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Disruptive marketing approach for downstream oil and auto fuel retailers

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Margins for gas retailers are razor thin and price pressure limits underselling competitors.

Much of fuel retailers profits comes from the convenience store & services, not the pumps.

Inspired by Taiwan's uniform invoice lottery, this concept turns traditional fuel retail practice on it's head by giving cash for gas, and not the other way round!

Published in: Marketing, Business
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Disruptive marketing approach for downstream oil and auto fuel retailers

  1. 1. APPROACH FOR DOWNSTREAM OIL Disruptive marketing concept for auto fuel retailers
  2. 2. Background  Margins for gas retailers are razor thin  Price   pressure limits underselling competitors Much of their profit comes from the convenience store & services, not the pumps Gas is a necessary evil most people are not brand-loyal  product advances do not increase purchases   Customer buy the gas they need and no more
  3. 3. Current Approach   Most promotions use gas purchases to get something else for free or discount Limited success as it will not lead to customers buying more gas  At most customers will return to by gas at their pumps  Does nothing to get people into the stores  Out-of-date retail strategy
  4. 4. Cash for Gas, not the other way round     Rather than giving away prizes with a gas purchase, give away gas with the purchase of merchandise Gas serves simply as a means to get customers into the stores The stores and services are geared to maximize spending given fuel customers purchasing routines, restrictions and preferences
  5. 5. Concept   Ongoing weekly lottery where customers can win their gas purchases Every dollar spent at the pumps is a chance to win the gas portion of the bill  The more you spend, the more chances you have at winning  As petrol is a necessity, this would be a perpetual state  The consistent purchase patterns for gas makes it easier to determine the break-even point  How many winners per draw, specials draws, etc.
  6. 6. The Cycle Refund on gas purchase Customer fills up at pumps Gas Sub-total Dry cleaning Grocery Hardware Car wash Sub-Total Weekly draw 135 Entries More Spending = Greater changes to win TOTAL Every nongas $ spent = chance to win 65.00 65.00 25.00 80.00 20.00 10.00 135.00 200.00 Pays at register Shops in store
  7. 7. Keeping ‘em honest!  Restricting to a single receipt is designed to prevent sharing gas purchases  Structuring draws based on loyalty programs is also possible, but may muddle the concept for the customer  Clearly any customer profiling benefits of loyalty programs should be retained  More advanced structures could also allow for purchases at partnering outlets
  8. 8. Changes to the store   Priority is to maximize spending as part of regular, cycling gas purchase routine High value, repeatable purchases + impulse buys  Dry-cleaning services  Grocery/online purchase pick ups  Partnering with other sellers Customers will not come back to buy anti-freeze or jumper cables week after week!
  9. 9. Marketing and Advertising   Win what you need, not what they need gone! Social media channels to allow users to highlight personal experience  Upload    to win extras Extra draws to partner with events & crossbranding
  10. 10. Keeping Ahead    Eventually competitors will also apply strategy First to market advantage is limited with such easy market entry Keeping market share will be tied to evolution of the services and products provided by the store  Partnering  Personalized offers  Virtual stores (e.g. items ordered online and brought to the pump)
  11. 11. Inspiration  Business state of downstream oil & retail gas stations: http://www.npr.org/templates/story/story.php?storyId=10 733468  http://www.accenture.com/SiteCollectionDocuments/PDF/Ac centure-Fuels-Retail-Achieving-High-Performance-VolatileFast-Changing-Environment.pdf   Taiwan’s uniform invoice lottery which boosted sales tax revenue by enticing the customers to demand receipts from vendors:  http://en.wikipedia.org/wiki/Uniform_Invoice_lottery

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