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UNIVERSITY OF PETROLEUM AND ENERGY STUDIES 2010 SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS SUMMER INTERNSHIP REPORT BY: VAIBHAV GODSE, MBA OIL AND GAS- 2009-2011 HINDUSTAN PETROLEUM CORPORATION LTD., MUMBAI(INDIA)
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Page 1: Hpcl lube report  by vaibhav

UNIVERSITY OF PETROLEUM AND ENERGY STUDIES

2010

SUCCESS

DETERMINANTS OF

SELECTED LUBRICANT

BRANDS

SUMMER INTERNSHIP REPORT

BY: VAIBHAV GODSE, MBA OIL AND GAS- 2009-2011

H I N D U S T A N P E T R O L E U M C O R P O R A T I O N L T D . , M U M B A I ( I N D I A )

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

EXECUTIVE SUMMARY

Title of the Project: Success determinants of selected lubricant brands.

Objective of the Project: Determining and analyzing the factors responsible for the

of brands in diesel engine oil (DEO), passenger car motor oil (PCMO) and four stroke oil (4T)

segment based on suggestions obtained from bazaar shops and retail outlets through

questionnaire. Further giving possible suggestions to HPCL to gain a competitive edge in its

bazaar shops and retail outlets.

This project is an initiative to determine the exact reason for the success of lubricant brands in the Indian

market. The segment taken for the study was Diesel engine oil, Passenger car motor oil and Four stroke

oil. The objective of the project was:

� To portray the lubricant market in India, it’s historical background, liberalization and

current state of competitiveness.

� To identify the successful lubricant brands launched by Hindustan Petroleum Corporation

Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation

Limited and Castrol India Limited (CIL).

� To identify the brand success factors of selected lubricant brands launched by HPCL,

BPCL, IOCL and Castrol.

Methodology: Literature review through secondary data, then expert opinion by interviewing the

brand managers within the industry and interviewing the bazaar shop and retail outlet owners.

Findings and Conclusions: Thus the basic reasons for the success of any lubricant brand

depends on the seven factors, these are:

� Brand Name

� Brand Image

� Positioning in the mind of consumer

� Quality of parent brand

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

� Proper and longer support

� Above the Line - Promotion

� Below the line – Promotion

These factors are one or the other way of communicating the product to the customers

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

ACKNOWLEDGEMENT

I, Vaibhav Godse, sincerely acknowledge the support and guidance given by my mentors,

without whom, the project would not have taken shape in the desired direction. Every single bit

put in by my mentors is precious in its own way.

I wish to thank and acknowledge Shri. R. Sudhakar Rao, Executive Director, Direct Sales

SBU, for his constant support and being the mastermind of this project. I owe him priceless

gratitude for making me privilege to work with his talented team in his highly esteemed SBU.

I also wish to acknowledge the valuable contributions of Shri. L.N.Maheswari, Dy.General

Manager, Consumer Lubes and Shri. A.K Bhan, General Manager, South Zone.

I thank Shri. V.Raghunathan, Chief Manager, Retail Lubes and Shri T. Jaya Surya, ESO-

Lubes, Direct Sales SBU.

I also acknowledge the efforts put in by Shri Harpreet Ghosal, LSO, Delhi Office for being “on

filed” mentor.

The architect of the project and the guide in the true sense of the term, Shri Amit Tandon,

Manager, Lubes- Branding, without his guidance this project would never have taken any shape.

I wish to sincerely acknowledge to contribution, guidance and support he lent me throughout the

course of the project and thank him from the bottom of my heart for the same.

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

ABSTRACT

The project is based on success determinant of lubricant brands in diesel engine oil, passenger

car motor oil and four stroke oil segments. The companies taken for the study are Hindustan

Petroleum Corporation Limited (HPCL), Indian Oil Corporation Limited (IOCL), Bharat

Petroleum Corporation Limited (BPCL), and Castrol India Limited (CIL).The brands selected for

the study are taken, based on highest sale for the past three years. There were four team members

and each one had to study one company. I did the study on success determinants of HPCL

automotive lubricant brands. The brands selected for the study are Laal Ghoda and Milcy Turbo

in DEO, Cruise and Cruise Classic in PCMO, and Racer 4 in 4T segment. There are about 30

small and big sized players in the market, who produce and market automotive lubes.

Bazaar shops and retail outlets are the only market where the lubricant is sold to the consumers.

For the survey, four cities were shortlisted Delhi, Mumbai, Pune and Jaipur. For data collection

more emphasis was given for DEO in Delhi and Jaipur bazaars, and more emphasis for PCMO

and 4T in Pune and Mumbai bazaars.

To start with, I got myself acquainted with the lubricant market and the various terminologies

used, the specifications required, the standards to be followed, reviewing some articles on

lubricant market in India as a part of my ground work by reviewing some literature, and

gathering information at HPCL’s Marketing Headquarters- Hindustan Bhawan. I reported at

office on June 1, 2010 for the first time, and from there on, eventually, collected the necessary

data regarding the sales, pricing and packaging. Within company the information gathered

formed the platform for my project.

Before exploring the market, one must have a clear awareness about the product of research and

survey, its specifications, its process and other marketing related issues involved.

This was followed by my visit to Delhi Regional office and the Delhi bazaar shops and retail

outlet survey was conducted from June 26 to July 10, 2010. Whereas the data from other cities

were collected by rest of the project members.

After collecting the data from various cities, it was merged and segregated according to the

companies under study. Then this was followed by data analysis and interpretation part.

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6

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

At the end a presentation was given in front of Mr Arunbalakrishnan (C.M&D), Mr. Sudhakar

Rao (E.D) and Mr. Amit Tandon (Manager). Necessary changes were made as guided by

respected Sir and a report was submitted thereafter.

Vaibhav Godse

UPES Dehradun.

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

DECLARATION

Vaibhav Godse hereby declares that the project work entitled “Success Determinant of Selected

Lubricant Brand” is a bona fide work done by me under the guidance and supervision of Mr.

Amit Tandoon. The work has not formed part of any earlier studies for the award of degree/

diploma/ fellowship.

Place: Mumbai, (Maharashtra)

Date: 31 July 2010 Signature of the Student.

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

CONTENT

SI.NO. TOPIC PAGE NO.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

ABOUT HPCL

RESEARCH METHODOLOGY

LITERATURE REVIEW

INDIAN LUBE MARKET

SUCCESS DETERMINANTS

STRATEGIES IN LUBRICANT BUSINESS

PRODUCT PORTFOLIO AND SPECIFICATION

MARKETING CONCEPTS

SAMPLE MARKET ANALYSIS

CONCLUSION AND RECOMMENDATION

ANNEXURE-

� GRAPHS � QUESTIONNAIRE

LIST OF RETAIL OUTLETS AND BAZAAR SHOPS

SURVEYED

ABBREVATIONS

REFERENCE

8-15

16-19

20-30

31-37

38-41

42-44

45-49

50-55

56-67

68-71

72-83

73-83

83 (1-15)

84-85

86-87

88

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

ABOUT HPCL

HPCL is a Fortune 500 company, with an annual turnover of Rs. 1,08,599 Crores and

sales/income from operations of Rs 1,14,889 Crores (US$ 25,306 Millions) during FY 2009-10,

having about 20% Marketing share in India and a strong market infrastructure.

HPCL operates two major refineries producing a wide variety of petroleum fuels & specialties,

one in Mumbai (West Coast) of 6.5 Million Metric Tonnes Per Annum(MMTPA) capacity and

the other in Vishakapatnam, (East Coast) with a capacity of 8.3 MMTPA. HPCL holds an equity

stake of 16.95% in Mangalore Refinery & Petrochemicals Limited, a state-of-the-art refinery at

Mangalore with a capacity of 9 MMTPA. In addition, HPCL is constructing a refinery at

Bhatinda, in the state of Punjab, as a Joint venture with Mittal Energy Investments Pte. Ltd.

HPCL also owns and operates the largest Lube Refinery in the country producing Lube Base

Oils of international standards, with a capacity of 335 TMT. This Lube Refinery accounts for

over 40% of the India's total Lube Base Oil production.

HPCL's vast marketing network consists of 13 Zonal offices in major cities and 101 Regional

Offices facilitated by a Supply & Distribution infrastructure comprising Terminals, Aviation

Service Stations, LPG Bottling Plants, and Inland Relay Depots & Retail Outlets, Lube and LPG

Distributorships. HPCL, over the years, has moved from strength to strength on all fronts. The

refining capacity steadily increased from 5.5 MMTPA in 1984/85 to 14.8 MMTPA presently. On

the financial front, the turnover grew from Rs. 2687 Crores in 1984-85 to an impressive Rs

1,16,428 Crores in FY 2008-09.

VISION

• Market leader in growth and profitability.

• Most preferred supplier of quality products at right price and time.

• Delighting the customers by value added services.

• Professional and empowered team for quick response to customers.

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10

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

QUALITY POLICY

• Total customer satisfaction through quality products by doing it right the first time, every

time.

• Ensure consistency of quality, and adherence to time deadlines.

• Strive to achieve excellence in quality through training, motivation, team work and

continuous up gradation of technology.

• To take appropriate steps to minimize wastage, increase productivity and optimize the

quality of products and services in a cost effective manner

PRODUCT COMMITMENT

• To provide quality products and services which shall reflect in a growing list of satisfied

customers.

• To consciously build a quality culture, through employee participation, motivation and

training.

• To strive for an eco - friendly environment.

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SUCCESS DETERMINANTS OF SELECTED

HPCL LUBRICANTS

� HP Lubes is an integral part of Hindustan Petroleum Corporation Limited, one of India's

frontline oil majors, committed to providing energy and fueling g

significant area of development. In pursuit of this vision, there is a sustained emphasis on

environment protection and preserving the cultural heritage of India.

� HPCL Lube market share is

� The HP Engine Oils product range covers over 300 brands of lubricants, gr

specialties catering to the automotive as well as the industrial sector.

� HPCL has six lube blending plants at Mumbai, Kolkata, Chennai and Silvassa.

HP Lubricants are borne out of an intense and unrelenting R & D effort, which aims at producing

quality products that enhance automotive performance standards. The range of HP Lubes is

comprehensive and catering to the minutest needs; from new generation cars to ploughing

tractors and industrial machinery. The range conforms strictly to OEM specifica

taking the initiative in customization of products.

