Date post: | 18-Jan-2015 |
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Innovations in Lube MarketingIndian Perspective – Challenges faced and way ahead
Vaisakh KV 83Sebin K Joseph 68Dhanish Ahsen 29Ankur Loomba 11
Indian Lube Industry
5th largest market in the worldGrowing @ 3 – 4% where as 0 - 2% globally2.5% of world lube marketAccounts for 10% of Asia’s lube demandPer capita lube consumption of 1 kg p.a. where as
31 kg. in U.S.A and 14 kg. in Western Europe
Market Size
Per capita lube consumption in India: 1 kg p.a. where as 31 kg. in U.S.A and 14 kg. in Western Europe
5th
4th3rd
2nd1st
GrowthIndian Global
3-4% 0-2%
Lubricant Industry Growth
• 4th largest car market in Asia• 2nd largest two wheeler
market in the world• 5th largest commercial
Vehicle market in the world• 2.5% of world lube market• Accounts for 10% of Asia’s
lube demand
Challenges Automobile sector growing at more than 10% but still lube
industry grows only at 3-4% High level of competition
High Base Oil prices & intense competition leading to lower
margins
Heightened threat from spurious lubes
Highly fragmented and complex market
Marketing Research ProcessProblem Definition
Develop the research plan
Data Collection
Data Preparation & Analysis
Report Generation & Presentation
Indian Lube market - Shrinking margins but Market growth rate higher than world average
Supply side expert opinion were taken & Demand side the questionnaire were filled.
Data Sources: Primary Data: Survey Secondary data: White papers.Research Approaches: Survey Research.Research instruments: Questionnaires.Sampling Plan: Sampling Unit Sample Size Sampling Procedure: Convenient JudgmentContact Methods: Mail Questionnaire Telephone Interviews
Data & Analysis
Bike/ Scooter
51%
Car49%
1) Vehicle type owned
Petrol85%
Diesel15%
2) Type of Fuel used
Maybe13%
No12% Not at
all1%
Yes74%
3) Do you care about the brand of Lu-bricant used in your vehicle?
Always69%
Never1%
Some times30%
4) Do you care about qual-ity of Lubricant used?
I don't know21%
Yes41%
No38%
5) Do you think the lubricants are correctly priced presently?
(is it worth it?)
<1000100%
6) Average Kilometers covered in a month?
Workshop64%
Fuel outlet15%
Lubri-cant sale
points2%
Self19%
7) Where do you prefer changing the lubricant?
<400047%
<7000
53%
8) Usual Engine oil Drain period for change in terms of Kilometers?
Min-eral oil
20%
Syn-thetic41%
I don't know40%
9) Which type of Lube is used?
Perfo
rman
ce
Qua
lity
Brand
Efficie
ncy
Oil d
rain
perio
d
Engine
clea
nline
ss
Engine
wea
r and
tear
325 323308 318
295
172
300
Factors influencing the purchase of lubricants
Factors influencing the purchase of lubricants
BPCL
CASTROL
IOCL
GULF
HPCL
SHELL
TOTAL
VALVO
LINE
OTHERS
25
90
37
15
2925
1624
57
Preferred LubricantBrands
Preferred LubricantBrands
Marketing Channels Petrol Stations Wholesale Distributors Lube Oil Shops Auto Spare Shops Authorized Service Stations Garages Rural & Agricultural dealers Super Markets
E-commerce as a marketing channel
Company Blending Plant
Carrying & Forwarding Agents
Distributors/ Wholesaler
Retail outlet
Consumers
Warehouse
Consumers
::::::::::::::::::::::
E Commerce
E-Commerce
Buying or selling of goods, products or services over internet More and more people stated buying online in India Internet penetration growing rapidly in India
How it works
Enter the vehicle model Website suggests the
suited lubricants for the vehicle
Can opt for assistance in Lubricant change.
Option for either online or offline payment
Can fix a proper appointment in case of assisted lube change
Assisted Lube change
OR
Home Delivery
At Customer end Solving
Accessibility (Can find best suitable Lube for the vehicle) Convenience (At Door Service) Reliable oil check and change Based on usage pattern regular alert Assurance of proper quality and service No adulteration with used lubes Proper draining off the used lube
At Lube Manufacturers end Solving
Better Customer delight Better inventory management Proper distribution channels Eliminating losses in distribution channel Repeat Customers Building better Customer Relation Management
Product
Lubricants of different brands. Lubricants,Greese,Coolants,Transmission oils Co-Branded Lubes with different automobile companies. Rationalization of product / pack (Currently it comes in
400ml,1l,2l,4l,5l,20l,50l,210l). Launch of high-end niche products for premium cars.
Place Efficient distribution through authorized channels. Direct marketing initiatives would be pursued for commercial
segment. Solving issues of convenience and accessibility. Local tie ups with workshop for assisted lube change
Price Rationalization of MRPs for select products & packs that
makes customer Increased level of trade discounts will continue to keep
margins under pressure. No delivery Charges from customers. Convenience charge for assisted lube change
Promotions Display and Media Ads Search Engine Marketing Sponsorship Ads Referrals & Email Marketing Online Catalogs & chats Viral Marketing Blog Advertising
Increased focus on CRM activities in the commercial
segment & trade partners
Joint promotion initiatives will increase margins
Reference Product management in India by Ramanuj Majumdar.Chapter-
22,Page 268-280 Indian Lubricant Industry- Shrinking Margins
http://www.crisil.com/Ratings/Commentary/CommentaryDocs/lubart.pdf as retrieved on 14 Feb 2014
Theo Mang, “Lubricants and their market” “Brand Positioning of Automotive Lubricants in Indian Market”
By Gautham Srivastava,Research Scholar,Upes,Dehradun http://www.kenresearch.com/press/indian-lubricants-industry/
124.html as retrieved on 14 Feb 2014 www.ibef.org-
http://www.ibef.org/download/IBEFreport_april6.pdf http://www.motorindiaonline.in/component/valvoline-proves-
fastest-growing-indian-lubricant-company/ http://en.wikipedia.org/wiki/Lubricants
Thank You
Need for long term commitment and not sheer opportunism