Lube Report Wednesday, December 16, 2009 VOLUME 9 ISSUE 50 COP Ups the Ante on Kendall By Lisa Tocci ConocoPhillips Lubricant is placing more of its eggs in the Kendall basket, with a relaunch of the old-line motor oil brand. In addition to being bolstered with Liquid Titanium antiwear agents, the brand is being upholstered in more glamorous packaging, company executives revealed in an interview with Lube Report. They also described a scheme to rapidly boost market penetration by giving all ConocoPhillips marketers access to a slate of premium Kendall offerings. Since Conoco and Phillips Petroleum merged in 2002, "our challenge has been that we have four regional brands -- Conoco, Phillips 66, 76 Lubricants and Kendall -- but no strong national brand for passenger car motor oil," explained Steve Tarbox, director of product management at ConocoPhillips Lubricants. The relaunch of Kendall GT-1 is meant to solve that. In late October, the company began meeting with marketers, distributors and direct national accounts to unveil Kendall GT-1 Motor Oil with Liquid Titanium. Liquid Titanium is an antiwear additive that first debuted last year in the company's heavy-duty engine oils. The additive is based on patented technology from Afton Chemical, and ConocoPhillips has trademarked the name Liquid Titanium for its exclusive use in engine oils. Marshall Cohen, the company's director of brand management, said a freshening of the Kendall brand has been in the works for some time. "It's a strong brand, but has been a quiet one. So now we expect to grow by differentiating Kendall." Step one towards that goal is to give more oomph to the Kendall formulation, using Liquid Titanium additive chemistry to deliver significantly better wear control, Tarbox said. For a 5W-20 grade, the reformulated oil now can demonstrate 75 percent better wear control in the Sequence IIIG engine test, and 85 percent better performance in the Sequence IVA test, versus the old formulation. "We're pretty pleased with these results," Tarbox said. "We already saw big improvements on the heavy-duty oil side, and so we're glad to see it on the PCMO side as well." Tarbox emphasized that the titanium chemistry does not appear to have any deleterious effect on emissions systems. "In fact," he said, "no titanium was measured on the exhaust catalyst after 120,000 miles, even though other lube additive metals are found." In-house tests also suggest that Kendall GT-1 5W-20 engine oil with Liquid Titanium may help boost fuel economy -- although there is not yet conclusive data, Tarbox conceded. It does seem to act as a friction modifier, however, which might help fuel economy. "We're going to soft-pedal that aspect at this time," Tarbox said. "We're doing vehicle tests and spending a lot of money, and maybe in the first quarter we'll have data on that." Meanwhile, the brand is also getting dressed in new packaging, with bottles, cases and labels all getting a fresh look. "The Kendall containers have been taken from black to silver, with the label having strong black capital letters, and a strong call-out to Liquid Titanium," Cohen pointed out. And the Kendall logo itself has been polished up, while keeping the familiar two-finger "V" icon that dates to the 1920s (when it was the first motor oil to offer drain intervals of 2,000 miles, versus the more common 500 to 1,000 miles of those days). Also, Cohen continued, the Kendall website has been restructured to take advantage of internet marketing opportunities. On the web, the marketing effort will include viral marketing, internet search engines and banner ads. Titanium-themed videos have been prepared for consumers to download and share on the web, and may also appear in movie theaters as film trailers, Cohen indicated. Finally, Cohen pointed out, sales tools and kits have been prepared for all channel partners, and B-to-B trade advertisements, trade shows and other marketing efforts are under way. One of the dominant images of the new web and advertising campaign is an animated muscle car with enormous blade-like teeth coming out of its front grille, with the tagline "a different beast altogether." Beyond these formulary and packaging changes, more Kendall products will be available to all ConocoPhillips marketing partners -- even those who do not at present carry the brand. These include Kendall GT-1 full synthetic, high-mileage, racing and other premium oils. "All our marketers will have access to some Kendall with Liquid Titanium, our exclusive differentiator," Tarbox said. "They'll be able to show users how they can prolong the life of their engines, which is an important message for consumers in these recessionary times. "The good news," Tarbox added, "is that we did not change the price at all from us to the marketers; even though we added the Liquid Titanium technology, they'll get it at the same price as Kendall without it." Generally, Kendall gets a slight premium versus the other three brands in ConocoPhillips' stable, due to its program benefits, Marshall Cohen observed. Marketing research found consumers willing to pay more for Kendall with Liquid Titanium -- if it works, he said. The changes to the Kendall brand come at a time ConocoPhillips is making its final approach to ILSAC GF-5, the motor oil upgrade that is scheduled for commercial licensing next fall. When the current category, GF-4, was introduced in 2004, ConocoPhillips took advantage of the change to roll out a line of synthetic-blend engine oils for all four of its brands. This time, the upgrade was looking more complicated, Steve Tarbox said, because the brand quartet also have "accessory grades" such as high-mileage oils, full synthetics, monogrades, racing oils and diesel oils. That would have greatly complicated the upgrade to GF-5. "Now we will wrap all these other into Kendall, and it will be our only line of these accessory grades, and will be available to all our marketers," Tarbox said. "It's a little bit of brand consolidation, and going forward the emphasis will be on Kendall being our primary brand for premium oils. "If not for increasing segmentation in the engine oil market, we may not have touched consolidation," Tarbox went on. "With all we have now, you have to question how many brands we can carry for all those products. There's the packaging, the SKUs, etc." Starting in January, Kendall GT-1 with Liquid Titanium will launch as a GF-4 quality product, and will roll up to GF-5 when licensing begins. As for the possibility of Kendall adding a product that meets General Motors' proprietary Dexos licensing requirements, also expected to launch next fall, Tarbox commented, "We're still looking at that, and at the range of chemistries that are out there for Dexos. We know that we'll need a Dexos product in our lineup, but it may not be this one." The new Kendall became available early this month, and "our plans are to hit the market hard in January," vowed Cohen. "And as we roll into 2010, we'll keep the fire going." Published by LNG Publishing Co., Inc. Copyright © 2009 LNG Publishing Co.