Wally Olins, one of the most knowledgeable writers and thinkers on brand management in modern times, wrote back in 1989 in his seminal book on “Corporate Identity”, that “…oil companies are poor retailers.” The irony was that then, as now, the brand identities of Shell, BP or Esso were amongst the most ubiquitous in the market-place. Today with over 40,000 petrol stations in around 100 countries Shell is by some distance the most visible retail brand in the world. Other great and international retail brands like McDonalds or Starbucks or HSBC have recognised the power inherent in their brands and have ensured not only that their brand image is constantly renewed to be fit for purpose but also that it is extensively promoted in mass media advertising and other communications activity. Meanwhile Shell and the rest in the oily world only occasionally burst onto the media at all – and then with ever more questionable and disingenuous “corporate” advertising self-praising their green credentials or their capability for innovation and lateral thinking. Sadly such innovations never seem to be directed at their motoring customers despite the fact that there are countless millions of them visiting their myriad of retail outlets every day.
So what then should we make of the trackside advertising for “Shell V-Power” that you will see on television at the Hungarian Grand Prix and throughout this year’s F1 season? You may not know what “V-Power” is; it would be fairly surprising if you do. The brand is a brand of petrol that Shell would like you to buy and pay a premium for. Yes, that’s right, in a time when petrol prices are at a record high Shell would like you voluntarily to actually pay even more for your fuel every time you fill up your tank. At the time of writing you can buy standard unleaded petrol here for around 122p per litre or, if you wish, you can buy “V-Power” for around 131p per litre – a premium of around £5 per tank full. If you follow this link you will see Shell’s argument as to why you should do this.
Now I am not going to try and argue the merits of premium fuels - suffice it to say, that although my car will go perfectly well on standard fuel (as will all modern cars) I do pay the premium myself. This is because in my long Shell career I was impressed by the technological skills of our fuel development people and I do believe that V-Power is better for my car and that it provides performance advantages. Silly me? Maybe, but that’s my choice.
But back to marketing and to Wally Olins charge that oil companies are lousy retailers - which they are. What other branded retailer would have a premium offer at their outlets and not advertise or promote it? Shell has sorted the technology, the manufacturing and the distribution logistics to make V-Power available at their outlets in the UK and elsewhere in the world - but they hardly spends a cent in creating a “reason to believe” about the brand. Sure they will get some brand name recognition from their trackside advertising and from their point of sale displays on site. That is a necessary condition for the promotion of a differentiated product brand such as V-Power – but it is not a sufficient condition. If you want the punter to stump up nearly 10p per litre more for the premium in these difficult times then you absolutely must give them a reason to do so. You do this by presenting the benefits not on websites (helpful support though that can be) but with mass media advertising. The fact that you, gentle reader, may at best be vaguely aware of the V-Power brand is because Shell has never tried very hard to make you aware of it - and not at all to create brand preference for it.
Shell meanders on with its appeal to what it calls its “special publics” with its highly questionable and, I suspect, largely ineffective corporate advertising. Full page ads in The Economist don’t come cheap but every week it seems Shell is there promoting its green credentials. Meanwhile when it has, as I believe it has, a product in V-Power that many might choose to try if they knew about it they comprehensibly fail to give these people a reason to do so. No doubt V-Power sells a bit to folk like me who are either deluded or in the know. Meanwhile the rest of the petrol market sits low in the public’s esteem and it is simply a commodity that most people try and get for the lowest price whenever they can. And if they see Lewis Hamilton whizzing past a hoarding at the Hungaroring which carries the “V-Power” brand logo they might wonder what it is. If they do wonder then Shell won’t be telling them – which is why Shell and the rest of the oil industry have such deservedly low reputations as marketers.