Indian Lubricant Industry An Introduction Marketing Essay

Indian Lubricant manufacture An world Marketing EssayIndian lubricating substance industry in a recent past has presented bargon-assed technicalize opportunities. Firm increase in the Indian power, engineering and self-propelling sectors has been a boon for lubricant manufacturers. In self-propelling sector, as consumers migrate to efficient fomites and motorbikes, they use utmost schooler grade lubricants. As a result, multi-grade lubricant products ar getting benefitted.In the industrial segment, high level of investment in manufacturing, assault and power sectors experience the potential to drive very severe yield for marine aviation lubricants and transformer crude.The automotive lubricant market in India is highly price sensitive the chroma growth is getting stagnated all over ascribable to longer lasting lubricants.The sell trade and original equipment segment are two major market channels in the Indian context. Due to ever growing competition, tie-ups OEMs are becoming great as they provide the value hint of a brand. In retail trade, Petrol pumps (ROs) form the major diffusion channel. Sales of lubricants via ROs or the bazaar trade has changed the Indian automotive lubricant market into a FMCG sector. The new(prenominal) marketing channels are garages, super markets, rural and agricultural dealers, authorized service of process stations and sell distributors. PSU companies manufacture their own abode oil and follow a different distribution strategy as compared to their private counter classs that solely dependent on imports. PSUs sell from their own wide spread network of ROs fleck private manufacturers prefer supermarkets.Engine oil plays the most important role in deciding the market touch of lubricant manufacturers. Increase in demand for 4-stroke motorcycles, tie ups with OEMs and implementation of new norms of pollution are a few(prenominal) of the key drivers of the growth of the engine oil segment. Growth in hea vy commercial vehicle segment, increasing awareness among the node base, new cooling technologies and OEM tie-ups has led to increase in coolant demand which has occasion the next largest segment in the automotive lubricants market.In brake oil segment, introduction of new brake dodgings, increasing growth in LCVs, consumption of lubes by CPVs and changing client mindset related to particularity lubricants are believed to push demand further. The gear oil market is also growing fast and has high potential owing to increasing number of vehicles on pathway. Vehicles of new gen geological eration with advanced gear system technologies automatic transmission systems need special cause of lubricants conceiving greater demand for API synthetic and multi axel gear oil, API MT-1, API GL-5 ultra-Matic, which reduces the oil changing intervals.In the long run, the overall picture for automotive lubricants sector looks bright due to growth of Indian economy along with increased purch asing power of consumers.BPCLs Lube DivisionBharat Petroleum vortexs a complete range of Gear Oils, Automotive Engine Oils, Specialty Oils, Transmission oils and Greases. The fine quality of the lubricant and its correct habit ensures longer engine life and trouble free operation. Lubricants were all t ancient deregulated during the liberation era of early nineties. Thereafter, a large number of players have forayed into this market. Despite operate in a totally competitive environment, BPCLs Lubricants SBU has been registering a growth in lubricant sales continuously over the past couplet of geezerhood. As compared to 2008-2009, a growth of 13.73% has been achieved and sales volume of 231.12 TMT has been achieved. The channels viz. retail and direct aphorism a growth of 20%.BPCL has a strong RD competency, extensive distribution network own bloodline of sort II+ base oil, highly motivated and dedicated workforce which serves as a fortify mechanism for it but due to increa sed competition and continuous phasing out of 2-stroke engines are threat to the association in its growth path.Birth of MAKIn 1998, BPCL re-launched lubricants in new attractive occupys. It was mainly in automotive category with three major brands- Automol for Petrol Engine oils, MAK for Diesel Engine oils and Glide for 2-3 wheelers. The year 2003, MAK was named as an umbrella brand and subsequently all industrial grades too were branded with it.MAK Lubricants sales and its market shareThe Lubricants business of BPCL delivered a sales volume of 231.12 TMT in 2009-10 as compared to 203.22 TMT in 2008-09, a growth of 13.73%. The volume of finished lubricants grew by 23% during the last year. Both the reseller channel and direct channel grew by over 20%. MAK Lubricants are now available at more than 23,000 retail counters crosswise the field obscure from the small