Rainchem Business Plan

De La Salle University ± Dasmariñas, Cavite
College of Business Administration
Marketing and Advertising Management

Industrial Marketing Plan
For

International Inc. Motorcycle Oils

In Partial Fulfillment of the Requirements in Industrial Marketing Subject

Submitted By:
Joanne Palad
Roanerie Año
Lorman Maris Discipulo
Ana Mandac
Maristel Role
Joanna Marie Roma

March 4, 2010

1
A. Executive Summary
The oil industry is a major contributor to the whole country¶s economy.
Aside from its ability to generate electricity, many enjoy and utilize fully the
different benefits produced by oils. But even though oils are a good source of
income and resources, there are many environmental factors that affect the
production, distribution, and marketing of this product. These issues will be
discussed further on the next pages of this paper.
There are different kinds of oil but the main focus of this paper will be on
synthetic oil. Synthetic oil is a lubricant consisting of chemical compounds
artificially made or synthesized from compounds other than crude oil or
petroleum. Synthetic oil is used as a substitute for lubricant refined from
petroleum, because it generally provides superior mechanical and chemical
properties than those found in traditional mineral oils. This synthetic oil is also
being manufactured by Rainchem International Inc.
Rainchem International Inc. produces synthetic oil and lubricants for
industrial use, consumer use and other purposes. The marketing strategy of
Rainchem International Inc.¶s certain product line will be the focus of this
business plan with the hope of effectively reaching the objectives of Rainchem
International Inc. at the end of the analysis and marketing plan.
Improvements will be done in the marketing mix strategy and
implementation after a thorough environmental scanning and SWOT analysis of
Rainchem International Inc.

2
B. Company Profile
Rainchem International Inc.

was originally

named RDLP

RAIN

COMMERCIAL and has been producing oils, lubricants and specialty chemical
to various manufacturing and business establishments in the Philippines since
1995. Their headquarters and office facility is located in Sucat Parañaque City,
Philippines and a Sales Office and warehousing facilities in Cebu.
The Company supplies to more than 40 customer nationwaide in the
Philippines with deffirent product offerings. RAINCHEM INTERNATIONAL,
INC.serves major industries such as:

‡ Automotive

‡ Aircraft

‡ Appliance

‡ Bearing Manufacturers ‡ Construction

‡ Compressor/

‡ Agriculture

‡ Electronics

‡ Food/Beverage

‡ General Industry

‡ Heavy Equipment

‡ Marine

‡ Mining

‡ Paper & Pulp

‡ Specialty

Air Conditioning

Manufacturers
‡ Steel

‡ Transportation/Rail

RDLP Rain Commercial was renamed to Rainchem International Inc. on
2006 as an oil and chemical manufacturer. The company also buys base oils and
additives. List of product lines Rainchem sells are Die Casting Release Products,
Stamping Oil, Lubricating Oil, Preventive Maintenance, Janitorial Product,
Degreaser, 2T and 4T Oil, Metal Working Fluids, Greases, Water treatment

3
chemicals, Aerosol, Automotive Oil, Painting Expertise, and other services
related with oils and lubricants.
As an ISO9000 certified company, it is one of the most reliable suppliers
of lubricants and specialty chemicals in the Philippines. The company has the
technical expertise to meet the specific requirements with the research and
development staff that surely can provide customer with first class quality of
lubricants and other chemicals.
Engr. Robert De La Peña is the owner, President and CEO of the oil
manufacturer RDLP Rain Commercial or also known as Rainchem International
Inc. since 1995. The establishment has the following vision and mission
statement, quality policy, code of ethics and safety and health policy:
Mission
To be known as one of the best manufacturer and distributor of
chemicals and lubricants nationwide, most committed to being the future
for our customers, employees and our country.
Vision
Place the customer first and deliver the best product and services
towards the highest level of customer satisfaction. Respect diversity,
recognize contribution, and reward achievement to bring out the best in
everyone. Use strategy to unify and direct our actions to achieve.

4
Quality Policy
RAINCHEM is committed towards ensuring customer satisfaction
by providing product and services that meet defined customer
requirements. We shall achieve this by delivering product and services on
time, by implementing and maintaining a Quality Management System
That meets established standards.
Code of Ethics
RAINCHEM employees will not engage in any behavior that is
outside of the normal & acceptable practices of your company. We will
partner with your corporation with the understanding to service &
administrate your chemical program strictly on a professional business
basis
Safety and Health Policy
People are our most important asset; their safety is our greatest
responsibility. It is the policy of our company that every employee is
entitled to a safe and healthful place to work. When the person enters the
employ of our company, he or she has the right to expect to be provided
with a proper place in which to work, as well as proper machines and tools
with which to do the job, and that the employee will be able to devote his
or her energies to the work without undue danger. It is our basic
responsibility for to make SAFETY of human beings a part of their daily

