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Marketing Battles Return To Gasoline Retailing

Declining demand and drivers shopping solely by price prompt the latest advertising campaigns.

by on Mar.10, 2009

Look for more gasoline marketing campaigns as the weather warms.

With demand down, look for more gasoline marketing campaigns as the weather warms.

There’s nothing like a free tank of gasoline to cause a commotion at a gas station. That’s precisely what happened last Friday, when Shell kicked off its latest line of gasolines. Driver’s lined up to try the new fuel in seven commuter markets, including New York City, Los Angeles, Washington DC, Seattle, Houston, Jacksonville, and Cincinnati. Throughout the week of March 2, local radio stations hinted where the participating gasoline stations were. Then, finally, on Friday morning listeners were actually told where tanks would be filled for free from 7 to 9 a.m.

The gasoline market is tougher these days. Cumulative travel for 2008 changed by -3.6 percent (-107.9 billion vehicle miles), according to the Federal Highway Administration. But we still consume lots of fuel since Americans traveled an estimated 2,921.9 billion vehicle miles last year. So this is a market worth fighting over. Even though gasoline prices are down nationally on average to under $2 a gallon from $3.20 a year ago, according to AAA, demand is also way down as the Great Recession continues. Worse, from a brand promotion point of view, I speculate that virtually all consumers –who have been battered by outrageous increases during the last couple of years — are shopping price, then price, and not quality, a completely rational  response.

Advertising to the Rescue

Shell’s good, old-fashioned publicity stunt was created to hype Shell Nitrogen Enriched Gasolines. Shell claims that nitrogen is a new and key ingredient of the additive package in all three of its gasoline grades. Nitrogen is said to be more stable at higher combustion chamber temperatures common in late model engines. This increased stability resists breakdown better than conventional cleaning additives and is said to remove carbon deposits on intake valves and fuel injectors left behind by lower quality gasolines. Shell is supporting the launch of Nitrogen Enriched Gasolines with a national marketing campaign, including TV, radio and online advertising, as well as point-of-purchase marketing at Shell-branded stations.

Thus the latest shot was fired in the ongoing gasoline marketing wars. Virtually all major branded gasolines in the U.S. have additive packages and use marketing claims of cleaner running engines from their use, among other touted benefits.  Well, maybe so,  but maybe not.