Name Proshanjit Dey

Question 1

Question 1A: Based on the data provided in exhibit 3, find out the rate of growth (in
percentage terms) of two-wheeler vehicles in India for the following periods:

 Between 2000 and 2004 (1 marks)

 Between 2004 and 2010 (1 marks)
 Between 2010 and 2015 (1 marks)

Period Rate of Growth

2000-2004 22.27%

2004-2010 90.47%

2010-2015 50%

Question 1B: Also, list down the three factors (mentioned in the case) responsible for the
growth (or decline) of the two-wheeler market in India. (1.5 marks)

Reasons for growth of two wheeler segment;

1. Consumer’s increasing disposable income

2. Aspiration to own a motorized vehicle
3. Availability of easy financing
Question 2

Question 2A: List down three private- and three public-sector players in the industry. (1.5 +
1.5 marks)

Private Sector Companies;

1. Shell
2. Gulf
3. Valvoline

Public Sector Companies;

1. Indian Oil Corporation Ltd.

2. Bharat Petroleum Corporation Ltd.
3. Hindustan Petroleum Corporation Ltd.

Question 2B: Also, determine two direct distribution channels and three distribution
channels serviced through the distributor for the lubricant market in India. (1 + 1.5 marks)

Direct Distribution Channel

1. Forecourt – Petrol Pumps and Gasoline Stations

2. FW (Franchised Workshops): Authorized workshops that serviced vehicles under
warranty

Distribution Channel Serviced through Distributors

1. NFWs (Non Franchised Workshops: Small Workshops set up by mechanics to service

vehicles
2. Agri Stores: Stores that sells seed, fertilizers and pesticides
3. Institutional : Large sellers such as co-operative stores, associations etc.
Question 3

Question 3A: Consumer buying behavior (1.5 marks)

Consumer buying behavior in India: Two wheelers two -wheelers are regarded as the first step
of achievement and therefore, its maintenance for long term is considered important. During
the warranty period of the vehicle, most customers do service with the authorized franchised
workshops for the sake of warranty. After warranty period, most change over to Non
franchised workshops for the sake of convenience, personal relationships, service costs etc.

The consumer base is divided into three categories,

a) Minimalists-the consumers who seek maximum value for the money spent through
the reassurance from a credible brand.
b) Appreciators-the consumers who regard their vehicles as their lifeline and are
ready to pay a slight premium, so that vehicles don’t break down.
c) Enthusiasts-the consumers who regard vehicles as their dream and therefore, want
the best for their vehicle, irrespective of the price.

It is important for the company to develop and position the products according to the
consumer base. Here, company has to follow the concept of STP. The process of segmentation
and target consumer base is done by classifying the consumer base. Now, company has to
follow the apt positioning strategy and thereby, increase the sales.

Question 3B: Technological advancements happening in the two-wheeler industry (1.5

marks)

The engine designs are changing and the sizes are decreasing. This would result in a slump in
oil use. Two stroke engines are replaced by four stroke engines which mean PSUs are no
longer the front-runners are losing the first mover advantage. All companies in the industry
got the same advantage to go penetrate deeper .Companies just have to search for better
 distribution networks and can also innovate this products as per the changing technological
advancements for getting advantage in the market

Question 4

Question 4A: Channel share (2010), in percentage terms, for the ‘four-stroke oil Market’:
For each channel given in the following table, find out its contribution in ‘sales potential’
as a percentage of the ‘total sales potential’ in the year 2010. (Hint: Refer to exhibit 11 in
order to answer this particular question.). (0.5+0.5+0.5+0.5 marks)

Channel Partner Channel Share (%) 2010

Franchised workshops 30.95%

Spare part outlets 42.85%

Oil shops 11.90%

Non-Franchised workshops 14.28%

Question 4B: Based on these two metrics, find out for which channel(s) the ‘channel share
(2005), in percentage terms, for the four-stroke oil market’ is greater than the ‘channel
share (2005), in percentage terms, for Castrol’s four-stroke oil sales’. (2 marks)

Franchised Workshop and NFWs for four stroke oil market is significantly greater in
percentage than Castrol for stroke oil four

Channel Partner Four Stroke Oil Castrol

Market

Franchised 39.47 > 29.77

workshops

NFWs 10.52 > 7.14

Question 4C: Step 1: In exhibit 12, the data on the total number of outlets is given against
each distribution channel (Refer to the column named ‘outlet universe’). You need to
calculate the sales per channel outlet (for the four-stroke oil market). For each channel,
find out the sales (in litre) per ‘outlet universe’ for the four-stroke oil market industry (for
the year 2005). (0.5+0.5+0.5+0.5 marks)

