API Motor Oil Matters Status. November 2010

Transcription

1 API Motor Oil Matters Status November 2010

2 API Convinced That Motor Oil Matters Necessary Because of What We ve Heard from Distributors and Installers Many consumers appear to lack understanding of what oil is installed in their engines More consumer and trade education needed Segment of industry wants to do-it-right but others believe oil s oil Deceptive trade practices appear to be increasing Many distributors and installers highly supportive of voluntary certification program to highlight those who do-it-right Distributors indicated desire to promote certification program to installers Support from installers feeling pressure from those believed to be cutting corners

3 Key What Points What s API Motor Oil Matters? in it for my company? in it for consumers? in it for OEMs? it going to cost? the API Motor Oil Matters timetable?

4 What s API Motor Oil Matters? Originally, Shell initiated Motor Oil Matters (MOM) as quality and integrity campaign designed to address trade issues and provide consumer education API offers opportunity to take MOM campaign industry-wide Initiative designed to help drive quality transparency throughout bulk motor oil supply chain Perfect timing API and market as whole have heightened concern about consumer awareness of need for quality motor oil, bulk oil quality, deceptive industry practices and chain of custody

5 What s API Motor Oil Matters? Perfect timing Consumer awareness: Recent ILSAC GF-5 development effort revealed OEMs concerned about misapplication (consumers unaware of need to use recommended motor oil in vehicles) Bulk oil quality: API Aftermarket Audit (AMAP) results indicate bulk engine oils have more quality issues than packaged oils Chain of custody: No current requirement for bulk motor oil chain of custody Some individual company procedures noteworthy, but no real requirement to inform consumers about oil installed Proper chain of custody beneficial to API audit program

6 What s API Motor Oil Matters? API adopting Motor Oil Matters as industry-wide program Program in three parts: 1. Consumer education and trade awareness through public relations 2. Bulk oil quality program to ensure chain of custody (marketer, distributor and installer components) 3. Effort to revise National Conference on Weights and Measures language governing labeling requirements for motor oil: especially apply existing labeling requirements to bulk motor oils

7 What s API Motor Oil Matters? Other organizations have expressed support for Motor Oil Matters Association of International Automobile Manufacturers Alliance of Automobile Manufacturers American International Automobile Dealers Association National Automobile Dealers Association AMRA/Motorist Assurance Program

8 Motor Oil Matters Foundation for Future Success Trade Education/Support Public Relations campaign 5k features/stories: TV, radio, print, online Motor Oil Matters Tours loyal installer appreciation In-house Certified Installer Program 5,500k enrolled Consumer Education MotorOilMatters.org > 60k + visitors National PR 55.1 million impressions: TV, radio, print, online Women s Day online, Fox News local affiliates, AskPatty.com, Alan Taylor Car and Driver radio host Research Proved Two-thirds of DIFM consumers are uninvolved: Ambivalent, Price Driven & Passive Acceptors indicating a large population available for education about oil quality A Separate Consumer Survey Indicated Attitudes about oil quality changed after visiting MOM.org Consumers spent average of 8 minutes on website

9 Some Survey Results Informed survey participants tended to better understand need for quality motor oil. Preliminary data, while encouraging, is based on small sample size The motor oil used by oil change centers should reflect the oil viscosity/weight recommended by my vehicle's manufacturer The motor oil used by oil change centers should always meet the latest industry specifications Using the correct motor oil can help maximize fuel economy Having regular oil changes with a premium quality oil is critical to maximizing my vehicle's life Using the correct motor oil can reduce emissions The quality of motor oils used by oil change centers varies The brand of motor oil I choose matters Name brand motor oils are better products than store brands The next time I get my oil changed, I will ask what brand of motor oil the oil change center uses Having an oil change with an unbranded or store brand oil may void my vehicle's warranty 25% 34% 29% 37% 18% 25% 43% 45% 42% 57% 55% 65% 62% 69% 69% 77% 80% 97% 97% 95% 0% 20% 40% 60% 80% 100% Initial Informed

10 Governing Bodies for API Motor Oil Matters API Lubricants Group (motor oil marketers, base oil manufacturers, additive suppliers) MOM Advisory Board of oil marketers, distributors, and installers advising API on program and standard development Marketing Task Force of Board guiding public relations and communications efforts

11 API Motor Oil Matters Participation Categories Marketing Members Participate in program management through rotating Board membership Approval of program elements such as promotion plans Subject to membership criteria Certified Distributor & Installer Participants Implement quality programs Promote MOM to trade and consumers Subject to membership criteria

12 What s in It for my Company? Joint effort to promote consumer awareness on importance of using API quality motor oils System to safeguard motor oil quality from manufacturer to distributor to installer (true, industry-wide bulk oil chain of custody) One remedy for deceptive trade practices in marketplace Increased API product quality monitoring (permitted by chain of custody) Ability to claim environmental benefits from increasing use of OEMrecommended API quality motor oils intended to provide improved fuel economy and emission system protection Bragging rights for being part of joint consumer-oriented program and as member of select group of marketers recognized as doing it right

13 What s in It for Consumers? Makes consumers aware of importance of using API quality motor oils Safeguards motor oil quality from manufacturer to distributor to installer (true, industry-wide bulk oil chain of custody) Helps prevent deceptive trade practices in marketplace Provides increased testing of oils in marketplace, thus providing greater assurance of quality Benefits environment by ensuring use of OEM-recommended API quality motor oils that provide improved fuel economy and emission system protection

14 What s in It for OEMs? Makes customers aware of importance of using recommended APIlicensed oils Addresses concerns about misapplication Safeguards motor oil quality from manufacturer to distributor to installer (true, industry-wide bulk oil chain of custody) Helps prevent deceptive trade practices in marketplace Provides increased testing of oils in marketplace, thus providing greater assurance of quality Benefits environment by ensuring use of OEM-recommended API quality motor oils that provide improved fuel economy and emission system protection

15 Possible Promotional Approaches Web Print API MOM mark POS material Searchable, detailed directory of certified distributors & installers Social media Plan to flesh out strategy being developed by Marketing Task Force

16 Proposed MOM Symbols

17 What s it Going to Cost? Marketing Task Force providing input on appropriate cost allocation formula MOM Marketing member contribution considerations Assist development of MOM promotional campaign Provide financial support for campaign MOM members mitigate costs by including MOM in product promotion and corporate public relations efforts Distributor/installer certification fees to provide some portion of funding

18 What s the API Motor Oil Matters Timetable? Weights and measures efforts underway now Western, Southern, and Northeastern Weights and Measures Associations endorsed proposed API language Vote on proposed language expected at July 2011 National Weights and Measures Conference API branding of MOM as soon as legal issues resolved: target end of 2010 Criteria for API MOM membership defined by end of 2010 Distributor certification program defined by end of 2010 Opportunity to join and fund API MOM in early 2011 MOM promotion to start in early 2011 Distributor certifications 1 st or 2 nd quarter 2011 Installer certification to follow later in 2011