Marketing Management II Project Report On Submitted By Hardik Badgujar (11DM035) Bhavsheel Kohli (11DM037) Dhaval Gokani (11DM042) Durgashis Mahapatra (11DM045) Gaurav Mani Diwakar (11DM050) Gaurav Mittal (11DM051) Under The Guidance of Dr. Kartik Dave Prof. Gagan Katiyar
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Marketing Management II
Project Report
On
Submitted By
Hardik Badgujar (11DM035)
Bhavsheel Kohli (11DM037)
Dhaval Gokani (11DM042)
Durgashis Mahapatra (11DM045)
Gaurav Mani Diwakar (11DM050)
Gaurav Mittal (11DM051)
Under The Guidance of
Dr. Kartik Dave
Prof. Gagan Katiyar
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Acknowledgement
It‟s our pleasure to take this opportunity to thank all those who helped me directly or indirectly in
preparation of this project.
We are very much thankful to Dr. Kartik Dave & Prof. Gagan Katiyar, for their real time help. Having
healthy discussions & valuable inputs from them, helped us a lot in giving the present shape to this report. Their
constant encouragement & co-operation have been a source of inspiration for us all the time.
-Group 1 Members
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Index
Sr. No Topic Page No.
1 Executive Summary 4
2 Introduction 5
3 Lubricants SBU 6
4 Current Scenario of BPCL Lubes Business 7
5 Marketing 8
6 BPCL in lubricant Business (4P‟s) 11
7 STP Analysis 20
8 PORTERS Five Force Analysis 22
9 SWOT Analysis of MAK Lubricants 23
10 Product Life Cycle 24
11 Reasons for Study 25
12 Customers Response Analysis 27
13 Mechanic Response Analysis 35
14 Suggestions & Recommendations 43
15 SPSS Analysis 45
16 Finding & Conclusion 48
17 Bibliography 49
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Executive Summary
Increasing globalization, new products and services and innovative marketing have resulted in a very market-
savvy consumer. The production-based success philosophy of marketers has now been replaced by a customer-
oriented philosophy.
The Indian lubes market was regulated till 1993, with the market dominated by the 4 public sector
undertakings including IOCL, BPCL, HPCL and IBP. It encouraged foreign majors to set shop in India. The number
of players increased overnight to over 25 with entry of MNCs like Shell, Exxon, Mobil, Caltex, Elf, etc. Competition
has become intense. This sector will witness severe competition, which may lead to a price war. With the entry of
MNCs with deep pockets, better technology and brand power, the exit of marginal Indian players is imminent. After
this will emerge a period of consolidation marked with mergers and acquisitions, which will change the face of the
lubes industry.
Our analysis provides BPCL Lubes SBU to make future strategies as per the projected data for the total
market capacity. The data we have acquired & calculated would enable BPCL Lubes SBU to define its marketing,
advertising, promotional offers to be provided & how to make the customer think better of MAK lubricant.
This project is a step towards understanding the consumer and mechanic needs that can help MAK4T plus to
establish itself as a leading player in the 4-stroke lubricant segment. In this we briefly talk about the industry and its
key success, BPCL overview, MAK Base Oils and MAK4T plus. STP analysis for MAK4T plus was carried out and a
brief analysis of the competitors was carried out. Then we move to the consumer and mechanic response analysis.
These responses were collected with the help of a questionnaire and the analysis was carried out in MS-Excel and
SPSS. Finally, recommendations and strategies were formed.
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Introduction
Bharat Petroleum Corporation Limited (BPCL) is a Global fortune 500 company.
On 24 January 1976, the Burmah Shell Group of Companies was taken over by the Government of India to
form Bharat Refineries Limited. On 1 August 1977, it was renamed Bharat Petroleum Corporation Limited. It was
also the first refinery to process newly found indigenous crude Bombay High, in the country. Today, BPCL with a
sales turnover of over Rs. 77,000 crores ($27.873 Billion) is the second largest oil marketing company in the country
with a market share of over 22% and 3 refineries under its fold. BPCL has Refineries at Mumbai and Kochi (Kochi
Refineries) with a capacity of 12 Million Metric Tonnes (MMT) and 7.5 MMTPA respectively for refining crude oil.
BPCL's subsidiary at Numaligarh (Assam) has a capacity of 3 MMTPA. Mahendra Singh Dhoni signed on as the
Brand Ambassador for BPCL in 2006. Narain Karthikeyan is another brand ambassador for BPCL. It is headquartered
at Ballard Estate, Mumbai.
To bring sharp customer focus and address customer requirements, BPCL has been structured in six
Strategic Business Units (SBU‟s) i.e. Retail, Lubricants, Aviation, Industrial and Commercial, LPG and Refinery. It
has more than 7300 Retail outlets, over 2000 LPG Distributors, a large number of Kerosene Dealers and over 150
Lubricants Distributors across the length and breadth of the country. It has over 400 grades of lubricants manufactured
through four manufacturing units. BPCL has a fully dedicated R&D centre for lubricants and are committed to
continuously upgrade the quality of the products marketed by it.
BPCL has been following an innovative and creative approach for marketing petroleum products in India.
