The fuel additives market may be characterized as fiercely competitive, yet many see great potential in a category that may soon get another boost from the environmental sector.
An aging vehicle fleet, and concerns about large smog clouds hovering above many cities around the country, are just some of the causes for the unprecedented popularity of fuel additives. Restrictions on vehicle pollution, like the B.C. AirCare program, Ontario’s expanding Drive Clean program, and Quebec’s emissions test program, or even the coming lowering of sulfur levels in gasoline, are likely to further stimulate the market, which is already growing at a rate of 20% annually.
As promising as these forecasts are for the industry and the jobbers who market these products, questions abound about how best to ride the wave of soaring popularity for fuel additives. Manufacturers are using very different approaches, which range from guarantees to pass emissions tests, to better educating both customers and consumers, to the ever-popular prize promotions.
All this attention to fuel additives does present one major question for jobbers and their customers: Which products should they choose?
Though there is no single answer to this question, especially when taking into consideration the different approaches that jobbers may have when it comes to promoting their products, there are many factors that can help make choices about which additives are best suited for their marketing strategies.
“What we are trying to do is concentrate on tech support and after-hours training,” says Dave McDuffe, product manager for Pennzoil-Quaker State Canada. “We want to educate retailers and consumers on what are the right ways of using our products and why they are important.”
Jobbers can take advantage of this emphasis on informational literature to lure customers more easily. However, since many companies are now offering more and more of this type of literature, they should do so selectively, or otherwise they could run into the same problems that manufacturers have when trying to get their message out in the open market.
“All the how-to information is in the packages,” says Jim Hollins, product manager for Honeywell Consumer Products Group, which makes Prestone brand products. “But there are so many products that what we are trying to do right now is just to cut through all that noise.”
The emphasis on information is a very important tool that jobbers can use to boost sales, by promoting the advantages of fuel additives to the aftermarket industry, especially when that information is given to their sales personnel in the form of training sessions. But, then again, training is only useful if employees tell customers about the advantages of fuel additives.
“We provide information about our products for retailers through staff-training sessions,” says Hollins, “but the problem is that the turnover ratio for employees there is so high that it becomes difficult, so you have to definitely do something on the shelf.”
Guarantees are nothing new to the automotive industry, but in the fuel additives market, because of government emissions tests, the emphasis on better performance has prompted some companies to come up with very specific guarantees.
“What we are concentrating on right now are guarantees to pass the emissions test,” says Roy Howarth, managing director at CRC Canada Inc. “If anyone who buys our fuel additive does not pass the test, then we give double their money back. Cars are getting more sophisticated nowadays, and additives have to match that.”
All manufacturers do not share this type of bravado marketing, but it may become increasingly common as the fleet of vehicles gets older and more people resort to fuel additives to pass their tests.
“We feel that with the emphasis on emissions tests out in the market right now we need to concentrate on that,” says Chris Osborne, director of marketing for Kleen-Flo Tumbler Industries Limited, which attaches an emission test guarantee to one of their products.
Guarantees, however, should not be the only thing that jobbers should look at when choosing what fuel additives to market.
For starters, making sure that the performance of a product matches its money-back guarantee is necessary. Guaranteed products put extra stress on jobbers and technicians, who stake their reputations and risk losing not only what they earned with a product or service, but also customers who are dissatisfied with having failed an emission test.
“There are some very legitimate aftermarket deposit-control products out in the market right now, but, unfortunately, there are also a number of ‘snake oils’ being offered to consumers,” says Kevin Foley, Americas region manager for fuel additives at Chevron Oronite Co. “We have analyzed the chemical composition of many aftermarket deposit control additives, and found that some are not effective, and that a few can actually cause harm. Retailers can protect themselves against these illegitimate products by insisting upon performance data that supports the claims being made on the products they purchase.”
The current boom in sales and variety for fuel additives is no doubt the result of many factors. But, because of environmental and economic reasons, better fuel efficiency has become one of the main goals of the automotive industry, and many in the fuel additives market feel that their products will be the key to that.
“Fuel additives are some of our key products this year,” says McDuffe. “From 1998 to 2000 there was an increase of 2.5 million more units sold in the market. Also, because of the aging fleet of vehicles out there, 65% of vehicles who use fuel additives are 8 years or older.”
But even booming markets, not to mention retail space, have their limits. So, the question for jobbers then becomes what types of additives will become more popular as time goes on.
“There are so many products out there in the market,” says Chris Osborne, “that I see the market growing at a vertical rather than a horizontal level. You are going to have low cost additives, medium cost additives, and then the more expensive types. From there, the consumer is the one who will decide which one is good for them.”
However, not everyone in the industry agrees with that view, or, for that matter, that fuel additives are a sure cash cow for anyone in the business.
“Our company got out of the fuel additives market because it is not a company focus at this point,” says Anthony Stadelman, marketing manager for Castrol Canada Inc, “and also because the market is pretty crowded. Most of the products out there are very alike, and there is not any that stands above the rest.”
Views like that, though not uncommon, seem to be the exception rather than the rule, as many companies struggle to develop new products that tackle the new challenges that come up.
One major cause of concern in the market is the growing sensitivity of cars to both chemicals and residue deposits. Some manufacturers are even advertising that they do not contain certain chemicals, like methyl hydrate, to ensure buyers that they will not damage sensitive fuel injector components.
“Through our research, we’ve realized that 30% of maintenance for cars is fuel injection related,” says Colleen Cooper, product coordinator for Pennzoil-Quaker State Canada. “We’ve had these products out in the market for a while, and what is happening now is that the market is finally catching up to what we do. That’s why the growth has been so dramatic for fuel additives.”
For jobbers, even more so than for retailers, that could be the key to cashing in big.
“Fuel additives can definitely bring added value to the aftermarket,” says Osborne. “For a lot of technicians it is hard to compete with $14.99 tune-ups. But, if you can give added value to a customer, like technicians can by using fuel additives to help a car run better, and maybe even pass an emissions test, during a tune-up, then you have a much bigger chance of selling your product.”
In the end, it seems that fuel additives are already poised to become an integral part of the tune-up of the future. And that is something that people in this industry, if they themselves want to become the jobbers of the future, should definitely make a note of.
Tips for jobbers on fuel additives:
Use the information that is provided by manufacturers to fit your marketing needs. Companies generally have information packages and displays for their products.
Get free training. Many companies provide free training for staff.
Inform your customers. As well as promoting training for retail and wholesale personnel, companies also provide after-hours clinics for installers. Passing this information on to customers may prove productive down the line.
Use displays. All manufacturers want to see their products advertised near the counters. Consult different manufacturers to see which ones can provide you with displays that best fill your needs.
Check performance test results. Larger companies tend to have better, more thorough testing done.
Though fuel additives can help lower emissions and make cars run more efficiently, the chemical changes in fuels and additives that have taken place in the last decade may be contributing to problems like exhaust valve sticking, injector fouling, or damage to catalytic converters and oxygen sensors. Inform yourself about which additives are tackling these problems.
Fuel additive sales have been growing at a rate of 20% a year.
65% of fuel additive users are people who own cars eight years or older.
30% of maintenance for cars is fuel injection related.
Some of the facts influencing growth in the fuel additives market are emissions tests, low resistance by new vehicles to deposits in the fuel tank, an aging vehicle fleet, environmental concerns, and better fuel efficiency.