Channel Partner Sales (in litre) per channel outlet, 2005

Franchised workshops 6666.66

Spare part outlets 577.38

Oil shops 884.15

 Non-Franchised workshops 670.87

Question 4D: Step 2: Sales per channel outlet (for Castrol): For each channel, find out
‘Castrol’s four-stroke oil sales’ (in litre) per ‘outlet selling Castrol oil’ (2005) (Hint: In
exhibit 12, the number of outlets selling Castrol’s four-stroke oil is given in the column
named ‘Outlet Selling Castrol Oil’.). (0.5+0.5+0.5+0.5 marks)

Channel Partner Sales (in litre) per channel outlet, 2005

Franchised workshops 5323.30

Spare part outlets 577.38

Oil shops 884.15

Non-Franchised workshops 670.87

Question 4E: In 2005, find out for which channel(s) is the ‘sales (in litre) per channel outlet
(for the four-stroke oil market)’ significantly greater than the ‘sales (in litre) per channel
outlet (for Castrol)’. (2 marks)

Channels for which sales (in litre) per channel outlet (for the four stroke oil market)
significantly greater than the sales (in litre) per channel outlet (for Castrol)
 Franchised Workshops 6666.66 > 5323.30

Oil shops 1103.44 > 884.15

Spare part Outlets 578.94 > 577.38

Question 4F: Based on these key metrics, determine the area(s) where Castrol is facing a
problem(s). (1.5 marks)

1) Franchised workshop: While this channel would have a large part to play in future
growth, Castrol had restricted access due to limited tie-ups with original
equipment manufacturers and the influence of genuine oils.
2) Oils shops: This channel was slated to have the lowest growth rate, due to a shift in
consumer’s behaviors.
3) Spare part Outlets and non-franchised workshops: These channels were expected
to be the growth drivers of the future.

Question 5

Question 5A: Determine the characteristics of the three segments of NFWs (answered in the
section on ungraded questions) based on the following parameters:

 Segment size (1.5 marks)

 Share in the oil change process (1.5 marks)
 Oil buying behavior (1.5 marks)
 Financial condition (1.5 marks)
Module Segment Share in Oil Oil Buying Financial Conditions
Size change Behavior
process

Stock and Sell 10% 30% of the Routinely Stock and Sell mechanics
mechanic oil change serviced by are stable on finances as
process the the product they
distributor developed was sold easily
and was appreciated in
the market

Mechanics who 40% of 50% in the Received Mechanics were short on

have worked with the oil change their supply finances as it was a group
franchised mechanics process of MCO’s of youngsters wanting to
workshop and are from nearby start up a business and the
ready to set up distributors did not get
their own Business any confidence related to
their existence and money.

Mechanics who 50% of 20% in the If the Mechanics who had

have approached the oil change consumers approached for
for small/minor mechanics process needed an small/minor jobs seem to
jobs are likely to base oil change , be struggling on finances
be apprenticed then they as they were falling short
under a stock – and would buy on branding to generate
sell mechanic their own customer base
bottles of
MCO’s and
 take it to the
shop

Question 5B: Evaluate these three models on the following parameters (Answer as ‘High’
or ‘Low’.):

 Parameter 1: Willingness of these channel partners to supply to the NFWs (0.5 + 0.5
+ 0.5 marks)
 Parameter 2: Channel partners’ preliminary knowledge of the local market that they
are operating in (0.5 + 0.5 + 0.5 marks)
 Parameter 3: Potential of conflict(s) with other channel partners (0.5 + 0.5 + 0.5
marks)
 Parameter 4: Capital investment required to set up this model (0.5 + 0.5 + 0.5 marks)
 Parameter 5: Cost incurred by the channel partner to supply to the NFWs (delivery
cost) (high, medium, low) (0.5 + 0.5 + 0.5 marks)

Module Parameter 1 Parameter 2 Parameter 3 Parameter 4 Parameter 5

1 Low Low High High High

2 Low High Low High High

3 High High High Low Low

Question 6

Who will these CASAs report to? (1 marks)

Who will these CASAs serve? (1 marks)

Ans6A: CASA’s (Castrol Authorized Service Associates) they will direct report to the DSR in
the headquarters locations. They are the trained distributors sales representatives with access
to these markets

Ans6B: CASA’s (Castrol Authorized Service Associates) will pick up the product from small
distributor’s and they will serve the NFW’s small mechanics who set up shop to serve here