Lubricants slide into prime time
( 2003-11-21 00:16) (China Daily)
The question: What do milk, tooth paste, medicine capsules and lubricant oil have in common?
The answer: they are the products most likely to pop up in commercials when you turn on your TV in the evening.
On Tuesday, China Central Television (CCTV), the national broadcaster with more than 1 billion viewers, auctioned off US$530 million worth of prime-time advertising time for next year.
Three leading domestic lubricant companies--Kunlun, Monarch and Great Wall--were the most active bidders in the auction. Each spent nearly 100 million yuan (US$12.1 million) to secure the prime time slots.
The proactive advertising campaigns were a surprise for many. Industrial products like lubricants traditionally limit advertising to specialized magazines and papers. Many think those products are unsuitable for TV stations that reach millions of ordinary people.
However, company officials and experts said domestic lubricant companies are shifting their promotion strategy in an attempt to quickly build up brand recognition and turn that into cash during China's auto-buying craze.
"Lubricant products are changing from traditional industrial products to commercial products as the number of cars increases,'' said Yao Qi, vice-general manager of Monarch, the only private company of the big three lubricant manufacturers.
"Branding is very important for domestic companies to penetrate the lucrative high-end lubricant market and the influential CCTV is the best stage to promote the reputation.''
At present, foreign brands such as BP, Shell, ExxonMobil and Castrol, hold 80 per cent of the high-end lubricant market in China. Although high-end products only make up 30 per cent of the whole lubricant market, they contribute 80 per cent of the total profits.
Experts say high-end products are expected to rise by more than 5 per cent annually, parallel to the rapid increase of auto sales in coming years.
"Domestic companies are trying to catch up with the foreign brands in the high-end market,'' said Qian Yuansheng, of Shenzhen Runxun Branding Consultant.
The promotion campaigns of Kunlun and Great Wall on CCTV are believed to be a counterattack to the Monarch campaign.
Monarch quickly rose to fame after it paid 60 million yuan (US$7.3 million) to put ads on CCTV earlier this year.
Monarch's slogan "More lubricant, less confliction'' during the Iraq war has helped the company increase its revenue by 80 per cent this year.
"Monarch's branding strategy is successful as more wholesalers are flooding for its products after they see the ads on expansive CCTV, which is kind of a symbol of the strength of the company,'' said Xie Ying, an analyst from CVSC TNR Research, a joint venture market researcher founded by CCTV and London-based TNS.
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