When the going gets rough … the rough will need lubricants - because nothing ruins the ride like grinding gears and brake-screeching agony!"
The lubricants business is often overshadowed by its more popular cousins diesel and gasoline – but in reality, it is a very essential commodity that keeps the wheels of industry smoothly gliding and churning – be it from the roaring engines of Formula 1 race cars wherein a split second could entail victory or defeat; mammoth manufacturing facilities and power plants to the heavy-duty equipment and tools used in construction or mining – all that while also underpinning key industries like pharmaceuticals.
To the energy companies that have been leading the charge in the lubricants market, a precision- engineered product performance is the major pitch that they could really dangle to consumers – since in this industry, failure isn’t an option – as machinery breakdowns can cost millions or billions to businesses or lives to those who are driving their cars.
Beyond that, this industry has likewise been steering new wave of innovations - since in the bigger world of cloud computing, artificial intelligence (AI) and machine learning, lubricants are also thriving as support commodity to the seamless operation of data centers as well as other technological infrastructure reinforcing the digital transformation of various industries.
In rewriting marketing rulebook: Shell sells efficiency
Everywhere in the world, Shell has already positioned itself as an undisputed leader in lubricants – and to a large extent, that’s also the market supremacy it was able to carve in its over-a-century presence in the Philippines; a success that leans on fully understanding the need of its customers.
Shell primarily acknowledged that ‘customer satisfaction’ has been prompting it to dive deeper into research and development (R&D) initiatives as well as innovate further on better lubricant formulas and additives while also improving on its packaging solutions – because the company recognizes that the bigger play it must uphold is: preserving the environment.
Jacqueline “Jackie” B. Famorca, vice president and general manager for Lubricants at Shell Pilipinas Corporation, shared that their company’s roll of customers reflects array of industries they have been catering to.
“Our Shell lubricants products are also heavily known in the industrial sector such as power, construction, general manufacturing, and mining. We want to be known as an integrated lubricants and fluids solutions provider and break the connotation that it’s just for vehicles,” she enthused.
For the transport sector, which is manifestly a core market for Shell and undeniably the arena of cutthroat competition among industry players, Famorca explained that as a global brand, Shell strategically explored opportunities to partner with OEMs (original equipment manufacturers) or the car manufacturers.
“Shell is a trusted brand which is why about 70% to 80% of OEMs recommend us and have been partnering with us,” she stressed.
And it is quite an incredible feat that if someone mentions Ferrari in motorsports, Shell would automatically come to mind – because under that hood, it’s not only the mechanics that will make the driver reign on the track – it’s also the chemistry of the lubricants used in a race car.
In the Philippines, the suite of lubricants offering from the company would include: Shell Helix, an engine oil designed to minimize friction, prevent wear and tear and also cools the engine through different driving conditions; the Shell Gadus which is a range of greases that could enhance protection and increase the operational reliability and life cycle of heavy machineries (i.e. for power generation, manufacturing and mining); as well as Shell Spirax, an oil that could aid transmission components to work efficiently.
Correspondingly, lubricants’ use for pharmaceuticals as well as for the cooling needs of data centers are either being experimented on and marketed to wider base of Shell customers in other parts of the world; hence, that is the same aspiration that Shell Philippines has been setting its future business sights on.
In the current raging force of market competition for lubricants – whether hydraulic oil for industrial machineries or synthetic oil for vehicles -- price wars, aggressive marketing campaigns and innovation play tend to be the name of the game – so what sets Shell lubricants apart then versus industry peers?
Famorca summed up that paramount to the company’s goal is understanding the behavior as well as distinctive and unique needs of customers, and with that, they have been constantly reinforcing feedback loop from clients – and conversely treating competition as a catalyst for further innovation and customer satisfaction rather than a threat.
And it helps that Famorca’s academic degree in Psychology offers a high-discerning perspective on how to understand consumer motivations, preferences as well as pain points in patronizing a product – suffice it to say that it’s another way of applying Maslow’s hierarchy of needs in analyzing both the emotional and practical preferences of target end-users.
For the firm’s growing base of industrial customers, she noted that “our proposition is really end-to-end solution – meaning, from the purchase of the oil up to the disposal of our lubricants, we provide full-chain services. We have Shell staff and engineers who will really go to the plants and they will assess and analyze the exact needs of our clients for their facilities or assets – we check their oil condition, filtration, etc and we also train their staff on lubrication management.”
