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The U.S. EPA Regulated A Syndicated
Market Research Study Forecasting Structural
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More Study Findings...
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Introduction
And Overview
Several events, including station compliance with the EPA regulations, recent mergers and acquisitions by major oil companies, and new refueling technologies, have influenced how major oil companies conduct their businesses. Aging refineries, EPA regulations, and Clean Air Act mandates calling for reformulated fuels have increased refining costs and pushed down margins. These factors, coupled with the recent surplus of crude oil, are causing major oil companies to look for new ways to increase downstream profitability by streamlining costs and administrative operations. The recent joint venture announcements by Shell-Texaco, Marathon-Ashland, Tosco-Unocal, BP-Amoco, and Exxon-Mobil are examples of the underlying pressures on marketers to reduce costs and create synergies. To compete in this new marketplace, retailers are in need of statistically accurate and reliable data to align themselves with other major oil companies, jobbers, and dealers. Forecasts of infrastructure changes resulting from consolidation and rationalization of facilities are necessary as well. This latest syndicated study by Havill Consultants contains rarely found data on these changes within the retail market. This research will allow subscribers to benchmark their company’s position in terms of compliance with the EPA regulations. The study examines the compliance situation by type of ownership (major oil, jobber, dealer) and by compliant equipment (tanks, piping, leak detection, and spill and overfill equipment, etc.). As a reader, you will understand exactly how compliance with EPA regulations will affect your business. In 1995, Havill Consultants published the well-respected study entitled The DOE-EPA Regulated Commercial Fleet Market Fuels, Equipment, and Services Forecast, 1994 - 2000. That research identified five billion gallons of fuel potentially available to retail marketers as a result of private fleet operators deciding to refuel off-site. The change in refueling practices was primarily due to UST facility closures. The 1995 research also guided marketers into building stations that met the unique needs of specific fleet customer segments. With a variety of refueling locations available, customers choose station formats that provide the most convenience. This new study on the retail refueling market provides insight into the existing make-up of facilities, including c-stores, truck stops, travel plazas and card locks, and the changes in the retail population through the year 2000. Another way marketers can compete in this new retail environment is by offering the latest refueling technology at their facilities. This study allows subscribers to gain insight into the facility technology other marketers plan to implement. Your team will be able to benchmark its position in terms of advanced dispenser features, such as card readers, cash acceptors, touch screens, video screens, and payment methods. The data will raise questions as to whether your budget will be able to supply stations with the latest trends in dispenser technology. Most importantly, the research allows you to understand the benefits that other marketers are experiencing through the use of these products. Understanding how industry players are creating business and profits through "value added" amenities, such as fast food and car washes, is quickly becoming an essential part of marketer’s business plans. This study examines the number of facilities currently using co-branding and car washes, and the number that will be installed in the future. Decision-makers at major oils, jobbers, and dealers were interviewed to determine which companies they are co-branded with, what car wash methods are most used, and most importantly, whether these efforts are paying off. One of the most prominent recent events to affect the industry is the mergers and acquisitions by many major oil companies. This study sets out to determine whether mergers will affect marketer’s pricing strategies. You will gain insight into whether or not merging oil companies plan to use pricing as a competitive advantage. The opinions of merged marketers regarding re-branding of their stations will aid in making strategic decisions to compete. Hypermarkets are making a significant impact in the modern petroleum retailing environment. They can be seen as both a threat and an opportunity to major oils. These stores are able to offer discounted gasoline at the facility as a loss leader, which enables them to draw customers into their hypermarket. The research provides an understanding of how other marketers are dealing with pricing strategies and positioning to compete with hypermarkets. On the other hand, marketers are now treating this trend as an opportunity. Major oils have an opportunity to create new branded partners at these new facilities. In addition, jobbers have an opportunity to supply fuel to these additional fuel operators. Readers will have access to statistical and demographic information not readily available on hypermarkets. Havill Consultants has completed over 45 proprietary and syndicated petroleum industry studies during the past decade. Havill Consultants has established a reputation in the petroleum industry as a primary source of retail and commercial marketing knowledge. Articles have appeared in numerous industry publications, such as NPN, JPM, Petroleum Marketing Management, CSP, Modern Truck Stop News, and SIGMA, exposing the findings. National Petroleum News has called our research "the most detailed analysis and outlook to date on the impact of the EPA's UST regulations on the petroleum marketplace." Our reputation for developing accurate industry forecasts is a direct function of our proven methodology. Petroleum marketers and manufacturers have been solicited to understand their ideas regarding current industry issues. Based on their feedback, a questionnaire was developed and re-submitted to contributors for feedback and accuracy. We are confident that this new research study will be used by petroleum marketers and equipment manufacturers as a primary source of planning data for developing their retail market strategies through the year 2000.
