e-portal for lubes
DESCRIPTION
workTRANSCRIPT
SUB: MARKETING OF HP LUBRICANTS ONLINE – HP E-PORTAL FOR LUBES
BUSINESS CASE
SALE OF HP LUBRICANTS, SPECIALTIES, VALUE ADDED PRODUCTS
THROUGH ONLINE E-COMMERCE PORTAL
BY
P.PRAKASH
SR.MANAGER-MAINTENANCE
MDPL- JAIPUR H.O.
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Table of Contents
BUSINESS CASE......................................................................................................................................3
JUSTIFICATION.......................................................................................................................................3
E-COMMERCE PORTAL FOR LUBRICANTS: CURRENT MARKET STATUS.............................................3
Recent Developments in India...........................................................................................................4
NEED FOR ONLINE E-COMMERCE PORTAL FOR LUBRICANTS................................................................6
HOW MUCH VOLUMES WE CAN EXPECT THROUG ONLINE...................................................................7
HOW TO START AND TEST MARKET OUR E-PORTAL..............................................................................7
INVESTMENT.........................................................................................................................................7
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BUSINESS CASE Creation of E-Commerce Portal for
Selling HP Lubricants, Specialties, and Value added products there by connecting to the end user directly
Obtaining inputs/feedback from customers, for improving the existing products and services; and R&D of new products
Increasing the customer base by offering product customization
JUSTIFICATIONCurrently, HPCL is having approx. 20% market share with a total sale of 480 TMT of lubricants in India. Year on year, our market share is growing due to our maximized sales efforts, Tie ups with OEMs, Increased R&D by bringing new products. A well-established PAN-India network of Dealers, Lube distributors, CFAs etc. are catering to the demand. Direct supplies from our lube plants to major customers such as Defense, Railways, State transport corporations etc. is helping us growing the sales.
E-COMMERCE PORTAL FOR LUBRICANTS: CURRENT MARKET STATUS As on date, we are following conventional practice of selling lubricants/Specialties through the network of Dealers, Distributors, CFAs. Due to increase in awareness and availability, customers are looking beyond the conventional system of approaching lube shops, retail dealers for lubricants. Customers are expecting door-delivery of right lubricant with usage instructions.
In India as on date no company has gone on on-line for selling lubricants for reasons beyond our understanding. Few years back, books were sold through a small e-portal called “Flipkart” which has turned into a very big platform for many products. Most of the well established brands which are having their own network of shops, dealers, and distributors also formed suppliers for this portal and increasing their sales volumes.
Across the world, only one company called Matrix lubricants –Netherlands is having their own e-portal for selling their lubes as well as customer service.
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www.matrix-lubricants.com - NETHERLANDS
Matrix Specialty Lubricants BV has been created by a group of enthusiastic people who have been working for major oil companies for many years. More and more they didn't feel comfortable with the culture within these companies; slow, large and very impersonal. During the last couple of years major merges between oil companies have made things even worse. Very often the contact with the customer appears to be little or even doesn't exist. These large oil companies reduced their R&D facilities to a minimum which have resulted in no further development of products and applications.
Matrix Specialty Lubricants BV is a company where the communication lines are very short and direct, and offers high level of service and high performance products using the latest available technology and materials.
Recent Developments in India
1. Recently in India, Shell started selling their lubricants through Amazon.com with free delivery irrespective of value of the purchase.
2. BPCL also started selling their lubricants through Snapdeal.com with free delivery up to worth Rs. 500/- and nominal delivery charges for purchases below Rs. 500/-
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3. In this regard, the author of this article has contacted “flipkart.com” in 2011, for requesting details to sell HP Lubricants through their e-portal. However, they informed that they do not have lubricants in the product category. Even today, there is no sale of Lubricants through “flipkart.com”.
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E- Mail confirmation from FLIPKART on Sale of Lubricants:
“Dear Mr. Prakash,
Thank you for writing to us.
We regret to inform you that presently we do not offer this product category and hence we will not be able to take this forward. We will get back to you whenever we plan to add the same in the future.
