Name Saptak Samadder

Question 1

Part A: The rate of growth (in percentage terms) of two-wheeler vehicles in India for the
following periods can be calculated by the formula:

{(Current value-Previous value)/ Previous value/100}

Period Rate of Growth

2000-2004 27.27%

2004-2010 90.47%

2010-2015 50%

Part B: The primary growth of 2 wheeler market in India was mainly coming from the
younger demographic market and the 3 factors which are responsible for growth in 2 wheeler
market in India are:

1. The desire or aspiration to own a motorized vehicle

2. Availability of easy financing modes
3. Increase in consumer’s disposable income
Question 2

Part A: As per the Indian MCO market fragmentation,

Three Private sector players are:

1. Veedol International Limited

2. Shell plc.
3. Valvoline Inc.

Three Public sector players are:

1. Hindustan Petroleum corporation limited

2. Bharat Petroleum corporation
3. Indian Oil Corporation

Part B: The two direct distribution channels and three distribution channels serviced through
the distributor for the lubricant market in India are:

Direct Distribution channels:

1. FW (franchised workshops): Authorized workshops that serviced vehicles under a

warranty and providing all services related to the vehicles.
2. Forecourt: Gasoline stations and Petrol pumps.

Distributor channels:

1. NFWs (non-franchised workshops): Small mechanics who set up shop to service

motorcycles.
2. Pure lubricant outlets: Stores that stocked and sold lubricants of all companies; they
did not stock or sell other products.
3. Wholesalers: Operations that bought directly from distributors of all companies and
sold primarily in the rural markets, helping to widen the distribution, by offering
multiple brands.
Question 3

Part A: Consumer buying behavior:

Majority of the consumers saw oil changes as an important requirement for their bike
maintenance. In the time of the warranty period of the vehicle (18 to 24 months), the
consumers visited motorcycle dealerships, or FW’s for warranty benefits provided by the
manufacturers. Later on completion of these warranty periods, there was a change in the
consumer behavior The factors driving this behavioral change were:

 Trust
 Convenience
 Personal attention from the mechanic

Additionally based on the extensive consumer market research 3 consumer segments were
identified namely:

 Minimalist: Consumer seeks value for money.

 Appreciators: Consumer give little high importance on bike as their lifeline.
 Enthusiasts: Very high importance given on bike maintenance as it is their dream
vehicle.

Part B: Technological advancements happening in the two-wheeler industry

New technology in engine and shift to four stroke from two stroke engines have impacted the:

1. Choice of distributer channel: The consumers would change the oil during their
vehicle’s maintenance service, which created a trend at every workshop. This led
to a complete shift of lubricant sales from forecourts to the open market, which is
also known as the bazaar.

2. Consumer behavior: Initially 2 wheeler with 2 stroke engine had to be fed with
engine oil every time during tank fueling and thus here consumers would depend
on fueling station and the fueling station had to decide the choice of lubricant.
While with the advancement on 4 stroke engines, lubrication oil system was
separate and the oil needed to be changed only once every in 2000 to 2500 kms,
which made the consumers decide the oil change based on workshop where vehicle
were serviced.
Question 4

Part A: Channel share (2010), in percentage terms, for the ‘four-stroke oil Market’:

Four-stroke oil market in 2005 = 210 million litres

Franchised workshops’ market share = 35 million litres

Franchised workshops’ channel share = 65 / 210 * 100 = 30.95%

Four-stroke oil market in 2005 = 210 million litres

Spare part outlets’ market share = 90 million litres

Spare part outlets’ channel share = 90 / 210 * 100 = 42.85%

Four-stroke oil market in 2005 = 210 million litres

Oil shops’ market share = 25 million litres

Oil shops’ channel share = 25 / 210 * 100 = 11.90%

Four-stroke oil market in 2005 = 210 million litres

Non-franchised workshops’ market share = 30 million litres

Non-franchised workshops’ channel share = 30 /210 * 100 = 14.28%

Channel Partner Channel Share (%) 2010

Franchised workshops 30.95%

Spare part outlets 42.85%

Oil shops 11.90%

Non-Franchised workshops 14.28%

Part B:
 Channel Partner Channel share (2005) in %
Four Stroke oil Market
Castrol Four stroke oil sale
sale
Franchised workshops 39.47%
29.8%
Spare part outlets 28.94%
30.3%
Oil shops 21.05%
32.8%

Non-Franchised workshops 10.52%

7.1%

Based on above comparison:

Franchised workshop & Non-Franchised workshops are the only two channels where the four
stroke oil market channel share is great than the Castrol four stroke oil sales channel share.

