Whose Customer Is It, Anyway?

FROM THE NOVEMBER ISSUE: Rob Lamberty of the American Coalition for Ethanol writes his column this month about marketing in the ethanol industry.
By Ron Lamberty | October 15, 2018

Marketing is fun.
At least the stuff most people think of when they hear the word “marketing” is fun. Naming your product, creating a brand and logos, coming up with catchy slogans, cool ads, maybe a jingle, planning and executing advertising and social media campaigns—all that activity is fun. And when you’re done doing it, you get shiny stuff you can touch and hold in your hands that makes your product look good and cool. And it makes you feel good and cool, too.

That’s probably why ethanol industry folks get excited when they talk about marketing ethanol. If I had a dime for every time I’ve heard someone say we need to do a better job “marketing ethanol to consumers” over the past two or three years, I would … OK, let’s be honest, if I could somehow collect money from people based on words they say, I would probably have moved on to phrases or words used a lot more often than “marketing ethanol to consumers …” But I digress …

In the ethanol industry, there is growing interest—bordering on obsession—with “marketing ethanol to consumers.” The thought process goes like this: If drivers only knew what we know about how good ethanol is for cars, the economy and the earth, gas stations would have long lines of cars and trucks 24/7, waiting to fill up with the highest possible ethanol blends.

Most of the “marketing to consumers” urgency surrounds E15. A couple years ago, station owners told us if we want to sell more E15, “you guys need to tell us how we’re supposed to market this stuff.”  Ethanol people heard that and released years of pent-up ethanol-loving creativity (and spending). They bought airtime and ad space, created new logos, developed clever promotions, and generally felt better and cooler about making E15.

I followed up with one station owner to get his impression of all the promotional activity. He said, “All I really wanted to know is what we should call the stuff … E15? Unleaded15? Unleaded Plus? Unleaded88?” Unlike other consumer products, drivers don’t want new and different fuels to put in their cars. Dull, boring, “same as it ever was” is what works—hence the success of UnleadedXX as demonstrated by Thorntons, Sheetz and Kwik Trip .

But those things are only one part of marketing. And it’s the least effective part—or more correctly, the least necessary—when the other parts are done well. Those of you who studied marketing in college probably remember the four Ps: product, price, place and promotion (or some version of those categories). The preceding “fun” items fit in the promotion category.

Our product is ASTM D4806 denatured fuel ethanol, and the marketplace determines its price (with unwanted input from politicians and bureaucrats). We don’t sell E15 or flex fuels. Marketers buy ethanol and make those fuels to sell to consumers, who are their customers, not ours.

That leaves place, often referred to as distribution channel or simply supply. Place is the ethanol industry’s most critical marketing challenge. Aggressively promoting E15 or Unleaded88 to consumers could backfire if drivers can only find it in one of 100 gas stations. Go ahead and celebrate 2800 E15 stations in a few years, and 4500 stations selling flex fuel today, and we’ll continue to work on converting more of the 145,500 locations that aren’t offering either blend.

The truth is, current higher-blend retailers aren’t having trouble selling our fuel—but they’d like some company. And one positive of historically underpriced ethanol is that the math of higher blends is tougher for prospective retailers to resist.



Author: Ron Lamberty
Senior Vice President
American Coalition for Ethanol
605.334.3381
rlamberty@ethanol.org