The various lubricant segments of HPCL are

AUTOMOTIVE

GRADES

INDUSTRIAL

GRADES

SELECTED LUBRICANT BRANDS

HP Lubes is an integral part of Hindustan Petroleum Corporation Limited, one of India's

frontline oil majors, committed to providing energy and fueling g

development. In pursuit of this vision, there is a sustained emphasis on

environment protection and preserving the cultural heritage of India.

HPCL Lube market share is around 11%.

The HP Engine Oils product range covers over 300 brands of lubricants, gr

specialties catering to the automotive as well as the industrial sector.

HPCL has six lube blending plants at Mumbai, Kolkata, Chennai and Silvassa.

HP Lubricants are borne out of an intense and unrelenting R & D effort, which aims at producing

quality products that enhance automotive performance standards. The range of HP Lubes is

comprehensive and catering to the minutest needs; from new generation cars to ploughing

tractors and industrial machinery. The range conforms strictly to OEM specifica

taking the initiative in customization of products.

lubricant segments of HPCL are:

HP

LUBRICANTS

INDUSTRIAL

GRADES

INDUSTRIAL

SPECIALITIESGREASES

11

HP Lubes is an integral part of Hindustan Petroleum Corporation Limited, one of India's

frontline oil majors, committed to providing energy and fueling growth in every

development. In pursuit of this vision, there is a sustained emphasis on

The HP Engine Oils product range covers over 300 brands of lubricants, greases and

HPCL has six lube blending plants at Mumbai, Kolkata, Chennai and Silvassa.

HP Lubricants are borne out of an intense and unrelenting R & D effort, which aims at producing

quality products that enhance automotive performance standards. The range of HP Lubes is

comprehensive and catering to the minutest needs; from new generation cars to ploughing

tractors and industrial machinery. The range conforms strictly to OEM specifications, often

GREASES

Page 12: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

Since the study is focused on au

are taken under study within which Diesel engine oil, passenger car motor oil and four stoke oils

are taken. The various brands of HPCL in automotive segment are:

ENGINE OILS

DIESEL ENGINE OILS

PETROL ENGINE

OILS

NATURAL GAS

ENGINE OILS

FIRST FILL ENGINE

OILS

GEAR OILS

SELECTED LUBRICANT BRANDS

Since the study is focused on automotive lubricants and within automotive lubricant

within which Diesel engine oil, passenger car motor oil and four stoke oils

various brands of HPCL in automotive segment are:

HPCL AUTOMOTIVE

LUBRICANT

GEAR OILSTRANSMISSION

OILSAUTOSPECIALITIES DEFENSE GRADES

12

within automotive lubricant, engine oils

within which Diesel engine oil, passenger car motor oil and four stoke oils

DEFENSE GRADES

Page 13: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

LUBRICANT PRODUCT LINE IN ENGINE OIL SEGMENT

DIESEL ENGINE OIL SEGMENT

� MILCY 40 – SAE 40 API CD

� LAL GHODA – SAE 20W 40 API CF

� CHAMPION – SAE 20W0 40 API CF/SF

� MILCY TURBO –

� HP NO1 – SAE 15W 40 API CI4

DIESEL ENGINE

OIL

LAAL GHODA

MILCY

MILCY TURBO

CHAMPION

HP NO.1

SELECTED LUBRICANT BRANDS

LUBRICANT PRODUCT LINE IN ENGINE OIL SEGMENT

DIESEL ENGINE OIL SEGMENT

SAE 40 API CD

SAE 20W 40 API CF

SAE 20W0 40 API CF/SF

SAE 15W 40 API CF4

SAE 15W 40 API CI4

ENGINE OIL

DIESEL ENGINE

LAAL GHODA

MILCY

MILCY TURBO

CHAMPION

HP NO.1

PASSENGER CAR

MOTOR OIL

CRUISE

CRUISE CLASSIC

HP ACE

FOUR STROKE

RACER 4

RACER 4 EXCEL

13

Page 14: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

PASSENGER CAR MOTOR OIL

� HP CRUISE - API SG 15W 40

� HP ACE - API SL , 15W 40

FOUR STROKE OIL

� RACER 4 - API SG

� RACER 4- EXCEL (API SL

GRAPH SHOWING THE HPCL SALES/INCOME FROM OPERATIONS

0

20000

40000

60000

80000

100000

120000

140000

2004-05 2005

SA

LES

/IN

CO

ME

FR

OM

OP

ER

AT

ION

S,

RS

/cro

res.

SELECTED LUBRICANT BRANDS

PASSENGER CAR MOTOR OIL

API SG 15W 40

API SL , 15W 40

EXCEL (API SL)

GRAPH SHOWING THE HPCL SALES/INCOME FROM OPERATIONS

2005-06 2006-07 2007-08 2008-09

YEAR

SALES Rs/Crores

SALES Rs/Crores

14

GRAPH SHOWING THE HPCL SALES/INCOME FROM OPERATIONS

SALES Rs/Crores

Page 15: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

GRAPH SHOWING HPCL SALES VOLUME OF LUBES AND GREASES

GRAPH SHOWING THE NUMBER OF RETAIL OUTLETS

0

100

200

300

400

500

600

2004-05 2005-06

SA

LES

VO

LUM

E,

00

0T

ON

NE

S

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2004-05 2005-06

NU

MB

ER

OF

RE

TA

IL O

UT

LET

S

NUMBER OF RETAIL OUTLETS OF HPCL

SELECTED LUBRICANT BRANDS

GRAPH SHOWING HPCL SALES VOLUME OF LUBES AND GREASES

GRAPH SHOWING THE NUMBER OF RETAIL OUTLETS

06 2006-07 2007-08 2008-09

YEAR

SALES VOLUME

SALES VOLUME

2006-07 2007-08 2008-09

YEAR

NUMBER OF RETAIL OUTLETS OF HPCL

NUMBER OF RETAIL

OUTLETS

15

GRAPH SHOWING HPCL SALES VOLUME OF LUBES AND GREASES

SALES VOLUME

NUMBER OF RETAIL

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16

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

RESEARCH METHODOLOGY

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17

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

RESEARCH METHODOLOGY

DEVELOPMENT OF APPROACH TO THE

PROBLEM

FIELD OR DATA COLLECTION

RESEARCH DESIGN FORMULATION

DATA PREPARATION AND ANALYSIS

REPORT PREPARATION AND

PRESENTATION

PROBLEM DEFINITION

BAZAAR

SHOPS

RETAIL

OUTLETS

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

PROBLEM DEFINATION AND APPROACH TO THE PROBLEM

Project is about “Success determinants of lubricant brands”. To identify the determinants for the

success of lubricant brands of HPCL in the diesel engine oil segment, passenger car motor oil

segment and four stroke segment.

How the market dynamics work for the lubricant brands, which factor influences the most for the

sale of any particular brand whether brand name, image, promotion etc.

RESEARCH OBJECTIVE

� To portray the lubricant market in India, it’s historical background, liberalization and

current state of competitiveness.

� To identify the successful lubricant brands launched by Hindustan Petroleum Corporation

Limited (HPCL).

� To identify the brand success factors of selected lubricant brands launched by HPCL.

� Applying various marketing models on HPCL lubricant brands- Poter’s Five Forces,

SWOT Analysis etc.

Before starting the research work some of reasons for the success of any lubricant brands were

shortlisted through literature review.

The basic objective is success determinants of four lubricant brands of HPCL in the three

segment- Diesel Engine Oil, Passenger Car Motor Oil and Four Stroke oil. The selections of

brands made for the study was based on sale of each brand in the Indian market i.e., highest

selling brands for the past three were shortlisted for the study. Two largest selling brands each

of diesel engine oil and passenger car motor oil and one for four stroke oil were taken. The

brands included were:

� Diesel Engine Oil- Laal Ghoda and Milcy Turbo

� Passenger Car Motor Oil- Cruise and Cruise Classic

� Four Stroke- Racer 4

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

RESEARCH DESIGN

At first expert opinion is taken to get the insight of the problem. For the same brand managers

were interviewed using a questionnaire based on the determinants shortlisted from literature

review.

The feedback obtained from experts helped in preparing the questionnaire for bazaar shops and

retail outlets. After having the expert opinion and formulating the questionnaire according to the

feedback, field work was carried out. Field work included interviewing the bazaar shop and retail

outlet owners.

FIELD OR DATA COLLECTION

Field work was based on collecting the data from bazaar shop and retail outlet. The survey was

conducted in four cities- Delhi, Mumbai, Jaipur and Pune.

Sampling plan:

CITY DEO (laal ghoda and

milcy turbo)

PCMO (cruise and

cruise classic)

4T (racer 4)

Bazaar

shop

Retail

outlet

Bazaar

shop

Retail

outlet

Bazaar

shop

Retail

outlet

Delhi 12 3 9 2 3 1

Mumbai 12 3 9 2 3 1

Jaipur 12 3 3 1 9 2

Pune 12 3 3 1 9 2

DATA PREPARATION AND ANALYSIS

Data obtained from the field was analyzed. Only those factors were taken which were given

highest weight age or which the retailer and bazaar shops has agreed upon.

Based on the field data various graphs are plotted. The graphs are plotted between “reasons for

success” versus “percentage of people saying yes” for the determinant of that particular brand.

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

LITERATURE REVIEW

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

LITERATURE REVIEW

LUBRICANT

A lubricant (sometimes referred to as "lube") is a substance (often a liquid) introduced between

two moving surfaces to reduce the friction between them, improving efficiency and

reducing wear. It may also have the function of dissolving or transporting foreign particles and of

distributing heat.

One of the single largest applications for lubricants, in the form of motor oil, is protecting

the internal combustion engines in motor vehicles and powered equipment.

A lubricant is a blend of base oils and performance enhancing additives as required by

engine, gear box and other application areas. At the refinery, the crude oil is refined into

gasoline, diesel, kerosene, LPG, naphtha and base stocks (Lube). This base stock is further

processed, blended and strengthened with required properties to make different kind of

lubricants.

Typically lubricants contain 90% base oil (most often petroleum fractions, called mineral oils)

and less than 10% additives. Vegetable oils or synthetic liquids such as

hydrogenatedpolyolefins, esters, silicones, fluorocarbons and many others are sometimes used as

base oils. Additives deliver reduced friction and wear, increased viscosity, improved viscosity

index, resistance to corrosion and oxidation, aging or contamination, etc.

