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Retail Outlet channel is not only profitable having a large captive customer base, but it also gives opportunity to personally interact with customers. The challenge would be to revitalize the channel and win back the oil change business. ii. Bazaar Channel Consequent to shift in market for automotive grades from oil company retail outlets to Bazaar, the market share of oil PSUs have fallen sharply. In early nineties, 70% of automotive lubricants were marketed through retail outlets of oil PSUs. Now the share has reduced to a mere 30% and bulk of the market in this segment has shifted to Bazaar. This shift in automotive lubes market has necessitated development of new connections and relationships along with new learning and unlearning of selling lubes in the high street. BPCL, therefore, from 2001 onwards started marketing in the Bazaar channel by creating a separate marketing structure at Regional and Territory level to handle this channel in exclusivity. With a network of 281 Primary Lube Distributors (PLD), 115 Industrial Lube Distributors (ILDs), 18 Rural Lube Distributors (RLDs), 59 LPG Distributors selling lubricants, 550 MAK Garages (automobile garages assisted by us in exchange for sale of MAK brand lubes), the Lube business has continued to show year on year growth. However BPCLs share in bazaar channel still continues to be lower as compared to other established players. BPCLs sales volume in Bazaar channel has increased from 5000 MT in 2000-01 to 55000 MT in 2010-11. This channel has thrown up several challenges in particular as BPCL needs to compete with several reputed and experienced MNCs. Future Aspirations Lubes business has drawn up plans to target substantial higher share in Bazaar market by 2015 with a significant high brand recall. The brand vision is that MAK Lubricants shall be one of the most Reliable, Innovative, Youthful and Endearing Lubricant Brands in the country. The Lubricants SBU also has the following business aspiration for the next 5 years : To Strengthen Brand Equity and be amongst the Top Two Lubricant Brands in India. The Lube Business has also drawn up plans to upgrade support services to make this happen. Even though BPCL has the strategy to enhance the business potential and increase the market share of MAK through various initiatives, there are still certain areas which need strategic decisions/investments. Apart from selling only Lubricants, can MAK become an automotive solution provider to its customers?
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According to industry estimates, in the next four years, automobile companies in India will roll out more than double the number of cars than they make today. BPCL expects the domestic demand to grow at double-digit rates for the next three to four years. The growth which is being witnessed in this segment has changed the dynamics of the automobile service industry in India. The authorized service stations, though, are expanding their base, the high service costs involved at these station is unable to pull the customer back after the sales. It is evident from the fact that most of the OEs operate at the level of less than 30% for after sales services at authorised service stations. The potential of the growing automobile population is common knowledge and is attracting lots of outside interest. The service segment in particular is about to face the toughest competition that the segment has ever seen. And, this will not come from the local garages, or the road-side mechanics, or even other dealers. The competition that this segment is facing today, and the gravity of which would increase with time, is from large business houses who have sniffed the huge potential that this rapidly expanding segment presents and are willing to pump in enormous amount of capital to capture a significant pie of the after-sales service market. They will do this by providing top class services and a positive overall experience to the customer. Historically, strong brands like Castrol have depended on a strong service network (Bike Zones and Pit Stops) to maintain a connect with the customer as well as the people influencing the purchase. Relationship building has formed a strong part of their strategy, which includes relationship with the customer in terms of better and stronger services and relationship with influencers in terms of tie ups etc. Currently, servicing if offered is in different variants which are spread across the value ladder and offer different propositions to consumers seeking vehicle servicing. The different segments are: 1. Mechanics who are normally attached to retailers and carryout servicing. 2. Road side garages which have sufficient infrastructure, however their business model is very crude and does not focus on customer amenities. 3. Structured service stations independently operating or are franchisees of renowned groups like BOSCH, TVS, Carnation etc. 4. Authorised Service Stations who service only specific brands of vehicles.
