Eco 7: Launching a New Motor Oil Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Eco 7: Launching a New Motor Oil Case Solution

Introduction

Avellin was established as an oil refiner in the United States in 1936. It had diversified its products towards petroleum division in 1995. Afterwards, Avellin faced bad economies of scale among its competitors with which it lowered off the profit margin in the business of refining and marketing fuels. In order to sustain, Avellin focused towards its other businesses of Industrial Materials and Automotive. However, the automotive industry resulted in the generation of 60% of the revenue and 40% of the profit for Avellin.

By 2014, Avellin carried out with the ten lubricant’s blending and packaging plants along numerous distribution channels for its lubricants. Similar to its rivals, Avellin also incorporated a fast – lube chain. These stores were AvellinAuto chain. Avellin is ranked at number three in the industry behind Moro line and Baud. There were many competitors in the lubricant market against Avellin. However, the new launch of Avellin, Eco7, had only one peer in the market, which was SevoGreen.

Problem Evaluation

The new launch of Eco7 was going to be a successful project for Avellin. The main purpose of Eco7 was to provide an eco-friendly lubricant. It was made possible by preventing the oil lubricant to go to waste due to the installer of the oil change. If the oil does not decompose properly into soil or water during the oil change in vehicles, then the oil gets wasted by the installer. However, if the lubricant decomposes appropriately, it can be reused multiple times and more efficiently than when it was extracted and refined for the first time. Avellin used proper marketing research, pricing, and promotional strategies for its product launch. However, it was also concerned about the unsuccessful sales of the Eco 7.

Aaron Jonnerson, vice president of Avellin; was worried about the situation of the business that was diminishing day by day. Moreover, Marketing Intelligence for the Eco 7 brought many aspects of concern. One of the concerns of the consumers was the creation of brand awareness for the innovative product that is not only best in the quality, but its also an Eco-friendly lubricant. People were price conscious that is why another concern of the high price was also raised. Hence, Avellin had to re-establish the marketing strategies for Eco 7 that involved pricing, promotion, positioning, and channels of distribution. In addition, it had to ponder about its positioning and target the groups that use such lubricants. There were two main groups of consumers of oil; one were Do-it-Yourself, they used to service their vehicles themselves and had immense knowledge of lubricants. The other group was Do-It-For-Me; they used to get the services of the vehicles through some professional resources.

Availability of Motor Oil

Various types of channel of distribution of different companies in the market accommodate buyers to take services for the lubricant oil. As there were two groups of the consumer in the market, this is why separate channel of distribution for both of the segments were designed. DIY consumers had appropriate knowledge about motor oils. Hence, they used to buy and change the oil of the vehicle themselves. Moreover, for the segment of DIY Automotive parts store or mass merchandisers like Wal-Mart, Advance Auto Parts or AutoZone were in-lined, from where DIY customers could buy easily.

On the other hand, DIFM consumers prefer to get professional maintenance of their vehicles rather than doing it themselves. Hence, they had less knowledge of the quality of the motor oil. Thus, the company designed five types of distribution centers, where the DIFM consumers could conveniently buy their products..............

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