I don't buy into this "Mobil 1 is formulated to a price point" and "Red Line and Amsoil are cost is no object" motor oils. That was the whole reason for my original post in this thread. Given ExxonMobil's resources, it could very well cost Red Line or Amsoil MORE to produce the exact same oil Mobil 1 sells if they were to try to duplicate it. The retail price of an oil is not a good indicator of the quality of the ingredients used to make it, IMO.
The economics of synthetics
- Thread starter G-MAN
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PM is "private message." Go to your profile, select "View/update Profile" and then scroll down and select "Enable Private Messaging."quote:
Originally posted by M Smith:
G-Man II - I'm down in the Lowcountry; Beaufort County. I assume PM means "personal mail?" I didn't know I could "allow" such a link on this board?
Having talked to some former Mobil, then Exxon folks involved with synthetic oils, I believe that Mobil 1 was cost-engineered after the buyout (oops-merger).
I also believe that Mobil 1 could be made better, but since it is really designed to last the normally recommended drain interval there is little incentive to spend more on additives.
It is still an excellent oil.
I also believe that Mobil 1 could be made better, but since it is really designed to last the normally recommended drain interval there is little incentive to spend more on additives.
It is still an excellent oil.
When you look at the price structure I think that one of the reasons, besides volume, for Amsoil and Redline being more expensive is the distribution network. The independent dealer network of these two I feel is very expensive to maintain, and you don't get and are unlikely to get a retail off the shelf product that would result in more sales and lower cost. With the dealer getting a commission, the dealer/jobber that signed him up getting a commission and AJ paying for his boat it seems more expensive then traditional retail marketing. However, I may be wrong as I have never been in the retail field. My main complaint is that due to the the lack of off the shelf retail outlets carrying the product it is difficult to find plus the shipping aspect as well. Mass merchandising works wonders for cost reduction.
If by "normally recommended drain interval," you mean the normal US car manufacturer drain interval, this is something else I don't buy into regarding Mobil 1. Every grade of Mobil 1 carries the European A5 or A3 rating, which are extended drain ratings in Europe.
From what I've seen on here, Redline is the best oil you can buy. There results are very good and consistant. I also like the more "humble" approach they take with there marketing.
It's hard to say what Mobil really does. I think everyone makes valid points. None of us have enough info. to really know. I think when you compare what you get for your $$, Mobil exceeds Amsoil. Redline seems to hold up very well and is probably worth the price they charge.
G-Man II, dragboat, buster and others bring up very good points about economies of scale and their possible effect on oil pricing and quality. But Groucho said something a while back and it seems to have been largely forgotten in the most recent posts:
"Mobil has a competitive advantage. This does not mean that their economic advantage is passed along to the consumer with a better value."
Exactly!
Most of us have seen Castrol's weasely response to the criticism they received when their Syntec ceased being PAO-based, and became a Group III oil. Among other things, they claim that moving to a Group III oil gave them economic advantages they didn't have with PAO. Perhaps someone else can find the direct quote because that sentence is from my memory and not exact. Anyway, did I miss the retail price drop of Castrol Syntec in 1998? Around here it stayed the same ... then more recently went UP. They chose to pocket the difference.
'Kule: "With Mobil's economy of scale, and the fact they produce their own base oils and addtives, they could produce a better oil."
I think the operative word here is "could." I remember having a similar discussion with MolaKule a couple weeks ago. With their army of chemists and nearly limitless resources Mobil could produce the finest internal combustion lubricant the world has ever known. However, I think they have decided to produce a single competent (but compromise) product for the (generally ignorant) mass OTC automotive market.
I also need to point out that companies "sell" products and services between their divisions and depending on management style, etc ... they may include mark-up on those sales. This pressures each division to be independently financially viable and exposes laggard parts of the company for possible selling/restructuring. So, Mobil's refinery wholesale base stock price to its blending plants may be the same as (or very close to) its price to an independent blender. The difference is all those profits internally add up to greater profits for the corporation as a whole (which is the purpose of a corporation's existence) and not necessarily cheaper products for consumers.
Usually, the only time a company lowers its price is when they are seeking greater market share. They make little money in the short run but once they have a greater share of the market (and possess an established brand loyalty), they can raise prices and (hopefully) make up for those leaner years.
And hey, look at all the money Mobil spends on advertising/sponsorships/marketing compared to Red Line which runs miniscule black & white ads in the back of a handful of car magazines, usually right next to the offers for discount sources of Viagara and books which guarantee to help you score more with women.
I like to see that people are thinking about the behind-the-scenes factors and their effect on price and quality (with ALL products, not just oil) but with so many variables and guesses involved, I don't think any of us will be able to arrive at any definitive conclusions.
--- Bror Jace
PS - In case ya'll couldn't guess, I have a background in marketing but currently work in finance.
[ February 11, 2003, 02:38 PM: Message edited by: Bror Jace ]
"Mobil has a competitive advantage. This does not mean that their economic advantage is passed along to the consumer with a better value."