5
hourly concern. This responsibility must be accepted by each one who
conducts the affairs of the company, regardless of the capacity in which he
functions.
Employees are expected to use the SAFETY equipment provided.
Rules of conduct and rules of SAFETY shall be observed. SAFETY
equipment must not be destroyed or abused. The joint cooperation of
employees and management in the observance of this policy will provide
safe working conditions and accident-free performance to our mutual
advantage. We consider the SAFETY of our personnel to be of the first
importance, and we ask for your full cooperation in making this policy
effective.
C. Current Marketing Situation
The current marketing situation of the market will be the detailed
information about the type and size of the oil industry, the company¶s growth and
competitiveness, the product¶s stage in the life cycle, current strategies employed
and the macro-environment of oil industries as a whole.
1. Market Situation

The oil industry belongs to an already mature market because of stiffer
competition present in the market, great cost and service, product innovation
and new uses of their products are harder to come by, international

6
competition is present and increasing, industry profitability falls and mergers
and acquisitions reduce number of industry rivals.

Entry Barriers and Cost Structure

There is a present stiff competition in this industry because of the oil
deregulation law, allowing entry of small oil suppliers like Rainchem
International Inc. The oil deregulation law caused barriers for new entrants to
be low. Also, the pricing of different industry players are changing rapidly due
to the absence of the Oil Price Stabilization Fund as an effect of the law
formerly stated. This issue will be further discussed in the issue analysis
portion.

Market Size, Profitability and Growth

The oil industry leaders are Petron Corporation, Chevron Phils., and
Pilipinas Shell.According to the Department of Energy or DOE, total market
share for petroleum products on fiscal year 2007 has more than eighty-four
percent (84.2%) credited to the combined sales of Petron Corporation,
Chevron Phils., and Pilipinas Shell.

Meanwhile, other industry players which include PTTPC, Total Phils.,
Oilink, Seaoil Corp., TWA/Filpride, Liquigaz, Petronas, Prycegas, Trisolid,
Andan, Mawab and Jetti as well as the end users who directly imported part of
their requirements got the remaining 15.8 percent of the market (Fig. 1).
Rainchem International Inc. belongs to 13.5 percent of other players.

7

Figure 1
2007 Market Size

On fiscal year 2008, Petron Corp., Chevron Philippines and Pilipinas
Shell Petroleum Corporation maintained their dominance of the market with a
total of 81.9 percent share of total demand while other industry players which
include PTT Philippine Corp. (PTTPC), Total Phils., Oilink, Seaoil Corp.,
TWA/Filpride, Liquigaz, Petronas, Prycegas, Trisolid, Andan, Mawab and
Jetti as well as the end users who directly imported part of their requirement
got 1.8 percent of the market.

The local refiners (Petron Corp. and Pilipinas Shell) captured 68.2
percent of the total market demand, while 31.8 percent was credited to direct
importers/distributors (Fig. 2).

8

Figure 2
2008 Market Size

But upon reaching the first half of the fiscal year 2009, the major oil
companies¶ (Petron Corp., Chevron Phils. and Pilipinas Shell Petroleum
Corp.) dominance of the market was reduced to 78 percent share of total
demand vis-à-vis 2008¶s 83 percent. This may be due to the increased market
share of the other players in the LPG business as well as to the entry this year
of new players in the oil industry who are also importers.

Other industry players, on the other hand, of which include PTT
Philippine Corp. (PTTPC), Total Phils., Unioil/Oilink, Seaoil Corp.,
TWA/Filpride, Liquigaz, Petronas, Prycegas, Micro Dragon, Zhenron, Ixion

9
Corp., Cross Country, Jetti and World Precision as well as the end users who
directly imported part of their requirement has market share that grew from 17
percent of a year ago level to 22 percent this year. Other small players are
18.7 percent of the total market size (Fig. 3).

Figure 3
2009 (first half) Market Size

Meanwhile, the local refiners (Petron Corp. and Pilipinas Shell)
captured 65 percent of the total market demand, while 35 percent was credited
to direct importers/distributors.

Phoenix Petroleum Philippines Inc., Resource One Corp., and Oracle
Petroleum Corp. are among the new small companies manufacturing and

10
supplying oils to different end users in markets from Luzon, Visayas and
Mindanao. The sales of Rainchem and other competitors in the industry are
listed below (in thousands) from year 2007 to 2009, as taken from the books
in the office of the Securities and Exchange Commission.
Table 1
Market Sales 2007 to 2009 (Security and Exchange Commission, 2010)
Company
Petron Corp.
Caltex-Chevron
Phil.
Phoenix
Petroleum Corp.
Shell Chemical
Phil. Inc.
Resource One
Corp.
Rainchem
International Inc.
Oracle Petroleum
Corp.

