Strategies for marketing of LPG under differential/higher price structure
Marketing, especially consumer marketing is a challenging field. You have to sell an article of daily use, needed in every house and many commercial establishments. These are few suggestions and strategies that we can successfully adopt in our sales promotion.
There are initial reservations lingering in the minds of some of our distributor/dealers whether it will be possible to become successful in this field, when our product is priced at a much higher price than the existing well-entrenched market competitors i.e. Bharat petroleum, Hindustan Petroleum & Indian oil corporation and how the customer will reached to our higher prices?
Consumer awareness of the correct facts
Through presentation of correct data and information to the customers, we can make them aware of the correct facts about the pricing criteria and the cause of the differential price being charged as under:-
Subsidized sale is a temporary and transitory phenomenon
Initially public distribution system was the only source for LPG. The product was sold at extremely low prices. But the commodity was scarce and beyond the reach of many genuine consumers. The waiting lists with the distributors were pending for long period. Public distribution of LPG on a monopoly basis at subsidized rates is the past policy of the government. Parallel marketing is the present policy of the government commencing from the year 1993. Presently the old and the new exist side by side and this is the transition stage. The full implementation of the policy will be operative very soon.
In fact the wide gap has already started narrowing. LPG from INDANE and other government oil companies was marketed at Rs.80/- for 14.2 Kg a couples of years back, when the parallel marketers could sell a 12 Kg cylinder only at Rs. 250/- or so. Today, we are selling 12 Kg cylinder at Rs. 680/- to Rs. 720/-, while the 14.2 Kg cylinder of public distribution system is sold at Rs. 804/- to Rs. 850/-.
Govt. has already decided to abolish the subsidy grants for LPG within short span. Commercial marketing by parallel marketers is the pilot project of the Govt. and the government oil companies have to follow the same. This is the current policy of the government. Price structure linked with the international prices has already started for diesel and petrol. Please explain the point to prospective consumers during your business campaigns.
Subsidized LPG is not available to everyone
It is available only to those who are already listed. No subsidized fuel is being supplied to the commercial sector. The segment left out is large. Fresh entry in Public distribution system is procedure oriented and time-bound. Only few may like secure in the near future.
Market situation when subsidy is withdrawn
When the subsidy is withdrawn, there will be a glut of demand from consumers to the parallel marketers and despite our eagerness to serve every customer, we will find infrastructure constraints viz. capacity of bottling plants, storage godowns etc. All cannot be attended to. Existing and first-entrants will always enjoy our first choice have the priority & preference at that time.
Better service a plus point
If the price appears to be an adverse point, the service is a positive and plus point for us. We are not a monopoly structure. We live and breathe in perfect competition. Our business is customer oriented. We eagerly wait for the customer. Our service hours will be 7.00 a.m to 7.00 p.m and for seven days in a week. Our cylinder of 11 kg will contain marginally higher than 11 kg. it will never be a product of under-weight. Our motto will be ZERO PERCENT complaints in service.
No booking no waiting
We give new connection on spot. We do not require any ration card & there is no limitation of numbers of connections. We do not keep our customers waiting. Our charges are uniform for all our customers. Ours is a recognized and law-abiding business. We should advise the customer not to purchase the illegal connections in the name of other persons and without names, diverted, i.e. a theft from govt. agencies.
Multiple options to consumer
We market the 11 kg. cylinder with stove attachment, to those who are accustomed using the janata kerosene wick stove. 4 kg cylinders are ideally suited for small families, and low-income groups living in small apartments, not having a spacious kitchen. This incurs no huge initial investment and no separate stove.
A business venture does not return the fruits of your endeavor on the next day. It takes prolonged and hard efforts to establish firmly in such a career. But when you cross the initial hurdles, the growth potential is unlimited. This is thus different from salaried service, where a person gets an assured and fixed income from the very first month, generally with a security of service, but does not have further growth prospects except over a prolonged period and to a minimum extent. In a self employment, one needs to possess Self-confidence and determination to lead a carrier-path with sure prospects at the appropriate time.
While we assure you that there is presently enough existing prospects in LPG under parallel marketing, when the transitory period is crossed and subsidies are withdrawn fully by the government and free-market trade is restored, the prospects before our distributors/dealers are unlimited.
Every new business you start carried risk-tag. There are risks of business loss. But our distributors/dealers function under our protective umbrella. You have no prospects of loss in this business. You complete the agreement period, and in case you are not interested, you may return the unsold cylinders to us and get back full refund of the price, without deductions.
In distribution you sell to the consumer against cash. There is no pain of tedious credit-collections and fear of consequent bad-debts and unrecovered collections.
You deal with the household sector and commercial sector and provide them a basic necessity of daily use. We look after everything for you and only responsibility given to you is customer-relation. Look after the customer and secure the business and success will tap at your doors for your inputs of hard-labour.