Thank you once again for your interest to offer these products on
flipkart.com.
With regards,
Ajay Bhat
Executive Asst.
-----Original Message-----
From: [email protected] [mailto:[email protected]]
Sent: 11 August 2011 17:15
Subject: [ Business Related Query ] from: [email protected]
Date: 2011-08-11 17:15:11
From: [email protected]
Hai,This is P.Prakash,Manager-Operations from HPCL ,a public sector Oil company. I order books thru flipkart for myslef. So far I had purchased 4books. I would like to propose selling our Lubricants thru your portal. We have all varities of oils applicable for all types of vehicles. This would be for entire India. Once it is okay please contact me. We can discuss the modalities. Since ours is a public sector company we need to take Higher management approval for starting this channel. Currently like in otherbusiness we too have dealers, distributors etc to sell our LUBRICANTS. Selling lubricants thru a portal will be an additional channel for us. For supporting our proposal if it is okay to you, we may need your back ground details, like details of year started, % growth in sales over the years etc.”
Thus, it can be opined that even though the present sales volumes may be negligible, companies are showing interest to test market their product through other e-commerce Portals which are general in nature before launching their own.
NEED FOR ONLINE E-COMMERCE PORTAL FOR LUBRICANTSIs there any need for starting an exclusive Online Portal for selling Lubricants? - YES
Below are some of the reasons that makes online sales is an attractive channel
1) Get connected with the end customer and obtain their feedback on the product
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2) Provide customer service on vehicle maintenance tips, care during monsoon, etc. through our Portal, brochure mails etc.
3) Repeat volumes from satisfied customers4) Word of mouth publicity from satisfied customers5) First player advantage in Online sales6) Professional customer service for the usage of lubricants7) Additional volumes and benefits for existing Distributors8) Sales of associated Products like Distilled water, Polish clothes, wax polish etc. (ARB income)9) Reduction of carbon foot prints- Door delivery of product10) Additional business opportunities for special products such as Bitumen, Emulsions and
Solvents11) Minimum investment for developing and maintaining an online Portal 12) Enhancement of Brand Image in elite customers.
HOW MUCH VOLUMES WE CAN EXPECT THROUG ONLINEInitially we can expect to have some negligible volumes say 1-2 percent to total Sales volume (say 50000 KL or MT) which are otherwise can go to any of the lubricant marketing company. However once we establish, volumes picks up and also margins.
Today, there is need for thinking differently for marketing our products in customers prospective. When a right lubricant with product data sheet and method of using the same is available at our door step, any end customer welcomes the same. Our portal will also serve as platform for industrial customers to pose their technical queries online to develop indigenous Lubricants / Specialties to reduce import of Lubricants. An opportunity for our value products such as Bitumen, Emulsions, Solvents, RPOs etc. to get advertised with their availability, Prices etc.
HOW TO START AND TEST MARKET OUR E-PORTALUsing our in-house expertise of IT systems, an e-commerce portal can be designed with back up information of all lubricant data sheets, prices, packaging available, Address and contact numbers of Regional Offices, Distributors, CFAs etc. Initially, this Portal can be tested for say 10 major cities and encourage our employees and stake holders to order lubricants online for their vehicles. Test the workflow at back hand, how logistics worked out so that delivery can be made within 48 hrs. A special incentive for our Lube distributors for delivering the product. Considering the success of implementation after easing out teething problems of software, connectivity, response time etc., e-portal can be launched for general public. It may take 3-6 months from test marketing to go full stream. May be after monitoring the sales through e-portal for 1 year, we can slowly develop displaying our Specialties, Value added Products in the portal. Existing network of Sales offices to widely give publicity among industry sector to use the Portal for raising their queries, need for new product development. There is no need to maintain warehouses for stocking the lubes as our existing network is capable of supplying the product to customer.
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INVESTMENTDevelopment of e-portal can be either done using in-house expertise or can be outsourced, which does not require substantial investment. A cell with a group of employees having domain knowledge of Lubes, Finance implications, and logistics has to form at HQO level, for exclusive monitoring of portal developments, sales deliveries, and margins earned.
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