They have been the pioneers in various initiatives of the petroleum ministry in India such as „World class lubricants
under the brand name MAK‟, „Pure for sure‟, premium fuels – „Speed‟, „Hi-Speed Diesel‟, „In and Out‟ convenience
stores, „Ghar‟ retail outlets at highways, loyalty programs like „Petrocard‟ and „Smartfleet‟. Bharat Petroleum is
considered to be a pioneer in the Indian petroleum industry with various path-breaking campaigns such as „Pure for
BHARAT SUPER HEAVY DUTY BRAKE MAK HEAVY DUTY BRAKE FLUID
SPIROL EP OILS MAK SPIROL EP OILS
SPIROL HD OILS MAK SPIROL HD OILS
SPIROL XEP OIL MAK SPIROL XEP OIL
SPIROL XHD OIL MAK SPIROL XHD OIL
SPIROL S OIL MAK SPIROL S OILS
SPIROL DIAMOND MAK SPIROL XHD
SUPERKOOL MAK SUPERKOOL
REDIKOOL MAK REDIKOOL
SUPERKOOL AF MAK SUPERKOOL AF
BHARAT TURBO SHPD OIL MAK SHPD (D5)
UNIVEX A MAK UNIVEX A
UNIVEX CD MAK UNIVEX CD
UNIVEX RB MAK UNIVEX RB
BHARAT WB GREASE SPECIAL MAK WB GREASE SPECIAL
2nd
P: - Price
Following price variables are considered by BPCL for MAK:-
Strategies : Premium pricing
Least price : Rs. 09 to Rs. 14 / Ltr more than regular lubricant
Discounts: MAK offers the opportunity instantly reading the points, you earn for at participating
BPCL retail Outlet. Extra discount are also given to the OEM partner.
Payment mode and period: On cash/debit card/credit card/petro card i.e. smart card, which can be
used by the card holder to make purchase of lubricant at designated retail outlet of BPCL.
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.
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. 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
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manufactures. Maruti Udyog, Hyundai Motors, Hindustan Motors, TAFE, Toyota, and Skoda have entered
into collaboration with IOC and Castrol for some of their models.
Price List
Category BRAND NAME PRICES(Rs.)
500ml 1 litre 3 litre 5 litre
1. Two Wheeler Oils (Two Stroke) MAK 2T 116 228
920
2. Two Wheeler Oils (Four Stroke)
Mak 4T PLUS SL
20W40
263
MAK 4T
STALLION
263
Mak 4T ZIPP
10W30
235
3. Passenger Car Motor Oils
MAK ELITE 15
W 40 (SJ) 139 270 793
MAK CLASSIC
20 W 50 (SG) 132 257 752 1221
4. Passenger Car Genuine Oils
MAK TATA
MOTORS PCD
CLASSIC 20W40
243
1165
5. Diesel Engine Oils
MAK
PLATINUM
TURBO 15W40
278
1340
6. Gas Engine Oils MAK GE 112 202 1015 825
7. Gear Oils MAK SPIROL EP 116 225
1075
MAK SPIROL EP
90 112 214
1030
8.Transmission / Front Fork Oil
MAK ATF A 120 230
1110
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3rd
P:-
Lube Distribution Channel
Retail Channel
Its core strength is its retail outlet network across the country, this comprises of about 7530 retail
outlets. Its Lubes SBU have undertaken various initiatives in co-ordination with Retail Business to grow its
sales volume through this channel. Initiatives undertaken by the SBU are setting up of Hero Honda City
Works, Tata Authorized Service Station (TASS) and installation of Quick Oil Change Machines at retail
outlets.
Bazaar Channel
With a network of 190 PLDs (Primary Lube Distributorship), 600 MAK Garages and MAK Mobile
Vans established to improve reach and penetration in rural and unrepresented areas of MAK Brand, the SBU
could reach to the last mile as far as the customers are concerned. BPCL continues to improve its brand
visibility across the network and thereby increasing its market share across the segments.
Industrial Channel
Large number of prestigious customers has been added during the year to its already existing
prestigious customer list. BPCL is also suppliers of initial engine oil fill to TATA Motors, TVS, and Hero
Moto Corporation etc. BPCL also holds respectable share of Railway and Defence business.
Infrastructure
The Lube Plants at Wadilube (Mumbai), Budge Budge (Calcutta), Loni (Delhi) and Tondiarpet (Chennai)
have organized themselves as close-knit teams to maximize levels of production and dispatch. The Plant at Wadilube
is an ISO 9002 certified plant. As part of the ongoing improvements in packaging, the new series of packages
developed entirely in-house have been introduced.
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Other initiatives
To support the business initiatives, a major thrust has been given for improving BPCL‟s product
offering and increasing its market presence. The new R&D Centre at Sewree, Mumbai, has developed a
number of new products in the automotive and industrial categories. The entire distribution system has been
revamped with the formation of Supply Chain Management department to ensure that products are more
conveniently available and distinctively visible in the market price. Exclusive branded Lube Shoppe's have
been opened all over the country to improve its reach, as well as many innovative & unconventional
methods are being used to create brand awareness especially in the diesel oils segments.
Another major initiative has been to reach the products to the rural population through the tie-up with
ITC – e-choupal network which has spread the MAK brand across the country in rural areas also. Currently
this network is available in Uttar Pradesh, Maharashtra, Rajasthan, and Madhya Pradesh and is likely to
extend to other states also shortly.MAK also embarked on another thrust area of enrolling garages across the
country in the network of “MAK Garages” there by providing standardized service across the network. This
initiative not only provides opportunity for the garages to enhance their business opportunity but also
provides an assurance to the end customers that their vehicles are getting the right kind of lubricants.
Brand Ambassador
To promote MAK brand among the youth and improve the brand visibility, MAK
signed up M.S.Dhoni as Brand ambassador in the year 2006. The rise of MAK brand in
the minds of the consumers as well as market share coincided with the rise of Dhoni
also, who today is the Youth icon of the year and also the Captain of the Indian team for
all versions of the game – like MAK being the “Champion of All Engines”. BPCL is
confident that it will continue to make substantial and sustained efforts with appropriate
investments, synergies business between channels, improve quality and quantity
standards, invest in R&D for new product development and aggressively build the
brands to result in maximising the value addition for both the business and its
customers.
