cng market analysis
DESCRIPTION
Market Study for potential of CNG use in Private Vehicles (Incl. Govt. vehicles) in DelhiTRANSCRIPT
Market Study for potential of CNG use in Private Vehicles (Incl. Govt. vehicles) in Delhi
Qualitative Phase Findings
Image & Perception of CNG with Private Car Owners
Presented To:Indraprastha Gas Limited
Presented by: IMRB InternationalResearch-based Consultancy for B2B and
technology Markets
BIRD
2
Background
IGL is promoted by BPCL, GAIL, Government of Delhi and Financial Institutes
IGL is the supplier for PNG (Piped Natural Gas) for Domestic use and CNG (Compressed Natural Gas) in Delhi city.
Till now, CNG was allowed only for Commercial Vehicles (Buses, Three-wheelers, Taxis), now RTO has allowed for private vehicles as well.
IGL is currently supplying approximately 7 Lac SCMD of CNG in Delhi, but has the capacity to supply up to 14 Lac SCMD approximately.
3
Need for the Study
With the capability to supply more CNG to the city,IGL plans to introduce CNG for Private Vehicles and Government Vehicles in Delhi
With the advent of Delhi Metro Rail Network, the use of commercial vehicles for public transport shall be affected, therefore other avenues for CNG use have to be explored
Targeting private vehicle segment thus expands the target market for CNG
To enable development of clear future strategy, IGL would like to assess the image of CNG in consumer mind, as well as gauge the potential demand in this segment.
4
Study Design
Study is divided in Two Phases
Qualitative Phase I: Attitude & Perception Towards CNG in Private Car Owners in Delhi
Quantitative Phase II: Demand Estimation for CNG in Private Car Owners in Delhi
The current presentation covers Phase I of the Study
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Objectives: Phase I
Objectives of Phase I are: Level of Awareness of CNG as a fuel option among private car
owners Level of Awareness of maintenance and operation of CNG run
vehicle Attitudes & perception (including misconceptions) towards CNG as a
fuel option & comparison to other fuels Strengths & Weaknesses of CNG as a fuel option Awareness & Attitude towards CNG kits and conversion Level of awareness & attitude towards cost economics of CNG as a
fuel vis a vis other options Current level of satisfaction and future expectations of services
available at CNG filling stations
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Methodology: Phase I
Focus Group Discussions: Specialized Qualitative Research Technique to enable brainstorming & exchange of ideas on a concept Executed among private car owners of different types of cars
(small car, medium cars and big cars or high end car owners) Highlight the issues related to awareness, perception and
customer desires in terms of service requirements at the filling stations
Depth Interviews: Semi-structured face to face discussions to uncover issues related to CNG & its usage Conducted with various influencer segments – CNG kit
dealers/mechanics, government officials & OEMs
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Methodology: Focus Group Discussion
A focus group is a specialized qualitative research technique 8-10 persons of similar demographic profile are brought together to
discuss and express their opinions on specified issues These persons are first screened through pre-determined
recruitment criteria to enable a relevant discussion For these FGDs, the selection criteria were car segment, kilometers
driven per month, age of car and employment (salaried vs. business) segment
Persons of similar criteria are group together for separate (7 in our case) FGDs
Moderator(s) guide and facilitate the discussion through an unstructured guide covering the concept & related issues being tested/exposed for opinion of the respondents
Focus groups bring out spontaneous reactions, opinions and unbiased views of the target group, to get a clear picture of image & perception on the discussion concept/issue
These opinions/ideas can be validated for a large universe through a quantitative approach which derives cues from the FGDs
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Methodology: Recruitment Criteria for Focus Groups
The FGDs for this study related to gauging current image of CNG as a fuel and reaction to its usage in private car segment
The selection criteria, therefore, for the participants was: Fuel – Only petrol vehicle owning persons Car Segment
Small Car Owners(Maruti 800 owners) Mid Segment I (Zen, Alto, Santro, Matiz, Wagon R, Indica, Uno) Mid Segment II (Esteem, Palio, Siena, Indigo, Corsa, Accent, Ikon) High End Segment (Lancer, Astra, City, Sonata etc.)
