Gulf Oil, the venerable New England fuel brand, is midway through a major branding campaign that will seethe oil company convert 11 Exxon travel plazas along theMassachusetts Turnpike. But what is most significant aboutthe Turnpike deal is the oil company’s plan to introduce the GulfExpress convenience store brand.
Gulf’s popular blue and orange color scheme has long beenassociated strictly with fuel retailing, so the Newton, Mass.-basedcompany realizes it needs to make a strong impact with its new convenience store brand, and it has a lot riding on the concept, Gulf Oil’sPresident and CEO Joseph Petrowski told CSD.
Since Gulf is chiefly a fuel wholesaler, its long-term success willdepend largely on its ability to help branded marketers grow theirnon-fuel business.
“The biggest challenge facing the gasoline market is it’s onlygrowing about 2% annually—less if caf standards continue changing—but operating costs are increasing at an even higher rate,”Petrowski said. “When we were evaluating the business, it becameobvious that one of our biggest priorities would have to be helpingour marketers grow incremental sales on the lot, and the most effective way to do that is with a strong convenience store offering.”
The company seized upon the Massachusetts Turnpike to introduce the Gulf Express brand for two primary reasons: for thehigh-profile locations it offers and the opportunity to make a majorbranding statement.
For more than four years, Gulf supplied the Mass. Turnpike stores,but they operated under the ExxonMobil banner. Following the $87billion merger in 1999 that created Exxon Mobil Corp., the company was required to divest all of its Exxon-brand stations in NewEngland and allow new owners to use the brand for up to 10 years.ConocoPhillips Corp. acquired the units in 2000, but the Turnpike travel plazas were subsequently purchased by Gulf in 2003.
“Strategically, upgrading the turnpike stations isa very important move,” Petrowski said. “It really is aplatform for us to refurbish the Gulf image throughout our operating footprint.”
Going on its own should have advantages forGulf. By no longer having to pay a royalties of a fewcents a gallon to ExxonMobil for the Exxon name,Petrowski said he hopes the switch will lead tosomewhat lower prices for motorists.
By promoting this strategy, he hopes to persuade 500 more gas stations across New England to adoptthe Gulf brand by 2010,a 26% expansion for thecompany, which sells through1,900 independently owned Gulf-branded stationsin the Northeast and supplies fuel to 550 Exxon-branded stations.
“If independent distributors were to analyze our price at therack, they would find Gulf to be very favorable and very competitive,much more so than the premiere Exxon, Mobil, Shell and BP brands,”Petrowski said. “But we realize that is not the ultimate factor; it’s whatthe marketers can get on the street that is important. In that area, Gulfis very favorable as well, and developing a convenience store brandis only going to enhance that value proposition for customers.”
While the Turnpike is a big branding deal for Gulf, it also highlights the company’s assets. Gulf has the network infrastructure inplace to stay bullish on growth in a marketing area that ranges from Ohio to Maine.
Gulf maintains an interconnected network of pipelines, oceantankers, barges and truck fleets that move Gulf products to strategically located terminals quickly and efficiently. The Gulf terminalnetwork consists of 12 company-owned facilities and it has established several alliances with other terminal operators in areas wherea Gulf terminal does not exist.
Battling for new Business
Since it is dealing with travel plazas, Gulf is pushing its valueadded benefits like commercial fleet fueling andproprietary credit cards. In the competitive battle for new fleet business, fleet managers areoffered comprehensive vehicle analysisreports detailing purchases by vehicle anddriver letting them know where and when thedriver fueled, what was purchased and whatit cost. Plus, monthly transactions are electronically delivered to fleets so they can easilybe imported and reconciled with virtually all accounting systems.
Gulf is also aggressively building a creditcard base. New accounts opened throughSept. 15 offers cardholders discounts of up to25% on purchases at Gulf stations.