profile, Information relating to plant locations etc.
ii) External Secondary Data: External sources of data include all external i
nformation needed for the study.
News papers, Business Magazines, Web sites are some important sources of info
rmation, which are used in this project work.
Sampling Process
Sample size - 86
Area covered - Bagalkot district
Duration - Two months

PART 5

DATA ANALYSIS & INTERPRETATION

MOST SOLD BRAND
Brands servo castrol Veedol Gulf Elf Volvo line Pennzoil
lalghoda Ipol others
Sales in no of shops 11 27 5 24 0 0 6
4 2 7
Sales in % 13 31 6 28 0 0 7 5
2 8

ANALYSIS:
From this survey it was found that amongst 86 respondents,
• 31% respondents are told as castrol is the most sold brand in our shop.
• 28% respondents are considered as Gulf is the most sold brand
• 13% respondents are told as servo lubricant oil is sales more in our shop.
• 7% respondents Pennzoil
• 6% respondents veedol
• 5% respondents lalghoda
• 2% respondents ipol
• 8% respondents other brands
This indicates that in whole Bagalkot district castrol is the most s
old brand. Maximum numbers of people are using this brand.
QUANTITY OF OIL SOLD BY EACH BRAND MONTHLY

Brands servo castrol Veedol Gulf Elf Volvo line Pennzoil

lalghoda Ipol others
Sales in liters 5525 7992 3830 8811 965 1245 1957 1917
2495 3050
Sales in % 15 21 10 23 3 3 5 5
7 8

ANALYSIS:
According to our survey it was found that amongst 86 respondents takin
g quantity as consideration
23% of Gulf lubricant oil sold from 86 respondents in Bagalkot di
strict. That means 8811 liters of oil sold by them monthly.
• 21% of castrol oil is sold monthly that means 7992 liters.
• 15% of servo oil sales monthly 5525 liters.
• 10% of veedol oil sales monthly 3830 liters.
• 7% of ipol oil sales monthly 2495 liters..
• 5% of Pennzoil & lalghoda oil sales monthly that mean 1957&1917 liters.
• 3% of elf & Volvo line oil is sold monthly that means 1245 & 965 liters.
• 8% of other brands that means 3050 liters.

MAJOR CUSTOMERS
customers Two Wheeler Thee Wheeler Four Wheeler H.C.W All Type
in % 12 6 7 73 2

ANALYSIS:

According to our survey it was found that amongst 86 Respondents.

• 73% of customers are heavy commercial vehicles like truck, tractor, JCB, Hitachi
, these are the major players for lubricants.
• 12% of customers are two wheelers.
• 7% of customers are four wheelers like car, zeep, etc.
• 6% of customers are three wheelers like tumtum, riksa etc.
• 2% of customers are all type.
From this major customers for lubricants are heavy commercial vehic
les.

INFLUENCY OF SHOPPERS ON CUSTOMERS PURCHASE

Influence Yes No
no of shoppers in% 31 69

ANALYSIS:
According to our survey out of 86 respondents
• 69% of shoppers are not influence to the customers purchase. Customers which bra
nd wants that brand only they will give to them. They cannot tell as like you ca
n purchase this brand, that brand.
• 31% of shoppers are influence to the customers purchase. In which brand they get
more margin they influence more that brand.

INFLUENCY OF MECHANICS ON CUSTOMERS PURCHASE

Influence Yes No
no of mechanics in% 84 16

ANALYSIS:
According to our survey out of 86 respondents
• 84% of shoppers are told as mechanic influence more than of us. His influence pl
ays very much important role in market place. Most of the customers are ask mech
anic about purchase of particular brand while purchasing the lubricant oil. Whic
h brand he told that brand will be purchased by customers.
• 31% of shoppers told as no one can influence the customers purchase. Customers t
hemselves only purchase a particular brand on the basis of their mind set. Most
of the customers are keeping single brand from many years so that they can use t
hat brand only.