MAK Services
Lubes Shop
To facilitate customers an easy accessibility for procurement of their
Lubricants requirement and meeting them at their point of need compelled Bharat
Petroleum to open Lube shops. These shops are exclusive lubricants reselling points, which cater to customer
satisfaction confirming with the 'Quality' and other standards of Bharat Petroleum. With the deregulation and
entry of multinationals in the lubricants market, BPCL have experienced a shift of trade to the 'bazaar'.
Recognizing the potential and the fact that competitors have utilized this channel segment to their advantage by
allowing huge discounts Bharat Petroleum is also determined to address this customer segment and passing the
discount to the end customer instead of the channel. These branded lubes shops are available in all major cities.
MAK Garage
MAK lubricants has launched this initiative in the year 2006 to promote
MAK lubricants among the mechanic segment by enrolling them in to the umbrella
network of MAK Garage. Currently BPCL have approximately 800 MAK garages
across the country - exclusively using MAK Lubricants.
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Hero Honda Service Stations
A Joint venture initiative between Hero Honda - the worlds largest bike
manufacturer and Bharat Petroleum. This initiative is to utilise the BPCL network
across the country to provide value added services to our customers through this
City Work network at our retail outlets. Currently we have around 170 HH city
works operating in the country.
TASS
TATA Authorized Service Station is another initiative for strengthening our
strong relationship with Auto Major TATA. We have a tie-up for marketing co-
branded Lubricants/greases/specialty products - MAK TATA products. TASS is an
extension of this tie-up - providing TATA vehicle service network across the
country through out Dealer network. This service network is of two types - TASS
for heavy vehicles and "SUVIDHA" for TATA Ace vehicles.
VCC
Bharat Petroleum launched this new initiative "VEHICLE CARE
CENTRE" at our retail outlets mainly to provide state of the art servicing facility
to our esteemed customers at an affordable rates. The network is growing and is
gaining popularity across the country.
MAK Quik Lube Oil Change
An Initiative to provide the best of service to esteemed customers –
keeping in mind the value of time, BPCL have initiated the “MAK Quik Lube oil
Change” at many of its Retail outlets. This initiative is mainly to cater to the Bike
and Car/SUV customers to change the Engine oil in their vehicle with in short
span of time.
The major advantages of this initiative to the customer are:-
Speedy oil change in front of their own eyes.
Mechanized system of Oil change – helps in removing the old oil completely.
Genuine MAK product
Free Oil change facility – Only cost of the product to be paid by the customer.
Quick turnaround time for the customer.
Special offers to the customers.
OEM Tie ups of MAK Lubricants
MAK CAPABILITIES
Keeping pace with changing customer preferences, the vehicle/equipment manufacturers are competing
to offer the best Value for Money to customers. Coupled with emerging environmental regulations and new
technologies, OEMs of vehicles and equipments are constantly trying to reduce maintenance costs. BPCL is
continuously working alongside OEMs to develop and upgrade genuine oils for their vehicles and equipments to
address the requirements of ever changing technology. Pioneering the cause of industrial growth over the last 3
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decades, BPCL R&D and marketing teams have provided solutions for efficient and specialized lubricant
applications in steel, cement, power, engineering, road construction and other leading industries in India. These
applications include various compressor, genset, shock absorber oil manufacturers who provide branded
lubricants for use during and after warranty for peak performance. Right from the advent of Maruti-Suzuki in
1984, our R&D team at BPCL state-of-the-art R&D Centre has demonstrated competencies to develop
customized solutions for automakers in India. BPCL R&D has developed more than 300 different formulations in
the past 10 years, out of which 50 were developed in the last 3 years BPCL commissioned its own LOBS plant
at Mumbai, using the latest Chevron Lummus Global patented „All Hydro Processing Technology‟ in June 2006.
This has enabled us to manufacture superior quality „MAK Base’ oils exceeding the requirement of API Group
II (rated as Group II plus). OEMs have acknowledged BPCL‟s identity of quality base oil producer, best in
class R&D capabilities and marketing acumen.
OEM PARTNERSHIPS
In addition to Indian presence with plethora of lubricant options for all cross sections of the industry,
BPCL (MAK LUBRICANTS) also has agreements with leading automotive manufacturers having both National
& International presence. Original Equipment Manufacturers (OEMs) and Equipment manufacturing industries
play a strategic role in our business. BPCL have a long and successful history of partnerships with leading OEMs
across all vehicle categories. With strong brands, superior technology and width and depth of distribution, BPCL
(MAK LUBRICANTS) is an ideal partner for progressive OEMs seeking to offer their consumers the best
products and services.
Hero Moto Corporation Limited
Hero Moto Corporation Ltd. - the single largest two-wheeler manufacturer in the
world has an association with BPCL (MAK LUBRICANTS) since the year 2004. MAK
Lubricants during the five years of association has become the largest supplier of engine
oils for initial fill as well as to HMC dealers, Authorized service stations and spare part
stockists. BPCL has been working closely with HMC & its sister concerns to develop
speciality products like Engine oils and Shock Absorber Fluids which can meet the
stringent HONDA (JAPAN) specifications. Apart from the above BPCL has
commissioned Hero Honda City Works exclusive servicing option for HMC customers‟ at
BPCL Retail Outlets and numbers are growing by the day.
TVS Motor Company Limited
TVS Motor Company is the third largest two-wheeler manufacturer in India
and one among the top ten in the world, with annual turnover of mo re than USD 1
billion in 2008-2009, and is the flagship company of the USD 4 billion TVS Group.
