Strategies for marketing of LPG under differential/higher price structure
LPG cylinders, as we know it, has been the main source of fuel for cooking at the residential and commercial places (such as restaurants, hotels etc.). It has also been used widely at industrial sites nationally. There is a huge demand for the product in various forms i.e. in cylinders, in tankers as bulk, Auto LPG (vehicles) etc.
Major players operating in this industry
- owned companies like Bharat Petroleum, Hindustan Petroleum and Indian Oil Corporation
- Privately owned firms such as Aegis, Reliance, Super Gas, Max, Gilden, Premier LPG and many other smaller players in the market
Challenges we face, operating as private firm in this industry
- Subsidy :: It is only available to govt. owned companies to give affordable gas to the end consumers (general public only). This is only for LPG cylinders, comes in the size of 14.2 kg, also known as domestic gas.
- Price Difference :: Due to subsidy, domestic gas is substantially cheaper than the retail commercial price of a cylinder. Example, the cost of per kg gas in May 2021, was approx. Rs. 56 after subsidy whereas we offered the same product at Rs. 69 per kg. Therefore, it makes it difficult to compete in the market but with only those who are entitled to get the subsidy.
- Corruption/Illegal activities :: It has been observed in the market that domestic subsidized gas is being used for commercial purposes. Although, this is illegal, but due to lack of strict guidelines and supervision by the government, commercial places have been taking an undue advantage of the scenario.
To overcome above challenges, Premier LPG is taking the following steps :-
- Educating customers : It is critical to inform the client, specifically commercial and industrial sites that they are not eligible for subsidy and use of domestic gas is illegal. An inspection will impose heavy penalty on them and bad reputation on their firm. This is a risk for incurring heavy cost on the business.
By converting them as a customer of commercial gas with Premier LPG and with minimal increase in their cost today, their business is safe and becomes sustainable.
- Reducing gap in prices : Historically, the price difference between subsidized gas and commercial gas was very high, upwards of Rs. 20 to Rs. 30 per kg. Due to booming economy in India and various initiatives taken by the government such as “Give Up Subsidy”, privatization in various industries including LPG etc. the price differential is reducing. The market is much more competitive now, with differential of only Rs. 5 to Rs. 10 per kg, depending on the customer segment. This will further reduce and hopefully will eliminate eventually.
There are several important advantages that we provide to the customers, some of them are listed below :
- Ease of booking
You can order our products conveniently by any of the following methods :
- Calling us on our customer care number
- Order on our mobile app
- Order online on our website
- Collect instantly from our authorized retailers near you
- Timely delivery
You can choose the delivery day and indicative time slots, as per your preference.
The LPG we provide is imported and therefore is of high quality. It is tested for the purpose it will be used for. Example, small size cylinders such as 4kg, 12kg are tested for domestic use whereas big sizes such as 17 kg or 33 kg are highly efficient for commercial & industrial places
- Cylinder Sizes
We have different sizes available for variety of applications. Sizes are 4kg, 12kg, 17kg and 33kg. It can be used for any purposes such as barbeque, residential cooking, commercial cooking or industrial use.
- Gas Quantity
One of the important elements is the actual quantity of gas filled in the cylinders. You will often find that govt. agencies & other firms are charging for 14.2 kg gas but when you weigh, it is much less than that, ranging from minus 500 gms up to 1500 gms. We assure you the right quantity in the size you buy. If you find it less, we are happy to weigh instantly at the time of purchase and discount the product accordingly.
- Customer Service
We are available from 7am to 7pm seven days in a week to take your order, provide you service and answer any questions you have
- Minimal documentation
A customer can purchase our product on any authorized ID proof they have versus very limited acceptable options by the government agencies
Extra perks with no additional cost to you
- Our product comes with money back guarantee in case we fail to deliver to you as promised
- Accidental insurance policy
- Claim GST wherever applicable (no minimum quantity needed)
- Consumer loan scheme available to make it affordable for everyone
- You can refill the cylinders as often as you need with no limits in an year imposed by the government currently for determining the subsidy eligibility
- Refundable cylinder security as per the terms listed from the distributor/dealer of the area.
Opportunities available in future for the LPG industry
- Removal of subsidy
Subsidy is one of the major cost and burden on the government. Government has been taking various steps gradually to reduce and ultimately remove the subsidy on the LPG product. Additionally, they want the market to be competitive, promote privatization and make it a fair field for all the players in the market.
- Commercial and industrial sites
Given subsidy is not available to this enormous segment, keeping in mind all the benefits mentioned above, we can easily educate them and expand our coverage of this segment nationally.
- Auto LPG
This has been seen as the best alternate to petrol/diesel for the vehicles. It is environmentally better and affordable. The demand is ever increasing and much more profitable.
Multiple options to consumer
We sell 4 kg. cylinder with stove attachment which is beneficial for those who are using the Janta kerosene wick stove, ideally suited for small families, and low-income groups living in small apartments, not having a spacious kitchen. This incurs no huge initial investment as well as for filling. The uses are narrated at our website under the navigation of “Product”.
Market situation after withdrawal of subsidy
As mentioned in our website under the navigation of “Parallel Marketing System in LPG” and news on the scroll where you will find that there will be good scope for parallel marketer because they work under the parallel marketing system in which they can sell the product at their own level by fixing the price where no restriction of rates which can be varied according to situation and circumstances. When the subsidy is withdrawn, there will be a glut of demand from consumers to the parallel marketers. This increased demand will be difficult to manage and it is very critical that we prepare our infrastructure i.e. bottling plants, storage godown, selling network etc. beforehand. Our firm will have competitive advantage and will be able to gain maximum market share.
How our associates will be successful
- Risk free opportunity
Every new business carries a risk-tag, which leads to huge business losses. But our business associates/distributors/dealers/retailers/mini retailers function under our protective umbrella of “risk free opportunity” click here to know the full details. They have no prospects of loss in this business. They complete the period of one year which has been given under this scheme, if they found that business is not viable, and due to any other reason they are not interested, they can return the unsold cylinders to the company if they have started as Customer Representative, they can get back full refund of the price of the connections without deductions.
- Wait & watch policy
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.
You deal with the household & 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.
We advise our prospective customers to book their area because we are rigid and adopt our policy of “Premier Marketing Set-Up” which contain limited scope of jurisdiction with minimum investment and franchisee fee which may increased in the near future.