National Petroleum News (NPN) has been the independent voice of the petroleum industry since 1909 as the opposition to Rockefeller’s Standard Oil. So, motor fuels marketing and retail is not just a sideline for us, it’s our core competency.
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RETAIL OPERATIONS BY MARKWARD, SR. Changing Attitudes Towards Automated Pricing PRICE MODELING puter and worried that automation would diminish their control. F Because Skyline has partnered with the Oil Price Information Service (OPIS), the PriceAdvantage software automatically imports the daily OPIS Radius Report OUR YEARS AGO WHEN NATIONAL PETROLEUM News reported on software solutions for optimizing fuel prices, vendors observed that many petroleum market- ers remained wary of trusting a com- [in 2007], the market is increasing dictating that savvy petroleum marketers must develop the abil- ity to instantly react to competitive market changes and confirm with absolute certainty that their responses occurred.” That trend prompted one vendor in 2007 to tell National Petroleum News his prediction that “with- in five years it will be unheard of for petroleum retailers to just stick a finger in the air and do their prices,” even though “a lot of people in the petro- leum business figure they’ve got experience and intuition with pricing which nothing else can duplicate.” Now four years later, in 2011, has that prediction come true? Stadjuhar reports, “Fuel marketers today want to auto- mate. The question four years ago was, ‘Can I trust a comput- er to do my pricing?’ Now the question is, ‘Should I do this with a solution I develop inter- nally or should I get an off-the- shelf solution?’ Four years ago, people worried about main- taining control. Today, we’ve got data to prove the perfor- As vendor Bob Stein, president and CEO of KSS Fuels in Florham Park, N. J., related in 2007, he then spent much of his time explaining to fuel retailers how “you don’t lose control over your pricing. The system is flexible so that you set up your own pricing rules, as well as your own margin and volume targets. It’s a tool that takes your rules and then automates them, which saves you a lot time by alleviating manual tasks.” Despite retailers’ general unfamiliarity with price optimization software, sales and marketing vice president Greg Stadjuhar of Skyline Products in Colorado Springs, Colo., noted that “even now 14 JULY/AUGUST 2011 mance and results of automated pricing solutions.” Similarly, Stein relates, “Our solutions and peo- ple’s attitudes have evolved over the past four years. We don’t even use the phrase ‘price optimization’ anymore. Now we’re talking about a ‘total pricing solution.’ KSS Fuels isn’t just a ‘software company’ but, much more than four years ago, we go in as a consultant to talk about your total pricing strategy.” Stein offers three reasons for marketers’ chang- ing attitude toward automated pricing. First, he believes, “Since price volatility is now the norm, marketers realize that manual systems can no longer keep up with the amount of data involved NPN Magazine n www.npnweb.com