Niche Marketing – An Example

Driving through a neighboring town the other day a small sign near a gas station exit caught my eye… “Check Out Our Low Price On Full Serve.”

This station is located at the intersection of two state routes, with a competing station diagonally across the street. On the other two corners are a supermarket and a drug store. The station is an Independent and small (two pumps) while the competing station is much larger and has an Exxon franchise. 1 ½ miles up the road, next to the Interstate, are two even larger stations directly across from each other. One is a Cumberland Farms store with gas; the other is Mobil with a store and a Dunkin' Donuts

The two stations next to the Interstate compete on gas prices as well their convenience stores. Their current price for regular is $2.80. The Exxon diagonally across is $2.85. The Independent’s is $2.79…but with full service.

To me this is a prefect example of niche marketing. The owner/operator of this Independent station has recognized the market and has decided to go after two specific niches. The first is the price buyer, regardless of seller or brand. The second is the group that does not want to pump gas but is not disabled; generally elderly, some men who don’t like the smell of gas, and some women.

It will be interesting to see how this Independent operator does. I suspect that it recently changed hands, as the station was closed for a while and is operating under a new “logo.” The risks are; that the 1 cent difference may not make up for the lack of a brand, that there is not a large enough market of people who want their gas pumped, and that the lack of food/coffee while stopping for gas is a bigger negative than a lower price. Whatever the long term outcome, I am impressed with his/her Marketing acumen and their willingness to differentiate themselves in a competitive market.

Have you examined your market and competitors as well as this Independent operator? Can you turn a perceived disadvantage (only two pumps, no food store/coffee shop) into an advantage? Can you articulate the different segments or niches among your buyers?

Here is a link to an excellent article that Dick wrote earlier this year about Market Segmentation – A Market Segmentation Guide. I doubt if the new gas station owner read and then followed all of Dick’s steps or suggestions, but it does seem that he has covered all the bases.

Call (517) 306-6147 or contact us if you need help in segmenting your market.

RHM 11/04/2010
P.S. I didn’t buy gas this time as my tank was full, but will the next time.

1 comment to Niche Marketing – An Example

  • Jim Matorin

    Interesting example Bob. Being in the food business, I firmly beleive in segmentation. It varies by industry. Back to your example – independent might have a niche now, but with our 24/7 wired society, got to have my food now, there might be a trade-off here for those people who need to kill two birds with one stone or fuel either way you look at it.

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