Castrol india_Case Analysis and educaation

Case study

1. CASTROL INDIA LTD AN INNOVTIVE DESIGN CHANNEL By – (Sami Shaikh)

2. Presentation Flow Case Scenario Understanding the current problem Factors leading to Growth Competition Analysis Castrol Market Share Distribution Channel Challenges Proposed Solution –Options CONTEXT SETTING UNDERSTANDING THE PROBLEM FINDING A SOLUTION CURRENT PROBLEM

3. The market potential estimates for MCO 4T was not making sense BUSINESS CASE SCENARIO Mohit Rai – GM Catrol India

4. Project analysis slide 2 Problem Analysis In 2005 January Castrol India was a MARKET LEADER in 4T MCO Castrol was a market leader in the segment and was present in almost all outlets Castrol had strong over the counter market share Castrol was adding 2.5 Ltr per Yr < Market Leader High Demand for Bikes 5 Mn added on road every year After 18-24 months of the warranty period all bikes came in for maintaince and Oil Change At 3.5 Ltrs / Yr /Bike the MCO was growing from 17 Mn to 18 Mn Castrol was not growing at par in the category versus the industry growth inspite of being a leader in the category

5. Factors Driving Long Term Growth : Exhibit (1, 2 and 3) More than 100 Mn HH was expected to purchase a new car by 2025 Highest Gr expected in 2W Segment Growing Middle class population

6. Change in Consumer trend from 2T to 4T led to Open Market Open market or Bazaars took over the control Forecourts

7. Castr0l India Major Breakthrough with 4T moving sales to BAZAAR CHANNELS with contributed to 65% slaes

8. Project analysis slide 4 Competitive Landscape 22 PSUs HPCL , Indian Oils`and Bharat Petrolleum PSUs MNCs GULF Shell Vedol & Elf PSUs had control over forecourts due to which they owned 2T mkt Castrol had leadership in 4T in an open market

9. Castr0l India – Market Share Castrol has a dominant share in a growing Market POSITIONING IN THE MARKET

10. Project analysis slide 6 Consumer Behavior Most the consumers visited FW During warranty period 18-24 months Post warranty period consumers moved to mechanics as trusted source First step of mobility and economic independence Consumers said they could feel the engine Consumers did not differentiate products and brand offerings SHOP TO WORK SHOP

11. Project analysis slide 3 Finding a Gap DIRECT DISTRIBUTION NFWs ECONOMIC ANALYSIS NSWs FORECOURTS FW FW and Forecourts Accessories Pure Lub Outlets Market Stores Wholesalers Large NFW Agri and Institutional An emerging channel that dependent on indirect supply however was fuelling growth in the category Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. 1.STOCK AND SELL 10% market but contributed to 30% of the oil change known as USTAADs 2. FW mechanics with small clientele wanting to start their business 3. Apprentice under the Ustaads were still struggling to build their clientele

12. Project analysis slide 6 Consumer Behavior at NSWs Consumers said they could feel the engine SHOP TO WORK SHOP

13. Project analysis slide 10 PROJECT TEAM’s Findings POP STRATA - CLASSIFICATION NSW Classification Sales Team There was lower coverage across After market channels GAP > In Lower Population > 5,00,000 offered HIGHER GROWTH POTENTIAL

14. Project analysis slide 5 CHALLENGE (Exhibit 11 and 13) The total market for 4T MCO was 76% Mn 23% CAGR HIGHER THAN MARKET RATE 27 % AFTER MARKET Mainly through oil outlets 16% CASTROL PENITRATION Opportunity was mainly through spare parts and NFWs AFTER MARKET MCO MARKET SIZE

15. Project analysis slide 5 Options Distributor Led Channel Feasibility > 18 Ltrs Daily Requirement is 1 Ltr Credit Risk Distribution Cost to service scattered NSWs Ensuring the profitability of new MCO It will increase the cost It may create channel conflict Exclusive MCO Distributor Exclusive MCO Distributor CASA Entrepreneurial in nature so will put their own working capital Margin sharing 4.3% COST NEUTRAL COST IMPACT