BPCL (MAK LUBRICANT) has an exclusive tie-up with TVS MOTOR
COMPANY to supply engine oils for initial service fill as well as TVSM dealers,
Authorized service stations and spare part stockists. BPCL is also working to
develop, manufacture and supply specially formulated engine oils and speciality products for use in TVSM two
wheelers as well as factory requirement. . TVS TRU 4 the first JASO MA 2 specification oils of its kind has been
introduced by BPCL for use in TVSM two- wheelers and is distributed through all TVSM authorized dealerships
& workshops as well as BPCL‟s extensive reseller network.
Tata Motors - Commercial Vehicles Division
Tata Motors - Commercial Vehicles Division is the largest manufacturer of
commercial vehicles in India. We have a long and fruitful relationship with Tata
Motors for over 5 years. This includes a strategic alliance for supplying of Engine oils
for initial fill as well as Co-branded engine oils and speciality products to Tata Motors
dealerships, Authorized Service Network & Tata Motor Spare part dealerships across
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the country. MAK Lubricants has been jointly working with Tata Motors in all areas including joint product
development, promotion and customer service. BPCL‟s MAK TATA MOTORS CH4 15 W 40 was specially
developed for Tata Motors and is endorsed by Tata Motors for use in all their commercial vehicles fitted with
both Tata & Cummins Engine. Apart from the above BPCL has commissioned Tata Authorized Service Stations
servicing option for TML customers‟ at BPCL Retail Outlets and many more are expected to get activated over
the years.
General Motors India
General Motors India has already completed 12 years if Indian Operations and
is the manufacturer of diesel & petrol passenger cars and multi utility vehicles in the
country. We have a strategic alliance for supplying Co-branded engine oils and
speciality products to the General Motors dealerships and authorized service network
across the country. BPCL (MAK LUBRICANTS) is jointly working with General
Motors India in all areas including joint product development, promotion and
customer service. BPCL GM MAK Genuine 15 W 40 Deisel & Petrol Engine Oils
were specially developed for General Motors and is endorsed by General Motor for use in all their passenger cars
as well as Utility vehicles. Apart from the above BPCL has commissioned Vehicle Care Centre exclusive
servicing option for customers‟ wherein GMI has adopted such VCC‟s at BPCL Retail Outlets and more such
VCCs are expected to get activated over the years.
L&T KOMATSU
L&T Komatsu is the market leader in the excavator segment & commands
more than 50% of the market share. BPCL (MAK LUBRICANT) has a tie-up with
L&T Komatsu for the past 5 years to supply oils for supply to L&T Komatsu
dealerships & users. BPCL is also working to develop manufacture and supply
specially formulated hydraulic transmission oils and speciality products for use in L&T
Komatsu excavators.
4th
P: - Promotion Strategies for MAK Lubricant
Following promotion variables are considered by BPCL for MAK lubricant:-
Brand ambassador: M.S. Dhoni, Captain of Indian Cricket Team
Brand line : „MAK makes it possible‟
Advertising : TV, News paper, Magazines, Internet
Sales Promotion: Various schemes are available in the market where customer has to SMS bill no to
the central data base to stand a chance to win lucrative offers.
MAK MALAMAAL DAILY - "JEET KI KHUSHI"
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SCRATCH & WIN - Chance to win upto to Rs. 30 on MAK 4T plus - 900 ml & 1 ltr pack and
chance to win upto Rs. 100 on selected MAK Petrol & Diesel Engine oil packs from 3 ltrs to 5 ltrs. Please
contact the nearest BPCL Retail outlet or Lubricants shops for further details.
GADI MEIN DHAMAK HASI MEIN DHAMAK!
Promise Tooth Paste and Bianca Toothbrush free with every pack of MAK GE 20W-50: 1 litre pack
& MAK PUMP - 3.5 litre pack
MAK MALAMAAL DAILY - "KISMAT KI BALTI KHOLO"
Chance to win up to Rs. 500 on purchase of MAK Lubricants Engine/gear oils - packs from 7.5 litres
to 20 litres packs. Double offer - An unbreakable LED torch light free with every pack of 15 & 20 litres.
Offer available on selected grade packs of MAK lubricants - please contact the nearest BPCL retail outlet or
Lubricant shops for further details.
Competitors of Bharat Petroleum Corporation Limited (BPCL) Lubricants
1. Hindustan Petroleum Corporation Ltd (HPCL)
2. Indian Oil Corporation (IOCL).
3. Castrol India Ltd
4. Gulf Oil Corporation Ltd (Lubricant Division)
5. Valvoline Cummins Ltd (VCL)
6. Tide Water Oil Co (India) Ltd
7. Savita Group
8. Total Group, India
9. Balmer Lawrie & Co Ltd
10. Apar Industries Ltd
11. IPOL
12. Fuchs Lubricants (India) Pvt Ltd
13. Gagan Gases Ltd
14. Ganesh Benzoplast Ltd
15. The Andrew Yule Group
16. Cenlub Industries Ltd
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STP ANALYSIS
Segmentation
It is the process of dividing total market of a particular product or product category in to relatively
homogeneous segments or groups.
Following are the variables for market segmentation in consumer market:-
1. Geographic segmentation: BPCL rolled out its lubricants under the brand name MAK in all
states of India. The variable includes:-
Region : All states of India
Cities : All most all cities in India
Density : Urban, Suburban and rural area
2. Demographic segmentation: MAK lubricant is focused on all commercial residential and public
usage in automobile vehicle including following variable.
