Media Updates, page-14521

Interesting thought. I can only speak from my experience in the petroleum industry. Comparing a premium product such as say BRAND NAME Premium 98 fuel vs Unleaded 91 or BRAND NAME premium diesel vs regular diesel - the cost difference of the "fuel additives" aka ingredients/herbs/spices that make ALL THE DIFFERENCE was close to zero. So the margin on the premium product was and continues to be huge! This does not mean that the additives/ingredients/herbs and spices etc do not add value - they absolutely do live up to the product claims and even do things that are not advertised ie Premium Diesel was equivalent to the Alpine Mix in terms of its tolerance to cold temperatures, except the cost of these ingredients was negligible.

Further example - a brand that I shall not name was working on the launch of a premium diesel product in Australia. The additive that was required cost next to nothing and was already being used in another product targeted at the mining industry. The mining industry product did not attract a premium vs regular diesel. BUT the moment we doubled the dosage of the additive at a cost of $0.0000001/L x 2 and changed the decals/branding, we were able to attract enormous margins. We also found that the demand for the premium product was fairly inelastic so by changing the margin between say $0.10 to $0.20 the sales volume was unaffected across a range of sites/suburbs etc. Note that I have not mentioned the cost of advertising/product launch etc

If the Platinum formula is conceptually similar to fuel from a marketing perspective, then premium = more margin, otherwise what's the point?