Identification of buying factors influencing consumer behavior in lubricants business

1. Introduction
The Indian lubricants industry is one of the fastest growing lubricant industries in the world
at a CAGR of 18.6% in last 6 years. Increased industrial activity, soaring population of
automobile users and rising disposable incomes are resulting in increased spending of
lubricants in India. Lubricant market in India is not growing at the same pace as automobile
market but as more and more vehicles are coming on roads, there is huge scope in this
segment. Currently, the Indian lubricant industry is the seventh largest lubricant market in the
world and sixth largest automotive lubricant market.
The major area of lubricants in consumed by the automobile sector i.e. 70% and the rest 30%
goes to the industrial and marine sector. The product slate includes auto engine oils, auto gear
oils, auto greases, turbine oils, hydraulic and circulation oils etc. As per estimates, Indian
lubricant consumption will cross 2 MMT by the end of 2014-15. The global lubricant market
is valued at $45 billion producing more than 48 MMT in which India accounts for only 2%.
The global lubricant market is valued at 48 billion USD with 45 million MT. As on date,
there are around 1200 manufacturers of various grades of lubricants and allied products in
organized sector out of which 1150 are in small and medium sector.
The lubricants market in India is dominated by three public sector refinery companies, Bharat
Petroleum leads the bunch followed by Indian Oil Corporation and Hindustan Petroleum.
Foreign companies comprising Shell, Mobil, Caltex, Castrol, Lubrizol, and Gulf Oil also
have their presence in the market with their local partners. The IMACS research has predicted
the Indian oil market to reach 126 billion USD by 2024-25 in which 18% will come from
Lubricants and allied products. As for distribution channel for automotive lubricants is
concerned, petrol pumps form the major part of it for big oil companies while private players
opt for retail outlets such as authorized service stations, garages, rural and agricultural
dealers, super markets and wholesale distributors.
The decision process and physical activity individuals engage in when evaluating, acquiring,
using, or disposing of goods and services, this defines the consumer behavior. Consumer
behavior has taken deep roots into the strategy formulation, marketing initiatives and various
other facets for organizations.
Competitive strategy in automotive lubricant market consists of the approaches and initiative
companies take to attract customers, approaches and initiatives companies take to attract
customers and retain them to strengthen their market position. These would help the
automotive lubricant marketers to understand consumers to learn which strategies whould
give more benefit for their company.
This project is therefore aim to identify the purchasing criteria and factors responsible for
purchasing automotive lubricants by the consumers. The findings of this research provides a
logical platform for the marketers and formulators of automotive lubricants and identifying
the key characteristics.

2. Literature Review
Page no 1 of the Report submitted by Rajagopalan Iyer of UPES

Identification of buying factors influencing consumer behavior in lubricants business

Sr.
Title
No.
1
Brand
Positioning Of
Automotive
Lubricant In
Indian Market
2

Authors

Competitive
Strategies of
Major
Automotive
Lubricant
Business in
Bangkok
A Study of
Factors
Influencing
Lubricant
Purchases by
Logistics,
Mining and
Construction
Business
Entrepreneurs in
the Three
Lower-North
Thai Provinces
of Uttaradit,
Pitsanulok and
Sukhothai
Analysis of
Influences on
Purchase
Decisions of
Automotive
Lubricants:
Evidence from
Rural Markets
of India
Customer
buying behavior
at selected
petroleum shops
in Cape Town

Year

Findings

Gautam
Srivastava

2013

Impact of brand
positioning on the
consumer purchase
decision of lubricant
consumers.

Worawalan
Tanesakorn,
Chuenjit
Changchenkit
and Thongchai
Sriwattana

2012

Major automotive
lubricants marketers
largely pursue
differentiation and costleadership strategy.

Manee Choo2010
Iead & Wattana
Keawpoolpako
rn

Remarks
Factors
identified are
price, quality,
accessibility
and customer
benefits.
Study reveals
the least used
method
however is
pricing below
competitors.

The most influential

purchasing factor of
product is quality of
product.

Further
research should
be conducted
to understand
better the
issues that
affect
entrepreneurs
in the study
area and to
help them deal
with threats by
making better
business plans.

Dr. Prafulla A.
Pawar and
Rahul K.
Khandelwal

2012

Research shows that the

rural market consumers
of interaction to ensure
accuracy of the data.
automotive lubricants
require brand and
quality.

Recommended
that the
company
should increase
their marketing
activities to
create a better
awareness

John Franklin
Bailey

2011

There are significant

relationships between
the gender and
population group of the
subjects and
their store choices
respectively.

