Quick Lubes Question PQS’ Value


Signaling a possible rift between the leading motor oil marketer and the largest U.S. quick-lube chain, the Jiffy Lube Association of Franchisees said yesterday that it plans toconduct a study to gauge the importance placed on motor oil brand.

In a news release, the Baltimore, Maryland-based association suggested that it may want to change its relationship with its primary motor oil supplier, Pennzoil-Quaker State Co.

Our Board of Directors has decided that to best serve the needs of our customers we need objective research to document just how much value our existing and potential customers place on the brand of oil we use, President Steve Sanner said in a written statement.

Pennzoil-Quaker State owns Jiffy Lube, a chain that includes more than 2,200 stores, making it more than twice as large as any other quick-lube chain in the United States. Seventy percent of those stores are franchised. Eighty percent of all the chains owner/operators sell Pennzoil-Quaker State products.

Those outlets represent a substantial sales outlet for Pennzoil-Quaker State. The Houston-based company supplies approximately 60 percent of the motor oil sold through U.S. quick lubes, although some of that volume goes to chains other than Jiffy Lube. Those sales help make Pennzoil and Quaker State the two best-selling brands of motor oil in the United States, with a combined 36 percent market share.

The association, which includes franchise owners of more than 1,300 Jiffy Lubes, said it has begun searching for a consumer research firm to determine the relative levels of importance customers place on oil brand and issues such as store brand, location, convenience, speed of service and mechanic expertise.

Neither the association nor Pennzoil-Quaker State would provide specifics yesterday about conditions under which the company supplies lubricants to franchises. The association did indicate, however, that some longtime franchise owners sell other brands, such as Exxon, Citgo and Chevron.

The associations news release suggested that franchisees may have a concern about the cost of Pennzoil-Quaker State products. Sanner said that stores selling other lubes perform well, even though those products are not advertised as much as Pennzoil-Quaker States. He added that the groups members face an additional challenge from car dealers, many of which feature private labels or local brands.

As our industry continues to mature, many of our members believe we have established ourselves under our own Jiffy Lube brand as the trusted source for preventive maintenance because of our superior customer service rather than because we feature a specific brand of motor oil, he said, just as customers select a fast-food outlet based upon its brand rather than the brand of soft drink it features.

In addition to determining customer priorities, the association said its market study will try to find out which oils customers consider to be premium, whether they are willing to pay extra for them and, if so, how much. It did not identify a schedule for selecting a research firm or completing the study.

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