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Building Consumer Preference and Customer Choice

Kevin Phelan, Chris Garlick and Linda Bartman provided an overview of 2008 marketing objectives, and updated branded marketers on the five aspects of the Customer Value Proposition: fuel products, brand, programs, local marketing and partnership.

- Brand: Helios Power, Helios 100

- Products: Differentiated fuel slate, Invigorate pilot

- Programs: BP Visa®, commercial cards, CommLinx

- Local marketing: AdDepot, FLW

- Partnership: Extensive board input

"Our objectives remain clear and unchanged," said Kevin Phelan, Senior Vice President of Midwest US Fuels Marketing with BP. These are to:

- Drive traffic to branded marketer sites

- Build loyalty to the brand

- Increase jobber revenue

- Reduce jobber costs to serve

"These objectives," explained Phelan, "are intended to strengthen our foundation. We need to differentiate not just what we sell but how we sell it." This is particularly crucial in today’s market. "We don’t have the luxury of a market that is growing organically in volume, so we need to grow brand preference and we start from a great foundation." We have:

- Most recognized brand of majors

- Strong brand loyalty

- Market leadership

- Strong alignment with branded marketers, BP’s key channel of trade

Phelan, as well as Chris Garlick, BP Products and Offer Development Manager, and Linda Bartman, BP Marketing Communications Manager, outlined what BP has accomplished in 2007 and where they are heading in 2008.

BRAND

"In 2007, we worked on creating affinity for the BP brand and we will continue this in 2008," explained Phelan.

Helios Power

This year, BP launched Helios Power campaign. "This was a real departure for the entire industry and a new and exciting direction for us," said Bartman. The goal of the campaign was to reestablish the BP brand as making things ‘a little better’ in an emotional, playful way.

"We launched this campaign with roadshows in local markets. So many of you really took this initiative to heart and executed it at your sites," said Bartman.

Bartman outlined the impressive results the campaign achieved during a time when the market was flat at best:

7% increase in unaided brand awareness

8% increase in product trial

Recently BP transitioned the Helios Power campaign into a local marketing program called, ‘a

In 2007, we made great progress together: Brand Focused on reestablishing the brand Helios Power Fuel products Grew market share and premium ratios Programs Introduced card programs and CommLinx platform Local marketing Introduced FLW and ‘a little better tailgate’ Partnership Developed a forward agenda with our Marketing Advisory Committee

little better tailgate.’ Six football game tailgates were supported with a BP footprint onsite and a trailer with clean bathrooms to personalize the brand and bring it into the community. In 2008, BP plans to deepen the Helios Power campaign with on-site promotions in February/March.

Helios 100
"We are continuing to focus on our compelling site experience with Helios 100," said Phelan. "It has allowed us to keep the green, green and the clean, clean." To consumers, Helios 100 translates into, ‘When I stop at a BP, someone smiles at me and says hello.’ Or, ‘I’ll stop at BP for the clean bathrooms.’

In a survey of site operators, Phelan remarked, efforts to be ‘a little better’ have taken hold. More than 70 percent said they have done something different, such as cleaner bathrooms. Ultimately, Helios 100 has transformed the consumer site experience – with passing scores moving from 51 percent in 4th quarter 2005, to 91 percent in 4th quarter 2007. “That is phenomenal progress,” commended Phelan.

In 2008, branded marketers will see some changes to Helios 100 to help improve the program operations (see side bar on page 5).

FUEL PRODUCTS

Full slate strategy
"The research shows the world changed. While 30 percent of the market used to buy premium grade gasoline, that has dropped to 10 percent. We need to be engaging the other 85 to 90 percent of the market. Our full slate strategy will do that," said Phelan.

However, BP still sells more gallons of premium gasoline than any other major competitor east of the Rockies. “These are very loyal consumers and they believe in our product. We will continue to leverage that position while we provide value across the entire fuel slate,” remarked Garlick.

Invigorate
Garlick explained that BP is currently piloting its Invigorate as the full slate strategy. Invigorate is positioned to improve the performance of consumers’ cars. When the pilot is complete, he said, BP will evaluate the results and move forward with the strategy. Rollout of the full fuel slate is expected in early 2008.

Diesel strategy
Demand for diesel fuel is growing at a rate of five percent per year, while supply is not growing nearly as quickly. "We know we need to create value for you around diesel," said Garlick. "We are completing our strategy recommendations this year and will move to implementation early in 2008," Garlick told convention attendees.

PROGRAMS

BP Visa
Kiplinger’s Personal Finance recently voted the BP Visa the “best gasoline credit card” for the second year in row due to its favorable fees. Moreover, the loyalty rewards aspect of the card has been very effective in doubling the consumer spend.

BP typically gets 35 percent of a cardmember’s gas purchase, with the BP Visa that shoots up to 70 percent of their gas purchases. This is a powerful tool for branded marketers, plus the bounty structure can be lucrative. To date, BP has paid out $2.7 million to jobbers in bounty fees.

Commercial credit cards
BP also has improved commercial credit card operations, making improvement in 2007 on back-office operations to ensure it has the basics right. It has enhanced support for branded marketers with direct marketing materials, sales support and prospecting leads that were available by location to branded marketers at the EXPO.

CommLinx
To date, BP has installed CommLinx at 74 percent of sites. In 2008, BP will be looking at the next phase of CommLinx enabled – that is, offers and programs to help drive more revenue and value with consumers onsite.

LOCAL MARKETING

AdDepot
Last year, BP launched AdDepot to complement its Co-op program. This new tool gives branded marketers access to ad templates to use in local markets. BP will continually add new programs, and refine the tools and templates that work best for branded marketers.

FLW
FLW was a great success story this year, with more than 100 branded marketers utilizing the sponsorship and simulator for customer events, and more than 33,000 consumers riding on the BP simulator. BP will continue this sponsorship in 2008. Branded marketers who would like to request a simulator for their sites should contact Laura Long at (248) 521-9137 or thetacklebox@longmarketing.net to sign up before yearend.

PARTNERSHIP

What to Expect In 2008 Brand Sustaining Helios Power LED program and Bullnose Fuel products Full slate product Results of Invigorate pilot Premium target Diesel offer Programs Refreshing the Fleet Card BP Visa growth Large format strategy CommLinx enabled Local marketing FLW Local Helios Power elements

Partnership with customer boards has been extremely productive and valuable this past year. “We could not do all of this without the input of these board members. They work with us on every phase of our program launch, from concept, through development, to execution and ongoing improvement,” said Bartman.

"Everything we do begins and ends there," she concluded.