October 1, 2015
Visiting the Indianapolis 500 Speedway Museum during the 2015 Transportation Energy Institute Annual Meeting gave me a lot to think about.
I must admit I have never been to a NASCAR or Indy race event and that my knowledge of the sport is extremely limited. Therefore, when I began to understand the dynamics of the race, the experience of the drivers and the speeds and G-forces involved, my appreciation grew and I promised myself I must experience it someday.
This also led me to evaluate the relationship between fuel and engines and to wonder if there is a consumer benefit to be had. During the Transportation Energy Institute meeting, we spent a lot of time talking about the role of octane in fuel and the benefits of finding an optimal relationship between the fuel and vehicle engines to deliver superior performance, efficiency and reduced emissions.
I am all for it, but ultimately, does the consumer really get it? At risk of making a gross generalization here, I would argue that most consumers only know 91 octane is more expensive than 87 octane, but I hazard they don’t know why. (Most might just say, “It’s more expensive because they (aka. “The Man”) can get away with it.”) (Note: I am using AKI as a proxy for octane because this is what consumers see on the pump.)
I might also suggest that consumer awareness is much degraded from say 60 years ago. Why 60? Because September 30 marked the 60th anniversary of the tragic death of 24-year-old James Dean.
Back in Dean’s time, the automobile was an integral part of pop culture and Dean, who had only completed two movies by then, was a racing enthusiast. In fact, on September 30, 1955, he took possession of his now-iconic Porsche 550 Spyder race car and headed north from Los Angeles to compete in a race in Salinas. A few hours later, he was killed in a near head on collision on Highway 41.
Reading Dean’s story on the plane coming back from Indy, I reflected on the difference in consumers yesterday and today. Growing up I remember my dad telling stories about his 1947 Buick or his 1955 Chrysler and the different engine specs. I would venture to guess that most consumers today don’t know what kind of engine is in their car. They might know if it’s a V6 but not necessarily what that means, and there are very few who know the compression ratio (or what that means) or even the power output at peak RPM. So, given this limited basis of knowledge, how should the industry educate consumers to select a higher octane fuel so their vehicle engine can deliver its designed performance?
I spend quite a bit of time with those involved with the ethanol industry and there is a growing line of thinking that E15 should be marketed based upon its octane value. The theory is that E15 could have an octane rating of maybe 88 and be priced for less than 87, thereby signaling instinctively to the consumer that it is a better deal—a typically more expensive fuel for less money.
Our closing speaker in Indianapolis, Matthew Willcox, a student of behavioral sciences, said that most of our decisions are non-conscious—they require very little cognitive effort. If this is true, then perhaps the octane theory for marketing E15 might work.
But the octane being considered for a new fuel is much higher than 88 AKI. Because such a fuel might ultimately cost more than competing products, it is incumbent upon those in industry advocating such a solution to embark upon an education campaign. Continuing with Willcox, a conscious decision of choice, one that requires some degree of effort and cognitive consideration, will rely upon a number of variables influence the individuals. Identifying the key message that will resonate with the discerning consumers will be key, and the education campaign should predate the introduction of the fuel. I believe there is a steep learning curve.
The challenge of developing a new fuel and vehicle combination is daunting, but it will all be for naught if consumers don’t embrace the new product. It is critical that industry and government advocates spend as much, if not more, time thinking about how to change consumer behavior as they do developing the next great thing. Today’s consumers are not in love with their cars like James Dean’s contemporaries. And convincing consumers to adopt a new fuel is a much bigger lift than getting me to go to a race. The effort to change behavior should start now.