Pennzoil Uses New Strategies to Expand Sales in Flat Market

The world of motor oil is about to undergo a shakeup. Pennzoil Products Co., Houston, is adopting techniques more familiar to consumer packaged-goods manufacturers to grab the customers' attention at the point-of-sale.As vice president of advertising and sales promotion for Pennzoil, Bob Merz is stirring things up. When Merz left Anheuser-Busch Inc. for Pennzoil, he brought with him a new attitude toward the merchandising of motor oil. Since joining the firm in December 1992, he has enlisted the help of several agencies and suppliers with whom he'd formed relationships while at the brewery."The competitive marketplace has changed," Merz says. "The motor oil market right now is flat. Motor oils are better, cars are better. We can't rely on increased use of the product any longer. Now we have to fight for existing volume and create shifts in market share that way. That's a lot more difficult to do than when you're in a growing market."Changes among competitors also have Pennzoil on the alert. "A formidable competitor of ours is Burma Castrol from the United Kingdom," Merz explains. "They've identified the U.S. as their primary target geography in the world, and they're turning up the heat."Plus, a new chairman at Quaker State, who comes from a major soup maker and is well-versed in advertising and marketing consumer goods, was recently named."Our competitors are beginning to realize the need to start marketing motor oil more like a packaged consumer product," Merz says. He believes Pennzoil has the jump on them when it comes to transferring that realization to the shelf.Pennzoil has scheduled three major national promotions for 1994. The first was built around the NCAA basketball tournament. A second involves the Brickyard 400, the newest event on the NASCAR circuit. That promotion runs June 13 to Aug. 6. The third promotion, due to hit in October, will give away Harley Davidson motorcycles.All three are scratch-and-win promotions. Consumers can win more than 10,000 prizes, including trips to the two sporting events. Game cards are packed in cases of Pennzoil and available with a qualifying Pennzoil oil change at participating lube-oil-and-filter service outlets.In-store merchandising materials include freestanding displays, pole signs, case toppers, shelf talkers, banners and counter cards. The merchandising kit is different for the installer segment than for the retail shelf segment -- in lieu of a case-display pole topper, installers get a 14-foot-long Tyvek banner.The materials are all free of charge. The trade portion of the promotion offers incentives to dealers, including additional chances to win the same prizes offered to consumers.In July, a much smaller scope Hispanic promotion will tie in with the World Cup soccer broadcast on Univision. The soccer promo includes a corrugated bin filled with Pennzoil-identified soccer balls. The balls can be sold or given away with the purchase of a case of Pennzoil. The balls are the only P-O-P materials not supplied free, Merz says, "because we expect the dealer to resell them."The P-O-P materials were designed by three different sales-promotion firms. Merchandising support for the NCAA effort was handled by Lifestyle Marketing Group, New York; the Brickyard 400 and Hispanic soccer-ball promotions are creations of McCracken Brooks in Minnneapolis; Kreps Wise, St. Louis, developed the Harley Davidson promotion and helped redesign the Pennzoil label.The new package design preserves the traditional yellow Pennzoil color, logo and Liberty Bell, but highlights the brand name and oil's weight through large, bold graphics. The design was introduced on five products in mid-December. A new ad campaign broke in late March. Ad spending has increased 35 percent over 1993, the company reports."P-O-P is key," insists Merz. "After all, we all know what extremely high percent of purchase decisions are made at the point-of-sale. You have to stand out amidst the clutter. Hopefully, if everything works in synergy, you're also reinforcing a message that the consumer has seen or heard elsewhere -- through television, print or radio. Your last chance to get them is at the point-of-purchase."Merz's philosophy targets the entry-level user, the "16-to-24-year-olds who may for the first time be concerned about what's going into the automobile that they own," he says. "It's more critical for a category like motor oil to capture that entry-level user than it is for some other product categories, like food. The use occasions for motor oil aren't anywhere near as frequent. We need to catch new users quick and build a relationship with them when they're still forming their brand preferences."Ultimately, Merz says, the goal of P-O-P materials is better sales. "Our distribution is pretty strong already," he admits. "But an increased presence in the store via off-shelf display and an increased presence at the lube center will, in turn, increase sales."Pennzoil has always provided some point-of-purchase materials, of both the permanent signage and promotional variety. Only recently has the corporation become more aggressive with its P-O-P materials. "We're using higher profile programs and a broader range of materials to cut through the clutter," Merz says. The clutter is particularly bad in auto-parts stores, he reports.Some years ago, Pennzoil held a sweepstakes for automobiles, recalls Merz, "but nothing where they had promotions that tied into events, like the Final Four, the World Cup, the Brickyard. The anomaly is where we give away a Harley."

Pennzoil Uses New Strategies to Expand Sales in Flat Market

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