Beyond that, she asserted that “as an outcome of our oil analysis and strategically-designed services to clients, we have testimonies from our customers that they were able to generate as much as 10-15% cost savings.”
Famorca firmly cited that Shell’s market proposition is about shifting the conversation from price to value that the customers can get, with her emphasizing that “what we’re selling to customers is efficiency – that in turn could result in enhanced uptime and reliability of their facilities or engines; and ultimately, higher figures for businesses’ top and bottom lines.
She narrated “while I understand that price is a factor in the decision making of our customers, what we offer is managing their total cost of ownership through the lubricant products that we sell. For example, the oil drain would be less frequent – that instead of spending for oil change once a month, it can be done just once in three months so that will yield savings to the customer.”
The Shell lady boss added “we facilitate a virtual masterclass session which is attended by existing and prospect accounts, and primarily engaging operations or technical teams to properly educate them on our lubricant products. We are also open to do collaboration with customers through product trials that can help them assess and appreciate our value proposition for efficiency and reliability that will benefit their company through cost savings.”
2Es of innovation: E-commerce and the environment
One sphere that sale of lubricants has been breaking into is the world of e-commerce – inherently a marketing game-change that has likewise been redefining the nuances of reorder cycles and most importantly, customer experience.
To some extent, Shell has already pivoted into that thriving marketing showdown since two years ago via Shopee and Lazada online platforms; and recently, joining the bandwagon through Tiktok LiveSelling!
However, ease of product access is just half the battle – because there’s that dark side of online marketing that has been endlessly lurking: the sellers who are peddling counterfeit or fake products.
Famorca qualified that “on Shell’s part, we’re giving premium to consumer education because what reigns supreme in marketing is product credibility” -- that’s why the company is also leveraging now on the power of social media, like Tiktok, primarily to grease also the wheels of consumer awareness either through catchy videos, understandable and relatable content on customer experiences as well as truthful knowledge-sharing on the quality and authenticity of products they have been selling – and in the process, guiding consumers on how they can avoid buying fake commodities.
Social media narratives of marketing could delve on an array of topics - from discussing the benefits and efficiency of oil changes to debunking myths about synthetic oils; and there could also be experts joining the discussion thread to reaffirm the credibility of the brand – factors that will really help build the confidence of consumers on their online purchasing decisions.
“We really went full blast in our online marketing strategy. On social media, we regularly release educational content based on frequently asked questions and feature testimonies from customers. It’s really consumer awareness that will spell the difference. Initially, the uptake had been relatively slow, but eventually we became number one on sales for engine oils, both for Lazada and Shopee. In February this year, we launched our Tiktok shop, and our technical engineers also help answer questions during Tiktok liveselling.” she highlighted.
Through all the innovations that Shell has been pursuing across supply chains, this energy giant is similarly giving priority to the environment by innovating on recyclable plastic packaging for its lubricants.
Famorca said Shell takes serious steps on the extended producer responsibility (EPR) compliance track – or the policy that holds producers accountable for the environmental impacts through the entire lifecycle of their products as well as on how their customers have been enforcing housekeeping rules on either recycling or after-use disposal, prompting Shell then to rev up its post-consumer recycled content (PCR) toolbox or the reprocessing of plastic wastes into new products.
“We need to comply with the EPR policy because our products are in plastic packaging. While we cannot immediately shift our packaging to non-plastics, we need to take a conscious effort as a business to recycle as part of our overall net zero ambition.” she stated.
Famorca specified that in their diverse black and yellow plastic packaging, there’s component of 60% recyclable plastic; “while on the end of consumers using our products, we have Shell Lube Recycle, which we started last year. Shell Lube Recycle bins are deployed in select partner auto workshops across Metro Manila, where customers can dispose of their used plastic engine oil bottles for recycling.”
On the reprocessing of plastic wastes, she emphasized that Shell has partnered with Green Antz, a company that has been converting recycled packaging into eco-bricks and will in turn be utilized as innovative construction materials – including in some of the mobility stations of Shell.
Onward, the emerging game theory for the lubricants industry is really transforming their products into greener and more sustainable solutions – alongside experiments on plant-based lubricants and ensuring that on their product packaging, industry players will come with a ‘cleaner conscience’ in protecting our precious planet.