Lessons from Consumer Marketers

Brand Building for Industrial Lubes: Lessons from Consumer Marketers

milind phadke
Milind Phadke
Vice President, Energy

kmc energySkyrocketing crude oil prices. Increasing standardization of product attributes. Significant overlap among product offerings. As these forces converge to create a perfect storm driving commoditization and competition in the industrial lubricants market, lubricant marketers are beginning to rethink their once-effective product-centric sales approach.

Seeking new strategies to differentiate their company and their products to maintain market share, many lubes marketers are finding that brand building isn’t just for tennis shoes and soft drinks anymore.

What is branding–– branding is that invisible yet powerful force that drives consumer behavior, sometimes unbeknownst to the consumer. Bombarded with brand messages nearly every minute of every day, many consumers may not even realize the influence these messages have on their day-to-day purchasing decisions. Yet many industrial lubricant marketers are struggling to determine the importance or relevance of brand management to their products.

However, in an industry where (not unlike tennis shoes and soft drinks) product attributes are becoming more standardized and significant overlap among competitive offerings is developing, branding can be an extremely efficient and effective competitive tool in the industrial lubricants market space.

While there are fundamental differences between industrial and consumer markets, the branding concept remains the same: determine the best brand message and communicate this to all audiences, both internal and external. When a product-centric approach becomes ineffective, a high-impact branding strategy can lead to significant competitive advantages (including internal benefits) for those with a well-defined, well-articulated, and well-managed brand strategy.

Without it, industrial lubricant marketers could be leaving money on the table by failing to maximizing the investments made in developing superior products.

Build-a-Brand Budget
One barrier to brand building and management in the lubes market may be the perception that it’s a costly and cumbersome process. But in reality, branding doesn’t have to be exorbitantly expensive, since many of the mechanisms for brand communication are already in place.

As with any product, a customer’s perception of an industrial lubricant brand is mostly based on day-to-day impressions: interaction with sales, customer service, accounting, technical service staff, and others. Certainly, exhibition displays, public relations efforts, write-ups in trade journals, OEM recommendations, trade advertising, and other factors also play a role, but more so with non-customers.

Lubes marketers already incur all of these costs, whether they have a strong brand strategy or not. Therefore, the only additional cost is the investment of time it takes to develop a sound and effective brand strategy that validates the overall core business strategy and that can be clearly communicated to all internal and external constituents.

Low Costs, Big Benefits

What exactly does a lubricant manufacturer stand to gain through branding?

Brand equity
Far more than just a logo stuck on a 55-gallon drum, a brand can be one of a company’s most valuable assets. It communicates the established values of the company it represents and carries with it promises for quality, service, innovation, and performance.

Formulating a sound brand strategy requires careful consideration of the number of brands in the market and in the pipeline, and their value to the overall business strategy. It also requires assessing the potential for new brands to fill positioning gaps and the buoyancy effect that the discontinuation of old, nonperforming brands may have on market position.

For this reason, formulating a sound, logical brand strategy is likely to eventually cost less than having no brand strategy at all by providing a mechanism for tossing dead weight overboard.

Better management of complex businesses and internal consistency
A well-planned brand management strategy creates a more consistent and unifying corporate culture. Identifying core values and reinforcing them throughout an entire operating system with an eye toward brand equity can have a direct correlation to overall profitability for the enterprise.

For the industrial lubricant marketer, this approach enables integration and cohesiveness of all brand-related activities around a common vision on a global scale. For some of the industrial lubricant powerhouses that have merged over the past decade, such as BP-Castrol, Shell-Pennzoil-Quaker State, Exxon-Mobil, and Chevron-Texaco, a strong brand strategy has proven to be the most effective way to coordinate a large, complex, global business.

With the recent acquisition of Shell’s food business by Fuchs and its metalworking fluids business by Houghton/Gulf, thought leaders inside those companies are surely grappling with brand management issues. Which brands should be retained and nurtured? Which brands should be discontinued? Should region, technology, or application play a role in the branding strategy? Can branding help fill some of the positioning gaps?

Longevity
A solid brand can outlive the products. Thanks to instant customer recognition, top-of-mind awareness, and the ability to communicate an inherent set of values, a well-developed brand can generate stronger customer loyalty, and even customer referrals, which can have a positive impact on sales.

It can also potentially slow down the degree and rate of commoditization. Competitive pricing and quality notwithstanding, it is clearly harder for a competitor to dislodge a brand from a particular account than it is to dislodge a product.
Certainly the high-impact, slick brand marketing tactics of the consumer products industry, with its massive doses of advertising, celebrity spokespeople, and promotions, will not play well in the industrial lubricants marketplace. But the underlying tenets of branding do rightly apply:

  • Build a strong brand message based on inherent core company values.
  • Ensure that the brand message permeates all communications and interactions, both internal and external.
  • Foster and protect brand equity to drive profits, gain competitive advantage, and stave off commoditization.

On the other hand, if you can manage to get Tiger Woods (especially today after his recent win) to endorse your hydraulic oil or metalworking fluid, I say “Just Do It.”

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