Age of Car - <3 years & >3 years Kilometers driven per month – <1000km (light users), 1500 –
2000km (moderate users), >2000km (heavy users) Employment – Self employed vs. Salaried
Permutations & combinations of the above criteria (explained in sample spread) were taken to see variation in ideas, opinions & perception
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Sample Spread
Car Segment Classification Variables FGDs
Small Car
Businessman/Trader with <3 years old vehicle (heavy user >2000km/month)
1
Salaried person with >3 year old vehicle (light user <1000 km/month)
1
Mid Segment - I
Businessman/Trader with >3 year old car (moderate user 1000 – 2000 km/month)
1
Salaried person with <3 year old car (moderate user 1000 – 2000 km/month)
1
Mid Segment - II
Businessman/Trader with <3 year old car (heavy user >2000km/month)
1
Salaried person with <3 year old car (moderate user 1000-2000km/month)
1
High End Segment
Businessman/Trader <3 year old car (heavy user >2000km/month)
1
Total 7
Focus Group Discussions:
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Sample Spread
Segment Sample Size
Focus Group Discussions 7
Depth Interviews 11
OEMs/Manufacturers 3
Mechanics/Kit Manufacturers/Dealers 4-5
Government Officials 4-5
Overall Sample Spread
Findings among Private Car Owners
This Section covers:
Awareness of CNG as Fuel Option
Imagery & Perception of CNG
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Petrol is top of mind and acceptable fuel for car owners across most segments…
For car owners, petrol is synonymous with ‘fuel’ for their cars It qualifies as the best option in terms of availability,
performance and quality Various brands of petrol occupy the mind space of consumers
as ‘fuel options’ “Speed…Premium…93 Octane…”
– Small Car Owner
“Petrol is the best fuel…quality is good and it is available everywhere…’
– Mid Segment I Car Owner
All other fuels are a secondary option and benchmarked in terms of performance with petrol
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Diesel comes a poor second to petrol, while others fall well below in the order of preference…
Diesel is viewed as a ‘poor man’s fuel’ – taxi & bus drivers An option for those who cannot bear the expenses of petrol An option for those clocking high number of kilometers However, the fuel cost advantage is offset by a number of
operational problems that the fuel creates for the car owner “Diesel’s advantage is that it saves cost…”
Mid Segment – II Car Owner
“Diesel cars are not good…produce a lot smell and vibrations…”Mid Segment – I Car Owner
“Diesel cars require good maintenance…its engine opens in 2 years…running cost may be low…but maintenance cost is high…’
Small Car Owner
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LPG & CNG come to the consumer mind most of the time when prompted…
Consumers are aware of the existence of CNG & LPG as fuel options
However, the awareness does not extend much beyond this level “Yes…heard of CNG…but never used it…cylinders…kits are there…
not meant for private cars…’Mid Segment II Owner
“CNG is there…for commercial vehicles…’Small Car Owner
“Yes…today there are people having LPG kits fitted as well..”Mid Segment I Car Owner
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Since awareness of CNG as a fuel & its usage is low, the awareness about kits and approvals is also minimal…
Almost all respondents were unaware of the brands of kits existing in the market except their Italian origin. “Italian kits…local like Hovell…Toyota (local)…”
Mid Segment I Car Owner “Italian? Lambda kits I think…”
Small Car Owner
None were aware that approvals were required for fitting CNG kits in a car
However, many were aware of the price range for both CNG & LPG kits “Cost between 32,000 to 35,000…”
Mid Segment II Car Owner “Rs.30,000 – 40,000…”
High End Segment Car Owner “LPG is even cheaper…I can get you for Rs. 1500 – 2000”
Mid I Segment Car Owner
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Except for being environment friendly, CNG does not have a positive image among most car owners…
Top of mind recall for CNG exposes an association with more negatives than positives: ‘Long queues…’ ‘Not safe…do not know what will happen to your car…’ ‘Meant for public transport…’ ‘CNG does not start in winters…in an accident the cylinder also
bursts..’ ‘CNG available in Delhi only…’ ‘Environment friendly…thanks to Sheila Dixit…but dangerous…catches
flames…’ ‘Eco friendly…it has reduced pollution in Delhi’
IGL’s focus on Environment Friendliness of CNG as a key attribute in its communication has been successful so far
and needs to continue!