automobile mechanic shops and authorized service stations.Products bid MAK Chakda and MAK Boat XP were launched duri ng the year. There has been an expansion in customer base across the segments with prime focus on the key growth sectors. The wide range of products ply to normal applications similar Engine oils to Hydraulic, Marine, Cutting and very vary products for Defense applications and Railways. Products catering to specific applications like MAK Amocam Plus, MAK Steel for steel plant applications and superior Industrial Gear Oils were launched.In the retail channel, focus was on generating secondary sales at the retail outlet. Initiatives like One Day Wonder and MAK QUIK improved profile of the brand and also offered a value proposition to the customers. Segment specific oils like MAK Auto XL and MAK D-Gen were introduced to cater to niche markets. The network of MAK distributors was further expanded with the objective of achieving leadership position in the high value grades. On the exports front, BPCL entered Sharjah and consolidated its presence in Nepal, Sri Lanka and Bangladesh.Poi nt of PurchaseLubes ShopThey are pocket lubricants reselling points to facilitate the customers for their Lubricants sine qua non and confirming with the Quality and other models of BPCL. The deregulation in the industry along with initiation of multinationals has led to a shift of trade to the bazaar. Owing to huge potential with competitors providing huge discounts, BPCL too has forayed in this direction and has started giving discounts to the end customer instead of the channel. These branded lubes shops are available all across the country in all major cities.TheseCUsersRomioDesktopLubeshoppe.gifMAK GarageBPCL started a campaign by enrolling the mechanic segment under the umbrella network of MAK Garage. It was launched in 2006 to promote the MAK lubricants and currently close 800 MAK garages across the country exclusively uses MAK LubricantsCUsersRomioDesktopmak_garage.gifHero Honda Service StationsJV between Hero Honda and Bharat Petroleum. The initiative is to utilise th e vast BPCL network across the country to provide value added services to the customers through the City scat network at our ROs. Currently, there are around 170 Hero Honda City Works operating across the countryCUsersRomioDesktopcitywrk.pngTASSTATA Authorized Service Station is yet another initiative for modify our relationship with TATA, Indian Auto Major. There is a joint coaction for marketing co-branded greases, lubricants and specialty products MAK TATA products. TASS provides TATA vehicle service network throughout Dealer network across the country. This network of service is of two types SUVIDHA for TATA lead vehicles and TASS for heavy vehiclesCUsersRomioDesktoptass.jpgVCCBPCL launched a new initiative VEHICLE CARE CENTRE at the retail outlets. This ought to provide esteemed customers state of the art facility at affordable rates. The network is in growth phase and is gaining huge popularity across the country.CUsersRomioDesktopvcare.pngMAK Quik Lube Oil ChangeTo valu e the time proposition of the esteemed customers, new initiative MAK Quik Lube oil Change has been started at various outlets. It mainly caters to the bicycle and Car/SUV customers for changing the Engine oil in the vehicles within a short span of time. The major advantages to the customer out of this initiative is Quick Oil change in front of eyes mechanise system of changing Oil which helps in removing the layer of old oil completely.Genuine MAK product No Servicing cost- only the cost of product needs to be paid by the customers. Fast about-face time for the customers. Exceptional offers to the customersCUsersRomioDesktopservice_makquik.jpgOEM standsDue to the ever growing competition, the tie-ups with OEMs have become important as they help in reinforcing the value proposition of a brand. BPCL is continuously working with OEMs to help them in providing the shell value for money to the customers by developing and upgrading genuine oils for the vehicles and equipments by addres sing the requirements of the changing technology.The marketing and RD teams have been providing the solutions for specialized lubricant applications in cement, power, steel, road construction, engineering and other leading industries in India. The RD team has unquestionable about 300 different formulations in last 10 years out of which last 3 years saw about 50.BPCL has started its own LOBS plant in Mumbai by using the latest All Hydro impact Technology a Chevron Lummus Global patent. This has enabled them to manufacture finer quality MAK Base oils beyond the requirement of API Group II which is rated as Group II plus.OEMs acknowledge BPCLs identity in producing quality base oil, best of RD capabilities and deep marketing acumen.OEM PartnershipsBPCL has agreements with