Consumer brand preference sets new record - automotives - Power Brands

Discount Store News, Oct 16, 1995

Thanks in part to its innovation in introducing a lower-priced synthetic motor oil, Performax 100, Pennzoil solidified its position as the top brand in automotives on the '95 Power Brands survey.

With strong support from both discount retailers and consumers, Pennzoil qualified again as a Power Brand, along with Fram in oil and air filters. Pennzoil attained an index reading of 218 on a scale that ranged from 133 to 632. Fram attained a Power Brand index of 151.

Despite its overall popularity with both retailers and consumers, Pennzoil derived relatively more of its Power Brand status from discounters. Five out of 10 cited it as one of their top-performing brands, up from four out of 10 in '94. Just two out of 10 consumers named Pennzoil as their preferred brand.

In 1995, national brands in automotives received their highest overall rating from consumers over the past five years, with 85% saying they had a brand preference.

Even though consumers split their brand preferences among a large number of brands, this level of brand preference is an increase of 10 points over the 75% level in the '94 survey. It puts automotives in ninth place out of 26 categories, tied with consumer electronics for strong brand loyalty.

The proportion who said they would be willing to try a store or private label brand dropped below 50% in '95. This places automotives low on the private-label opportunity list, 19th out of 26 categories.

Consumer willingness to switch brands if their chosen stores did not stock their preferred brands dropped to 45%, the lowest rating for automotives since 1991 and another indication of the potency of the dominant brands in this category.

That helps explain why Wal-Mart, with its major push into private label products in hardware and lawn & garden, limits private label products to just a handful of skus of oil, including its Tech 200 brand of blended synthetic oil, filters and anti-freeze.

Target limits private label to filters in its automotives departments. In marked contrast, Kmart has been expanding its private label auto chemicals offerings, including engine oil treatment. Kmart has cut back, however, on its Motorvator private label oil.

In spite of consumers' determination to buy the brands they want, consumer confidence that discount stores would carry their preferred brands has fallen to 7.26 on a scale of one to nine. This is a drop from 7.41 in '94, the lowest confidence rating for automotives in the past five years.

This drop in consumer confidence may be explained by another finding: Fewer than one in 20 retailers polled in '95 said their chain had increased the number of national automotives brands carried.

Among retailers, the top 10 list in '95 contained the same brands as in '94, and the rankings were virtually identical.

Quaker State came in a strong second on the top 10 list of retailers, just edging out Fram for the honor.

Of retailers, over one-third (35%) named Quaker State, which is also developing a market niche with its 4 by 4 synthetic-blend motor oil designed for four-wheel drive and pickup trucks. Fram came just a point behind at 34%.

Of consumers, only 14% named Fram, and only one in 10 chose Quaker State, which tied with Turtle Wax for fourth place behind Valvoline.

However, Quaker State, along with Pennzoil, is employing a strategy aimed at margin. With their niche oils, these two brands are attempting to market products that will generate profit dollars for retailers, rather than commodities, which merely generate traffic, often at loss-leader prices.

As usual, motor oils and filters dominated the top 10 automotives list among both retailers and consumers, with oils accounting for half the brands on both fists.

AC Delco (a division that General Motors this year renamed Delphi Automotive Systems) enjoyed the distinction of being the only hard-parts brand on both lists.

But in an anomaly, consumers named Goodyear (tires, belts and hoses) as a favorite brand, even though most discounters, of course, sell no tires. And of those that do (Wal-Mart and Kmart), only Wal-Mart stocks Goodyear tires.

Goodyear, of course, has been making a push into the mass market by agreeing to let Wal-Mart and Sears carry its products.

Kmart will continue to offer tires at about 40% of its stores, even though customers now will buy them through Penske Auto Centers at the Kmart stores. Kmart is selling its auto service centers to Penske, which will operate them for Kmart on a leased-department basis. This could affect the brand balance in tires.

Two chemicals brands, Prestone and STP, and one appearance brand, Armor All, rounded out the retailers' top 10 list.

Prestone, with new owners, tied for fifth place among retailers. First Brands sold its Prestone division to management, which is attempting to capitalize on the brand name by expanding into other product lines, such as ice-melter chemicals.

Armor All, along with Turtle Wax, also made it onto the consumer top 10 list, albeit with single-digit support.

Among consumers, preference for the brands was virtually identical among all three age brackets.