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    Eco 7 XL Final Version

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    Abhijan Carter Biswas
    The document contains exhibits summarizing market share data for passenger car motor oil (PCMO) sales channels from 2000-2012, branded vs. private label sales, consumer purchase intentions, and financial projections for a new "green" motor oil called Eco7. Key findings include: fast lube shops account for about one-third of PCMO sales; private label brands have grown their market share to 32% by 2012; and projections estimate Eco7 adoption could generate $13,151-$22,050 in additional annual gross profit per independent lube shop.

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    Eco 7 XL Final Version

    Uploaded by

    Abhijan Carter Biswas
    198 views12 pages
    The document contains exhibits summarizing market share data for passenger car motor oil (PCMO) sales channels from 2000-2012, branded vs. private label sales, consumer purchase intentions, and financial projections for a new "green" motor oil called Eco7. Key findings include: fast lube shops account for about one-third of PCMO sales; private label brands have grown their market share to 32% by 2012; and projections estimate Eco7 adoption could generate $13,151-$22,050 in additional annual gross profit per independent lube shop.

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    The document contains exhibits summarizing market share data for passenger car motor oil (PCMO) sales channels from 2000-2012, branded vs. private label sales, consumer purchase intentions, and financial projections for a new "green" motor oil called Eco7. Key findings include: fast lube shops account for about one-third of PCMO sales; private label brands have grown their market share to 32% by 2012; and projections estimate Eco7 adoption could generate $13,151-$22,050 in additional annual gross profit per independent lube shop.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    198 views12 pages

    Eco 7 XL Final Version

    Uploaded by

    Abhijan Carter Biswas
    The document contains exhibits summarizing market share data for passenger car motor oil (PCMO) sales channels from 2000-2012, branded vs. private label sales, consumer purchase intentions, and financial projections for a new "green" motor oil called Eco7. Key findings include: fast lube shops account for about one-third of PCMO sales; private label brands have grown their market share to 32% by 2012; and projections estimate Eco7 adoption could generate $13,151-$22,050 in additional annual gross profit per independent lube shop.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 12
    At a glance
    Powered by AI
    The documents analyze trends in the motor oil industry including the rising market share of private label oils and projections for adopting a new 'green' motor oil called Eco7. Key factors like pricing, store adoption rates and gross margins are examined.

    The documents show that the market share of private label motor oils has been steadily increasing over time compared to branded oils, rising from 18% in 2000 to 32% in 2012.

    The documents show that on average, DIFM gross margins tend to be higher for synthetic oils compared to conventional oils, and lowest for private label synthetic oils. Margins vary significantly depending on retail pricing as well as wholesale and manufacturer pricing structures.

    DIFM channel share

    Exhibit 1

    2000 2002 2004 2006 2008 2010 2012


    Fast lube 36% 37% 36% 36% 34% 33% 32%
    Oil change-plus 10% 10% 11% 11% 12% 12% 12%
    Car dealer 25% 25% 26% 26% 28% 29% 29%
    Mass merchandisers and club 6% 6% 6% 7% 8% 9% 10%
    Repair shop 11% 10% 10% 9% 9% 9% 9%
    Other 12% 12% 11% 11% 9% 8% 8%

    Source: Adapted from multiple sources, including Valvoline, Desrosiers, Aftermarket.org, Packaged Facts, Frost & Sullivan, NPD, Kline
    Brand and private label share

    Exhibit 2

    2000 2002 2004 2006 2008 2010 2012


    Private label sales 18% 20% 24% 27% 29% 31% 32%
    Branded sales 82% 80% 76% 73% 71% 69% 68%

    Brand share
    Baud 16% 18% 19% 20% 22% 23% 23%
    Motoline 13% 13% 14% 14% 15% 15% 15%
    Avellin 14% 13% 14% 13% 12% 11% 11%
    Texoil 9% 8% 8% 9% 10% 9% 9%
    Kemia 7% 7% 6% 8% 8% 8% 8%
    Sevoline 5% 6% 6% 7% 7% 7% 8%
    Others 36% 35% 33% 29% 26% 27% 26%

    Sources: Adapted from Petroleum Trends International, National Oil & Lube News
    Intent to Buy

    Exhibit 3

    DIFM, DIFM,
    Overall DIY
    Price-focused Quality-focused

    % of PCMO customers 25% 45% 30%

    Baud 16% 25% 9% 18%


    Motoline 15% 15% 12% 19%
    Avellin 15% 16% 17% 10%
    Other brands 13% 11% 13% 16%
    Undecided 41% 33% 49% 37%
    DIFM Margins

    Exhibit 4

    DIY
    What is your interest in a "green" motor oil? consumer

    Very interested 13%


    Interested 28%
    Unsure 25%
    Not interested 34%

    Assuming similar quality and performance, how likely are you to Same price as
    purchase a "green" motor oil if it is…? current PCMO

    Definitely 17%
    Very likely 28%
    Unsure 21%
    Unlikely to purchase 34%

    What information source will be most influential in your decision to


    purchase "green" motor oil?

