A report on lubricants distribution

A case study of Mobil

BY
M. Ramesh
DM-05-034

UNDER SUPERVISION
OF
Mrs Meghana AND
MR.Ajay Kumar

Submitted to:

Aurora’s Business School, Hyderabad.

 IN PARTIAL FULFILMENT OF
POST GRADUATE DIPLOMA IN MANAGEMENT

Aurora’s Business School, Hyderabad.

CERTIFICATE

This is to certify that this is the Bonafide Project Work

Entitled ………………………………………………………………………………

………………………………………………………………………………………

Carried out by Mr.…………………………………….…………………

Register No ………….…...Year………………..………………in

Partial fulfillment ofPOST GRADUATE DIPLOMA IN MANAGEMENTin

Aurora’s Business School, Hyderabad

Project guide: Director

Date: Date:
 DECLARATION

I hereby declare that this project report entitled “A report on lubricants

distribution - A case study of Mobil ”is an original project done by me and no part
of the project is taken from any other project or otherwise or submitted earlier to
any other college or university for any degree or diploma.

Mr. M. Ramesh

Date:

Place:
 ACKNOWLEDGEMT

I express my sincere thanks to my college, AURORA’S BUSINESS SCHOOL for giving me this
opportunity to work in one of the leading organizations in the financial services field. I thank our
director, Dr.Ravi Paturi and also the faculty of ABS for their support.

I thank Rotex Petrochem Pvt Ltd. for giving me the opportunity to work here and gain valuable
experience in the corporate environment.

I am thankful and feel very privileged for having Mr. Harish as my assigned project guide. I
thank him for the support and guidance he has given during this project.

I would also like to express my heartfelt gratitude for the support given to me by the research
team at Rotex Petrochem Pvt Ltd. This project could not have been completed without the
constant support and guidance given by them.

M. Ramesh
Lubricant Industry

Strong growth in the Indian automotive, power and engineering sectors is

creating new market opportunities for lubricants’ manufacturers, according to a new
study from the research and advisory firm, India Analysis.
In the automotive sector, consumers are migrating to better quality vehicles and
motorbikes and as a result, using higher grade lubricants; this is benefiting multi-grade
lubricant products with strong brand recognition and wide distribution. In the industrials’
segment, high levels of investment in the power, manufacturing and transport sectors
should drive very strong growth for transformer oils, marine and aviation lubricants.
Whilst there are no restrictions on foreign lubricant manufacturers from establishing
100%-owned operations in India, many have chosen to partner with local companies.
The Background
These are exciting times for the lube industry in India. Each one of the vast
contingent of 22 Multinationals and a total of 80 big & small players are vying for a pie of
Rs.5, 500 Crore market. Worldwide established brands, some of them albeit new to
India, like Shell, Mobil, Caltex, Elf, Pennzoil are fighting it out with established Indian
brands like SERVO & others to establish their foothold in the 6th largest lubricant
market in the World. Compared to the average World consumption of 35 Million tonnes
per annum & Asia-Pacific region consumption of 7.5 million tones, the Indian lube
industry with annual demand of 1 million tonnes is just behind Japan and China in Asia
having a demand growth rate of 4% compared to the World growth rate ranging
between zero to 2%. That is the lube industry in India today.
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 decanalisation 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 30% 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 & Public sectors. All
these new entrants are targeting for a very small share of the market considering that
even 1% market share means a sale of Rs.55 Crores.
The Indian Oil controlled 54% of the lube market out of total PSU's market share
of more than 90% during 91-92. The Government policy of deregulation followed by
entry of multinationals through JVCs had its effect on the market dominance of PSUs.
This has been followed by sudden entry of lot many players, each one claiming to have
some international collaboration and a `foreign' brand name. This had its initial impact
and illusions in the market and the market became more volatile. During these phases
marketing channels of distribution had drifted from petrol stations to bazaar trade.
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 upgradation 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. Indian Oil virtually dominated and
continues to dominate this sector through their proven track record of quality product
and vast network of professionalized pre sales & after sales services. But 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 in
general and IOC in particular initially restricted their channel of distribution through their
large infrastructure of marketing network i.e., petrol stations & distributor network. 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.
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.
Strength of an 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 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 focused
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. Among the oil companies in India, established companies like
IOC have good financial resources, who can afford to keep such high inventories.
Competitive Analysis

The first seeds of competition were sown in the early 1990’s when following the
liberalization of the Indian economy, the government decided to open the Indian market
to foreign competition. Import of base oil, the key raw material, was de-canalized with
IOC losing its status as the sole canalizing agent. Pricing of base oil was deregulated in
a phased manner and currently it is market determined. Basic custom duty on base oil
stock was also reduced from a peak of 85 percent to a level of 25 percent. All
quantitative restrictions were also removed. These developments naturally encouraged
the entry of foreign players on Indian shores who were already facing a slowdown in
demand in their local markets. The coming in of foreign participants created an excess
supply situation in the Indian automotive lubes market, which made it more difficult for
the Indian lube manufacturers to survive.

Recent deregulations in the lubricant market have promised many new opportunities for
the private lube manufacturers. With the dismantling of Administered Price Mechanism
(APM) the burden of subsidies is now being passed on to the government. Private
participants will also gain a presence in the Indian oil and gas sector and hence there
will be competition between participants that will ensure the growth of the sector. In the
next couple of years, the industry is going to witness sea changes. Retail networks,
logistics management, and risk management are going to be the crucial factors. The
stand-alone refineries will have to be merged with the marketing companies, as they do
not have the distribution infrastructure to sell their products in a deregulated market.
Companies like Reliance are already selling their products through petrol pumps. The
monopoly of the public sector holdings will no longer exist. MNC’s will be able to sell
their products through petrol pumps. Lubes manufactured by Reliance Petroleum,
Castrol, Elf, Gulf Oil etc, which are now sold at petrol pumps. In medium to long term,
Frost & Sullivan expects private sector companies to have a market share of around 25
percent.

Distribution Structure

There are two key markets for lubricants in India. Given high levels of competition
original equipment, linkages are gaining importance. The original equipment market
contributes almost 70 percent and 30 percent of the market is comprised by the retail
sales segment. The channel for replacement market or the retail segment is petrol
pumps or retail stores. Almost 70 percent of the lubricants in India are sold through
petrol pumps. Most of the MNC’s have tied up with oil majors for marketing their
lubricants like Castrol with Escorts and Tata BP with Telco. After the deregulation of the
petrol pumps companies are keenly watching the developments in the lubes market.

