Chevron Case Analysis

Chevron Case Analysis

Background

Views on the oil business were steadily decreasing overall in the 1970s through the 1990s. Chevron wanted to improve the overall view of the company and have a better reputation with the public. The VALS rating system was used to determine how the public viewed Chevron and what values were important to them. They classified consumers into two groups: the Inner-Directeds and the Outer-Directeds. They used three measures to identify what was important to consumers when choosing a oil company. The measures were 1) Marketing/business conduct 2) Environmental/social conduct and 3) Company contributions. Chevron had a strong standing with consumers in California who bought 25% of its products. Californians also had a more negative view of Chevron and were mostly Inner-Directeds. The Company wanted to focus on Californians to help reinforce their ratings.

Market Analysis

Chevron was pressed with three primary questions to improve consumer’s attitudes about the brand. They wanted to know if a new advertising campaign would improve customer views about chevron?, who would they target?, and what should the message communicate? Since the company was growing in California, which had the inner-Directed population, and had help environment as their main value, they decided to go with the “People Do” campaign. This was a good decision by the company as more companies, as well as consumers were becoming more environmentally friendly. The campaign proved successful as the $5 million dollar advertisement paid off, and consumer’s attitudes toward Chevron and the environment were improving. In 1988, a tracking study found that 57% of respondents recalled the commercial and 67% of Inner-Directeds recalled the commercial. But the Exxon oil Spill, although not related to Chevron, made Chevron skeptical of the effectiveness and again overall attitude of the company and oil companies in general.

Lessons from the Case

It is important to...