Lubricants such as 2-cycle oil are also added to some fuels. Sulfur impurities in fuels also

provide some lubrication properties, which has to be taken in account when switching to a low-

sulfur diesel; biodiesel is a popular diesel fuel additive providing additional lubricity.

Non-liquid lubricants include grease, powders (dry graphite, PTFE, Molybdenum

disulfide, tungsten disulfide, etc.), teflon tape used in plumbing, air cushion and others. Dry

lubricants such as graphite, molybdenum disulfide and tungsten disulfide also offer lubrication at

temperatures (up to 350 °C) higher than liquid and oil-based lubricants are able to operate.

Limited interest has been shown in low friction properties of compacted oxide glaze

layers formed at several hundred degrees Celsius in metallic sliding systems, however, practical

use is still many years away due to their physically unstable nature.

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SUCCESS DETERMINANTS OF SELECTED

LUBE OIL BASE STOCK MANUFACTURING

Lubricating oils need to be viscous, have stability during the heat generated by frication of the

machine, and the viscosity should not fall sharply with the rise in temperature due to friction.

These qualities are met by vacuum gas oils i.e. high boiling cuts distilled by vacuum distillation

of crude oil. These gas oil cuts are cal

give good lube base stock. For example waxy

Asian crudes oils are not good for lube oil manufacture. Yield of suitable lube base stocks are

lower in these cases (as the oil is light) an

extraction process. Some of the medium heavy Middle East Crude oils give good quality lube

base stocks.

SELECTED LUBRICANT BRANDS

LUBE OIL BASE STOCK MANUFACTURING

Lubricating oils need to be viscous, have stability during the heat generated by frication of the

viscosity should not fall sharply with the rise in temperature due to friction.

These qualities are met by vacuum gas oils i.e. high boiling cuts distilled by vacuum distillation

of crude oil. These gas oil cuts are called lubricating oil base stocks (LOBS). All crude oil do not

give good lube base stock. For example waxy crude oils like Mumbai High or some South East

Asian crudes oils are not good for lube oil manufacture. Yield of suitable lube base stocks are

lower in these cases (as the oil is light) and wax creates a lot of operational problems during lube

extraction process. Some of the medium heavy Middle East Crude oils give good quality lube

22

Lubricating oils need to be viscous, have stability during the heat generated by frication of the

viscosity should not fall sharply with the rise in temperature due to friction.

These qualities are met by vacuum gas oils i.e. high boiling cuts distilled by vacuum distillation

All crude oil do not

oils like Mumbai High or some South East

Asian crudes oils are not good for lube oil manufacture. Yield of suitable lube base stocks are

d wax creates a lot of operational problems during lube

extraction process. Some of the medium heavy Middle East Crude oils give good quality lube

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

LUBE OIL MANUFACTURING PROCESS

The various processing steps are:

� De-asphalting Unit: Asphalt from the lube base stocks is removed by solvent extraction

process.

� Aromatics Extraction: Aromatic hydrocarbons are removed by solvent extraction

process to improve viscosity.

� De-waxing: This is another solvent extraction process which removes wax from the lube

base stock.

� Hydro-finishing: After the series of extraction processes, the lube base stock is treated

with hydrogen (hydro-finishing process) to improve color and give stability.

� Finally additive chemicals in small dozes are added to boost certain properties.

ADDITIVES

Plain mineral oils cannot provide all the necessary functional properties that an engine requires.

These plain mineral oils need fortification with chemicals/additives which when used in small

quantities, import or enhance the desirable functional properties. Some of the types and reasons

for their use are as follows:

Dispersants: Keeps sludge, carbon and other deposit- precursors suspended in oil.

Detergents: Keeps the engine parts clean from deposits.

Rust/Corrosion Inhibitors: Prevents or controls oxidation of oil, formation of varnish, sludge and

corrosive compounds, limit viscosity increase.

Extreme Pressure (EP), Anti wear and friction modifiers: These form protective film on the

engine parts and reduce wear and tear.

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

Metal deactivators: Forms surface films so that metal surface does not catalyze oil oxidation.

Pour Point Depressant: Lowers freezing point of oils assuring free flow at lower temperatures.

Anti-foamants: Reduces foam in crankcase and blending.

GRADES

The Society of Automotive Engineers (SAE) has established a numerical code system for

grading lubricants (motor oils) according to their viscosity characteristics. SAE viscosity grading

include, from low to high viscosity: 0, 5, 10, 15, 20, 25, 30, 40, 50 or 60. The numbers 0, 5, 10,

15 and 25 are suffixed with the letter W, designating their "winter" (not "weight") or cold-start

viscosity, at lower temperature. The number 20 comes with or without a W, depending on

whether it is being used to denote a cold or hot viscosity grade. The document SAE J300 defines

the viscometrics related to these grades.

Kinematic viscosity is graded by measuring the time it takes for a standard amount of oil to flow

through a standard orifice, at standard temperatures. The longer it takes, the higher the viscosity

and thus higher SAE code.

Note that the SAE has a separate viscosity rating system for gear, axle, and manual transmission

oils, SAE J306, which should not be confused with engine oil viscosity. The higher numbers of a

gear oil (eg 75W-140) do not mean that it has higher viscosity than an engine oil.

Single/ Mono-grade

A single-grade engine oil, as defined by SAE J300, cannot use a polymeric Viscosity Index

Improver (also referred to as Vicosity Modifier) additive. SAE J300 has established eleven

viscosity grades, of which six are considered Winter-grades and given a W designation. The 11

viscosity grades are 0W, 5W, 10W, 15W, 20W, 25W, 20, 30, 40, 50, and 60. These numbers are

often referred to as the 'weight' of a motor oil.

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For single winter grade oils, the dynamic viscosity is measured at different cold temperatures,

specified in J300 depending on the viscosity grade, in units of mPa·s or the equivalent older non-

SI units, centipoises (abbreviated cP), using two different test methods. They are the Cold

Cranking Simulator (ASTM D5293) and the Mini-Rotary Viscometer (ASTM D4684). Based on

the coldest temperature the oil passes at, that oil is graded as SAE viscosity grade 0W, 5W, 10W,

15W, 20W, or 25W. The lower the viscosity grade, the lower the temperature the oil can pass.

For example, if an oil passes at the specifications for 10W and 5W, but fails for 0W, then that oil

must be labeled as an SAE 5W. That oil cannot be labeled as either 0W or 10W.

For single non-winter grade oils, the kinematic viscosity is measured at a temperature of 100 °C

(212 °F) in units of mm²/s or the equivalent older non-SI units, centistokes (abbreviated cSt).

Based on the range of viscosity the oil falls in at that temperature, the oil is graded as SAE

viscosity grade 20, 30, 40, 50, or 60. In addition, for SAE grades 20, 30, and 40, a minimum

viscosity measured at 150 °C (302 °F) and at a high-shear rate is also required. The higher the

viscosity, the higher the SAE viscosity grade is.

For some applications, such as when the temperature ranges in use are not very wide, single-

grade motor oil is satisfactory; for example, lawn mower engines, industrial applications, and

vintage or classic cars.

Multi-grade

The temperature range the oil is exposed to in most vehicles can be wide, ranging from cold

temperatures in the winter before the vehicle is started up to hot operating temperatures when the

vehicle is fully warmed up in hot summer weather. A specific oil will have high viscosity when

cold and a lower viscosity at the engine's operating temperature. The difference in viscosities for

most single-grade oil is too large between the extremes of temperature. To bring the difference in

viscosities closer together, special polymer additives called viscosity index improvers, or VIIs

are added to the oil. These additives are used to make the oil a multi-grade motor oil, however it

is possible to have a multi-grade oil without the use of VIIs. The idea is to cause the multi-grade

oil to have the viscosity of the base grade when cold and the viscosity of the second grade when

hot. This enables one type of oil to be generally used all year. In fact, when multi-grades were

initially developed, they were frequently described as all-season oil. The viscosity of a multi-

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grade oil still varies logarithmically with temperature, but the slope representing the change is

lessened. This slope representing the change with temperature depends on the nature and amount

of the additives to the base oil.

The SAE designation for multi-grade oils includes two viscosity grades; for example, 10W-

30 designates common multi-grade oil. The two numbers used are individually defined by SAE

J300 for single-grade oils. Therefore, an oil labeled as 10W-30 must pass the SAE J300 viscosity

grade requirement for both 10W and 30, and all limitations placed on the viscosity grades (for

example, a 10W-30 oil must fail the J300 requirements at 5W). Also, if an oil does not contain

any VIIs, and can pass as a multi-grade, that oil can be labeled with either of the two SAE

viscosity grades. For example, very simple multi-grade oil that can be easily made with modern

base oils without any VII is a 20W-20. This oil can be labeled as 20W-20, 20W, or 20. Note, if

any VIIs are used however, then that oil cannot be labeled as a single grade.

The real-world ability of an oil to crank or pump when cold is potentially diminished soon after

it is put into service. The motor oil grade and viscosity to be used in a given vehicle is specified

by the manufacturer of the vehicle (although some modern European cars now have no viscosity

requirement), but can vary from country to country when climatic or fuel efficiency constraints

come into play.

Turbine

Turbine motor oils are designed somewhat differently than reciprocating engine oils traditionally

used in automobiles. Deposit control and corrosion are not significant issues when formulating

turbine oil, and the shear stresses that turbine oils are exposed to are minimal in light of the fact

that turbines are naturally balanced rotating machines unlike reciprocating engines. Turbine oils

tend to have the ISO VG range 32, 46, and 68 (cst at 40 °C/104 °F), and make extensive use of

diester, polyolester, polyalphaolefin and Group II as base stock due to the high temperatures they

must withstand. Some jet turbine oils contain an amount of polyglycols. Varnish is one of the

most problematic contaminants, leading to sticking components, reduced oil flow and increased

wear. Most routine oil analysis tests cannot determine the formation of varnish. The most widely

accepted process for measuring varnish formation is with Membrane Patch Colorimetry testing

although the ultra centrifuge test is also run by a few laboratories.

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In most aviation gas turbine applications, peak lubricant temperatures are not reached during

engine operation, but after shutdown, when heat has been able to migrate from the

combustor cans and the compressors into the regions of the engine with lubricated bearings and

gearboxes. The gas flow associated with running the turbine provides significant

convective cooling that disappears when the engine is shutdown, leaving residual heat that

causes temperatures within the turbine to rise dramatically, an often-misunderstood phenomenon.