top notch automotive manufacturers which have both National and world(prenominal) presence. This is in addition to presence across the country with plethora of options available for all the sections of the industry . With superior technology, strong brands and vast distribution, MAK Lubricants is a perfect partner for OEMs looking for offering their consumers the best of products and services.Hero Honda Motor modifiedIt has an association with BPCL since the year 2004. MAK Lubricants has become the biggest supplier of engine oils in a span of first fiver years for initial fill and to Hero Honda Motor Limited dealers, Authorized service stations au naturel(p) part stockists. BPCL has been developing speciality products like Engine oils Shock Absorber with joint working with HHML that can acquire the stringent HONDA, Japan specifications. Also, BPCL has started Hero Honda City Works exclusive service outlets for HHML customersat BPCL ROs.http//www.maklubes.com/Images/HHSuperPremium4TPlus.jpghttp//www.maklubes.com/Images/Hero_Honda.jpgThis is the largest manufacturer of commercial vehicles in India. There exists a strategic alliance with Authorized Service Network, Tata Motors dealerships and Tata Motor Spare part dealerships for supply of Engine oils and Co-branded engine oils speciality products to. MAK Lubricants jointly works with Tata Motors in areas including joint product development, customer service promotion. MAK TATA MOTORS CH4 15W40, specially developed for Tata Motors, is authorized by Tata Motors to use in all commercial vehicles fitted with Tata Cummins Engine.Tata Motors moneymaking(prenominal) Vehicles Division http//www.maklubes.com/Images/MAK_ATF-A.jpghttp//www.maklubes.com/Images/tata_motors.jpgBPCL and GM have entered a strategic alliance to supply Co-branded engine oils and speciality products to the GM dealerships authorized service networks across the country. BPCLs GM MAK Genuine 15W40 Diesel Petrol Engine Oils are specially developed for GM is endorsed by GM for use in all its passenger cars and Utility vehicles. ordinary Motors India http//www.maklubes.com/Images/MAK_Genuine_Diesel_Engine_O.jpghttp//www.maklubes.com/Images/general_ motors.jpgThe 3rd largest 2-wheeler manufacturer in India and among top ten in the world, TVS had an annual turnover of more than $1 billion in 2008-2009. BPCL and TVS Motor telephoner have an exclusive tie-up to supply engine-oils for initial service fill TVSM dealers, spare part stockists Authorized service stations. TVS TRU 4the 1st JASO MA2 specification oil of its type has been manufactured by BPCL for TVSM two- wheelers. It is available at all TVS Motor authorized dealerships workshops and BPCLs extensive reseller network.TVS Motor Company Limitedhttp//www.maklubes.com/Images/Mak_TVS_tru4.jpghttp//www.maklubes.com/Images/tvs_motors.jpgLT KOMATSUA market leader in excavator segment, it commands greater than 50% of the market share. Tie-up for past 5 years for supplying oils LT Komatsu dealerships and users. BPCL also develop, manufacture supply specially formulated speciality products and hydraulic transmission oils for use in to LT Komatsu excavatorshttp//www.maklubes.com /Images/LT_Komatsu.jpg.Competitors of Bharat Petroleum Corporation Limited (BPCL) LubricantsHPCLIOCLHonda Engine OilYamaha LubesCastrol India LtdSavita GroupTotal Group, IndiaGulf Oil Corporation Ltd (Lubricant Division)Apar Industries LtdThe Andrew Yule GroupGagan Gases LtdBalmer Lawrie Co LtdMajor Competitors Engine Oils use at authorized Service StationsHonda Engine OilHonda 4-stroke engine oil is developed by the RD, Honda Motors Ltd., Japan. It conforms to International specifications of SAE 20W40 and API SJ. It has been developed keeping difficult driving conditions prevalent in India.Savita Chemicals LimitedIn 1961, it started as a small manufacturing unit in Mumbai started producing white mineral oil. Presently, SCL specializes in manufacturing of flatulencyeum specialty products like petroleum jelly, liquid paraffin, white mineral oil, transformer oil, automotive other industrial lubricants. It is in technical collaboration with largest independent oil company of Japa, I demitsu Kosan, for manufacturing automotive and industrial lubricants. It supplies lubricants to OEMs like Honda Siel, Toyota and HMSI.YamalubeThese are made by corporate trust base oils, additives and solvents chosen and mixed to work perfectly for the vehicle. It was designed to work in harmony with the important mechanical components of vehicle.4-stroke fully synthetic engine-oil for high-performance bikes and competition engines.4-stroke semi-synthetic engine-oil a unique blend for all road bikes in normal conditions.4-stroke mineral engine oil premium quality2-stroke semi-synthetic engine oil for 2-stroke engines for standard or unleaded petrol engines.The Marketing Channels**Pie