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Mktg – Castrol in top gear

Kalpana Pathak

From last month’s cricket excellence awards to superstar Rajnikanth riding a Castrol Power-lubricated bike that runs faster than a bullet – the largest pure-play lubricants company in India has done them all to promote its brand among a cross section of customers in India.

The target customer for Castrol, which controls around a fifth of the auto lubricants market in India, is actually everybody – truckers, tractor owners, car drivers, motorcyclists, mechanics, original equipment manufacturers and workshop owners.

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Castrol says it spends around Rs 100 crore on advertisements every year to woo users who are prepared to pay premium for world-class lubricants.

The main industrial segments in which Castrol operates are automobile manufacturing, machinery manufacturing, metals and marine. Industrial lubricants contribute 15 per cent to Castrol’s revenues.

“When the automotive industry was still in a nascent stage in India, Castrol took on the role of educating consumers on the need to use good quality oil and the role it played in the maintenance of vehicles. Over the years, the company has created several path-breaking advertising campaigns and properties like Castrol Power1 Passion Hunt and Castrol Golden Spanner Mechanic aimed at building brand loyalty and long-term relationships with consumers,” says Giriraj Bagri, Vice President-Marketing, Castrol India.

While innovative advertising has been a powerful tool for Castrol to get its product across its users, it has also cashed in on the growing passenger and commercial vehicle segment by forming partnerships with original equipment manufacturers.

Castrol has an exclusive partnership with companies like JCB and Mahindra Tractors amongst others and has launched customized products like – Castrol GTX for Maruti 800 when Maruti first came into the market 25 years ago, or Castrol GTX Compact, exclusively engineered for Tata Nano. “Even when the brand had a low market share, it was perceived as the market leader mainly on the strength of its technology leadership. Castrol brands are market leaders in most of the segments in which they operate – multigrade diesel engine oils, passenger car oils, four stroke two wheeler oils,” adds Bagri.

Castrol, a 100-year old brand in India, says during the pre-liberalisation days, it had to procure base oils (the main raw material) through its public sector competitors- IndianOil, Bharat Petroleum Corporation and Hindustan Petroleum Corporation.

“Our market share then was restricted to 6 per cent. At that time the dominant channel of sale was fuel forecourts, which were owned by the public sector companies and hence Castrol did not have access to this channel. We therefore pioneered the development of the Bazaar (retail market) trade, which is today the main channel of sales,” adds Bagri.

The main competitors of Castrol are the nationalised oil companies, which together hold over 50 per cent market share. Among these, the most dominant is IndianOil with its Servo brand of lubricants. The total lubricant market in India is 1.6 billion litres of which automotive is about 950 million litres.

While analysts say Castrol cannot match the public sector units in coverage (due to their petrol station networks which comprise around 30,000 stations), it does have strong distribution in other channels like workshops and spare parts suppliers-over 70,000 outlets, which compares well with the 40,000-plus for Indian Oil’s Servo

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October 15, 2009 - Posted by | Uncategorized |

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