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LnG | Europe Middle East Africa | March/April 2009 |Reproduced with permission. 2009, LNG Publishing Company Inc.

March/April 2009 Number 1

Many in the lubricants indus-try still struggle to see the rel-evance of brand management,especially when it comes toindustrial lubes. In their view,

branding belongs in markets for thingssuch as shampoo or breakfast cereal. Butbranding strategies can be adapted tomany types of products, and can help tomake industrial lubes businesses morerobust and protable.

Branding StereotypesFailure to focus on branding often

stems from a limited view of what it is. Asit is generally understood, brand manage-ment has evolved mostly from personalcare or packaged goods industries. These

fall under the umbrella of business-to-consumer (B2C) industries, wherein theprimary methods of reaching customersare through massive doses of advertisingand point-of-sale promotions.

Industrial lubricants are differenttypes of products in several fundamentalways. First of all, theirs is a business-to-business (B2B) market in which suppli-ers sell directly to end users. Secondly,they require a signicantly higher levelof technical service. Suppliers of these

products believe rightly so that consumer product brand-ing strategies are not always rel-evant to their markets.

Our markets dont work like

that, as we are not selling toothpastehere, one leading lube supplier said re-cently. Others almost hold branding be-neath contempt, insisting that real in-dustrial lubricant marketers should notwaste time on such management fadsand trends.

Another objection to embracing amore aggressive industrial brandingstrategy is the sheer magnitude andcomplexity involved. Based on researchby Kline and Co., the following are com-mon statements from leading industrial

lube marketers: We are global in our sales spread. Our customers are very highly

fragmented into various globalend-use niche markets.

Our product lines are very large,as a lot of our products are custom-designed for specic geographicmarkets. (Or end-use applications,or individual customers.)

Due to our recent merger, thisexercise has become very complex.

Then there are the industrial lubesuppliers that think that they do have brand: their company name. They tendto use generic names under the maincorporate brand, either containing basi

cally a description of the product itselor the end-use application targeted, othey pick a name signifying the products chemistry.

The problem with any of these stances is that by not having a brand strategy, marketers are not maximizinginvestments that they have made in developing superior products. The inherent danger is that customers may comto believe that these products are purecommodities. This risks leaving moneyon the table.

Benets of BrandingIndustrial lubricant suppliers should

recognize that brand management canbe adapted to their products and markets. Kline contends that it is an efcient and effective tool that offers thefollowing benets. Brand equity. A brand is far more

than just a name stuck on a 55-gallondrum; it represents an establishedsense of values. A sound brand

Branding for

Industrial Lubricants

By Geeta Agashe

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| LnG | Europe Middle East Africa | March/April 2009Reproduced with permission. 2009, LNG Publishing Company Inc.

strategy will clearly lead to a rethink-ing of the number of brands thecompany has in the market and inthe pipeline; the introduction of newbrands to ll positioning gaps; andthe discontinuation of old, nonper-forming brands. Formulating a sound,

logical brand strategy is likelyto eventually cost less than havingno brand strategy.

Better control and managementof complex businesses, and internalconsistency. Well-planned brandmanagement strategy creates arounditself an operating system thatevolves over a period of time intobrand equity that has a direct correla-tion to protability of the enterprise.This will enable the industriallubricant marketer to integrate allbrand-related activities around acommon vision all around the globe.

For some of the large industriallubricant powerhouses that havemerged over the past decade, suchas BP-Castrol, Shell-Pennzoil-QuakerState, Exxon-Mobil, Conoco-Phillipsand Chevron-Texaco, a strong brandstrategy is the most effective way forcoordinating a large, complex, globalbusiness.

Longevity. Brands can live for muchlonger than products. Brands leadto instant customer recognition,

communicate an inherent setof values, and result in strongercustomer loyalty, all of which havea positive impact on sales and canpotentially slow down the degreeand rate of commoditization. It isclearly harder for a competitor to

dislodge a brand from a particularaccount than it is to dislodge aproduct.

Some marketers may think that thingssuch as brand image and impressionsdont affect industrial lubricant pur-chasing decisions, but the evidence sug-gests otherwise. In a recently conductedbenchmarking study, we discovered thatthe company that spent the most mon-ey per volume unit on research and de-velopment was not perceived to be the

most technologically innovative by ei-ther its customers or peers. On the otherhand, one company with a strong brandknown for technology leadership actu-ally ranked in the middle tier of R&Dspending. Thus, a strong brand will helpsustain a position in the marketplace anda consistent corporate culture that willlead to internal effectiveness.

Findings such as these refute the pop-ular notion that branding makes senseonly in consumer markets, that con-sumers, unlike B2B customers, make

purchasing decisions based on emotionrather than research. Common sensealso says that there is more diversity inthe purchasing processes of the B2C andB2B segments and that the differenc-es between them are not so stark. Weknow many consumers are capable ofmaking informed decisions. On the oth-er hand, industrial customers sometimespossess imperfect product information,and they may not always have time tomake fully rational buying decisions.

There is more evidence that purchasersof industrial lubricants are susceptibleto brand images and advertising. In re-sponses to a survey conducted by Kline,purchasers remarked that they werebuying a particular brand of industriallube even though the supplier of that

product had discontinued it a few yearsearlier. The brand was recalled at such ahigh rate because it had been heavily ad-vertised when still on the market.

Big Benets, Little CostSo if branding does make sense for

industrial lubricants, what does it taketo develop an effective strategy? Notmuch additional expense, in our view.A customers perception of an industri-al lubricant brand is most often basedon his or her day-to-day experiences in

dealing with the brand, including inter-action with sales staff, order processors,accounting department, technical ser-vice staff and others.

Industrial lube marketers incur all ofthese costs whether or not they havea strong brand strategy. Therefore, theonly additional expense to be incurredis the time required to develop a soundand effective brand strategy that vali-dates the overall business strategy, andto communicate to internal and externalconstituents.

We suggest starting by taking a fewmoments to assess the attention yourcompany currently gives to brand man-agement. Does your company have brands?

If so, how many? What has it doneduring the past 12 months to createor enhance brand value?

Does your company really have abrand that signies a concept, or is it

just using generic product namesunder the corporate name?

It is harder for acompetitor to dislodge

a brand from an accountthan it is to dislodge

a product.

marketing matters

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Geeta Agashe is vice president,Petroleum and Energy Practice,at Kline and Company, a worldwideconsulting and research frm.Based in the United States, she canbe contacted at GeetaAgashe@KlineGroup.com or +1 973 435 3484.

How many brands should a companyof your size maintain? (What numbers would be too high or low?)

Should technology, application,or target geographic region inuenceyour brand?

Who should be responsible for brand

management? Do your customers perceive your

brands as your company wishes themto be perceived?

Is your company fully exploiting thebrand equity it possesses?

Do your companys current strategiesand actions work to build andreinforce its brand images, or is itsending conicting images?

Are your brands values clearlyarticulated and understood by allinternal and external constituents?

Sound branding does not cost much,but neither does it happen overnight. Itrequires patience and careful planning.

marketing matters

LnG | Europe Middle East Africa | March/April 2009 |Reproduced with permission. 2009, LNG Publishing Company Inc.