Quote:
Originally Posted by daiheadjai
You bet that's an example in a marketing text book somewhere...
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Strangely enough that price difference is yet another thing that makes people think the higher octane is "better" fuel. We are conditioned to believe that if we pay more for what we think of as the same thing then it must be a higher quality. There is much more to the price difference in fuels than quality. Although "premium" does have a few additives that cost a bit more to produce these are not really what drives the price up. The regular is made, stored and transported in massive volumes and this keeps costs down. Since premium is made in substantially smaller volumes then those costs get driven up.
If you pay $10 to make, store and transport 100 gallons of regular fuel and sell it for $1 a gallon you make $90 for your $10 investment.
If you spend $10 to make, store and transport 40 gallons of premium and sell it for $1 then you only make $30 for that same $10. In order to show a better profit you need to charge more and this is why they do. The oil companies make way more money on regular fuel sales then they do with premium so trying to upsell you really makes no sense.
(To all you economists out there I know my comments are way oversimplified but was going for brevity not 100% accuracy)