Specialist
convenience
skills are
required to
manage these
stores, since
a clearer and
focused
understanding

Page no 2 of the Report submitted by Rajagopalan Iyer of UPES

Identification of buying factors influencing consumer behavior in lubricants business

Consumer
Attitude towards
Automobile
Lubricants:
A Case Study of
PSO Lubricants

Salman Zakir
Dr. Fouzia
Naeem Khan

2011

Strategic
Planning for a
lubricant
manfufacturing
company using
SWOT Analysis,
QSPM model
(one of the Top
companies of
Iranian Oil, Gas
and
Petrochemical
Products
Exporters'
Association)
Marketing
Management
Changes in
consumer
behavior of
India

Maryam
Saghaei, Leila
Fazayeli(Corre
sponding
author) and
Mohammad
reza shojaee.

2012

Susheel Kumar
Shukla and
Aarti Devi

2010

Brand
recognition and
impulse buying
behavior of
automotive
lubricants in
Lagos state,
Nigeria

Ojo, James
Olanipekun,
KESINRO,
Olalekan
Rasheed &
Akinsunmi, A.
Sydney (Ph.D)

2015

Viscosity / thickness,
prior experience and
long lasting / better
mileage that counts as
the major factor
in consumer purchase
decision. Advertisement
and promotional
campaigns play
a role as a short term
strategy to increase
sales for a limited
period of time.
Three strategies can
solve this problem:
market development,
participation in
exhibitions and
collaboration with
department of
environment can change
customers' view
regarding recycle oil
engine as well as
introducing its
production at domestic
markets to develop it.
Pace of change in the
needs, desires and
wants of the Indian
consumers will be even
steeper and will further
change drastically in the
near future.
There is a significant
relationship between
brand recognition and
customer impulse
buying behavior.

of consumer
motivation is
required.
PSO should
develop a
brand image
development of
its
lubricants by
creating proper
attire of the
brand by all
means of
communication
Management
that makes the
final decision
based upon the
situation in
changing and
demanding
environment.

Branding is a
key factor

With
consumers too,
it is a matter of
whoever has
the purchasing
power to spend
his/her money
as deem
necessary
because it is a
well-known
fact that

Page no 3 of the Report submitted by Rajagopalan Iyer of UPES

Identification of buying factors influencing consumer behavior in lubricants business

10

An analysis of
role of
marketplace
influence in
adoption and
usage of
synthetic
lubricants for
Two-Wheelers.

Debanjan Saha

2015

Research highlights the

need for greater
intervention by
marketers to increase
awareness, knowledge
and involvement of
customers through
interactive BTL
promotions to escalate
the pace of adoption of
new and innovative low
involvement category
products.

consumers
sometimes just
love to
purchase
impulsively.
Additional
factors like
expected
increase in
awareness of
consumers
over time,
change in
involvement
due to increase
in prices and
wider access to
social and
online media
could be
included in
future studies.

3. Gap in Literature
Sr.
No.

Title

Authors

Year

Gap

Page no 4 of the Report submitted by Rajagopalan Iyer of UPES

Identification of buying factors influencing consumer behavior in lubricants business

1

Brand
Positioning Of
Automotive
Lubricant In
Indian Market
Competitive
Strategies of
Major
Automotive
Lubricant
Business in
Bangkok

Gautam
Srivastava

2013

Rresearch is limited only to Delhi region

and to four wheeler segment (Petrol and
Diesel).

Worawalan
Tanesakorn,
Chuenjit
Changchenkit
and Thongchai
Sriwattana

2012

A Study of
Factors
Influencing
Lubricant
Purchases by
Logistics,
Mining and
Construction
Business
Entrepreneurs in
the Three
Lower-North
Thai Provinces
of Uttaradit,
Pitsanulok and
Sukhothai
Analysis of
Influences on
Purchase
Decisions of
Automotive
Lubricants:
Evidence from
Rural Markets
of India
Customer
buying behavior
at selected
petroleum shops
in Cape Town
Consumer

Manee Choo2010
Iead & Wattana
Keawpoolpako
rn

Researcher noted that there are major

automotive lubricant brand who import
lubricants and sell in Bangkok and Thailand
whose statistics are neither captured in the
ministry of energy data nor that of
Petroleum Institute of Thailand. Time
limitations during Thai political disruptions
earlier this year (2014) constrained the
researcher from obtaining future planning
policies from major automotive lubricant
companies. Further, some companies
refrained from disclosing their policies
because those internal strategy policies are
proprietary.
Research should be conducted to understand
better the issues that affect entrepreneurs in
the study area and to help them deal with
threats by making better business plans.

Dr. Prafulla A.
Pawar and
Rahul K.
Khandelwal

2012

Constrained to Rural markets of India.

John Franklin
Bailey

2011

Research was conducted on a small sample

size without the use of random sampling.

Salman Zakir

2011

Consumption patterns of Petrol, CNG and

Page no 5 of the Report submitted by Rajagopalan Iyer of UPES

Identification of buying factors influencing consumer behavior in lubricants business

10

Attitude towards
Automobile
Lubricants:
A Case Study of
PSO Lubricants

Dr. Fouzia
Naeem Khan

Strategic
Planning for a
lubricant
manfufacturing
company using
SWOT Analysis,
QSPM model
(one of the Top
companies of
Iranian Oil, Gas
and
Petrochemical
Products
Exporters'
Association)
Marketing
Management
Changes in
consumer
behavior of
India

Maryam
Saghaei, Leila
Fazayeli(Corre
sponding
author) and
Mohammad
reza shojaee.

