The company plans to do this with the help of marketing and a promotional push, making its existing customer to move up the value chain from basic products like GTX to premium like synthetic and semi-synthetic products such as Magnatac and Edge. This move is also seen as a response to the strategy of other lubricant makers in the market like Shell Lubricants, who are increasingly focusing on synthetic lubricants. In terms of margins too, premium products garner better.
Further, it would also mean that Castrol may look at phasing out at least one of its product from the lower-end of the value chain in order to save production and marketing cost and free up capacity should it decide to bolster the portfolio with new products at a later stage. The company will look at re-visiting its packaging strategy in a bid to expand its reach in the premium segment and make its offerings available in smaller and convenient packages to suit customer needs.
"We want to target the customers that value our products and brand. We are looking at smaller and simplified portfolio with premium segment as our core business area," Ravi Kirpalani, automotive director & COO, Castrol India Ltd said. "Our strategy is to simplify organisational and product portfolio in a bid to make seamless operations all across the supply chain," he said, adding that there is a lot of headroom to expand in the premium segment.