Independent Gasoline Marketing, Spring 1996

Getting Your Fair
Share: A Case Study
in Market Analysis

Although different fleets have different needs, providing a
few basic services will satisfy many of them, according to
a survey of more than 1,300 fleet operators.

Are you getting your fair share of the fleet business in your marketing area? A recent study conducted by Toledo, Ohio-based Havill & Company, Inc. showed that 40 percent of fuel sales are to fleet vehicles; and the percentage would have been even higher if figures had been available for mini-fleets of one to three vehicles including small truck and bus fleets, but excluding car fleets of less than four cars.

To help assess the profitability of a potential fleet fueling site, consider the following two profiles developed for Lubner Petroleum, both situated within a three-and-a-half-mile radius of Lubner Petroleum outlets. (See Table 1 and Table 2. These figures are compiled from Dun and Bradstreet fleet data for two actual SIGMA marketer stations, but the company’s name is fictitious.)

FACILITY ONE:
Market: Mainly residential
Total Fleets: 272
Total Vehicles: 2.773
Residential Fuel Consumption: People who live within two miles of the outlet buy more than 30 million gallons of fuel a year for their personal vehicles (based on statistical averages).
Fleet Fuel Consumption: 10-million gallons-per-year, 6.3 million gallons from the over-the-road segment.
Advantages: Accessible to over-sized vehicles. However, that may not be necessary to serve the over-the-road market. As defined in the Havill study, over-the-road fleets are "any vehicles used in for-hire transportation of either passengers or cargo." Well over half of this category is taxicabs and other passenger sedans. It also includes various kinds of bus fleets and express package fleets, as well as a few trailer-pulling tractors. Lubner will need to look a little deeper to see what kinds of over-the-road fleets are in his market.

In addition, Facility One may be positioned to generate good traffic from fleets of service, construction, and wholesale businesses.

FACILITY TWO:
Market: More industrial area.
Total Fleets: 367
Total Vehicles: 3,802
Residential Fuel Consumption: Less than 5 million gallons-per-year.
Fleet Fuel Consumption: 18.5 million gallons-per-year, primarily from the over-the-road category. Construction, wholesale, and service companies in the area also operate more than 1,000 vehicles.

Getting your share
How much of that volume should Lubner be getting? That depends on how much competition there is in the area, both from other retail facilities and from privately owned on-site fleet refueling facilities, says Joe Slagel, a consultant for Havill. If each Lubner outlet competes with 19 comparable outlets for the fleet business, Facility One should be pumping more than 500,000 fleet gallons-per-year (43,000 gallons-per-month), and Facility Two should be selling 925,000 gallons-per year (77,000 gallons-per-month).

In Lubner’s case, both outlets stack up pretty well against local fleet requirements, says Christopher Oliver, the Havill consultant on the account (see Table 3). Both have air and water, 24-hour access, oversized vehicle access, ample parking, and fleet card acceptance capabilities.

The most significant omissions seem to be the lack of dedicated fleet islands and dispenser-mounted card readers at both facilities, and high-speed refueling nozzles at Facility One—features deemed important to about 25-30 percent of the fleets in the area.

The next step
At this point, Lubner is in a good position to evaluate whether he’s getting his share of the local fleet market and make informed judgements about how to improve that share. Since this marketer is well positioned to go after fleet business in terms of location and equipment, the next step is to develop strategies targeted at specific fleet customers.

How? Phone books, city directories, intuition, networking, and plain, old observation are good starting points to help identify potential fleets. In addition, marketers can use information services such as Dun and Bradstreet’s TRINC database—a listing compiled from state vehicle registrations—to create a basic fleet database, or an outside consultant such as Havill & Company could be hired to develop a customized computer customer directory.

WHAT’S HOT, WHAT’S NOT

In their 1995 study, Havill asked more than 1,300 fleet operators dozens of questions about what was important to them in a fueling outlet, including questions about the facility itself, fueling equipment, payment methods, merchandise offerings, and vehicle services. Here’s a sample of what they learned.

MUST-HAVES

• Fueling site close to the marketer’s home base or work site.

NICE, BUT NOT ESSENTIAL

• Air and water
• 24-hour access
• C-store items
• Take-out food
• Car washes

NOT AS IMPORTANT

• Parking areas
• Dedicated fleet islands
• Special equipment such as high-speed nozzles and card readers at the dispensers
• Vehicle identification systems built into the nozzle

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GIVE ‘EM WHAT THEY WANT

At SIGMA’s Annual Meeting in Houston last November, Carroll Fuller, coordinator of the driver education program at Houston Community College, told marketers what he looks for when choosing a fuel supplier:

• Price. Any fleet manager has to live within a budget, says Fuller.
• Convenience. Fuller told marketers he can get the lowest price by fueling up at school bus terminals and other bulk fueling sites. But those sites are in inconvenient locations and are open during inconvenient hours. "Convenience at a reasonable price is a little bit better than price alone."
• Safety. Fuller explained that most of his fleet is driven by a female instructor and teenage students. "They’re not very comfortable getting out at some locations to get fuel," he said.
• Service. Fuller also is concerned about getting good fleet management features, including the ability to control purchases and track odometer readings.
• Automation. Automation, said Fuller, provides 24-hour access and do-it-yourself convenience. And it eliminates double trips into the store-—once to get the purchase approved and another for the final arrangements.
• Easily identifiable signage. The signs identifying fleet fueling programs "are never big enough for my blind eyes," Fuller complained, "and they always seem to be hidden."

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