Question 4 (11.5 marks)

In order to understand how Castrol is performing as compared with the MCO industry, we need to identify how it is benchmarking against the industry on key metrics. Taking help from exhibits 11,12 and 13, find out the following for each of the distribution channels:

• Is Castrol distributing to the right mix of channel partners in the right amount? To find the answer to this question, calculate the channel share of each channel partner for Castrol and compare it with that of the entire MCO industry.
  • Question 4A:Channel share (2010), in percentage terms, for the 'four-stroke oil Market': For each channel given in the following table, find out its contribution in 'sales potential' as a percentage of the 'total sales potential' in the year 2010. (Hint: Refer to exhibit 11 in order to answer this particular question.). (0.5+0.5+0.5+0.5marks)

Channel Partner	Channel Share (%) 2010
Franchised workshops
Spare part outlets
Oil shops
Non-Franchised workshops

• In the section on ungraded questions, you calculated the channel share (2005), in percentage terms, for the 'four-stroke oil market'.
• In exhibit 13, you will find the channel share (2005), in percentage terms, for 'Castrol's four-stroke oil sales'.
• Question 4B:Based on these two metrics, find out for which channel(s) the 'channel share (2005), in percentage terms, for the four-stroke oil market' is greater than the 'channel share (2005), in percentage terms, for Castrol's four-stroke oil sales'. (2 marks)
• Is Castrol effectively utilising its channel partners? To find out, you need to calculate the channel utilisation rate of each channel for Castrol and compare it with that of the entire MCO industry. You need to solve this problem in the following stepwise manner. Refer to exhibit 12 for this particular question.
  • Question 4C:Step 1:In exhibit 12, the data on the total number of outlets is given against each distribution channel (Refer to the column named 'outlet universe').You need to calculate the sales per channel outlet (for the four-stroke oil market). For each channel, find out the sales (in litre) per 'outlet universe' for the four-stroke oil market industry (for the year 2005).(0.5+0.5+0.5+0.5marks)

Channel Partner	Sales (in litre) per channel outlet, 2005
Franchised workshops
Spare part outlets
Oil shops
Non-Franchised workshops

• Question 4D:Step 2:Sales per channel outlet (for Castrol): For each channel, find out 'Castrol's four-stroke oil sales' (in litre) per 'outlet selling Castrol oil' (2005) (Hint:In exhibit 12, the number of outlets selling Castrol's four-stroke oil is given in the column named 'Outlet Selling Castrol Oil'.).(0.5+0.5+0.5+0.5marks)

Channel Partner	Sales (in litre) per channel outlet, 2005
Franchised workshops
Spare part outlets
Oil shops
Non-Franchised workshops

• Question 4E:In 2005, find out for which channel(s) is the 'sales (in litre) per channel outlet (for the four-stroke oil market)' significantly greater than the 'sales (in litre) per channel outlet (for Castrol)'. (2 marks)
• Question 4F:Based on these key metrics, determine the area(s) where Castrol is facing a problem(s). (1.5 marks)