The Sixties are historically known as an uproarious decade for the U.S., with the Vietnam War, the anti-war movement, the Civil Rights Act and struggle, the rise of feminism and numerous riots around the country. In stark contrast, however, the period for the petroleum industry was relatively calm, with the major oil companies experiencing a kind of a golden era. In hindsight, the ‘60s set the stage for some of what would prove to be important trends in petroleum retailing and marketing for years to come.
By the 1960s, most of the groundbreaking ideas in selling petroleum had already been introduced. However, more and more of the oil marketers began trying out these novel ideas throughout the decade, the most popular of them—diversification. Several new areas of petroleum retailing were more frequently reported on in NPN throughout the period, and many of the reports discussed how these segments could offer new revenue streams.
Some petroleum marketers had been in the automotive service and TBA sales market since the ‘30s, and NPN had reported on it years before the ‘60s. However, articles, such as “TUNEUP: The $1,236,000,000 Market” in the August 1961 issue, started making more of a case for this business segment. The majors also started to turn in favor of it, as the piece noted, “Since NPN’s first comprehensive report on tuneup four years ago (NPN—Nov. ’57), there has been a marked shift by oil companies in favor of tuneup for their dealers. Only six majors were clearly in favor of tuneup then. Now 16 are.”
More cars on the road caused a demand for more light repair car work—a demand some marketers jumped at filling, especially when the pressure on the gasoline margin began forcing dealers to look for other sources of income. However, mass retailers also saw the demand for TBA and posed a threat to its place in the oil marketing industry, as illustrated in the NPN August 1962 article “How You Can Fight Back at the Discounters.”
In the June 1964 article “Finding New Directions for Extra-Payoff Sidelines,” NPN documented the other areas marketers tried entering. Some segments, like auto rentals, have not had much staying power, but others, like the car wash, has become a major profit center. In “Car Washing: An old tie-in takes new shape,” NPN reported that new technological advances and an equipment boom began spurring an interest in this area. Coin-operated self-service car washes also started garnering a lot of attention, but in 1964, some of that equipment had only been out less than a year and no one was certain of its future.
Pairing food service and convenience stores with selling gas only grew stronger during this decade. On the flipside, some convenience store chains started to enter the retail gasoline market, as noted in the NPN August 1964 article “Grocery Chains Eye Gasoline Sales.” The piece reported plans of a network of “Supertron” stations to enter the market using self-service pumps, which also marked the first substantial entrance of self-service in the U.S. market.
In a January 1967 article entitled “Three-Way Money-Maker Station,” it appears that one private brander in Los Angeles was offering a glimpse into the future. The brander was “combining three businesses at one location: gasoline, convenience store, and coin-op car wash.” The trinity was apparently paying off back then as it does today.
Credit at retail sites wasn’t exactly a new venture in the ‘60s, as it was reintroduced in the decade before, but its presence did become more prevalent. As the new highway culture was taking hold and America increasingly became an on-the-go nation, the consumer demand for a fast payment method, like credit, grew.
The evolution of credit spurred a number of other needs, leading to advances and trends in the oil marketing industry. With credit cards, self-service pumps began to have the capability of taking money without the need of an attendant. The May 1963 article, “New Self-Serve Pump Device,” documented the equipment’s entry into the market. The June 1967 piece “Gasoline Pump Takes On Printing Job” reported on Wayne Pump Co.’s development of a pump-actuated imprinter.
With the focus on the pumps, merchandising at the island became a hot idea. In the July 1964 issue, NPN took a look at this reborn concept in the article “The Service-Station Island: What Selling Role Should It Play?” The piece included tips, like placing “merchandise ahead of the island, where the motorist will see it,” and suggestions that the station of the future would be the island.
One of the side effects of the credit card boom was the high piles of paperwork. Oil companies, like Marathon, found themselves having to revamp their accounting and data processing departments, as noted in the NPN Sept. 1966 article “Machines Move Mountains For Paper-Ridden Marathon.” The company began to heavily invest in new and faster computers from IBM as well as “sorters, collators, microfilming recorders, accounting and proving machines.”
