A Conversation on Growth (Part III)
By Suzan M. Jagger for Lube Magazine.
Tackling the Challenges at Home…
German-based Liqui Moly is selling direct to independent workshops by leveraging its strong direct sales force and auto parts wholesalers. UK-based Morris Lubricants sells primarily direct with emphasis on OEM technology, marketing, and motor sports promotions. In the Americas, Mexico-based Roshfrans sells through its exclusive and company-owned distributor network with a focus on auto parts stores by leveraging quality, sponsorships, and competitive pricing. And in the USA, the Service Pro product line supplied by Warren Oil, and the CAM2 product line are sold to distributors and direct accounts.
In most cases, the success of Independents comes from providing local customers with a balance of quality, responsiveness, and cost. For the majors, this has become an operational hurdle as they drive to simplify product offerings, standardise delivery lead times and Minimum Order Quantities (MOQ), and focus on larger volume strategic accounts. The ultimate challenge is how can a Major create intimacy with customers and respond to needs when 50-70% of their sales are now through distributors and resellers? Social media is providing a partial bridge to visibility with customers, but additional SAP & ERP technology combined with new sales and marketing models will be the winning combination.
Simply put, Winning my way, is not winning your way.
“Are We Winning?”…
How many times have you been asked the question… “Are we winning in the lubricants business?” I can tell you that after 30 years of working with companies around the world, there are no two companies that look at this question with the same lens. Although we have a set of common financial and operating measures, the mix of priorities, preferences, aspirations for profits, and boundaries that define what we are willing to do in the marketplace is all over the map.
Simply put, “Winning my way, is not winning your way”. Even within the group of multinational oils who basically all play in the same growth markets, what makes Shell happy with its long-term focus on growing profits through commanding market share positions and a broad product-brand portfolio will not satisfy an ExxonMobil or BP with their focus on capital efficiency and willingness to sacrifice competitive product volume for ever higher net profit margins from a more focused premium brand offering. Although we all share the same basic drivers for industry profits, marketers come to this business in all colours and shapes, each carving out a different future.