Case Study on Castrol Oil

Sample Research & Development Report of Castrol Oil

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Castrol oil is a member of BP Group and its sells the lubricating oil which plays a vital role in our every day's life because it is used as a crucial component of every internal combustion engine. Castrol supplies oils, transmission fluids, antifreeze, coolants, greases and brake fluids in order to meet out the needs of all the customers around world (CASTROL TOP PRODUCTS, 2015). This report is mainly focused on the case study of Castrol and discussion about the research and development of Castrol in order to bring innovations in their product and to gain competitive advantage. Moreover, this report covers the policy guidelines which may improve the position of a company. Further, debate has been made on the the product oriented and market oriented approaches and also advice have been given to the company.


1. Importance of R&D and how it has enabled Castrol to gain competitive advantage

Research and Development basically referred as R&D is a separate functional department in a company which is directed towards the introduction, innovation and improvements of products and processes (Dash, 2015). R&D processes differs from company to company because in every organization, there is different types of innovations. It is basically term as an activities which is linked with corporate innovations. Generally, R&D is done to bring innovations and introduction of new products and services. R&D is very important aspect of every organization mainly, for the manufacturing units because they require every new process to bring innovation and to produce as per the requirements of customer's need. This aspect is very useful for the organization as it enhances the knowledge about the new market trends and changing needs of the customers. Moreover, the company can also gain the competitive advantage because with the help of R&D, innovations are done and customer's needs are fulfilled which leads to gain of competitive advantage.

This case study is aimed towards the R&D of Castrol oil where the enterprise spent heavily on the research and development in order to bring innovation and meet out the changing demand of the customers (Browning, Thompson and Dawson, 2014). R&D in Castrol is very important because Castrol operates in a changing environment and most important aspect of change is that customers become more demanding and to meet out the demand of the buyers, company has to do intense research and after that has to develop the new product which satisfy their needs. According to marketing planning, firm has to identify the needs of the customers before manufacturing, thus identification of needs involves doing research of the whole market so that latest trends and needs can be known and company can produce the goods as per the desire of customers. Castrol invest heavily in R&D because its customers are both business organization and individual buyers. Company researches and find out the information from Original Equipment Manufacturers and motor vehicle users after that produce and supply the best quality high technology oils in order to meet out the needs of modern engines (Evans, Brailsford and Macauley, 2011).

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Castrol is a manufacturing unit and it is highly important for the manufacturing firm to invest in R&D because it will yield good result which will be beneficial for the company itself. It is important to invest because it will help the firm in following manner:

Gains Competitive Advantage: As Castrol is a global company and for this purpose, company has to do constant R&D investment because it will increase the chances of succeeding in global market. It s because, every customers in different countries have different demands and needs for which company can find out the difference in demand by doing R&D (Laws and et. al., 2013). This will eventually aid the company to reach competitive edge.

Growth in Sales: Undeniably it can be said that more the investment in R&D leads to more growth in sales. Castrol investment in R&D will leads to increase the sales of their products because through this, new processes can be known and with this respect, products will be produced which is a satisfactory source for the customers. If it satisfies the needs of customers than eventually sells will get increase.

Innovations: R&D refers to as the important factor which helps in economic growth and balance. Through this new ideas get emerged and it work as a tool for an entire period of new products which transform the economic system. R&D brings innovation in the Castrol and it easily leads to highly valued technologies, strategies and design for this organization which helps in the origination of potential value while considering the gain of competitive advantage (Anderson, 2012).

It has been made clear that it is important to invest more in R&D so that company can bring innovations and meet the changing demands of customers in this dynamic environment. R&D enables the company to gain competitive advantage which can be described by considering following facts:

In the light of these aspects it can inferred that R&D has enabled the Castrol to gain competitive advantage as it depicts that company are providing the products which meet out the demand of consumers, business organization and government as well. Thus, there is a gain of competitive advantage as it is fulfilling the expectation of all of them which have been achieved by doing research and development. As it is known that without R&D company cannot attain the competitive edge (Laws and et. al., 2013).

