University of California
Type of paper: Thesis/Dissertation Chapter
Problem Statement of Lubricant Industry
Lubricant industry is a very competitive industry because many companies around the world have created their own private label and competition between the well-known product in the market such as Shell, Castrol, Royal Purple etc. The availability of a vast range of products at competitive prices has been a major factor in attracting customers to lubricants market. As a result, many manufacturers of lubricants, including big corporations, have been aggressively pursuing international and Asia markets. Moreover, the market share of the industry is monopolized by big corporations, such as, Petronas, Shell and Caltex.
The big corporations and manufacturers have the advantages many small companies lack of, such as, expensive advertisement, sponsorship and expert management team. For the small businesses to tap into market that has been monopolized by big corporations is very difficult for companies. Psychologically, consumers always and only use products that are recommended by peers or they have been using it for a while (2). Because of this reason, products that are very new will be hard to market their brands into the market effectively.
The user confidence is very low because weak brand image, uncertain quality and doubtful suitability. Besides that, counterfeiting has become the major issue for various types of products in the market. As technology become more sophisticated and cheap, many counterfeiters easily copied products that are well-known and established. This also becomes a problem by Moto7 Distribution S/B to overcome as it has to compete with the original products and counterfeit products, hence making the market shares become much smaller.