Marketing Plan

MARKETING MANAGEMENT

ALOK THAKUR, EMP16/A/45 Page 1

Prepare a long term marketing mix strategy for any one market / product. This plan

should include market positioning and marketing mix strategy.

Company: Hindustan Petroleum Corp. Ltd

Product: 4 stroke, 2/3 wheeler engine Oil

Brand Name Racer 4

APPROACH

Situational Analysis

Research Results & SWOT

Target Market

Positioning

Marketing Mix

Recommendation


ALOK THAKUR, EMP16/A/45

Lubricants: Lubricating oils are basically made of two components viz., Lube base oil which comes

out from refineries after refining the crude oil and has some inherent lubricating properties like any

other liquid and the performance enhancing chemical additives which

different characteristics of the resultant mixture.

following duties: Cooling, Sealing, Cleaning, Resist corrosion & wear & lubricate. These parameters

are enhanced by the addition of chemical additives. Lubricating oils are broadly categori

categories - Automotive & Industrial

automotive oils, turbine oil, bearing oil, hydraulic oil etc. are examples of industria

Existing Market Share of HPCL & Product Profile

HP Versus Segment Leader

11%8%

5%

4%

3%

3%3%2%

2%1%1%1%

13%

TOTAL 1250 TMT

MARKET SHARES- VALUE ADDED LUBES(DOES NOT INCLUDE BASE OILS)

Commercial

Vehicles

63%

Tractors

13%

Pumps/ gensetsRetail Lube Market in Automotive Sector


Lubricating oils are basically made of two components viz., Lube base oil which comes


other liquid and the performance enhancing chemical additives which are added to improve

different characteristics of the resultant mixture. Lubricating oil is basically required to perform the


of chemical additives. Lubricating oils are broadly categori

Automotive & Industrial. While Engine Oil, gear oil, transmission oil etc constitute

automotive oils, turbine oil, bearing oil, hydraulic oil etc. are examples of industrial oils.

Automotive Sector

Existing Market Share of HPCL & Product Profile

HP Versus Segment Leader

25%

16%

IOCCastrolHPCBPCGulfTotal Fina ElfShellValvolineIBPTide WaterBalmer LawrieExxon MobilPennzoilCaltexOthers

TOTAL 1250 TMT

MARKET SHARES- VALUE ADDED LUBES(DOES NOT INCLUDE BASE OILS)

48%

32% 14%

20 W 40 (VFM)2 STROKE MONO GRADES

PETROL CAR ENG OILS20 W 40 (Premium)

HPCL PRODUCT PROFILE

2 wheelers

10% 3 wheelers

3%Cars & MUVs

4%

Pumps/ gensets

7%

Retail Lube Market in Automotive Sector

Page 2

Lubricating oils are basically made of two components viz., Lube base oil which comes


are added to improve

ubricating oil is basically required to perform the


of chemical additives. Lubricating oils are broadly categorized in two

. While Engine Oil, gear oil, transmission oil etc constitute

l oils.

14% 2%2%2%

1%

PETROL CAR ENG OILS20 W 40 (Premium)

4 STROKE 15 W 40

HPCL PRODUCT PROFILE



Expected Growth Rate of Market Segments

2%

30%

68%

4 STROKE 2 WHEELER

2%

44%53%

PETROL CAR ENG OILS

1%

41%58%

15 W 40 DEO

18%

50%10%

22%

MONO GRADE DEO

1%

47%47%

5%

20 W 40 DEO (Premium)

60%40%

20 W 40 DEO (VFM)

20%

27%24%

10%19%

2 STROKE 2 WHEELER

HPCLIOC

BPC CASTROL OTHERS

HPCL VS SEGMENT LEADERS

0%

2%

4%

6%

8%

10%

12%

4 stroke Petrol Cars Engines Others

2010

2011

2012



Portfolio Analysis of HP Brands

Market Share High Low

High

Low

Brief Conclusion:

Market Growth Highest for 4 stroke engines

Product currently in Question Mark Zone

Focused investment required to convert 4 stroke engine oil (Racer 4) to shift from

Question Mark to Star, followed by Petrol Cars & Engine Oil

Segment under Dogs to be preferably exited & resources to be utilized in Question

Mark.

Buying decision

influenced by

Owner OEM Mechanic Distributor Bazaar Shop

SURVEY DATA of trade, influencers and consumers has been obtained by concerned department

and is being reproduced hereunder:

Awareness:

HP is on third behind Castrol & Servo in unassisted Brand recall among Mechanics

Unassisted recall of HP brand among mechanics is only 18% and among consumers only 15%.

Racer 4 awareness is too low.

14% consumers and 6% mechanics not aware of any HP brand

Umbrella branding working well for major competitors. HP has no umbrella brand.

STARS

TARGET

QUESTION MARK

4 Stroke

Petrol Cars

Engine Oils

CASH COWS

20W40 VFM

DOGS

Mono Grade

Deo Grade

20W40(P)

Market

Gro

wth



Buying Decision

Mechanic is a key influencer and aware of his role.

Mechanics recommendation, Brand Image and Price are major influencers.

Quality, specification and package attractiveness is not a decisive factor.

Consumers tend to repeat their current brand.

