Case Study: Avellin Corporation - Launching Eco7 Lubricants

This case study analyzes Avellin Corporation's business, focusing on consumer segments (DIY and DIFM), market position, and the strategic role of its new eco-friendly lubricant, Eco7. The study evaluates Avellin's position in the automotive lubricants market, considering consumer perception, distribution strategy, and the impact of competitors. It explores the strategic role of Eco7 in providing high-quality, environmentally friendly products. The analysis delves into the marketing strategy for launching Eco7, including the marketing mix (product, price, place, and promotion) tailored to the target market. It also examines value analysis and the importance of a competitive pricing strategy, distribution channels, and promotional tools to effectively communicate the product to the target audience. The study emphasizes the significance of understanding consumer behavior, particularly the eco-conscious trend, and the need for a strong marketing approach to successfully launch Eco7 and increase market share.

AVELLIN CORPORATION
Case Study

Table of Contents
1. Consumer Analysis...................................................................................................................2
2. Evaluation of Avellin’s position...............................................................................................2
3. Strategic role of Eco7...............................................................................................................3
4. Strategy to launch eco7............................................................................................................4

1. Consumer Analysis
a. Nature of purchase
The customer segment is mainly segmented into two categories, namely, do it yourself and do it
for me. The segments are explained below:
Do it yourself: The consumers mainly reside in the suburbs, so they have the knowledge and
skills of their vehicles and lubricants, so they compare with DIFM segment, so they manually
perform the replacement of lubricant with the vehicles. The seventy percent of the target market
is loyal towards the brand, and they are familiar with the brand. The replacement is done by the
consumers with the easy to reach merchandisers such as convenience stores, special stores, and
others.
Do it for me: The consumer segment resides in the big cities and the consumers are older that
DIY segment. The consumers are highly educated, upper middle class, so they prefer qualified
technician for the lubricant replacement automotive vehicles. So they purchase their vehicles
with the advice of professionals.
b. Benefits
The consumers consider the various benefits such as quality, quality, price and others. The
quality is the main element because the quality of motor oil directly impacts on the vehicles. The
consumers are very sensitive, so they consider the benefits associated with the motor oil (Juster
et al., 2015). The consumer's today are eco-conscious, and the product is environment-friendly
which helps to attract a large number of consumers.

c. Risk associated
The various risk associated with the launching of products such as meeting the expectations of
consumers, shareholders, and others. The consumers are price sensitive so the price strategy must
be market price penetration which helps to attract a large number of consumers.
2. Evaluation of Avellin’s position
Avellin was founded in 1936 in the United States. The company has introduced its petroleum
division in the year 1995. The company operates with the ten lubricants and plants of packaging
in the United States. The company generates its profits nearly sixty-five percent from the
passenger car motor oil. Avellin is ranked third in the market of automotive lubricants in PCMO
industry, and two major competitors are Moto line and Baud. The market share of the company
is 11%.
Consumer perception: The company excels at the segments of DIFM of price sensitive which is
seventeen percent of the of DIFM price-focused consumers, but it receives the least position in
the DIFM segment which is sensitive to the quality. It shows that the consumer perception
towards the product is that they are easily affordable, but the quality of the product is lost due to
which the company lose its market share over the time. The consumers who are price sensitive
are only purchased their products due to a low price of the product as compared to other
companies.
Distribution strategy: The Company is having successful distribution strategy in the segment of
DIFM because the company gives priority to the distribution of products and services. However,
the promotional strategy in the DIY segment must be done in order to promote the product and
services because it is another reason of market share loss over the time.

The company has two consumer segments which include Do it yourself and Do it for me. The
main reasons for loss of market share are quality of the product and poor promotional strategy
because the consumers are seventy percent of the consumers are high quality and lies under the
middle, high class who are willing to give the price in order to receive high-quality product but
the company is focusing on low price strategy which impacts on the quality of the product (Vidal
et al., 1997). Secondly, the promotional strategy is poor due to which the sales volume of the
company is impacted which influence the market share of the company.
3. Strategic role of Eco7
The strategic role is to provide environmental free products with high quality and affordable
price. The product is adjusted with the consumer perception and state of the earth which includes
the importance of material for the particular vehicle which helps to minimize the emission of
carbon. The cost of producing eco7 is higher than the production cost of synthetic and
conventional lubricants. However, the price offered for the product is under synthetic lubricants.
The quality of eco7 is considered best among other lubricants which are offered with the similar
price. Therefore the consumer perception towards the eco7 will be a high-quality product, and
the perception will be coupled with the production process of making high-quality products.
The increment of green living style leads to the emergence of PCMO environmental friendly.
However, the production process of eco-friendly products is more complex than the non-green
products due to which the company uses these contents in the tagline tends to high sales but it
results into low repurchase of environmentally friendly products.
The eco7 is the environment free product helps to attract a large number of the consumer because
the consumer is eco-conscious and willing to pay a high amount in order to receive high-quality