The distribution channel adopted by public sector units is through the petrol pumps.
Other private participants have had to set up an independent infrastructure comprising
of distributors, stockiest and retailers through out India. MNC’s and private companies
sell through retail stores. 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 the
lube market, Indian Oil Corporation Limited is leading the market with 30 percent market
share. Castrol is next with 25 percent of the share and HPCL and BPCL are next with
about 20 percent and 15 percent shares respectively. Other private companies hold the
remaining market share.

Key Success Factors

Frost and Sullivan believe that the key factors for success in this highly fragmented and
competitive industry include:

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.

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.

Margins and Discount Schemes

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.

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.

Market Trend

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 every one to carve a nich 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.

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.

R&D efforts & pursuits for excellence

Technology was never in short supply in the field of lubricant market in India. In fact it is
at par with the latest standards, thanks to the import of technology and the exceptional
efforts made by companies like IOC in the field of Research & Development of
indigenous products meeting World standards. The biggest & one of the best petroleum
R&D in Asia accredited with ISO 9001 belongs to IOC. This R&D has developed over
1500 formulations through their scientists with state of the art technology and enjoys
approval from competent bodies both at National & International level. Through
development of bio-degradable, energy efficient & eco-friendly lubricants, Titanium
complex grease, Indian Oil's R&D won various laurels like prestigious DSIR award,
NRDC award for best invention, ICMA & FICCI award & UN-WIPO award. It has also
got over 75 National & International patents including the US & Australia. Over the
years IOC's R&D has demonstrated its ability to develop World class lubricants suiting
Indian conditions. Quality & continuous technology upgradation is one of the key
attention area in this competitive environment and here also IOC scored very high
among all Oil Companies in India having secured ISO 9002 & ISO 14002 accreditation
for all its refineries, lube blending plants & QC labs.

EXXON Mobil

The Exxon Mobil Corporation, or ExxonMobil, is an American multinational oil and

gas corporation. It is a direct descendant of John D. Rockefeller's Standard Oil
company, and was formed on November 30, 1999, by the merger of Exxon and Mobil.
Its headquarters is located in Irving, Texas.

ExxonMobil is one of the largest publicly traded companies in the world, having been
ranked either #1 or #2 for the past 5 years. Exxon Mobil's reserves were 72 billion oil-
equivalent barrels at the end of 2007 and, at then (2007) rates of production are
expected to last over 14 years. The company has 38 oil refineries in 21 countries
constituting a combined daily refining capacity of 6.3 million barrels.

ExxonMobil is the largest of the six oil super majors with daily production of 3.921
million BOE (barrels of oil equivalent). In 2008, this was approximately 3% of world
production, which is less than several of the largest state-owned petroleum companies.
When ranked by oil and gas reserves it is 14th in the world with less than 1% of the
total.

ExxonMobil markets products around the world under the brands of Exxon, Mobil, and
Esso. It also owns hundreds of smaller subsidiaries such as Imperial Oil Limited (69.6%
ownership) in Canada, and SeaRiver Maritime, a petroleum shipping company.

The upstream division dominates the company's cash flow, accounting for
approximately 70% of revenue. The company employs over 82,000 people worldwide,
as indicated in ExxonMobil's 2006 Corporate Citizen Report, with approximately 4,000
employees in its Fairfax downstream headquarters and 27,000 people in its Houston
upstream headquarters.

Operating divisions by category are as follows:

 Upstream
o ExxonMobil Exploration Company
o ExxonMobil Development Company
o ExxonMobil Production Company
o ExxonMobil Gas and Power Marketing Company
o ExxonMobil Upstream Research Company

 Downstream
o ExxonMobil Refining and Supply Company
o SeaRiver Maritime
o ExxonMobil Fuels Marketing Company
o ExxonMobil Lubricants & Specialties Company
o ExxonMobil Research and Engineering Company

 Chemical
o ExxonMobil Chemical Company
  ExxonMobil Global Services Company
o ExxonMobil Information Technology
o Global Real Estate and Facilities
o Global Procurement
o Business Support Centers

