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.
