SYNTHETIC OIL BUSINESS IN DELHI CAR MARKET(CASTROL EDGE)

COMPILED BY:ASHWANI SAFAYA SUMMER TRAINEE FEB 2010 MAY 2010 CASTROL INDIA LTD.

RESEARCH METHODOLOGY


 

Market visit and survey for determining the potential of synthetic oil business. Interaction with dealers,customers,workshop owners, mechanics through designed questionnaire for each segment. To gather feedback about synthetic business. To ascertain the requirements and initiatives needed to develop synthetic oil business in Delhi/NCR.

RESEARCH OBJECTIVE

To understand the synthetic oil market (mainly synthetic engine oil market of Delhi/Ncr). To analyze all the important properties and features of synthetic engine oil. To carryout comparative analysis of all the major brands of synthetic engine oil. To undertake exploratory survey of synthetic Engine Oil market of Delhi/Ncr with the help of Mechanics, workshop owners, oil dealers, retail outlets selling engine oil. To analyze all the survey data & formulate recommendations based on it.

PRIMARY DATA COLLECTION

For Product: Car market survey through use of a questionnaire. For Price: Direct meeting with the dealers to know other companies pricing, by collecting and analyzing prices for customers (MRP) dealers (DLP),direct dealers, and distributors.

PRIMARY DATA COLLECTION

For Place: Obtaining feedback from the existing dealers of Castrol through direct interviews. To establishing and implementing processes for obtaining ideas, Information and insights from the dealers regarding the Castrol marketing proposition for the synthetic oil brand, after that evaluating the feedback, assessing the benefits and any risks associated with possible options, and making recommendations towards enhancing the Castrol synthetic marketing proposition especially place or in other words dealer expansion for synthetic oil business. Promotion: Observing the number of marketing activities done by the other companies by keeping the record of activities done by them, and also analyzing the activities to feel the difference between them and Castrol marketing activities.

SECONDARY DATA COLLECTION

Through company websites,Journals,synthetic oil articles Analyzing and interpretation. Mapping with respect to other competitors in the market in synthetic oil segment.

SYNTHETIC MECHANIC SURVEY

All

major synthetic mechanics were first sorted out from all major car markets in Delhi. The sample size was about 100 mechanics all over Delhi/Ncr. An informal questionnaire was formed to gather information and feedback from the mechanics. There was a need to interact with them on a personal front to understand their problems and challenges. The survey took around 45 days to complete.

MOST PREFERRED SYNTHETIC OILMECHANIC PERCEPTION

% PERCEIVED SHARE CASTROL
EDGE 8%

SHELL 12%

MOBIL1 80%

FINDINGS ON PERCEIVED SHARE

Findings:The above pie chart clearly shows that 80% of the mechanics who recommend synthetic oil to customers prefer Mobil 1 as the brand is more visible and gives good performance results as per the perception of the mechanics. Some mechanics around 12% of the surveyed prefer Shell due to certain benefits attached and also reasonable quality. Although mechanics have a very good brand image and trust on the quality of Castrol products in other category but it seems they are not well aware and properly informed about the synthetic oil of Castrol i.e. Castrol EDGE. They are confused how to convince the customer of such a costly oil without any benefit to them.

CONCLUSIONS
Conclusions: The above pie chart clearly states that presently Mobil 1 is having a edge over other major synthetic players as mechanics have developed trust in the brand. This can be attributed to price difference in the synthetic brands as well as attached benefits to the mechanic in selling a particular synthetic oil brand.

REASONS FOR THE PERCEPTION

% share

Attached benefits 40%

Good Lubricating oil 30% Smooth running engine 30%

FINDINGS AND CONCLUSIONS

Findings: The above pie chart clearly states that Mechanics give considerable importance to their attached benefits in selling a brand of oil. The mechanics also have faith in the quality of oil and its effects on the engine running and thus recommend on those parameters too. Conclusions: The above pie chart confirms the fact that in addition to good quality of oil and its effects on smooth running of engine mechanics also give importance to their personal benefits in recommending oil.

FINDINGS AND CONCLU.- CONTD.

The above chart shows that the perception of mechanics is formed from these three factors. So if the Castrol EDGE% is too less on the perceived chart it states that the brand is lagging in forming good perception in these parameters. So to change the perception of mechanic towards Castrol EDGE, the company should ask its officers to talk to mechanics and know the reasons of lagging of Castrol synthetic brand from other brands. Castrol should take classroom programs for mechanics and teach them the new ways of delivering good service to their customers. This will help in improving the perceived value Castrol in the minds of Mechanics. This will eventually help in raising the awareness and sales generation of Castrol EDGE with the help of mechanics.

INFLUENCING FACTORS FOR BUYING DECISION

% MARKET INFLUENCE
70% 60% 50% 40% 30% 20% 10% 0%

60% 30% 10%

Always Recommend Sometimes Recommend Never Recommend

% MARKET INFLUENCE

FACTORS- BUYING DECISION

Findings:The above bar chart clearly shows that 60% of the mechanics recommend the use of specific engine oil to their customers. There are around 30% of mechanics who always recommend a particular brand of oil to their customers. Conclusions:The above chart clearly states that around 90% of the mechanics recommend their customers to go for the usage of a particular brand. These recommendations are on the basis of the quality of oil, price margin of a particular brand, attached benefits to the mechanic and overall perceived value of the particular brand.