History

 Exxon Mobil Corporation was formed in 1999 by the merger of two major oil
companies, Exxon and Mobil. Both Exxon and Mobil were descendants of the
John D. Rockefeller corporation, Standard Oil which was established in 1870.
The reputation of Standard Oil in the public eye suffered badly after publication of
Ida M. Tarbell's classic exposé The History of the Standard Oil Company in 1904,
leading to a growing outcry for the government to take action against the
company.
 By 1911, with public outcry at a climax, the Supreme Court of the United States
ruled that Standard Oil must be dissolved and split into 34 companies. Two of
these companies were Jersey Standard ("Standard Oil Company of New
Jersey"), which eventually became Exxon, and Socony ("Standard Oil Company
of New York"), which eventually became Mobil.
 In the same year, the nation's kerosene output was eclipsed for the first time by
gasoline. The growing automotive market inspired the product trademark Mobil
oil, registered by Socony in 1920.
 Over the next few decades, both companies grew significantly. Jersey Standard,
led by Walter C. Teagle, became the largest oil producer in the world. It acquired
a 50 percent share in Humble Oil & Refining Co., a Texas oil producer. Socony
purchased a 45 percent interest in Magnolia Petroleum Co., a major refiner,
marketer and pipeline transporter. In 1931, Socony merged with Vacuum Oil Co.,
an industry pioneer dating back to 1866 and a growing Standard Oil spin-off in its
own right.
 In the Asia-Pacific region, Jersey Standard had oil production and refineries in
Indonesia but no marketing network. Socony-Vacuum had Asian marketing
outlets supplied remotely from California. In 1933, Jersey Standard and Socony-
Vacuum merged their interests in the region into a 50-50 joint venture. Standard-
Vacuum Oil Co., or "Stanvac," operated in 50 countries, from East Africa to New
Zealand, before it was dissolved in 1962.
 Mobil Chemical Company was established in 1950. As of 1999, its principal
products included basic olefins and aromatics, ethylene glycol and polyethylene.
The company produced synthetic lubricant base stocks as well as lubricant
additives, propylene packaging films and catalysts. Exxon Chemical Company
(first named Enjay Chemicals) became a worldwide organization in 1965 and in
1999 was a major producer and marketer of olefins, aromatics, polyethylene and
polypropylene along with specialty lines such as elastomers, plasticizers,
solvents, process fluids, oxo alcohols and adhesive resins. The company was an
industry leader in metallocene catalyst technology to make unique polymers with
improved performance.
 In 1955, Socony-Vacuum became Socony Mobil Oil Co. and in 1966 simply Mobil
Oil Corp. A decade later, the newly incorporated Mobil Corporation absorbed
Mobil Oil as a wholly owned subsidiary. Jersey Standard changed its name to
Exxon Corporation in 1972 and established Exxon as a trademark throughout the
United States. In other parts of the world, Exxon and its affiliated companies
continued to use its Esso trademark.
 On March 24, 1989, the Exxon Valdez oil tanker struck Bligh Reef in Prince
William Sound, Alaska and spilled more than 11 million gallons (42,000 m³) of
crude oil. The Exxon Valdez oil spill was the second largest in U.S. history, and
in the aftermath of the Exxon Valdez incident, the U.S. Congress passed the Oil
Pollution Act of 1990. An initial award of $5 billion USD punitive was reduced to
$507.5 million by the US Supreme Court in June 2008, and distributions of this
award have commenced.
 In 1998, Exxon and Mobil signed a US$73.7 billion definitive agreement to merge
and form a new company called Exxon Mobil Corporation, the largest company
 on the planet. After shareholder and regulatory approvals, the merger was
completed on November 30, 1999. The merger of Exxon and Mobil was unique in
American history because it reunited the two largest companies of John D.
Rockefeller's Standard Oil trust, Standard Oil Company of New Jersey/Exxon
and Standard Oil Company of New York/Mobil, which had been forcibly
separated by government order nearly a century earlier. This reunion resulted in
the largest merger in US corporate history.
 In 2000, ExxonMobil sold a refinery in Benicia, California and 340 Exxon-branded
stations to Valero Energy Corporation, as part of an FTC-mandated divestiture of
California assets. ExxonMobil continues to supply petroleum products to over
700 Mobil-branded retail outlets in California.
 In 2005, ExxonMobil's stock price surged in parallel with rising oil prices,
surpassing General Electric as the largest corporation in the world in terms of
market capitalization. At the end of 2005, it reported record profits of US $36
billion in annual income, up 42% from the previous year (the overall annual
income was an all-time record for annual income by any business, and included
$10 billion in the third quarter alone, also an all-time record income for a single
quarter by any business). The company and the American Petroleum Institute
(the oil and chemical industry's lobbying organization) put these profits in context
by comparing oil industry profits to those of other large industries such as
pharmaceuticals and banking.
 On June 12, 2008, ExxonMobil announced that it was exiting the retail fuel
business, citing the increasing difficulty to run gas stations under rising crude oil
costs. The multi-year process will gradually phase the corporation out of the
direct market, and will affect 820 company-owned stations and approximately
1,400 other stations operated by dealers distributing across the United States.
The sale will not result in the disappearance of Exxon and Mobil branded
stations; the new owners will continue to sell ExxonMobil gasoline and license
the appropriate names from ExxonMobil, who will in turn be compensated for use
of the brand.
Environmental record

 While it has been a contributor to environmental causes (the company donated

$6.6 million to environmental and social groups in 2007), ExxonMobil's
environmental record has been a target of critics from outside organizations such
as Greenpeace as well as some institutional investors who disagree with its
stance on global warming. The Political Economy Research Institute ranks
ExxonMobil sixth among corporations emitting airborne pollutants in the United
States. The ranking is based on the quantity (15.5 million pounds in 2005) and
toxicity of the emissions. In 2005, ExxonMobil had committed less than 1% of
their profits towards researching alternative energy, less than other leading oil
companies.

Revenue and profits

 In 2005, ExxonMobil surpassed Wal-Mart as the world's largest publicly held

corporation when measured by revenue, although Wal-Mart remained the largest
by number of employees. ExxonMobil's $340 billion revenues in 2005 were a
25.5 percent increase over their 2004 revenues.
 In 2006, Wal-Mart recaptured the lead with revenues of $348.7 billion against
ExxonMobil's $335.1. ExxonMobil continued to lead the world in both profits
($39.5 billion in 2006) and market value ($460.43 billion).
 In 2007, ExxonMobil had a record net income of $40.61 billion on $404.552 of
revenue, an increase largely due to escalating oil prices as their actual oil
equivalent production decreased by 1%, in part due to expropriation of their
Venezuelan assets by the Chavez government.
 As of April 1, 2008, ExxonMobil occupied all 10 slots for Top Corporate Quarterly
Earnings of all Time.
Rotex Petrochem Private Limited-Establishement

Profile

Year of Establishment : 1965

Nature of Business : wholesaler

Number of Employees : 26 to 50 People

Turnover : US$ 0.25-1 Million (or Rs. 1-4 Crore Approx.)

Area of Operation : Manufacturers and Traders

Legal Status : Limited Liability/ Corporation (Privately Held)

Major Markets : Indian Subcontinent

Based at : Pune, Maharashtra (India)

Three branches:

 Tashkent Industrial Oil Corporation,

 Pentagon Lubricants
 Paragases and chemical private limited

They offer custom made specialty industrial oil such as mobil spindle oil, automotive gear oil,
sugar mill oil, silicone lubricating grease, rust preventives, antistatic agent, heat transfer fluid
and many more that are at par with international standards. They procure our quality raw
material from certified and trusted vendors.
They Manufacture antistatic agent, conning oil, rust preventive, cutting oil (soluble & direct),
quenching oil, transformer oil, hydraulic oil, sugar mill oil, spindle oil, lubricating grease, rear
oil and heat transfer fluid, machine oils, turbine oil, etc. They source quality raw material from
the certified vendors after thorough inspection. They have in-depth knowledge in manufacturing
the products as per the international standards. Our team of quality auditors stringently checks
every stage of product development right from sourcing of the raw material to the final dispatch
of the consignments. We also provide safe packaging of our oil and greases with the help
automated machines
Tashkent Industrial Oil Corporation:

