With the Gulf Oil spill behind it, a new CEO at the helm and the clean up effort underway, BP now must turn its attention to making good on its recovery promises and helping BP branded stations win back customers who may not quickly forget the devastation in the Gulf.
Since the spill began, and as CSD reported in our July issue, BP branded stations run by independent dealers and jobbers have faced a backlash from consumers, including protests and even vandalism ranging from broken windows and signs defaced with paint. Almost all have seen revenues plummet as customers avoid stations with BP signs in favor of neighboring fuel brands. In fact, the protests have gone viral. Numerous Facebook fan pages urging BP boycotts still exist and attract supporters.
As the industry continues to speculate what tactics BP will take to turn things around, one idea that has sparked interest among branded marketers and fuel distributors is reverting back to the Amoco brand at the pumps. When BP and Amoco merged in the late 90s, the unified brand name became BP Amoco. In 2000 it shortened the name to BP, introduced its current logo to symbolize energy in “all its dynamic forms,” and identified itself as a company that was beyond petroleum and invested in alternative forms of energy.
BP declined to respond to a CSD inquiry on whether the buzz is mere speculation or a serious consideration. A spokesman said the oil company didn’t comment on “market rumors.”
However, some insiders are giving the idea quite a bit of credibility and many seem to support the idea.
“I think it’s more speculation than reality,” said John Kleine, executive director of BP Amoco Marketers Association, Savannah, Ga. “The Amoco question comes up in conversations, driven by the goal of distributors to recapture fuels leadership in terms of quality, performance and sales.”
Approximately half of BP’s distributor network have been Amoco distributors at one point in their careers, Kleine added, so it’s not unnatural that they would ask, particularly given the fact that BP uses the Amoco brand name today in the branding of its premium Amoco Ultimate fuel. “Many distributors have experienced the Amoco brand and remember it was the gold standard in consumer preference and want the BP brand to regain that lead,” he said.
While some operators who support the rebranding are pointing to all the negative attention BP has attracted since the spill, Kleine argues it would be difficult to recreate the decade of equity BP has built in the U.S. under a different name.“You really have to dig a little deeper and consider what BP has stood for during the 10 years it has been establishing its current identity,” he said, adding BP must build a plan and rally support to regain that position, if it is to remain BP.
In making a name change, it would have to offer financial support to branded marketers and help them rebuild as Amoco. Eitherway, there is much work ahead.
Jeff Miller, president of Miller Oil Co. in Norfolk, Va., who has 16 of his 37 stations branded BP and supplies BP fuels to nearly 50 independent operators said he believes that even if BP shifts gears to Amoco, it won’t make much difference unless the brand starts lending a hand to those in the industry that are connected with the brand and hurting from the fallout.
“BP has to step up and support their jobbers and dealers and invest in the brand with as much effort as was put into publicizing what they were doing to restore the Gulf. Unless the company really comes out with some strong support programs, it won’t matter what they call the gasoline,” Miller said.
While Miller feels BP has done a good job of advertising its Gulf recovery efforts and aid to area residents, it hasn’t done much in terms of talking about the commitment of the local BP retailers and what they do for their communities. It has been up to the retailers to get the word out on their own, leaving some of them feeling high and dry.
“BP has given some financial support, but I believe the company has to make a significant investment in the brand. From that perspective, I’d rather they spend the effort on rebuilding the BP brand than starting all over again with another brand,” Miller said.
But not everyone agrees that’s a possibility. “The overwhelming opinion from a lot of the top brand strategists is that BP built a lot of momentum in being ‘beyond petroleum’ and a progressive, responsible brand looking out for the future of the planet, and it was a green oil brand compared to its competitors, and then when the rubber met the road it was really a façade,” said Derrick Daye, managing partner of The Blake Project, a Rochester, N.Y.-based brand consultancy. “That curtain was pulled away and what you saw was an oil company just like everybody else—it wasn’t beyond petroleum, and it was sloppy and risky in how it was operating.”
A Costly Second Chance
Daye is among the strategists that expect BP to resurrect the Amoco brand. “I know they have so much equity in BP, but the strongest brands do something very well and that is deliver on the promises they make as a company to their customers,” he said. “If they do change the name, which they should and probably will, the expectations are going to be that they deliver on whatever their new promise is going to be. If they’re going to shift back and say, ‘OK, we’re really going to be beyond petroleum now,’ they’re going to have to have a lot of proof points to make believers here.
“A new identity would give BP a second chance, but to continue on as BP and to carry the banner of beyond petroleum—it’s not possible. I think the marketers of that organization know they don’t have a chance unless they make a change,” he added.
If BP does decide to rebrand as Amoco it would mean a mammoth expense for franchisees that would need to overhaul convenience stores and invest in new signage at a time when they are already losing revenue. Daye predicted that if a rebranding does take place corporate BP would be forced to pay a percentage of the cost for the franchisees.
BP Amoco Marketers Association’s Kleine, however, thinks it is most likely that BP will forge ahead with the BP name under the new leadership of CEO Robert Dudley, who is set to replace Tony Hayward on Oct. 1 of this year.
“BP has made it clear that they are committed to the BP brand,” said Bob Juckniess president at RWJ Management Co. Inc., and owner of 10 BP stations in the Chicago area.
However, he favors an in-depth market study regarding the effects of a fuel brand change. But, like Miller, Juckniess noted that the brand’s name on the pumps is perhaps the least of its issues.
“Unless BP fundamentally changes the very core of its corporate culture from the top down, it is useless to discuss any other strategies because without such a drastic culture modification, BP is bound to relive its history,” Juckniess said. “In that regard, I question the ability of BP to successfully implement such culture changes without a wholesale review of their management teams who have been steeped for years in the current culture. Any management consultant will tell you how hard it is to change a corporate culture—especially in a large company.”
When BP holds its annual convention in Washington next month, Kleine expects BP’s future plans for rebuilding its image and conveying its faith in the BP brand to take center stage.
“The jobbers have been working shoulder to shoulder w
ith BP on that, and they are sharing their plans and ideas and challenging each other, and that’s the way it ought to be,” Kleine said.