It’s no secret that most of Big Oil has been withdrawing from the retail sector. Selling off refineries and divesting retail assets, major companies such as ExxonMobil, BP and Shell are staking their long-term growth exclusively on often-lucrative upstream investments.
So it is notable when an oil company of scale reaps benefits for downstream successes. Such is the case with CITGO, based in Houston and an indirect subsidiary of Petroleos de Venezuela S.A., a brand long known for extending strong services to a robust fuel-marketing base.
Four years ago, CITGO dealers started replacing the old CITGO logo, canopy and other well-known signs of its brand. (See photos at end of story.) Instead, drivers were greeted with a redesigned package of bright, bold graphics on its retail canopy, pump cabinets and building design that conveyed a more contemporary, striking presence.
CITGO called the new look its Centennial Image and rolled it out to mark 100 years since oil entrepreneur Henry Latham Doherty created Cities Service Co., the forerunner of CITGO.
The visual upgrades not only look better, but fuel marketers employing them are also enjoying a noticeable surge in sales that they attribute to the aesthetic makeover.
“The fresh, bold look of the CITGO Centennial image gave each of our locations the powerful visual impacts of a ground-up rebuild at a fraction of the cost,” says David Gilbride, senior vice president and COO of Dattilo Petroleum, a Spring Valley, N.Y.-based CITGO distributor of 30 service stations across New York, New Jersey and Connecticut.
Gilbride says he has seen a 10% increase in sales at all of his locations. “It’s a product of marketing life cycle,” he says, “a result of a product change that is creating an attitude of something special. It’s a change for the better.”
Executives with Cary Oil, a Cary, N.C.-based fuel wholesaler that distributes to more than 200 CITGO sites in 19 states, is impressed with the enhancements.
“The color specs are similar, but they light up differently,” says Chris Hickman, Cary’s project manager for branded marketing. “They are more visually appealing. It kind of grabs your attention the way the colors overlap. The illumination at night is just enough to get your attention without being too much.”
And with greater customer attention has come increased traffic and spending. CITGO largely credits the new image with lifting gasoline sales volume at many branded locations by 7% to 10%.
The news underscores what CITGO anticipated just a few years ago, when it launched a campaign called A Fresh Makeover Is Good. Rather than rolling out an extensive mass-marketing campaign, the company tapped the trades, banking on its marketers and dealers to spread the word.
“We believe this contemporary look is more inviting to today’s consumer and hope that they will find it as exciting as we do,” said Gustavo Velasquez, CITGO’s vice president of supply and marketing when the new image was announced in 2010. “While we are proud of our heritage ... we want to provide our marketers and retailers with an updated, refreshed look that is distinguishable from the competition and cost-efficient to implement.”
CONTINUED: Going Modern, Sort Of
Going Modern, Sort Of
Oil companies are generally moored in tradition. CITGO’s iconic logo is no exception. The company’s trimark design was initiated in 1965 when Cities Service became CITGO. The new look hearkens back to its predecessor while contemporizing it.
Alan Flagg, CITGO’s general manager of light oils sales and marketing, shares the company’s desire to marry old with new. A group, including what Flagg describes as “internal stakeholders,” worked closely with two outside agencies, Stantec Architecture and Bedrock Brands, on the look. The goal, says Flagg, “was to design a cost-effective, eye-catching design that would attract consumers at the street level.”
Here’s what they came up with:
▶ The quad band on the canopy was replaced by a dynamic tri-form design.
▶ The trimark extends above the canopy, using three CITGO reds with silver returns on the primary fascia.
▶ Columns and bollards are CITGO gray.
▶ Tri-form design is also incorporated on the valance and the dispenser skirt.
▶ Dispenser side cladding was removed and a new valance design was installed.
▶ The CITGO word mark was moved to a more prominent point on the canopy for maximum exposure.
To the company’s objective of keeping the new look affordable for its retail network, CITGO is paying for the materials and some of the installation cost, which CITGO estimates at $5,000 to $20,000 depending on local labor and other factors. The average, one marketer says, is $15,000.
And the new look has caught on. The company says about 4,000, or 75% of its branded retailers, have made the switch, with the rest of the network expected to have the image by the end of 2015.
“The quad-band image was “due for a change,” says Mark Maddox, Cary Oil’s vice president of brand and marketing. “CITGO did a really nice job of not only the design aspect, but also trying to keep the cost down.”
A business professor is not surprised by the correlation between fresh imaging and increased sales. “The fresh new look of the signage is probably creating interest and some new trials from consumers who never realized they were there before,” says Marc H. Kalan, an assistant professor who has taught about CITGO in his courses at Rutgers Business School. “All of a sudden they see something different; they are jolted a bit. Logos do that. Contemporary packaging does a lot. It creates a sensation—there’s something new.”
Kalan also points out “a lot of companies are updating and making their logos more contemporary to be more attractive to and effective with the younger generation that doesn’t necessarily want to interact with old things.”
The new image seems to be spilling over into c-store operations. Many operators are sprucing up their c-stores, upgrading the entire look to bring new gasoline customers into the stores.
Although CITGO says the sales increase is based on anecdotal feedback, Kalan doesn’t doubt its veracity.
“Remember, convenience stores are all about location,” he says. “They are all about speed and they are all about a very limited offering of items. So a refreshed logo and refreshed signage can create the excitement that can draw new consumers into their location.”
CONTINUED: Reinvigorated
Reinvigorated
“The CITGO Centennial image has reinvigorated our locations,” says Scott Stangel, wholesale marketing manager for Quality State Oil, a marketer of 35 CITGO gas stations and c-stores based in Sheboygan, Wis. “It has changed the opinion of the consumer on the street because it really jumps out at you.”
The new Centennial image was about more than refreshing a moniker; rather, he says, it creates a “whole new brand” and propels CITGO “into the 21st century.”
Bo Bearden is director of retail for Gainesville, Ga.-based Mansfield Oil, which owns 30 CITGO locations and supplies 62 CITGO dealers in nine states. He raves about the new Centennial image, saying it “brings real value to our CITGO locations and creates a very competitive advantage in helping secure new branded customers.”
Redesigning an iconic image is never easy. It is fraught with emotions and multiple interests. Yet in the end, the new look is achieving its primary goal.
“The Centennial image is a clean, contemporary design that makes a great first impression and leads to new and repeat customers,” says CITGO’s Flagg.
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