CUSTOMERS PREFERENCE AT THE TIME OF PURCHASE

Factors Quality Price Brand All
Customers preference in % 12 31 20 37

ANALYSIS:
According to our survey out of 86 respondents
• 31% of customers are considered more on price while purchasing the lubricant pro
ducts. Most of the customers will purchase low priced lubricants with quality &
they expect good quality lubricant within low price.
• 20%of customers are considered brand name only while purchasing the lubricant. N
ow castrol & gulf are having very good name in the market so customers purchase
more these brands.
• 12% of customers are considered Quality. If the product quality is good then cus
tomers not consider above factors, they will directly purchase with consideratio
n of quality only.
• 37% of customers are considered all above factors.

SHOPPERS PREFERENCE WHILE SELLING THE PRODUCT

Factors Margin Customer satisfaction Both

in % 12 70 19

ANALYSIS:
According to our survey out of 86 r
espondents
• 70% of shoppers are considered more on customer’s satisfaction while selling the l
ubricant products. They not much consider on margin, they more concentrate on cu
stomer satisfaction.
• 12%of shoppers are more concentrate on margin. In which brand they get more marg
in they keep that brand much in their shop.
• 19% shoppers are considered both customer satisfaction as well as margin. Accord
ing to them product should have good margin with good quality then only we can r
eady to sale.

READY TO SELL ANY NEW COMPANIES LUBRICANT OIL

Ready to sell Yes No

No of shoppers in % 14 86

ANALYSIS:
According to our survey out of 86 respondents
• 86% of shoppers are directly not ready to sell newly entering lubricants. First
they will see the market situation of that product. If the product position is g
ood in the market then they will ready to sale otherwise not.
• 14% of shoppers are directly ready to sell newly entering lubricants. Shoppers t
old as once we will test that new product along with our daily selling product.
Almost These peoples are keeping more varieties in their shops.

AWARENESS ABOUT RELSTAR

Awareness Yes No
in % 6 94
 ANALYSIS:
According to our survey out of 86 r
espondents
• 94% of shoppers are totally unaware about newly coming up of reliance lubricant
product relstar. Awareness about this new product is very much less in the Bagal
kot district.
• 6% of shoppers are aware about newly coming up of reliance lubricant product rel
star. Awareness about this new product is very much less in Bagalkot district.

READY TO SELL RELSTAR A RELIENCE LUBRICANT PRODUCT

Ready to sell Yes No

in % 78 22
 ANALYSIS:
According to our survey out of 86 r
espondents
• 78% of shoppers are ready to sell newly entering reliance lubricant product rels
tar. These respondents are told as we are ready to sell your new product but fir
st we will see the market situation of that product. If the product position is
good in the market then we will ready to sell.
• 22% of shoppers are not ready to sell newly entering reliance lubricant product
relstar. Because these respondents are not ready to keep more varieties. They wi
ll restrict only few brands so that they sale that brand only.