The growth of credit cards also caused the proliferation of fraud, which NPN focused on in its March 1967 article “Credit-Card Frauds: What You Need to Know About this Growing Danger.” The piece documented the petroleum marketers’ urge for better prosecution, security and control. Similar to the PCI compliance articles of today, the report warned of “organized theft of credit cards. More theft of credit cards from the mails. Underworld traffic in illicit credit cards. Rackets utilizing lost or stolen cards or cards obtained with the intent to defraud.”
Promoting and Marketing
Throughout the decade, major oil companies strengthened their brands and took their previously regional stations nationwide. With more petroleum players entering the market, many existing companies started to merge, including Pure Oil and Union Oil in July 1965, which helped to spread the Union 76 corporate trademark, as noted in the June 1967 NPN article “’Union 76’ Goes Nationwide.” Additionally, an oil company from overseas, British Petroleum or BP, crossed the pond and jumped into the U.S. market as a result of oil companies Atlantic and Sinclair merging, reported in NPN’s April 1969 issue.
Part of what made this coast-to-coast movement possible was the country’s brand new highway system, some of it still being built in the ‘60s. The Highway Beautification Act of 1965 set up the gas-food-lodging signs that are characteristic of all interstates today. The development was a big win for marketers with stations near highways, as reported in the NPN August 1966 article “Marketers Win Right to Interstate Signs.” It meant that they would be able to advertise their brands right on the roads.
In the May 1967 issue, NPN published a report on how the stations on the highway were faring in the article “Interstate Market: New, Big, Rich.” The article stated the interstate results surpassed even optimistic forecasts, “Traffic is heavier than expected. I-station volume is higher than expected. Targets are being met earlier than forecast.” At the time, more than 5,000 stations on the highway system existed, making up an estimated four-billion-gallon gasoline market.
Advances in pricing strategies and new marketing methods proliferated throughout the decade. Zone pricing was introduced by some of the majors, which priced by wide areas rather than station by station. The method became more common throughout the decade and resulted in some price stabilization.
Oil companies in the ‘60s became acutely aware of the effects of advertising, as reported in NPN’s August 1961 article “Behind Those Oil Ad Changes.” As a result of the mergers and expansion of brands in new territories, the majors needed to communicate to the customers and began spending more than ever to reach their audience. Some marketers took a more basic approach, as the NPN August 1963 article “Florida Station” illustrated. The piece reported on a station “staffed 100% by girls,” with the intention to attract male motorists; evidence that the rise of feminism in the decade hadn’t quite permeated the culture yet.
The trading stamps program, for better or worse, reached its height in the ‘60s. The program was widely popular among customers, much to the dismay of some in oil marketing, as reported in the July 1968 article, “For Marketers, It’s Still a Green-Blue-Gold Stamp World.” The piece stated, “So dealers and even congressmen go on calling stamps a ‘parasite.’ The stamp industry, however, is proving itself almost impregnable…this near-billion-dollar industry has swatted down more than 700 anti-stamp bills in legislatures of most of the states.”
Investigations and Hearings
The Federal Trade Commission had finally been letting up on its oil pricing cases by the middle of the decade, but the petroleum industry started to face opposition stemming from a new concern—pollution. Although environmentalism was in its very early stages, the charges made against oil marketers were already significant enough that NPN devoted a special report to it in the August 1966 issue, entitled “What You Need To Know And Do About Air Pollution.” The article mentioned congressional hearings on air pollution had “brought forth a flood of testimony from witnesses who thought that leaded gasoline creates a health hazard,” which would become a major issue in the years to come.
Another series of congressional hearings looked at promotional games used by some major oil companies, reported on in July 1968’s article “Games Become a National Issue.” Rep. John Dingell (D-Mich.) lead the investigation into the practice of the lottery-like contests, which were designed to promote products through sweepstakes. The 1969 investigation charged that small businesses were unfairly having to bear the financial brunt of the majors-run games and that some of the contests were deceptive and had been manipulated. However, Congress did not pass a regulatory bill; thus, sweepstakes continue to be a heavily used form of marketing in many industries to this day.
The petroleum industry escaped most of the ‘60s unscathed, with mostly expansive endeavors to show for it. However, in a few short years, the industry would be dealing with price spikes like it had never experienced before, turning the industry on its head.