Its number one in the United States market as well, she added. In the U.S., per Kline, Shell has just slightly under 12 percent of the lubes market.

Davis passed lightly over these landmarks in a recent interview with LubesnGreases, recalling that in August 2009, when she first took up her job, the lubes market was still tottering from the economic downturn. Yet the company managed to hold its own. How?

Our focus, as it has been for the past two years – and very challengingly – is on growing our market share, she replied. During the economic downturn, we saw many companies cutting back on investments, reducing staff and limiting innovation. We went the other way. We invested in our talent, our brands, in technology and innovation.

As examples, Davis cited the 2010 launch of Pennzoil Ultra, a super synthetic engine oil that competes in the top tier, against national rivals Mobil 1, Castrol Syntec and Valvoline Synpower. Weve seen the most success with our Pennzoil Ultra with our distributors and the installed channel, where it has been received quite well, she said.

Shell also in 2010 inked new agreements to supply factory-fill automatic transmission fluids and engine oils to General Motors, Hyundai, Subaru and Chrysler, including both new business and renewals of older contracts.

Plus it has a new motorsports and sales relationship with the transportation giant Penske Corp., a cross-business alliance which were very pleased with, Davis said. We will be their sponsor for both the NASCAR and the Indy race circuits. (In the past we were their NASCAR partner only.) And now we will move our brand into various Penske business units, and be the leading lubricant offered in the whole array of Penske operations, including its trucks, rental fleets and dealers.

All About Brands

For the Americas, the oil marketer has four heavy hitters in its engine oil stable – Shell, Rotella, Pennzoil and Quaker State – and each has a devoted following. In a presentation last month to the ICIS Pan-American Base Oils & Lubricants Conference, William Downey Jr., vice president of Kline & Co. in Parsippany, N.J., credited this to shrewd brand positioning. In North America, he said, Shell has cascaded the products in a classic good, better, best market strategy, with Shell, Quaker State and Pennzoil filling those slots respectively. For the heavy-duty market, the Kline executive said, Rotella is positioned at the top tier in North America, and at the mid-tier in Latin America.

These stances are important, he added, because the best products dont move as much in price with base stock prices as lower-tier products do. Their perceived value helps to insulate such products from strictly margin pricing.

What weve seen with the finished lubricants business is that Shell has shifted away from being a company that thinks about integration – from base stocks to lube blending and on to market – to one that focuses on brand positioning. As a branded marketer, product positioning is critical.

Lisa Daviss own words confirm that surmise. Some consumers need higher quality, and we have that, and some dont feel the same and will buy conventional oils, so we have that too, she said. We think the best way to maximize value is to have a portfolio, so we can offer all to meet the needs of any consumer.

If you look in the marketplace, Quaker State has a tremendous following, and so does Pennzoil. From Shells perspective, were happy to support both. She said the company has no intention to rationalize its brands, as ConocoPhillips has done with its Conoco, Phillips and 76 Lubricants products, and as Chevron just did, dropping the Texaco name from Havoline containers and substituting its own.

Quaker State and Pennzoil have been strategically positioned with separate pitches, she emphasized: Pennzoils message is clean, while Quaker States is antiwear.

The Quaker State brand is absolutely a critical asset, and over the past two years we have repositioned it and reformulated to provide durability. Its formulated to be resilient, even after significant use without breakdown. The targeted customer segment is those with aging vehicles and in tough service. Were confident in the positioning of the brand, and with increased support to the brand were seeing growth too. In the retail area, weve seen double-digit percentage growth over the past two years with some channels, and it has great DIY appeal.

Wooing Distributors

Before taking over as president, Davis was business-to-business manager for lubes, which gave her close ties to distributors. Her philosophy is to make Shell easier to do business with by improving things behind-the-scenes for these channel partners, she said.

As yet, were not at the level wed like, frankly, but we are making progress. I think the back-office processes can be more customer-friendly. That means things like how quickly we are bringing out new products, how quickly we can set up a new customer, and automated ordering.

What our customers want is very basic, she continued. They want easy ordering, on-time delivery, invoice accuracy – by which we mean accuracy 99.5 percent of the time – and to have problems resolved.

Automated ordering also will help with accuracy, but the challenge from a Shell Lubricants perspective is the broad range of customers we have, from small ones through large corporations. Wed like to have an ordering system to serve them all, but we recognize that one size doesnt fit all.

In a 2009 LubesnGreases interview, Davis had spelled out Shells intention to reward distributors who allied themselves most closely – i.e., exclusively – with its brands, and to offer them greater support and sales tools.

That has been happening, Davis said. We have been working very closely with our network over the last year or so, and have developed a strong alliance network. These are distributors who are very aligned with Shell. Theyre not just carrying the products, but are working to grow in the marketplace. Its our job to increase their capabilities, and help them grow.

One way were doing this is through a very robust business planning process, where our Shell team members sit with the distributors team members and look at opportunities in the market so we can jointly win these customers. Another key resource weve added is more talent resident in the field to support distributors. We can help them understand the market, and also help with their business financials. Well work with their sales representatives and make joint sales calls, and offer technical training.

GF-5 and Dexos

The newest passenger car engine oil upgrade, ILSAC GF-5, made its marketplace debut in October, but Shell had rolled its products up to the new standard well before then, Davis said. October also saw General Motors new Dexos1 specification come to market, leaving many to speculate that the era of industrywide engine oil standards might be ending.

Whether there even will be an ILSAC GF-6 remains a puzzle, Davis admitted. The industry is seeing more complex engineering specifications for lubricants. We always are working with OEM partners and developing lubes, so when and if GF-6 comes about, well be there. Meanwhile, a pair of top-tier products, Pennzoil Platinum and Quaker State Ultimate Durability, will sport the Dexos1 logo from GM.

These products have ILSAC GF-5 and Dexos both, Davis noted. Our other products all meet GF-5, but Dexos is a bit different. It requires passing some unique tests, so the standard GF-5 oil doesnt meet it.

Shell Lubricants has six U.S. blending plants, and more than one is able to produce Dexos1 oils. But as Davis contemplates Dexos, and the potential for other automakers to demand their own exclusive oils, she has mixed feelings. From a technological point of view, Dexos is a positive. But viewed through a second lens – from a customers perspective – I think theres a need to be careful of cost and to avoid confusion for consumers. Wed prefer to do [upgrades] based on an industry specification, but thats not always possible. Thats why we have strong relations with the OEMs, to help us see where they want to go with their technology.

Looking ahead to 2011, Davis said, I see us continuing to focus on our growth, our products and our team in the field with customers. Im optimistic about where were going. Whats the outlook for lubricants overall? So much has changed in the past two years, with the economy, I hate to venture a guess. I can tell you that our focus going forward will be on two key areas. One is growing and delivering value, and two is operational excellence. We want to simplify, be excellent and do our best as business partners.

Sounds good, but will the company deliver? We might get a clue this summer, when Kline reveals its 2010 lube market rankings.