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And where does CNG stand vis a vis other fuels?
Fuel Availability Performance Safety Maintenance Cost Economics
PetrolEasily
AvailableBenchmark for
smooth performance
Safest fuel – tried & tested
Regular check ups per 5000 km give car engine a long
life
Most expensive fuel among options
available– especially high octane variants
DieselEasily
Available
Freezes in winter, causes knocking,
vibrations in vehicle
Equally safe as Petrol
High maintenance – ‘Car opens in l lac kilometers’
Cheaper than petrol, but maintenance cost is
high
LPG
Easily Available (especially Domestic Cylinder)
Freezes in winter, knocking,
Smell of Gas
loss in pick up, cannot take AC load
Unsafe unless properly
maintained
High maintenance, life of car reduced
Cheaper than both diesel & petrol, but poor
performance & high maintenance makes it a
weak replacement option
CNG
Available only in Delhi. What
about out of city travels?
Similar to LPG, Heating pads
required in winters
Similar to LPG, but less
flammable
Maintenance cost higher than petrol
car.
Cheapest fuel –
But perception of unsafe fuel renders it a weak
competition.
Positive Negative Mid Way – Can be overcome
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Safety…or the lack of it, is the primary area of concern for most car owners…
• Lack of faith in technology
• Fear of leakage & cylinder burst
• Concern about availability in Delhi
• No supply outside Delhi
• Deterioration in pick up
• Inability to carry load of AC
• Loss of Boot space
• Engine Life reduces
Safety
Availability
Performance
• ‘Not safe for my family…I saw car burst’
• ‘If it was a fool proof technology…then the car would not be bi-fuel…only CNG…’
• ‘There are always long queues…’
• ‘There used to be queues, now decreased…’
• ‘If I have to go out of station…what do I do…CNG is not available…’
• ‘Slow pick up with CNG…’
• ‘Cannot work with AC…’
• ‘Cylinder takes up boot space’
• ‘Engine opens very soon…’
Primary Areas of Concern / Disadvantages
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Cost Effectiveness & Eco Friendliness are Secondary to Primary Concern Areas…
All types of car owners were aware that CNG was more cost effective (running cost)
However, stemming from the lack of trust on the technology itself, many felt that like diesel vehicles, maintenance & operation of a CNG vehicle would equalize the cost
Cost Effective Eco Friendly• ‘Cheaper…saves money…’
• Mid Segment I Car Owner
• ‘But what about maintenance…I feel eventually it is the same
• Small Car Owner
• ‘Pollution Control…but its difficult to run…’
• Mid Segment II Car Owner
• ‘But it is only good for commercial vehicles…’
• Small Car Owner
IGL primary action must be to dispel the current beliefs prevailing about CNG & educate the customers!
The CNG User
Perception of a CNG User versus a Petrol User
(By Projective Technique)
CNG Car Petrol Car
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The petrol user is a more cosmopolitan person, who prefers quality to saving money…
• ‘Executive…living in metro…’
• ‘At good post…tension free person…’
• ‘Performance & reliability conscious…’
• ‘Energetic…keeps his car maintained…cares…’
Bottom line: ‘There is no substitute for petrol…’
Petrol is THE FUEL – it connotes status & reliability. Other fuels are looked down upon & only for those who cannot afford to maintain a petrol car.
IGL needs to develop a similar association with CNG!
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The CNG user is the ‘Lala type’, more concerned with saving money than his vehicle…
• ‘Lala type…taxi wala…money minded’
• ‘Semi urban…from village with agricultural money…’
• ‘Government servant…clerk with less pay..’
• ‘Not having high income…’
• ‘No concern for traveling comfort or family safety…’
• ‘CNG car owner will always be under tension…what happens if it finishes?’
• ‘I would look down upon him…’
• ‘Its ok for those traveling long distances…1500km/month’
Bottom line: CNG is ‘not for me…but for some other poor guy…’
CNG means ‘a headache’ in terms of operation & maintenance. It is considered a risky proposition. It is a viable proposition only for those clocking high kilometers and is a compulsion to save cost.
