Sales and Distribution Management

Sales and Distribution Management

Castrol India Limited: An innovative distribution channel

Write your answer for Part A here.

Period Rate of Growth

2000-2004 27.27%

2004-2010 90.48%

2010-2015 50.00%

Reasons for growth of two-wheeler segment

1.Fast growing economy with large expanding middle class. Factors including consumers

increasing disposable incomes.

2.Aspiration of having own motorized vehicle. Freedom from public transport.

3.Easy availability of personal loan and financing on tier 1,2 and 3 places.

Question 2

Write yourAnswer 2A :

Private Sector players in the industry :

1. Gulf Oil Lubricants India Ltd

2. Castrol Limited

3. Shell India Markets Private Limited

Public Sector players in the industry :

1. Indian Oil Corporation Ltd.

2. Bharat Petroleum Corporation Ltd.

3. (HPCL) Hindustan Petroleum Corporation Ltd

Answer 2B :

Direct Distribution Channel

1. Forecourt: Petrol Pumps and Gasoline Stations

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

Provide services related to the vehicles.

Distribution channel serviced through distributors (Retail Distribution channel):

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

2. Agri stores: Stores that sells agricultural products such as fertilizers, Seeds and

pesticides.

3. Company branded workshops : company Exclusive outlets that catered to all requirements

of services.

Question 3

Answer 3A : Consumer buying behavior

In some cases, tier 2-3 cities two wheelers is considered as financial achievement.

Maintenance is considered important in terms of long-term prospects.

During warranty period consumer go for authorized franchised workshops for servicing. After

warranty period got over, they go for reliable NFW for their convenience.

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,

1. Minimalists-: consumers seeking for maximum value for money spent through the

reassurance from a credible brand.

2. Appreciators-: They are slightly premium consumers who regard their vehicles as their

lifeline and are ready to pay little more , To get good service of vehicles.

3. Enthusiasts-: the consumers who regard vehicles as their dream and therefore, wants 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.

Revolutionary advancement of resources and open-source technology made engine design

more compact lighter and advanced also economical.

Two strokes are replacing four strokes further public sectors will lose their market due to

privatization and also from more FDI in India.

Companies just have to search for better distribution networks

and can also innovate their products as per the changing technological advancements for

getting

advantage in the Market.

Question 4

Write your answer for Part A here.

Channel Partner Channel Share (%) 2010

Franchised workshops 30.95%

Spare part outlets 42.85%

Oil shops 11.90%

Non-Franchised workshops 14.28%

Ans4:B

Franchised workshop and NFW’s for Four Stoke oil market is significantly greater in

(percentage) than the Castrol for stroke oil

four –stoke oil

market Castrol

Franchised

workshop 39.47

>

29.77

NFW’s 10.52 > 7.14

Write your answer for Part C here.

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

Franchised workshops 6666.66

Spare part outlets 578.94

Oil shops 1103.44

Non-Franchised workshops 400.00

Write your answer for Part D here.

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

And4E: Channels for which the sales (in litre) per channel outlet (for the four –stoke oil

market) significantly greater than the sales (in litre) per channel outlet (For Castrol)

Franchised

workshop 6666.66 > 5323.30

Oils shops 1103.44 > 884.15

Spare part Outlets 578.94 > 577.38

Ans4F: 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 behavior’s.

3) Spare part Outlets and non-franchised workshops: These channels were expected to

be the growth drivers of the future

Question 5

Write your answer for Part A here.

Segment

size

Share in the oil change process

Oil buying

behavior

Financial

condition

Stock and sell

mechanics 10%

30% the oil

change process

30% the oil

change process

Stock and

sell

mechanics

are

stable on

finances as

the

product they

developed

was

sold easily

and was

appreciated

in the

market.

Mechanics who

have

worked with

Franchised

workshop and are

ready to

set up their own

Business

40% of

the

mechanic

s

50% in the oil

change process

Received their

supply of

MCO’s from

nearby

Mechanics

were short

on

finances as

it was a

group of

youngsters

wanting to

start up a

business

and the

distributors

did

not get any

confidence

related

to their

existence

and money.

Mechanics who

have

approached for

small/minor

jobs are likely to

be

apprenticed under

a stock –

and sell mechanic

50 % of

the

mechanic

s base

20% in the oil

change process

If the

consumers

needed an oil

change , then

they would

buy their own

bottles of

MCO’s and

take it to the

shop

Mechanics

who had

approached

for

small/minor

jobs seem

to be

struggling

on finances

as they

were falling

short on

branding

to generate

customer

base

Write your answer for Part B here.

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

6A : Write your answer CASA’s (Castrol Authorized Service Associates)

Castrol can have district level distributors.

The Castrol’s Authorized service associates should work under each distributor

This will help Castrol to have better reach in the market.

6:B: CASA’s (Castrol Authorized Service Associates) Who will these CASAs serve?

Selecting local associates who has better understanding and knowledge about the territory

which will help in daily distribution of lubricants to the NFW stores.

Distributors should be financially sound. More the number of CASA higher the amount they

need to pay as salary.

Castrol should take initiatives to train this CASA on bikes technicality. CASA having more

technical knowledge will help them to sell more.

Local, young, energetic associates are required in CASA.