2006

2007

2008

2009

212,825,750.10

212,932,163

213,038,575.90

213,149,888

76,774,709.71

77,887,943

79,001,176.29

80,114,409.58

1,493,683

2,364,232

4,615,217

5,945,911.33

1,161,871.07

1,166,170

1,170,468.92

1,174,767.85

71,483.26

73,013

74,542.74

76,072.48

45,484.71

55,707.01

65,929.31

76,151.61

50,293.55

54,910

59,526.45

64,142.89

For the whole 2009, Petron was still leading the market having the
most number of market shares in the motor oil industry, with Caltex as
second, then, Phoenix Corp. as third and Shell Corp, fourth. Next are
Resource One Corp., then, Rainchem International Inc and Oracle Petroleum
Corp as small players with minimal share in the industry.

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2. Product Situation

Since motorcycle trend is tremendously arising in the Philippines,
buyers and users of the said vehicle are also increasing. Because of this,
2T and 4T motor oils are now in the growth stage of the product life cycle
since new chemical and technological developments and innovations are
continuously being introduced. Barriers for new entrants in the industry
are not too high that¶s why high level of investment in promotion and
distribution is also highly needed.
2T and 4T are under the product category of motor oils except that
2T are fuel oils for two-stroke motorcycles while 4T fuel oils are for fourstroke motorcycles. The technology platform of the 2T motor oil is its
³Decarbonizer´ content while 4T motor oils have their advance and
modern base oil technology, superior high temperature performance and
maintains full engine power that exceeds API SG/JASO MA.
The 2T ³Decarbonizer´ technology promotes lesser carbon
emission to address the carbon production issue that is nowadays being
talked about by environmentalist in the national government and in other
countries. Low cost production also makes it possible for Rainchem to sell
the 2T and 4T motor oils in a lower price than the competitors.
Competitors of Rainchem 2T and 4T motorcycle oils are those
distributed and manufactured by the leading oil companies, Phoenix,
Resource One, Oracel Corp. and other small players.

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3. Competitive Situation
Rainchem International Inc¶s competitive edge over its competitors
can be seen on its current product, price, distribution and promotional
strategy.
a. Product
Rainchem International Inc. is a reliable supplier of
Lubricants and Specialty Chemicals in the Philippines. The
products of Rainchem was made with the technical expertise to
meet their client¶s specific requirements in providing first class
quality of lubricants aimed at all levels of industry because of its
Chemical Engineers that are highly trained, well-experienced and
well-compensated. But the product brand and positioning is
weaker as compared to the equity built by the leading market
players and other booming small players.
b. Price
The company offers cheaper price of lubricants and oil to
industrial parks and other oil retailing company as compared to
other players of the same industry. They purchase the cheapest
price of raw chemicals to be able to supply low priced of
hydraulic products in the Philippines.

13
Rainchem¶s price is 20 percent cheaper than the national
market leaders and 5 percent cheaper than its direct competitors,
namely, Resource One, Oracle Corp and other players.
c. Place
Rainchem International is a supplier of generic lubricants
and oils to few players in the industry even to their competitors.
Rainchem, import raw materials from Korea and Taiwan and
supply products to industrial parks and gasoline companies as
generic oil. Rainchem products are available nationwide
particularly in Cebu, Bacolod and Davao. Other competitor such
as Phoenix Corp. utilize distributorship and franchising to be
able to reach wholesalers, retailers and end users and build trust
for other industrial consumers.
d. Promotion
Rainchem personalize their packaging depending on their
clients¶ preference. They are known for their on-time delivery
and good customer relationship. A year ago they had a onetime
promotion offer to their clients which is the free whole body
massage for every order of 10 barrels chemical oils. Competitors,
on the other hand, are engaging in sponsorship, advertisements
endorsed by big time celebrities and sales contest for brand
building.

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4. Distribution Strategy

Raw materials can be imported or locally produced but with right
machineries and technical expertise. Local refineries and newly
discovered oil fields are being utilized mostly by the top three oil
companies, namely, Petron, Caltex and Shell. Other small players buy
their raw materials, such as oils and additives, outside the Philippines
since they don¶t have refineries to produce such. Motor oil products are
processed in the black oil pipelines and sent to retail outlets and industrial
or consumer buyers via tank trucks. The industry structure is shown in the
figure below as seen from the webpage of the Department of Energy.