products. The target market is mainly upper-middle-class consumers who are willing to pay high
amount because they are more consider the quality and environment. The trend of using eco-
conscious products supports the sales of eco7 because the products support current trend by
neglecting the harmful substances in the production of eco7.
Avellins is offering the eco7 product which is comparatively cheaper than the environmental
products offered by other competitors in the same industry. The company has also conducted
research to understand the consumer behavior towards the environmental free products. Other
factors which are considered include a price of PCMO, discount price, and others. From the
above analysis, it can be concluded that eco7 is the right product at the right time.
4. Strategy to launch eco7
Marketing strategy
It is defined as the fundamental tool which helps to boost the sales volume of the company
in the particular period of time. The company will adopt marketing mix which helps to
communicate the product to the target audience. It includes four P’s, namely, product, price,
place and promotion mix. The marketing strategy of the company is a very crucial stage
because it impacts on the sales volume of the company.
Value analysis
The marketing strategy is to serve the product to the high-end market. Though the company
is one of the major players in the market is by offering a product to the high-end DIFM
market the company will receive the reasonable value of money, and it also benefits the
company in developing the value of money. The product is having features of

environmental free which show that the company is launching the product according to the
current trend of eco-conscious products.
Target market
The lucrative automotive market comprises of two type of audience, namely, DIFM and
DIY in the United States. The company is one of the major players among the competitors
within the same industry. The company is launching the new environmental free product so
it must be positioned in a correct manner which helps to generate higher revenue.
The company is launching Eco7 which is recycling motor oil and it has distinct features
from others. The target audience must be DIFM market because they are not price conscious
and they will by the product from its superior quality (Garb et al., 2014).
Marketing Mix
1. Product Mix
The product is offering distinct features such as high performance, less emit of
radiations which do not harm the environment. The company is offering eco7 to the
DIFM market which is a target audience so that the product will satisfy the demand of
target consumers. The extensive research is done by the company at the production
development cycle which helps to ensure that the right product is produced according to
the market demand. The trend of environmentally conscious products influences the
demand for such product which will be fulfilled by the eco7. The consumers want high
quality and affordable price with the feature of environment free and eco7 is fulfilling all
the requirements of the consumers. The name of the product is also distinct which will
gain the attention of target audience. The product is distinct from the competitors by the
price strategy in which the company is offering similar quality and features with the low

price. The company is offering a product to the DIFM market with the Advantage
program to the loyal consumers which help to retain the existing consumers by making
them feel delighted. So the existing consumers will not be impacted by the high price of
the product (Leonidou et al., 2013).
2. Price Mix
The competitive price strategy must be adopted by the company in which the price is
decided by considering the price of competitors which help to see from the consumer’s
point of view. The company must adopt high price from the existing price of the product
which helps to show that the company is offering the exclusive quality product to its
consumers. It is the most crucial decision because it directly impacts on the sales volume
of the company. The various factors must be considered at the time of deciding the price
such as profit margin, operational cost, consumer perception and others. The pricing of
the product creates the perception about the product and services so the company must
use premium price which helps to show that the company is offering the high quality
product to its target consumers. The production cost if the product is higher because the
process is more complex than the non-green products. The consumer perceived product
value is also high because the consumer is demanding same product with the high trend
of the product. The competitive price strategy must be used, and lower price than the
competitors helps to attract a large number of consumers which enable to generate a
high market share of the company.
3. Place Mix
It is one of the most parts of product mix because the position of the product is impacted
by the distribution strategy of the company. The target audience is DIFM market so the

exclusive distribution strategy must be used in order to reach the potential buyers of the
product. The various factors are considered at the time of deciding distribution strategy
of the company such as a type of stores visit by the potential consumers, where the
consumers look at the product, medium of selling and others (Hollensen et al., 2015).
The company must be its product at offline and online mode which helps to reach
potential consumers in a wide manner. The product availability with the convenience of
the buyer helps the position the product in the eyes of the consumers and it directly
impacts on the sales volume of the company. The distribution strategy is decided after
understanding the behavior and perception of the consumers which helps to boost the
sales of the company. The strong sales force of the company is required which helps to
develop the brand image in the eyes of the consumers. The positioning of the product
helps to generate high revenue for the company within the particular period of time.
4. Promotion Mix
It is the main component which helps to communicate the brand to the target audience
through using various promotional tools. It comprises of various tools such as sales
organization, advertisement, public relation and sales promotion. The advertisement is
the paid form of communication which is performed through the internet, print media,
television advertisement, radio commercials, and others. The company must use
advertisement tool which helps to promote the brand on the national and international
channels. Word of mouth is another promotional tool which must be used by the
company for communicating about the benefits of the product and it impacts on the sales
volume of the company over the particular period of time. The marketing message needs
to be sent to the target audience which helps to promote the brand in the eyes of the

consumers. The promotional strategy of the competitors must be analyzed which helps
to generate more innovative ideas to communicate about the product. The company must
also use "Eco9: Ecofriendly oil" tagline which helps to communicate the distinct feature
of the oil, and it also helps to create image among its consumers. The promotional
budget of the company must be ten percent of the overall sales. The company must use
marketing programs such as imaging program, media builder and other which helps to
promote the brand in the eyes of the consumers. The promotional tool must be
considered carefully in order to do effective promotion of the product.

References
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
Leonidou, C. N., Katsikeas, C. S., & Morgan, N. A. (2013). “Greening” the marketing mix: do
firms do it and does it pay off?. Journal of the Academy of Marketing Science, 41(2), 151-170.
Juster, F. T. (2015). Anticipations and purchases: An analysis of consumer behavior. Princeton
University Press.
Garb, M., & Lindemann, L. (2014). Engine Oils for Passenger Cars. Encyclopedia of Lubricants
and Lubrication, 501-510.
Vidal, C. J., & Goetschalckx, M. (1997). Strategic production-distribution models: A critical
review with emphasis on global supply chain models. European Journal of Operational Research,
98(1), 1-18.