Rebranding: how does it impact fuel pricing?

As the supplier of a quarter of all Australia’s fuel, the business occupies a strong position.

There is well-documented, ongoing activity to acquire Caltex Australia. Following Chevron removing the licensing rights for Caltex Australia to use the brand, Caltex Australia announced their plan to rebrand as AMPOL, to revive a much-loved, iconic Australian fuel brand after it was retired 25 years ago.

As the supplier of a quarter of all Australia’s fuel, the business occupies a strong position. It is currently evaluating two proposals that the press have been informed of; one from Canada’s Alimentation Couche-Tard Inc. and another from Britain’s EG Group, whilst potentially in talks with others.

At Kalibrate, this jostle for acquisition and brand-power caught our attention. We are interested to know what the outcome will eventually be, what impact this rebrand may have on competition, on local fuel pricing and the behaviour of the wider Australian market.

The value of branding

To answer the latter question, we first must assess the value branding brings to a fuel retail network. The short answer is: it depends. A stronger or weaker brand can impact everything from market perception, customer loyalty, volume, and profit. And these nuances are driven by local market conditions, customer behavior, and the unique characteristics of the brand in each market.

Bigger, international brands already have established roots and loyalty in the market, which is important for some retailers and consumers. Smaller, regional brands can be less established and can sometimes take on the brand of the convenience chain, which has its own value.

As we know, capturing the value of a fuel retail brand is not a matter of a one-time review. Indeed, reviewing a brand is a task you must take on consistently, and take frequent action that will improve your brand overall.

Does a rebrand drive market change?

Rebranding doesn’t just impact the fuel retailer that’s presenting a new logo and name. A rebrand can create a ripple effect through any given market.

For example, if a more premium brand can command a few cents per litre more than the previous, where does this market share come from?

Not to mention, a rebrand can strongly impact customer behavior; if they feel more loyal to one brand or alienated by another, it will impact the volumes achieved. Puma Energy has agreed to sell the majority of its business to Chevron, who it is suspected will then rebrand to Caltex. Will this combination of changes in the market impact the brand’s value?

What can a competitor rebrand mean for your business?

The same short answer applies; it depends.

The strength of the new brand will determine how big an impact your business will face. One thing is for certain, however, inaction and “hoping for the best” could seriously damage your profits and brand value.

The best thing a fuel retailer can do, in the time preceding a major rebrand in their market (whether their own or a competitor’s) is to assess the scene, run analytical simulations, and devise a robust strategy.

By running a number of “what if” scenarios on your sites, like those we provide to our clients at Kalibrate, you can understand your competitors, see your potential market share, and plan a new pricing strategy. It delivers the power of knowledge, so you understand the implications of a rebrand on your business, and the rest of the market.

Of course, such analyses are not predictions but potential scenarios. While the outcomes are hypothetical, it’s a key starting point for conversations within the company. You can discuss which position you are aiming for, ask yourselves where you will sit, where you may gain or lose volume, and what you will do if you see volume loss.

At Kalibrate, we have the market data, the technology and expertise to support these simulations. Our Brand Value Analysis reports are used worldwide to support the very analysis which these types of scenarios require.  A rebrand won’t have the same impact across all markets, as there are varying demographics and local flavours to every market, but our detailed assessments can help you unpick these scenarios on a market by market basis to be informed and prepared when the changes come about.

When it comes to Caltex Australia, the impact of their rebrand could be positive or negative, or have an overall neutral effect given the scale of their coverage and the likelihood that some markets will react differently to others. Will a new brand like AMPOL be exactly the nostalgic hook they are hoping for, to drive new volume and customer loyalty? Or will an older, national brand get lost in today’s modern, consumer world?

The answer remains to be seen.

Found this interesting? Why not share it:

Read more articles about:

Fuel pricing

Related posts

Location intelligence

The Census and data granularity

Karl Schrantz explores what the 2020 Census tell us about how retailers should approach data granularity to achieve...

The Census and data granularity

Fuel pricing

May 2023 Canadian Petroleum Price Snapshot

We conduct a daily survey of retail gasoline, diesel, propane, and furnace fuel prices in 77 Canadian cities....

May 2023 Canadian Petroleum Price Snapshot

Location intelligence

How to choose a location intelligence company

The most fundamental use of location insight is in helping your brand select locations that are most likely to...

How to choose a location intelligence company

Start your journey to more informed decisions today

Get in touch to see how Kalibrate could empower your decision-making.