Age : 18+
Family size : All
Family life cycle : All
Gender : Male, Female
Income : All
Occupation : All area including unemployment
Education : All
Religion : All
Generation: All
3. Psychographic segmentation: MAK lubricant is focused on affluent and educated buyer.
4. Behavioral segmentation: MAK has focused mainly on following behavioral segmentation.
Benefits : Quality products by offering superior performance
User status: Regular
Main driving factor in the lubricant market is quality. Based on quality we can divide lubricant market into
two segments:
Premium Segment
Economy Segment
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Targeting
BPCL targets economy segment with MAK4T plus which is available in 900ml and 1 ltr packs at a price of
Rs. 192 and Rs. 212 respectively. Good quality and reasonably priced has helped it to establish itself as economy
product.
BPCL has targeted market, adapting a product specialization approach for MAK lubricants by
1. High quality lubricant for all automobiles
2. Old and new auto vehicles: MAK is designed not only to optimize performance of new generation vehicle
but also rejuvenate old vehicles to perform better.
Positioning
Brand that offers value for money is how MAK4T plus positions itself and is continuously able to
inline itself with its value proposition. Also its image has been as smooth oil.
BPCL has position MAK by adapting following positioning approach:-
1. Benefit and quality : The clean and keep clean function of super cleanser activity in MAK lubricants reduces
deposit at the fuel port injector and controls combustion chamber deposit to maintain new life performance
of vehicle. Regular use of MAK gives the vehicle as superior pick up, smooth drive, better mileage and
lower emission.
Analysis:
However it is available only in API SL 20W-40 grade that is widely used in 100-150 cc bikes. However, with
the entry of higher cc bikes and Indian consumers switching to higher cc bikes is a matter of concern. Being considered
smooth oil will hamper its usage in higher cc bikes leaving a big segment of premium consumers untouched in times to
come.
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PORTERS FIVE FORCES ANALYSIS
This model is evaluated on 5 forces of competition: -
Threat of New Entry
Suppliers Bargaining Power
Buyer‟s Bargaining Power
Threat of Substitutes
Rivalry among Existing Firms
As seen from Porter‟s 5 forces diagram we have concluded the following about the lubricant market: -
Threat of New Entry – Threat of any new entrant in this market is very low. Market got deregulated in
1993 & many new players entered the market. Market is well set at this point of time & there is not much space for a
new player to enter. There lies economies of scale & huge capitals are required to enter in this market. Most of the
large volume buyers are brand loyal so it is very difficult to target those customers.
Suppliers Bargaining Power – Suppliers have low bargaining power as far as lubricating market is
concerned. As this business consists of large economies of scales, there are very less chances of forward integration by
suppliers. Also, lubricant companies possess option to switch across suppliers because there are too many suppliers for
this industry.
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Buyer’s Bargaining Power – Buyers have high bargaining power because they have large no. of choice
to choose the product from. Their switching cost is very low. Industrial lubricants buyers have more bargaining power
than automotive lubricants buyers because their buying capacity is more.
Threat of Substitutes – Threat of substitutes for lubricant market is NIL as there are no substitutes for
lubricants as a product. This is the same case as with that of Pharmaceutical Industry.
Rivalry among Existing Firms – This is the most important force as far as Porter‟s 5 forces model is
considered. Existing lubricant companies maintain rivalry over several parameters like to increase market share, to
increase sales volume, to improve distribution network & to provide Distributors,Retailers/Dealers & Mechanics with
more profitable schemes. These are the parameters on which BPCL has to concentrate upon so that it can
stand in the category of market leadership.
SWOT ANALYSIS OF BPCL
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Product Life Cycle
"Life Cycle Analysis methodology is used for identifying and reducing the impact of our lubricants
on the environment. With this approach, respect for the environment may be built into the design of new
consumer products, right from the start."
From initial design to disposal of a lubricant
In Total's Lubricants division, sustainable development finds its application through product life
cycle analysis. This means examining and monitoring environmental impacts arising from our products
using ISO 14040 standard procedures. In a concrete, methodical and quantitative manner, we assess
environmental impacts and power consumption of each stage in the life cycle of our products: production,
utilization and end-of-life (see flowchart).
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Reasons for Study
Strategies for MAK 4T plus based on the customer needs, Mechanic needs, Channel needs. Also,
an effort to answer the following two questions that have come up during various discussions:
Is there a need to launch MAK 4T plus in various categories?
We need to find out whether the customer is aware of the lubes specifications in various categories 20W-40,
20W-50 and 10W-30.If not, then who drives the purchase decision of the customer for a particular
category of lubricant
Is there a need to focus our marketing efforts toward various segments of consumers?
In this we need to find out the perception of lubes in the consumer mind and how this perception varies w.r.t.
demographics and psychographics of the consumer. It will help us to know if there is need to launch our
product for premium/normal segment of consumers.
Scope of the Study
The detailed Interviews have been conducted with consumers, mechanics and retailers. However, the
interviews were limited to the following areas: Noida (sector 12, 1, 16, 18, 35, 9, BP 35, GIP mall) and New
Ashok Nagar.
Methodology of the study
Research design: A descriptive research focused to examine the consumer, mechanic and retailers
perception and their needs towards MAK 4T plus.
Unit of Analysis: Three categories will be analyzed: Retailer, Mechanic, and Consumer
Descriptive research: A survey was being carried out to understand the consumers, retailer and mechanics
minds.
Data Collection Method
We have collected following types of data during our survey: -
Nominal Data – In this type of data consumer is asked to give response to direct questions where he can choose
his preferences or simply answer Yes/No
Ordinal Data – In this type of data consumer is asked to give rating to certain parameters according to his
preferences.
Interval Level Data – In this type of data a particular person is asked to give some numerical data in response.
This type of data we have collected in form of monthly sales volume from various Distributors & Retailers/Dealers.
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Analysis of the data
Coding: Coding of the dataset was carried for the analysis in SPSS.
