An Analytical Study On Distribution Strategies And Customer Satisfaction of Mak lubricants pvt ltd

CHAPTER-1
INTRODUCTION
A Distribution channel is a chain of businesses or intermediaries through which a good or
services passes until it reaches the final buyer or the end consumer. Distribution channels can
wholesaler , retailer, distributor, dealer and agents or brokers To maintain the records in the
books of Accounts of the distributed goods or services . And sometimes they take the help of
internet . Distribution channels are part of the downstream process, answering the question ,How
do we get our product to the consumer? This is in contrast to the upstream process , also known
as the supply chain , which answers the question , who are our suppliers?. A distribution channel
represents a chain of business or intermediaries through which the final buyers purchases a good
or services . In a direct distribution channel the manufacturer sells the product directly to the
customer , but indirect distribution channels involves intermediaries before the product ends up
in the hands of the consumer . A distribution channel is a path by which all the goods and
services must travel to arrive at the intended consumer . Conversely, it also describes the
payment make from the end consumer to the original vendor . Distribution channels can be short
or long , depending upon the number of intermediaries required to deliver a product or service.
Goods and services sometimes make their way to consumers through multiple channels it is a
combination of short and long . Increasing the number of ways a customer is able to find a good,
can increase the sales. But it can also create a complex system that sometimes makes distribution
management difficult .The choice of distribution of channels is fundamental is establishing the
strategic direction for a business . The decision on the channel affects the assortment and
characteristics of the goods made available to the final consumer and the processes by which
they are made available .Distribution of goods is as important as production. Existence of an
organisation largely depends upon a proper and well organised system of distribution. It is
therefore, necessary then utmost attention should be paid in selecting a channel of distribution .
Various constituents of the marketing mix like promotion , place.etc are the closely related to the
channels of distribution . A wrong choice of distribution channel leads to ultimately increases the
price of the product Deciding a proper channels of distribution is not an easy task. It involves a
careful study and consideration of many factors consists. Distribution is efficiently managing the
acquisition of raw materials by the factory and the movement of products from the producer or
manufacturer to business to business(B2B) users and consumer. It includes many facts ,such as
location,hour,website,presence , Logistics, atmosphere, inventory management , supply chain
management , and others logistics activities are usually take the responsibility of the marketing
department and all parts of the large services of activities included in the supply chain . A supply
chain is the system through which an organisation acquires raw materials, producer delivers the
products and services to its customers. On their way from producer to end users and consumers ,
products passes through a service of marketing entities known as a distribution channel . At the
end of the distribution channel are final consumers and industrial users . They include
manufacturer , retailer , suppliers, dealers etc . A Distribution channel is a network of firms that
are interconnected in their quest to provide sellers a means of influencing the marketplace with
goods and buyers a means of purchasing those goods , doing all as efficiently and profitably as
possible . The products will be accessible for everyone , within different budget ranges to reduce
the price of the goods to that they will become more affordable for the users. Since the
intermediaries are in the marketplace and near to consumer they are the first hand source of
getting feedback.

Scope of the study

Offering a product in a variety of ways ( advertising , direct sales, placements, advice, etc) in
order to urge the client to accept it . Distribution channel is their not limited to recommending a
given product to a client . The scope of a distribution channel is to make the right quantities of
the right product available at the right place , at the right time. This has made distribution
strategy unique relative to the other marketing mix decisions is that it has been almost entirely
dependent on physical locations . Intermediaries facilitate the searching process of both
producers and customers by investigating the information essential to both places. Sellers are
searching for buyers and buyers are searching for sellers, and at the simplest level. Customers
cannot be sure that they will be able to satisfy their consumption needs. Intermediaries reduce
their uncertainties for both parties. selling more is always a challenge ,especially in the
competitive retail landscape . As a result , it can be helpful to take advantage to a diverse range
of distribution channel ,because channel expansion creates opportunities to reach new
customers , build brand recognition in promoting the product awareness regarding products and
other offers should be created among the consumers. The distribution channel consists of a set of
people and firms involved in the transfer of title to a product as the product moves from producer
to ultimate consumer or business users.