2012

Susheel Kumar
Shukla and
Aarti Devi

2010

Brand
recognition and
impulse buying
behavior of
automotive
lubricants in
Lagos state,
Nigeria
An analysis of
role of
marketplace
influence in
adoption and
usage of
synthetic
lubricants for

Ojo, James
Olanipekun,
KESINRO,
Olalekan
Rasheed &
Akinsunmi, A.
Sydney (Ph.D)

2015

Debanjan Saha

2015

Motor oil lubricants can also be a good

area of further study.Recording the
consumption pattern for high street sales can
be a challenging area to explore since no
such study is done as yet on academic
level. Exploring mediums of
communication of the truck and bus owners
can also add
to a good area of research to find out ways
of communicating brand image of
lubricants to this segment.
The QSPM model is totally based on
personal opinions of experts and therefore
management makes the final decision based
upon the situation in changing and
demanding environment.

New generation will prefer brands that are

launched during their growing up years.
They will not prefer brands that are very old
in the market. This will make it easier for
new brands to cement their place in the
market and run successfully.
New generation will possess more risk
taking capability.
There is no attempt to draw a conclusion.

Research is limited to domain specific

psychographic constructs in consumer
behavior and factors of influence on users in
one product category viz. two-wheeler
lubricants in one city of Maharashtra. The
research lacks generalizability as it suffers
from restricted scope. Researchers are
invited to extend the research to rural and

Page no 6 of the Report submitted by Rajagopalan Iyer of UPES

Identification of buying factors influencing consumer behavior in lubricants business

Two-Wheelers.

semi-urban markets in other areas covering

wider product categories. Additional factors
like expected increase in awareness of
consumers over time, change in
involvement due to increase in prices and
wider access to social and online media
could be included in future studies. New
constructs may be developed to reflect
change in lifestyle, affluence, brand
exhibitionism etc.

4. Need for Study

PSUs lubricant brands (Servo, Mac and HP Lube) are continuously losing their market share
in the Indian lube market. So this research will be focused on finding the important attributes
of brand positioning which affects the purchasing decision of lubricant consumer. The
lubricants industry has become a global business. Major international firms like ExxonMobil,
Shell, BP and Chevron, even Thai National Oil Company. The research will help, examine
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Identification of buying factors influencing consumer behavior in lubricants business

characteristic of automotive lubricant buyers, analyze the different consumer factors and also
trust factor that influence consumer behaviors and develop competitive marketing mix to
analyze consumer behavior.

5. Research Objective
1. To identify the factors influencing consumer behavior in automotive lubricants.
2. To identify, to establish the competitive strategies employed by major automotive
lubricants

6. Research Methodology
Research Design
Exploratory Research
Exploratory research will be used to identify out the different factors and their impact on
consumers purchasing decision in automotive lubricants.
Descriptive Research
Descriptive research will be used to find out the relationship between the factors identified
and consumer purchasing decision.
Sources of Data Collection
Primary data
Primary data will be collected from the two strata:
Four Wheeler segment consumers
Four wheeler segment consumers will be divided into the following strata
Commercial four wheeler (petrol)
Commercial four wheeler (diesel)
Secondary Data
Secondary data are required for the study and will be collected from various research papers
published worldwide, reports, websites etc.
Sampling
Total No. Of four wheelers in Dehradun = (Source: Population census)
The sample size will be calculated by using Yamane, 1967 formula.
n = N / 1 + (N * e2)
Where, n = The sample size
N = the size of the population
e = the error of 5 percentage points.
Area of Sampling
The sample will be collected from the Dehradun region.
Dehradun region will be divided into following sub region:
East
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Identification of buying factors influencing consumer behavior in lubricants business

West
North
South
Central
The sample size will be divided on the basis of the ratio of petrol and diesel four wheelers.
Sampling Techniques
Convenience sampling will be used. The data will be collected from people who own a petrol
or diesel and they will be ask to fill up a survey questionnaire.
Hypothesis
H0: Only tangible factors have significant impact on consumer purchasing decision of
lubricant oil.
H1: Tangible and intangible factors have significant impact on consumer purchasing decision
of lubricant oil.
Tools to be used:
Multiple Regression Analysis
Perceptual mapping (Price, Quality and Choice)

7. Chapter Outline
1. Introduction to Lubricant Business in India and Consumer behavior
2. Various models for consumer behavior study.
3. Significance of consumer behavior in lubricant business.
4. Literature Review
5. Background and objectives of the project
6. Research Methodology
7. Data Analysis and Interpretation
8. Observations
9. Recommendations
10. Conclusion
11. References
12. Annexures

Page no 9 of the Report submitted by Rajagopalan Iyer of UPES