PART 6
FINDINGS, RECOMMENDATION AND
CONCLUSION

Findings
From this survey it was found that amongst 86 responde
nts,
31% respondents are told as castrol is the most sold brand in our shop.
Taking quantity as consideration Gulf has the highest sales i.e. 23% of Gulf lub
ricant oil sold from 86 respondents in Bagalkot district. That means 8811 liters
of oil sold by them monthly
73% of customers are heavy commercial vehicles like truck, tractor, JCB, Hitachi
, these are the major players for lubricants.
31% of shoppers are influence to the customers purchase. In which brand they get
more margin they influence more that brand.
84% of shoppers are told as mechanic influence more than of us. His influence pl
ays very much important role in market place. Most of the customers are ask mech
anic about purchase of particular brand while purchasing the lubricant oil. Whic
h brand he told that brand will be purchased by customers.
Most of the customers are price sensitive so that 31% of customers are concentra
ting more on price while purchasing the lubricant products. Most of the customer
s will purchase low priced lubricants with quality & they expect good quality lu
bricant within low price.
20%of customers are considered brand name only while purchasing the lubricant. N
ow castrol & gulf are having very good name in the market so customers purchase
is more of these brands.
12% of customers are considered Quality. If the product quality is good then cus
tomers not consider above factors, they will directly purchase with consideratio
n of quality only.
37% of customers are considered all above three factors.
70% of shoppers are considered more on customer’s satisfaction while selling the l
ubricant products. They not much consider on margin, they more concentrate on cu
stomer satisfaction.
86% of shoppers are directly not ready to sell newly entering lubricants. First
they will see the market situation of that product. If the product position is g
ood in the market then they will ready to sale otherwise not.
94% of shoppers are totally unaware about newly coming up of reliance lubricant
product relstar nova. Awareness about this new product is very much less in the
Bagalkot district.
78% of shoppers are ready to sell newly entering reliance lubricant product rels
tar nova. These respondents are told as we are ready to sell your new product bu
t first we will see the market situation of that product. If the product positio
n is good in the market then we will ready to sell.
Recommendations
Awareness about Relstar lubricant product is very much less in Bagalkot district
. So better to concentrate more on advertisement of this new lubricant.
Mechanic influence more on customers purchase so that company should attracts hi
m by giving some gifts, coupons, and other different facilities. recently in Ja
makhandi ipol distributor given some gifts and party to the mechanics from this
now the mechanics are influencing the ipol product and sales becomes also more
now in their.
In Bagalkot district customers are very price sensitive so that your newly comin
g product price should be reasonable.
Most of the shoppers are wants credit facility to sale your new product. So for
that you should provide the credit facility to them. It will help to acquire mor
e market.
With lubricants becoming a fast moving consumer goods and the brand preference
of the consumers witnessing a change, brand image plays a key role in affecting
the consumer’s decision to buy a lubricant. In a recent study by Frost & Sullivan,
it was found that vehicles owners’ decision to buy a certain lubricant is affecte
d by a garage mechanic, retail storeowner, or the advertisements. Hence, it beco
mes important to have a good brand name in the market, which can affect the cust
omer’s decision to buy a certain brand.
With increasing number of players in the market, it is vital for the companies t
o reach a wider segment of customers. The lubricants market in India is very hig
hly fragmented and complex. Public limited companies selling primarily through p
etrol pumps manage to achieve a deeper penetration. Most of the MNC’s have tied up
with oil majors to market their brands like Castrol with Escorts, Tata BP with
Telco. This will help the private companies to establish a wider access, brand a
wareness, as well as preference.
Private companies mostly sell their products through stockiest, dealers, distrib
utors, mechanics, and retail stores. Maximum sales are achieved through mechanic
s and retail stores. Margins and discount schemes offered to the storeowners and
mechanics prompt them to sell and promote a particular brand.
The transformation from the administered pricing mechanism to free pricing has i
ncreased the importance of providing cost effective product to the users. Thus p
roduct costing and competitive pricing are key factors affecting the market.
In the recent past, the Indian lubricant market has witnessed a phase of consoli
dation. Multinationals with better technology, brand name and finances have the
power to launch themselves on their own in the market. However, with increasing
number of competitors it is not possible for every one to carve a nich in the ma
rket. This sector has witnessed considerable amount of mergers and acquisitions.
British Petroleum’s not so recent acquisition of Castrol is one example. The Indi
an lubes market is a combative market place and lubricant companies find themsel
ves fighting a tough battle for survival. In the OE sector also lubricant manufa
cturing, companies are entering into collaborations with vehicle manufactures. M
artin Udyog, Hyundai Motors, Hindustan Motors, TAFE, Toyota, and Skoda have ente
red into collaboration with IOC and Castrol for some of their models.
In the future, growth in the automotive lubricants industry will largely depend
on the overall performance of the economy. In the past one and a half years, the
scenario has improved with higher sales of commercial vehicles and two-wheelers
. However, in the future volume growth will be affected because of use of better
quality, long drain lubes. This will increase the replacement cycle for lubes.
In the shorter term, one will witness intense competition in a slow growing mark
et marked by a consolidation activity, which has the potential to change the fac
e of the lubricant industry. Given the rising competition, success of a product
would largely depend how well it is branded and distributed.