Crude
Import

Product Imports
Product Exports

Refinery
Refinery/ Import/Export Terminal

White Oil Pipeline

Black Oil Pipeline

Tankers/ Barges

Tank Truck

Depot Terminal

Industrial Consumer/ End User

Tank Truck

LPG Retail

Figure 4
Industry Structure (DOE, 2009)

Retail Outlet

15
Rainchem International Inc. currently imports raw materials from
Korea and Taiwan and supplies directly to both wholesaler and retailers
via truck and van containers.
5. Macro-environmental
The

assessment

of

political,

economic,

socio-cultural,

technological, environmental and legal factors was used to define and
summarize the general environment and the associated issues that
Rainchem International Inc. operates within. The Oil Industry started off
more than five thousand years back.
The demand for Oil was much higher than what it actually
produced and this brought forward the concept of making oil production
companies. The Oil Industry is a very important industry in the world and
a lot depends on the price of the oil and it has been observed that
whenever the oil prices increase the price of various products also
increases.
Political Factors
The political factors that may have an effect on the operation of
Rainchem in the Philippines are:
1. Unstable political environment
2. Product Stewardship Arrangements for Waste

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3. Oil ± Subsidies for different used oil based products
4. PSO Transitional grant scheme ± provided collection facilities
5. Oil Deregulation Law
Economic Factors
The economic factors that are present in the Philippine oil industry
which might have an effect on Rainchem and other player¶s operations
are the following:
1. Unstable price in the market
2. High unemployment
3. High level of activity in resources sector
4. Increasing cost of transport fuel
Socio-Cultural Factors
Of the social influences, key issues are the relatively small
population base and distance from further markets to either provide
used oil supplies or provide markets for the resulting products. The
volumes of used oil generated are unlikely to increase beyond the
influence of economic cycles, therefore the total volumes are relatively
static and this factor may make some process technologies unviable in
the Philippines due to insufficient volumes to achieve the required

17
economies of scale. A further key social influence is the poor
perception of the quality of recycled lubricating oils. Buyers of base
oils typically blend base oils with additive packages to achieve a
consistent product that delivers specified performance attributes. These
buyers are highly sensitive to the risk of using materials that may
cause their own products to fail in use or for their own production
process to be stopped as additive packages fall out of suspension.
Moreover, lubricants offer performance-critical attributes for a
value that is typically insignificant when compared to the equipment
(motor vehicle or industrial equipment) it is protecting. Other issues
arising from socio-cultural issues in the country are:
1. Increasing demand motorcycle ownership
2. DIY oil change and disposal by community
3. Small population base
4. Remote communities / used oil sources
5. Illegal disposal
6. Poor perception of recycled and synthetic oils
Technological Factors
With the increasing complexity of lubricating oils, a wide
variety of additives are added to base oils during the manufacture of

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lubricants. All of these additives provide benefits in terms of
performance but can create difficulties for re-refiners. Technological
externalities can reduce economic efficiency if the benefits (improved
performance) are not as great as the costs (reduced recoverability).
Hence, economic efficiency can be reduced if incentives are
not provided to ensure that the product designer does not take the
downstream costs into account. Some of the most problematic
additives

for

re-refiners

are

chlorinated

hydrocarbons

and

dithiocarbamates (containing lead and used as extreme pressure
agents), polysulphides and several sulphur containing compounds that
can cause emissions. Additives such as styrene butadiene (SBR) and
styrene isoprene (SIP) are used in engine oils to provide shear stability
appear in the waste from re-refining as asphalt or as a substitute for
heavy fuel oils used in cement kilns (OECD, 2005). If the costs
associated with re-refining are not transmitted back up the product
chain, it is possible that sub-optimal specifications for lubricating oil
will be developed.
As noted above, a technological externality results in suboptimal design if the performance advantages associated with the
additive are of smaller positive value than the negative values
associated with reduced potential for re-refining. Indeed, it has been
argued that minimum quality standards can be redrafted with a view
toward increasing the potential for re-refining (AATSE, 2004). Other

19
technological issues arising with the production and selling of oils are
listed below.
1. Increasing service intervals for lubricating oils
2. Increasingly complex lubricating oils (e.g. synthetics)
Environmental Factors
The most significant environmental impacts associated with
lubricating oils almost certainly arise from illegal disposal. A survey
commissioned by the Government found that one in three households
have motorists who change their own vehicle oil. It was found that
nearly half of those people inappropriately dispose, store or reuse the
oil.
The amount of uncollected waste oil has been estimated to be
in the region of 40-65 million liters. Thus, significant quantities of
used lubricant are deliberately spilled on the ground or in surface
waters.
The Oil Industry also through oil production accounts for a
large amount of the consumption of energy. According to the statistics
the amount of oil consumed by the world every year is as many as 30
billion barrel. The Oil Industry can be parted in two, Upstream and
Downstream. The importance of oil in the world evolved at a slow

20
pace but once it was identified, it became one of the most important
things in the lives of human beings.
1. High pollution potential from µillegally dumped¶ used oil and
lubricants
2. Used oil and lubricants classified as Hazardous Waste
3. Carbon emission in using oil which has an effect on Global
Warming
Legal Factors
The legal factors generally affecting the operation and
production of oil in the Philippine industry are the following laws and
policies related with the production, distribution and waste
management of oil manufacturing.
1. Hazardous Waste (Regulations of Exports and Imports) Act
1989 (Commonwealth Act) restricts to exporting of µwaste¶
products
2. DENR License for treatment site
3. Controlled Waste Regulations for transport storage by the
Environmental Management Bureau.
4. Dangerous goods licensed for storage by the Environmental
Management Bureau.

