IOC kickstarts brand valuations

MUMBAI: In a bid to boost its valuation before a possible public offer, public sector giant Indian Oil Corporation has decided to go in for extensive brand valuation exercise, encompassing the Fortune 500 company''s six key brands.
Market sources say that this is the first instance of a PSU going in for brand valuations. IOC marketing director NG Kannan says the exercise will be flagged off early next year.
The six brands include IOC''s own superbrand Servo, the largest and oldest lubricant brand in the country; Indane, the liquefied petroleum gas brand; Xtra Premium and XtraMile in fuels; and Indian Oil Aviation, its aviation fuel brand.
The company also owns an LPG brand called Auto Gas, which is available in Mumbai, Hyderabad and Bangalore.
N Bhagwat, CEO of Interface Communication, a brand management company, says, "A company usually undertakes valuation of its brands to find its intrinsic strength. The value will thereafter be reflected in the annual report, which will increase the valuation of the company while making a public offer."
Obviously, brand valuation is a pre-cursor to a sale of the brand.
On the marketing front, Kannan says IOC plans to spend Rs 2,400 crore on a revamp programme during this financial year. This includes an investment of Rs 1,000 crore in retail initiatives.
The company has set a target of setting up 900 new retail outlets before the end of this fiscal, of which 552 outlets are already in place.
Under its ''Operation Everest'' initiative, IOC plans to invest Rs 160 crore in setting up 123 flagship retail outlets along national highways and the golden quadrilateral.
These efforts are an attempt to prepare for deregulation, when the company will have to face competition in the country''s fuel retailing market, say IOC officials.
"We plan to set up a network of retail outlets across the country. This way, we can saturate the market for any competitor trying to enter it," Kannan said. The company will also emphasise on including its ''Xtra'' branding slogan at retail outlets and on product packages.
It has roped in Leo Burnett to help in branding the retail outlets.
IOC has also signed an MoU with Hyundai Motors to service and sell spare parts of Hyundai vehicles at IOC''s outlets. It plans to introduce its fleet card for truckers by January, Kannan said.