    Personal sources, e.g. friends or family 8%


    Public sources, e.g. online consumer reviews 18%
    Analysis or scientific study conducted by neutral party 7%
    Professional service provider 67%
    DIFM consumer

    23%
    32%
    15%
    30%

    50% more 100% more

    10% 4%
    21% 10%
    28% 35%
    41% 51%
    DIFM Margins

    Exhibit 5
    Avellin Avellin
    Conventional Synthetic
    DIFM Retail
    Average retail price, per quart $3.25 $7.00
    Average revenue, per oil change (5 quarts) $16.25 $35.00

    Gross margin %, DIFM outlet 50.0% 60.0%

    Wholesaler
    Gross margin %, wholesaler 12.5% 12.5%

    Avellin
    Average revenue, per oil change (5 quarts) $7.11 $12.25
    Private Label Eco7 Eco7
    Synthetics full price discounted

    $4.75 $6.75 $5.25


    $23.75 $33.75 $26.25

    65.0% 55.0% 50.0%

    15.0% 12.5% 10.0%

    N/A $13.29 $11.81


    Eco7 projections

    Exhibit 6
    Eco7 Aventage
    only, full price
    Adoption of Eco7
    Independent fast lube
    Aventage stores 95%
    Other stores
    Other independent stores (oil-change plus, repair shops, etc.)

    Retail sales of Eco7


    Fast-lube: Monthly upgrades to Eco7 from conventional 105
    AvellinAuto Stores 150
    Other independents 25% of fast lube
    Eco7 Eco7
    full price discounted

    75% 90%
    45% 60%
    30% 40%

    105 135
    150 180
    25% of fast lube 25% of fast lube
    TN - Eco7 channel economics

    DIFM Independent AvellinAuto

    Avellin Avellin Private Label Eco7 Eco7 Eco7 Eco7


    Conventional Synthetic Synthetics full price discounted full price discounted
    Source
    DIFM Retail
    DIFM price, per quart $3.25 $7.00 $4.75 $6.75 $5.25 Exhibit 5
    DIFM revenue, per oil change (5 quarts) $16.25 $35.00 $23.75 $33.75 $26.25 Exhibit 5

    Gross margin %, DIFM outlet 50.0% 60.0% 65.0% 55.0% 50.0% Exhibit 5
    Gross profit, DIFM outlet $8.13 $21.00 $15.44 $18.56 $13.13 Calculation: DIFM revenue x gross margin %

    Wholesaler
    Wholesale revenue, per oil change $8.13 $14.00 $8.31 $15.19 $13.13 Calculation: DIFM revenue - DIFM gross profit

    Gross margin %, wholesaler 12.5% 12.5% 15.0% 12.5% 10.0% Exhibit 5


    Gross profit, wholesaler $1.02 $1.75 $1.25 $1.90 $1.31 Calculation: Wholesaler revenue x gross margin %

    Avellin
    Avellin revenue, per oil change $7.11 $12.25 $13.29 $11.81 $13.29 $11.81 Calculation: Wholesaler price - wholesaler gross profit
    Cost of goods sold, per quart $1.20 $1.95 $2.01 $2.01 Case text
    Cost of goods sold, per oil change (5 quarts) $6.00 $9.75 $10.05 $10.05 Calculation: COGS per quart x 5

    Gross profit, Avellin $1.11 $2.50 $3.24 $1.76 $3.99 $2.51 Calculation: Avellin revenue - COGS per oil change; AvellinAuto gross profit is 75 cents higher (case text)
    Gross margin %, Avellin 16% 20% 24% 15% 30% 21%
    TN - Eco7 channel economics

    Eco7 Eco7
    full price discounted Source
    Eco7 potential volumes per store
    Upgrades to Eco7, monthly 105 135 Exhibit 6
    Upgrades to Eco7, annual 1,260 1,620 Calculation: Monthly upgrades x 12

    Incremental vs. Conventional


    Revenue per change, Eco7 $33.75 $26.25
    Revenue per change, conventional $16.25 $16.25
    Incremental revenue per change $17.50 $10.00 Calculation: Revenue for Eco7 - revenue for conventional oil

