IOCL appoints Leo Burnett; Starcom is the AOR

This time round, Indian Oil Corporation (IOCL) has done away with its usual practice of hiring the services of a panel of agencies and splintering the advertising business among them. The advertising account of IOCL (both for brands and corporate) that was earlier split among seven agencies - Grey Worldwide, Euro RSCG, Ushak Kaal, Publicis, Enterprise Nexus, Crayon and Interact Vision - has been consolidated with one agency, Leo Burnett. Starcom has been entrusted with the media duties of IOCL.

Confirming this development to agencyfaqs!, N Srikumar, deputy manager, corporate communications, IOCL, said, "The spends on the brands and the corporate account put together would be in the region of Rs 50-60 crore." Srikumar added, the amount is not sacrosanct; it could vary "…depending on the need, on how the product or the service would be backed".

Leo Burnett won the business in a multi-agency pitch. Seven agencies were asked to make presentations. These included Lowe, RK Swamy/BBDO, FCB Ulka, Grey Worldwide, Rediffusion, JWT and, of course, Leo Burnett. Leo Burnett and Rediffusion made it to the final shortlist. And as things turned out, Leo Burnett clinched the business.

Explaining why IOCL decided to align its entire business with one agency, Srikumar says, "We realised that there was a need to synergise communication for the corporate and the products (the brands). The core strength of IOCL lies in its sub-brands because the actual feel of the company, the mother brand, comes through the sub-brands."

The task for the new agency will be to promote the lubricant brand Servo (the flagship brand of IOCL), the retails outlets of IOCL and retail-related offerings, Indane cooking gas, as well as devise the corporate campaign. Bulk of the promotional spends, which comprises all forms of advertising and marketing support, are going to be on Servo. Annually, the budget for Servo is around Rs 30 crore. For the record, Servo commands a 40 per cent share in the Rs 4,000-Rs 5,000 crore lubricant market.

With regard to the retail outlets, the communication task is promote the IOCL petrol stations as brands, in addition to promoting the offerings at the outlets such as branded diesel, branded petrol and branded cards. Indane too will get its share of visibility.

Outlining the communication objective of IOCL, Srikumar, says, "The idea is to make IOCL top-of-mind. We have to grow the market and at the same time protect our market share. So the strategy would be to establish an emotional connect with consumers, while trying to offer the consumers a meaningful service."

All forms of media will be part of the media plan. TV would be considered depending on factors such as rates and whether a certain channel meets the communication requirements - in terms of the kind of programmes and the audience profile of the programmes.

Besides advertising, IOCL has an aggressive expansion plan chalked out. The annual spends on retail expansion is estimated to be between Rs 400-Rs 500 crore. In the current financial year, IOCL plans to add another 700-800 outlets to the existing 8,000 IOCL outlets.

Indian Oil accounts for 53 per cent of the petroleum products market share, 41 per cent national refining capacity and 76 per cent downstream pipeline transportation network. In fact, Indian Oil is the sole Indian presence in Fortune's prestigious listing of the world's 500 largest corporations, having improved its ranking to 191 for fiscal 2002 from 226 the previous year. It is the 17th largest petroleum company in the world. © 2003 agencyfaqs!