CASTROL India Limited: An

Innovative distribution Channel -

Case Study

Submitted By: Group-3 | Sec-A

BACKGROUND

• Castrol is a globally recognized leading lubricant specialist headquartered at UK.

• Known for Technological innovation and marketing expertise.
• Respected brand, commands a good premium.

Compan • PSUs -
y • IOCL
• HPCL
• Distributors • BPCL
• Oil Shops retailers • Multinational Lubricant company-
• Franchised Workshops Collaborators Competition • Shell
• Non- Franchised Workshops • Gulf
• Spare-part outlets • Valvoline
• Veedol
• Elf

• MCO 4T market was growing by 17 – 18 mn. liters

yearly but Castrol’s MCO 4T average was only 2.5 mn.
Customers Context
• Two-Wheelers Liters
• Trucks • Opportunities-
• Buses • Growth of MCO 4T market was over 20%
• Industrial lubricants user annually w.r.t. overall lubricant growing at 3%.
• Marine Lubricants user • Threats-
• Competitors can capture the growing Open
Market or Bazaar.
 Decision Problem

How to increase the market share of Castrol’s MCO 4T to 30%

in next 5 years
 Alternatives

Alternative 1 Alternative 2 Alternative 3 Alternative 4

● Focus on ● Focus on ● Focus on ● Focus on

Spare part Oil Shops Non- Direct
Outlets
through Franchised Franchised
through
distributor Workshops Workshops
distributors
s through
distributors
Evaluation of Alternatives

Evaluation Criteria Spare Parts Oil Shops NFW Franchised workshops

Change in Channel 30% to 38% 32% to 20% 7% to 23.8 % 29.8% to 17.5%

Share from(2005-
2010)

CAGR 33% 9% 30% 17%

Credibility for credit High High Only 10% of High

payments mechanics are
credible

Overhead Cost Cost Neutral Cost Neutral Distribution & Cost Neutral exercise
(Route to Market) Exercise exercise Trade margin will
increase

  Distributors’ Interest High High Low NA

 Recommendation

• Continue with Spare parts distribution channel and at the same time
try to  Increase market share for Franchised Workshops(FW)
• Selling through FWs will help gain brand loyalty and customer trust
• Increase marketing campaigns to reach out to NFWs through indirect
channelling (Spare Parts)
• Special offers/ schemes for NFWs through Spare Parts shops to
capture additional 6% of the targeted market share and make them
loyal towards brand
Thank You !