SPECIFICATION:

The lubricant is said to meet a certain specification. In the consumer market, this is often

supported by a logo, symbol or words that inform the consumer that the lubricant marketer has

obtained independent verification of conformance to the specification. Examples of these include

the API’s donut logo or the NSF tick mark.

The most widely perceived is SAE viscosity specification, like SAE 10W-40. Lubricity

specifications are institute and manufacturer based. In the U.S. institute:

� API S for petrol engines

� API C for diesel engines.

The current specs are API SM and API CJ. Higher second letter marks better oil properties, like

lower engine wear supported by tests.

In EU the ACEA specifications are used. There are classes A, B, C, E with number following the

letter.

Japan introduced the JASO specification for motorbike engines.

SOCIETIES AND INDUSTRY BODIES FOR STANDARDIZATION OF LUBES:

API

American Petroleum Institute

STLE

Society of Tribologists and Lubrication Engineers

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NLGI

National Lubricating Grease institute

SAE

Society of Automotive Engineers

ILMA

Independent lubricant manufacturer association

ACEA

European Automobile Manufacturers Association

JASO

Japanese Automotive Standards Organization

APPLICATION OF LUBES:

Lubricants are mainly used is three sectors automotive, industrial and aviation. There are

numerous application of lubes in these sectors, some of these applications are listed below:

Automotive

� Engine oils

� Petrol (Gasoline) engine oils

� Diesel engine oils

� Automatic transmission fluid

� Gearbox fluids

� Brake fluids

� Hydraulic fluids

� Tractor (one lubricant for all systems)

� Universal Tractor Transmission Oil – UTTO

� Super Tractor Oil Universal – STOU – includes engine

� Other motors

� 2-stroke engine oils

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

Industrial

� Hydraulic oils

� Air compressor oils

� Gas Compressor oils

� Gear oils

� Bearing and circulating system oils

� Refrigerator compressor oils

� Steam and gas turbine oils

Aviation

� Gas turbine engine oils

� Piston engine oils

� Marine

� Crosshead cylinder oils

� Crosshead Crankcase oils

� Trunk piston engine oils

� Stern tube lubricants

LUBRICANT COMPANIES:

Public Sector Undertakings (PSUs):

� Indian Oil Corporation Limited (IOCL)

� Hindustan Petroleum Corporation Limited (HPCL)

� Bharat Petroleum Corporation Limited (BPCL)

Private Players:

� Reliance Petroleum

� Castrol

� Elf Total-Fina

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

� Gulf

� Shell Oil

� Caltex

� Pennzoil

� Mobil

MARKETING CHANNELS:

The marketing channels for automotive lubricants in India consist of the following,

� Petrol Stations

� Wholesale Distributors

� Lube Oil Shops

� Auto Spare Shops

� Authorized Service Stations

� Garages

� Rural & Agricultural dealers

� Super Markets.

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

INDIAN

LUBE MARKET

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MARKET STRUCTURE

ERA OF LIBERALIZATION

Prior to 1992 the lube industry in India was controlled by the 4 major Public Sector Oil

companies namely Indian Oil, HPC,BPC & IBP and a handful of private companies like Castrol,

Gulf, Tidewater & others. With the distribution & canalization of base oil import being controlled

by the Government of India, the PSU Oil Companies controlled 90% of the market share. The de-

canalization of the lube base oil imports in 1993 by the Govt. of India followed by reduction of

import duty on lube base oils from 85% to 25% and gradual scrapping of administered pricing

observed the announcement of almost a new lube venture every month during 1994. Most of the

new entrants formed associations with Indian companies both in the Private and Public sectors.

INDIAN AUTOMOTIVE LUBRICANT MARKET

Total demand for finished lubricants in India is estimated at over 1,600 kilo tones. The Lube

market consists of two major segments, automotive and industrial.

The Indian automotive lubricants market is largely price sensitive and volume growth is

stagnating due to longer lasting lubricants. The market is fragmented with over 22 big and small

manufacturers and with the spate of mergers and acquisitions (M&A), only a handful of big

companies enjoy a major market share.

Companies are adopting a more customer-oriented approach where they are likely to focus on

creating brand awareness through print and visual media. For example promotional campaigns

and trade shows offering gifts to their customers are methods of driving sales of automotive

lubricants.

The original equipment segment and retail trade are the two major marketing channels in the

Indian automotive lubricants market. Due to the growing competition, tie-ups with original

equipment manufacturers (OEM) are becoming important as they reinforce the value proposition

of a particular brand.

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Petrol pumps form a major distribution channel in retail trade, however sales of lubricants

through retail outlets (also called ‘the bazaar trade’) has transformed the Indian automotive

lubricants market into a fast moving consumer goods (FMCG) sector. The other marketing

channels are authorized service stations, garages, rural and agricultural dealers, super markets,

and wholesale distributors

Public sector unit (PSU) companies, that manufacture their own base oil, follow different

distribution strategies as compared to private participants that solely dependent on imports.

While PSUs sell through their own wide spread network of petrol stations private manufacturers

prefer retail outlets.

Engine oil, which accounted for over 70.0 percent market share in 2004 in the Indian automotive

lubricants market, plays the most crucial role in deciding the market share of manufacturers.

Increase in demand for four stroke motorcycles, tie ups with original equipment manufacturers,

and implementation of new pollution norms are just some of the key drivers of the engine oil

segment.

The brake oil and coolant is the next largest segment in the Indian automotive lubricants market.

Demand for coolants is increasing due to continuous growth in heavy commercial vehicles,

increasing awareness among the customers, new cooling system technologies, and OEM tie-ups.

In brake oil segment, increasing growth in light commercial vehicles, introduction of new brake

systems, and consumption of lubes by commercial passenger vehicles, and changing customer

mindset regarding specialty lubricants are expected to push demand further.

The market for gear oils is also growing rapidly and has a high potential due to the increasing

number of vehicles on the road. New generation vehicles with advanced gear system

technologies and automatic transmission systems require special type of lubricants resulting in

greater demand for multi axel gear oil and API synthetic gear oil, API GL-5, API MT-1, and

ultra-Matic, which reduce the oil changing intervals.

In the long term, the overall outlook for the automotive lubricants market is expected to be

positive due to the growing Indian economy along with the increased purchasing power of

consumers.

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SUCCESS DETERMINANTS OF SELECTED

MARKET SIZE AND GROWTH RATE

Segment wise market share

40%

LUBE MARKET SHARE

AUTOMOTIVE SEGMENT

2- stroke

14%

4- stroke

7%

PCMO

SELECTED LUBRICANT BRANDS

ZE AND GROWTH RATE

60%

LUBE MARKET SHARE

AUTOMOTIVE SEGMENT INDUSTRIAL SEGMENT

Diesel engine oil

71%

PCMO

6%

CNG Oils

2%

MARKET SHARE

34

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

Indian Lubricant market comprises about 0.90 MMTPA of the automotive segment and 0.60

MMTPA of the industrial/direct segment.

The Indian automotive lubricant market is the sixth largest market in the world with revenues of

approximately $1.30 billion. Total production of automotive lubricants in India is approximately

8 to 10 percent of global lube production. Indian lube industry has an annual demand of 1 million

tones. Unlike other countries where lubricant demand has witnessed stagnation, the Indian

market has been growing at approximately 7 percent per annum for the past 2 years. The public

sector contributes to over 60 percent of the revenues for this market. MNC’s have 5 percent

market share and the remaining share is held by the unorganized sector. Automotive lubricants

are further divided into diesel lubes and petrol lubes. Diesel lubes comprise 70 percent of the

market and petrol based lubricants cover the rest. As diesel lubes are used by commercial

vehicles, which have to cover greater distances, their market share is higher. Engine oil

constitutes around 83 percent of total sales volumes. Gear oils, transmission fluids, hydraulic

brake fluids, and engine coolants contribute to the balance.

MARKET TERND

In the recent past, the Indian lubricant market has witnessed a phase of consolidation.

Multinationals with better technology, brand name and finances have the power to launch

themselves on their own in the market. However, with increasing number of competitors it is not

possible for everyone to carve a niche in the market. This sector has witnessed considerable

amount of mergers and acquisitions. British Petroleum’s not so recent acquisition of Castrol is

one example. The Indian lubes market is a combative market place and lubricant companies find

themselves fighting a tough battle for survival. In the OE sector also lubricant manufacturing,

companies are entering into collaborations with vehicle manufactures. Maruti Udyog, Hyundai

Motors, Hindustan Motors, TAFE, Toyota, and Skoda have entered into collaboration with IOC

and Castrol for some of their models

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AUTOMOTIVE INDUSTRY

The growth of lubricant industry is directly linked with the growth of automobile industry.

Therefore to grow in lubricant market one has to keep the growth record of automobile industry.

India is the 4th largest car market in Asia (after Japan, Korea & China). For commercial

vehicles, it holds 5th spot in the world. Whereas, for 2-wheelers, India is the second largest

market, next only to China, with both countries accounting of over 50% of global two wheeler

production and sales. The Tractor segment is also making steady progress in India.

According to McKinsey Report – “Auto Components Industry: Vision 2015,” the Indian Auto

Components Industry is envisaging to grow to US$ 33-40 Billion, by 2015 from around US$ 7

Billion, at present.

LUBRICANT INDUSTRY SEGMENTATION

The lubricant industry can be divided into two major categories i.e., Automotive & Industrial

brand of lubricants. The industrial segment basically comprises of Core Sector industries like

Defense, Railways, State Transport Undertakings, Steel Plants, Coal Mines, Fertilizers, Power

Houses, and Chemicals & Heavy Engineering Industries. In the industrial segment, the PSUs

could successfully maintain their stronghold due to the reasons that the requirement is most end

use specific, customer focused, productivity linked & service oriented. Here, price, quality,

performance track record, R&D infrastructure for technology up gradation and product

development for end use specific application & after sales service play the most significant role

& FMCG techniques of promotion and creating illusions takes a back seat. The automotive

segment which accounts for major share i.e., 67% of the lubricant market became soft target for

new entrants and here private sector players could immediately consolidate their market share by

adopting FMCG techniques. PSU oil companies initially restricted their channel of distribution

through their large infrastructure of marketing network i.e, petrol stations & distributor network.

