ANALYSIS: Petrol retailers push sexy prizes

Fuel Texaco's campaign shows how the sector is turning to tactical promotions in the search for loyalty.

This month, Texaco launches its first pan-European promotional campaign, with MG Motors and Virgin Radio in the UK set to headline the multi-million pound push.

The objective is familiar. "Petrol consumers are notoriously promiscuous and we hope this promotion will put the focus back on us," says Mick Jones, manager, marketing and advantage Europe at Texaco.

Jones admits the activity isn't revolutionary for Texaco, but what it does do is highlight the way the sector is striving to combine its traditional focus on loyalty with tactical promotions aimed at increasing footfall.

Points collection schemes for ceramic premiums are out; sexier prizes are in. In its current push, Texaco is offering customers the opportunity to win an MG a day in the UK, where the bulk of its spend is concentrated.

It has teamed up with Virgin Radio and promotional leaflets at 1,000 UK sites direct customers to the station's Pete and Geoff breakfast show.

When a trigger track is played on air, customers can phone the station, answer a question and potentially win an MG. There are 20 cars up for grabs and the campaign runs until the end of October.

Big brand partnerships

The European promotion runs on a smaller scale, with a total of ten cars up for grabs via a gamecard mechanic running across 172 sites in Belgium, 245 in the Netherlands and 13 in Luxembourg. Aside from the MGs, other gamecard prizes are available, including Siemens mobile phones.

As Jones points out, the firm has linked with big brands in the past.

"We have teamed up with Mercedes and Disney in recent years, so we needed something just as fitting this time," he says. "MG has a great heritage, like Mercedes, while Virgin Radio has national coverage and serves as our key media partner. The campaign pulls in listeners to Virgin Radio, promotes MG as an aspirational brand and, we hope, will increase footfall to our petrol outlets."

The promotion and supporting TV creative, through Perspectives Red Cell with media planning and buying through Mediaedge:cia, builds Texaco's reputation for partnership marketing, according to Nigel Owens, a director at Perspectives. "Such big brand names ensure Texaco stands apart from its competitors and the 'live' element with the radio engages the consumer further," he adds.

But for all Texaco's big brand partnerships, it's not unique in its offer in terms of the perceived value of the premiums it is offering or in linking its tactical push to its loyalty scheme. Competitor petrol retailers are thinking along the same lines. Though both Shell and Total have their own loyalty schemes, they still run ad hoc promotions to drive sales.

Shell gave away 40,000 pairs of British Airways tickets in one promotion and linked with the British International Motor Show to give away a car up to the value of £65,000 in another. Total teamed up with MGM's Die Another Day film to give away a stack of goodies, including a Bond-location holiday.

Added benefit

Just as Jones is keen to stress that this push sits alongside Texaco's relaunched WE.O.U. loyalty scheme, with the campaign tailored to give added benefit to members through a mailing offering three MG Race Days, so does his competition.

"Petrol retailers won't move away from loyalty schemes but all of them, us included, are running more tactical promotions on top to drive trial and repeat purchase in order to stand out," says Noel Kubala, Shell UK promotions and communications manager.

Total marketing executive Fiona Over says Total is committed to a full promotional calendar for 2004 while keeping loyalty front of mind. "We're just getting our loyalty scheme to work better through targeting and cross-promotions," she says.

Mighty levering

The sector's commitment to both loyalty and tactical promotional marketing comes as BP begins to lever the might of its loyalty partnership with Nectar. A customer loyalty report from research analyst Mintel stressed the strength of loyalty schemes earlier this year by concluding it was difficult to visualise a "dream ticket" coalition of issuers to rival Nectar.

The report maintained that though the number of customers signing up to petrol-based loyalty schemes had increased by only one per cent since 1999, the arrival of Nectar is likely to attract motorists who were not previously interested in petrol loyalty schemes.

But it warned that the number of loyalty schemes in the market meant only those that are consistently invested in would maintain their hold.

With none of the petrol retailers having yet managed to steal a significant march on competitors in the loyalty stakes, tactical promotions have become key in an increasingly tough marketplace. For Texaco, the lure of winning an MG will be enough to draw in more customers in the short term. But the real battleground remains loyalty, and the true test will be just how much the tactical push can encourage long-term uplift.

BRAND HISTORY

1986: Launch of Global Club loyalty scheme

1997-2001: Sponsors ITV's Formula 1 racing coverage: first broadcast

sponsor

1999: Appoints HHCL; parts company with IMP after 15 years

2000: Treasure Hunt promotion with Mercedes, through HHCL

Sep-Oct 2002: Disney campaign with Lilo & Stitch, through HHCL

January 2003: Appoints Y&R, including Perspectives Red Cell

February 2003: Relaunches loyalty scheme WE.O.U.

October 2003: First pan-European campaign, with MG and Virgin Radio

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