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D. Opportunity Issue Analysis
The strengths, weaknesses, opportunities and threats internally seen in
Rainchem International Inc.¶s operation are discussed below and will be used to
analyze right positioning and strategy of Rainchem International Inc.
1. Strengths
The strengths of Rainchem are its cheap price, and quality products
that has a technology addressing the issue of carbon in oil usage.

y

Affordability
Rainchem offers chemicals and lubricants in a much
affordable price as compared to its direct competitors in the in the
industry

y

High Product Quality
Rainchem manufactures high quality products that will
surely take good care of the vehicle engine.

y

Good Product Platform
Product technology, especially the ³Decarbonizer´ of their
2T product addresses the issue of carbon emission of motorcycles
that is polluting the atmosphere and causing worse effect on global
warming.

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2. Weaknesses

y

Low brand awareness
Rainchem still have low brand popularity. This may be
associated with the company¶s few advertising and promotional
activities.

y

Mediocre distribution strategy
Distribution strategy is not efficient for a nation widest
reach and may be costly because of the lack of an independent
intermediary.

y

Weak Sales Force
Sales force is not trained and compensated enough for a
better industrial prospecting coverage.

3. Opportunities

y

Increase connection with other suppliers, retailers and wholesalers
This innovation in value chain will help Rainchem
International Inc. reach its target market easier and better.

y

Increase sales to current customers through strategic alliances
An increase in sales can happen through right strategic
alliance, advertising and communication mix.

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y

Supply generic oils to industrial motorcycle manufacturer
Sales force¶ effort to reach, support and build rapport with
industrial motorcycle manufacturers will be needed.

4. Threats

y

Costly Raw Materials
The oil fields are in hard-to-reach that¶s why imported raw
materials might increase in price.

y

Non-polluting vehicles
There are lots of innovations that can minimize the use of
oil since environmental issues like pollution and global warming is
now being addressed in the whole world. These innovations may
lessen the demand for motorcycle oils.

5. Issue Analysis
The issue on low brand awareness can be addressed by a vast
advertisement, promotion and sales strategy. Also, Rainchem¶s weak
distribution strategy can be improved by a strong and well-trained sales
force to reach both industrial consumers and end-users.
The threat of price increase in raw materials will always lead to
price increase in oil products. This is inevitable because of the presence of

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the oil deregulation law making it impossible for competitors, especially
the leading companies to increase prices. But raw material price increase
caused by production and importation will heighten Rainchem¶s motor oil
price on a rate that is still reasonable.
The issue on hazardous waste produced by the manufacturing of
oils will be addressed by a hazardous waste management where experts
will be paid to study and manage the hazardous wastes of the company.
E. Marketing Objectives
The marketing objectives of Rainchem International Inc. are to increase its
market share in the industry from 0 percent to 1 percent by the year 2014 through
conducting a vast promotion and sales force coverage. Also, reach a growth of
500 percent in it sales and revenues by the year 2014.
Rainchem also aims to create a unique identity for its motorcycle oil
through a recognizable brand name and high technical performance in the
motorcycle market which can be seen by an increased number of retailers and
wholesalers from motorcycle dealers and parts suppliers by 70 percent at the end
of the year 2014.
Promotion and advertisements will be done to increase brand awareness of
motorcycle manufacturers, dealers and suppliers in NCR and CALABARZON
areas by 150 percent on 2012. This will be evident through the growth in sales
and revenues.

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F. Marketing Strategies
Rainchem marketing strategies will be choosing the right market segment,
positioning, product improvement, advertisement, sales force, promotion, contest
and research and development.
1. Target Market
The target market of Rainchem International Inc. would be mainly
from the motorcycle industry in the Philippines. Under this industry are
segments from the motorcycle industrial manufacturers, dealers and
motorcycle parts and accessory suppliers.
Rainchem will target the manufacturers, dealers and accessory or
parts supplier in the National Capital Region (NCR) and Region IV-A
(CALABARZON) since the main industrial manufacturing sites and
offices of motorcycle companies are usually located in these areas. Major
motorcycle manufacturers and dealers are Honda, Toyota, Mitsubishi,
Kawasaki, other high-end motors and new industry players.
Rainchem

will

prioritize

the

industrial

manufacturers

of

motorcycles through telemarketing, personal visits and web mails. Dealers
and Suppliers will be reached out via the executive sales team.
Nevertheless, if the NCR and CALABARZON market will be substantial,
expansion to different markets from other regions in Luzon, Visayas and
Mindanao will be considered at the end of the fiscal year 2014.