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The focus happened to be on ensuring quality & customer accountability and restrict

mushrooming of spurious trade in bazaar through the marketing channels where some kind of

control could be exercised by the company. The major thrust put by Industry leader like Indian

Oil at this juncture was to promote brand visibility and creation of brand image through

endorsement, TV advertisements & image building at Retail sites.

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SUCCESS DETERMINANTS

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

KEY SUCCESS FACTORS FOR LUBRICANTS

Brand Name

A word, group of words, letters, or numbers that represent a product or service; also known as a

product brand. Name used to distinguish one product from its competitors. It can apply to a

single product, an entire product line, or even a company.

Brand Image

With lubricants becoming a fast moving consumer good and the brand preference of the

consumers witnessing a change, brand image plays a key role in affecting the consumer’s

decision to buy a lubricant. In a recent study by Frost & Sullivan, it was found that vehicles

owners’ decision to buy a certain lubricant is affected by a garage mechanic, retail storeowner, or

the advertisements. Hence, it becomes important to have a good brand name in the market, which

can affect the customer’s decision to buy a certain brand.

Proper and Longer Support- Distribution Channels

With increasing number of players in the market, it is vital for the companies to reach a wider

segment of customers. The lubricants market in India is very highly fragmented and complex.

Public limited companies selling primarily through petrol pumps manage to achieve a deeper

penetration. Most of the MNC’s have tied up with oil majors to market their brands like Castrol

with Escorts, Tata BP with Telco. This will help the private companies to establish a wider

access, brand awareness, as well as preference.

good or bad quality, high or low price.

Quality of parent brand

Any product in its start has a parent or the initial product and then further modification or up

gradation is seen in the upcoming new product. If the initial product or the parent had good

quality then this would in turn affect the success of the product in the market.

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New Technology

Any up gradation done in the existing product would reflect its success or not. Introducing new

features to the existing lubricant whether in lube itself or packaging would affect its market

share.

Prices and Promotion

The transformation from the administered pricing mechanism to free pricing has increased the

importance of providing cost effective product to the users. Thus product costing and

competitive pricing are key factors affecting the market.

Above the line (ATL)

ATL is a type of advertising through media such as television, cinema, radio, print, web

banners and web search engines to promote brands. This type of communication is conventional

in nature and is considered impersonal to customers. It differs from BTL advertising, which uses

unconventional brand-building strategies, such as direct mail and printed media (and usually

involves no motion graphics). It is much more effective when the target group is very large and

difficult to define.

The term comes from top business managers and involves the way in which Procter & Gamble,

one of the world’s biggest advertising clients, was charged for its media in the 1950s and 1960s.

Advertising agencies made so much commission from booking media for clients that the creative

generation and actual production costs of making TV ads was free – hence above the line.

Everything else they paid for and were therefore below the line.

Below the line promotion (BTL)

BTL sales promotion is an immediate or delayed incentive to purchase, expressed in cash or in

kind, and having short duration. It is efficient and cost-effective for targeting a limited and

specific group. It uses less conventional methods than the usual ATL channels of advertising,

typically focusing on direct means of communication, most commonly direct mail and e-mail,

often using highly targeted lists of names to maximize response rates. BTL services may include

those for which a fee is agreed upon and charged up front.

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BTL is a common technique used for "touch and feel" products (consumer items where the

customer will rely on immediate information rather than previously researched items). BTL

techniques ensure recall of the brand while at the same time highlighting the features of the

product.

Another BTL technique involves sales personnel deployed at retail stores near targeted products.

This technique may be used to generate trials of newly launched products.

Private companies mostly sell their products through stockiest, dealers, distributors, mechanics,

and retail stores. Maximum sales are achieved through mechanics and retail stores. Margins and

discount schemes offered to the storeowners and mechanics prompt them to sell and promote a

particular brand.

Tie Up with OEMs

Among the PSU Oil Companies Indian Oil is one company who has all along given utmost

importance on tie ups with Original Equipment Manufacturers (OEMs) after signing agreements

with major OEMs like Maruti Udyog Ltd, TELCO, Bajaj Auto, Kinetic Engineering, SKODA

etc. Even initial fill & warranty fill agreements were also signed with TELCO & Hindustan

Motors. In fact, the Japanese vehicle manufacturers prefer to tie up with one or two major oil

manufacturers for use of engine oils as `Genuine Spare Part' of the vehicle whereas the American

vehicle manufacturers prefer to follow the American Petroleum Institute who defines the

performance parameters of engine oils. The Indian vehicle manufacturers follow a route which is

combination of both.

These inner strengths of PSUs and the quality policy adopted by them, even attracted major

multinational players like Shell, Mobil, Exxon & Caltex to enter into tie up with one or the other

PSU to have access to their well established marketing network.

Environment Friendly

Now a days environment awareness is increasing a lot, therefore providing the lubes in

environment friendly packaging could be one factor for success. This is basically the factor

which relates to the packaging, whether providing the lubricant in environment friendly

packaging would affect its success or not.

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

STRATEGIES IN LUBRICANT

BUSINESS

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

LUBE BUSINESS STRATEGY

To compete with dominant public sector distribution, concepts like "Bazaars" and "Super

Stores" have also been developed. Castrol developed the concept of "Bazaars." These are outlets

meant only for lubricant sales.

The concept of "User Outlet" is another new concept developed by Castrol. In this, the consumer

selects his own brand of lube after giving his vehicle for service in the same outlet. Convenient

stores and highway stops for vehicles are being built from where the vehicle owners can get their

vehicles repaired and get their supply of lubricants.

In this front Indian Oil after emerging as India's largest commercial organization and being the

only company in the country to feature in the Fortune Global 500 listing has adopted structured

business plan approach to strike a balance between conventional marketing channels (petrol

stations)/distribution network and parallel marketing channels (bazaar trade). The parallel

marketing channels chosen by the Company also adopted the path of brand image, customer

focus & customer accountability.

Mergers and acquisitions is another way of increasing market share for any industry. British

Petroleum’s acquisition of Castrol is one example. The Indian lubes market is a combative

market place and lubricant companies find themselves fighting a tough battle for survival. In the

OE sector also lubricant manufacturing, companies are entering into collaborations with vehicle

manufactures. Maruti Udyog, Hyundai Motors, Hindustan Motors, TAFE, Toyota, and Skoda

have entered into collaboration with IOC and Castrol for some of their models.

STRENGTH OF OIL COMPANY

Manufacturing of quality lubricants is guided by two important parameters i.e., resourcing of

consistent premium quality base oils and incorporation of cost & performance effective additive

technology which is privy to the oil company and is an effective tool to establish superiority over

competitors. In this area R & D effort plays a significant role as it has to be end use specific,

location specific, environment specific & at the same time cost effective. Just bringing in

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

imported technology without any own & defined resource of quality inputs like base oil may not

be suitable for Indian road/market conditions. Today, technology has become so demanding and

requirement is so stringent that leading institutes like API (American Petroleum Institute) gives

performance approval on the basis of identification & sourcing of base oils. Their approval is on

crude specific, Refinery specific & base oil specific considerations. Bringing in base oils taking

leverage of decanalisation of imports & reduction of duty, putting up blending plants at Tax

holiday locations to remain in the cut throat competition & dumping may or may not yield far

reaching benefits. The need of the hour is long term commitment and not sheer opportunism and

with more competition expected in the coming years, customers will also realize impact of such

approach.

The automotive lubricant trade is gradually becoming wiser today. The traders now understand

the benefits of stocking fast moving & familiar brands instead of overcrowding the shelf space

because there are very few companies in India, who can make the entire range of automotive

products available. It has also been found by the trade that because of working capital constraints

the new entrants are increasing cash discounts resulting in price war and reduction of dealer

margins. For making all the products available at all times a company would need to keep a high

inventory commensurate with the sales volume for which an additional working capital of at

least 35% would be necessary.

OUTLOOK

In the future, growth in the automotive lubricants industry will largely depend on the overall

performance of the economy. In the past one and a half years, the scenario has improved with

higher sales of commercial vehicles and two-wheelers. However, in the future volume growth

will be affected because of use of better quality, long drain lubes. This will increase the

replacement cycle for lubes. In the shorter term, one will witness intense competition in a slow

growing market marked by a consolidation activity, which has the potential to change the face of

the lubricant industry. Given the rising competition, success of a product would largely depend

how well it is branded and distributed

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

PRODUCT PORTFOLIO AND

SPECIFICATION

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SUCCESS DETERMINANTS OF SELECTED

PRODUCT PORTFOLIO AND

LAAL GHODA 20W40

HP laal ghoda is a multigrade diesel engine oil and economy range diesel engine

API CF and US military MIL-L-

It is recommended for, use in all types of diesel engines in

set and DG set.

Characteristics / Features:

� All round performance

� Engine cleanliness

� Efficient lubrication

Specification:

Kinematic Viscosity cSt @40 deg C

Kinematic Viscosity cSt @100 deg C

Viscosity Index, MIN

Flash point, (COC) C,MIN

Pour Point, C , MAX

Sulphated Ash,%WT,MAX

TBN ,mgKOH/g,MIN

Colour

SELECTED LUBRICANT BRANDS

PRODUCT PORTFOLIO AND SPECIFICATION

multigrade diesel engine oil and economy range diesel engine

-2104B, IS:13656:1993 specification.

It is recommended for, use in all types of diesel engines in truck, bus, muv, tractor, taxi, pump

cSt @40 deg C 130

cSt @100 deg C 13.5-16

110

200

-18

0.8

4.4

Red

46

multigrade diesel engine oil and economy range diesel engine oil. It meets

truck, bus, muv, tractor, taxi, pump

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SUCCESS DETERMINANTS OF SELECTED

MILCY TURBO 15W 40

HP Milcy Turbo is a premium quality multi grade Diesel Engine Oil with enhanced

handling capacity which keeps engine clean and reduces

control and sludge control helps to keep the engine in healthier condition.

MB 228.1 & EDL-5 of IS 13656 requirements

Recommended for:

Diesel engines of heavy duty as well as light duty service of

Turbocharged Engines- heavy & light commercial vehicles,

& jeeps.

