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Marketing strategy and its effect on retail site : a case study of the Vancouver gasoline market Rothwell, David Colin

Abstract

The thesis examines one aspect of urban structure -- namely the quality of retail site. The specific research hypothesis is that different marketing strategies can cause differences in site quality. The gasoline service station industry of Vancouver, British Columbia was chosen as a case study for purposes of testing the hypothesis. From the marketing literature it was shown that there exists two distinct strategies for marketing gasoline: non-price competition as practiced by the major oil companies and price competition as practiced by the small independents. A quality rating schedule, using both variables internal to the site itself (micro variables) and variables based on the surrounding socio-economic environment (macro variables), was devised as a surrogate measure of site quality. Gallonage performance of a station was used as a direct measure of site quality. For a sample of major company stations the correlations between site rating scores and gallonage were very high. The quality rating schedule also possessed high predictive ability for gallonage. It was demonstrated that stations of high quality (in terms of the site rating score) pump the most gasoline. In contrast, correlations between the site rating scores and gallonage for the population of price-cutters was very low. Since the average independent station pumps twice as much gasoline as the average major station, it was apparent that the site rating instrument was not a good surrogate measure of quality for the price-cutter stations. It is concluded that explanation for this discrepancy in gallonage and site scores is attributable to the differences in marketing strategy. Quality requirements for successful company service stations are different from the quality requirements of successful price-cutter stations. This fact is important to both industrial and urban planners. For example, in Vancouver the City Council embarked on an explicit plan of reducing the number of service stations. However, its actions were made without a full understanding of the different corporate strategies and have prevented what was an already declining population of stations.

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