A new report claims forecourt customers can be categorised into increasingly divergent groups – price-seekers at one end and service-seekers at the other. They are driven by their differing needs and expectations, according to David Kurtz, director of energy analysis at Datamonitor, and author of a new report that takes a Europe-wide look at dual branding strategies on the forecourt.

“We are currently witnessing increasingly divergent behaviour from forecourt customers,” he says. “Fuel retailers are therefore taking the opportunity to create specific, alternatively branded concepts to attract and retain different types of forecourt customers. In many markets a single brand for all sites is being eschewed for dual forecourt brands with which customers can identify clear and consistent brand values, which can ensure suppliers a larger market share at each end of the motoring market.”


Kurtz says fuel retailers have a good appreciation of the power of the brand in fuel retailing – after all, a large proportion of advertising and marketing is brand-related, with little focus on specific products or services offered. Some major brands are able to command a price premium on fuel – Shell Optimax for example – often by virtue of a well-equipped forecourt, while others are renowned for value, with customers willing to forego certain comforts or service in order to save money.

“As the range and quality of offerings improve, we are seeing more customers being attracted to forecourts because of the services on offer, while at the same time, rising pump prices are encouraging customers to spend more time and effort on finding lowest-priced fuels,” says Kurtz. “In this context we have seen successful launches of dual brand offerings by oil majors, primarily differentiating the simple, low-price unmanned sites with the well-developed manned offerings, as motorists become more clearly divided between price-seekers and service-seekers.”

Datamonitor interviewed more than 40 retail managers across Europe, asking them to predict how the breakdown of forecourt customers was going to change to 2007, with a view to understanding how the market may diverge between price-seekers (interested in a low price of fuel and less interested in non-fuel services) at one end, and service-seekers (those looking for a full range of convenience and top-up shopping and other services) at the other.

And a falling number of convenience-seekers (looking for a mix of fuel at a reasonable cost and a small selection of convenience items) in the middle.

Respondents predicted that by 2007, within the private motorist segment, the share of price seekers in Europe would reach 42 per cent from 37 per cent, with service-seekers particularly rising in southern Europe. In the business sector, the service-seeking segment is expected to grow from 25 per cent to 31 per cent, with price-seekers also increasing in certain areas as corporate cost-cutting encourages greater use of low-price options.

Various companies across Europe have already created different brands for different concepts. In many cases this is to differentiate the unmanned stations from the manned, but Total in France has created two distinct offerings across its manned network of Elf and Total sites to appeal to different customer segments.

Total has focused on the service element across its Total sites and ensured consistency, as well as introducing products that tie in with macro trends in convenience retailing. Meanwhile, Elf sites focus more on low costs and efficiency. For example, the Elf sites do not accept oil company cards or loyalty cards, have a reduced range of products and services, and rely more on throughput to maintain healthy profits.


In Denmark several retailers have introduced unmanned networks under a different name. Statoil, for example, has introduced an unmanned offering – 1-2-3 – as a reaction to the lead taken by other suppliers who introduced unmanned sites into the country, converting poor-performing stations and using local marketing to attract customers.

While the Statoil and 1-2-3 operations are all managed within the same operation, Tinq in the Netherlands operates a wholly autonomous operation from its parent Shell, with most of its strategic decisions devised and delivered independently. Tinq maintains low costs and high efficiency by avoiding the use of loyalty cards, yet distributes Tinq credit cards to allow motorists to pay for their fuel, and receive additional rebates on fuel prices.

For companies devising dual brand strategies on the forecourt, Kurtz says it is important to consider all aspects of price, promotion, product and placement, and differentiate between each to focus on their target audience.

For service-focused offerings, products should reflect the overall emphasis on quality and fit into general mega trends of health, convenience and pleasure. Above all they should focus on non-price benefits to customers. For the price-conscious, the offering should be simple and easy to

use, enabling customers to fill up quickly.

Given the need for higher volumes to make up for lower margins, retailers should also focus on supply chain optimisation and sourcing efficiencies to consistently deliver lower-priced fuel, according to Kurtz.

“Finally, companies should avoid occupying the middle ground,” he says. “It is easy to replicate, often confuses the customer, is not as cost-efficient as unmanned operations, nor does it deliver such a differentiated service as a premium offering, whereby companies effectively offer low prices without matching low costs.

“As forecourts develop in opposing directions – service at one end and price at the other – so customers across Europe are forecast to favour certain brands as they diverge more towards price-seekers and service-seekers. Retailers must focus on competing either on low prices or on offering a recognised, premium service. Those brands sitting in the middle will suffer at the hands of new or growing competitors at either end of the market.”