Motiva Enterprises Competition
Now Viewing Motiva Enterprises's competition in: Convenience Stores
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who is the company's target market? - While the historical demographic for c-stores is low to middle income men, customer profiles can vary and depend on the surrounding market.
How many customers do the company's stores typically serve in a single day? - A typical c-store that sells fuel serves about 1,000 customers per day, according to the National Association for Convenience Stores (NACS).
What are the company's most effective marketing and promotional vehicles? - C-stores often rely on outdoor signage to generate awareness and attract customers. Window and in-store signage communicates featured items. Large chains may use traditional marketing vehicles, including TV, newspaper, and radio ads.
How important are marketing allowances from suppliers? - Companies may receive marketing allowances from suppliers to promote certain products.
What proprietary or private-label products does the company offer? - Proprietary products, such as 7-Eleven's Slurpee, can help companies differentiate from competition.
What does the company do to ensure fast service? - Fast service can help differentiate c-stores from other retailers. The average transaction time, including time spent walking to and from a car, is three to four minutes.
What strategy does the company use when pricing non-fuel merchandise? - Because convenience commands price premiums, retail prices for most non-fuel items in c-stores are higher than prices in other retailers, such as grocery stores and mass merchandisers.
How volatile are retail gas prices for the company? - Because gas sales drive store traffic, companies tend to price gas competitively. Stores may change retail gas prices as often as daily, due to rapidly changing market conditions.
Competitive Landscape
Consumer and commercial driving trends drive demand. The profitability of individual stores depends on competitive pricing, effective merchandising, and the ability to secure high-traffic locations. Large companies have advantages in purchasing and finance. Small companies can compete effectively by acquiring superior locations or offering specialized merchandise or services. Average annual revenue per worker is about $500,000 for gas station/c-store combinations and $150,000 for c-stores without gas.
Business Challenges
CRITICAL ISSUES
Narrow Margins on Gas - While c-stores rely on fuel sales to drive store traffic, gas carries extremely low margins and fluctuating wholesale prices can drastically reduce profits. Driven by highly volatile commodity prices for crude oil, manufacturer prices for gas can change up to 45 percent in a single year. Competition and price sensitivity limit companies' ability to raise retail gas prices to cover increased costs. When wholesale gas prices increase suddenly, stores may make just pennies per gallon. With thin margins on gas, c-stores must depend on non-fuel merchandise sales to generate profits.
Competition from Alternative Retailers - C-stores face competition from various alternative retailers for both gas and non-fuel merchandise sales. As more retailers capitalize on the traffic-generating benefits of selling gas, more outlets are adding gas pumps. Grocery stores, mass merchandisers, and warehouse clubs have added gas stations and generally offer lower prices on comparable non-fuel items. Many large retailers stock a wide variety of merchandise and can provide customers a different type of convenience with one-stop shopping. Even large home improvement centers, such as Home Depot, have experimented with c-store prototypes.
Industries Where Motiva Enterprises Competes
- Energy & Utilities
- Oil & Gas Refining, Marketing & Distribution(primary)
- Retail
- Convenience Stores & Truck Stops
- Gasoline Retailers
