Name Nitisha Agarwal;

Question 1

Write your answer for Part A here.

Period Rate of Growth

2000-2004 27.27%

2004-2010 90.47%

2010-2015 50%

Write your answer for Part B here.

➢ Consumers' increasing disposable income

➢ Aspiration to own a motorized vehicle

➢ Availability of easy financing

The other prominent factors can be:

➢ Younger demographic market

➢ Growth in demand from rural area

 ➢ Capital and financial market doing well in India

Question 2

Write your answer for Part A here.

Private Sector Companies 1. Shell 2. Gulf 3. Valvoline Public

Sector Companies 1. Indian Oil Corporation Ltd. 2. Bharat Petroleum Corporation Ltd. 3.
Hindustan Petroleum Corporation Ltd

Write your answer for Part B here.

Direct Distribution Channels

1. Forecourt-Petrol Pumps and Gasoline Stations

2. FW (Franchised Workshops)-Authorized workshops that serviced vehicles under warranty.

Distribution channel serviced through distributors

1. NFWs (Non franchised workshops)-Small workshops set up by mechanics to service

vehicles

2. Agri stores-Stores that sells seed, fertilizers and pesticides.

3. Institutional-Large sellers such as co-operative stores, associations etc.

Question 3

Write your answer for Part A here.

In India, long term maintenance of two-wheelers is considered important as owning them is

regarded as the first step of achievement. During the warranty period of the vehicle, most
customers do service with the authorized franchised workshops for the sake of warranty. After
warranty period, most change over to Non franchised workshops for the sake of convenience,
personal relationships, service costs etc.

Shift in shop to workshop impacted the new demand for the Non – franchised workshops.
Considering oil change as an important aspect to ensure continuity in their personal mobility
impacted a need for the change of the consumer perception towards buying the motorcycle oil.

Based on the buying behavior and consumer segments, Castrol was able to identify three
consumer segments in the market – minimalists, appreciators, and enthusiasts. To elaborate:
a) Minimalists-the consumers who seek maximum value for the money spent through the
reassurance from a credible brand. b) Appreciators-the consumers who regard their vehicles
as their lifeline and are ready to pay a slight premium, so that vehicles don’t break down. c)
Enthusiasts the consumers who regard vehicles as their dream and therefore, want the best for
their vehicle, irrespective of the price. It is important for the company to develop and position
the products according to the consumer base. Here, company has to follow the concept of
STP. The process of segmentation and targeting consumer base is done by classifying the
consumer base. Now, company has to follow the apt positioning strategy and thereby, increase
the sales.

Write your answer for Part B here.

Technological advancements are impacting the two-wheeler industry in the following

ways-

➢ Changes in engine design-The newer design has made the oil sumps size smaller and has
increased the time between oil changes for routine maintenance.

➢ Shift from 2 stroke to 4 stroke engines has impacted the consumer buying behavior and
choice of the distribution channels.
 ➢ 4 stroke engine design with separate lubrication system for the engine cooling impacted the
change in the demand of the motorcycle oil from forecourts to workshops (FW or NFWs). The
engine designs are changing and the sizes are decreasing. This would result in a slump in oil
use. Two stroke engines are replaced by four stroke engines which mean PSUs are no longer
the front-runners are losing the first mover advantage. All companies in the industry got the
same advantage to penetrate deeper. Companies just have to search for better distribution
networks and can also innovate these products as per the changing technological
advancements for getting advantage in the market.

Question 4

Write your answer for Part A here.

Channel Partner Channel Share (%) 2010

Franchised workshops 30.95%

Spare part outlets 42.85%

Oil shops 11.90%

Non-Franchised workshops 14.28%

Write your answer for Part B here.

Franchised workshops and NFW’s for overall Four Stroke oil market is significantly greater
in(percentage) than the Control four stroke oil. For Castrol it is higher for spare parts outlet
and oil shops.

Four stroke oil market Castrol

Franchised 39.47 > 29.77

Workshops

NFW’s 10.52 > 7.14

Write your answer for Part C here.

Channel Partner Sales (in litre) per channel outlet, 2005

Franchised workshops 6666.6

Spare part outlets 578.95

Oil shops 1103.45

Non-Franchised workshops 400

Write your answer for Part D here.

 Channel Partner Sales (in litre) per channel outlet, 2005

Franchised workshops 5323.30

Spare part outlets 577.38

Oil shops 884.15

Non-Franchised workshops 670.87

Write you’re answer for Part E here

Channels for which the sales per channel outlet (for the four-stroke oil market) significantly
greater than sales per channel outlet for Castrol.

Franchised Workshops 6666.66>5323.30

Oil Shops 1103.44>884.15

Spare Part Outlets 578.94>577.38

1) Franchised workshop: While this channel would have a large part to play in future
growth, Castrol had restricted access due to limited tie-ups with original equipment
manufacturers and the influence of genuine oils.

2) Oils shops: This channel was slated to have the lowest growth rate, due to a shift in
 consumer’s behaviors. 3) Spare part Outlets and non-franchised workshops: These
channels were expected to be the growth drivers of the future. Therefore, it’s significantly
higher for FWs, and Oil shops. It is marginally higher for spare part outlets

Write your answer for Part F here.

Following are the problem areas for Castrol:

➢ Franchised Workshops- They’re underperforming as compared to rest of the market, in

terms of channel share and sales per outlet

➢ Oil Shops- low sales per outlet

➢ Non – Franchised Workshops- Giving oil to NFWs on credit

Question 5

Write your answer for Part A here

The 3 NFW segments are as follows:

1. Stock and sell mechanics.

2. Mechanics who have worked at the franchised workshops and are ready to set up their own
business.

3. Mechanics who are approached for small, minor jobs are likely to be apprenticed under a
stock and sell mechanic.

Module Segment In Size Share in oil Oil Buying Financial

 change process Behavior Conditions

Stock and sell 10% 30% the oil Routinely Stock and sell
mechanic change process serviced by the mechanics are
distributor stable on
finances as the
product they
developed was
sold easily and
was appreciated
in the market

Mechanics who 40% of the 50% in the oil Received their Mechanics were
have worked mechanics change process supply of short on
with Franchised MCQ’s from finances as it
workshop and nearby was a group of
are ready to set youngsters
up their own wanting to start
business up a business
and the
distributors did
not get any
confidence
related to their
existence and
money

Mechanics who 50% of the 20% in the oil If the consumer Mechanics who
have mechanics base change process needed an oil have
approached for change, then approached for
 small/minor they would buy small/minor
jobs are likely their own jobs seem to be
to be bottles of struggling on
apprenticed MCQ’s and finances as they
under a stock- take it to the were falling
and sell shop. short on
mechanic branding to
generate
customer base.

Write your answer for Part B here.

Module Parameter 1 Parameter 2 Parameter 3 Parameter 4 Parameter 5

1 Low High Low Low Medium

2 High Low High High High

3 High High Low Low Low

Question 6

Write your answer for Part here.

CASA will report to distributors. CASA’s (Castrol Authorized Service Associates) will direct
report to the DSR in the headquarters locations. They are the trained distributors sales
representatives with access to these markets.

CASA will serve to Non-Franchise Workshops. CASA’s (Castrol Authorized Service

Associates) will pick up the product from small distributor’s and they will serve the NFW’s
small mechanics who set up shop to serve here