Exactly!
'Kule: "With Mobil's economy of scale, and the fact they produce their own base oils and addtives, they could produce a better oil."
I think the operative word here is "could." I remember having a similar discussion with MolaKule a couple weeks ago. With their army of chemists and nearly limitless resources Mobil could produce the finest internal combustion lubricant the world has ever known. However, I think they have decided to produce a single competent (but compromise) product for the (generally ignorant) mass OTC automotive market.
I also need to point out that companies "sell" products and services between their divisions and depending on management style, etc ... they may include mark-up on those sales. This pressures each division to be independently financially viable and exposes laggard parts of the company for possible selling/restructuring. So, Mobil's refinery wholesale base stock price to its blending plants may be the same as (or very close to) its price to an independent blender. The difference is all those profits internally add up to greater profits for the corporation as a whole (which is the purpose of a corporation's existence) and not necessarily cheaper products for consumers.
Usually, the only time a company lowers its price is when they are seeking greater market share. They make little money in the short run but once they have a greater share of the market (and possess an established brand loyalty), they can raise prices and (hopefully) make up for those leaner years.
And hey, look at all the money Mobil spends on advertising/sponsorships/marketing compared to Red Line which runs miniscule black & white ads in the back of a handful of car magazines, usually right next to the offers for discount sources of Viagara and books which guarantee to help you score more with women.
I like to see that people are thinking about the behind-the-scenes factors and their effect on price and quality (with ALL products, not just oil) but with so many variables and guesses involved, I don't think any of us will be able to arrive at any definitive conclusions.
--- Bror Jace
PS - In case ya'll couldn't guess, I have a background in marketing but currently work in finance.
[ February 11, 2003, 02:38 PM: Message edited by: Bror Jace ]
MolaKule
Staff member
Bror,
"And hey, look at all the money Mobil spends on advertising/sponsorships/marketing compared to Red Line which runs miniscule black & white ads in the back of a handful of car magazines, usually right next to the offers for discount sources of Viagara and books which guarantee to help you score more with women. "
Dat gummit! I knew I was in the wrong area of organic chemistry. I should be making "Designer" pheremones to add to motor oil to attract women. Whomever the contributor is on this board who said he bathed in motor oil has the right idea!
"And hey, look at all the money Mobil spends on advertising/sponsorships/marketing compared to Red Line which runs miniscule black & white ads in the back of a handful of car magazines, usually right next to the offers for discount sources of Viagara and books which guarantee to help you score more with women. "
Dat gummit! I knew I was in the wrong area of organic chemistry. I should be making "Designer" pheremones to add to motor oil to attract women. Whomever the contributor is on this board who said he bathed in motor oil has the right idea!
That should be "Whoever the contributor is..." Remember, any form of the verb "to be" takes the nominative. "Whomever" is the objective and would be correct as the object of a preposition.quote:
Originally posted by MolaKule:
Whomever the contributor is on this board who said he bathed in motor oil has the right idea!
I'd still like to hear the collective take on this query that I posted above:
quote:
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As for Red Line, with the exception of the most recent UOA posted, their results have appeared somewhat mediocre at best.
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Is this really the case? Are Red Line's analyses mediocre? What would make them better?
quote:
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As for Red Line, with the exception of the most recent UOA posted, their results have appeared somewhat mediocre at best.
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Is this really the case? Are Red Line's analyses mediocre? What would make them better?
I also have trouble believing that Mobil 1 formulates their oils to a price point. M1 certainly had no qualms about charging many multiples of the price of all their OTC competition when they first intoduced their synthetic oil. And they haven't been shy or hesistant about raising the price over the years, inlcluding the most recent SuperSyn increase.
It seems to me that M1 is setting the pricepoint that other oils are aiming for.
It seems to me that M1 is setting the pricepoint that other oils are aiming for.
Terry addressed this in a couple of UOA and his theory was that when someone switches over to Red Line Oil in a car that has seen some miles, the esters in Red Line dissolve deposits (and the metals they contain) from previous miles and hold them in suspension. This is the same way that Auto-Rx and other ester-based engine detergents work.
So, some of the metals showing up in UOA should not be attributed to Red Line. They were worn off thousands, perhaps dozens of thousands of miles in the motor's past.
If Terry's theory is correct, people should see these (old) metal levels drop as they use Red Line for a handful of oil changes in a row and the exemplary UOA we just say in that Toyota Sienna should become the norm.
The problem is that many people switch to Red Line (myself included) and want to see great lab test results after the first oil change. It seems that in many cases, it won't work that way unless Auto-Rx or a similar cleaner was used prior to the switch-over.
Jay, I think you have a good point. But, the retail price is usually the end result of many, many factors starting with the cost of manufacture. And since this is not the first version of Mobil 1, they've had plenty of time to rethink and tweak everything involved, including the formula.
