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    Castrol Case Study - Sami Shaikh

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    Tanmoy Banerjee
    Castrol India was the market leader in the 4-stroke motorcycle oil (MCO) segment but was not growing at the same rate as the overall industry growth. This was despite two key factors driving long term growth: a fast growing middle class population and continued reduction in import tariffs. The presentation analyzed Castrol's market share, distribution channels, and key challenges. It identified neighborhood workshops and spare parts dealers as an emerging aftermarket channel with higher growth potential but lower coverage that represented an opportunity. Several options were proposed to help Castrol achieve its goal of increasing its market share to 30% in 5 years, including a distributor-led channel expansion or appointing exclusive MCO distributors.

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    Castrol Case Study - Sami Shaikh

    Uploaded by

    Tanmoy Banerjee
    47 views16 pages
    Castrol India was the market leader in the 4-stroke motorcycle oil (MCO) segment but was not growing at the same rate as the overall industry growth. This was despite two key factors driving long term growth: a fast growing middle class population and continued reduction in import tariffs. The presentation analyzed Castrol's market share, distribution channels, and key challenges. It identified neighborhood workshops and spare parts dealers as an emerging aftermarket channel with higher growth potential but lower coverage that represented an opportunity. Several options were proposed to help Castrol achieve its goal of increasing its market share to 30% in 5 years, including a distributor-led channel expansion or appointing exclusive MCO distributors.

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    Castrol India was the market leader in the 4-stroke motorcycle oil (MCO) segment but was not growing at the same rate as the overall industry growth. This was despite two key factors driving long term growth: a fast growing middle class population and continued reduction in import tariffs. The presentation analyzed Castrol's market share, distribution channels, and key challenges. It identified neighborhood workshops and spare parts dealers as an emerging aftermarket channel with higher growth potential but lower coverage that represented an opportunity. Several options were proposed to help Castrol achieve its goal of increasing its market share to 30% in 5 years, including a distributor-led channel expansion or appointing exclusive MCO distributors.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    47 views16 pages

    Castrol Case Study - Sami Shaikh

    Uploaded by

    Tanmoy Banerjee
    Castrol India was the market leader in the 4-stroke motorcycle oil (MCO) segment but was not growing at the same rate as the overall industry growth. This was despite two key factors driving long term growth: a fast growing middle class population and continued reduction in import tariffs. The presentation analyzed Castrol's market share, distribution channels, and key challenges. It identified neighborhood workshops and spare parts dealers as an emerging aftermarket channel with higher growth potential but lower coverage that represented an opportunity. Several options were proposed to help Castrol achieve its goal of increasing its market share to 30% in 5 years, including a distributor-led channel expansion or appointing exclusive MCO distributors.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 16

    CASTROL INDIA LTD

    AN INNOVTIVE DESIGN CHANNEL

    By – (Sami Shaikh)
    Presentation Flow
    • Case Scenario CURRENT PROBLEM
    • Understanding the current problem
    • Factors leading to Growth
    CONTEXT SETTING
    • Competition Analysis
    • Castrol Market Share
    • Distribution Channel
    UNDERSTANDING THE PROBLEM
    • Challenges
    • Proposed Solution –Options FINDING A SOLUTION
    BUSINESS CASE SCENARIO

    The market potential estimates for MCO 4T was not making sense

    Mohit Rai – GM Catrol India


    Problem Analysis
    Project analysis slide 2
    High Demand for Bikes Castrol was a market leader in the
    5 Mn added on road every year segment and was present in almost all
    outlets

    In 2005 January

    Castrol India Castrol had strong over the counter


    After 18-24 months of the warranty was a
    period all bikes came in for maintaince market share
    MARKET
    and Oil Change LEADER in
    4T MCO

    At 3.5 Ltrs /Yr/Bike the MCO was Castrol was adding 2.5 Ltr per Yr <
    growing from 17 Mn to 18 Mn Market Leader

    Castrol was not growing at par in the category versus the industry growth inspite of being a leader in the category
    Factors Driving Long Term Growth : Exhibit (1, 2 and 3)

    Growing GDP doubled in


    Fastest Growing Middle
    2000- 2005
    Class Population Growing Middle class population
    Continued Tariff Reduction
    (est to go 10% by 2007+)