IGL needs to create a space in the mind of consumers that CNG is safe and for everyone to use, not just a cost saver!
Pre-Concept Exposure Conclusions
This Section covers:
Image & Perception of CNG User
Likelihood of Shifting
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Salaried Segment
Pre-Concept Exposure: Perception of CNG Based on Customer Segment
Overall: CNG is more Suited for Business Segment Petrol is a hassle free option for the basic driving needs of salaried people CNG Serves as a replacement for diesel car owners – predominantly in
business segment “…they use it for rough use…” “…travel long distances…for business purposes…saves money…”
Small Car
Mid Segment I
Mid Segment II
• Slightly Positive towards the concept, since running cost lower than petrol – especially those traveling long distances.
• View Petrol as the only option for convenient driving
• Unlikely to shift as they can absorb petrol cost
• Definitely not shift- look down upon fuel options besides petrol
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Business Segment
Pre-Concept Exposure: Perception of CNG Based on Customer Segment
Overall: Agree on cost savings if used, however primary concerns of safety & availability still need to be addressed
Boot space: Another issue, as many in this segment use vehicle for loading & unloading of goods
Small Car
Mid Segment I
Mid Segment II
High End
• Open to the option for business use if safety & availability fears allayed
• Open to the concept if safety issues addressed
• Boot space issue addressed as larger cars in this segment
• Vehicle: Lifestyle product
• View CNG option for lower strata Only
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Likelihood of shifting: Overview (Pre-concept Exposure)
Low
High Likelihood of Shifting
Kilo
meters T
raveled
Attitude Towards Vehicle
Small Car Small Car Business Business
BasicConvenience + PleasureStatus Symbol
Low
High
Small Car Small Car SalariedSalaried
Mid Segment I Mid Segment I SalariedSalaried
Mid Segment IMid Segment I
BusinessBusiness
High End, Mid High End, Mid Segment IISegment II
“It is for lower income group…”
“Make kit for Rs. 1 lac & then we will buy…penetrate in upper strata of society
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However, most consumers willing to shift Prefer purchasing a CNG variant to getting the kit fitted…
Assurance for safety and trust in the technology primarily stems from manufacturer (OEM) of vehicles
Since primary concern of consumers with CNG technology is safety – they are more inclined towards OEM fitted variants of current car models ‘Government cannot provide assurance…they are corrupt…whereas a
manufacturer’s whole reputation is at stake when he comes out with such technology…’
Small car owner
‘OEMs will have tried & tested the technology before launching it…they will aim to provide complete safety..service…same features/performance as a petrol car…’
Mid Segment I car owner
Post Concept Exposure Reactions & Conclusions
This Section covers:
Reaction to Concept of CNG as a Fuel Option
&Reaction to Cost Effectiveness
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The Concept
IMRB exposed the following concept to the respondents for their reaction
CNG is easily available for private cars
There are 112 CNG filling Stations in Delhi and they shall grow to 127 by this year – end. This will also allow private cars to use CNG stations at short distances within the city.
CNG is Safe to use in the vehicles
CNG cylinder is made of Carbon steel that is lighter and stronger than normal LPG cylinder. CNG is lighter than air, thus it evaporates in the air in case of leakage. Transport Authorities have approved specific kits for each specific model of cars through thorough testing procedures & research organizations.
CNG is environment
friendly
The emissions of CNG vehicle have very less polluting substances. The pollution level of Delhi has gone down significantly since CNG is introduced in the commercial vehicles.
CNG is economical to
use
1 kg of CNG is equal to 1.4 litre of petrol. 1 Kg of CNG is available for Rs. 16.8. Thus, On every litre of petrol you use, you save Rs. 18 if the vehicle is run on CNG.
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Concept: Cost Economics
Details on cost effectiveness of to the respondents
Kms run per monthPetrol Mileage
10 Km / ltrPetrol Mileage 12 Km
/ ltrPetrol Mileage 15
Km / ltr250 6 Years & 4 7 years & 7 months 9 years & 6 months500 3 years & 3 3 years & 10 months 4 years & 9 months750
2 years & 2 months 2 years & 7 months 3 years & 3 months
1000 1 year & 7 2 years 2 years & 5 months1500 1 year & 1 1 year & 4 months 1 year & 7 months2000 10 month 1 1 year & 3 months2500 8 months 10 months 13000 7 months 8 months 10 months
CNG
Authorised Kit Price (Rs.)
