Distribution channel of Castrol

1. CASTROLINDIALIMITED:AN
INNOVATIVEDISTRIBUTIONCHANNEL
1

2. IMPACT OF THE
ENVIRONMENT
Question 1.0
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3. IMPACT OF THE ENVIRONMENT
2T VS 4T impact
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• In two stroke engine the lubricating oil is mixed with gasoline and it is burnt along with
the fuel.
• Most consumers will have oil mixed with the fuel in the petrol pump.
• The oil makes all two-stroke engine smoky to some extent and a badly worn two stroke
engine can emit huge clouds of oily smoke. This will be a huge impact to the environment.
• This was avoided by introduction of four stroke vehicle.
• In a four-stroke vehicle the lubrication system was separate.
• Hence the oil needs to be changed only once in 2500 KMs in Four stroke engines.
• This leads to less consumption of oil and as a result it is beneficial to the environment.

4. GROWTH
OPPORTUNITIES IN
THE MCO 4T
SEGMENT
Question 1.1
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5. GROWTH OPPORTUNITIES IN MCO 4T
Growth statistics
5
• India was showing great demand for motorcycle resulting 5 million bikes being added on
road each year.
• On an average, each bike consumes 3.5 liters of MCO 4T oil per year.
• The MCO 4T oil was growing by 17 to 18 Million liters per year.
• Overall lubricant market was growing at 3% per year.
• The MCO 4T oil was growing at 20% per year.

6. HOW CONSUMER’S
BUY MCO
Question 2.0
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7. HOW CONSUMER’S BUY MCO
CONSUMER BEHAVIOR
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• Earlier consumers buy lubricants and they used to take it to the preferred mechanics and
ask them to change the lubricants before them.
• The consumers used to have fear about Mechanics not using standard quality lubricants.
• Now the behavior has changed. Customers are now more likely to take the bike directly to
the mechnic shop and trust the mechanic to use the right oil.
• So Mechnic recommendations are now major deciding factor to buy lubricants.
• This behavioral move is called “Shop to Workshop”.
• The factor driving this behavioral change was trust, convenience and personal attention
from the mechanic who is seen as credible source of information.
• These mechanics are called as NFW – Non franchised Workshops.

8. EXISTING
CONSUMER
SEGMENTS
Question 2.1
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9. EXISTING CONSUMER SEGMENTS
SEGEMENTS
9
Need Insights Consumer Targets
Do the right thing Seeks value & reassurance
from a credible brand.
Minimalist
Hold my hand Bike is integral part of
their life and they don’t
expect any break downs
and are even willing to pay
slight premiums to avoid
any breakdowns.
Appreciators
Get the most of the engine Bike’s are considered as
passion and they are full of
optimism and wants to
uncover new opportunities
Enthusiasts

10. CHALLENGES FOR
RAI & TEAM
Question 3.0
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11. CHALLENGES FOR RAI & TEAM
Key Challenges
11
• After the project team findings, they understood that there is low coverage across key after
market channels.
• The gap was larger in towns with lower population and they see a great potential
• Rai & Team wants distributors to have DSR to bridge the gap by replenishing the stocks in
all the NFW’s.
• There was a strong push back from the distributors. They don’t want to supply ro these
small and unreliable mechanics with their current 4.3 % margin.
• Most of the mechanics are unauthorized and can close shop any day.
• Delivery cost will rise phenomenally, and they don’t want to deliver less than minimum
order of one carton considering the labour cost.

12. DISTRIBUTION
OPTIONS
Question 4
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13. DISTRIBUTION OPTIONS
OPTIONS FOR EXPANSION
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• Franchise work shop (Existing)
• NFW – Non Franchise Workshop
• Accessories and spare parts
• Wholesalers
ADVANTAGES:
• Wholesalers have more penetration in rural market.
• When consumers shop for accessories and spare parts, it will be easily accessible to buy.
• Small mechanics who setup shops for service of bikes will have direct connect with the
customer and they can recommend Castrol lubricants during service.
CHALLENGES:
• Increased Labour cost for distributors.
• Franchise network may get low business and it my bring in dissatisfaction with Castrol
and hence we need to plan for boundaries to consider the interest of all stakeholders.

14. CRITICAL
SUCCESS FACTOR
FOR DISTRIBUTION
OPTIONS &
RESOURCES
REQUIRED
Question 5.0
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15. CRITICAL SUCCESS FACTORS
CSF
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• More penetration among consumers as we are making the product available via more
distribution channels.
• Expanding distribution line will help us get more market share.
• Penetration to rural market will give long term business benefits.

16. THANK YOU