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2. Policy guidelines for retaining or improving the position in a very competitive place

The position of company refers to as the point where company stands. It is measured against the competitor’s positions in terms of financial strength, assets, goodwill, product it provides, innovations, etc. Presently, the market is highly competitive and every day the demands of the customers are changing which imposes a greater challenge on the company because organization has to bring innovative products and satisfy the needs of the customers (McKechnie, Grant and Katsioloudes, 2008).

Castrol also operates in a competitive market and provides customers with premium quality lubricants. Today, Castrol has a synonyms of premium quality, high performance and leading edge technology in lubrication. The position of Castrol is shown in the positioning map which are depicted as follows:

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Illustration 1: Positioning Map of Castrol

From the above map it can be inferred that position of Castrol is excellent in present market but due to the dynamic nature of the environment, position can get fluctuated, thus company should follow several guidelines in order to retain or improve its position in this highly competitive market. Some of the policy guidelines are discussed below:

Meeting Customer's Demand: Company should meet the demands of customers by providing the products as per their requirements. Moreover, firm should do research and development in a market so that changing needs of the customers can be known and according to the need, products should be manufactured (Katchamart, 2013). If the company will provide the products as per the changing needs than their will be more sales of a product because these are satisfying the needs of the customers and thus, company will remain on the top position. Segmentation has been done on two basis and customer's demand in both the segments are different, so company should assess their demand and then produce the product which best suits their needs.

Bringing Innovation: Company has introduced many new products in the market which are technology driven such as GTX Magnatec uses ‘Unique Molecular Attraction’ (UMA) technology and GTD Magnatec. These products are innovated by the company so that best support can be provided to the engines of luxurious cars which will match with the needs of the customers (Arora, 2006). Similarly, company should bring innovations in the market on a regular basis so that less combustion can happen and cope up with the changes happening in the market. This will enable the company to improve its position in the market and become market leader.

Satisfying Employees: Castrol should motivate their employees on regular interval so that their work performance can be improved. If the employees are motivated than they will retain in the business for longer period of time which will aid to gain competitive advantage for the firm. In order to satisfy the employees, company should motivate the employees through monetary as well as non-monetary incentives such as bonuses, recognition, rewards, training and development, etc. If the employees are satisfied and highly motivated than Castrol will have highly efficient employees which will help in gaining competitive edge. The motivated employees will perform efficient businesses and thus productivity will get enhanced. If the firm is highly productive and their employees serve the customers in a better manner than the position of the company can be retained in a highly competitive market (Ulph, 2011).

Public Relations: Company should maintain the relations with the customers that is both organizational buyers and individual buyers. By closely working with OEMs Company can maintain the relations with the vehicle manufacturers so that new designs and specifications of the engine can be known so that Castrol could produce the lubricant as per the suitability of engines. Through this, customer demand can be met out. Relations with the individual customers can be maintained by using range of methods such as regularly taking feedbacks from them, through mails, etc. This will lead to the improvements and retention of the existing position of Castrol in the market.

Promotions: More the promotions, more will be the sales of a product. Thus, Castrol should promote its products heavily (Aaker and McLoughlin, 2010). It can promote in the events such as car races F1, sponsor the car racing events, conference can be organized in order to promote the new products and also the outhouse promotions that is advertising using hoardings and advertising can be done. If the promotion is done in an attractive manner than customers will be more attracted and this will retain the positions of a company in a dynamic environment.

Research and Development: Enterprise has to invest lot of money in doing research and development for introducing new products which satisfy the changing demand of the customers (Arora, 2006). If regular research is done than company can come up with the innovative products and procedures to produce that product which will help in reduction of cost of production and through this firm can supply the product at relatively cheaper prices than other competitors. This will help in more sales of the oils which will eventually build the brand image in the minds of consumers and also company can retain its position at the top in an industry.

Comparison with the Competitors: The strategy of the other competitors should be assessed so that company can make the strategies against the competitors. For this purpose, company has to make good relations with the competitors and fair game should be played so that unfair practices can be avoided. Moreover, company should compare its every factor with that of competitors so that loopholes can be identified and company should work upon it in order to gain the competitive edge in the market (Katchamart, 2013). If Castrol improves its productivity and other aspects by comparing with the competitors than it can improve its position in the market which is changing every now and then and the best positions can be retained as well.

