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THE MARKET
TheAustralianmarket for automotive lubricants
and car care products is changing. The
increased cost to run and maintain a motor
vehicle has influenced consumer
behaviour. The majority of motorists are
DIFM(Do-it-for-me) consumers, having
their oil professionally changed as part
of the car service at a car dealership
or workshop. Extended car
manufacturer warranties and
the time and cost to service
vehicles all influence the
consumer’s choice of
service provider. The DIY
(Do-it-yourself) market is
relatively small in
comparison. Consumers in
the DIY market can be
segmented into two broad
groups: enthusiasts who
enjoy tinkeringwith their car,
and pragmatists who
change the oil themselves
in order to save money.
The automotive lubricant
market is a mature market with
volume expected to decline over
time given that crankcase
capacities are decreasing and
service intervals are
increasing. This change,
along
with
more
demanding manufacturer
specifications designed to increase
fuel economy and protect vital
engine parts, is placing more
pressure on the engine oil to
perform than ever before and
will increase thedemand for
premium, quality lubricants
in the longer term in both
market segments.
ACHIEVEMENTS
In a category where the
consumer cannot taste, feel
or interact with the
product, the Valvoline
brand is seen as a premium
lubricant specialist and has earned
a high level of consumer trust and
advocacy. Valvoline has consistently grown
its volume and share in a mature Australian
automotive lubricant market by seeking
to understand its customers and
developing new products and
services to best serve them.
In the DIY category, Valvoline
was the first to introduce the
successful 6 litres Value Pack
concept. In 1993 it also
developed a packaging
innovation by introducing
the 8 litres oil drain pan. The
pack initially was sold with 8
litres of engine oil. The
packaging could later be re-used
as a drain pan and storage device
for used oil.
Prior toValvoline’s growth
in importance in the DIY
category, its heritage lay in the
DIFM channel and Valvoline
was considered a product
innovator. Valvoline was first to
market professional grades of
synthetic fortified lubricants
differentiating these from
its retail range under the
Formula 5000 and ProBlend
sub-brands. It also pioneered
the marketing of premium
synthetics in this channel by
putting together programs
where service attendants
sold the benefits of
synthetics to their
customers and offered the
option to upgrade their oil.
TodayValvoline is a leading
supplier of premium engine oils
into this market with the
majority of its
resources focused
on winning in the
DIYchannel. While
its competitors are
rationalising their
service levels in this
channel, Valvoline
has
increased
service and sales
support recognising
that customer needs
call for goingbeyond
simply
recom-
mending and delivering the right engine oils. Thus
Valvoline has positioned itself as a true business
partner to these customers.
HISTORY
Valvoline traces its beginnings to 1866, when an
American physician, Dr. John Ellis, became
fascinated with various claims relating to the
medicinal value of crude oil. Although he quickly
concluded that the medicinal claims were
unfounded, Ellis became consumedwith the notion
that it might be possible to create a machinery
lubricant from the crude oil. Ellis built the world’s
firstmineral lubricating refinery inBinghamton,New
York. Eight years later in 1873 the product that he
called Binghamton Cylinder Oil
was given the first mineral
lubricating trademark ever
registered: Valvoline.
In the 1930s Valvoline
introduced the first ever all-
season, all-purpose gear
lubricant which became the first
lubricatingoil for diesel andpeak
loads in gasoline engines. In
1940, Valvoline
became the first
company to offer an
u n c o n d i t i o n a l
m o n e y - b a c k
guarantee on its
motor oil. Valvoline
was acquired by
Ashland Oil in the
late 1950s and is still
part of Ashland’s
portfolio.
In Australia
Valvoline was ini-
tially sold through
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