Case Study R&D of Castrol Oil

CASE
STUDY

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Questions..........................................................................................................................................3
1. Importance of R&D and how it has enabled Castrol to gain competitive advantage..............3
2. Policy guidelines for retaining or improving the position in a very competitive place...........5
3. Product oriented approach versus market orientated approach ..............................................8
4. Advice to the Castrol for a continuous marketing research program....................................14
Conclusion.....................................................................................................................................16
References......................................................................................................................................17
INDEX OF TABLES
Table 1: Merits and Demerits of Product Oriented and Market Oriented Approach.......................8
ILLUSTRATION INDEX
Illustration 1: Positioning Map of Castrol.......................................................................................6
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INTRODUCTION
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.
QUESTIONS
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,
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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).
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).
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