32,000 – 38,000Avg. Rs. 35,000
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Most respondents were aware that CNG is less expensive…but were still surprised as to what extent!
Pre Concept – ‘Yes CNG is cheaper than other fuels…but it will still cost me 30,000 to fit the kit…I will only break even in 3 years or more…’
Post Concept Most respondents were slightly surprised that at the current
average of their car (12 – 15km/L) it would not take them more than 1.5 years!
A positive attitude towards the fuel developed as soon as they were made aware of this
Post concept exposure heated discussions & queries related to CNG were raised…
Again emphasizing need for communication & a tremendous potential of petrol users to shift if awareness is created!
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Despite reassurance & effort to allay fears related to CNG & its usage…doubts persisted…
‘There is no doubt that CNG is cost effective…but I would still have reservations unless I got it from an OEM…’
Small Car Owner ‘It still does not address performance issues like pick up, boot space and
after sales…’Mid Segment I Car Owner
‘It does not seem viable to get a kit fitted in my 3 year old car…I would be changing it anyways by the time my cost is recovered…’
Mid Segment I Car Owner ‘I would prefer a company fitted car…if I go for a new car…
Small Car Owner ‘Depending on safety, maintenance cost, after sales service issues I might
consider going for it…’Mid Segment II Car Owner
Need to launch massive awareness & education campaign for CNG
OEM variants have higher probability of success than getting kit fitted
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Cost Effectiveness will be the major driver for shifting…again more inclination towards OEM variants..’
Small Car & Mid Segment I respondents grew more inclined towards CNG as a fuel option post exposure of the cost economics concept
Other segment respondents also of opinion that it would serve as a viable option for the lower car segments, especially business class
However, again several issues were raised: ‘Resale value? It will go down if I get a kit fitted…’
Mid Segment I Car Owner ‘Insurance premium will also increase and current insurance will be void if I
get kit fitted…’Mid Segment I Car Owner
‘Company fitted (OEM variant) will make more sense if I’m making the investment…’
Small Car Owner ‘Tax exemption or price less than LPG will bring more smaller segment users
in thisMid Segment II Car Owner
However, reiterating again: Customer education & collaboration with OEMs will be key determinants for establishing demand
Possibility of high demand in lower car segment – largest selling car segment!!
35
LIKELIHOOD OF SHIFTING FUEL H
igh
Likelih
oo
d o
f Sh
ifting
Lo
w
Low
Kilometers Traveled
High Moderate
1
2
7
5
63
4Small Car business
Small Car Salaried
Mid - I business
MID I Salaried
MID II business
MID II Salaried
High End
1
23
45
67
1
2
34
5
67
Pre Concept
Post Concept
Services Expected from a CNG Filling Station (Projective Technique II – NLP)
This Section covers:
Experience at a regular Petrol Pump
Ideal Filling Station
Branding/Communication at a CNG Station
37
Current gamut of services offered at petrol pumps has raised the level of expectations from a CNG station…
‘Today’s petrol pumps are very good…they offer so much…’ However, most consumers look for basic services at a pump
Most not willing to spend too much time there except for filling petrol and getting the tyre pressure checked
Other services offered like car washes, convenience stores, ATMs, workshops etc are used once in a while.
Basic
Used Sometimes
Value Adds
Air Check, Pollution Check, Drinking Water, Clean Toilets, Space for parking, Polite attendants, Bright ambience
Workshops, Credit Card Payment Facility, quick food items, ATMs
Schemes (gifts/offers), Convenience Stores
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Most consumers do not see the same level of services at a CNG pump…but expect the same…
‘Most of those pumps are empty…only have cylinders lying around…not even basic facilities there..’
‘Green and brightly lit…lots of space…but they should not make the passenger get out of the car while filling…must be because CNG is dangerous…’
Must Have
Possible Additions
Not So Necessary
Air Check, Pollution Check, Drinking Water, Clean Toilets, Space for parking, Polite attendants, Bright ambience
Workshops, Credit Card Payment Facility, ‘CNG Card, Basic Tuck shop (water, snacks), ATMs
Full fledged Convenience Store
Ideal Filling Station
Concentrate in providing large spacious pumps with basic facilities with focus on branding & awareness through hoardings!