    Gross profit per change, Eco7 $18.56 $13.13


    Gross profit per change, conventional $8.13 $8.13
    Incremental gross profit per change $10.44 $5.00 Calculation: Gross profit for Eco7 - gross profit for conventional oil

    Incremental revenue per store, annual $22,050 $16,200 Calculation: Annual upgrades x incremental revenue
    Incremental gross profit per store, annual $13,151 $8,100 Calculation: Annual upgrades x incremental gross profit

    Incremental vs. Private Label Synthetic


    Revenue per change, Eco7 $33.75 $26.25
    Revenue per change, PL synthetic $23.75 $23.75
    Incremental revenue per change $10.00 $2.50 Calculation: Revenue for Eco7 - revenue for PL synthetic

    Gross profit per change, Eco7 $18.56 $13.13


    Gross profit per change, PL synthetic $15.44 $15.44
    Incremental gross profit per change $3.13 ($2.31) Calculation: Gross profit for Eco7 - gross profit for PL synthetic

    Incremental revenue per store, annual $12,600 $4,050 Calculation: Annual upgrades x incremental revenue
    Incremental gross profit per store, annual $3,938 ($3,746) Calculation: Annual upgrades x incremental gross profit

    Average revenue per store $650,000


    Average gross margin per store 55%
    Average gross profit per store $357,500
    Eco7 projections

    Other
    Fast Lube AvellinAuto
    Independents Source
    Eco7 full price, Aventage and AA stores only
    Total stores 6,000 6,500 436 Case text
    Aventage stores 4,400
    Others 1,600

    Penetration - 0% 100% Exhibit 6


    Aventage stores 95% Exhibit 6
    Others 0% Exhibit 6

    Aventage stores 4,180


    Others -
    Eco7 penetration, total stores 4,180 - 436
    Eco7 upgrades per store, annual 1,260 - 1,800 Exhibit 6

    Total Eco7 upgrades 5,266,800 - 784,800

    Revenue per change, Eco7 $13.29 $13.29 $13.29


    Revenue per change, conventional $7.11 $7.11 $7.11
    Incremental revenue per change $6.18 $6.18 $6.18

    Gross profit per change, Eco7 $3.24 $3.24 $3.99


    Gross profit per change, conventional $1.11 $1.11 $1.11
    Incremental gross profit per change $2.13 $2.13 $2.88
    Total
    Incremental revenue $32,547,178 $0 $4,849,819 $37,396,997
    Incremental gross profit $11,216,638 $0 $2,259,979 $13,476,617

    Eco7 full price, no exclusivity


    Total stores 6,000 6,500 436 Case text
    Aventage stores 4,400
    Others 1,600

    Penetration - 30% 100% Exhibit 6


    Aventage stores 75% Exhibit 6
    Others 45% Exhibit 6

    Aventage stores 3,300


    Others 720
    Eco7 penetration, total stores 4,020 1,950 436
    Eco7 upgrades per store, annual 1,260 315 1,800 Exhibit 6

    Total Eco7 upgrades 5,065,200 614,250 784,800

    Revenue per change, Eco7 $13.29 $13.29 $13.29


    Revenue per change, conventional $7.11 $7.11 $7.11
    Incremental revenue per change $6.18 $6.18 $6.18

    Gross profit per change, Eco7 $3.24 $3.24 $3.99


    Gross profit per change, conventional $1.11 $1.11 $1.11
    Incremental gross profit per change $2.13 $2.13 $2.88
    Total
    Incremental revenue $31,301,353 $3,795,873 $4,849,819 $39,947,045
    Incremental gross profit $10,787,293 $1,308,161 $2,259,979 $14,355,432

    Eco7 discounted
    Total stores 6,000 6,500 436 Case text
    Aventage stores 4,400
    Others 1,600

    Penetration - 40% 100% Exhibit 6


    Aventage stores 90% Exhibit 6
    Others 60% Exhibit 6

    Aventage stores 3,960


    Others 960
    Eco7 penetration, total stores 4,920 2,600 436
    Eco7 upgrades per store, annual 1,620 405 2,160 Exhibit 6

    Total Eco7 upgrades 7,970,400 1,053,000 941,760

    Revenue per change, Eco7 $11.81 $11.81 $11.81


    Revenue per change, conventional $7.11 $7.11 $7.11
    Incremental revenue per change $4.70 $4.70 $4.70

    Gross profit per change, Eco7 $1.76 $1.76 $2.51


    Gross profit per change, conventional $1.11 $1.11 $1.11
    Incremental gross profit per change $0.65 $0.65 $1.40
    Total
    Incremental revenue $37,485,788 $4,952,391 $4,429,215 $46,867,393
    Incremental gross profit $5,205,668 $687,741 $1,321,407 $7,214,815

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