Halfords motor oil redesign and re branding of an existing product


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Halfords motor oil redesign and re branding of an existing product

  1. 1. WBB 10202 - INNOVATION MANAGEMENT HALFORDS MOTOR OIL redesign and re-branding of an existing product Prepared by: Mohd Syahmi Nuruddin Mohd Khairul Najmi Najid Alif Izamie Osman
  2. 2. Introduction A leading retailer of car parts, cycles and accessories in UK. 1.2 million customers every week. Around 12,000 product lines. Annual turnover of in excess of £500 million. Own brand of motor oil in 1990s but did not sell well. Not highly valued by customers. The company set out to in investigate.
  3. 3. Company History 1892 – Founded as local hardware store in Birmingham by F.W. Rushbrooke. 1965 – Halfords Limited. 1969 – open its 300th store. – become part of the Burmah Group. 1980 – changes; recognizing customers’ needs. 1984 – changes of ownership 1 (Ward white Group). 1989 – change of ownership 2 (The Boots Company).
  4. 4. Company History 2000 – Rod Scribbins became MD. – ‘Arcade’ superstore programme (Bikehut, Audio Parts, Ripspeed and Touring). 2002 – Acquired by CVC Capital Partners from The Boots Company . – Rod Scribbins appointed CEO. Until today – the business moved to a custom-built head office and warehouse in Redditch, Worcestershire. Head office employs 600 people, with 400 stores with total staff of 9,000.
  5. 5. The problem Why the not motor oil? How Halfords saw this as a business opportunity they wished to exploit? Was there something particularly unusual about motor oil? Who were the competitors? What were the other brands? Was this a market in which Halfords could be competitive?
  6. 6. Design Brief Did not have sufficient expertise in-house to tackle the task of exploring the task of re-branding and repackaging a major product. Commissioned Pentagram (international design group) with a brief to redevelop the motor oil brand. Involved redesigning the container, re-labeling, and repositioning it in the market. Product design expertise rarely found in-house Such projects commonly contracted to third-party experts.
  7. 7. Research Pentagram undertook its own market research on retailing motor oil and undertook a series of in-depth interviews with consumers in the form of focus group to try to uncover some of the issues surrounding motor oil.
  8. 8. Finding from Pentagram Overall decline in sales as modern cars require less servicing and less frequent top-ups and changes. Premium grade motor oils rather than standard grade becoming more prevalent. The industry is dominated by some of the largest firms in the world (most notably the world’s oil companies). The ‘flashy’ Grand Prix-style branding gives no help for consumers to select the correct oil.
  9. 9. Brand leaders in Europe BP and Castrol. Shell Oils. Exxon (Esso) Mobil.
  10. 10. Purpose of Engine motor oil: Lubricant of the moving engine parts to prevent wear. Reducing friction. Maintaining engine cleanliness. Protecting against engine rust and corrosion. Cooling engine parts. Sealing combustion gases. Permitting easy starting. Extending engine life.
  11. 11. Different types of engine oil There are different types of engine oil and consumers have to pick the oil is the best for their own usage and application. They have to choose an oil depending upon how they use their car, and the outdoor temperature they are driving in.
  12. 12. Outdoor Temperature As the temp. changes, the viscosity of the oil changes. When oil in an engine is cold, the oil will be thick. If it is too thick, it may not even allow the engine to turn over and start. If it is too thin, it may allow the engine to start but it could be too thin when the engine warms up to do its work properly.
  13. 13. Viscosity measurements The Society of Automotive Engineers (SAE) established a viscosity classification on top of oil cans for consumers awareness. 5W – very thin oil used in extremely cold weather conditions, up to… 50 – very thick oils that have specials uses such as very hot applications or racing engines. Most people use a multi-graded oil that covers the highest and lowest temperatures that will be encountered.
  14. 14. SAE Viscosity grade Was useful and helped Pentagram paint a picture of the product, the brands and the market. 50% of cars required premium grade oil 70%of sales was standard grade. Many consumers were not buying the correct oil; moreover Halfords was not selling its most profitable lines. Many motorist did not buy motor oil and left this to the annual service of their car.
  15. 15. Motor Oil Buyers DIY enthusiast – regular motor oil purchaser which undertook their own servicing of their vehicle. DIY part-timer – did not service their own vehicle but regularly checked their vehicle and would top-up their engine with oil if necessary. Emergency – only purchased oil in an emergency.
  16. 16. Research Conclusion DIY enthusiast is the group that most likely to purchased the Halfords store brand. This group armed with more knowledge that would make their purchase decision based on performance and price. However the price itself would be sufficient There needed to be additional qualities that would convince the DIY enthusiast to select the Halfords brand ahead of the branded oils.
  17. 17. Consumer testing The price was a significant factor in the decision- making process. They have low knowledge about the properties and performance of motor oil. Many were buying incorrect oil for their car. Halfords brand hold up well under analysis and regarded as a trusted brand. Consumers feel leading manufacturer brands of oil are expensive, yet only few tried it.
  18. 18. Consumer testing Problems with pouring a heavy 5-litre container. The only way to determine how much oil was in a can was to lift it up and feel the weight. So, if the Halfords brand can solve the pouring problem and make it simple, provide a viewer for oil level and offer some better info and labelling regarding properties and performance, maybe this would encourage people to try Halfords brand.
  19. 19. New packaging The problem seemed to center on the inability to accurately direct the flow of oil Designers developed the ‘pull-up teapot pouring spout’. A ring tab is pulled, revealing a long neck about 50cm in length, giving sufficient direction in pouring. Improve direction of flow.
  20. 20. New packaging The handle for the container is in line with the spout, helping to direct the flow of oil.
  21. 21. New packaging Labeling issue solved:  A premium-grade oil for most 16-valve petrol engines.  A diesel grade for diesel engines.  A standard grade. Offered in three different colors. After one year, volume of sales increased by 18%, its value by 44% and profits by 54%.
  22. 22. Discussion This case clearly illustrates the value of packaging and labelling in product development. The motor oil remained unchanged, but the packaging and labelling was considerably altered, enabling Halfords to reposition its oil as a slightly more upmarket store-brand oil. Initial sales were very encouraging and if copying is viewed as a form of flattery then Halfords is surely content.
  23. 23. END OF PRESENTATION Thank you for your attention!!!
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