Characteristics / Features:

� Long drain & Prolonged engine life

� Good control over soot reduces engine wear

� High temperature stability reduces oxidative oil

� Reduced oil consumption

Specification:

Kinematic Viscosity cSt @100 deg C

Viscosity Index, MIN

Flash point, (COC) C,MIN

Pour Point, C , MAX

TBN, mg KOH/g, MIN

SELECTED LUBRICANT BRANDS

remium quality multi grade Diesel Engine Oil with enhanced

handling capacity which keeps engine clean and reduces soot induced wear. Excel

control helps to keep the engine in healthier condition. It m

5 of IS 13656 requirements

engines of heavy duty as well as light duty service of both Naturally Aspirated and

heavy & light commercial vehicles, tractors, multi utility vehicles, cars

Long drain & Prolonged engine life

d control over soot reduces engine wear

High temperature stability reduces oxidative oil thickening

Reduced oil consumption

cSt @100 deg C 14- 15.2

120

190

-21

9

47

remium quality multi grade Diesel Engine Oil with enhanced soot

soot induced wear. Excellent oxidation

It meets API CF-4,

both Naturally Aspirated and

tractors, multi utility vehicles, cars

Page 48: Hpcl lube report  by vaibhav

48

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

CRUISE

HP Cruise is premium quality multi grade engine oil which provides outstanding performance in

all petrol engine passenger cars. It meets API SJ/CD, MIL-L-46152D & E-PL 3/ E-DL 2 of IS:

13656:1993. Recommended as engine oil for all Passenger cars running on petrol.

Characteristics / Features:

� Outstanding engine cleanliness & enhanced engine life

� Excellent lubrication over a wide temperature range

� Improved fuel economy

� Compatible with catalytic converter.

Recommended for:

� M/s Hyundai Motors India

� M/s Mahindra & Mahindra Ltd.

Specification:

Kinematic Viscosity cSt @100 deg C 14-16

Viscosity Index, MIN 120

Flash point, (COC) deg C,MIN 200

Pour Point, deg C , MAX -24

Sulphated Ash,%WT,MAX 1.03

TBN ,mgKOH/g,MIN 6.0

Colour Orange

Page 49: Hpcl lube report  by vaibhav

49

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

CRUISE CLASSIC

HP Cruise Classic is red color superior quality multi grade engine oil for cars made from high

quality base stocks and additives. It meets API SF/CC, MIL-L-46152B & E-PL 2/ E-DL 1 of

engine oil for all passenger cars running on petrol.

Characteristics / Features:

� Outstanding engine cleanliness

� Excellent oxidation stability

� Improved wear protection & extended engine life

� Improved fuel economy

� Compatible with catalytic converter.

Specification:

20W40 20W50

Kinematic Viscosity cSt @100

deg C

14-16 18-20

Viscosity Index, MIN 110 118

Flash point, (COC) deg

C,MIN

200 200

Pour Point, deg C , MAX -21 -21

Sulphated Ash,%WT,MAX 1 1

TBN ,mgKOH/g,MIN 4.19 5.4

Colour Red Red

Approved by:

� M/s Maruti Udyog Ltd.

� M/s Hindustan Motors Ltd.

Page 50: Hpcl lube report  by vaibhav

50

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

RACER 4

HP Racer 4 (20W40) is multipurpose engine oil for lubrication of engine, gear box and wet

clutches in 4- stroke two wheelers. it meets API SG and JASO T903: MA specifications. It is

recommended for use in all 4 stroke motorcycles, scooters, mopeds and scootteretes.

Characteristics / Features:

� Optimized co-efficient of friction

� Excellent oxidation stability

� Sludge and Varnish control

� Gear anti wear and extreme pressure properties.

Specification:

Kinematic Viscosity cSt @100 deg C 1.5-15.5

Viscosity Index, MIN 110

Flash point, (COC) deg C,MIN 200

Pour Point, deg C , MAX -21

Sulphated Ash,%WT,MAX 0.82

TBN ,mgKOH/g,MIN 5.9

Approved by:

� M/s Escorts Yamaha Motors ltd.

� M/s Royal Enfield Motors.

� M/s Bajaj Auto.

Page 51: Hpcl lube report  by vaibhav

51

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

MARKETING CONCEPTS

Page 52: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

POTER’S FIVE FORCES

EXSISTING RIVALRY AMONG COMPETITORS

� Lubricant market is highly competitive, with mor

� Major competitors are Castrol, BPCL

� Strong product promotions

PCMO and FOUR STOKE (Castrol magnetec) segment

� Quality of parent brand-

impact on customers mind, therefore driving the customer to buy

� Strong distribution channel

BARGAINING POWER OF SUPPLIE

� Lube base stock is obtained from its own (HPCL) refinery

bargaining power

� May or may not depend on IOCL and

BARGAINING

POWER OF

SUPPLIER

SELECTED LUBRICANT BRANDS

POTER’S FIVE FORCES

EXSISTING RIVALRY AMONG COMPETITORS

Lubricant market is highly competitive, with more than 30 players in the market

are Castrol, BPCL, IOCL, Gulf, Valvoline

Strong product promotions through advertisements for example Castrol is doing for its

PCMO and FOUR STOKE (Castrol magnetec) segment

- quality of first brand launched by the competitors have good

impact on customers mind, therefore driving the customer to buy the current brand

Strong distribution channel- Castrol has strong hold on bazaar shops

BARGAINING POWER OF SUPPLIER

Lube base stock is obtained from its own (HPCL) refinery, hence have some control over

May or may not depend on IOCL and BPCL

RIVALRY

AMONG

EXSISTING

COMPETITORS

THREAT OF

NEW

ENTRANTS

BARGAINING

POWER OF

BUYER

THREAT OF

SUBTITUTE

PRODUCTS

52

e than 30 players in the market

through advertisements for example Castrol is doing for its

quality of first brand launched by the competitors have good

the current brand

, hence have some control over

Page 53: Hpcl lube report  by vaibhav

53

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

BARGAINING POWER OF BUYER

Bargaining power of consumer in high because of large number of competitors, therefore

consumer has many choices.

� Margins for retailers and bazaar shop owners

� Schemes provided for retailers, mechanics.

� Product variety/ differentiation based on pack size, based on quality or specification

� Quantity/ volume purchased (KL) per month by buyer- Based on the amount ordered the

schemes can be provided to the retailers and bazaar shop owners.

� Importance of product to the buyer- Whether the brand is providing all the benefits or not

� Credit period to the buyer, whether the period is 1 month or more

� Quality of pack- Attractive packaging (sticker, labeling), packaging material

� Cost of lubes is low as compared to Castrol, Valvoline, Gulf etc.

THREAT OF SUBTITUTE PRODUCTS

No substitutes

THREAT OF NEW ENTRANTS

� Government policies- Decanalization of lubricant industry in 1993, gave entry to private

players.

� New technology- IOCL to launch biodegradable lubricant.

� Cost advantage- Provide same segment lubricant brand at lower price.

� Entry barrier- Brand name and image of existing brand and distribution network.

Page 54: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

SWOT ANALYSIS

STRENGTH

� Prices are comparatively low

� Consumer have good image about the company

� Laal ghoda has made position

product is concerned.

� Schemes offered to consumers are good

� Manufactures raw material (LOBS) for lubricants thus having control over margins

� Retail outlet as strong distributional channel.

STRENGTH

OPPORTUNITY

SELECTED LUBRICANT BRANDS

Prices are comparatively low.

Consumer have good image about the company.

Laal ghoda has made position as low price DEO, which is competitive as per cost of

Schemes offered to consumers are good.

Manufactures raw material (LOBS) for lubricants thus having control over margins

distributional channel.

STRENGTH WEAKNESS

THREATSOPPORTUNITY

54

as low price DEO, which is competitive as per cost of

Manufactures raw material (LOBS) for lubricants thus having control over margins.

Page 55: Hpcl lube report  by vaibhav

55

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

WEAKNESS

� Low above the line (ATL) activities such as advertisements through media, hoardings,

bill boards etc.

Since lubricant marketing is same as that of FMCG products therefore requires continuous media

promotion as a reminder to the customers.

� Packaging of Racer 4 is not attractive specially the label and sticker.

� Laal Ghoda is used only for top-up purpose. Also, most of customers use this brand for

pressure jack oil, not as engine oil.

� Has lower percentage occupancy of lubes in bazaar shop shelf, which is around 10-12%.

OPPORTUNITY

� Tie ups with OEMs (original equipment manufacturers) such as with Eicher Motors, Tata

Motors, Volvo etc. specifically in DEO segment.

� Expansion in rural India, auto firms have begun tapping the countryside. For instance,

Maruti Suzuki generates 10 per cent of its sales from rural sales, amounting to 32,000

cars.

THREATS

� Increasing market share of Valvoline and IOCL in Delhi NCR region.

� High duplicity in market leads to low pull for product.

Page 56: Hpcl lube report  by vaibhav

56

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

SAMPLE MARKET ANALYSIS

Page 57: Hpcl lube report  by vaibhav

57

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

SAMPLING PLAN

In the project two types of sampling techniques are used judgmental and convenience sampling.

� Judgmental sampling through expert opinions within HPCL.

� Convenience sampling was done during field survey based on convenience of bazaar

shops and retail outlets.

Survey was conducted in Delhi, Mumbai, Pune and Jaipur. Data was collected from both bazaar

shops and retail outlets.

Table showing number of sample collected from each city:

CITY DEO (laal ghoda and

milcy turbo)

PCMO (cruise and

cruise classic)

4T (racer 4)

Bazaar

shop

Retail

outlet

Bazaar

shop

Retail

outlet

Bazaar

shop

Retail

outlet

Delhi 7 3 6 2 3 1

Mumbai 10 3 7 2 3 1

Jaipur 12 3 1 1 9 2

Pune 12 2 3 1 9 2

Therefore a total of 105 questionnaires for HPCL are collected, out of which 82 are from bazaar

shop and 23 from retail outlets. Survey data collected for Diesel engine oil segment are 41, for

passenger car motor oil are 17 and four stroke oil are 24.

Page 58: Hpcl lube report  by vaibhav

58

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

SAMPLE DATA AND ANALYSIS

Response of managers across various strategic dimensions within HPCL

Strategic Dimensions Hindustan Petroleum Corporation Ltd.

Degree to which you focus

your effort in terms of:

Width of your product line. Target customer segment. Geographic spread of markets served.