3. Product oriented approach versus market orientated approach

Table 1: Merits and Demerits of Product Oriented and Market Oriented Approach





Product Oriented Approach

This type of orientation refers to as the company's focus is solely on the product which an organization intends to sell (Chang and Ahn, 2005). The marketing activities are emphasized on the products features, its quality and standardization. However, firm assumes that if the product is of high standard than consumers will buy and consume the product.

  • If the firm adopts product oriented approach than quality of the product can be obtained. Further, it allows the company to focus on the quality of its product and in this approach quality will be not be undermined.
  • Main emphasize of the marketer is on the features of the product and thus, for this purpose, company will do heavy investment on the technological advancement in order to make the product of utmost level.
  • Third merit is that if they adopt this approach than economies of scale can be developed in an easier manner. This will help in reducing the cost of the production and this will lead to the reduction of per unit price. This will eventually decreases the price of the product and customers may get the product of highest quality at lower price.
  • It is not necessary that customer will always buy what is available in the market for sale. They sometimes want the products as per their requirements. Firm which is solely adopt this approach may miss several opportunities to build their brand as per the customer needs. Through this, brand image get lost in the minds of consumers.
  • In this changing and dynamic environment, this approach has become obsolete. Organization which are following this concept cannot survive in this environment (Lings, N. I. and Greenley, 2010).
  • This kind of approach is of short term and customer's loyalty cannot be raised by adopting such approach. This kind of approach requires intense research and product testing which may involve heavy expenditure and lot of time.

Market Oriented Approach

It is a business approach in which marketers focuses on identifying and meeting the specified or hidden needs and requirements of a customer. In this, company focused solely on the customer's needs and then make the product as per their requirements. The company makes the product which is of highest quality and fulfill the expectations of the customers (Urde and Koch, 2014).

  • This approach is a customer centric approach. Company produces and sells the product which satisfy the need of the customers. Further, the business is wholly built on the basis of addressing the needs of the people whom it is serving.
  • Market oriented approach leads the business to gain competitive advantage. It is because making the customers at top priority will help the business to succeed in the industry and become a market leader.
  • To build a product as per the needs of buyers does not only help to develop products which suits but also help to promote in a better manner which persuade the customers to buy those products.
  • This type of approach will help the company to focus on the customers along with that focus on the features, quality and also sales will get increase.
  • Deep research is involved in such case which requires high amount of money and time which may reduce the profitability of the company.
  • Due to changing demands of the customers, company has to bring changes in the product as per the needs which becomes a very complex process.
  • This approach lacks the predictability and there is less product differentiation because all the companies are providing the products as per the need which involves less differentiation in the products.
  • Such type of approach involves intense competition among the brands and rivalry level also get rise which reduces the harmony of the industry (Aaker and McLoughlin, 2010).

According to the given case it has been assessed that Castrol follows the product oriented approach as well as marketing oriented approach because it can be assessed from the above discussion that product oriented approach solely focuses on the better development of product. Castrol has always evolved their products and emphasized has been made on its features and quality. Along with that Castrol has manufactured a lubricant which fits with the customer's demand (Urde and Koch, 2014). For instance, Castrol supply the oils which are required by the large cars manufacturers which are supplying their cars to USA because USA people require large cars because the roads of America is quite good than those of Europe and Africa. Moreover, a younger mother will want such car which may not break down in the middle while taking her child to the school. To have such car, an engine should be perfect and OEMs has ensured that lubricant in such engine is of highest quality which meets the needs of the customers. Further, a racer will want those cars which make them win and to assist the engine, oil should be of optimum quality so Castrol fulfill these expectations of buyers. On the other hand, it has brought the changes in its product portfolio and has put emphasized on the synthetic oils, new oils which are technology driven like, GTX Magnatec, GTD Magnatec, etc. Through this, main focus has been made on the products features and quality and Castrol has assumed that customers will buy what company will produce. However, it is not necessary that always customers will buy the products and this may lead to the fluctuations of the position of the Castrol.

