For gas stations, the key is location, location, location
Despite all the fuss over high prices, drivers don't see cost as top factor in deciding where to fill up.
HOUSTON — Marv Wang hops out of his car and yanks the nozzle from the gas pump. He pokes the button for premium grade and looks anxiously at his watch. A few minutes and $35 later, he's on the road, racing to make a meeting downtown.
With record prices, you might expect him to go elsewhere: He's paying $1.93 a gallon at a westside Shell station when it's 20 cents cheaper not far from here.
But he never shops around for gas. "Four dollars is immaterial. I've got other things to worry about," says the polished businessman. "I go to the closest station when I'm running out of gas. Today, I had eight miles to empty."
Surprising as it may be to those watching their pennies, research shows that when it comes to filling up, most consumers say location matters most.
That's not to say that price doesn't matter. It's a close second - especially when it's near $2 a gallon. But it takes more than a few cents to lure people from that station by the dry cleaners, on the way to work, or around the corner from home.
"Gasoline is what we refer to as a convenience purchase. We buy it when we need it," says David Stewart, a professor of marketing and consumer psychology at the University of Southern California. "And most of the time, we need it when we are going about our normal course of business."
There are, of course, a host of reasons people buy gas where they do - from quality and brand to clean restrooms and hot dogs - most of which aren't affected by rising prices. In fact, ExxonMobil research found that fewer than 20 percent of consumers are concerned solely with finding the lowest price.
"Consumers are smart enough to understand value," says Stew McHie, global brand manager for ExxonMobil. "They know that savings from a cheaper alternative ... don't show up to any great extent in your pocketbook."
His company found that the top four factors in choice of gas station are location, price, facilities, and service. Similarly, the National Association of Convenience Stores found that location, price, and quality are the most important factors.
Bob Chapman, for instance, stops at the same place, regardless of price. It's convenient, easy to get in and out of, and has the quality of gas he wants. "I have two fairly expensive cars, and I notice the difference in the way the engine works."
But no two gas consumers are alike, say experts. Some may buy gas when they're empty. Others top off tanks for a good price. But one factor is universal: speed.
"There was a time when the service station was really about service. You'd get your oil changed and your windshield washed," says Dr. Stewart. "But now it's about getting in and out as fast as you can."
To that end, ExxonMobil is touting its Speed Pass for quick purchases; Shell promotes speedy tanks for a faster fill-up.
"Most people consider buying gas a chore. They don't think about it until the warning light comes on and they are already late to something," says Jeff Lenard, spokesman for the National Association of Convenience Stores. "That's why speed at the pump is so important."
He says his group's research shows that there will always be price shoppers who drive long distances to save 50 cents, plotting out routes near the cheapest stations.
Jacob Molina is one of them. He's putting in exactly $3 worth at an ExxonMobil to last him until he gets to southeast Houston, where gas is six cents cheaper.
But that's not always the most cost-effective method. "One [thing] we tell our members when gas prices get high is that, while it's important to shop around for price, you don't want to drive miles out of your way," says Geoff Sundstrom, spokesman for AAA, the nation's largest organization for motorists. "By the time you get there, you're losing money."
Gas stations know that some people are price sensitive. Part of that may be the industry's fault. "We are the only retailer in the world that puts prices on the street for everyone to see. So we have to be competitive," says Mr. McHei.
Indeed, some point out that there's little price difference among major brands, causing companies to find ways to increase traffic, including teaming up with fast-food franchises and installing car washes.
"Think of it like the sum total of your consideration. My wife told me to get a quart of milk, I need to air up the tires, and I have to use the restroom," says Ron Zolno, a partner at the BRS Group, whose clients include Shell and Texaco. "Price matters. But convenience is what matters the most."
Then there's the mental factor: "We all feel pressed for time," says Michael Solomon, a professor of consumer behavior at Auburn University. "So the psychological cost of altering your routine probably exceeds the financial savings of going to another station."