Medium to high Medium to high High

The degree to which you

seek brand identification

rather competition based on:

Price Other variables

Medium to high Medium

Degree to which you seek to

develop brand identification

with end consumer:

Directly on your own Through distributional channel

Medium to high Medium

The choice of distributional

channel based on:

Bazaar Trade Petrol pumps

Low to Medium Medium to high

Level of product quality: Raw materials Features

Low to medium Medium to high

Degree to which you provide

ancillary services, schemes

etc. with your product line

Medium to High

Price position of your

product in market relative

to:

Cost position Product Quality

Medium to high Low

Page 59: Hpcl lube report  by vaibhav

59

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

Data collected from bazaar shops and retail outlets is represented in form of percentage of people

agreeing for the reason for success of that particular brand. This data obtained is plotted between

percentages of people agreeing versus reasons for success of the brand.

Delhi bazaar shops

Reasons For success Laal

ghoda(%)

Milcy

Turbo%

Cruise% Cruise

classic%

Racer

4(%)

Brand name 71.4 85.7 100 100 66.6

Brand Image 71.4 85.7 100 100 100

Quality of parent brand 42.8 42.8 83.3 83.3 66.6

Positioning of brand in the

mind of consumer

71.4 85.7 66.6 66.6 66.6

Proper and longer support

(distributional channel)

28 71.4 50 50 33.3

Quality of pack 14.2 85.7 83.3 83.3 33.3

Variety of pack 85.7 42.8 66.6 66.6 33.3

New Technology 0 42.8 16.6 16.6 33.3

Making product

environment friendly

0 0 0 0 0

Brand promotion- ATL 42.8 71.4 83.3 83.3 66.6

Brand promotion- BTL 14.2 14.2 66.6 66.6 33.3

Accreditations/

Recommendations

- - 16.6 16.6 25

Page 60: Hpcl lube report  by vaibhav

60

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

Analysis of Delhi bazaar shop

The table clearly shows that for Laal Ghoda the key success factors are brand name, brand

image, positioning in the mind of customer and variety of pack, whereas for Milcy Turbo it is the

brand name, brand image, positioning in the mind of consumer, quality of pack, proper and

longer support, and above the line promotion are dominant factor for its success.

For Cruise and Cruise Classic brand name, brand image, quality of parent brand, positioning of

brand in the mind of consumer, variety of pack, quality of pack, above the line promotion and

below the line promotion are the success determinants.

For Racer 4 brand name, brand image, quality of parent brand, positioning in the mind of

consumer, and above the line promotion are the reasons for its success.

Page 61: Hpcl lube report  by vaibhav

61

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

Jaipur Bazaar Shop

Reasons For success Laal ghoda Milcy

Turbo

Cruise Cruise

classic

Racer4

Brand name 83.3 100 100 100 88.8

Brand Image 83.3 `100 100 100 88.8

Quality of parent brand 75 91.6 100 100 77.7

Positioning of brand in the

mind of consumer

91.6 100 100 100 88.8

Proper and longer support 91.6 100 100 100 88.8

Quality of pack 16.6 66.6 0 0 77.7

Variety of pack 83.3 25 100 100 25

New Technology 8.3 8.3 0 0 0

Making product

environment friendly

0 0 0 0 0

Brand promotion- ATL 75 100 100 100 100

Brand promotion- BTL 83.3 100 100 100 100

Accreditations/

Recommendations

- - 16.6 16.6 -

Page 62: Hpcl lube report  by vaibhav

62

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

Analysis of Jaipur bazaar shop

The table clearly shows that for Laal Ghoda the key success factors are brand name, brand

image, quality of parent brand, positioning in the mind of customer, proper and longer support

variety of pack, above the line and below the line promotion, whereas for Milcy Turbo it is the

brand name , brand image, quality of parent brand, positioning in the mind of consumer, quality

of pack, proper and longer support, above the line promotion and below the line promotion are

dominant factor for its success.

For Cruise and Cruise Classic brand name, brand image, quality of parent brand, positioning of

brand in the mind of consumer, proper and longer support, above the line promotion and below

the line promotion are the success determinants.

For Racer 4 brand name, brand image, quality of parent brand, positioning in the mind of

consumer, proper and longer support, quality of pack and above the line promotion and below

the line promotion are the reasons for its success.

Page 63: Hpcl lube report  by vaibhav

63

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

Mumbai Bazaar Shop

Reasons For success Laal ghoda Milcy

Turbo

Cruise Cruise

classic

Racer4

Brand name 88 100 85.7 100 100

Brand Image 80 90 100 85.7 100

Quality of parent brand 70 80 85.7 85.7 100

Positioning of brand in the

mind of consumer

70 80 100 100 100

Proper and longer support 60 90 85.7 71.4 100

Quality of pack 30 70 42.8 57.1 100

Variety of pack 70 30 28.5 14.2 0

New Technology 0 10 0 0 0

Making product

environment friendly

0 0 0 0 0

Brand promotion- ATL 30 90 100 100 100

Brand promotion- BTL 40 80 85.7 85.7 100

Accreditations/

Recommendations

- - 17 17 -

Page 64: Hpcl lube report  by vaibhav

64

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

Analysis of Mumbai bazaar shop

The table clearly shows that for Laal Ghoda the key success factors are brand name, brand

image, quality of parent brand, positioning in the mind of customer, proper and longer support

and variety of pack, whereas for Milcy Turbo it is the quality of parent brand, positioning in the

mind of consumer, quality of pack, above the line promotion and below the line promotion

proper and longer support are dominant factor for its success.

For Cruise and Cruise Classic brand name, brand image, quality of parent brand, positioning of

brand in the mind of consumer, proper and longer support, above the line promotion and below

the line promotion are the success determinants.

For Racer 4 brand name, brand image, quality of parent brand, positioning in the mind of

consumer, proper and longer support, above the line promotion and below the line promotion are

the reasons for its success.

Page 65: Hpcl lube report  by vaibhav

65

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

Pune Bazaar Shop

Reasons For success Laal ghoda Milcy

Turbo

Cruise Cruise

classic

Racer4

Brand name 66.6 58.3 100 100 100

Brand Image 33.3 58.3 100 100 100

Quality of parent brand 58.3 83.3 100 100 88.8

Positioning of brand in the

mind of consumer

83.3 58.3 66.6 66.6 77.7

Proper and longer support 75 83.3 100 100 100

Quality of pack 8.3 0 33.3 33.3 22.2

Variety of pack 0 16.6 33.3 33.3 22.2

New Technology 0 33.3 33.3 33.3 11.1

Making product

environment friendly

0 0 0 0 0

Brand promotion- ATL 41.6 33.3 33.3 33.3 66.6

Brand promotion- BTL 58.3 75 100 100 77.7

Accreditations/

Recommendations

- - 100 100 22.2

Page 66: Hpcl lube report  by vaibhav

66

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

Analysis of Pune bazaar shop

The table clearly shows that for Laal Ghoda the key success factors are brand name, positioning

in the mind of customer and proper and longer support, whereas for Milcy Turbo it is the quality

of parent brand, proper and longer support and below the line activity is dominant factor for its

success.

For Cruise and Cruise Classic brand name, brand image, quality of parent brand, positioning of

brand in the mind of consumer, proper and longer support and below the line promotion are the

success determinants.

For Racer 4 brand name, brand image, quality of parent brand, positioning in the mind of

consumer, proper and longer support, above the line promotion and below the line promotion are

the reasons for its success.

Page 67: Hpcl lube report  by vaibhav

67

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

CONCLUSION

Page 68: Hpcl lube report  by vaibhav

68

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

CONCLUSION

Those determinants are taken as a success determinant, which the bazaar shop owners and

retailers have agreed up to 60%. Thus conclusion is obtained brand wise for the reasons for the

success of that particular brand.

Key determinants from bazaar shop survey are:

Laal Ghoda Milcy Turbo Cruise Cruise Classic Racer 4

Brand name Brand name Brand name Brand name Brand name

Brand image Brand image Brand image Brand image Brand image

Quality of parent

brand

Quality of parent

brand

Quality of parent

brand

Quality of parent

brand

Quality of parent

brand

Positioning of brand

in the mind of

consumer

Positioning of

brand in the mind

of consumer

Positioning of

brand in the mind

of consumer

Positioning of

brand in the mind

of consumer

Positioning of

brand in the mind

of consumer

Proper and longer

support

Proper and longer

support

Quality of pack Proper and longer

support

Proper and longer

support

Variety of packs Brand promotion-

ATL

Brand promotion-

ATL

Quality of pack Brand promotion-

ATL

Brand Promotion-

BTL

Brand Promotion-

BTL

Brand promotion-

ATL

Brand Promotion-

BTL

Brand Promotion-

BTL

Page 69: Hpcl lube report  by vaibhav

69

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

Key determinants from retail outlet survey are:

Laal Ghoda Milcy Turbo Cruise Cruise Classic Racer 4

Brand name Brand name Brand name Brand name Brand name

Brand image Brand image Brand image Brand image Brand image

Quality of parent

brand

Quality of parent

brand

Quality of parent

brand

Quality of parent

brand

Quality of parent

brand

Positioning of

brand in the

mind of

consumer

Positioning of

brand in the mind

of consumer

Positioning of

brand in the mind

of consumer

Positioning of

brand in the mind

of consumer

Positioning of

brand in the mind

of consumer

Proper and

longer support

Proper and longer

support

Brand promotion-

ATL

Brand promotion-

ATL

Brand promotion-

ATL

Quality of pack Brand Promotion-

BTL

Brand Promotion-

BTL

Brand Promotion-

BTL

Brand promotion-

ATL

Brand Promotion-

BTL

Page 70: Hpcl lube report  by vaibhav

70

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

RECOMMENDATIONS / CONCLUSIONS

Thus the basic reasons for the success of any brand depends on the seven factors, these are:

� Brand Name

� Brand Image

� Positioning in the mind of consumer

� Quality of parent brand

� Proper and longer support

� Above the Line - Promotion

� Below the line – Promotion

These factors are one or the other way of communicating the product to the customers.

For Example:

� HP Milcy Toofan to HP Milcy Turbo, the change in brand name relates that brand name

should able to convey or able to communicate to the customer the type of segment it is

meant for.

� Media promotion, showing a “Oil man” with a tag line “ your engine’s engineer”

� Promotion through sponsorship like Castrol has done in FIFA world cup.

Page 71: Hpcl lube report  by vaibhav

71

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

OTHER RECOMMENDATIONS

For DEO

� Aggressive media promotion.