Data reduction: Data from the filled up questionnaires for consumers, retailers and mechanic was taken
and filled up in excel sheet and was reduced as per the requirement
Data extraction: Data was then extracted from excel sheet and filled up in SPSS data editor for analysis
Data analysis: Data analysis was carried out in excel (for percentage calculations) and in SPSS for
Frequency distribution and Cross tabulation.
Tools used for analysis of data: The basic tools used for the analysis of data were:
MS-EXCEL: Microsoft Excel is a spreadsheet application written and distributed by Microsoft.
Microsoft Excel has the basic features of all spreadsheets, using a grid of cells arranged in numbered rows
and letter-named columns to organize data manipulations like arithmetic operations.
SPSS: SPSS is a computer program used for statistical analysis. It is used by market researchers,
health researchers, survey companies, government, education researchers, marketing organizations and
others.
Limitations of Study: Primary research was carried out in Noida (BP 35 Noida, GIP mall Noida, Spice Mall Sector 25, Noida
sector 12, 9, 21, 31).Hence there can be certain region bound requirements among the consumers. This
research was mainly conducted in the form of a survey carried out with the help of a questionnaire designed
especially for consumers. Around 73 responses were collected.
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Profiles of Customers Surveyed
Age Group of Respondents:
As one can see from the diagram that majority of the respondents belonged to the age group 25 -34 years followed
by 18-24 years. This shows how majority of the bike market is skewed towards the people of age less than 35
years.
Occupation: One can see from the figure that majority of the respondents belonged as salaried employees followed by student and
then involved in their own business.
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Questionnaire Responses from Consumers
Average Run after which Bike goes for Service:
Around 68% of customers get their bike serviced after an average run of 2000km and less.
Where do customers get their Bike serviced?
Majority of the customers (62.5%) get their bike serviced at authorised service stations followed by mechanics
and other local service stations.
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Engine Oil Change Frequency of the Customer:
It can be easily ascertained from the above figure that majority of the respondents get their engine oil change at the
time of service only, hence one needs to target various service centres to increase the engine oil sales.
Various ways in which customers get engine oil change:
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More than 55% of customers gets their engine oil change by authorised service stations and mechanics, followed by
26% who purchase the engine oil on their own but get it changed by mechanic/service station.
Are customers aware of engine oil used in their bike:
Almost 60% of respondents were not aware of lubricants used in their bike.
Various Attributes on which customers purchase particular engine oil:
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Based on the rankings given by respondents to various attributes on the scale of 1 to 5 where 5 being the highest
and 1 the lowest, one can say that customers look for performance and quality of the lubricant as a major factor
while buying engine oil. It is then followed by the brand name or the current market leader. One needs to take
notice of the fact that customers do not care much about the price of lubricant.
Most preferred customer lubricant:
Based on the current analysis Castrol is the most preferred brand followed by Servo and MAK lubricants.
However, one needs to take notice of the fact that around 64% percent people prefer Castrol compared to
around 10% for MAK lubricants.
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Do consumers act on others advice while purchasing engine oil?
Based on the figure above it can be see that around 55% of customers use engine oil recommended by mechanics or
service centres, around 19% purchase on their own without acting on anybody‟s advice and around 15% are
recommended by their friends and families.
Are customers satisfied with the usage of MAK lubricant?
From the survey taken around 71% of people were satisfied with the usage of MAK Lubricants and 29% were
not. Customers mainly complained about the performance and quality of lubricant with respect to its
competitors.
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Are Customers aware of oil changing machine at BP Retail Outlets?
Of the people surveyed at BP 35 most of them were aware of the oil change machine but people surveyed in other
adjoining areas such as sector 18,9,12, 21 and 25 were not aware of this facility. Overall 21% of people knew
about this machine and rest did not.
Are customers getting oil change at BP Retail Outlets?
Majority of the people have not used this service as of now, only 30% of people aware of the service have actually
get the engine oil change done at Retail Outlets. Thus one needs to target this large segment.
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Are customers satisfied with the oil change at BP Retail Outlets?
Based on above data one can see a high satisfaction index among the customers who have availed this service.
Thus one needs to market this service so that large number of customers can be targeted. Once customers start
using this service in large number it will be a big success due to high satisfaction levels among the customers.
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Mechanic Response Analysis and Recommendations
Study limitations
Primary research carried out in Noida sector 12, 10, 9 and 31.This research was mainly conducted in the form
of a survey carried out with the help of a questionnaire designed especially for mechanics. Around 33 responses
were collected.
Profile of Mechanics
Based on number of years in this profession
Based on the survey it can be seen that 45% of the mechanics are in the profession for more than 15 years and 27%
have been doing this job between 10and 15 years. Thus one can see that the survey population was well experienced.
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Based on number of bikes serviced per day
A big chunk consist of mechanics who service up to 10 bikes per day. However, it was a general trend that most of
them were associated with retailers, garages and were using the oil that retailer recommends but they act as a link
between consumer and the retailer. They recommend and the consumer purchases the oil from retailers and gets it
changed through mechanic.
Based on average usage of lubricant per day
Almost 72% of mechanics use between 8-12 litres of lubricants every day and 18% use more than 15 litres a day.
Thus one can see on an average there is sale of almost 300 litres of lubricant at every mechanic shop.
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Questionnaire Responses from Mechanics How many of them are aware of the specification of lubricants they use?
82.8% of the mechanics were aware of the specifications of the lubricants they use.
What all specifications of lubricants are they aware of?
Above bar graph shows that awareness of 20W-40 is the highest; this can also be due to the high availability
of this specification. This is followed by the SL specification among the lubricants.
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Who recommends customers what lubricants to use?
As seen in the bar graph most of the sale is made on recommendation of mechanics, almost 72% of it. 64% of the sale is made on demand by customers and 18% of sale is influenced by advertisement and
brand promotion.