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BPCL has identified few challenges for each of the above segments which must be addressed so as to make MAK a dominant brand. These challenges mainly pertain to reseller market and are : i. Mechanics the Influencer in enhancing Lubricants brand and business: Automotive Lubricant is a Low involvement category where users have very little knowledge of the product, due to which mechanics exert high influence on the selection of the lubricant brand. Consequently, the road side mechanics/garages (unauthorised) play a vital role in both the promotion of the brand as well as influencing the purchase of the lubricant. It would be beneficial for BPCL to build a relationship with mechanics of those customers who do not visit Authorised Service Stations to get their vehicles serviced. This trend is more prevalent in the 2 wheeler sector where customers prefer the advantage of quicker, convenient and economical servicing. The challenge would be to enrol these mechanics into becoming our brand ambassadors with the ultimate aim of recommending our brand and also to retain them in their association with MAK Lubricants through a tie up / franchisee set up. ii. Un authorised Service Network Potential for MAK Servicing Vertical Network During last 4-5 years with the emergence of foreign automobile makers and advancement in automobile technology, servicing and repairing of vehicles has shifted to Authorised service stations (ASS) of original equipment (OE) manufacturers. However, the general perception of the Indian Consumers is that the Authorised Service Stations tend to overcharge the customers and the economy of service and value for money will be available only through reputed Mechanics / Unauthorised Garages. The challenge would be to have a service vertical which would provide the value for money benefits of an unauthorised service station while at the same time reassuring the customer that his vehicle is getting the best service under trained manpower supervision.
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So the questions that need to be answered are 1. To enhance the business potential and to be perceived as an all round lubricants service and solutions provider, is it necessary for MAK to venture in to a Service Vertical? 2. If yes, what should be the business model options for BPCL which would bring in value for all stake holders (Customer, Company, Mechanics, Garage / Service Station Owners, OEMs)? 3. For each of the segments mentioned above what should be the business strategy for BPCL to strengthen its presence in lubes market? Participants should cover the following : i. Short term tactical measures BPCL should take immediately ii. Long term strategy which can give sustainable competitive advantage to lubes business. 4. Management feels that the first segment i.e) the mechanics, could be taken on first as it involves least infusion of funds. If that be the case, how do you feel the company should develop a comprehensive model to enthuse this important stake holder? 5. Is BPCL increasing or devaluing the value of its brand MAK by entering into service tieups? How would the customer look at this overall initiative? 6. Do you think service initiatives can emerge as a separate revenue stream for BPCL in near future, please justify your recommendations? 7. Will these initiatives create any channel conflict - Inter (between Retail & Bazaar) / Intra (mechanics, service stations & MAK branded service stations) channels ? Participants are required to carry out complete environment analysis (SWOT, PESTAL, Competitor analysis) while they workout the modalities of proposed model. It is also suggested that dipstick surveys be carried out to understand the current AS-IS models of BPCL and other key competitors in this space. The participants must cover the financials of the Model and ROI for the investments recommended both for BPCL and Channel Partners (If any). The participating teams should focus on improving the current value proposition to the company, associates, as well as the customer. The participants must give due consideration to the changing economic scenario, changing demographic profile, growing middle class aspirations, realistic assessment of improvement in literacy levels in society- Urban, semi urban and rural, in next 5 to 10 years etc.
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Mr. Pushp Kumar Nayyar National Channel Manager (Lubes) Reseller Mr. Akshay Wadhwa Business Strategy Manager Ms. Sheilagh Nair Brand Manager Mr.K.Ravi Territory Mgr. Lubes Mumbai - Reseller Mr. Rajen Saha Territory Mgr. Lubes Delhi - Reseller Mr. Sanjay Maity Territory Mgr. Lubes Kolkata - Reseller Mr.Rajeev Kumar Territory Mgr. Lubes - Bangalore Mr.S.Kannan Territory Mgr. Lubes Chennai Mr.M.Sudhakar Babu Territory Mgr. Lubes Secunderabad Mr.D.Saha Territory Mgr. Lubes Reseller - Pune Mr.H.V.Gireesh Territory Mgr. Lubes Ahmedabad Mr.Brij Dutta Territory Mgr. Lubes Bhopal Mr.Vinay Sharan Territory Mgr. Lubes Lucknow Mr. Sanjay Kanotra Territory Mgr. Lubes Bhubaneswar Mr.Shailesh Malhotra Territory Mgr. Lubes Ranchi Mr. Suresh Kumar Territory Mgr. Lubes Kochi Mr.Ashish Nigam Territory Mgr. Lubes Guwahati
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The finalists shall be reimbursed for 2-way sleeper tickets for the shortest distance between NITIE and their college.
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