----------------------------------------- Research ObjectivesThe primary purpose of this research is to forecast the changes that will occur in the retail refueling market between 1997 and 2000. The report forecasts changes in the number and format of facilities and provides an accurate benchmark of the industry structure and current compliance with the 1998 EPA UST standards. Subscribers will also gain valuable insight into evolving technologies and industry trends. Overall, the primary objectives of the report are to:
----------------------------------------- Havill Consultants has a proven track record of developing accurate industry forecasts for both syndicated and proprietary research. From our experience, the most reliable information source for predicting future trends and purchasing patterns comes from the end-users themselves. For this study, in-depth interviews were conducted with executives and engineers at major oil companies, independent jobber organizations, dealers, and convenience store companies. These interviews were supplemented with prior Havill research, as well as secondary research and interviews with industry participants. In preparation for this study, Havill Consultants conducted the background research necessary for achieving the study objectives. Primary information sources included government agencies and reports, as well as petroleum industry trade journals and associations. Secondary resources were scoured to produce the latest updates on market conditions. These steps were necessary to ensure the statistical accuracy and thoroughness of the data. In addition, petroleum industry executives were given an opportunity to review an early version of the questionnaire in order to add pertinent issues and suggest topics to include. This process yielded the objectives and issues for this study. Our research follows a proven methodology. Issue ballots and questionnaires were circulated to over 50 marketers of petroleum products, equipment, and services. All questionnaires were pre-tested by conducting a dozen interviews, analyzing the results, making any necessary revisions, and then continuing the cycle until all of the necessary refinements had been made. This study employed a stratified random sample of small and medium-sized petroleum marketers. Additionally, interviews with several of the top 50 major U.S. gasoline marketers, supermarket chain operators, and other primary industry sources resulted in the completion of over 500 interviews, representing over 175,000 facilities. As interviews were completed, they were entered into Survey System®, our full-featured market research software program. Market survey data from each questionnaire was computer tabulated and projected to the population. Equipment statistics were based on both primary and secondary research. Statistical procedures were applied to establish the significance of the research findings. Havill & Company personally managed all aspects of the project. Each of the professionals assigned to this project has extensive petroleum marketing research experience. They shared responsibility for the total project, including secondary research, questionnaire design, interviewing, analysis, and writing the final report. All study findings were fully documented in a report of approximately 500 pages. Where appropriate, graphs were used to visually support the analysis. 
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tudy
Findings
Many
facilities do not meet requirement
As many as 92,000 facilities may still have tanks that will not meet
requirements on Dec. 22, 1998. About 50,000 of the projected noncompliant
sites are retail (independent oil and convenience store) facilities and the
remaining 42,000 are industrial/commercial fueling facilities. (Major oil
company - about 32,000 in all - are virtually in total complaince with the
regulations, according to the research.)
Compliance
costs and economic factors effect many facilities
According to Havill's previous research findings, up to 11,000 retail
facilities and 25,000 industrial/commercial facilities may close because
compliance costs in relation to gasoline throughput and other economic
factors are too high to bear. It is clear that numerous retailers who
earlier reported plans to upgrade, replace or close tanks to achieve
compliance changed their minds or could not accomplish the task.
Opportunities
for marketers!!
If there is a silver lining on the other side of this cloud, it is for
marketers that have remained in the game and can take advantage of some of
the opportunities it offers. The closing of 2,998 retail and private
facilities this year will present opportunities for marketers, both from the
possibility of acquiring retail facilities and from increased demand for
fuel from closing private facilities.
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Deliverables
The report is based on the outline shown below. Each chapter discusses a particular topic. An executive summary provides an overview and summary of the major issues. Each client receives three copies of the final report. In addition to a hard copy report, each subscriber will have access to the document via the Havill Consultants Internet site. This capability is particularly helpful for companies that would like to share the research information with managers and offices in multiple sites.
Note: Final report is arranged in a different order than the above outline.
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Who
will Benefit From The Study
This study grew out of requests by our clients for industry statistics and forecasts to drive their business planning and project development activities. During the design phase of this research, we discovered that each company had information needs specific to their business. Information on industry structure and technological change were of interest to both petroleum marketers and equipment suppliers. Additionally, petroleum equipment suppliers wanted a forecast of their market opportunity after the 1998 UST deadline through the year 2000. Petroleum Marketers
Petroleum Equipment & Service Providers
----------------------------------------- Retail Refueling Market Project Team To ensure that the study was thorough and complete, only consultants with experience in previous syndicated studies were assigned to the retail refueling market research team. This team is available to subscribers for consultation and follow-up projects. Havill & Company consultants routinely conduct both syndicated and proprietary studies of the petroleum market. Our research studies have covered the full gamut of refueling markets and equipment. From this research, we have also developed extensive databases of contractors, distributors, petroleum marketers, and commercial fleet owners. Past research studies include:
----------------------------------------- The subscription fee for this study is $17,000 for those subscribers submitting signed contracts. To subscribe, please fill in the purchase agreement and return one copy to us. We are confident you will find that we have earned our reputation for achieving significant, long-lasting results for our clients.
----------------------------------------- This
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