 Rust Preventives
 Hydraulic Oil
 Quenching Oil
 Conning Oil
 Antistatic Agents
 Transformer Oil
 Cutting Oil
 Spindle Oil
 Gear Oil
 Sugar Mill Oil
 Lubricating Grease
 Heat Transfer Fluids

Annual Turnover (INR/US $): 50 Crores (500 million INR)

Pentagon Lubricants:-

 Automotive lubricating oils

 industrial lubricating oils
 industrial specialty oils
 marine engine oils
 metal working oils
 rubber process oils
 grease

Paragases and chemical private limited:-

 industrial chemicals
 lubricants
 refrigerant gas
 pharamacitical
 propellents
 transformer oils
 automotive oils
 engine collent
The broad category of products manufactured and traded by us includes industrial gases
industrial chemicals, ultra high pure gases, calibration gases and lubricants. The company has the
expertise in supplying these chemicals in any quantity specified by the client. We utilize only
tamper proof cylinders and containers to make sure that the products are safely delivered to the
client’s address. As a pioneer organization, engaged in manufacturing and trading of industrial
chemicals, we are very particular about the quality of our products.

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Product Portfolio of Mobil

Mobil Delvac Mobil Mobil1 4T oils Gear Grease

Product Depth

 Mobil Delvac
 Delvac MX W40 15W40
 Delvac Super 1300 15W40
 Delvac 1340
 Delvac 1300
 Diesel Super 20W40

 Mobil Super
 Super 1000 TM 15W40
 Super 1000 MS 15W40
 Super 10W30
 Super HP 10W30
 Special 20W50
 Super FE Special 5W30
 Super 1000 X2 20W50
 Super XHP 10W40

 Mobil1
 Mobil1 5W50
 Mobil1 0W40
 Mobil Synt S 5W40
 Mobil 4T oil
 Super 4T 20W40

 Gear Oils
 Mobilube HD 80W90
 Mobilube HD 85W140
 Mobilube GX 80W90
 Mobilube GX 140
 Mobilube GX-A 80W
 Mobilube SHC 75W90
 Mobil ATF 220
 Mobil multipurpose ATF

 Grease
 Mobil XHP 222 Grease
THEORETICAL BACKGROUND OF THE STUDY

Marketing involves satisfying consumer’s needs and wants. The task of any
business is to deliver customer value at a profit. The American Marketing
Association offers the following formal definition: Marketing is an organizational
function and a set of processes for creating, communicating, and delivering value
to customers and for managing customer relationships in ways that benefit the
organization and its stake holders.

21According to this view, holistic marketers succeed by managing a superior value

chain that delivers a high level of product quality, service, and speed. Holistic
marketers achieve profitable growth by expanding customer share, building
customer loyalty, and capturing customer lifetime value.

A holistic marketing framework shows how the interaction between relevant actors
(Customers, company, and collaborators) and value-based activities (value
exploration, value creation, and value delivery) helps to create, maintain, and
renew customer value.

THE ROLE OF MARKETING CHANNELS

Successful value creation needs successful value delivery. Holistic marketers are
increasingly taking a value network view of their businesses. The marketing
channel performs the work of moving goods from producers to consumers.
Intermediaries normally achieve superior efficiency in making goods widely
available and accessible to target markets. Through their contacts, experience,
specialization, and scale of operation, intermediaries usually offer the firm more
than it can achieve on its own.

These are the various roles performed by the channel partners:

  Gather information about potential and current customers, competitors, and
other actors and forces in the marketing environment.
 Develop and disseminate persuasive communications to stimulate
purchasing.
 Reach agreements on price and other terms so that transfer of ownership or
possession can be affected.
 Place orders with manufacturers.
 Acquire the funds to finance inventories at different levels in the marketing
channel.
 Assume risks connected with carrying out channel work.
 Provide for the successive storage and movement of physical products.
 Provide for buyers' payment of their bills through banks and other financial
institutions.
 Oversee actual transfer of ownership from one organization or person to
another.
All channel functions have three things in common: They use up scarce resources;
they can often be performed better through specialization; and they can be shifted
among channel members. When the manufacturer shifts some functions to
intermediaries, the producer's costs and prices are lower, but the intermediary must
add a charge to cover its work. If the intermediaries are more efficient than the
manufacturer, prices to consumers should be lower. If consumers perform some
functions themselves, they should enjoy even lower prices.

CHANNEL MANAGEMENT DECISIONS

After a company has chosen a channel alternative, individual intermediaries must

be selected, trained, motivated, and evaluated. Channel arrangements must be
modified over time.

 SELECTING CHANNEL MEMBERS

Companies need to select their channel members carefully. To customers, the
channels are the company. Consider the negative impression customers would get
of if one or more of their outlets or dealers consistently appeared dirty, inefficient,
or unpleasant. To facilitate channel member selection, producers should determine
what characteristics distinguish the better intermediaries. They should evaluate the
number of years in business, other lines carried, growth and profit record, financial
strength, cooperativeness, and service reputation. If the intermediaries are sales
agents, producers should evaluate the number and character of other lines carried
and the size and quality of the sales force. If the intermediaries are department
stores that want exclusive distribution, the producer should evaluate locations,
future growth potential, and type of clientele.

 TRAINING CHANNEL MEMBERS

Companies need to plan and implement careful training programs for their
intermediaries. The company must constantly communicate its view that the
intermediaries are partners in a joint effort to satisfy end users of the product.
Coercive and reward power are objectively observable; legitimate, expert, and
referent power are more subjective and dependent on the ability and willingness of
parties to recognize them.

 MOTIVATING CHANNEL MEMBERS

A company needs to view its intermediaries in the same way it views its end users.
It needs to determine intermediaries' needs and construct a channel positioning
such that its channel offering is tailored to provide superior value to these
intermediaries. Being able to stimulate channel members to top performance starts
with understanding their needs and wants. The company should provide training
programs, market research programs, and other capability-building programs to
improve intermediaries’ performance.