Product Non Availability, discounts affect buying decisions negatively

Perception

Confidence of HP brand decreases down the supply chain.

Perception is more in the form of Value for money & acceptable performance

Does not occupy superior performance or premium category space in consumers mind.

Preference

Castrol & Servo enjoys greatest customer and trade loyalty.

Retailers are not averse to push sales of brands that fetch them decent margin.

HP brand does not enjoy comparable loyalty.

Distribution

92% of distributors face shortage often or sometimes

95% of them lose sales due to short supply sometime or other

40% customers felt that HP oils are available at few shops only

Service level of filling plant is an area of concern

Packaging

HP packaging are generally rated unattractive

Better packaging can improve sales to some extent

Two wheelers and car segment is more sensitive to packaging

Damage of package in transit is a major concern

Pricing

HP Oils are considered to be reasonably priced

Majority of customers compare price..

Sales would decrease if price advantage is nullified.

Product Specification

Less than 50% consumers are aware of product specification.

Even those who are aware know only about viscometrics.

Customers ask for OEM recommended viscometrics.

Majority of buyers who are aware of specification vouch that HP product is comparable

to competing brands

Trade Incentives

Distributors agree that HP oil have good payment terms and their concerns are profitable.



Promotion

Castrol & Servo enjoy maximum visibility among consumers and trade.

HP enjoys marginal visibility.

Traders and consumers agree that effective advertisement boosts sales.

HPs scheme attractiveness is comparable to leaders but mechanics are not aware of it.

Traders and influencers feel that HP does not establish contact with them frequently.

Castrol is known for frequent schemes.

SWOT ANALYSIS

STRENGTH

WEAKNESS

Good Trade Margins

Trustworthy reputation

Own Lube Base Oil refinery

Price Advantage

Massive Retail Outlet network

Frequent touch point with customers at

retail outlet

In advantageous position to tap rural market

thru retail outlet and Kisan Kendra

Limited Brand Awareness

No Umbrella Brand

Very low retailer and Mechanic loyalty

Brand awareness deteriorates down the

supply chain

Weak supply chain

Limited Tie ups with OEM

Only one Cash cow portfolio.

Too many products in dogs

Racer 4 in Question mark area

High Growth in 4 stroke 2/3 wheeler

particularly in rural sector.

Development of roads will further boost

growth

Urbanization will increase intercity

transport.

Increasing retail network will provide better

coverage of rural areas.

Younger section more prone to opt for 4

stroke 2 wheeler.

Shift of lube buying from retail outlet to

Bazaar

Access to private retail outlets network for

competitors.

Increased usage by authorized service

centres will result in increased buying

power.

Strong competitors & threat of

commoditization

No control on spurious products.

OPPORTUNITIES THREATS

MARKET SEGMENTATION:

The product RACER 4 is suitable for 4 stroke 2 wheeler vehicles only.

Broad Geographic Segmentation: Urban & Rural

Demographic :

Urban:

(i) Young College going Students.

(ii) Young Professionals in the initial stage of their career.

(iii) Others in the middle/ low income group



(iv) Primarily male users

Rural:

(i) Middle to high income group.

(ii) Engaged in Small business or some job.

(iii) Primarily Male users

(iv) Users concerned about mileage, price and quality.

Behavioral:

Urban:

(i) Between Loyal & Split loyal

(ii) Not much concerned about the brand

(iii) Dependent on Service Centre/ Mechanics recommendation

Rural:

(i) Can be very loyal.

(ii) Concerned about the quality of product

(iii) Values Mechanic recommendation strongly, but

(iv) Brand Image comes first

TARGET MARKET

It is clear that the product will serve two broad segment namely Rural & Urban. In Urban

segment, the classification is Young students & professionals and Others

The life style, income, priorities, loyalty etc differs between Urban & Rural segments. Hence,

differentiated strategy shall be adopted wherein the product shall be same but different

marketing mixes shall be offered to different segments viz. different promotional schemes and

distribution channels etc.

POSITIONING

The positioning statement should read like

HP Racer 4 has been specially designed for 4 stroke engines to improve performance and protect the engine.

The 4 stroke 2 wheeler owners are either high class young student who value performance or middle income urban and rural folks who are concerned about the performance (fuel efficiency etc) and also protection (life of the vehicle).

Dual attributes performance and protection has been given to differentiate the product from the competitor. (In general, the competitor stress on the performance only).

In coming years, the growth of 4 stroke 2 wheeler rural market will outpace the urban segment.



MARKETING MIX

PRODUCT PRICE

Look for strategic tie ups with OEMs. Highlight specification on package. Make package informative at least for

comparison with competitors product.

Retain Price Advantage Revisit schemes for repackaging the

offer in attractive fashion.

Strengthen Sales force Strengthen distributor network. Explore new avenues for outlet

particularly in rural areas. Free Oil check and Oil change at retail

outlet Target Loyalty card customers in urban

areas. Improve service level of filling plant.

Develop Umbrella Brand Develop exhaustive plan to educate and

interact with mechanics. Improve packaging of Racer 4 Focus on rural areas thru free vehicle

checkup camps. Educate rural customers on product

specification vis--vis competitor. Differentiate promotions. Regular meet with retailer and down the

chain stakeholders. PLACE PROMOTION

Documents

Marketing Plan