January 31, 2007

Jobbers World Online News Briefs is a service to Subscribers to the Jobbers World Newsletter.

  • Jobbers World - Lubricant Price Monitor
  • ConocoPhillips is Transition out of Light Oils in 8 States
  • David and Goliath - A Sign of the Times

  • Jobbers World - Lubricant Price Monitor

    Jobbers World introduces its new Lubricant Price Monitor. The Lubricant Price Monitor is a quarterly survey designed specifically to keep lubricant marketers in touch with the cost to procure lubricants from majors and independent lubricant manufacturers. In addition, it provides price benchmarking data to better understand the street price for a wide array of lubricants sold to end users. Jobbers World - Lubricant Price Monitor is an excellent resource for majors and marketers to benchmark their cost and price position.

    ConocoPhillips is Transition out of Light Oils in 8 States

    ConocoPhillips announced today that it will be “transitioning" out of the branded gasoline and branded diesel sales in eight states. These states include Minnesota, North Carolina, South Carolina and parts of Wisconsin, North Dakota, South Dakota, Arizona and Nevada.

    According to what Jobbers World is hearing, ConocoPhillips' decision is part of its continuing efforts to rationalize its product portfolio and strengthen its marketing.

    The number of Phillips 66, Conoco and 76 branded locations will be reduced by about 850. JW is told these account for roughly 8.5% of its 9,150 branded outlets.

    David and Goliath - A Sign of the Times

    On December 6, 2006 KDKA News out of Pittsburg reported a story about a fast lube operator in the area facing a $1 million lawsuit from Shell Oil. The man locals dubbed “David” in this story is Keith Smith, the owner of Lube Pro. He purchased the business in 2004 and when he did, it came with a Pennzoil sign - So he thought.

    According to Smith, the sign came with an agreement the first owner of the shop struck with Pennzoil back in 1995. Although it took the first owner six years to satisfy the terms of the five year agreement due to lower than expected volume, Smith says the terms of the agreement was satisfied and the sign was part of the deal. And that seemed to be the case after the business was sold to the second owner in 2001, and even to the third owner (Smith) when he bought the business in 2004. But everything changed in 2006.

    That’s when Smith says a Shell Oil representative visited and said he wanted him to buy Pennzoil exclusively from a local distributor. A distributor Smith says owns competing quick lubes in his area. And even if the distributor was not his competitor, Smith told Shell he could buy Pennzoil for significantly less if he went to Wal-Mart or Costco. With that, Smith says he refused to make a deal with Shell.

    Then the fireworks started. Shell filed a $1 million lawsuit against Smith in federal court. Shell’s claim is that the Pennzoil sign is a “trademark infringement, dilutes their business and is false advertising among other things.”

    Rather than trying to throw a stone into the eye of this Goliath lawsuit, Smith says he scraped together a “few thousand dollars and removed the Pennzoil sign.” But according to Smith, who we interviewed for this story today, Shell did not back off. Instead, they continue to press forward with the lawsuit.

    JobbersWorld plans to track development of this story and keep you posted. Although we certainly don’t have a dog in this race, it is a story worth following for several reasons. First, it’s of interest because it speaks to what appears to be a grey area in lube contracts and the use of logos and signs. Let’s face it; this guy is not the only one in the country flying a brand flag without a contract. And you can bet he is not the first one to think the signs on his property came with the business when he bought it.

    But maybe the most interesting part of this story, Smith says, is about why Shell continues to pursue the lawsuit after he complied with their demand. Because now that the sign is down, the only thing left to come down with a $1million dollar lawsuit is his business.

    From what Jobbers World is hearing from a number of marketers, there may be more to this story than meets the eye. Some say the Goliath in this fight may be trying to set an example with this small town David to send a message to other fast lube operators it deals with that are thinking about taking on more lower priced lubricants (i.e. house brands). That message being; if they don't sign with Shell there will be no signs with Shell's brand on it.

    If this is the case, it certainly sets the stage for some very interesting legal and marketing battles moving forward.


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