Gasoline – no different to detergent?
Gasoline or fuel brands on the German market were virtually indistinguishable
In its "gas station special", the Energie Informationsdienst (Energy Information Service) recently published the results of our study on brand differentiation in the gas station business. Read the English version of the article here:
The leading gas station operators all have a similar brand profile in the eyes of German drivers, according to the findings of a Roland Berger study.
What do detergents and fuels have in common? Irrespective of what's on them or in them, consumers in Germany see them as almost totally substitutable products. 84 percent of the respondents in a 2009 survey conducted by advertising agency BBDO said that the gasoline or fuel brands on the German market were virtually indistinguishable to them. That was the biggest percentage in the survey, and it was followed by the above-mentioned detergent (81 percent), as well as energy (74 percent) and credit cards (71 percent).
For German gas station operators like Aral, Shell, Esso, JET, OMV and Agip, that must have come as quite a shock, given that some of them spend enormous amounts of money on advertising to position their brands. They are all saddled with the problem that their brands are not sustainably differentiated from the customer perspective: drivers see them as comparable and therefore substitutable, says Tim Bohmann, head of the Oil and Chemicals Competence Center at Roland Berger Strategy Consultants.
The reasons for this are as obvious as they are simple. For consumers, fuel is a quasi-homogeneous commodity that has difficulty repeatedly awakening the consumer's "interest" in new ways. That's because the consumer buys it frequently and therefore more or less knows it inside out. The BBDO findings largely coincide with those of a study of 323 gas station customers conducted this year by Roland Berger. Here, too, the vast majority of respondents confirmed that the leading gas stations all have a similar brand profile as far as they could see, although there was a tendency for Aral and Shell to have a slight advantage on this count, notes Bohmann.
However, the best performer according to the Roland Berger study was the Conoco-Phillips subsidiary JET. This is where the aspect of price comes in, in that JET has managed to give itself a clear positioning as the best on price.
The leading gas station operators all have a similar brand profile in the eyes of German drivers, according to the findings of a Roland Berger study.
What do detergents and fuels have in common? Irrespective of what's on them or in them, consumers in Germany see them as almost totally substitutable products. 84 percent of the respondents in a 2009 survey conducted by advertising agency BBDO said that the gasoline or fuel brands on the German market were virtually indistinguishable to them. That was the biggest percentage in the survey, and it was followed by the above-mentioned detergent (81 percent), as well as energy (74 percent) and credit cards (71 percent).
For German gas station operators like Aral, Shell, Esso, JET, OMV and Agip, that must have come as quite a shock, given that some of them spend enormous amounts of money on advertising to position their brands. They are all saddled with the problem that their brands are not sustainably differentiated from the customer perspective: drivers see them as comparable and therefore substitutable, says Tim Bohmann, head of the Oil and Chemicals Competence Center at Roland Berger Strategy Consultants.
The reasons for this are as obvious as they are simple. For consumers, fuel is a quasi-homogeneous commodity that has difficulty repeatedly awakening the consumer's "interest" in new ways. That's because the consumer buys it frequently and therefore more or less knows it inside out. The BBDO findings largely coincide with those of a study of 323 gas station customers conducted this year by Roland Berger. Here, too, the vast majority of respondents confirmed that the leading gas stations all have a similar brand profile as far as they could see, although there was a tendency for Aral and Shell to have a slight advantage on this count, notes Bohmann.
However, the best performer according to the Roland Berger study was the Conoco-Phillips subsidiary JET. This is where the aspect of price comes in, in that JET has managed to give itself a clear positioning as the best on price.
Under Tim Bohmann's management, a group of experts identified methods of brand differentiation for hard-to-differentiate services
So, are all of the other players in the German gas station market destined to remain prisoners, so to speak, of their uniformity? This is exactly what Roland Berger wanted to find out. They wondered whether there might be strategies for brand differentiation that could even work in the German gas station market.
To date, says Bohmann, companies that do attempt to achieve differentiation operate overwhelmingly downstream of the fuel segment in the services they provide (with the exception of high-performance fuels) and rarely with a direct link to the brand. And they also frequently copy each other's service offering, thereby cancelling out any differentiation successes and quickly causing the brands to be perceived as substitutable once more, explains Bohmann.
Under his management, a group of 15 experts, encompassing both Roland Berger consultants and experts from the gas station operators, set to work identifying methods of brand differentiation for hard-to-differentiate services – of which fuels and gas stations are examples. Six methods were found, four of which could be transferred to the German gas station market. The experts believe that brand differentiation in the gas station business can be achieved by
Method number 6, design-oriented brand management, such as the approach pursued by Apple in the computer segment, was rejected by the experts as an option for the German market, explains Bohmann.