Which is the most preferred brand among the mechanics?
90% of mechanics prefer Castrol Active 4T, this is due to the high demand of this product among the customers.
64% prefer servo which is followed by MAK 4T.
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What are the various attributes based on which mechanics rank the lubricant?
The above graph shows that mechanics rank quality as the number one parameter for the sale of lubricants; this is
followed by brand name and advertising. Thus one needs to spend more on advertising and brand building of MAK
lubricants.
What all schemes would mechanics like in order to sell MAK lubricants?
Bar graph shows schemes that mechanics would prefer scratch cards followed by gift vouchers. 36% of the
mechanics prefer free lubricants and 18% cash discounts on the sale.
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What are the problems with sale of MAK lubricants faced by mechanics?
Most of the mechanics have mentioned low demand from the customers as the main problem with the sale of MAK
lubricants.
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Perceptual Mapping by FISHBEIN’S Analysis
This is one of the methods to get a picture of the how the product is perceived by the customers. We test customers
on various parameters related to our product (like in our case the parameters are price, appearance, performance &
flexi-packing). Questionnaire was designed in such a way that one could know about the attitude & behaviour of
the customer towards the purchase of the product (as lubricant in our case). On the attributes that have been
identified, we get scores of the correlation between attitudes and beliefs of customers. Through this, one can
compare how these attributes fare as far as the scores are concerned.
After performing Fishbein‟s Analysis, we get Perpetual Mapping diagrams as shown below. We have compared
customer‟s perception about MAK with other companies‟ products like Castrol, Servo, ELF, and GULF.
Perceptual Map shown below is the comparison between MAK & Servo. According to this map we can say that in
customer‟s perspective Flexi-packing & Appearance are almost same in case of the products offered by these two
companies. But on the contrary customers think that Servo is little bit better than MAK as far as performance is
considered & they are more satisfied with price of MAK in comparison with that of Servo.
Perceptual Map shown below is the comparison between MAK & Gulf. We can see clearly that customers perceive
MAK & Gulf almost similarly. MAK is slightly better in customer‟s perspective on the parameters of Price &
packing. This is because MAK has lower price than Gulf & their products come in very attractive packing.
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Perceptual Map shown below is the comparison between MAK & ELF. It can clearly be seen that these two
companies‟ products are similar in customer‟s perspective. MAK has a slight advantage over ELF over the price
parameter.
Perceptual Map shown below is the comparison between MAK & Castrol. It can be seen clearly from the map that
MAK has a good advantage over Castrol as far as price is concerned. Castrol has higher price than MAK on all the
similar products offered in market.
But Castrol has remarkable edge over the performance parameter. People perceive Castrol as prime performance
provide when used as a lubricant. This can be seen from previous data used for analyses. Castrol is market leader at
all the locations surveyed & this might be because people think that Castrol‟s performance is incomparable.
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Suggestions & Recommendations
Suggestions
BPCL should work to improve its distribution system in the regions covered for project.
Company should concentrate on doing meaningful advertising in electronic & print media.
More advertisements in electronic media with clear vision & target.
Weekly & monthly advertisements about MAK in local & national NEWS papers.
Banners & Print advertisements should be increased.
More schemes should be given to Distributors, Retailers/Dealers, and Mechanics & Consumers.
Retailers / Dealers
More cash discounts on the purchase of large volume
More margin should be given along with the credit
Yearly points schemes should be introduced
Scratch cards schemes should be there for whole year
Some company official should visit Retailers/Dealers regularly
Mechanics
Camp should be organized for mechanics to promote MAK as a brand & make them learn about
MAK & its advantages.
Free gifts should be given at the time of camps to make them interested to attend it.
This will instill a feeling of promoting MAK as a brand.
Customers
Scratch card schemes for the customers should be continued.
Free pamphlets should be distributed to make them aware of all the products by the company.
Bharat Petroleum Corporation Limited
Company should increase the production of small packs of 40ml & 60ml pouches; it will increase
sales at the petrol pumps.
Speed products like MAK 4T plus should be continuously supplied in the market to make consumers
remain brand loyal. We have observed in the regions surveyed that sometimes consumers ask for
MAK 4T plus & it is not there in Retailers/Dealers shelf due to either distribution channel flaws or
absence of the product in company depots.
Distributors should also be rewarded for the completion of targets. This will instil a feeling in
distributor to work more efficiently in the market.
Tie ups with vehicle‟s manufacturer should be advertised a bit more, as we have observed that people
tend to buy the lubricant that their vehicles‟ manufacturer recommends
Recommendations Exclusively for Business Development
Castrol is increasing prices of all of its products on regular basis. We have observed that because of
this, there is some ire in people for Castrol. This is the time when BPCL should act aggressively to
increase its customer base in the markets that we have surveyed.
Retailers/Dealers should be given top priority & should be provided with good promotional schemes.
Advertisements in Local newspaper should also be taken care of.
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Sales force should be improved to cover market in a better way. We suggest BPCL to use Adhoc
Sales force for this purpose. Adhoc sales force would have people who work exclusively in sales
only. This will help company to capture market in more efficient way.
Some new & innovative advertising methods should be pursued like: -
Put a MAK sticker on cycle rickshaws in the regions covered under project.
MAK watermark on Railway tickets & Reservation charts. Advertising on Radio channels.
Threats
Market survey revealed great potential for MAK lubricants in the region. As far as truck segment goes,
market is highly in favour of MAK having almost 80 percent share, MAK Diamond and Multigrade being
the major products in demand.
Still, there is a negative feeling regarding distribution ship of MAK lubricants because of following reasons:
Earlier two authorised dealer for MAK Lubricants namely Jai Hind and Balaji have opened closed
down within a short period incurring huge loss.
