For lube oil products, the packaging is a vital touch point and is where our customers and stakeholders begin to develop their perception of the Kunlun brand, said the head of PetroChina Lubricant Co.s marketing department. So it is crucial that we invest as much in branding and design as we would in R&D. The Brand Union was an ideal partner for us because they have a great deal of experience in packaging design for the Chinese energy industry, and they understand our audience.

The Brand Union, a WPP agency and affiliate of the Ogilvy Group in China, entered the country in 1999 as the first global branding agency to enter the mainland market. The agencys Shanghai headquarters opened in late 2001 and its Beijing office opened in 2006. In China, the agency previous clients included BP, ENN and Suntech Power.

Delivering a consistent brand experience through a strategic and smart approach to design will bring the Kunlun family of brands to life and elevate them to the next level, said William Woduschegg, The Brand Unions creative director in China.

Geeta Agashe, vice president of Klines energy research practice, noted that PetroChina made Kunlun its exclusive lubricant brand for sales of lubricants in March 2005. Other brands like Feitian, Daqing, and Oixing are no longer promoted, Agashe said. This move helped increase awareness of the Kunlun brand among consumers and the general public.

According to Agashe, about 75 to 80 percent of Kunluns volume is sold in industrial applications, and about 20 to 25 percent in automotive applications. Within automotive, she continued, only about 5 percent is consumer automotive with the rest being commercial applications.

Hence, there was not a big thrust or pressure to improve its package, she told Lube Report. But times are changing, and PetroChina realizes that it does need to increase its presence and compete in the automotive segment as well. I do believe that PetroChina is hoping that a fresh new package and design will grab the customers eye – as China is a strong choose-it-yourself market – and increase their automotive market segment sales in the coming years in China.

She pointed out there is also now greater competition within China, with national oil corporations such as PetroChina and Sinopec competing with the global multinational corporations who in many instances have better packaging and designs. Hence, in order to maintain and grow their market share in China, Kunlun needs a fresh look.

While the domestic market remains PetroChinas main focus, Agashe said the company will likely increase marketing efforts in overseas markets over the next five years. PetroChina has set up a service center in Singapore, mainly targeting at supplying marine oil to customers in Asia, she continued. In addition, the company also exports small volumes of naphthenic oil to some Asian countries.

PetroChina traditionally has been stronger in Northern China, while Sinopec has been stronger in Southern China, according to Agashe. Due to the rapid development of Northern and Inner China, PetroChina is perhaps sensing another key opportunity to increase their attractiveness to their customers by providing improved packaging and design, she said.