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Branding…what kind of communication cues are customers suggesting?
IMRB also asked the respondents of a symbol for IGL that would act as a mascot for CNG to increase recall & establish a brand identity ‘Smiling face…’ ‘Innocent child or face…holding a tree..’ ‘Open sky…flying bird..’ ‘Dove above trees…’
Obvious point made was that the colour green should always be part of the symbol or communication strategy Already, the top of mind recall about IGL are its green colored
banners and logo This instant recall emphasizes that to create a connection with
the target audience, a strong communication strategy will go a long way to create awareness
The other side: Supply Side View
IMRB also met major automobile manufacturers & mechanics to get their view on CNG as an option
for private cars
41
OEMs are open to launching CNG variants…if demand is established
IMRB met Maruti Udyog Ltd, Hyundai Motors & Ford India for their views All three were open to the concept, however were skeptical
about the demand Their foreign partners/parents had already explored alternative
fuel vehicles in parent countries, therefore technology was not an option
Expressed the need for collaboration with IGL to establish demand in this segment
All three agreed CNG is safe, easily available and environment friendly CNG run vehicles were at par with petrol vehicles on
performance & operation
42
Maruti already caters to commercial (taxi) segment with its CNG variant for OMNI
Maruti produces 50 CNG Omnis every month. Transenergy CNG kits are fitted in OMNIs CNG kits are fitted after the normal production of vehicles –
main production line is not tampered with The cost difference between petrol and CNG variant is Rs.
12000 – 15000 – more economical than fitting Rs. 30,000 kit!
Maruti has not looked into private car segment for CNG variant – lack of awareness about demand
Maruti plans to launch CNG variant of another existing car model but no further information was shared
Maruti, the largest automobile manufacturer, could induce tremendous demand if it sees potential – Need for IGL to collaborate!
43
Hyundai & Ford do not produce any CNG variant in India…but are open if they see potential
Hyundai views CNG as heavy vehicle fuel like Buses and LPG for lighter vehicles like cars, etc. Hyundai produces CNG buses in Korea It produces LPG Santros (I Litre engine) in Korea
No plans are disclosed for introduction of CNG vehicle in India
Ford also has technical expertise available Internationally
FORD is open to hybrid cars (petrol + CNG) for India.
Again technology is not a problem for these OEMs, just collaboration and potential has to be established by IGL!
44
Then what kind of support are these OEMs looking for from IGL?
OEMs require specific information related to CNG from IGL Availability of CNG in India (present and future scenario) Details of CNG available in Delhi Technical details of kits compatible with engines (here government
agencies like RTOs, IIP, CRRI need to be involved as well)
Other information support OEMs are not a part of kit approval procedure for a
model and need IGL support for inclusion in that process
OEMs are ready for kit retro fitment at authorized dealers after consultation with IGL and government authorities.
45
Some important issues raised by OEMs…
OEMs would prefer models that do not cannibalize with their present models. Thus, no change in production design & process is desired Only an addition at the end of the line is possible.
Thus, IGL will have to hard sell R&D for CNG variants proposition if alteration in production process required A/C problem and Boot space constraints can be taken care of
by a few modifications in the basic design, However, this increases the R&D and investment cost for
OEMs Thus, the potential has to be large enough to justify this Otherwise retrofitting at the end of the production line has to be
the option without taking away boot space constraint
46
Mechanics are however not very positive about the potential of CNG vehicles…
In 2000 – 01, a popular CNG mechanic has fitted between 2500 – 3000 kits a year.
