Koreans Push Engine Oils


It seems like all of South Koreasrefiners are working to strengthen their lubricant retail networks, and they are using a variety of tools. Current strategies range from establishment of an oil change franchise, a mobile phone application for repair shops, and building a team of dedicated distributors.

SK Lubricants has launched a chain of oil change franchises, named Im Zic for the companys Zic brand of engine oils. In a recent press release, the company stated that the centers will provide standardized car maintenanceservice and will recommend SKs Zic brand engine oil over other brands.SK Lubricants will offer incentives to reward franchise owners based on sales performance.

The companyaims to create a national network of up to 2,000 stores by 2015, partly by attractingexisting car care centers and converting sites that are part of SKs existing Speedmate chain of auto repairfranchises. SKalsoplans to launch an Im Zic distribution network in Russia, where Zic has a good reputation and healthy sales.

Another refiner and leading lubricants manufacturer, GS Caltex, released a mobile app, GSlubricating oil, designed to be used by car repair centers. The app provides repair centers witha convenient platform to accumulate sales rewardpoints and torelay consumer demands and complaints about our Kixx products, GS Caltex stated. South Korea has approximately 35,000 car maintenance service providers.

GS Caltex is a joint venture between South Korean conglomerate GS Group and U.S. energy company Chevron, owner of the Caltex brand.

The app also allows centers to downloada catalog of GS Caltex automotive lubes, chemical safety data and information on promotional events. Meanwhile, GS Groups auto maintenance chain,Auto Oasis,isalso pushing the companys Kixxbrand of engine oils through its chain of 471 stores.

Lubricant marketers in South Korea typically use several channels toget products to end users. Large suppliers enlistdistributors, referred to locally as agencies, which carry their brands exclusively. Agencies supply products to wholesalers, called bupanjom, whichcarrya variety of brands. Wholesalers in turn supply retailers such as car care centers and car washes. Smaller wholesalers and dealers also populate the market.

But Hyundai Oilbank, which entered into engine oil market with XTeer branded products in 2013, has so far abstained from use of wholesalers. Instead the company has recruited a team of individual dealers who will push its lubricants under exclusive contracts. These dealers, mostlyfemales with sales call experience,aretargeting car repair centers and car washes.

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