Creating a New Brand
How one company introduced, marketed, and cultivated a new quick lube brand.
January 30, 2020
Building a brand takes time and the right resources, and it can be tough to compete with the big quick lube brands already out there. That shouldn’t hold you back from creating a successful brand as well, and that surely didn’t stop VP Racing Fuels.
VP Racing Fuels isn’t brand new to the industry, but the company has added on to its portfolio, recently deciding to join the quick lube game—VP has already opened five locations since last April. When it comes to battling other big-time name brands, the company has found its own niche of standing out from the competition.
“We don’t want to reinvent the wheel of what our competitors are doing,” says Matt Schuster, the upper Midwest/Northeast regional manager of the VP Racing Fuels brand.
VP Racing Fuels dives into how it introduced, marketed, and cultivated its successful brand.
Joining the Club
In the early 1970s, founder Steve Burns was tearing up the speedway in San Antonio. His business journey began when the young racer started producing his own racing fuel to use in all of his races. Not long after, friends wanted in on the product. And thus, VP Racing Fuels was born and has since established itself as a premium racing fuel brand.
Burns ran the operation until 2011, deciding to hang up his hat and pass the torch on to Alan Cerwick. As CEO, Cerwick was quick to catch on and saw more opportunities for the brand, establishing two additional lines of business: a consumer products division, creating performance products and additives, as well as launching its own brand programs—this is where VP’s gas stations emerged. Now, over 350 gas stations are open across the nation.
While the brand itself has been around for nearly 46 years and adding other businesses along the way, VP Racing Fuels wanted another industry segment under its belt. The company started creating its PCMO (passenger car motor oil) lubricants in 2017 in addition to its racing fuel, followed by opening its very own quick lube locations a few years later.
VP had its eyes on the quick lube market. Promotional materials for the brand say that it’s a $14 billion market among some 17,000 locations.
Just recently in April 2019, the company opened up its first-ever quick lube oil change center—or “Fastlube”—in Fredericksburg, Texas.
“With everything the VP brand and our programs have to offer, just as we’ve seen with our branded gas stations and c-stores, the Fastlube platform is poised to take off from coast-to-coast,” says Karen Madden, VP of Retail, in the press release unveiling the new operation.
With VP already having its gas stations, it just made sense to add quick lubes into the mix.
“VP is a performance brand, obviously the history [of our company] is a natural transition [into the industry],” says Schuster. “The idea of having our own quick lubes came to light and filled a niche in the lube pavement for those folks that want to have a major brand but don’t want to be part of a franchise.”
Unlike some of the bigger quick lube brands, VP doesn’t have a franchise program. Instead, the company created what they call a licensed-brand program to help create vendor relationships—owners are considered partners instead of franchisees.
“We are partners servicing the same customer,” Schuster says. “If we all do our jobs well, our site owner is successful, which makes our vendors successful, and ultimately VP successful.”
In the program, VP shops have full ownership of their quick lubes, charging a 1.5 percent royalty, which compares to rates up to six or seven percent with other brands. Within its program, VP offers a Preferred Supplier Program, which has partnered with companies to help hit the ground running. Schuster says this program network can help manage anything from building a facility to servicing an existing one, including demographics, site selection, design and construction and retention.
The program includes some of those traditional support services, like marketing and ad support, signage and an internal credit card program. The company is also able to leverage its own additives and other retail items.
VP says it has become the only brand that offers its operators a national buying program for air filters, oil filters, mats, auxiliary products, and more; Schuster says one store owner even gets the same offerings as a 100-store owner. Overall, Schuster says the program provides owners with all of the right tools to get started, as well as giving them more autonomy and power in their business.
“We saw there was a void that needed to be filled, especially with consolidation in the business,” Schuster says. “We thought there was a market to push a new brand that gives owners a lot more control of their businesses.”
Since the first opening in April, the company has debuted its five quick lubes locations in California, Nevada, Louisiana, Michigan, and Texas. The company is looking to open quick lubes alongside existing gas stations, but it’s also looking to launch shops in other states where VP hasn’t yet reached.
“The focus moving forward is to rebrand stand-alone states, both existing and ground-up,” Schuster says. “We are currently interviewing and seeking strategic partners and investors as we speak.”
So, how exactly was the transition for VP going from gas stations to quick lubes?
“It’s more of an addition than a transition,” Schuster says.
But with the new addition to the company’s growing portfolio, Schuster says it took a lot of research. The company focused on what its competitors were doing and how they were doing it.
“We’re putting a program together similar to what they are doing and adding on different aspects,” Schuster says. “We want to be like them, but now we want to build on and be better.”
Although they’ve had great success, Schuster says it takes the right company to do it, especially when you have a good product and have a good brand behind it. Schuster compares VP’s operation to Valero, saying the company doesn’t market itself as a premium gas, and that the company doesn’t have a culture of high-end or elitism in the industry. Schuster says it takes a lot of research and the right brand to make it. VP has always had the ability to cultivate and performance, making it easy to transition into the quick lube business. Going forward, Schuster says the brand is making it all happen—or “Makin’ Power” as Schuster puts it—but the company wants to hand it over to operators that are successful in the industry.
“It’s important to get through, whether it’s on the gas side of the lube side, that every brand is only successful or as successful as the individuals that get involved in it,” Schuster says. “Partnering with the right people will be the difference between success that goes through the roof and success that is just average.”
Source Article: https://www.noln.net/articles/3953-creating-a-new-brand