Innovations in Lube Marketing

Indian Perspective Challenges faced and way ahead

Vaisakh KV
Sebin K Joseph
Dhanish Ahsen
Ankur Loomba

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Indian Lube Industry

5th largest market in the world
Growing @ 3 4% where as 0 - 2% globally
2.5% of world lube market
Accounts for 10% of Asias lube demand
Per capita lube consumption of 1 kg p.a. where as
31 kg. in U.S.A and 14 kg. in Western Europe

Market Size

1st

3rd
5

nd
2
th

Per capita lube consumption in India: 1 kg p.a. where as 31 kg. in

U.S.A and 14 kg. in Western Europe

4th

Lubricant Industry Growth

Indian

Growth

3-4%

Global
0-2%

 4th largest car market in Asia

2nd largest two wheeler
market in the world
5th largest commercial
Vehicle market in the world
2.5% of world lube market
Accounts for 10% of Asias
lube demand

Challenges
Automobile sector growing at more than 10% but still lube
industry grows only at 3-4%
High level of competition
High Base Oil prices & intense competition leading to lower
margins
Heightened threat from spurious lubes
Highly fragmented and complex market

Marketing Research Process

Problem Definition

Develop the
research plan

Data Collection

Data Preparation
& Analysis

Report Generation
& Presentation

Indian Lube market - Shrinking margins but Market

growth rate higher than world average
Data Sources: Primary Data: Survey
Secondary data: White papers.
Research Approaches: Survey Research.
Research instruments: Questionnaires.
Sampling Plan:
Sampling Unit
Sample Size
Sampling Procedure: Convenient
Judgment
Contact Methods: Mail Questionnaire
Telephone Interviews
Supply side expert opinion were taken &
Demand side the questionnaire were filled.

Data & Analysis

1) Vehicle type owned

2) Type of Fuel used

Diesel; 15%
Car; 49%

Bike/Scooter; 51%

Petrol; 85%

3) Do you care about the brand of Lubricant used in your vehicle?

Maybe; 13%
No; 12%
Not at all; 1%
Yes; 74%

4) Do you care about quality of Lubricant used?

Sometimes; 30%
Never; 1%

Always; 69%

5) Do you think the lubricants are correctly priced presently? (is it worth it?)

I don't know; 21%

No; 38%

6) Average Kilometers covered in a month?

Yes; 41%

<1000; 100%

7) Where do you prefer changing the lubricant?

Self; 19%
Lubricant sale points; 2%
Fuel outlet; 15%
Workshop; 64%

8) Usual Engine oil Drain period for change in terms of Kilometers?

<7000; 53%

<4000; 47%

9) Which type of Lube is used?

Mineral oil; 20%

I don't know; 40%

Synthetic; 41%

Factors influencing the purchase of lubricants

Factors influencing the purchase of lubricants
325

323

308

318

300

295

172

Preferred LubricantBrands
Preferred LubricantBrands
90

57
37
29

25
15

25

24
16

Marketing Channels
Petrol Stations
Wholesale Distributors
Lube Oil Shops
Auto Spare Shops
Authorized Service Stations
Garages
Rural & Agricultural dealers
Super Markets

E-commerce as a marketing channel

Company Blending
Plant

Carrying &
Forwarding Agents

Distributors/
Wholesaler

Retail outlet

Consumers

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E Commerce

Warehouse

Consumers

E-Commerce
Buying or selling of goods, products or services over internet
More and more people stated buying online in India
Internet penetration growing rapidly in India

How it works

Assisted Lube
change

Enter the vehicle model

Website suggests the
suited lubricants for the
vehicle
Can opt for assistance in
Lubricant change.
Option for either online or
offline payment
Can fix a proper
appointment in case of
assisted lube change

OR

Home Delivery

At Customer end Solving

Accessibility (Can find best suitable Lube for the vehicle)
Convenience (At Door Service)
Reliable oil check and change
Based on usage pattern regular alert
Assurance of proper quality and service
No adulteration with used lubes
Proper draining off the used lube

At Lube Manufacturers end Solving

Better Customer delight
Better inventory management
Proper distribution channels
Eliminating losses in distribution channel
Repeat Customers
Building better Customer Relation Management

Product
Lubricants of different brands.
Lubricants,Greese,Coolants,Transmission oils
Co-Branded Lubes with different automobile companies.
Rationalization of product / pack (Currently it comes in
400ml,1l,2l,4l,5l,20l,50l,210l).
Launch of high-end niche products for premium cars.

Place
Efficient distribution through authorized channels.
Direct marketing initiatives would be pursued for commercial
segment.
Solving issues of convenience and accessibility.
Local tie ups with workshop for assisted lube change

Price
Rationalization of MRPs for select products & packs that
makes customer
Increased level of trade discounts will continue to keep
margins under pressure.
No delivery Charges from customers.
Convenience charge for assisted lube change

Promotions
Display and Media Ads
Search Engine Marketing
Sponsorship Ads
Referrals & Email Marketing
Online Catalogs & chats
Viral Marketing
Blog Advertising
Increased focus on CRM activities in the commercial
segment & trade partners
Joint promotion initiatives will increase margins

Reference
Product management in India by Ramanuj Majumdar.Chapter22,Page 268-280
Indian Lubricant Industry- Shrinking Margins
http://www.crisil.com/Ratings/Commentary/CommentaryDocs/lub
art.pdf as retrieved on 14 Feb 2014
Theo Mang, Lubricants and their market
Brand Positioning of Automotive Lubricants in Indian Market By
Gautham Srivastava,Research Scholar,Upes,Dehradun
http://www.kenresearch.com/press/indian-lubricantsindustry/124.html as retrieved on 14 Feb 2014
www.ibef.org- http://www.ibef.org/download/IBEFreport_april6.pdf
http://www.motorindiaonline.in/component/valvoline-provesfastest-growing-indian-lubricant-company/
http://en.wikipedia.org/wiki/Lubricants

Thank
You
Need for long term commitment and not sheer opportunism