This is especially evident in the varied market environments of Central and Eastern Europe, where automotive lubricant brands compete fiercely in all possible channels, sometimes including open marketplaces. Are automotive lubes both types of products, or do they hang in limbo between the two categories?

The answer is more than academic. The channels in which lubricants are bought and sold matters greatly to those tasked with marketing them, as do other questions about the factors involved in such sales. Those that best understand these factors stand a better chance of ensuring that the products purchased will be theirs. It seems that an automotive lubricant brand hangs in a limbo between the business-to-consumer and business-to-business worlds, known in industry jargon as B2C and B2B. So the question is worth considering: When we speak about automotive lubricant brands, do we mean consumer (B2C) or customer (B2B) brands?

The answer depends very much on the particular market conditions. In 2008 Austrian oil and gas company OMV conducted a region-wide survey to explore these conditions. The company interviewed 1,000 people in each of eight countries – Austria, Germany, Slovenia, the Czech Republic, Croatia, Hungary, Romania and Bulgaria. Figure 1 represents the answer to one question: Do you know which brand of engine oil is currently in your vehicle?

The overall results show a clear geographic pattern within the region. Drivers in Central Europe are not very much aware of the oil in their vehicles as oil changes are done mainly in workshops during scheduled maintenance. The situation in the eastern part of the survey region is totally opposite. Consumers there are still highly involved in motor oil purchases, and in some countries up to 30 percent of drivers actually change their own oil. The reason is simple. When disposable income is less than 200 per capita per month, oil changes can become a significant expenditure in a households budget.

We should take a moment to define what branding means. Branding consists of all activities contributing to a brands equity, including the promotion of brand name awareness, cultivation of brand loyalty, encouraging perception of brand quality, and development of associations related to the brand.

Lubricant marketers face a variety of challenges branding automotive lubricants in Central and Eastern Europe – some that are common in many countries worldwide and others that are specific challenges to the region. The former include:

the trend of automobile manufacturers to promote their own lubricant brands. Many car manufacturers are trying to close the circle of their business by getting involved in the production and delivery of consumables. Some are pushing to establish their own lubricant brands, in some cases in violation of legal requirements for fair competition. Manufacturers may offer bonuses for dealers to push the house brand, thereby closing doors for outside lubricant brands in spite of the fact that they meet all specifications.

perception of lubricants as industrial products. Many drivers still perceive lubricants as something out of reach for ordinary consumers.

need for sales channels to end users. For lubricant brands that do not have their own chains of retail stations, the main direct sale channels are hypermarkets and automotive parts shops. These are normally overcrowded with brands, and purchase prices are very low.

consumer lack of knowledge. Most drivers do not understand how lubricants work, modes of application or performance parameters. This is true even for some workshop mechanics.

These challenges persist throughout Central and Eastern Europe. Dealing with them there is even more difficult as there is a shortage of reliable market data on both B2B and B2C channels.

These general threats may seem like dj vu for many marketers, but even the most experienced of them could be taken aback by the abundance of specific issues that arise in Central and East European markets. One is the uneven pace of economic development within different parts of the region. Lesser developed countries may have untapped opportunities, but they are also more volatile and price sensitive. Because of the presence of such markets here, lubricant demand in Central and Eastern Europe is prone to much larger fluctuations in demand than Western Europe.

Apart from obvious problems this fluctuation creates for production and supply, it also complicates the tasks of planning and budgeting for marketing departments, as their budgets are inevitably linked to sales results. Maintaining a constant level of branding activities becomes more difficult, especially for local and regional brands since they lack the financial resources of huge multinational companies, which can offset losses in one region with growth in another.

Another important issue – which in all fairness can also be seen in other parts of the world – is oversaturation in Central and East European lubricant markets. A typical passenger car motor oil market in this region includes two or three global lubricant companies; three or four regional players; usually one strong domestic player competing mainly on price and good local knowledge; and several niche players.

Market leaders in most of these countries have less than 15 percent market share, which is quite atypical for fast-moving consumer goods industries. This abundance of competitors inevitably creates a downward push on prices and, again, pressure on marketing budgets. It also contributes to significant noise in brand communication, be it via media activities or business-to-business methods such as point-of-sales materials.

How do marketers in our survey region deal with these issues? First of all, it is imperative to understand the driving motives of end consumers. There is a key lesson lurking in this plethora of survey data: In every country OMV examined, advertisement in mass media was less important to people than indications that a brand was well-equipped to meet an engines requirements. Product suitability was more important even than attractive price. The research also suggests that having a well-known brand is not crucial for success.

There is one caveat, however: These are claims about what motivates peoples choice of lubricant. Actual buying behaviour can differ substantially as it is subconsciously influenced by a brands image and popularity.

Another interesting insight is that language identifying an oil as ecological and renewable can be a powerful marketing tool. Surprisingly enough, this card has been seldom played by market players. It may be that technical challenges make the claim difficult to achieve, but nevertheless, consumer responses suggest a possible path for future development.

Design is an inseparable part of branding. Global lubricant brands normally do not produce special bottles for Central and Eastern Europe. One exception is the presence of four-liter bottles. Containers of this size are normally not found in Western Europe but are necessary in Central and Eastern Europe because many people perform their own oil changes.

It is interesting to see how the design of top-up one-liter bottles sold in the region varies from a classical industrial design to a form-specific design, where the brand can be identified by the bottle shape alone. As can be seen, variations are quite considerable, and every company selects its own approach. The author personally believes that a unique design facilitates marketing communication in all channels and can provide a valuable advantage.

Generally the main marketing strategies in Central and Eastern Europe fall into one of the following categories:

Global brand – local deployment. Global brands normally rely on local utilization – typically in sports – of an image built by global campaigns.

Use retail distribution channels as main branding tool. This is typical for players which have fuel station networks

Create a regional lubricants brand. Companies operating in several countries can utilize synergies in production, copy creation, promotions, etc.

Create a local lubricants brand. This is normally done by local players and supported by investment in media, including television and workshop branding. It aims at creating a pull effect.

A combination of several elements.

It is quite obvious that the focus of all players is on using synergies and exploiting those elements that provide a unique competitive advantage, be it strong retail presence, global sponsorships, local production or knowledge of the local market.

It is worth mentioning some of the latest trends in lubricants branding in the region. First, there is some decline, though not precipitous, in the use of traditional media and a shift instead to online activities and direct interaction with end consumers. Secondly, local brands are investing quite a lot in local sponsorship programs, especially in motor sports. Finally, we are seeing the rise of special programs and activities combining B2B and B2C elements, such as OMVs Engine Protection Guarantee, which offers a guarantee for drivers who use OMV Bixxol motor oil at selected workshops.

There has been a long-running debate about whether the market for passenger car motor oils will be the same in the near future. One thing is for sure: the CEE market will be gradually heading in the same direction as the more established economies of Western Europe as the car park is modernized and purchasing power increases. Nevertheless, this region will continue to provide its unique challenges to lubricant marketers in the foreseeable future.