The margin of distributor gets affected by the aggressive sale of lubricants at retail outlets in the
region, Janta RO being one of them who sold 20litre Multigrade pale at a margin of Rs. 10-30. Thus
small shop owners or mechanic prefer to buy from RO‟s rather than authorised distributor.
Another problem faced in the region is by the operation of traders working in the nearby region, most
active of them being Goel Trader from Rudrapur region. He gets his supply from distributors
operating in Ghaziabad regions and offers very attractive prices to the dealers, sometimes as
competitive as offered by the company to its distributor.
One more serious problem in the region is that of duplicate products of MAK being sold. Most of the
duplicate products come from a factory operating near Agra region and sell them to the dealers at
half the price offering large margins. These fake products are devoid of any batch numbers and also
do not contain coupons or torch present in the genuine product.
Recommendations
In order to be competitive in this region BPCL has to allay fears of margin and other apprehensions
related to selling of MAK lubricants. This can be done either by going and talking to big players over
there or through one of our ILD located in the region.
BPCL also has to support potential distributor in the region and make sure that retail outlets (RO‟s)
do not mar the margins and sale of the distributors.
One also needs to reduce the amount of unbilled lubricants entering into the market through Goel
trader; this can be done by installing software solution at the distributor place so that none of the
lubricants goes unbilled.
BPCL can also try and educate end consumers in the region by asking them to look for batch number
on the box or pale containing the lubricating. This way one can limit the sale of duplicate products in
the market.
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SPSS Analysis
The null hypothesis states that there is no significant impact of Independent Variable (Price, Brand Name,
Advertisement, Quality, and Performance & Mechanic Recommendation) on the Dependent Variable
(Purchase Behaviour). The null hypothesis will be rejected when the significance value will be greater than
0.05 for a confidence interval of 95%.
Price:
ANOVA
Purchase behaviour
Sum of Squares df Mean Square F Sig.
Between Groups .991 1 .991 .831 .366
Within Groups 60.821 51 1.193
Total 61.811 52
There is significant impact of Price on purchase behaviour.
Brand name :
ANOVA
Purchase behaviour
Sum of Squares df Mean Square F Sig.
Between Groups .424 2 .212 .173 .842
Within Groups 61.387 50 1.228
Total 61.811 52
There is significant impact of Brand name on purchase behaviour.
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Advertisement:
ANOVA
Purchase behaviour
Sum of Squares df Mean Square F Sig.
Between Groups 1.261 3 .420 .340 .796
Within Groups 60.550 49 1.236
Total 61.811 52
There is significant impact of Advertisement on purchase behaviour.
Quality:
ANOVA
Purchase behaviour
Sum of Squares df Mean Square F Sig.
Between Groups .863 2 .432 .354 .704
Within Groups 60.948 50 1.219
Total 61.811 52
There is significant impact of Quality on purchase behaviour.
Performance:
ANOVA
Purchase behaviour
Sum of Squares df Mean Square F Sig.
Between Groups 1.326 3 .442 .358 .783
Within Groups 60.485 49 1.234
Total 61.811 52
There is significant impact of Performance on purchase behaviour.
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Mechanic recommendation:
ANOVA
Purchase behaviour
Sum of Squares df Mean Square F Sig.
Between Groups 2.884 3 .961 .799 .500
Within Groups 58.927 49 1.203
Total 61.811 52
There is significant impact of Mechanic recommendation on purchase behaviour.
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Findings
MAK is the market leader; it is used in more number of authorized service stations in two wheeler
segment.
OEM tie-ups play prominent role in selection and buying of lubricants in authorized service stations
segment.
If a automobile company has more OEM tie-ups, then price, quality, gifts and incentives are deciding
factors in selection of lubricant brand in authorized service stations segment.
The authorized service stations which don‟t follow OEM tie-up lubricants brand follow based on
customer demand and management preference.
If a lubricant company offers a scheme to customers at authorized service stations shows a positive
impact. It increases the number of customers coming to authorized service stations for the service of their
automobile.
The authorized service stations of the company who don‟t have OEM tie-ups with the MAK lubricant are
not ready shift to MAK brand.
MAK is the market leader in sales of lubricant to authorized service stations which is known by their
consumption at authorized service stations.
The consumption of lubricants at authorized service stations can be increased by offering schemes to the
customers coming to their service stations which inturn will increase the sales of lubricants to authorized
service stations.
The consumption of lubricants will be more at authorized service stations in the months of rainy season,
October due to Dussera festival, June, December, January.
Conclusions
In order to increase more market share the company has to increase its OEM tie-ups.
Another to way to increase its market share, in the case of company having more than one OEM tie-ups,
they can be made to switch MAK brand by offering price lower than the competitor, offering gifts and
incentives.
Quality is also a major factor during selection and buying of the lubricants, it should be continuously
improved and its grades also must be improved depending on the technology growth, as the technology in
the automobile sector is continuously changing, so its quality and grades should improved dynamically
according to the technology.
The market share can also be increased by setting up MAK Garage, Hero Honda Service Stations (A
Joint venture initiative between Hero Honda - the world‟s largest bike manufacturer and Bharat
Petroleum vehicle care centre), and MAK Quik Lube Oil Change in Hyderabad market. Their presence is
available in other major cities and by implementing the same in this market the market share can be
increased. According to my knowledge
MAK Quik Lube Oil Change will be easier to set up and also increases the consumption of MAK
lubricants.
The company should offer schemes to the customers coming to authorized service stations using MAK
lubricant in order to increase the consumption of lubricant at authorized service stations in turn it will
increase its sales to authorized service stations. These schemes should be implemented in the months of
rainy season, October due to Dussera festival, June, December, January, and March.