Thursday, March 31, 2011

Valvoline 'All In' For New 50 Percent Recycled Motor Oil

Valvoline is throwing almost all of its marketing budget this year behind a completely new kind of product for the motor oil segment: 50% recycled motor oil. The company says the new product, called NextGen, is of as high quality as Valvoline's other products, and that will be a big part of the message. Thom Smith, VP of branded lubricant technology at the Lexington, Ky.-based company, explains that new technology made the venture possible.

About 85% of motor oil is base oil, with the remaining 15% performance additives. "As the oil ages, contaminants can build up, but the oil itself -- the molecules -- are in good shape when you drain it. What we are able to do now is take used oil, remove the contamination, remove the additives and refresh it. In the past the processes for re-refining weren't of the quality to make a quality base oil. Recently, innovations in re-refining use the same process as virgin refining, so we are able to take that base oil and produce finished oils that are as good as virgin."

The other piece, he adds, is that the public had to be ready for this. "In the past, the public wasn't willing to accept re-refined oil; there was reluctance to buy such products. But crude oil is finite, so it only makes sense to make the best possible use of it. Also the production of re-refined is much better for the environment than production of virgin oil, so production of NextGen also means a smaller environmental footprint."

Blair Boggs, VP of global brands, says marketing activity around the new product, which hits retail next month (he says it will be in 75% of oil change centers by May and the rest through the summer) will include TV, print, radio, digital, grassroots efforts and a new program called MORE (Motor Oil Recycling Education). He adds that consumers in the U.S. go through about 800 million gallons of motor oil every year. "The key message," he says, "is that NextGen is not just a product but one that closes the recycling loop, because most people actually recycle motor oil already."

Boggs adds that a critical element of the new marketing strategy is pricing: unlike many "green" products, there will not be a price premium on NextGen. "Our challenge is to drive consumer acceptance of recycled motor oil," he says. "To do that, first, we had to make sure consumers don't have to pay more for the privilege. Second, we could not ask them to make a performance tradeoff."

The MORE educational program is designed to encourage consumers not only to recycle, but also to close the loop by using recycled products, says Boggs. "We will be asking them to begin recycling, and to pledge to use recycled oils." He says that for every consumer who takes the pledge, the company will donate a dollar to "Keep America Beautiful," and "The Great American Cleanup."

"From a marketing budget standpoint, Valvoline is all in supporting this," says Boggs. "It's what we are going to be talking about this year; we will advertise across traditional, interactive, social media, and activate with NASCAR teams with paint schemes, the use of product on race day and qualifying days. We are spending everything we've got against it."

(Source: Marketing Daily, 03/15/11)

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