Caso De Pennzoil Quake State Canda
904A10
PENNZOIL — QUAKER STATE CANADA: THE ONE-TO-
ONE DECISION (A)
Christopher Spalding prepared this case under the supervision of Professor Terry Deutscher solely to provide
material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of amanagerial situation. The authors may have disguised certain names and other identifying information to
protect confidentiality.
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Copyright © 2003, Ivey Management Services Version: (A) 2004-04-20
It was March 17, 2002. Mark Reed, director of Lubricants for Pennzoil-QuakerState Canada (PQS), had asked that he not be disturbed for the remainder of the
day. Sitting in his office wrestling with his decision, he reflected on the words of
PQS President Owen McManamon: “Mark, I think it sounds like a great concept,
but you are the marketing expert, so it’s your call. I will back whatever decision
you make.”
McManamon was referring to a consumer retention concept that had developed byPQS’s account team at Quality Marketing Solutions1 (QMS), the company’s
longtime supplier of promotion management services. QMS had spent months
refining a new promotional program called One-to-One, which was designed to
persuade consumers to have their vehicle’s oil changed with a PQS product every
four months. Everyone involved expected Reed to announce his final decision onOne-to-One at the follow-up meeting the next morning.
Despite more than 25 years of marketing experience in the auto industry, Reed
struggled with selecting the right marketing programs for PQS to strengthen its
relationships with individual consumers. He had grown frustrated that despite the
1QMS was a privately held agency that specialized in the development and implementation ofinformation-based micro marketing programs focused on influencing the loyalty and purchase frequency
of customers and consumers.
Page 2 9B04A010
industry’s effort to educate motor vehicle owners,2 they were still apathetic about
changing their motor oil. Reed commented:
I am open to trying different ways to build our relationship with
consumers, but it may well be that when it comes to motor oil, thevast majority of consumers just don’t care.
Nonetheless, PQS motor oil had done very well in the Canadian market. Quaker
State and Pennzoil held the number one and number four share positions in the
consumer motor oil market. Industry growth had leveled off and was expected to
decline over the next three years. In this environment, PQS believed thatincreasing the retention, loyalty and oil change frequency among existing
consumers were critical for continued financial success.
THE CANADIAN MOTOR OIL MARKET
The Canadian motor oil market was well established and highly competitive. The
number of passenger cars, light trucks, vans and SUVs in Canada had reached 17
million3 in 2001, and was expected to grow by 0.5 per cent annually. Despite thisgrowth, total motor oil consumption in 2001 was 332 million liters, representing a
decline of 1.8 per cent from 2000. This was not a new phenomenon; Canadian
consumption of motor oil had been on the decline since 1999.
One of the primary reasons for this decline was that vehicle owners were...
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