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2. Positioning
Rainchem International Inc. motorcycle oil offers a carbon enginesmoke reducing technology formulated by licensed engineers with
expertise focused on chemical mixtures. Its 2T two-stroke and 4T four
stroke motor oils are available for motorcycle industrial manufacturers,
distributors and parts suppliers. This will help minimize the pollution
problem caused by motorcycles and will address one of the environmental
issue motorcycle industry may encounter.
Aside from its decarbonizing platform, Rainchem motor oils have
the same quality that is offered by leading brands but is more affordable
than the competitors. It is 20 percent cheaper than the leading brands and 5
percent cheaper than competitors. With this, Rainchem motor oils will be
positioned as a top of the mind motor oil that has a recognizable name and
reliable technical performance in an affordable price. It will target both
industrial and consumer buyers with the help of advertisements,
promotions and sales contest.
On the other hand, sales team of Rainchem motor oils will always
be present for regular feedback communication, constant support and
timely delivery for a win-win relationship with its small or big customers.
Customer and staff communication will never be a hassle that¶s why
solution will always be the answer. The accounting, marketing and

27
manufacturing department will work hand-in±hand to improve better the
personnel¶s performance for a better customer service.
3. Product/ Product Line
Rainchem International offers motor oils under the product line of
Engine Oils. Rainchem International will position motor oils with a brand
name ³RenOil´ coming from the word ³Rain´ and ³Oil´. This will be the
recognized identity of Rainchem Motorcycle Oils with trademark licensed
to Rainchem. Licensing budget will be P 540, 000. Logo of RenOilTM
Brand is shown on the figure below.

Figure 5
RenOilTM Brand Logo
This product brand will be shown on all available containers of
Rainchem motorcycle oils. Products under this line are 2T and 4T which
will be described below.

y

RenOilTM 4T Dash
This product is premium grade engine oil designed
developed to provide excellent lubrication for all four-stroke

28
engines. It is formulated from high viscosity mineral oils blended
with superior performance additives to provide high oxidation
resistance, and thermal stability to meet the stringent requirements
of modern four-stroke motorcycle engines. It also protects and
ensures dependable transmission & clutch operation. It is offered
in 200L and 20L for industrial consumers and 1L and 200ml for
retailers and wholesalers.
The packaging for 1 Liter RenOilTM 4T Dash will be a red
container with the brand logo and tagline speed as shown on the
figure below. 200 ml retail container has the same color, style and
sticker.

Figure 6
RenOilTM 4T Dash Packaging

29
y

RenOilTM 2T Flash
This product is premium or high-quality two-stroke motorcycle oil
designed for the lubrication of all two-stroke gasoline engines
fortified with additives to help control engine wear, deposit
formation and exhaust smoking tendencies. It is offered in 200L
and 20L for industrial consumers and 1L and 200ml for retailers
and wholesalers.
As we all know, packaging plays an important role for the
promotion of the product itself. Improved product packaging for
RenOilTM 2T Flash is shown on the figure below.

Figure 7
RenOilTM 2T Flash Packaging

30
The packaging design would also showcase handy container
for the 1L and 200ml, made of recycled and reusable plastic material.
In such way we could help lessen waste products. The color of the
container will be red, which will be accentuated by a sticker for its
packaging design.
4. Price
Rainchem will make use of penetration pricing as their strategy to
maximize the quantity demand while upholding the position as a company
that produce cheaper product of lubricants and oils in the industry. The
company will also make use of Discount Pricing for bundle orders as a
part of their promotional strategy.
Table 2
Variable Costs for RenOilTM

RenOil Variable Cost

4T Dash 20W40 XP
GEO 20W40 SL

DRUM

PAIL

Carton

Carton

200

20

16667

1756

2147

2220

81

16667

1756

2147

2220

81

(18x1L) (24x200ml)

BULK
(1L)

2T Flash 20W50
XM
GEO 20W50 SL

31
Rainchem will maintain lower price than competitors. Cross-subsidization
among products may no longer be possible as petroleum product pricing
will now be linked to the prevailing national price levels. This has lead to
expectations of improved price realizations for lubricant companies as
there could be no undercutting. The fact is that the public sector oil
companies can still afford to compete on price if they choose to do so give
their bigger balance-sheets and larger resources. This is the reason why
Rainchem still manage to maintain affordable price for buyers.
Mark-up pricing wil alsol also be applied to compensate the
strategies that will be implemented by Rainchem for the fiscal years 2010
to 2013. The margin applied is 30 percent which is still 10 percent lower
than the market leader¶s pricing. For 1L, bulk orders would be 10 percent
lower than its retail price. The list of product price is shown on table 3.
Table 3
Pricing of RenOilTM