It can be concluded that in a changing environment, company has not only focused on the updation of the products but also have adopted the market approach and commercial strategy. In order to become industry leader, Castrol should also become more marketing driven than product driven (Lings, N. I. and Greenley, 2010). For the success of the organization, it is necessary to follow the marketing approach along with the product approach so that firm can supply better product as per the requirements of the customers.

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4. Advice to the Castrol for a continuous marketing research program

Market research is basically a process or set of processes which links the end users of the products to the marketer through information. It has been already discussed in the former question that Castrol conduct the research and development and comes out with a innovative product. However, market research is quite different from the research and development (Patino, Pitta and Quinones, 2012). In R&D, company searches for the new procedure and brings out a new products while in market research, marketers searches about the products position, customers changing needs, new market trends, etc. It is very necessary for the company to carry out the market research in order to succeed in this dynamic market. Market research guides the company to communicate with the existing and potential customers so that customer's changing needs can be identified. Moreover, it helps to identify the opportunities which is prevailing in the marketplace which will lead to the success for the company. Furthermore, this research also let the company to recognize the problems which may arise in the future and company can plan the measures which may help in preventing the future issues. Similarly, MR aids in establishing new trends by the company and also through this market position can be strengthen. However, it can be said that company should focus on the market research so that all these aspects can be fulfilled and customer's requirements can be met out (Horn, Brem and Ivens, 2014).

Castrol also conducts the market research and therefore, it should continue its market research in order to get success in the market and cope up with the changing needs of the customers. There are several advice which I should give to the Castrol in order to continue its market research program so that it can remain updated with business trends and customer’s needs. This in the end will benefit the company to become most preferred brand by the customers. For this purpose, some of the guidelines are given below:

From the above discussions it can be assessed that Castrol should continue its marketing research program in order to remain updated towards the business trends and customer's needs. This will be highly beneficial for the organization if it continue the research program because through this, firm can retain its position, can increase their sales and production cost can be reduced. Mopreo0ver, the products will be less obsolete because the products will be made as per the customer's need so they will less discard the products.

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As per the above study, it can be inferred that from long Castrol has been most appreciated firm for the technically advanced automotive lubricants. Through this, this company has maintained a good position in the market and its products are of high quality, high technology. Company has made a huge investment for the Research and Development and it can be concluded that the investment are not going waste as the return on investment is much higher than what its investing for the research purpose. It is very important for the company to continue its research and development activity. As it has been identified that through research and development, company is able to do gain competitive advantage which have helped the organization to reach to the top most position in the industry. The key to this success is that, firm has really understood the driver's relationship and their involvement with the car as they desire top performance, seek reassurance and reliability. Castrol plays an important role in satisfying everyday needs of motoring that is supplying engine and gear oils, brake and clutch fluids, transmission lubricants, antifreeze, coolants and greases. All are formulated by the company to meet the different demands and conditions. It has become possible only by doing market research as through this changing needs of the customers have been identified and also fluctuating trends has been assessed which have aid the company to remain up to date and retain the highest position in the market. Market research will also help the company to analyze the competitor’s strategy so that firm can build its strategy against the competitors in order to give cut throat competition to their rivals.

Moreover, it has also been concluded that company focuses on the products features by keeping in mind the demand of customers. Therefore, it can be said that company follows product oriented approach as well as marketing oriented approach. Through market oriented approach it has become possible for the company to focus on the demands of the customers and with that expectation are met up by providing them high-tech product with excellent quality. Along with that, product oriented approach have enabled the company to make product of utmost quality and high tech features for the product. There are however, advantages and disadvantages of both the approaches but in order to remain competitive in this environment, company has to follow both types of approaches. Furthermore, the winning formula of the company is a combination of all aspects that is technological superiority, sales strategies, excellent marketing and constantly adapting to changes which are happening in the market as well as in the consumer’s needs. If all these aspects are accomplished than Castrol can retain its position in the market at the top and can also become the market leader.

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