OK, all you drivers out there - this thought may have crossed your mind. Why is the fuel at a Mobil/Shell/BP, etc. gas station priced higher than the average small town 'no-name' gas station? According to this ABC News report, it's simply because of the brand name!
According to scientific lab tests carried out on various brand-name and generic gas fuels, results show that the difference between a generic gas and a brand name gas is technically, zero. Experts believe that the brand name gas suppliers (ex: Mobil, Shell) are simply basing their prices on simple brand marketing strategies: 1) Brand loyalty 2) Brand recognition. The fact that most consumers feel comfortable buying brand name gas as opposed to generic gas, tells you that this strategy has been quite successful. For example, consumers may chose to buy fuel at a brand gas station because of it's customer service (ex: 'brand gas station' credit card usage, quick payment methods). In other words, consumers are willingly to pay extra for a brand name gas b/c of the added incentives and 'appearance-engineered' quality attributed to the brand name. Hence, the extra cents you pay for 'Mobil/Shell' gas is the 'added value' created via the supplier's brand-name. Excellent price strategy!
Link to video report:
1 comment:
The primary difference between the gasoline coming out of a Shell or Mobile pump versus one from a generic gas station is the level of potential risk. Generic gas stations are also supplied by the big oil companies - however, they purchase the re-filtered bottom quarter of gasoline storage containers at a discount. The idea is that as the bulk storage container is further drained condensation and small particle accumulation become an increasing factor in affecting fuel quality/vehicle performance/etc. Therefore this gasoline is then re-filtered and sold at a slight discount. Really, the only difference between your Ricky's Gas and Mobil is that if the filtration and QC process were not executed smoothly you could not be getting exactly the quality of fuel you expected. Which with repeated long term use could affect your engine lifespan. (99.99% of the time the quality is just as good as the brand anyways)
An interesting study would be to see how much the brand name is worth as prices climb, and at which point different consumer segments switch to generic where available.
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