� Increase visibility of the brand.

For PCMO

� Strategic Alliance: More tie-ups with OEMs, which would help in increasing the sale at

retail outlets through service stations.

� Introducing “free service programs at retail outlets”.

� New Distribution system: Making product available at OEM workshops and service

stations.

For FOUR STROKE

� Below the line promotion should be aggressive- through mechanics.

� Awareness among mechanics for the brand- through schemes.

� Sponsorships- Sponsoring the events like sports, T.V. program (MTV roadies) would

increase publicity.

� Celebrity branding.

Page 72: Hpcl lube report  by vaibhav

72

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

ANNEXURE

Page 73: Hpcl lube report  by vaibhav

73

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

GRAPHS

Page 74: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

GRAPHS FOR BAZAAR SHOPS

FOR DIESEL ENGINE OIL

LAAL GHODA

77.3

6761.5

79

0

10

20

30

40

50

60

70

80

90

Percentage of retailer agreeing for the reasons behind the success of Laal Ghoda

SELECTED LUBRICANT BRANDS

FOR BAZAAR SHOPS

79

63.7

17.1

65.7

2 0

47

Percentage of retailer agreeing for the reasons behind the success of Laal Ghoda

74

4742

0

Percentage of retailer agreeing for the reasons behind the success of Laal Ghoda

Page 75: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

MILCY TURBO

84

7074

0

10

20

30

40

50

60

70

80

90

100

Percentage of retailer agreeing for the reasons behind the success of Milcy Turbo

SELECTED LUBRICANT BRANDS

80.786

55

2823

0

73

Percentage of retailer agreeing for the reasons behind the success of Milcy Turbo

75

73

67

0

Percentage of retailer agreeing for the reasons behind the success of Milcy Turbo

Page 76: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

FOR PASSENGER CAR MOTOR OIL

CRUISE

96100

92

0

20

40

60

80

100

120

Percentage of retailer agreeing for the reasons behind the success of Cruise

SELECTED LUBRICANT BRANDS

FOR PASSENGER CAR MOTOR OIL

83

5864

31

12

0

Percentage of retailer agreeing for the reasons behind the success of Cruise

76

7987

33.3

Percentage of retailer agreeing for the reasons behind the success of Cruise

Page 77: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

CRUISE CLASSIC

10096

92

0

20

40

60

80

100

120

Percentage of retailer agreeing for the reasons behind the success of Cruise Classic

SELECTED LUBRICANT BRANDS

8380

68

28.4

12.4

0

Percentage of retailer agreeing for the reasons behind the success of Cruise Classic

77

79

88

33.3

Percentage of retailer agreeing for the reasons behind the success of Cruise Classic

Page 78: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

FOUR STROKE

88.5

97

88.5

0

20

40

60

80

100

120

Percentage of retailer agreeing for the reasons behind the success of Racer 4

SELECTED LUBRICANT BRANDS

82.780

58

20

11.1

0

Percentage of retailer agreeing for the reasons behind the success of Racer 4

78

8377.5

55

Percentage of retailer agreeing for the reasons behind the success of Racer 4

Page 79: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

GRAPHS FOR RETAIL OUTLET

FOR DIESEL ENGINE OIL

81 81

72.7

90.9

0

10

20

30

40

50

60

70

80

90

100

Percentage of retailer agreeing for the reasons behind the success of Laal Ghoda

SELECTED LUBRICANT BRANDS

GRAPHS FOR RETAIL OUTLET

90.9

63.3

11

54.5

18.18

0

36.6

Percentage of retailer agreeing for the reasons behind the success of Laal Ghoda

79

45.45

0

Percentage of retailer agreeing for the reasons behind the success of Laal Ghoda

Page 80: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

MILCY TURBO

90.9 90.9

81

0

10

20

30

40

50

60

70

80

90

100

Percentage of retailer agreeing for the reasons behind the success of Milcy Turbo

SELECTED LUBRICANT BRANDS

90.9

63.3

72.7

45.4

27.2

0

90.9

Percentage of retailer agreeing for the reasons behind the success of Milcy Turbo

80

90.9

72.7

0

Percentage of retailer agreeing for the reasons behind the success of Milcy Turbo

Page 81: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

PASSENGER CAR MOTOR OIL

CRUISE

83.3 83.3

66.6 66.6

0

10

20

30

40

50

60

70

80

90

Percentage of retailer agreeing for the reasons behind the success of Cruise

SELECTED LUBRICANT BRANDS

PASSENGER CAR MOTOR OIL

66.6

33.3

50 50 50

0

83.3

Percentage of retailer agreeing for the reasons behind the success of Cruise

81

83.3

50

Percentage of retailer agreeing for the reasons behind the success of Cruise

Page 82: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

CRUISE CLASSIC

83.3 83.3

66.6

0

10

20

30

40

50

60

70

80

90

Percentage of retailer agreeing for the reasons behind the success of Cruise Classic

SELECTED LUBRICANT BRANDS

66.6

33.3

50 50 50

0

Percentage of retailer agreeing for the reasons behind the success of Cruise Classic

82

83.3 83.3

57

Percentage of retailer agreeing for the reasons behind the success of Cruise Classic

Page 83: Hpcl lube report  by vaibhav

SUCCESS DETERMINANTS OF SELECTED

FOUR STROKE

66.6

83.3

66.6

83.3

0

10

20

30

40

50

60

70

80

90

Percentage of retailer agreeing for the reasons behind the success of Racer 4

SELECTED LUBRICANT BRANDS

83.3 83.3

33.3

16.6

33.3

0

83.3

Percentage of retailer agreeing for the reasons behind the success of Racer 4

83

83.3

66.6

50

Percentage of retailer agreeing for the reasons behind the success of Racer 4

Page 84: Hpcl lube report  by vaibhav

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

LIST OF RETAILERS AND BAZAAR SHOPS

BAZAAR SHOPS AND RETAIL OUTLET SURVEYED

� Aggrawal Petrochem

� Goyal Sales corporation

� G.S.Lubes

� Hindustan Lube oil Co.

� Om Motors

� Universal Oil

� Aggrawal oil Co.

� Vinsol Oil Co.

� Laxmi Oil Lubricants

� Satnam Automobile

� M/S Olympic Oil

� S.M Motors

� Bunty Auto parts

� Darshan Motors

� Singh automobiles

� Kholi Autoparts

� Jungpura motors Store

� M/S Garg oilCo.

� M/s Barkat laal & Roshan Laal

� Navkar trading Co.

� Sanchit Trading Co.

� Malhotra Petrochem

� Hindon Motors & Spares

� Varinder Motors & repairs

� Sahni Petroleums

� Vadhera oil Co.

� Paras lubricants

Page 85: Hpcl lube report  by vaibhav

85

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

� Jain motors & repairs

� Winstrol Petrochemical

� Mittal Oil Co.

� Arihant energy Solutions

� Prakash oil Coorp.

� Prem oil Company

� Hindustan service station

� Chadha oil company

� Anand service station

� Ever green service station

� Angara H.P centre

� Dhaulakuan service station

Page 86: Hpcl lube report  by vaibhav

86

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

ABBREVATIONS

DEO- Diesel Engine Oil

PCMO- Passenger Car Motor Oil

4T- Four Stroke

ATL- Above The Line

BTL- Below The line

OEM- Original Equipment Manufacturer

MRP- Maximum Retail Price

API- American Petroleum Institute

STLE- Society of Tribologists and Lubrication Engineers

NLGI- National Lubricating Grease institute

SAE- Society of Automotive Engineers

ILMA- Independent lubricant manufacturer association

ACEA- European Automobile Manufacturers Association JAS0- Japanese Automotive Standards

Organization

HPCL- Hindustan Petroleum Corporation

BPCL- Bharat Petroleum Corporation

IOCL- Indian oil Corporation

CIL- Castrol India Limited

PSU- Public Sector Undertaking

MNC- Multinational Company

Page 87: Hpcl lube report  by vaibhav

87

SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

MMTPA- Million Metric Tonnes Per Annum

MGO- Maruti Genuine Oil

AMA- American Marketing association

MBA- Master of Business Administration

Page 88: Hpcl lube report  by vaibhav

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SUCCESS DETERMINANTS OF SELECTED LUBRICANT BRANDS

REFERENCE

� HPCL site- http://www.hindustanpetroleum.com/En/UI/LubesHome.aspx ,

http://www.hindustanpetroleum.com/En/UI/Home.aspx

� http://en.wikipedia.org/wiki/Lubricants, API 1509, Engine Oil Licensing and

Certification System, 15th Edition, 2002. Appendix E, API Base Oil Interchangeability

Guidelines for Passenger Car Motor Oils and Diesel Engine Oils

� www.thehindubusinessline.com-

http://www.blonnet.com/catalyst/2005/11/17/stories/2005111700020100.htm

� www.bharatbook.com-

http://www.bharatbook.com/general/searchresults.asp?cx=015290539315878563373:km

okkcuchgw&cof=FORID:11&q=lubricants&srchgo.x=0&srchgo.y=0&srchgo=Go

� www.ibscdc.org-

http://www.ibscdc.org/Case_Studies/Strategy/Growth%20Strategies/GRS0233A.htm

� www.frost.com-http://www.frost.com/prod/servlet/report-

toc.pag?ctxixpLink=FcmCtx1&searchQuery=lubricants+in+india&repid=4B40-01-00-

00-

00&bdata=aHR0cDovL3d3dy5mcm9zdC5jb20vc3JjaC9jYXRhbG9nLXNlYXJjaC5kbz9

4PTAmeT0wJnF1ZXJ5VGV4dD1sdWJyaWNhbnRzK2luK2luZGlhJnBhZ2VTaXplPTh

AfkBTZWFyY2ggUmVzdWx0c0B%2BQDEyODgxODgyMTA0ODA%3D&ctxixpLab

el=FcmCtx2

� www.klinegroup.com-klinegroup.com/2010/.../the-passenger-car-lubricants-market-in-

india-leapfrogs-quality-levels/

� www.shilpabichitra.com- http://www.shilpabichitra.com/shilpa2000/indart32.htm

� www.ibef.org- http://www.ibef.org/download/IBEFreport_april6.pdf

� indiaanalysis.com/Indian%20lubricants%20press%20release%20(070408).pdf

� www.motorindiaonline.com/.../valvoline-proves-fastest-growing-indian.html.