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Multi-profit Centers

Getting branded

October 11, 2010
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It’s a long-held belief in the world of retailing that consumers will always gravitate toward a nationally-recognized brand. Mountains of syndicated research support this assertion.

The bottom line is that consumers like brands. Brands provide a sense of security, well-being and the utmost confidence in purchase decisions. Most importantly, the emotional attachments formed with strong brands often supersede any concerns about price or availability.

Consumers naturally assume a branded product is of higher quality and delivers better performance than an un-branded or generic equivalent. According to William Dillon, associate dean at Southern Methodist University’s Cox School of Business, this is called “brand equity.”

“The notion is that brands that have created equity command a price premium in the marketplace. Hence, consumers may pay $1.89 for a cup of Starbucks coffee when they could purchase the same volume for about 69 cents at another coffee shop. If consumers prefer the Starbucks coffee and will pay more for it simply because of the label, their choices appear to be determined by their positive associations with the Starbucks’ name,” says Dillon.

Whether you’re selling coffee or oil change services, one fact is very clear — associating your business with a nationally-recognized brand only help create and secure a powerful, and potentially profitable, link with your customers.

Finding the right brand
If you have already expanded your carwash operation to include a fast lube, you already know the potential positive impact this service can have on your bottom line. Taking the next step and aligning it with a nationally-recognized oil brand can reinforce your customers’ purchase decision — if only for that fact that they may see the service as more valuable and your business as more reliable.

Customer familiarity aside, the brand provides you with an instant support network of other “like” business; many of whom have the same challenges and opportunities as your carwash/fast lube operation.

The process of finding the right brand “fit” for your business should begin with an assessment of the prospective suitor’s product line:
  • Make sure the oils they offer meet the engine specifications of today’s automobiles (especially those for lower emission engines);
  • Take note as to if they offer a complete line of lubricants including special motor oil blends for higher mileage vehicles, as well as either full- or semi-synthetic products;
  • Look at the breadth of the company’s product line to ensure they have the types of products — such as a variety of greases, fluids and gear lubricants — that will allow you to more easily expand your service menu in the future to include a wider swath of services (e.g. transmission fluid replacement or radiator flush/fill); and
  • Affiliation with a national oil brand can mean access to tens of thousands of loyal credit card users of the brand.
Beyond products, make sure your supplier has insights and opinions into the current state of the automotive service industry. The prospective company should be your eyes and ears when it comes to market and consumer trends, which will free up time for you to run your business. The advice and direction your supplier offers will help you best provide products and services to capitalize on wholesale shifts in the industry.

Other factors to consider include:
  • Access to marketing support. Exterior signage options, point-of-purchase materials and service menu boards should be plentiful and diverse;
  • Alliances for preferred pricing on such items as air filters, management software, used oil heaters and other supplies.
  • Financing and leasing programs to help you manage cash flow while keeping your business model current and up-to-date;
  • Opportunity to order product on a “just in time” basis, which means you’ll be able to order quantities consistent with your short-term needs; and
  • Ancillary services like site selection support, operational training programs, and relevant impulse items to help boost your fast lube’s bottom line.
The “franchise question”
Aligning your business with a nationally recognized oil brand does not automatically mean you will need to enter a formal franchise agreement. In many cases, the alignment could take the form of a supply and merchandising agreement.

Generally speaking, most supply agreements allow you to easily align your fast lube with a national oil brand without the obligations and fees normally associated with being a full-fledged franchise. Entering into these types of agreements is generally a more affordable option to expand your carwash to include fast lube services.

As part of a supply agreement, you will have access (usually at very competitive prices) to a wide array of marketing support materials. Additionally, these types of agrees normally require you to have some type of mandatory exterior/interior signage so, to customers, your business will still have the “look” consistent with a national brand affiliation.

Don’t forget “you” in the branding equation
Regardless of the sign hanging in the front of your door and above your counter, never forget that your business is its own unique brand. Whether you realize it or not, that’s how your customers view your business. The experiences you create and the impressions customers gain while at your business are every bit as important as the brand you choose to align yourself with.

Aligning your carwash with a strong national oil brand is one of the best ways to reinforce your image and build customer confidence in your fast lube business. Managing that brand’s equity by paying very close attention to your business’ own, unique brand will keep your hard-earned customers engaged and loyal.


David Kunkel is manager of marketing & direct sales for CITGO Petroleum Corporation. He can be reached at: 800-331-5483 ext. 4106 or dkunkel@citgo.com.

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