RenOil with 30 %

DRUM

PAIL

Carton

Carton

Mark-up

200L

20L

(18x1L) (24x200ml)

21667

2283

2791

2886

105

21667

2283

2791

2886

105

BULK

FLASH 4T 20W40
XPremium
GEO 20W40 SL
Speed 2T 20W50
XM
GEO 20W50 SL

32

5. Distribution Outlet
One of the firm¶s objectives is to increase its sell and product
awareness of people, because of this Rainchem will make use of intensive
distribution as their strategy. 4T and 2T products will be distributed to
authorized merchant wholesalers and retailers who will be the main
channel to deliver the products directly to customers. Building partnership
to motorcycle manufacturers and distributors will benefit Rainchem in
many ways.

Figure 8
Rainchem Distribution Strategy

33
RenOilTM products are sold through its network of retail service
stations in Manila, Makati, Laguna, Batangas, Cavite and Quezon.
Lubricants and oils are delivered to the client's area of operations via vans
or tank trucks. For high-volume accounts, the company uses its truck for
delivery of drums and pails
The location of retail centers will be near

motorcycle

manufacturers designed to select capable business partners for town in
NCR and Region IVA.
Contract carriers will remain a major part of the distribution
program, but changes are underway. Moving to a dedicated carrier
approach to be done in most of areas of region IVA and NCR where
Rainchem operates. Rainchem will select well-established tank truck
carriers with managers who have vision and a willingness to grow with
Rainchem through strategic partnerships. Rainchem is offering these
carriers five- to seven-year contracts. Carrier partners will also be
expected to run as branded RenOilTM trailers with the spec and dedicate
drivers and tractors to do the business. Partners will be expected to
achieve a base safety goal of less than one accident per million miles.
6. Sales Force
As part of its ongoing activities to develop Rainchem Brand awareness
and visibility, Rainchem Philippines must conduct a µDirect retailer contact
program¶ all over the Philippines. Here, teams of Rainchem personnel visited

34
various lubricant outlets ³en masse´ in their respective areas to raise
awareness of the brand and promote the use of RenOilTM products. The
program received overwhelming response wherever it went. As a further
element of its regular activities, Rainchem Oil Philippines is also conducting a
similar program but this time aimed directly at the end-user. Commission will
be implemented upon reaching monthly quota of sales executives in peso.
Commission is 5 percent of their monthly quota of 100,000 pesos.
Part of the sales force strategy is to have a sales representative on the
target locations. Rainchem will be assigning one managing sales
representative on each city in Region IVA and NCR which most likely would
be on each major branch of motorcycle distributor or dealers. Materials such
as pamphlets and brochures will assist the sales team in their responsibility.
7. Advertising
Rainchem will sponsor a Moto-Cross for Motor-Cycle Drivers and
enthusiasts in every region, in alliance with the Motor-Cycle People. More
than 50 participants should take part in the event for tremendous public
response. More such events will be organized for the company to be active in
its Corporate Social Responsibilities and to develop awareness and promote
the brand.
Joining business convention meetings and trade shows would still be
part of the advertising strategies of Rainchem. These activities would create
new industrial partnership; create new potential target market and increase

35
sales and demand on our product. Poster stands, flyers and brochures are the
materials distributed and displayed during conventions and trade shows.
Sample of this is on the figure below.

Figure 9
RenOilTM 4´x8´ back-to-back leaflet

36
Another trade show is Philconstruct trade exhibits that will be held this
November 2010 at SMX Exhibition and Convention Center, Pasay City. Since
other product lines sold by Rainchem will be displayed there, RenOilTM will
also have leaflets distributed there. Promotional campaigns and trade shows
offering gifts to their customers are methods of driving sales of automotive
lubricants.
Sponsorships on noontime shows with the two big networks in the
country, the ABS-CBN and GMA7 will be one of the strategies of RenOilTM..
This TV ad campaign will run for twelve months.
8. Sales Promotion
Gift certificates will be given to end users through a cap papremyo. A poster showing the promo guidelines and period will be
distributed to gas stations, motor cycle dealers and accesory suppliers.
Sample of the promotion is shown below.