 EVALUATING CHANNEL MEMBERS

Producers must periodically evaluate intermediaries' performance against such
standards as sales-quota attainment, average inventory levels, customer delivery
time, treatment of damaged and lost goods, and cooperation in promotional and
training programs. A producer will occasionally discover that it is paying too much
to particular intermediaries for what they are actually doing. Producers should set
up functional discounts in which they pay specified amounts for the trade channel's
performance of each agreed-upon service. Underperformers need to be counseled,
retrained, motivated, or terminated.
  MODIFYING CHANNEL ARRANGEMENTS
A producer must periodically review and modify its channel arrangements.

Modification becomes necessary when the distribution channel is not working as

planned, consumer buying patterns change, the market expands, new competition
arises, innovative distribution channels emerge, and the product moves into later
stages in the product life cycle.

LEVELS OF MARKETING SEGMENTATIONS AND TARGETS

Markets are not homogeneous. A company cannot connect with all customers in
large, broad, or diverse .markets. Consumers vary on many dimensions and often
can be grouped according to one or more characteristics.

 SEGMENTATION MARKETING
The starting point for discussing segmentation is mass marketing. In mass
marketing, the seller engages in the mass production, mass distribution, and mass
promotion of one product for all buyers. The argument for mass marketing is that it
creates the largest potential market, which leads to the lowest costs, which in turn
can lead to lower prices or higher margins. However, many critics point to the
increasing splintering of the market, which makes mass marketing more difficult.
The proliferation of advertising media and distribution channels is making it
difficult and increasingly expensive to reach a mass audience. Some claim that
mass marketing is dying. Most companies are turning to micromarketing at one of
four levels: segments, niches, local areas, and individuals.

 TARGET MARKETING
Once the firm has identified its market-segment opportunities, it has to decide how
many and which ones to target. Marketers are increasingly combining several
variables in an effort to identify smaller, better-defined target groups. Effective
target marketing requires that marketers:

 Identify and profile distinct groups of buyers who differ in their needs and
preferences (market segmentation).
 Select one or more market segments to enter (market targeting).
  For each target segment, establish and communicate the distinctive benefits)
of the company's market offering (market positioning).

COMPETITIVE STRATEGIES FOR MARKET LEADERS

The leader might spend conservatively whereas a challenger spends liberally. The
leader might misjudge its competition and find itself left behind. The dominant
firm might look old-fashioned against new and peppier rivals. The dominant firm's
costs might rise excessively and hurt its profits, or a discount competitor can
undercut prices. Leaders can respond to an aggressive competitor in three ways
first, the firm must find ways to expand total market demand. Second, the firm
must protect its current market share through good defensive and offensive actions.
Third, the firm can try to increase its market share, even if market size remains
constant.

 EXPANDING THE TOTAL MARKET

The dominant firm normally gains the most when the total market expands. The
market leader should look for new customers or more usage from existing
customers. Every product class has the potential of attracting buyers who are
unaware of the product or who are resisting it because of price or lack of certain
features. A company can search for new users among three groups: those who
might use it but do not (market-penetration strategy), those who have never used it
(new-market segment strategy) or those who live elsewhere (geographical-
expansion strategy). Usage can be increased by increasing the level or quantity of
consumption or increasing the frequency of consumption.

 DEFINING MARKET SHARE

While trying to expand total market size, the dominant firm must continuously
defend its current business. The leader leads the industry in developing new
product and customer services, distribution effectiveness, and cost cutting. It keeps
increasing its competitive strength and value to customers.

 EXPANDING MARKET SHARE

Market leaders can improve their profitability by increasing their market share.
Gaining increased share in the served market, however, does not automatically
produce higher profits—especially for labor-intensive service companies that may
not experience many economies of scale. Much depends on the company's strategy.
Because the cost of buying higher market share may far exceed its revenue value, a
company should consider four factors before pursuing increased market share: The
possibility of provoking antitrust action, Economic cost, pursuing the wrong
marketing-mix strategy, the effect of increased market share on actual and
perceived quality.

Transportation

To fulfill the order in a marketing channel is to obtain the items prepare them to
ship, otherwise known as picking and packing. It is difficult to do this humble task
without errors, to do it cheaply, and to meet the customer’s service requirements.
Catalogue companies master the art of shipping small lots directly to the
individuals or quite often they contract with an organization that has mastered the
art, that is, a fulfillment house. This is one reason why many pundits think catalog
marketers will adapt to internet better than mass-merchants, who specialize in
shipping large lots to a few locations.

Transportation, of course is a complex and expensive endeavor. In a simpler time,

shippers often thought in terms of a single type of carrier, such as a rail car, a
truck, a ship, or a plane. Carriers encouraged this single mode mentality often
creating barriers to mixing shipping modalities. Competition and deregulation has
obliged the readjustment of attitudes and methods. Mixing modalities is common
in many economies and the carriers themselves make it even easier. For example
some maritime shippers use containers that can be affixed directly to a truck bed
by a crane, then moved directly to a railroad factor, sized to seat the container
securely. Postal carriers routinely connect with private truck depots. Airfreight
operators freely cooperate with truckers. The list of coordinating mechanisms
available in many economies is long.

Transportation is not just the routing of shipments. It is closely linked to the

location and operation of some number of warehouses. This determines the routing
possibilities and is therefore a critical decision. Hence, an increased interest in
contract warehousing, that is, outsourcing the warehouse function. By abandoning
their own warehouse whose configuration, emplacement, and number they may
have come to regret, shippers create great transportation flexibility.

Increasingly they are making a distinction between a warehouse and a distribution

center. Warehouses are intended to hold inventory for some time. Distribution
centers are meant to hold inventory only for the short time necessary to send it
somewhere else. They are central points to accumulate large lots, break and sort
them into smaller lots and mixed lots and reroute inventory. They are not intended
to hold large lots for long periods. As such, distribution centers are like central
dispatches.

The ultimate in dispatching quickly is a fairly new system called Cross-docking.

The key to cross-docking is that the end-users’s site places an order for an
assortment of items. Generally the order would be composed from pallets of
merchandise at the distribution center, and then sent to the store. In cross-docking,
the store’s assortment is composed at the factory or at a holding warehouse and
labeled for the store. It goes to the distribution center where it is merely loaded
with a variety of other orders on to a truck bound for the store. The merchandise
crosses the asphalt from one loading dock to another, never entering a warehouse.