Part C: The sales (in litre) per ‘outlet universe’ for the four-stroke oil market industry:

Channel Partner Four-stroke oil market industry sales

(in litre) per channel outlet, 2005

Franchised workshops 6666.66

Spare part outlets 578.94

Oil shops 1103.44

Non-Franchised workshops 400

Part D: Sales per channel outlet (for Castrol):

 Channel Partner Castrol 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

Part E:

Based on the below table:

The four-stroke oil market Castrol

Sales (in litre) per channel Sales (in litre) per channel
Channel Partner outlet, 2005 outlet, 2005
6666.66 5323.30
Franchised workshops
Spare part outlets 578.94 577.38

Oil shops 1103.44 884.15

Non-Franchised 400 670.87
workshops

As per the above findings, The sales per channel outlet for the four-stroke oil market is
significantly greater than the sales per channel outlet for Castrol in Three partners:

1. Franchised workshops
2. Spare part outlets
3. Oil shops
 Part F:

Based on these key metrics, the area(s) where Castrol is facing a problem are:

1. Franchised workshop –Due to limited tie-ups with original equipment manufacturers

and restricted access to genuine oils, Castrol is not able to grow in these metric.
2. Oil shops –Due to a shift in consumer behavior this channel had the lowest growth
rate.
3. Spare part outlets and non-franchised workshops – Considered to be the growth
drivers of the future.

Question 5

Part A: The characteristics of the three segments of NFWs

The three NFW segments are as follows:

1. Stock-and-sell mechanics.
2. Mechanics who have worked at the franchised workshops and are ready to set up their
own business.
3. Mechanics who are approached for small/minor jobs are likely to be apprenticed
under a stock-and-sell mechanic

A. Stock and sell mechanics:

 Segment Size: This segment was very small in market which account to 10% of
market.
 Share in oil change process: This segment contributed to 30% of oil changes.
 Oil buying behavior: These are the mechanic workshops that stocked up and sold
lubricants, normally these segments would buy oils from distributors or wholesalers..
 Financial condition: This segment mechanics were highly respected and skills for
their work. They were financially sound due to which they could stock and sell
 lubricants

B. Mechanics who have worked at the franchised workshops and are ready to set up their
own business:

 Segment Size: This segment was medium size market which accounted to 40% of
market.
 Share in oil change process: This segment contributed to 30% of oil changes.
 Oil buying behavior: This segment was not supported by distributors since no payment
guarantee and these mechanics not financially good. These mechanics would buy oil
from nearby spare parts shops.
 Financial condition: These segment mechanics were highly skilled but short of
finances and were looking for finance supports

C. Mechanics who are approached for small/minor jobs are likely to be apprenticed under a
stock-and-sell mechanic:

 Segment Size: This segment accounted to 50% of market with mechanic base.
 Share in oil change process: This segment accounted to remaining 20% of oil change
where consumer buy their own oil and provide to mechanic.
 Oil buying behavior: In this segment consumer who want their 2 wheelers to get
serviced had to buy their own oil and provide to mechanic.
 Financial condition: This segment mechanics were approached for small jobs, even
though they were skilled they did not had reputation. Financially they had to depend
on very small work and had to depend on consumer buying oil any spares
 Part B:

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

Strategizing the CASAs (Castrol Authorized Service Associates) within the existing
distribution model:

CASA’s would be reporting to Regional distribution Manager (RDM) who is responsible for
all the distributor in that region. CASA’s would report sales progress to Regional distribution
manager

CASA’s would serve to distributors and the NFW’s by working as intermediate retailer in-
between who manages the short-term working capital to make distribution flow effective