The experts were keen to test whether the first four methods (could) actually manage to enhance a brand's image. They did so by conducting an empirical study of test persons' views.
In the case of Agip, for instance, the Italian firm – now operating under the brand of its parent firm ENI – was identified by the experts as a typical example of the differentiation by means of "geographic origin and personality". The test persons were first asked about their current perception of the Agip brand. They were then "manipulated" or "stimulated", which involved showing the test persons advertisements and press releases meant to enhance the image of the brand.
In Agip's case, attributes like "passion", "power" and "Italian sports car flair" were emphasized, not only in relation to certain offerings from the shop and bistro, for example, but also – and in particular – from the company's core service offering of fuels.
This has led to proven success, stresses Bohmann, as the analysis of the results of both studies concluded (see chart 2). "The Agip brand was able to obtain a distinctly positive influence from the manipulation, in other words from the emphasis of its Italian origins," according to the Roland Berger expert. Particularly the personal and social benefit attributes and the uniqueness of the brand or the brand as part of one's personal values were enhanced in relation to the status quo. And the overall perception, the brand's global image, was also rated more positively by the test persons.
The same is true for the other methods of differentiation. For Aral, authentic innovation leadership proved to be an effective brand differentiation strategy. Placing the emphasis on past innovation successes – Aral was the first company in Germany to bring unleaded fuel onto the market – the firm wants to highlight the fact that it has been driving the development of innovative fuels ever since, says Bohmann: "In all benefit dimensions, the customer's view of Aral improved by emphasizing its historic and future fuel competency."
Conclusion: The German gas station market does offer companies ways of sustainable brand differentiation, providing they concentrate on certain strengths and consistently underline them in the customer's eyes with appropriate marketing activities.
To date, says Bohmann, companies that do attempt to achieve differentiation operate overwhelmingly downstream of the fuel segment in the services they provide (with the exception of high-performance fuels) and rarely with a direct link to the brand. And they also frequently copy each other's service offering, thereby cancelling out any differentiation successes and quickly causing the brands to be perceived as substitutable once more, explains Bohmann.
Under his management, a group of 15 experts, encompassing both Roland Berger consultants and experts from the gas station operators, set to work identifying methods of brand differentiation for hard-to-differentiate services – of which fuels and gas stations are examples. Six methods were found, four of which could be transferred to the German gas station market. The experts believe that brand differentiation in the gas station business can be achieved by
- Highlighting authentic innovation leadership
- Playing the geographic origin and brand personality card
- Extending the brand functionally
- Positioning what's known as a presenter, a unique selling proposition, as a reflection of the brand.
Method number 6, design-oriented brand management, such as the approach pursued by Apple in the computer segment, was rejected by the experts as an option for the German market, explains Bohmann.
The experts were keen to test whether the first four methods (could) actually manage to enhance a brand's image. They did so by conducting an empirical study of test persons' views.
In the case of Agip, for instance, the Italian firm – now operating under the brand of its parent firm ENI – was identified by the experts as a typical example of the differentiation by means of "geographic origin and personality". The test persons were first asked about their current perception of the Agip brand. They were then "manipulated" or "stimulated", which involved showing the test persons advertisements and press releases meant to enhance the image of the brand.
In Agip's case, attributes like "passion", "power" and "Italian sports car flair" were emphasized, not only in relation to certain offerings from the shop and bistro, for example, but also – and in particular – from the company's core service offering of fuels.
This has led to proven success, stresses Bohmann, as the analysis of the results of both studies concluded (see chart 2). "The Agip brand was able to obtain a distinctly positive influence from the manipulation, in other words from the emphasis of its Italian origins," according to the Roland Berger expert. Particularly the personal and social benefit attributes and the uniqueness of the brand or the brand as part of one's personal values were enhanced in relation to the status quo. And the overall perception, the brand's global image, was also rated more positively by the test persons.
The same is true for the other methods of differentiation. For Aral, authentic innovation leadership proved to be an effective brand differentiation strategy. Placing the emphasis on past innovation successes – Aral was the first company in Germany to bring unleaded fuel onto the market – the firm wants to highlight the fact that it has been driving the development of innovative fuels ever since, says Bohmann: "In all benefit dimensions, the customer's view of Aral improved by emphasizing its historic and future fuel competency."
Conclusion: The German gas station market does offer companies ways of sustainable brand differentiation, providing they concentrate on certain strengths and consistently underline them in the customer's eyes with appropriate marketing activities.
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