--- Bror Jace
[ February 11, 2003, 04:34 PM: Message edited by: Bror Jace ]
So, some of the metals showing up in UOA should not be attributed to Red Line. They were worn off thousands, perhaps dozens of thousands of miles in the motor's past.
If Terry's theory is correct, people should see these (old) metal levels drop as they use Red Line for a handful of oil changes in a row and the exemplary UOA we just say in that Toyota Sienna should become the norm.
The problem is that many people switch to Red Line (myself included) and want to see great lab test results after the first oil change. It seems that in many cases, it won't work that way unless Auto-Rx or a similar cleaner was used prior to the switch-over.
Jay, I think you have a good point. But, the retail price is usually the end result of many, many factors starting with the cost of manufacture. And since this is not the first version of Mobil 1, they've had plenty of time to rethink and tweak everything involved, including the formula.
--- Bror Jace
[ February 11, 2003, 04:34 PM: Message edited by: Bror Jace ]
If you purhcase Mobil 1 at most places other than Walmart etc, you pay a lot more. The quick-lube place charges 49.95 for a Mobil 1 oil change, teh auto parts store here sells it for $7.45 qt. If it was not for Walmart, you would be paying a lot more for the products. There are a lot of middle men that need to make a profit.
This is pretty much true of all oils, not just Mobil 1. Castrol, Pennzoil, Valvoline...they all cost less at Wal-Mart than at other retail outlets. (The one exception in my area IS Mobil 1. It's just $3.39/qt at Target. It's $4.77 at Wal-Mart.)
MolaKule
Staff member
G-MAN,
"That should be Whoever the contributor is...' Remember, any form of the verb 'to be' takes the nominative. Whomever" is the objective and would be correct as the object of a preposition."
What's a nominative, a proposition, and an objective?
I'll have you know, I are very articulatitivenesslessness after my medicine kicks in! Of course, that's if I remember to take it!
[ February 11, 2003, 05:30 PM: Message edited by: MolaKule ]
"That should be Whoever the contributor is...' Remember, any form of the verb 'to be' takes the nominative. Whomever" is the objective and would be correct as the object of a preposition."
What's a nominative, a proposition, and an objective?
I'll have you know, I are very articulatitivenesslessness after my medicine kicks in! Of course, that's if I remember to take it!
[ February 11, 2003, 05:30 PM: Message edited by: MolaKule ]
MolaKule
Staff member
"A couple questions: Given the physics of how boundary protection additives seem to work, how can an ester alone function as one? Also, are you saying that Castrol RS oils have relatively heavy doses of ester in the base oil blend? (Given a 10-60 spread, this wouldn't surprise me, actually.)"
Good discussion guys!
Esters can act as boundary lubes but mostly function as FM's. Now, there are some AW/EP additives as esters, such as esters of TriCresyl Phosphate (or TCPE, one of my favorite for racing applications), esters of ZDDP, and lately esters of boron - or "Borate Esters."
Non-ester AW's of late are the Calcium additives of suspended solids.
Mobil marketing has done extensive analysis and has determined what they believe the market will bear in terms of the cost/performance ratio of their oils, and have formulated and priced accordingly. I agree with Terry, it could be a better oil, but until Mobil sees that the general public will purchase a higher cost oil with better performance, they won't put it on the shelves, with a correspondingly higher price. One has to realize that that they are still selling an OTC product to the general public, and not to overcritcal schmucks like us who know the quality difference in oils and send in streams of oil samples to see "what gives."
With Mobil's economy of scale, and the fact they produce their own base oils and addtives, they could produce a better oil.
Redline and Amsoil are specialty blenders. Although I believe that Redline has a better product, due their higher ester content and later technology AW's, I also think that with Amsoil's higher volume of raw materials, Amsoil could be priced much lower.
Good discussion guys!
Esters can act as boundary lubes but mostly function as FM's. Now, there are some AW/EP additives as esters, such as esters of TriCresyl Phosphate (or TCPE, one of my favorite for racing applications), esters of ZDDP, and lately esters of boron - or "Borate Esters."
Non-ester AW's of late are the Calcium additives of suspended solids.
Mobil marketing has done extensive analysis and has determined what they believe the market will bear in terms of the cost/performance ratio of their oils, and have formulated and priced accordingly. I agree with Terry, it could be a better oil, but until Mobil sees that the general public will purchase a higher cost oil with better performance, they won't put it on the shelves, with a correspondingly higher price. One has to realize that that they are still selling an OTC product to the general public, and not to overcritcal schmucks like us who know the quality difference in oils and send in streams of oil samples to see "what gives."
With Mobil's economy of scale, and the fact they produce their own base oils and addtives, they could produce a better oil.
Redline and Amsoil are specialty blenders. Although I believe that Redline has a better product, due their higher ester content and later technology AW's, I also think that with Amsoil's higher volume of raw materials, Amsoil could be priced much lower.
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