A Marketing Study

Contents1. Significance of Study2. Industry Profile3. Company Profile4. 4 Ps of Marketing5. SWOT Analysis6. Porter’s Five Forces Model7. Way Forward8. Key Lessons

1. Significance of studyOil plays an important element of our energy basket. Also , a scarce & expensive commodity

The ever changing oil prices and current shift of power dynamics globally.

A greater demand for well informed and resourceful managers.

The need of intelligent and proactive approach towards niche marketing sector

2.Industry Profile India :• An Important market for the lubricant industry world-wide• Contributes 6% to global automotive lubricants demand and over 4% of

industrial lubricants demand.• Largest lubricant market after China and US

Indian Na-tional Oil

Companies + Castrol

55%Other Multina-tionals20%

Smaller Players

25%

Indian National Oil Companies + Castrol : share 55% of market in terms of volumeAnother 20% shared by other multinationals.Rest by smaller players largely local

Automotive Lubricants Non- Automotive Lubricants

Industry Segmentation

Four Wheelers, Two Wheelers, Trucks

Marine and Energy Lubricants

Industrial Lubricants

Major Industry Development • Industry saw favourable cost of goods environment for the year due to the prevailing crude pricing and supply situation all through the year (2015)

• Vehicle Sales grew by 2% compared to previous year

• Industry needs to respond with new products that are able to cope with the increasing sophistication of modern vehicles.

• The advent of with higher performance has an impact on structural demand in the industry as lubricant consumption decreases while per unit cost and price realization increases.

• Other drivers remaining unchanged, the growth in demand for lubricants is expected to lag vehicle population growth rate in the foreseeable future.

3. Company’s profile

Castrol India is the 2nd largest manufacturer of automotive and industrial lubricants in the Indian lubricant market and owns around 22% market share in the overall Indian lubricant market

The company is headquartered in the UK and operates directly in over 40 countries, and employing approximately 7,000 staff worldwide.

In nearly 100 other markets, it is represented by third party distributors who market and sell our products locally.

The Castrol delivery network extends throughout 140 countries, covering 800 ports and partnering with over 2000 distributors and agents

Castrol India Ltd. has 5 manufacturing plants that are meticulously network with 270 distributors, serving over 70,000 retail outlets.

It is also equipped with a state-of-the-art plant in Silvasa, as the leading lubricant-manufacturing

It is a worldwide strategic lubricants partner for automobilegiants like Jaguar Cars Ltd., Land Rover, Volvo Car Corporation,and Aston Martin.

Product portfolio :

The full range of Castrol metalworking fluids, cleaners, corrosion preventives and lubricants. Marine - Cylinder oils-crosshead, crankcase oils-crosshead, truck piston engine oils, hydraulic oils, gear oils, compressor oils, turbine oils, refrigeration oils, emulsifiable oils, heat transfer oils, greases, and fishing. Products range of more than 100 products has around30 high selling products.

4.

Product • Castrol has set up technology centers in various countries such as the united Kingdom,

Germany, Italy, etc. which gives Castrol an edge over its competitive rivals.• Huge presence in India due to an extensive network of dealers • Strategic tie-ups with companies like Tata Cummins, Godrej, ITC and Reliance who act

as Original Equipment Manufacturers for Castrol.

Castrol EDGE 5W-40:

• Maximizes short and long term engine performance• Reduces engine deposits to help maximize engine response• Sustains maximum performance even when under pressure• Independently proven to Improve engine efficiency• Delivers unsurpassed levels of protection across a variety of

driving conditions and temperature• Delivers and sustains maximum horsepower for longer, even

when under pressure

Castrol GTX ECO delivers 10% CO2 reduction* AND helps extend engine life .

Kedar Apte, Head - Brand and Communications at Castrol India commented:

“Our team of experts has achieved what was previously thought impossible: to deliver significant CO2 reductions from the oil’s life cycle, while providing the benefits of Castrol GTX Diesel, which helps to extend your engine life by providing 2 times better protection from soot problems**. By re-refining used oil and delivering it as a high-quality product, Castrol GTX ECO delivers CO2 reductions without compromising on engine performance or protection.”

Price• Offers superior Customer value propositions in terms of product quality

with relevant customer benefits.• Prices its products at a premium-to-market.• Historically, Castrol has adopted a strategy of effecting price hikes before

the cost curves, helping ring fence its margins.• Its policy of defending margins and attacking cost inefficiencies gives it a

edge over its rivals.

Promotion

Innovative Ways of Marketing

Castrol Power 1 Biking App• Launched in 2014 by John Abraham• Enables bikers to connect with each

other.• It creates biking clubs, biking trips,

finds Castrol Bike Points and gives recommendation about the lubricants for bikes.

• App available on Google Play Store and Apple Store.

• According to AC Nielsen Brand Tracker, Castrol master brand enjoys 92% unprompted brand awareness among its customers.

• Takes all routes to market its products to the customers.

• ‘TheTitanium Trial’ was to pick two world-beating supercars – the Aston Martin Vulcan and the Koenigsegg One:1 – and two world class drivers (Darren Turner in the Aston and Koenigsegg factory test driver, Christoffer Nygaard, in the One:1). The challenge was to face their ultimate test: to race against themselves!

Place• Castrol lubricants are in everything that is 'Mined, Made and

Moved.’• Its global reach in the automotive manufacturing, marine, natural

products, aerospace and industrial sectors means that it has a unique view of world trade.

• The Castrol Global Trade Barometer (CGTB) can help you assess potential growth opportunities across key sectors and markets by highlighting underlying growth trends and the key drivers of trade.

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6. Porter’s 5F Model

Competitive Rivalries

New Entrants India is now the world’s third largest lubricants market, behind only America and China, with a market size of 2.5 billion liter's.  Petronas Lubricants International (PLI) launched a $50-million lubricant blending plant at Patalganga, Maharashtra in December 2015. This, it said, would help make it a formidable entity in the segment here. “India is without exception a very important market for us in the Asia region and we are confident of the potential. Therefore, we have embarked on a solid growth plan to accelerate our business here in India,” said Giuseppe Pedretti, PLI’s Asia head.

Buyers The Lubricants market has changed over the

years from a Volume-driven market to a value-driven market.

Consumers now expect a better quality product due to increasing consumer awareness, changes in engine technology, innovations which focus on energy efficiency,etc.

They force the lubricant manufacturing companies and independent lubricant consultants to stress lubricant performance than price.

Hence, due to increase in demand for high performance products, condition monitoring and knowledge of product performance will increase.

Sellers As the graphic shows, majority of the market share

of the lubricant market in India belongs to Castrol. However, the restrictions on the lubricants market

have been lifted in the last year or two i.e. deregulation has taken place which has invited a lot of foreign attention.

This means that a lot of new players are entering the market which is testing the traditional stronghold of the PSU’s and the usual big players such as Castrol.

This is pushing the market towards a oligopoly situation if it isn’t in it already.

Substitutes

7. Way Forward Castrol enjoys the position of leading private player in India. Yet its major competitors are the PSUs.

The new entrants in the market are coming up with products at lower rates than Castrol. Castrol will need to maintain the quality of its customers and brand recall value amongst the customers.

Customer Choices: A small segment of lubricant consumer still rely on the words of mechanic. Awareness about product needs to be encouraged further.

8. Key Lessons Aggressive Marketing: All routes policy

Research and Development – Better market study, better promotions, better products

Trade Marketing

Role of Distribution Channels