Refining and marketing oil company Indian Oil Corporation, as part of its new rural marketing strategy, is reworking its convenience stores model to suit the needs of rural areas.
The new strategy involves not only setting up 250 retail outlets to address the fuel requirement of its clientele but also sell farm produce, seeds and fertiliser.
T L Jain, executive director (retail), IOC told Business Standard, "IOC is working on a major rural marketing thrust to cater to the needs of the rural populace. We are looking at setting up 150 small outlets called 'utility outlets' and 100 mobile dispensing units."
IOC intends to spend Rs 3,000 crore (Rs 30 billion) in its marketing initiatives in 2004-05.
Of this, Rs 1,348 crore (Rs 13.48 billion) will be utilised to set up 1,000 retail outlets, Rs 1,250 crore (Rs 12.50 billion) in liquefied petroleum gas operations and Rs 144 crore (Rs 1.44 billion) in aviation, lubricants and depots.
Jain said that the rural initiative would mean additional outlets apart from the 1,000 outlets which are on the corporation's drawing board.
Although investments for utility outlets are still being worked out, Jain claimed that "these outlets will be set up if they are financially and economically viable."
IOC has already commissioned 'Kissan Mitr', the first mobile retail dispenser.
Besides selling fuels, Indian Oil Corporation is also planning to use these outlets as well as mobile dispensing units to sell seeds, fertilisers and agricultural products to the farmers.
This will boost the corporation's revenues from the non-fuel offerings. Globally, oil companies record 40 per cent of their revenues from non-fuel offerings.
However, in India oil companies have not been able to generate revenues from non-fuel activities although in metros and in cities they have opened convenience stores.
Meanwhile, IOC's outlets will soon sport a new retail identity.
"We will don the corporate colour of orange and navy blue for our Xtra outlets," according to NG Kannan, director, marketing, IOC.
"At present IOC has about 9,155 retail outlets and our mission is to cross 10,000 retail outlets across the country," Kannan said.