CASTROL EDGE-BRAND PERCEPTION

%
80% 70% 60% 50% 40% % 30% 20% 10% 0% Good Quality Costly No Idea

70%

20% 10%

PERCEPTION- CASTROL EDGE

Findings:The majority 70% of the mechanics perceive Castrol as a good quality oil brand. Around 20% feel that the synthetic oil i.e. Castrol EDGE is costly from other synthetic brands. There are about 10% of them who are not well aware about the synthetic brand of Castrol. Conclusion:The above chart clearly states that although mechanics perceive Castrol as a quality brand name but they are not well aware and informed about the synthetic brand of the company.

CUSTOMER PREFERENCE
SELECTION
80% 70% 60% 50% 40% 30% 20% 10% 0% Discount Complimentary gifts

70% 20% 10%

More oil

SELECTION

CUSTOMER PREFERENCE

Findings:Around 70% of the dealers believe that the customers need discount while buying engine oil. There are 20 % of dealers who believe that the customers are looking for gift items with the engine oil. Only 10 % believe that the customers need extra oil. Conclusion:The figures in the above graph clearly depicts that discount on oil plays a great role in influencing the customer to go for a particular brand of oil. Also, attractive and utility based gift items with the oil influence customer positively in taking a buying decision for a particular brand of oil. It can be clearly seen that there is not much positive influence regarding getting extra oil to the customer.

CASTROL EDGE V/S COMPETITION

%BURN OFF
16.00% 14.00%

12.00%

10.00%

8.00%

6.00%

14% 4.50%
CASTROLEDGE 5W40 COMPETITIVE OIL

%BURN OFF

4.00%

2.00%

0.00%

TEST DESCRIPTION- BURN OFF

TEST DESCRIPTION: This test will ascertain how quickly an oil will burn off.This test is called the Noack, this test is an indication of how long an oil will last as well as how stable it can be over its lifetime. EDGE has less than half the burn off when compared to competitor oil.

PERFORMANCE IN EXTREME CONDITIONS 1. FLOW TIME

FLOW TIME(SEC)
45 40 35 30 25 20 15 25 10 5 0 40 41 FLOW TIME(SEC)

CASTROL EDGE 5W40

COMPETITIVE OIL 15W40

COMPETITIVE OIL 20W50

2.REVOLUTIONS
REVOLUTIONS
500 450 400

50 00
50 00

460 0
CASTROL EDGE 5W40 COMPETITIVE OIL 0W50

REVOLUTIONS

150 100 50 0

60
COMPETITIVE OIL 0W50

3. BATTERY DRAW
BATTERY DRAW
400 350

300

250

200

150

360 180
CASTROL EDGE 5W40

BATTERY DRAW

100

240
COMPETITIVE OIL 15W 40 COMPETITIVE OIL 20W50

50

4. DEPOSITS
DEPOSITS
500 450 400 350 300 250 200 150 100 50 0

460 110
CASTROL EDGE 5W40

DEPOSITS

190
COMPETITIVE OIL 20W50 COMPETITIVE OIL 20W50

PERFORMANCE IN EXTREME CONDITIONSCONCLUSION EDGE 5W40 is formulated to present low viscosity at low temperatures.This means easier starting from cold,less battery drain,less starter motor strain,and quicker delivery to vital components.This test was performed at a controlled -15degree Celsius.

CASTROL EDGE-FUEL ECONOMY V/S COMPETITION

EDGE showed an increase of 2.8% in fuel economy testing against the competition.
FUEL ECONOMY
2.5

1.5 2.1

FUEL ECONOMY

0.5

CASTROL EDGE 5W40

-0.5

COMPETITIVE OIL 20W50

-0.8

-1

CASTROL EDGE- THERMAL CONTROL V/S COMPETITION

EDGE runs 5 degrees cooler than competitor oil,20W50

THERMAL CONTROL

141 140 139 138 141 137 136 135 134 133 136

THERMAL CONTROL

CASTROL EDGE 5W40

COMPETITIVE OIL 20W 50

HORSEPOWER MAXIMIZATION- CASTROL EDGE

On an average, EDGE 5W40 made about 1.7% more power than the competitor oil. A feat demonstrating how EDGE 5W40 maximizes horsepower:EDGE 5W40 was rigged up against a semi synthetic oil on a Honda engine, drove them from 0 to 160, and got a one second advantage. Only you know the value of one second. Thats 45 meters. Thats the difference between winning and losing. Only you would know the difference that a second can make.

BRIEF ANALYSIS

Quality is the top most factor which is affecting the buying decision of synthetic oil. in addition to it the perceived value both in terms of Quality "and Personal benefits to the mechanics in selling and recommending synthetic oil to the customer. Hence, in order to gain business and increase sales of the synthetic oil we have to develop the perceived value both in the minds of mechanics as well as customers about the Quality and benefits of synthetic oil Castrol EDGE.

ANALYSIS-FACTORS
The other factor which is affecting the buying decision of lube oil is the price of a particular brand. The brand has to justify the price structure to its users. So, in order to increase the perceived value of Castrol EDGE the company can offer discounts or complimentary gift items along with the bottle of synthetic lube oil.

MECHANIC INFLUENCE FACTOR

The other major factor which is a affecting the buying decision of synthetic lube oil is the mechanic variable. Mechanics help a layman to judge good quality oil. So many users/customers buy oil on the recommendation of Mechanics. So the company should try to develop a good perceived value in the minds of mechanics regarding synthetic oil.

MADE BY
ASHWANI SAFAYA SUMMER TRAINEE FEB 2010 MAY 2010 CASTROL INDIA LTD.