areas not to the scaleTill date, the Indian consumers tie in filling of lubricants to petrol stations. With the deregulation of market fierce competition, lubricant is being positioned as high matter consumer goods. Hence, there is a resultant drift outside the petrol stations, shift to bazaar trad e. In the developed World, Do-it-Yourself concept has evolved for filling up of engine oil as customers have high detail of awareness sensitivity. This is still the job of mechanism service stations in India. This shift had the following effectsDumping of products in bazaar.Decline in Market Share of oil companies in public sector.Industry got transformed to FMCG owing to crowding of the marketEntry of spurious lubricants.War of trade discounts ending in lesser margins for dealers.Consumer Buying BehaviorTo start the understanding of the behavior, first we need to know who the consumer is or quite a we should define the consumer. A consumer is one who owns a motor vehicle it can be a motor-bike, a car, a truck or an auto. Let us take example of a farmer who owns a tractor, jeep and a truck. He does not buy separate lubricants for his truck or tractor but alternatively he would buy for one in bulk and would use it for other two. This might be due to his belief that diesel oils are better than petrol ones. Also, in many parts of country, the farmers use left-over/old oils in their tractors/trucks into the agricultural pump sets.MotivatorsThe main motivators or influencers in the buying decision of customers are retailers/mechanics/dealers. As quite obvious, the owner of the vehicle or the driver has a very little break of knowing about the intricacies or the composition of the lubricant oils in the market. Initial corrupt of lubricant for hi is influenced by the brand recommended by the dealer or the mechanic. Subsequent purchases may be influenced by the petrol pump attendants or dealers. He would go for the brand which provides him value for money and would not consider the costliest one.pet brandsAs seen during the study, the consumers are bargain seeker and can shift their loyalty for a matter of few bucks. This can be attributed to the fact that the purchase of lubricants is a low involvement purchase for the majority of people. For a person having multiple motor vehicles can purchase the engine oil and subsequently use them in some other means as for example in pumps as discussed earlier. But one who is having a sole motor vehicle say a truck would rather prefer to buy diesel than lubricants as this would directly have an effect on his livelihood.His choice of lubricants would be influenced by-PromotionsNow-a-days, by adopting a customer-oriented approach, companies focus on creating brand awareness via print and visual media. E.g., promotional campaigns and trade shows offer gifts to their customers these are ways of driving sales of the automotive lubricantsMAK MALAMAAL DAILY JEET KI KHUSHISCRATCH WIN This promotional offer provides a chance to win up to Rs. 30 on MAK 4T plus 900 ml 1 ltr pack and a chance to win up to Rs.100 on selected MAK Petrol Diesel Engine oil packs from 3-5 ltrs.http//www.maklubes.com/MAKADMIN/Promotiondata/8_Image_JEET_%20KI_KHUSHI.jpgThis promises the customers a Promise Tooth Paste and Bina ca Toothbrush free with every(prenominal) pack of MAK GE 20W-50 1 ltr pack MAK centre 3.5 ltr pack.GADI MEIN DHAMAK HASI MEIN DHAMAKhttp//www.maklubes.com/MAKADMIN/Promotiondata/10_Image_HASI_MEINDHAMAK.jpgMAK MALAMAAL DAILY KISMAT KI BALTI KHOLOThis provides a chance to win up to Rs. 500 on purchase of MAK Lubricants Engine/gear oils packs from 7.5 -20 ltr packs.Double offer An unbreakable LED torch light free with every pack of 15 20 ltrhttp//www.maklubes.com/MAKADMIN/Promotiondata/2_Image_Kismat_ki_balti.jpgAwareness/Sales Booster MechanismDiversificationGoing on the lines of innovation, BPCL MAK have embarked upon thinking beyond Lubricants. As a part of this inventiveness, MAK lubricants have through dynamic RD have offered new products catering to specific requirements and the problems faced by the customers.MAK All-Season HMO Apple sprayer Tea Spray OilsThis Horticultural Mineral oil is manufactured out of Group II plus MAK Base oils which are environment friendly, therefore, they not only protect the tender plants and fruits but also their users. It is superior to both pass and Dormant Oils and has no side effects.All season protectionReduces number of spraysBroad spectrum protection against expletives and diseasesAvoids usage of synthetic pesticidesExcellent crop returnValuable tool when it comes to integrated pest management programsReduces pest control costsEnvironmental benefitsEco-friendly approachNo residue on evaporationOrganic biodegradableSafe on predatory complexesNo toxic elementsNo interference with plant respiration stylemarkIncreases crop value