Figure 10
RenOilTM Cap Sales Promo

37
Through this promo, end-users will look for the RenOilTM product,
and retailers and wholesalers will continue to order RenOilTM. Aside from
this, calendar freebie will be given to distributors for customers who will
use RenOilTM 2T and 4T products.
9. Sales Contest
"Moto-paint". This event will be sponsored by Rainchem
International Inc. wherein the focus is to look for individual who has a
unique talent to set-up his motorcycle with his unique concept in a given
time period. Winner will get one year supply of either 2T or 4T RenOilTM
as prizes. The objective of this will basically to create wider brand
awareness, obtain new customers, secure larger orders of 2T and 4T 200
ml, get higher rates, sell special inventory, sell a higher percentage of
retail and lastly to improve customer satisfaction. Posters of this contest
will be distributed to retailers from motorcycle dealers and accessory
suppliers.
10. Research and Development
Research and development will be included in the strategy since to
attain customers¶ best expectation is one of the visions of the company.
Customer survey questionnaire will be yearly distributed to measure and
evaluate the efficiency of each strategy. Also, sales representatives will do
census research on competitors¶ market sales and clients¶ current demand
since the sales force are usually in the field.

38
G. Action Program
Schedule of the implementation of product, promotion and other strategies
are shown in order on the table below. The strategy implementation will start
from trademark licensing of RenOil on June 2010. Together with this, packaging,
distribution and sales force will also start its implementation. Other promotional
activities will commence at the start of different fiscal years.
Agencies/
Action Plan

Period

Department/

Time Frame

Budget

Individual Involved
1. Trademark

18 months

3. Carriers
Rental
4. Retail

outlet 3 months

construction
5. Sales
Commission

Monthly

June

August 2010

Logistics

June
onwards

Administration

June

Department

Monthly

Marketing

Department

Packaging

December 2011

Department

2. New Product 3 months

June

Department

Licensing

Administration

2010

August 2011

Sales Executives

Continuous

2010

to P 540,000

to P 30,000

2010 P 30,000

2011to P 2,160,000

P 65, 000

39

6. Brochures,
Leaflets

Once a year

September

Department

every year

Marketing

Dec

Department

and

Marketing

P 50,000

Dec 2011

Marketing

January 2012

P 30,000

January 2013

P 25,000

Displays
7. TV

show 12 months

sponsorship
8. Sales Promo

3 months

2010

to P 500,000

Department
9. Sales Contest

3 months

Marketing
Department

10. Research and Once a year
Development

Marketing

December every P 30,000

Department

year

TOTAL

P 3,460,000

Hence, total budget for the implementation of the strategies will be
P 3,460,000 to be budgeted for the operation and marketing of RenOilTM
starting the fiscal year 2010, 2011, 2012, and 2013.

40
Appendix 1

Name of Person Completing: ___________________________________________
Title: ______________________________________________________________
Tel. Nos.: _________________________ Email: ___________________________

1. How would you rate our performance as a supplier to your organization?
Order accuracy:

___Poor ___Fair ___Good ___Excellent

*

Order filled completely:


*

Timeliness of deliveries:


*

Helpfulness of delivery
personnel:


*

Prompt pick-up of returns:


Accurate billing:


*

Ease of understanding
invoice & statements:


*

Prompt issuance of credits:


Customer Service support:


Ease of placing orders:


*

Phone responsiveness,
courtesy & listening skills:


*

Helpfulness of Accounting
Department:


41
Communication:


*

Your overall satisfaction
level:


*

Is Rainchem the only lubricant/ oil supply company
with whom you deal?

___Yes ___No

*

In the past 6 months, how have you ordered from Rainchem?

___Phone

___Fax

___Acct Mgr

___Online

___In-Store

Which method do you prefer and why?
________________________________________________________________________

2. Level that Account Representative or Sales Rep meets your expectations.
Is friendly, courteous, and
professional:

___Poor ___Fair ___Good ___Excellent *

Is knowledgeable about our
products and services:


Is organized regarding my account:


Provides clear answers to my
questions regarding my account:


Calls on me enough to meet my
needs


Shows genuine interest in
providing solutions to my needs


Demonstrates "Your success is our
focus"


42
3. To what extent are you aware of the following value-added services we provide
(1 - Did not know; 2 - Know, but haven't used; 3 - Use occasionally; 4 - Use all the time)
Custodial training

__1 __2 __3 __4

*

Website order entry

__1 __2 __3 __4

*

Free delivery

__1 __2 __3 __4

*

Service Department repair

__1 __2 __3 __4

*

Labor Cost Reduction

__1 __2 __3 __4

*

4. What can we start doing to improve the value you receive from Rainchem?
_______________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
5. What should we stop doing that is of no value?
_______________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
6. Suggestions for a product, product feature or service that Rainchem should consider
adding to better meet your needs?
_______________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
7. Is there a person that needs special recognition for exceptional customer focus
and satisfaction? If so, please provide a brief description what that person did.
_______________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

Rainchem Business Plan

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