Objectives of the study

 To study the role of intermediaries .

 To study the process of ordering and delivery of goods at mak lubricants pvt ltd.

 To Analyse the customer satisfaction towards distribution procedd of ordering and

delivery by mak lubricants pvt ltd.

 To study the distributional strategies adopted by mak lubricants pvt ltd .

Limitations of the study

 It Reduce the distribution channel options.
 It increase the internal workload.

 Because the information collected from the distributor by meeting them at their
working place , the information extracted would not be sufficient .

 The study is only limited to Ballari city.

Literature review
1) Morgan et al (2004) :

The study on innovation in distribution channel, The effectiveness as

performance indicators , performance or non performance indicators , To
analyse the financial measure of distribution issue .To study the distribution
strategies which depends on market fluctuation system .

2) Mukhannad and kiminami(2011) :

To study the distribution channel functions, To understand the

assortment information sharing and transportation , factors affecting
relationship between intermediaries and customers .

3) Anderson and Rose (2003) :

The study on affiliation ineffective processing activities, public policies

makers and researchers handling coordination management , conflict
avoidance of sales and profits performance .

4) Ramashen and patton (1994) :

The study on establishment of importers networks and decentralisation

of channels of distribution which are narrowed down the performance issue .
The study on export oriented and agro based manufacturing activities or
issued , the effects of competitiveness of firms, the study on improvement on
sakes growth of small firms which are not influenced much .

5) Geroski and machin (1997) :

This studies on performance of produced different results for the firm ,

The study on effectiveness of impact of innovation in the supply chain
activities has performed on the basis of distribution channel.
6) Bowersox et al (1986) :

The study on fundamental functions ,To study the handling and

communication , The study on investigation of resource based view in
distribution channel. The study on great implications on a firms competitive
advantages . To understand the product and distribution scheduling , To study
on significant impact on distribution channel effectiveness , studied on
financial performance and ling term orientation of a firm .

7) Nurul and tulus (2008) :

To study the capital market and legal issues .To study on investigation
of the rural areas which were facing problems in the sector, The study on
difficulty in dealing with customs procedures and infrastructure .

8) Kongmanila and Takashahib ( 2009) :

To study the methodology on roles of intermediaries , The study on

business units hiring less than 100 workers as a SME (small and medium
enterprises) . To study the measures of export sales and profitability , The
study on External logistics during delivery of the product .

9) Humphreys and mcchung (1981) :

The study on relationship between the environment hostility and firm

performance , The study on product and punctuality of order and delivery .

10) Milles and priesen (1982) :

The study on effectiveness and advantage of product technology and

studied the results which are discussed being involved in the distribution
channel of products which are delivered to end customers on time.
 Chapter -2
Industry profile
Mak lubricants industry:
Mak lubricants provides new market opportunities ,strong growth
in the Indian automative,power and engineering is creating new market opportunities for
lubricants manufactures .According to the study, In the automotive sector , consumers are
migrating To better quality vehicles and motorbikes and as a result, using higher grade lubricants
; This is benefiting multi – grades lubricant products and strong brand recognition and wide
distribution. In the industrial segments , high levels of investments in the power , and
manufacturing and transport sectors should drive very strong growth for transformer oils , marine
and Aviation lubricants. Whilst there are no restrictions on foreign lubricant manufacturers from
establishing 100% owned operations in India , many have chosen to partner with local
companies .

The Mak lubricants is largely price sensitive and volume growth is stagnating due to long lasting
lubricants . The market is fragmented with over 22 big and small manufacturers and with the
spate of merger and acquisition (M&A) , only a handful of big companies enjoy a major market
shares

Companies are adopting a more customer oriented approach where they are likely to focus on
creating brand awareness through print and visual medias .for example promotional campaigns
and trade shows offering gifts to their customers are methods of driving sales and automotive
and industrial lubricants .

