Lets Make a Deal on Synlubes


A record number of U.S. motor oil buyers reported making their purchase at a special discount price, according to market research company NPD Groups ongoing Car Care Trac survey of consumers automotive purchases.

For the 12 months ending November 2009, 22 percent of consumers surveyed by NPD reported they paid a special or sale price for motor oil, compared to 16 percent in 2007.

In this economic environment, consumers are really looking for a deal price-wise, David Portalatin, industry analyst for NPDs Houston-based automotive unit, told Lube Report. Its an opportunity to perhaps grow the total ticket by encouraging larger overall transaction amounts, perhaps incentivized by the deal.

Motor oil deal shoppers last year were slightly more likely to purchase full synthetic motor oil than other types of motor oil, NPD found. Its Aftermarket Industry Monitor, which tracks point-of-sale data from more than 18,000 auto parts stores, found that full synthetic quart volume increased nearly 9 percent in the 12 months ending November 2009 compared to the year-earlier period. While the total passenger car motor oil price per quart increased 11 percent, NPD pointed out, the full synthetic price per quart went up only 4 percent, which may reflect promotional discounts.

Previous NPD research indicated many consumers were considering purchasing a premium oil because they were trying to hang onto their cars longer and make them perform better. Clearly thats part of the reason some consumers are choosing synthetic now, Portalatin pointed out. It would also be fair to say, and incomplete if we didnt say, that promotions have played a role as well.

He noted that companies have heavily promoted both conventional and synthetic motor oils over the last year. That may be just the incentive that a lot of consumers are looking for, to go ahead and make that purchase, Portalatin continued.

NPDs ongoing tracking of consumers responses to the economy across all industries indicated that 74 percent say they will be more likely to buy only if theres a deal or special promotion, he added. So its something very relevant to the consumer today, that in combination with other attributes – in the case of synthetic oil, some of the quality attributes it offers – those things can be pretty powerful in swaying consumer behavior, Portalatin said.

NPD also noted that 81 percent of customers who bought motor oil on deal pricing said they specifically went to the store for that motor oil purchase. Those shoppers were more likely to say they would have made no purchase if their preferred brand were not available (15 percent, compared to 11 percent who said they would make the purchase even if the preferred brand werent available). The shoppers were five times as likely to choose a brand based on an advertisement. Deal shoppers are also likely to be higher volume purchasers, NPD explained, as 78 percent who bought on deal reported buying five quarts or more, compared to only 53 percent who paid regular price.

Manufacturers of automotive products need to understand the particular drivers of purchase behavior in their categories and for its brands to determine whether to offer a deal and how effective dealing might be, Portalatin cautioned. Collaborating with retail partners to evaluate the dynamics of each brand and category, manufacturers can craft effective promotions that appeal to their consumers sense of value and deliver positive results.