Conclusion
From the survey analysis it was found that in Bagalkot district
lubricant oil market is more so that in this regions oil sales is more because
of most of the area is covered by industries in Bagalkot district.perticularly
Ilkal,Mudhol,Jamakhandi these areas covered by more industries so that here oil
sales is more than the other regions.
Gulf is the major player in Bagalkot district most of the customers
are using this brand followed by castrol and it set up in the customer mind fro
m few previous years.
Major customers are heavy commercial vehicles like truck, tractor,
JCB, Hitachi, etc.these vehicles are consumes more lubricant oil than the other
vehicles.
Mechanic influence more than the shoppers to the customers purchase
s of lubricant oil. His influence plays very much important role in market place
. Most of the customers are ask mechanic about purchase of particular brand whil
e purchasing the lubricant oil. Which brand he told that brand will be purchased
by customers.
Most of the customers are price sensitive so that they concentratin
g more on price while purchasing the lubricant products. So that customers will
purchase low priced lubricants with quality & they expect good quality lubricant
within low price
Shoppers are considered more on customer’s satisfaction while selling
the lubricant products. They not much consider on margin, they more concentrate
on customer satisfaction
Awareness about newly coming up of reliance lubricant product is ver
y much less in Bagalkot district only few respondents are aware of this product.
Most of the respondents are ready to sell the newly entering lubrica
nt product of reliance petro marketing Ltd after seeing the market condition of
that product. And also few respondents are wants coupons, discounts credit facil
ity, and they told as if these facilities are available to your newly entering l
ubricant then only we are ready to sale your product otherwise not.
I
PART 7

BIBLIOGRAPHY AND ANNEXURE

Bibliography
Text Books
1. Marketing Management : Kotler and Keller
2. Marketing Research : Aaker,Kumar and Day
News Papers & Magazines
1. Business Line
2. Business Standards
3. Business India
4. Business world

Web Sites
1. www.google.com
2. www.RIL.com
3. www.reportbuyer.com
4. www.wickepedia.com
5. www.indianfoline.com
Questionnaire
Dear respondent.
I am Shankreppa.S.Atalatti M.B.A. IInd sem. Student of Kousali Ins
titute of Management Studies, Dharwad. As a curricular part of this course I am
undertaking a project to determine the “potential market for relstar nova lubrican
t a reliance product in Bagalkot district”. This is sincerely meant for academic p
urpose. The information which is provided by you will be kept strictly confident
ial & used only for academic purpose.
NAME:
ADDRESS: __________________________________________
__________________________________________
PHONE NO: __________________________________________
1) Which Brands do you sell?
Castrol Veedol Pennzoil Lal Ghoda Valvoli
ne
Elf Gulf Servo Others ________
_______
2) Which Brand is sold most?
___________________________________________
3) Quantity of oil sold under each brand in liters per month
Castrol Veedol Pennzoil LalGhoda Valvoline Gulf Elf
Servo Others

4) Who are your customer’s?

Two Wheeler Three Wheeler
Four wheeler Heavy Commercial Vehicle
5) Who are Your Major customers?
____________________________________________
6) Distributor from whom you Purchase?
Name and address ______________________________
_______________________________
7) Do you influence customers Purchases?
Yes No
8) According to you who influence more on customers purchases?
_________________________________________________
9) What do customers prefer at the time of purchases?
Quality Price Brand

10) On which factor do you concentrate more while selling the product?
________________________________________________
11) Are you ready to sell any new Companies Lubricant Oil?
Yes No

12) Do you know that Reliance is coming up with new Lubricant Oil under the Bran
d Name “Relstar”
Yes No
If yes
Mention the source from which you came to know?
______________________________________________________

14) Are you Ready to sell Reliance Lubricant Oil “Relstar”?

Yes , No
If no state reason ________________________________

THANK YOU