5.18.17 Drop by Red Drop
At the very epicenter of American marketing, something strange is going on.
A recent drive up the Joisey Turnpike revealed an interesting trend: hundreds of the most prominent service stations have been refitted with garish new graphics. A new brand has been springing up everywhere. Where for decades one saw Mobil’s Pegasus and Exxon’s Tiger, one now sees a simple red drop of oil in a ubiquitous new brand name: “LUKOIL”. There are so many of these stations, we asked ourselves, “Who are those guys?”
Exxon/Mobil is the fourth largest company in the world, the world’s largest oil company, and the brand most symbolic of America’s control of the world market. In this time of surging oil prices and profits, with the United States engaged in a war in an oil-rich region, it would seem the company would be as vibrant as ever. But back in 2004, as part of a highly complicated deal, Exxon/Mobil sold several hundred stations to upstart LUKOIL. And as far back as 2001, LUKOIL had acquired hundreds more stations as part of its acquisition of Getty Oil. None of this was visible to the average consumer until 2005, when LUKOIL launched its aggressive re-branding campaign. There are now several thousand LUKOIL stations throughout the critical Washington-NYC corridor.
Here’s the ironic twist: LUKOIL is a Russian company (it’s RED, get it?) that trades publicly on the London Exchange. Formed in 1991 from 3 Russian gas producers, LUKOIL holds the second-largest oil and gas reserves in the world. It plans to spend $100 billion over the next 10 years, behind two initiatives. First, to open refineries throughout Europe, the US and China. Second, to crank up the marketing engine and re-brand all those stations it has been quietly buying for the past five years.
The Bear is out of the bag. Coming soon to a station near you: the Russian Marketing Revolution.