Third party logistics providers

There is a general theme in business press: Logistics is more and more being
reconsidered, rebundled and outsourced – not just to a single party. In this vein, a
striking phenomenon has been the explosive growth of third party logistics
providers (3PL), otherwise known as contract logistics providers, Ex: FedEx and
UPS. Many alliances also exist, for example, between freight forwarders and
companies that actually do the transportation. In an interesting twist some 3PL
firms are also forming working partnerships with freight forwarders and air
carriers. On paper, this looks like duplication of service. In reality, it represents an
effort by FedEx to expand its in-house ability to offer service to various locations
and industry sectors.

The decisions a business owner must make regarding transportation of products are
closely related to a number of other distribution issues. For example, the
accessibility of suitable means of transportation factors into decisions regarding
where best to locate a business or facility. The means of transportation chosen will
also affect decisions regarding the form of packing used for products and the size
or frequency of shipments made. Although transportation costs may be reduced by
sending larger shipments less frequently, it is also necessary to consider the costs
of holding extra inventory. The interrelationship of these decisions means that
successful planning and scheduling can help business owners to save on
transportation costs.

BASIC MEANS OF TRANSPORTATION

There are five basic means of transporting products utilized by manufacturers and
distributors: air, motor carrier, train, marine, or pipeline. Many distribution
networks consist of a combination of these means of transportation. For example,
oil may be pumped through a pipeline to a waiting ship for transport to a refinery,
and from there transferred to trucks that transport gasoline to retailers or heating oil
to consumers. All of these transportation choices contain advantages and
drawbacks.

Air transport:

Air transportation offers the advantage of speed and can be used for long-distance
transport. However, air is also the most expensive means of transportation, so it is
generally used only for smaller items of relatively high value—such as electronic
equipment—and items for which the speed of arrival is important—such as
perishable goods. Another disadvantage associated with air transportation is its
lack of accessibility; since a plane cannot ordinarily be pulled up to a loading dock,
it is necessary to bring products to and from the airport by truck.

According to Transportation and Distribution, air cargo remains a comparatively

small segment of total freight transportation volume when measured by tonnage
(12.5 billion domestic ton-miles of freight annually). But L. Clinton Hoch noted in
the magazine that "access to air transportation is expected to become increasingly
important since a growing number of customers (such as hospitals and electronic
manufacturers) depend upon 'just in time' delivery systems as well as the
increasing number of high-tech industries (such as computer manufacturers)
adopting the 'build-to-order' strategy." These trends, coupled with increased
pressure on consumer goods manufacturers to deliver products quickly to 1) meet
customer expectations and 2) reduce inventory and other supply chain costs, are
expected to "fuel the demand for expedited services," wrote Hoch. "Accordingly,
competition is heating up among the major air cargo and express carriers who are
building specialized hubs to handle larger aircraft and major sorting facilities."

Railways:

The rail transportation network in the United States included about 120,000 miles
of major rail lines in the late 1990s, on which carriers transported an estimated 1.3
million tons of freight annually. Trains are ideally suited for shipping bulk
products, and can be adapted to meet specific product needs through the use of
specialized cars—i.e., tankers for liquids, refrigerated cars for perishables, and cars
fitted with ramps for automobiles.

Rail transportation is typically used for long-distance shipping. Less expensive

than air transportation, it offers about the same delivery speed as trucks over long
distances and exceeds transport speeds via marine waterways. In fact, deregulation
and the introduction of freight cars with larger carrying capacities has enabled rail
carriers to make inroads in several areas previously dominated by motor carriers.
But access to the network remains a problem for many businesses.

Motor carriers:

Accessible and ideally suited for transporting goods over short distances, trucks
are the dominant means of shipping in the United States. In fact, motor carriers
account for approximately $120 billion in annual revenue, much of it due to local
shipments (shipments to and from business enterprises in the same community or
local region). This industry sector underwent tremendous change in the 1990s with
the introduction of deregulation measures that removed most state and federal
regulations in the areas of pricing and operating authority. "With few exceptions,
motor carriers are now free to operate wherever they wish and to charge any rates
that are agreeable to the shipper and the carrier," wrote Hoch, although he noted
that trucks are still subject to federal laws on vehicle specifications and the
parameters of the sanctioned truck routes of the Surface Transportation Assistance
Act of 1982.

Water transport:

Water transportation is the least expensive and slowest mode of freight transport.
It is generally used to transport heavy products over long distances when speed is
not an issue. Although accessibility is a problem with ships—because they are
necessarily limited to coastal area or major inland waterways—piggybacking is
possible using either trucks or rail cars. However, industry observers note that port
terminal accessibility to land-based modes of transportations is lacking in many
regions. The main advantage of water transportation is that it can move products
all over the world.

Pipeline facilities:

Most pipeline transportation systems are privately owned. Generally used for
transport of petroleum products, they can also be used to deliver certain products
(chemicals, slurry coal, etc.) of other companies. According to Transportation and
Distribution, the nation's natural gas line networks include 276,000 miles of
transmission pipe and more than 919,000 miles of distribution lines, which
combine to deliver nearly 20 trillion cubit feet of gas on an annual basis.
Present Channel of Rotex Petrochem:

To Rotex

From Rotex
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Type of market

Number of
Type of market
outlets
PVL 81
CVL 58
both 34
Source: Secondary data
 PVL
CVL
both

Interpretation
From the above data we can say that most of the outlets present in Hyderabad
are of PVL Market i.e. passenger vehicles. And only few outlets are serving both PVL and CVL
market.

Number of Outlets
Number of
Outlet Grade
outlets

A grade outlets ( more than

11
500ltrs)

B grade outlets( 250-500ltrs) 10

C grade outlets( 100-250 ltrs) 43

 D grade outlets( less than 100
109
ltrs)
Source: Secondary data

120

100

80

60

40

20

0
A grade outlets B grade outlets C grade outlets Dgrade outlets

Interpretation
From the above data, it can be analyzed that more number of outlets in D
Grade selling less than 100litres per month. And only 11 outlets are selling Mobil oil in high
volumes i.e. more than 500 liters.

