Eco7:LAUNCHING A NEW

MOTOR OIL
THE
ALLIANCE(GROU
P-3)
KESHAV KUMAR
NILAY KRISHNA
NEERAJ SINGH
RITWIK RAJ
KUMARI NISHA
ROY
MD QUADIR
IQUBAL
NEHA BHARTI
 INTRODUCTION
Studies conducted in 2012 revealed that consumers were willing to pay more for environmentally
friendly items, and that the market demanded more cars that were both fuel-efficient and
environmentally friendly. This rise in demand led to the creation of Eco7. Avellin created a brand-
new motor oil that was composed of recycled materials.

Avellin has access to the following distribution networks:

A quick lubrication chain called Avellin Auto makes up 7% of total sales.

66% of sales are accounted for by 6000 independent fast lubes and 6500 oil changes plus.
The do-it-yourself market, which accounts for 9% of sales, is drawing attention from national
retailers.

At $10.5 billion, the passenger car motor oil (PCMO) market was in its mature stage of development.
Thus, in order to break into this market, innovation became essential. This fact explains why new
products such as Servoline began to show potential in the market.
Manager's problem • What is the specific challenge Eco7 faces in launching the new motor oil? Is
it related to pricing, competition, market segmentation, marketing strategy,
or something else?
• What are the potential consequences of making the wrong decision?

Decision Dilemma • What are the available alternatives or options Eco7 is considering?
• What are the pros and cons of each option?
• What are the key factors or criteria influencing the decision (e.g., market
research, competitor analysis, budget constraints)?

Alternative to be • Develop a marketing strategy emphasizing the motor oil's eco-friendly

selected features, superior engine protection, and customer testimonials. Implement
a targeted digital campaign, influencer partnerships, and in-store
promotions to build brand awareness and trust.
 SWOT ANALYSIS
STRENGTHS WEAKNESS
• The new motor oil is environment friendly • The slow growth of the company since
and so is a refined oil. 2005.
• Higher quality performance in the oil • Financial performance as in 2013; the
industry company generated 4% of the profit from
• Superior reliability. its sales.
• Long-lasting mileage fuel.

OPPORTUNITIES THREATS
• Eco7 is helpful for the growth of the
company. • Competitors, as they offer lower prices.
• Innovation and Expansion. • Slow growth in the industry.
• As the company ranked in the passenger- • Sevoline as it introduce SevoGreen.
car motor oil (PCMO) market’Eco7 is
expected to generate higher revenues for
the company.
 SWOT ANALYSIS
Strengths Weakness
• High production cost
• Innovative product
• Price-sensitive market
• Strong brand image
• Limited market reach
• Existing Avellin Auto stores
offer controlled messaging S • Competing eco-friendly
products
and potential for higher
margins. w
Opportunities o Threats
• Growing market for eco- • Competitive landscape
friendly products T • Negative consumer
perception
• Positive environmental
• Fluctuations in oil prices
impact
• Shifting environmental
• Potential for brand regulations
differentiation
• Partnerships and
collaborations
 BCG ANALYSIS

1. Question Marks (High Market Growth, Low Market

Share):

STAR
HIGH

This could apply to a recently released product or a less

well-known motor oil variety. To find out if these items can
grow market share and become stars or if they need to be
phased out or repositioned, more thought and funding are
needed.

2.Stars (High Market Share, High Market Growth):

Eco 7's high-end motor oil with state-of-the-art technology
may be rated as a star if it has a high market share in a

DOG CASH market sector that is expanding quickly. To preserve and

LOW

improve its position, this product probably needs ongoing

investment.
COW

LOW HIGH
3.Cash Cows (High Market Share, Low Market Growth): Well-known and
profitable motor oil products that command a high market share in a
market that is expanding more slowly may be categorized as cash cows.
Managers can concentrate on increasing efficiency rather than making
significant investments because these items consistently bring in revenue
and profit.

4. Dogs (Low Market Share, Low Market Growth): A product in a stagnant or

decreasing market could be classified as a dog if its market share is low.
Managers may have to determine whether to divest, reposition, or stop
certain items after critically evaluating them.
 MARKETING MIX
• PRODUCT
• Environmental Friendly Moter Oil

• Recycling the used oil potentially multiple times

• Manufactured from recycled materials

ECO7 • Better driving performance

• 65% of recycled oil

• Eco7 is packaged part of PCMO services

• 45% less energy

• PRICE
Price @ $5.25
• Too tight and would squeeze margins
• Devalue the innovation
• Undermine efforts to market Eco7 as
premium product
• Easy to sell
• 4.5 sales per day

Price @ $6.75
• Nearly as expensive as full synthetic
• Hard to sell independently
• Require installer to understand the
product well enough to explain to
customer
• Competitor is selling at $7.50
• 3.5 sales per day
 PLACE
AvellinAuto
• Avellin also sold via its own
AvellinAuto stores.
• AvellinAuto usually located near
the distribution centre and away
from independent DIFM
• Margin is slightly higher
• 436 stores open as of 2014
• Generated 7% of PCMO sales
Car Dealer Independent DIFM
• Car dealer that sells hybrid and
• Included fast lubes, oil change plus
electric cars.
stores, and repair shops.
• They provided predetermined
• To build loyalty, the company
maintenance check.
promoted its Aventage program.
• One-stop shop for all maintenance
• 5,000 independent fast-lube
• The oil change would be done in
• 6,500 oil change-plus store and
strict accordance with the
repair shop.
manufacturer recommendation,
• 4,400 were in Aventage program.
 • PROMOTION
Aventage AveGreen
Market Independent DIFM Car dealer

Mission To strengthen their brand awareness and improvement of To create new market segment and support
perception green product

Message Main focus is on communicating their vision of providing best Main focus is emphasizing the significant green
value to customers in terms of quality, durability and value for factor with no sacrifice in quality and value for
money money

Media A mix of advertising, public relations, direct

marketing and relationship marketing

Money About 2-3% of net profit is used for promotion purposes

Measure Metrics used are response rate from firm owner/customer, loyalty rate, monthly sales report and customer
satisfaction index
 CONCLUSION
• Eco7 is a good environmentally friendly product.
The price between $5.25 - $6.75 should be further explored in
order to identify the right price point.
• Test marketing is a good approach to understand the customer needs and demand
• Upgrades from conventional to Eco7 will have impact towards demand on
conventional market, to some extend customer may choose product from
competitor.
• The penetration percentage provided is too high to achieve.
• Avellin should consider collaboration with car dealer to capture new customer
rather than relying on existing customer