The original equipment’s and retail trades are the two major marketing channels in the mak
lubricants market . Due to the growing competition ,tie up with Original equipment’s
manufacturers (OEM) are becoming important as they reinforce of the value proposition of a
particular brand .
Petrol pump is a major distributional channel in retail trade , however sales of lubricants through
retail outlets ( also called ‘The bazaar trade ‘) ,he transferred the Indian automotive mak
lubricants market into a fast moving consumer goods (FMCG) sector .The other distribution
channels are authorised service station, garages , rural and agricultural dealers , super markets
and wholesale distributors.

Public sector units(PSU) companies That manufacture their own base oil , Follow different
distribution strategies as compared to private participants that solely dependent in imports .
While PSU’s sell through their own wide spread networks on petrol stations private
manufacturers prefers retail outlets .
Engine oil, which accounted for over 70.0 percent market share in 2004 in Indian automotive
mak lubricants market , plays the most crucial role in deciding the market share of
manufacturers . Increase in demand for four stroke motorcycles , tie ups with original
equipment’s manufacturers and implementation of new pollution norms are just some of the key
drivers of the engine oil segment .

The brake oil and coolant is the next largest segment in the Indian automotive mak lubricants.
Demand for coolant is increasing due to continuous growth in commercial vehicles , increasing
awareness among the customers, new cooling system technologies, and OEM tie ups .

In brake oil segment , increasing growth in light commercial vehicles , introduction in new brake
system ,consumption of lubes by commercial passenger vehicles and changing customer mind-
set regarding specialty lubricants are expected to push , demand further.
The market for gear oils is also growing rapidly and has a high potential due to , increasing
number of vehicles in road , New generation vehicles with advanced gear system technologies
and automatic transmission systems require special type of lubricants resulting in greater demand
if multi axel gear oil and API synthetic gear oil , API GL -5 , API MT -1 , ultra -mastic , which
reduces the oil changing intervals.

In the long term , the overall outlook for the Mak lubricants market is expected to be positive due
to the growing Indian economy along with increased purchasing power of consumers . The
lubricant marketers generally pursue one or more following strategies when perusing business .

Specification :
The lubricant is said to meet a certain specification . In the consumer market , this is often
supported by a logo , symbol and words That inform the customers that the mak lubricant
marketers has obtained independent verification of conformance to the specification . Example
of these include the API ‘s donut logo or the NSF tick mark . The most widely perceived is SAE
viscosity specification , like SAE 10W- 40 . Lubricity specifications are institute and
manufacturer based. In the us institute: API S for petrol engines, API C for diesel engines, for
2007 the currents specifications are API SM and API CJ .Higher second letter marks better oil
properties , like lower engine wear supported by tests . In EU The ACEA specifications are
used .There are classes A , B , C and E with number following the letters. Japan introduced the
JASO specifications for motorbike engines. In the industrial market place the specification may
take The form of a legal contract to supply a confirming fluid or purchasers may choose to buy
on the basis of a manufacturer own published specifications.

Original equipment manufacturer (OEM) approval :

Specification often denote a minimum acceptable performance level. Thus many equipment
manufacturers add on their own particular requirements or tighten the tolerance on a general
specification to meet their particular needs ( or doing a different set of tests or using different /
own test bed engine ). This gives the lubricant marketer an avenue to differentiate their product
by designing it to meet an OEM specification .often , The OEM carries out extensive testing and
maintains an active list of approved products. This is a powerful marketing tool in the lubricant
marketplace , Text on the back of the motor oil label usually has a list of conformity to some
OEM specification , such as MB ,MAN , Volvo , Cummins , VW , BMW Or Others.
Manufacturers may have vastly different specifications for the range of engines they make ; one
may not be completely suitable for some other.

Performance :
The lubricant marketer claims benefits for the customer based on the superior performance of the
lubricant .such marketing is supported by advertising ,sponsorships of typically sporting events
and endorsement . Unfortunately broad performance claims are common in the consumer market
place . Which are difficult or impossible for typical consumer to verify .in the B2B marketplace
the marketer is normally expected to show data that supports the claims . Hence reducing the use
of broad claims .increasing performance , reducing wear and fuel consumption is also aim of the
later API , ACEA and car manufacturers oil specifications , so lubricant marketers back their
claims by doing extensive (expensive ) and testing .