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    Submitted by Group-4 Section - B

    Uploaded by

    Rohit Garg
    Castrol needs to expand its distribution channels to non-franchised workshops (NFWs) as this channel is expected to be a key growth driver. Currently, Castrol's market coverage of NFWs is only 6.3%, leaving huge untapped potential. Some options for Castrol to expand in this channel include asking distributors to directly supply NFWs, creating a parallel set of motorcycle oil distributors focused on NFWs, or launching an innovative "Castrol Authorised Service Associate" program to directly service and support NFWs. Each option has pros around targeting this high-growth channel, but also cons like implementation challenges.

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    Submitted by Group-4 Section - B

    Uploaded by

    Rohit Garg
    381 views10 pages
    Castrol needs to expand its distribution channels to non-franchised workshops (NFWs) as this channel is expected to be a key growth driver. Currently, Castrol's market coverage of NFWs is only 6.3%, leaving huge untapped potential. Some options for Castrol to expand in this channel include asking distributors to directly supply NFWs, creating a parallel set of motorcycle oil distributors focused on NFWs, or launching an innovative "Castrol Authorised Service Associate" program to directly service and support NFWs. Each option has pros around targeting this high-growth channel, but also cons like implementation challenges.

    Original Description:

    Castrol case : Sales and Distribution Management

    Original Title

    Castrol SDM

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    Castrol needs to expand its distribution channels to non-franchised workshops (NFWs) as this channel is expected to be a key growth driver. Currently, Castrol's market coverage of NFWs is only 6.3%, leaving huge untapped potential. Some options for Castrol to expand in this channel include asking distributors to directly supply NFWs, creating a parallel set of motorcycle oil distributors focused on NFWs, or launching an innovative "Castrol Authorised Service Associate" program to directly service and support NFWs. Each option has pros around targeting this high-growth channel, but also cons like implementation challenges.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    381 views10 pages

    Submitted by Group-4 Section - B

    Uploaded by

    Rohit Garg
    Castrol needs to expand its distribution channels to non-franchised workshops (NFWs) as this channel is expected to be a key growth driver. Currently, Castrol's market coverage of NFWs is only 6.3%, leaving huge untapped potential. Some options for Castrol to expand in this channel include asking distributors to directly supply NFWs, creating a parallel set of motorcycle oil distributors focused on NFWs, or launching an innovative "Castrol Authorised Service Associate" program to directly service and support NFWs. Each option has pros around targeting this high-growth channel, but also cons like implementation challenges.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
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    Castrol Case

    Submitted by

    Group- 4
    Section- B
    #Q1 Automobile Business Micro Environment
     Middle class population is increasing significantly, Expected to increase 10 times to 533 million people
    5% - 20% from 2005 to 2015 Projection 40% by 2025
     Demand of motor cycle will increase with increasing middle class population
     India GDP growth rate increasing and expected to 10% (2007+)
     Exchange rate reducing (47.69 in 2001-02 to 44.25 in 2005-06) also import tariff reducing will impacting
    foreign player will boost the foreign investment
     2 wheelers growth rate 42 million to 120 million people (2005 - 2015) – nearly 185%
     Expected, 2 wheelers contributed highest in automobile nearly 83% of overall automobiles
     2 wheelers growing at faster rate than population
     5 millions bike added on road each year hence potential market for lubricant oil
    BPCL ,
    IOCL,
    23.4
     Market Share MCO: 20.8

    BPCL 23.4%
    Castrol ,
    IOCL 20.8% HPCL,
    20.4
    CASTROL 20.4% (3rd largest) 16.3
    HPCL 16.3%
    Other 19% Others,
    19
    BPCL HPCL Others Castrol IOCL
    #Q1 Competitive situation for lubricants

    BPCL IOCL
    Strength Strength
    Forecourts Forecourts
    Weakness Weakness
    Limited only to pump stations Limited only to pump stations
    Not present in after market Not present in after market

    Castrol
    Strength
    HPCL • Dominated retail lubricant market, 70,000 + outlets
    Strength • Placed as premium product
    Forecourts
    • Weakness
    Weakness • Not present on Petrol pumps
    Limited only to pump stations • Low coverage in after market channels
    Not present in after market • Non dominance in low population areas
    #Q3 Buying Behavior and process

