Eco7: Launching A New Motor Oil Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Eco7: Launching A New Motor Oil Case Study Solution

The threat of New Entrants

The obstacles to enter in the oil business are low in light of the fact that there is gigantic starting capital required for the business. The oil business is alluring a direct result of its quick development and client base. In any case, it is difficult for new players to make a solid brand picture. Eco7 has fewer chances for new entrants in the market.

Threat of Rivalry

The contention in the oil business is high. Results of the oil business are marked and have a solid customer base. These additionally make the market exceptionally serious. The significant competitors of the organization are:

Baud with 23% share of branded sales in 2012.

Motoline with a 15% share of branded sales in 2012.

Bargaining power of Customers

The dealing intensity of customers in this industry is low. The intensity of the purchaser is restricted in light of the fact that the costs are set by the providers. The haggling intensity of clients can be high on account of Eco7 launch, as the new products should not be high-priced and should focus on the customer’s attraction first and on profit later.

Bargaining power of Suppliers

The bargaining power of merchants in this industry is moderate. The suppliers are not earth shattering in setting new expenses in the business, given its improvement. The expenses of raw material are constrained by brands. Moreover, the associations can change to various suppliers as there are different suppliers in the business.

Marketing Mix

The marketing mix strategy includes price, promotion, product and price. Marketing mix for Eco7 launch, can be as follows:

Product

Environment-friendly oil.
Produced by Recycled oil.
Less energy of around 45%.
65% recycled oil.
Better performance in driving.
Exo7 is a part of PCMO.

Price

Retail price is $6.75, whichis highly expensive.
Discounted price $5.25 and it will also squeeze the profit margin.

Place

DIFM: Expected to contribute 68% of sales, 6500 fast-lubes, repair shops and 6000 own fast-tubes.
State Retailers:Expected to contribute 9% of sales and distribution by the wholesale clubs.
AvellinAuto: Distribution through its stores, direct service to regional distribution, and this channel is expected to contribute 7% of sales.

Promotion

Advertisement: Local TV and new papers.
Displays: In stores and eye-catching green.

Testing the Market

Trails for three months

Product Cost:Synthetic $1.95, conventional $1.29, and Eco7 $ 2.01.
Prices of Eco7:$5.25 and $6.75.
Slogan: You have the green light.

Results

Price concerns.
The company should ignore the DIY segment for Eco7.
DIFM segment can influence the customers.
Available only DIFM and AvellinAuto.

Recommendations

Keeping under consideration the internal, external, qualitative and qualitative analysis;it is recommended that the company should sell Eco7 at a higher price of 6.75 as it has more chances of helping the company in having profit margin.There are different causesalso, which contribute to the launch of Eco7, and these are the progresswhich are required by the business to develop, recover and advertise with Eco7.Dispersion to the DIFM fragment as the gross net revenue is 55%, and limited costs (See Exhibit 1).The testing market also showed the needs and wants of the customers for Eco7. Exhibit 2 also shows that the volumes of stores, incremental revenue change, and annual revenue and gross profit increment also encourage the launch of Eco7. Projection also showed an increase in the revenue generation and gross profit of the company. (See Exhibit 3)..........................

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