Sales of outlets

Grade Sale in ltrs

A grade outlets 16741
B grade outlets 3613.8
C grade outlets 7017.2
D grade outlets 5374.3
Source: Secondary data
 18000

16000

14000

12000

10000

8000

6000

4000

2000

0
A grade outlets B grade outlets C grade outlets Dgrade outlets

Interpretation
From the above graph we can say that major part of the sales are from A grade
outlets. Around 64% of sales are from A grade outlets followed by c grade outlets.

Most Sold Product

Product Sale in ltrs

Mobil 1 69

Mobil delvac 12275.5

Mobil super 5434.3

Mobil Special 3922.5

gear oils 1878

Source: Secondary data

 Mobil 1
Mobil delvac
Mobil super
Mobil Special
gear oils

Interpretation
From the above data we can say that Mobil Delvac is mostly sold in the
outlets followed by Mobil Super, Mobil Special, gear oils and Mobil1

Display Shares
Share in
Brand
display
Mobil 19%
Castrol 27%
Servo 16%
ELF 10%
Gulf 7%
others 21%
Source: Secondary data
 30%

25%

20%

15%

10%

5%

0%
Mobil Castrol Servo ELF Gulf others

Interpretation
From the data available, it can be observed that 27% of the outlets are having
Castrol in their display; Mobil is having only a share of 19% standing in second position. Servo
has a share of 16%.

Most sold brand

Brand No. of outlets
Bp 2
Castrol 16
Mobil 18
Servo 4
Source: Primary Data
 Bp
Castrol
Mobil
Servo

Interpretation
From the above diagram we can say that Mobil is sold in most of the outlets, followed by
Castrol, servo and BP

Mobil’s share in counter sale

No of
Counter share outlets
0-24% 10
25-49% 16
50-74% 13
75-100% 2
Source: Primary Data
 0-24%
25-49%
50-74%
75-100%

Interpretation
From the above data it can be seen that most of the Mobil products have a counter share
of 25-49% and 50-74%. And only two outlets have a counter share more than 75%, and 10
outlets have a counter share of less than 25%.

Most Sold Product

NO. of
Product Outlets
Mobil Delvac 29

Mobil Super 11
Source: Primary Data
 35

30

25

20

15

10

0
Mobil Delvac Mobil Super

Interpretation
From the data available we can say that Mobil delvac is the most sold product of all the
Mobil products. Mobil super stands next.

Customer Driving Factor

Factor Share
Money 30%
Mechanic Suggestions 35%
Quality 25%
OEM 10%
Source: Primary Data
 35%

30%

25%

20%

15%

10%

5%

0%
Money Mechanic Suggestions Quality OEM

Interpretation
From the data it can be observed that mechanic suggestion plays an important role in
deciding the lubricant by a customer. Money, Quality and OEM (original Engine Manufacturers)
factors stands next.

Order Placing Factor

No. of
Factor outlets In %
stock 28 70%
time 12 30%
Source: Primary Data
 80%

70%

60%

50%

40%

30%

20%

10%

0%
stock time

Interpretation
The above data states that nearly 70% of the retailers place their order based on stock
present in their outlet and only 30% place their order based on time factor.

Timely Delivery
In time
delivery No. of outlets Share in %
yes 15 37.5
no 25 62.5
Source: Primary Data
 Chart Title
yes no

38%

63%

Interpretation
From the above data, it can be observed that 63% of the retailers feel that the stock is not
delivered in time to the outlets.

Display Shares
Brand No. of outlets
Bp 2
Castrol 17
Mobil 14
Servo 7
Source: Primary Data
 18

16

14

12

10

0
Bp Castrol Mobil Servo

Interpretation
From the above data it can be observed that Castrol is mostly displayed in outlets. Castrol
is displayed in 17 outlets, Mobil in 14 outlets and servo in 7 outlets.

Relation between Display and sales

Brand display sale
Bp 2 2
Castrol 17 16
Mobil 14 18
Servo 7 4
Source: Primary Data
 18
16
14
12
10
display
8 sale

6
4
2
0
Bp Castrol Mobil Servo

Interpretation
From the above data, we can say that there exists a correlation between display and sales
as most of the products that are sold in the outlet are kept in display.

Recieval of gifts & schemes.

yes no
26 14
Source: Primary Data
 yes
no

Interpretation
From the above data we can say that not all the retailers receive all the gifts and schemes.
Only 70% of the retailers are getting all the gifts and schemes.

Relation between Gifts and Outlet Grades

Grade yes no
A 10 0
B 9 1
C 5 5
D 2 8
Source: Primary Data
 10
9
8
7
6
no
5
yes
4
3
2
1
0
A B C D

Interpretation
From the above table, it can be seen that the outlets having more sales are receiving all
the gifts & schemes. And the outlets having fewer sales i.e. lower grade outlets are not properly
provided with gifts & schemes. There exists a positive relation between sales and recieval of
gifts and schemes as outlets having more sales are getting the gifts & schemes.

Service Satisfaction Levels

No. of
Satisfaction level outlets
highly dissatisfied 0
Dissatisfied 6
satisfied 26
highly satisfied 8
Source: Primary Data
 highly dissatisfied Dissatisfied satisfied highly satisfied

Interpretation
From the above data it can be observed that more number of retailers are satisfied with
the service and 20% of the retailers are highly satisfied with the service. 15% of the retailers are
dissatisfied with the service provided by the distributor.

Overall Satisfaction levels

No. of
Satisfaction level outlets
highly dissatisfied 0
Dissatisfied 1
satisfied 28
highly satisfied 11
Source: Primary Data
 highly satisfied

satisfied

Dissatisfied

highly dissatisfied

0 5 10 15 20 25 30

Interpretation
From the above data, we can say that more number of retailers are satisfied with the
distributor and only fewer are highly satisfied with the distributor. And only one retailer is
dissatisfied with the distributor. No retailer is highly dissatisfied with the distributor.

Relation between the Satisfaction level and outlet grades

highly highly
Grade dissatisfied dissatisfied satisfied satisfied
A 2 8
B 7 3
C 10
D 1 9
Source: Primary Data
 12

10

0
highly dissatisfied dissatisfied satisfied highly satisfied

Interpretation
From the above data we can say that more the sale in the outlet more the satisfaction
level, fewer the sale lower the satisfaction level of the retailer.

