CARPENTER, MARANGOS & CO.

Management Consultants
Delivering solutions

Case Studies
1 Better Utilisation of Time 1
2 Innovative New Product
3 Building Distribution
4 Countering Scepticism
5 Better Utilisation of Time 2
6 Recapturing Market Share

Text Box: CASE STUDY 2 - Innovative New Product Brokers discovered that they could buy motor oil, which had been refined to an excellent quality, at very competitive prices on the spot market in Rotterdam for delivery in France. The question was what was the most effective way to profit from this opportunity? The decision was made to ask former French racing driver and Formula One team owner, Guy Ligier, to franchise his name at a fair price based upon a royalty agreement. The problem still remained, though, how best to approach the market? The motor oil market in France was dominated by three types of distribution. The first was petrol stations, 70% of which were owned by major petrol companies. The second form of distribution was through super and hyper markets, with 25% of the market. And, thirdly, small village blacksmiths and similar types of establishment. The same brands were sold in all of these different types of outlet. So was there an opportunity for another one? We decided the answer was yes, but only if it was presented and marketed properly. We were convinced that the name Ligier would encourage the French customer to identify with the small man against the big internationals. More than that, though, we believed that Guy Ligier's name would reassure the customer about product quality, even if we attacked the market aggressively on price. Consequently, we were able to offer a cheaper product but of similar quality. The price of oil at French petrol stations was sometimes three times higher than the same brand in the retail outlets. For Ligier, we decided to concentrate on the hypermarkets. However, to maximise profit, we also changed the size of the containers the oil was sold in. Until then, oil was sold in one and two litre cans. Ligier offered five litres for the price of two litres at the petrol station. The client won the French industrial packaging award for that year and the Ligier brand gained 3% of the motor oil market in two years.    

 

  
 

 

 

 

 

 

 

 

 

 

 

 

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