Customer preferences: Caltex enjoys largest share in lubricant market
Caltex edges past Shell in survey targeting petrol-fuelled vehicles.
KARACHI:
The favourite brand of lubricant for car owners in Pakistan is Caltex, with 27% of respondents in a recent poll saying that it is their most preferred auto lubricant, followed closely by Shell (25%), ZIC (21%), Total (7%) and PSO (4%).
The survey, which was conducted by Pakwheels.com and YouGov, revealed that although Caltex is the most popular lubricant brand, it has low popularity among car owners in Khyber-Pakhtunkhwa (12%). ZIC is most popular in Punjab, as 26% of Punjab-based car owners consider it their favourite brand.
“A quick look at the survey can tell you that it was done primarily on petrol-powered vehicles,” said Hascol Petroleum National Sales Manager (Lubricants) Baqar Aizaz, while speaking to The Express Tribune.
“Operating in the petrol market is tougher than operating in the diesel market, as the former involves brand loyalty on the part of customers,” he said.
Since petrol-powered cars are generally private vehicles with most car owners taking interest in their maintenance, Aizaz added, the decision to buy one brand as opposed to another is based on multiple factors like product quality, price, advertising influence, brand loyalty, etc.
“Drivers of petrol-powered cars are more sensitive to the brand of lubricant they use. On the other hand, the diesel market consists of commercial vehicles, a significant part of which is fleet-based. There you deal in bulk quantities and negotiate prices with a person who doesn’t own those vehicles in most cases,” he said.
Besides being the most popular brand in Sindh (34%), about half of the respondents in Gilgit-Baltistan say Shell is their preferred lubricant, according to the survey. It also reveals that Shell is most popular among car owners with a monthly income of less than Rs25,000.
Although there are many auto lubricants like engine oil, gear oil, brake oil and transmission oil, the real competition exists in engine oil, which is changed most frequently. A four-litre can of an engine oil of average quality costs around Rs1,500, although it can be as high as Rs5,000 in some cases.
Another notable trend in the survey is that the younger the car owner is, the more likely he is to use a Shell lubricant. About 28% of car owners aged 18-24 say Shell is their most preferred brand. The percentage decreases to 26% and 22% for age groups 25-29 and 30-34, respectively.
On the contrary, 23%, 26% and 29% of car owners belonging to the age groups 18-24, 25-29 and 30-34, respectively, say they prefer Caltex to other brands, which reflects that Caltex is relatively less popular among young car owners.
Lubricants are made by mixing additives with base oil. While some companies import base oil, others buy it from local refineries. Additives, on the other hand, are always imported. Some companies import lubricants in finished form, while others operate their own plants to manufacture lubricants locally.
Although common sense dictates that oil marketing companies with a bigger footprint in terms of filling stations should enjoy a larger share in the lubricants market – given their brand’s easy availability across the country – industry sources claim sales of lubricants have little correlation with the number of retail sites.
Speaking on condition of anonymity, a senior executive of one of the largest oil marketing companies said his firm operates far more retail sites than most of its competitors, yet its share in the lubricant market is relatively small.
“Ours is considered a low-value product because we use push-selling methods. It means retailers must sell a certain quantity of lubricants in order to keep receiving other fuel supplies,” he said, adding that the strategy results in the same product selling at different prices at different retail outlets.
“One consequence of employing push-selling methods is dissatisfaction among consumers. For the owner of a private, petrol-fuelled car, price volatility is reflective of inconsistent product quality,” he said.
Published in The Express Tribune, September 10th, 2012.
The favourite brand of lubricant for car owners in Pakistan is Caltex, with 27% of respondents in a recent poll saying that it is their most preferred auto lubricant, followed closely by Shell (25%), ZIC (21%), Total (7%) and PSO (4%).
The survey, which was conducted by Pakwheels.com and YouGov, revealed that although Caltex is the most popular lubricant brand, it has low popularity among car owners in Khyber-Pakhtunkhwa (12%). ZIC is most popular in Punjab, as 26% of Punjab-based car owners consider it their favourite brand.
“A quick look at the survey can tell you that it was done primarily on petrol-powered vehicles,” said Hascol Petroleum National Sales Manager (Lubricants) Baqar Aizaz, while speaking to The Express Tribune.
“Operating in the petrol market is tougher than operating in the diesel market, as the former involves brand loyalty on the part of customers,” he said.
Since petrol-powered cars are generally private vehicles with most car owners taking interest in their maintenance, Aizaz added, the decision to buy one brand as opposed to another is based on multiple factors like product quality, price, advertising influence, brand loyalty, etc.
“Drivers of petrol-powered cars are more sensitive to the brand of lubricant they use. On the other hand, the diesel market consists of commercial vehicles, a significant part of which is fleet-based. There you deal in bulk quantities and negotiate prices with a person who doesn’t own those vehicles in most cases,” he said.
Besides being the most popular brand in Sindh (34%), about half of the respondents in Gilgit-Baltistan say Shell is their preferred lubricant, according to the survey. It also reveals that Shell is most popular among car owners with a monthly income of less than Rs25,000.
Although there are many auto lubricants like engine oil, gear oil, brake oil and transmission oil, the real competition exists in engine oil, which is changed most frequently. A four-litre can of an engine oil of average quality costs around Rs1,500, although it can be as high as Rs5,000 in some cases.
Another notable trend in the survey is that the younger the car owner is, the more likely he is to use a Shell lubricant. About 28% of car owners aged 18-24 say Shell is their most preferred brand. The percentage decreases to 26% and 22% for age groups 25-29 and 30-34, respectively.
On the contrary, 23%, 26% and 29% of car owners belonging to the age groups 18-24, 25-29 and 30-34, respectively, say they prefer Caltex to other brands, which reflects that Caltex is relatively less popular among young car owners.
Lubricants are made by mixing additives with base oil. While some companies import base oil, others buy it from local refineries. Additives, on the other hand, are always imported. Some companies import lubricants in finished form, while others operate their own plants to manufacture lubricants locally.
Although common sense dictates that oil marketing companies with a bigger footprint in terms of filling stations should enjoy a larger share in the lubricants market – given their brand’s easy availability across the country – industry sources claim sales of lubricants have little correlation with the number of retail sites.
Speaking on condition of anonymity, a senior executive of one of the largest oil marketing companies said his firm operates far more retail sites than most of its competitors, yet its share in the lubricant market is relatively small.
“Ours is considered a low-value product because we use push-selling methods. It means retailers must sell a certain quantity of lubricants in order to keep receiving other fuel supplies,” he said, adding that the strategy results in the same product selling at different prices at different retail outlets.
“One consequence of employing push-selling methods is dissatisfaction among consumers. For the owner of a private, petrol-fuelled car, price volatility is reflective of inconsistent product quality,” he said.
Published in The Express Tribune, September 10th, 2012.