Retailer’s advice
Suggestion No. of outlets
advertisements 10
branding 6
Gifts & schemes 5
Promotions 5
others 4
margins 10
Source: Primary Data
 10
9
8
7
6
5
4
3
2
1
0
ts ng es s rs s
en di em on he gin
m an h oti ot ar
se br sc om m
erti & Pr
ad
v ifts
G

Interpretation
From the data, it can be observed that more number of retailers suggested the distributor
to increase advertisements and margins. And 6 retailers suggested branding, 5 retailers suggested
gifts & schemes to motivate them to increase the sales of Mobil.

Relation between Suggestion and grade of the outlet.

Advertisement Margin Brandin
Grade s s g Gifts & Schemes Promotions Others
A 2 3 2 2 1
B 1 1 2 3 2 1
C 3 3 1 2
D 4 6
Source: Primary Data
 6

4 Advertisements
Margins
3 Branding
Gifts & Schemes
Promotions
2 Others

0
A B C D

Interpretation
From the data, we can say that lower the grade of the outlet, to increase the margin is the
suggestion given and the upper grade outlets are mostly suggesting gifts & schemes as a
motivation to increase sales of Mobil products.

Present route plan of Rotex

T
Monday Tuesday Wednesday Thursday Friday Saturday ot
al
K K K K K K
Area Area Area Area Area Area
m m m m m m
Vehicl Autonag 2 Champape Habsigud Attapur, Gachibow 6 23
48 Sec'bad 48 41 7
e1 ar 0 t, a, Masab li, 6 0
 Shamshab
Autonagar Mallapur tank
ad
Ameerpet, Erragadd
Baglinga Dilsukh
Siddiam balkampet, a,
Vehicl 5 mpally, nagar, 3 Ghatkesar, 9 25
bar 17 BHEL, 21 Moosape 35
e2 5 Narayanag LB 4 BB nagar 6 8
bazaar Chanda t, Kukat
uda Nagar
Nagar pally
KPHB, Sainikpur
Jublee i, AS Rao
Vehicl Shamshab 14
hills, 53 Attapur 4 44 nagar, 44
e3 ad 5
Gachi Tirumala
bowli gherry
Bowenpa
Vehicl Masab 4
5 Uppal lly, 30 75
e4 Tank 0
Medchal

1 1
12 11 15 4 70
Total 1 6
3 3 0 1 8
9 2

Total Distance travelled:

The below table shows the distance travelled by each in a week.

Vehicle Distance travelled(km)

Auto 1 230
Auto 2 258
Auto 3 145
Auto 4 75
Total 708

The total expenditure incurred on transport in a week is

Assuming that each auto gives a mileage of 35km per litre. And the price of diesel to be 35Rs per litre.

No. of litres diesel required =708/35

=20.22ltrs

≈ 20ltrs.

As an auto is taken for rent for three days in a week. And the rent for each auto per day is 200rs.

Total rent =200 * 3

 =600Rs

Total expenses = diesel expenses + rent for autos

= (20*35) + 600

= 700 + 600

=1300Rs.

New route plan for Rotex

T
Monday Tuesday Wednesday Thursday Friday Saturday ot
al
K K K K K K
Area Area Area Area Area Area
m m m m m m
Vehicl Dilsukhn Siddiambar 2 Habsiguda, 5 Attapur, Shamshab 4 16
44 7
e1 agar, LB bazaar 0 Mallapur, 0 Masab ad 4 5
 Nagar,
Autonag Uppal Tank
ar
Jublee
Champa
hills, Ameerpet, Baghlinga
Erragadda. pet, LB
Vehicl Kondapu KPHB, 5 mpally, 3 4 Ghatkesar, 9 28
34 21 Moosapet, Nagar,
e2 r, BHEL, 5 Narayanag 5 8 BB Nagar 6 9
Kukatpaly Autonag
Gachibo Chandanagar uda
ar
wli
Sainikpuri,
Masab AS Rao
Vehicl Bowenpally, 3 Shamshab 4 14
Tank, 24 44 nagar,
e3 Medchal 0 ad 3 1
Sec’bad Tirumalagh
erry
1 1 1
10 5 59
Total 0 65 2 4
2 5 5
5 8 0

Total Distance travelled:

The below table shows the distance travelled by each in a week.

Vehicle Distance travelled(km)

Auto 1 165
Auto 2 289
Auto 3 141
Total 595

The total expenditure incurred on transport in a week is

Assuming that each auto gives a mileage of 35km per litre. And the price of diesel as 35Rs per litre.

No. of litres diesel required =595/35

=17ltrs

As no any auto is taken for rent, no expense on rents for autos is incurred.

Total expenses = diesel expenses + rent for autos

= (17*35) + 0
 = 595 + 0

=595Rs.

By using the new transportation model the distance travelled by autos in a week can be reduced by
113Kms.

Expenses saved = 1300-595

=705Rs per week.

% of savings = 705/1300

= 54.2%

By using the above transportation model the transportation charges can be reduced by 54.2%.

Findings
• Mechanics are playing an important role in the selection of lubricants.

• Upper grade outlets are mostly satisfied with the distributor.

• Distributor are mainly concentrating on upper grade outlets and showing less
interest on outlets having low sales.
 • Gifts are not properly distributed to the dealers due to which customers are
attracted to other products.

• No proper distribution channel to supply products, leading to more

distribution costs.

• Most of the customers are preferring short term benefits.

• Display plays a major role in sales.

• Less margins affects the willingness of dealers not to sell our product.

Suggestions
• To create awareness about Mobil as most of the customers are unaware
about Mobil.

• To encourage the lower grade outlets to increase the sales.

• To attract the dealers to maintain Mobil products in display.

 • To increase margins in order to drive the dealers to sell Mobil products.

• To revise the transportation model to reduce the transportation costs.

Learning’s
• Knowledge about oils and lubricants used in automobiles.

• How a distribution channel works.

• How to interact with retailers.

 • Learned how to deal with mechanics.

• Learned how to interact with different customers of different mindset.

Limitations.
• During the dealer study, some of the dealers did not give exact information.

• The study does not take into account the market Hyderabad as whole, but
only 40 outlets.
 • Many dealers showed less interest in providing information and haven't
cooperated.

• The study was done only on retail segment but not on Install and M1CCO.

Photos