    Oil change essential for bike maintenance post 2000 to 2500 Kms

    Trust on mechanic makes him the influencer as well as the consultant

    A shift from shop to workshop behavior

    The buying behavior is based more on trust, convenience and personal


    attention from the mechanic

    Because customers either bring their own oil or asks the trusted mechanic to
    get it which he does from the nearest shop

    Now this shop may or may not keep Castrol as it has cheaper options
    available too
    #Q4 Castrol SWOT Analysis
    Strength: Weakness:
    • Volume + Value focus • Volumes under pressure
    • Intensive sales force • Low coverage across after-market channels
    • Promotions though radio, print ads, and T.V.
    ads
    • Distribution drives execution
    • Channel relationships

    Opportunities: Threat:
    • Focus on Volume and Value • Changing dynamics of lubricant channels
    • Focus on growth through partnerships and technologies
    • Focus on key growth segments • Newer technologies
    • Relaxation of exchange control • Growing competition
    • Shifting from selling products to selling • Giving oil to Non Franchised Workshop on
    services credit
    #Q5 Channels of Distribution
    Company

    Distributor Direct

    Accessories & Large NFWs and company


    Market/Stores branded workshops
    Spares

    Agri. Stores Institutional


    Pure Lube Outlets Wholesalers

    NFWs Forecourts FWs


    #Q5 Analysis

    Association with In the category of


    OEMS was of Bazaar trade was Due to presence of town/city with
    importance as it the most profitable various brands, the lesser population
    reinforced distribution competition was the gap was
    approval and usage channel highly fragmented substantially large

    Stock-and-sell Castrol marketed Castrol had low Cities with


    mechanic shops its products mainly coverage across population less
    posed competition through bazaar key after-market than 500000 were
    as they are not channel using channels predicted to have
    being incentivized distributors and the great potential
    by Castrol and they retailers
    keep inventory
    from other
    competitors as well
    #Q6 Channel which needed the greatest push

    According to us, distribution Market potential forecast of


    channel for Non-Franchised four-stroke oils in India have According to reports, NFW is
    Workshops needed the CAGR of 30% in Non- expected to be the growth
    greatest push Franchised workshops drivers of the future

    Castrol India is projecting the


    Market coverage of Castrol in
    channel share to increase to
    NFW is only 6.3% so they
    23.8% from current 7.1% in 5
    have huge potential left to tap
    years
    #Q7 Castrol’s Options To Expand The Distribution

    Propose an innovative
    channel Castrol Authorised
    Ask Distributors to supply Create a parallel set of
    Service associate by creating
    directly to NFWs Motor Cycle Oil distributors
    a cadre to service only these
    new NFWs

    Pros: 1. Financial support to


    Pros: 1. Second highest growth Pros: 1. Focus on growth of 17 NFWs and decrease reliability
    of 30% in NFWs to 18 million litres/year in on Large NFW for credit
    2. Consumer trust the sales of 4T oil in motorcycles 2. 270 distributors catering to
    knowledge of NFW mechanics 2. Tap maximum of the 20% 70000 retailers and 120 CASA
    and take the oil growth in MCO 4T market catering to 12000 outlets will
    increase market penetration

    Cons: 1. Lubricant market is


    Cons: 1. Hiring cost for the
    Cons: 1. Direct sale will cause growing at 3% overall,
    company and Credit cost for
    decrease in sale to Spare part differentiating the Motorcycle
    the new NFWs need to be bore
    retail outlets Oil distribution will affect the
    by the company
    ROI of previous distributor
    #Q8 Castrol’s New distribution strategy

    Conduct gap analysis of MCO distribution

    Understand the potential market (area with less than


    500,000 people)

    Create employment and economic empowerment by


    deploying CASA agents in rural areas

    Mechanics of rural area were apprentice under


    ustaads, and comprise 50% of mechanic market

    Financial support and fixed credit policy for these


    NFWs

    Incentive for stocking and displaying Castrol products

    Allot 1 CASA for approximately 30 outlets

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