Now the incidence of retro fitment of CNG kit in private car is very low. Largely commercial (non-taxi segment and government vehicles) are
the customers According to Mechanics
The initial craze is over. The cost conscious customers still go for CNG variant but the numbers
are finger countable Usually businessmen get the retro fitment done in second hand and old
cars. Government ministries use CNG in a few official cars For re-sale, approx. 90% vehicles take out the CNG kit
They need IGL support for education and awareness campaigns
47
Mechanics have however failed to assess the big picture…
RTO officials however gave reasons why CNG retrofittment died down after initial craze Due to paucity in supply initially (as IGL was still establishing its
infrastructure) RTO stopped registering CNG fitted cars Initially many vehicles met with accidents as technology was
nascent and technically experienced retrofitters were unavailable
Over the years, only those mechanics or dealers have remained that had the capability & expertise to fit competently (Transenergy, Green Fuel Engineering etc)
Therefore, it is extremely important for IGL to collaborate with government agencies (RTOs, IIP, CRRI etc.) and kit manufacturers/dealers to induce demand & establish stringent norms for CNG vehicles
The Road Ahead for IGL
49
Recap: Issues raised by target audience
Primary Concern: Need to dispel myths about CNG being unsafe
Comparison with Petrol: Need to establish parity with petrol on performance & availability parameters
Cost Economics: Need to create awareness on exactly how economical CNG is vis a vis other fuels
OEM Variants vs. Retrofitting: Need to establish potential demand & target audience for both
Services at Filling Stations: Need to provide similar services as that at petrol filling stations
Branding: Need for establishing connect and space in consumer mind
How do we address each of the mentioned issues?
51
Dispelling fears about safety of CNG…Mass Customer Education!
Customer education campaign, ‘Marketing Blitz’ has to be launched in the local mass media PR articles in newspapers
Editorials, articles detailing reasons for past accidents being poor maintenance and nascent technology – ‘We have come a long way from then…’
Print advertising – Ads in newspaper stressing CNG is a safe fuel
Lighter than air – less flammable Testimonials from existing users
Private Car owners Commercial fleet owners Mechanics & CNG kit dealers/fitters
Road shows/Workshops in commercial & residential areas highlighting benefits of CNG and dealing with their queries
52
Comparisons with petrol & cost economics: Again mass customer education required
Print Advertising & PR has to reiterate that CNG run vehicle performs similar to a petrol run vehicle Exact savings by using CNG have to be highlighted and will go
a long way in shifting consumer perception Maintenance costs are not increased drastically, except for air
filter change AC can run effectively in a CNG run vehicle Engine life far from being reduced is increased in a CNG run
vehicle Switch from CNG to petrol in a bi-fuel vehicle does not lead to
excessive petrol consumption than normal Road shows/Workshops can also serve to certify
these facts and create an interactive platform with target audience
53
OEM Variants vs. Retrofitting: Collaboration with Auto majors & CNG kit manufacturers
Phase II of this study shall establish the exact demand potential & target audience for IGL
These findings need to be leveraged and communication with major automobile manufacturers has to be set in place to launch CNG variants
Joint promotion exercise has to then be undertaken to induce demand Joint awareness advertising & PR articles Road shows & workshops Authorised/certified fitting stations can be established
54
To provide a complete customer experience filling stations need to be state of the art…
Current level of services provided at petrol stations have to be matched (Ideal service station presented earlier)
To emphasize safety of CNG, the practice of making passengers disembark from the vehicle while filling has to be stopped
Further promotion and visibility can be created by increasing presence on hoardings at filling stations and major roads
55
With oil majors launching massive branding drives, IGL also needs to move into similar direction
Most petrol users can instantly recall petrol brands now – ‘premium’, ‘speed’ ’91 Octane’
Similarly ‘Pure for Sure’ type punch lines also go a long way in creating a space in consumer mind & establishing credibility
Instant recall for CNG can also be created by developing similar branding initiatives Respondents had also presented suggestions on this during the
discussions These cues can be used for developing a logo & punch line for
IGL – ‘Compressed natural greenery!’ ‘Save the environment while saving your money!’
Important Caveat: All these promotional activities need to be undertaken simultaneously for inducing demand!
Simultaneous promotional activities will create awareness rapidly & keep reiterating the benefits of CNG in the consumer mind repeatedly to be firmly
embedded!
Demand Estimation Exercise: Phase II
The Quantitative Phase of the study (Demand estimation) will determine the exact target group
and size of the market for these initiatives
Once the target segment & market size is clear, IGL needs to launch these promotional initiatives
immediately!