    More than 100 Mn


    HH was expected
    to purchase a new
    car by 2025

    Highest Gr expected in 2W Segment


    Change in Consumer trend from 2T to 4T led to Open Market

    2T Serviced by Petrol
    4T Open market
    or Bazaars
    took over the
    Gr 2-3 % Pumps and Gasoline
    stations run ‘National
    Gr 20% Lub was separate so
    the oil needed to be control
    Oil Companies’ changed every 2,000 Forecourts
    referred as to 2,500 KMS
    ‘FORECOURTS ’

    Lub Oil was mixed Consumers would


    with Gasoline and change oil during
    burnt along with Fuel maintenance ,
    managed by Pump happened at
    attendants workshop
    Castr0l India

    Major
    Breakthrough with
    4T moving sales to
    BAZAAR
    CHANNELS with
    contributed to
    65% slaes
    Competitive Landscape

    Project analysis slide 4 PSUs had control over forecourts due to


    which they owned 2T mkt

    Castrol had leadership in 4T in an open Shell


    market

    22 PSUs

    PSUs MNCs GULF

    HPCL , Indian
    Oils`and Bharat
    Petrolleum
    Vedol
    &
    Elf
    Castr0l India – Market Share
    Castrol has a
    dominant
    share in a
    growing
    Market

    POSITIONING IN THE MARKET


    Consumer Behavior
    Project analysis slide 6
    Most the consumers visited FW Post warranty period
    During warranty period 18-24 months SHOP TO WORK SHOP consumers moved to
    mechanics as trusted source

    Consumers said they could feel


    First step of mobility and Consumers did not
    the engine
    economic independence differentiate products and
    brand offerings
    Finding a Gap
    Project analysis slide 3

    DIRECT DISTRIBUTION NFWs ECONOMIC NSWs


    ANALYSIS 1.STOCK AND SELL
    • FW and Forecourts 10% market but contributed to 30% of

    FORECOURTS • Accessories An emerging channel Lorem ipsum dolor sit the oil change known as USTAADs
    • Pure Lub Outlets that dependent on amet, consectetur
    FW • Market Stores indirect supply however adipiscing elit, sed do 2. FW mechanics with small clientele
    • Wholesalers was fuelling growth in eiusmod tempor wanting to start their business
    • Large NFW the category incididunt ut labore et
    • Agri and dolore magna aliqua. 3. Apprentice under the Ustaads were
    Institutional still struggling to build their clientele
    Consumer Behavior at NSWs
    Project analysis slide 6
    SHOP TO WORK SHOP

    Consumers said they could feel


    the engine
    PROJECT TEAM’s Findings

    Project analysis slide 10


    POP STRATA - CLASSIFICATION

    NSW Classification

    There was lower coverage across After market channels Sales Team

    GAP > In Lower Population

    > 5,00,000 offered HIGHER GROWTH POTENTIAL


    CHALLENGE
    (Exhibit 11 and 13)
    Project analysis slide 5
    25

    20 Opportunity was mainly


    through spare parts and
    NFWs
    15

    10

    MCO MARKET SIZE AFTER MARKET CASTROL PENITRATION

    23% CAGR 27 % 16%


    The total market for 4T MCO was HIGHER THAN MARKET RATE Mainly through oil outlets
    76% Mn
    Growing organically to Disproportionate Growth
    achieve 24% market share with a goal of 30%
    market in 5Yrs

    Distribution sales push


    Benchmarking with the
    through promotions , sales
    leader CRT in the segment
    incentive and marketing
    which owned the market
    support could lead to 24%
    for 20 yrs with 30% shre
    market share increase

    How to achieve another


    6% was still a challenge ??
    Options

    Project analysis slide 5


    COST IMPACT

    COST NEUTRAL

    Distributor Led Channel Exclusive MCO Distributor CASA

    Feasibility > 18 Ltrs Entrepreneurial in nature so will put their


    Daily Requirement is 1 Ltr Ensuring the profitability of new MCO own working capital
    Credit Risk It will increase the cost
    Distribution Cost to service scattered It may create channel conflict Margin sharing 4.3%
    NSWs

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