Eco 7: Launching A New Motor Oil Case Study Solution
These outlets sold Liveliness product range exclusively, and the company was less aggressive in expanding its fast lube chains due to the anger of its other DI FM customers. Thus, when the company selected new sites for the fast lube station, it took care of the DI FM customers regarding the matter that the location may not take affect their business. This was because the company-owned stores were serviced directly from the company, which increased the gross profit of the company.
Price competition between the mass merchandisers, and club warehouses led towards the decline in the market share, where they had ran local promotion including Javelin products, due to this, independent fast lube centers were losing their business. On the other hand, the customers also started demanding their own private-label product, which could generate good margins at a lower price. Furthermore, the company has been in fear to lose its existing sales, if it expands its fast lube stations.
Question 3. What is the strategic role of Eco 7 in Javelin’s product portfolio? How should Javelin weigh consumer interest in, and willingness to pay for green motor oil? Is it the right product for the firm at the right time? Explain.
Eco 7 is an environmental friendly product, which is produced by used refined oil. It is a green product, because used oil would harm the soil and water if not disposed of properly. Furthermore, used oil could be recycled to produce the motor oil through an efficient refining process.
In addition to this, Javelin had three products before Eco 7, such as conventional oil, full synthetic, and synthetic blend requiring oil change after 5,000, 7,500, and 10,000 miles respectively. Among these, the most widely used was conventional oil.
However, due to Eco 7, Javelin added value to its product portfolio, which would attract DI FM customers, because many DI FM customers want professional expertise in suggesting oil, and that Eco 7 is comparable to the synthetic oil in terms of its performance, however the price factor is more important that could also drive the customers’ preferences.
Moreover, when surveyed the customer to purchase green motor oil, around 45% customers responded that they would purchase the oil at same price as PC MO, and 31% agreed that they would purchase green motor oil, if the prices increased by 50%, and 14% said they would purchase even if there was a 100% increase. Similarly, when respondents were asked that who would influence them to purchase green motor oil, 67% responded that they would be influenced by professional service provider.
Survey results clearly indicate that the company should focus on the fast-lube services, and car dealers by providing education and support to the customers, because about 67% customers stated that they would be influenced by professional service provider. On the other hand, the car dealers had deep knowledge about the oils specification, as well as the company.
However, car dealers are already provide the determined maintenance checks, therefore they are recommended by the manufacturers. Moreover, Javelin should also focus on expanding its fast-lube to provide professional services, as these two moves will attract the customers.
Furthermore, the company’s sales have been declining since 2000, however it has now approached the problem, and identified the symptoms of causes, therefore green oil product will help the company to again regain its market share, based on the competitive performance, and price. However, the strategy to approach the DI FM segmented consumers would be most important to address.
Question.4 Develop a suitable launch strategy for Eco 7? That is, whom should it target and how should it position the product? Propose a marketing mix (product, price, place, and promotion) to implement your proposed targeting and positioning decisions. Justify fully your recommendations.
The market has the potential for upgrading to Eco 7, as discussed above. On the other hand, the company needs to come up with the strategy to allow DI FM segment consumers come under the target population. Initially, the company should avoid targeting D I Y, because it will create further tensions for the company, as mass merchandiser, clubs, major auto-parts chains would again create pricing campaigns, which will affect the DI FM customers.
Eco 7 is a green motor oil product, produced from used oil, through proper refining process. It is an environmental friendly product that helps to reduce the harm to soil and water. Furthermore, Eco 7 has been priced competitively against the competitor’s product, Servo Green. Moreover, Eco 7 has better performance as compared to Evergreen, because Eco 7 offers more mileage than any conventional oil. The oil has more consistency in quality, and is long lasting as compared to conventional oil, and can help the engine to cool down either in high temperature, or low……….
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