Case Study
Prabhar Oil Company, and Distribution Challenges in the Indian Lubricants Industry(
Abstract
A leading multination oil giant Izo is planning to increase its market foothold in India, but is facing several challenges on the way to catch up with its competitors. Its rivals include public sector undertakings (PSUs) such as IOC, HPCL and BPCL which enjoy well-established brand presence, and distribution network in India’s near-stagnant automotive lubricants market. Creating a wider distribution network is however posing the biggest challenge for lubricants players in India. Public sector companies have an early advantage of a wider distribution network of petrol pumps. However, few private companies such as Castrol have made strong retail network in the bazaar trade. In this competitive business environment, Izo-a new market entrant- is facing a number of distribution challenges. This case highlights the problems faced by Izo in managing one of its distributors, POC, in its quest to quickly increase its market share. Simultaneously, the case also highlights the key sales management issues when dealing with matured markets specially when dealing with tough customers.
This case can be covered while teaching any of these courses- strategic marketing, distribution management, or sales management. The students can be either at undergraduate level or graduate level, but given the context of the case, graduate students would be more adept in learning from the case, and appreciate finer nuances in the case study. Few key learnings from the case that emerge are- challenges of a matured industry, the nature of competition in the given market structure, sales management issues especially salesforce controls, performance management, and motivation.
Key Words: Lubricants, distribution, market entry, distribution challenges.
On a cold November morning in 2006, Alok was called for a closed door meeting in Izo’s New Delhi regional office. Alok had recently
Abstract
A leading multination oil giant Izo is planning to increase its market foothold in India, but is facing several challenges on the way to catch up with its competitors. Its rivals include public sector undertakings (PSUs) such as IOC, HPCL and BPCL which enjoy well-established brand presence, and distribution network in India’s near-stagnant automotive lubricants market. Creating a wider distribution network is however posing the biggest challenge for lubricants players in India. Public sector companies have an early advantage of a wider distribution network of petrol pumps. However, few private companies such as Castrol have made strong retail network in the bazaar trade. In this competitive business environment, Izo-a new market entrant- is facing a number of distribution challenges. This case highlights the problems faced by Izo in managing one of its distributors, POC, in its quest to quickly increase its market share. Simultaneously, the case also highlights the key sales management issues when dealing with matured markets specially when dealing with tough customers.
This case can be covered while teaching any of these courses- strategic marketing, distribution management, or sales management. The students can be either at undergraduate level or graduate level, but given the context of the case, graduate students would be more adept in learning from the case, and appreciate finer nuances in the case study. Few key learnings from the case that emerge are- challenges of a matured industry, the nature of competition in the given market structure, sales management issues especially salesforce controls, performance management, and motivation.
Key Words: Lubricants, distribution, market entry, distribution challenges.
On a cold November morning in 2006, Alok was called for a closed door meeting in Izo’s New Delhi regional office. Alok had recently