Slippery Road to Success i

By : cnugraha | on 11:24 AM December 20, 2018
Category : Companies to Watch

Since joining the local arm of global energy giant Royal Dutch Shell as marketing manager more than four years ago, Edward J. Satrio has worked his way up to become the person responsible for the company's global sales of Shell Helix engine oils. He recently spoke with GlobeAsia's Elsid Arendra about his success and his exciting new challenge.

"During my first year at Shell, I worked as brand and communications marketing manager for three products: Shell Helix, Shell Advance and Shell Rimola. In the second year, I was given the responsibility as brand manager for business-to-consumer sales of Shell Helix and Shell Advance, so I had direct interaction with customers and wholesale sellers," Edward said.

"Customers and the community are our partners; they are not merely customers. We don't just sell products, we build relationships with our customers. So I started several approaches with our customers. We worked together on their events and supported some of their activities. We worked with the BMW owners' community in the car segment, and in the two-wheeler segment, with Parjo – a long-established gathering of bikers from across Indonesia," he said.

Bright Outlook

Shell has retained its position as global market leader in 2015 with an 11.6 percent market share, according to management consulting and research firm Kline & Company's report titled "Global Lubricants Industry: Market Analysis and Assessment 2016." This was the 10th consecutive year the company had been named the No. 1 global lubricant supplier. The report also said Shell lubricants were the market leader in three of the 16 surveyed markets, being Malaysia, the United Kingdom and the United States. In Indonesia, Shell is the second-biggest supplier of lubricant oil after state energy company Pertamina.

Shell also ranked in the top three in 11 other markets – Argentina, Canada, China, Germany, Austria, Switzerland, Indonesia, Mexico, the Philippines, Saudi Arabia, South Africa and Thailand.

Now almost four years later, the future is still bright. A recent report by Paris-based Ipsos Business Consulting showed that Indonesia, with its gross domestic product forecasted to reach $1.3 trillion by 2020, large urban centers will see more balanced growth and new opportunities. Continued urbanization, the addition of 21 million new consumers annually and growing demand for passenger vehicles and motorcycles will drive overall consumption. Assuming annual growth of between 10 percent and 15 percent, the lubrication oil market in the country will be worth Rp 9 trillion ($627 million) in two years, with Pertamina currently controlling 54 percent and Shell 20 percent, while the remainder is split between smaller players.

"The backbone of our growth in the lubricant sector is still automobiles, but sales in the two-wheel segment have increased considerably over the past two years. So we pay much more attention to the two-wheel segment now," Edward said.

Based on National Police data, there were 111,571,239 registered vehicles in Indonesia as of Jan. 1, 2018, with 91,085,532, or about 82 percent of them motorcycles.

"The main challenge at the beginning of our marketing campaign for motorcycle lubricants was awareness and distribution, besides portfolio problems. First, motorcycle owners often still wrongly assume that Shell Helix is the correct lubricant for two-wheelers and not Shell Advance. Some of them also see Shell lubricants as premium products, which is true to some extent, but we also have a more affordable product range," Edward said.

"Second, there was a distribution problem. It is not easy to find Shell lubricants in small towns in Indonesia, so when we worked on the distribution network, we also identified a portfolio gap in our products. About 80 percent of motorcycles delivered to dealerships are equipped with automatic transmissions. We had to fill that gap immediately. Lubricants for automatic motorcycles are clearly different from those used in manual or racing bikes," said Edward, who owns a Yamaha XMax scooter.

"To overcome this, we gradually and continuously educate our customers through community outreach programs and below-the-line activation. We show customers our considerable range of products in the two-wheel segment. We also launched a lubricant specially designed for automatic bikes, which is only produced and sold in Indonesia," said the 38-year-old father of two.

"So we fixed the product portfolio and market communication issues before taking on the last, which is distribution. We not only use the wholesale channel to liaise with our loyal customers, but also approach them directly. Over the past three years, growth of lubricants sales for two-wheelers doubled in terms of volume. And this year, Shell Advance became the brand with the highest distribution growth compared with other brands. While other brands experienced stagnant growth, Shell Advance actually increased," Edward said.

New Challenges

It was these achievements that prompted the energy giant to get Edward to lend his Midas a touch to the Shell Helix brand and increase its global sales.

"What is interesting at a global level, is the level of market understanding. I used to analyze local markets in Medan, Jakarta, Yogyakarta or Makassar; now I am facing a much greater challenge and contrast difference because of the wider scope in terms of location, geography, language and culture. The market in Hanoi is clearly different from the market in Manila. Therefore, engagement with local teams is also very different. Local brand managers have a much better understanding and are most familiar with local market conditions," the golf enthusiast said.

"I was asked to provide guidelines, become a partner and provide coaching in several countries. I provided coaching and interacted with brand managers in each country. I conducted a road show in several countries at the beginning of my assignment at Shell Trade Global. I spent at least four days in each country. From there, I got a better understanding of the local teams and customers. This is the art of marketing: interaction with humans is definitively an art. Interaction brings us closer to the customer," Edward said.

To meet the demand for lubricants in the automotive and industrial sectors, Shell has invested hundreds of millions of dollars in its supply chain and continues to increase and expand its world-class network. The company currently has 40 lubrication oil blending plants, five base oil plants and 10 grease plants. Shell also opened its first lubricant oil factory at Marunda in Bekasi, West Java, at the end of 2015 to meet growing demand in Indonesia.