Friday, December 05, 2008

How NOT to Compete in the Marketplace


What is up with this?

On the southern side of our town in California, an Arco's gas price--$1.83--and the Shell across the street--$2.37.


On the northern side of our town, a Chevron--$1.89--and the Shell across the street--$2.89.


Oh. And the starting gas price at another Shell in town, with no other stations in sight?

$1.89.

Any creative minds out there want to take a stab at explaining this one?

17 comments:

HollyMag said...

If only any of it made sense!

Deborah said...

if there's anyone who's going to that shell across from the chervon, they are either so filthy rich they don't care or just plain dumb.

Sunny said...

Now that's just brilliant! See, that's why you need to come back to ID. I haven't seen any such madness in this part of the world! :o)

I just finished Dark Pursuit and LOVED it! I thought I'd be too chicken but I plucked those feathers and I'm glad I did!! (I posted a review on my blog)

C.J. Darlington said...

I wonder if it's this way because the Shell still has old gas that they bought at a higher price. If they sell it for less than what they are, they'll lose a lot of money. But it does seem a bit crazy because they're losing money now by having the Chevron so near with those lower prices.

Susan Storm Smith said...

If it wasn't so stupid I would laugh

Top said...

It's obvious, Shell Oil is caught in a rip of the Time Space Contiunuum. Those stations are not a good palce to purchase fuel, but if you store some fruit there it will keep for weeks.

Kathleen Fuller said...

You're right. This boggles. Here in Cleveland when gas prices were sky high there was a guy charging over 4 bucks a gallon, while everyone else was hovering at around 3.89. His rationale was that most of his business was car maintenance, not selling gas, and his loyal customers would bring their cars in for maintenance and buy gas because it was convenient. Maybe that's the case with these stations...but who knows. But you'd think they'd want to be competitive.

Nicole said...

Shell is notoriously high, but they must have their fan favorites because they're always higher than everybody else. Whenever I've had to use their gas, my various cars have "pinged". I'm not a fan for multiple reasons.

Kristina said...

I may have you beat, Brandilyn. In our little town in Ohio we have not one but two Speedway gas stations right across the street from each other. One stays open all night and the other closes at 11 sharp. Everyone wants to know the rationale on that one.

BTW. Any possible hints on a next book that you are working on would be greatly appreciated!!!

~ Brandilyn Collins said...

Kristina--new books' about a skip tracer. That's about all I can tell you at this point. This book will release spring of 2010. In the meantime I have 3 books already written that will come our in 2009.

Grady Houger said...

Gas pricing seems crazy, but it’s because the fuel industry isn't well understood. Once explained it’s a boring as the price difference between usb drives.

Shell has a "club card" gets the price closer to the competition. But they are still a name brand, so it’s a benefit to the perception of their quality to be a touch higher priced than other stations. Do you not believe their marketing claim of superior fuel? Then you aren't in their customer target group and they don't care what you think.

Also, fuel pricing changes rapidly, based on the cost of production which is tied to the price of crude. Gas stations order fuel and get a volume discount if they can store more. But they have to sell that $4 gas before they can buy a shipment of $2 gas. Part of the pricing is up to the individual gas station owner charging what the market can bear.

Lastly, regional price differences stem from shipping cost from the refinery, and state regulations. Gas isn't all the same stuff everywhere. There are blends of additives regulated by pollution laws and climate (fuel air mixture performance issues). It all powers cars, just like racks of snacks inside the gas station fuel you, but it's not all the same food.

Now if gas stations would market 'regional blends' the way coffee blends are marketed, we could have a far more interesting (and expensive) time evaluating gas stations.

Lastly, I don't stop at Shell stations, but I suspect they have nicer restrooms. For some people, that's reason enough.

Kristina said...

Brandily, I can hardly wait for those three to come out!! I will be watching for them.

Blessings

Sunny said...

Brandilyn you completely made my day! Thanks for your sweet comment!

Jennifer AlLee said...

I think Shell is counting on people to be lazy. Let's see if I can explain this the way my mind sees it...

If the Shell and ARCO (or Chevron) are both on the north side of the street, then for anyone driving north, the Shell will be on the driver's side, therefore easier to zip into. To get to the cheaper station, you'd have to make a left or cut across traffic. So some folks will just drive into the more convenient station and fill up.

That's all I can come up with. Personally, I'd cross the street to save $1 per gallon!

Pam Meyers said...

And I envy all of you. Here in Cook County IL, the most expensive county in the nation thanks to the county board lining their pockets, the lowest I could find was to drive north about twenty miles and it came in at 1.67. Here in Cook County it was 1.78. IL is high enough without being in Cook. It was also 1.67 at a WI station just over the state line.

~ Brandilyn Collins said...

Jennifer--but you don't have to cross the street. Both of these instances are on major streets with a median in the middle. The street that separates the stations is a small turn-off. Traffic flows right for both of the stations in both of the pictures.

Grady--cool analysis. There is a sign somewhere else on the Shell stations--something about "earn 38 cents per gallon." Trouble is, who's gonna see it with the prices glaring at you? And second, even the 38 cents doesn't begin to make up the difference.

Finally to all, a note-- these price differences are not anomalies. They've been like this for many, many months.

Jessica said...

I have no explanation. Is shell an American company or foreign? It would be interesting to know.