The service station is a retail establishment that basically sells fuels, lubricants and greases, tires, batteries and accessories or TBA, groceries and other services such as car washes, vehicles repairs and maintenance and some are even equipped with automated teller machines (ATM) and vending machines. Stations in large cities and the metropolis do have convenience stores, restaurants, barber shops, and other retail shops that are on demand in certain highly populated and fast turnover of business demographics. In my field as a field marketer and business development practitioner in the oil and gas (or sometimes we’d refer to petroleum) retail industry, a service station should be a safe, secured and a reliable retail facility that meets the demands and expectations of consumers surrounding its trade area. A trade area for now is its neighboring establishments surrounding the service station. We’ll dwell so much on trade areas as we start talking about retail network development later on this book.
Nowadays, in today’s environmental consciousness and regulations, service stations basically sells unleaded fuels of ranges of octane ratings measured in RON – Retail Octane Number like RON 82, RON 83, RON 91, RON 93, RON 95, RON 98 and even RON 100, and cleansing derivatives for unleaded fuels and diesel varying in sulfur levels; as well as lubricants, greases and other ancillary products that improve the everyday journey of motorists along with and their love ones. On the RON, these are numbers indicating the boost quality the unleaded provides. The higher the RON, the faster the boost of adrenalin the octane gives the engine of the vehicle, but of course, it comes with a price.
The Service Station
From basic petroleum product, service stations expand offering other ancillary products (services and ATMs) into an entire gamut of convenience products consumers might want to purchase as they gas up and go. Thus, a service station, by nature, is a retail facility ideally opened twenty-four hours a day / seven days a week / 365 days in a year in the course of satisfying consumers’ demand on the spot just while having the mere intent of simply purchasing their basic need of petroleum products with a wow. Yes, these items may be more expensive a fraction thereof, but the niche is to meet every consumer demand reliably and yet profitably.
The schematic diagram shows a compact service station designed to serve a residential trade area in a major metropolis (this was designed for a cluster of subdivisions located in Quezon City, Metro Manila in the Philippines). It is compact given the size of the lot allotted to build the service station that’ll sell two grades of unleaded (93 RON and 95 RON) and diesel fuels. There are five under-ground storage tanks (UST) – three UST for the unleaded fuels where two of these UST are allocated to the 93 RON fuel product , one UST allocated for the 95 RON fuel product, and two UST for the diesel fuel product. The Retail Octane Number or RON indicates the octane rating of the unleaded gasoline fuels – the larger the RON, the more driving power boost however its price range gets more expensive as the RON gets larger dose of boost. Note, the trade area must indicate a large number of diesel-fed vehicles plying around the trade area inspite of it located in a residential area. We will find out why such a layout and configuration of a service station as we consider trade area analyses later as we read through service station competitiveness and its viability.
The schematic plan of this compact service station has four dispensing pumps that’ll accommodate the three distinct products – unleaded fuels of the 93 RON (cheaper by a few cents of unleaded fuel) and 95 RON respectively and the diesel fuel product. In petroleum engineering and design, such dispensing pump layout is called the Tandem Design, looking like a domino-4 layout since the depth of the land where the service station is designed to stand is quite shallow; as compared to the Lane Oriented Designs where scenarios show the land of the service station designed to be built is longer in length which is along the road. There are a dozen or more dispensing pump designs engineers develop depending on the size, shape and contours of the prospective land the oil companies intend to acquire as they grow their retail network of service stations. Thus, in every dispensing pump, there will be two filling positions or locations which you’ll find enormously important to know as you intend to manage sales efficiency in the service station as vehicles start to pour-in in certain hours or in time intervals.
The Underground Storage Tank
The under-ground storage tanks (UST) generally ranges from 2,000 gallons, 4,000 gallons, and 6,000 gallons to as much as 12,000 gallons in storage capacities depending on the requirements of fuels in the trade area that is under consideration. The UST quantity in a service station vary according to the type of fuel products planned to be sold, and further its sizes vary according to the volume the service station is projected to sell on a per product analysis. Similarly, its layout is determined based on the size, shape and contours of the land that is under consideration. Finally, as to the under-ground storage tanks that’re concerned in the planning of a service station, the quality of the material used depends on market analysis and throughput projections the trade area analysis projects, local government ordinances and the budget of the oil company and/or the private investor. In your further readings on UST designs and engineering, terminologies such as the basic steel plates, fiberglass single wall and the double wall technologies and so forth among others, you will definitely encounter.
We mentioned on ancillary products earlier on this subject, and we mean ancillary services such as the oil and water check station which is normally located in the egress of the service station. The location of the air and water check station was decided to be constructed on the egress of the service station based on observations and practical experiences so as to prevent any traffic build-up as vehicles tend to line-up turn after turn to fill air and water into their vehicles since this service is actually for free (not withstanding to the dealer’s marketing policy on patronship and loyal customers)! In certain studies and observation of some oil companies I know, the traffic build-up for such services is well better managed on the outgoing side of the service station as compared to such infrastructure located on the ingress of the service – station where vehicles driving-in. Later innovations brings such services near the fueling motorists under the canopy via standardized containers for water and pressurized tanks whose shapes and sizes are those of that used for stored liquefied petroleum gas (LPG) and liquefied natural gas (LNG).
Another functional ancillary service is the cashier’s kiosk or booth. Such is designed under the forecourt area for means of flexibility for the motorist to pay as you gas up either in cash or in card. However, nowadays, marketing, as well as for safety and security, payments are made inside the service station’s convenience stores to pull customers to appreciate the myriad of ready-to-go snacks and cold drinks impulsive merchandising.
Retail Automation has played a very important role of trajectory pivot in the ever evolving service station from full serve to self-serve and cash payments to the various forms of electronic payments as far as forecourt operations are concerned; online reservations of products and services to avoid the usual queue; the timed lighting mechanism in the various areas of the service station such as under the canopy, cashier’s booth, cat walks, service and lube bays, rest rooms, yard lights and the other various areas in the service station just to project the corporate image of safety and security; loyalty cards and promotional systems to increase new customer base and improve existing patronship as far as defining sales and market shares are concerned; dealer account management as far as product orders, payment collections and account reconciliations are concerned; and so much more development pours-in as far as retail automation brings forward outcomes from retail technology.
Retail Technology on the other hand has helped evolve the ways and practices service stations operate in terms of service station management, operations, excellent customer service, forecourt operating items, safety and security, emergency response, standards operations audit, training and people management, retail marketer’s visit and support to the dealer and his or her staff, trade area analysis, business sustainability, legalities and the standards operations procedures and development. At this point, I’d like to reiterate on standards operations, systems design and management information as the core elements of this book. Given these core elements, I believe, the reader will truly appreciate the material of this book specially when applying certain subjects or contents in certain subjects in his work, research and studies. Again, these core elements sprung from my work experiences throughout decades of employments in various oil companies in the Philippines and in other countries.
Customer service is the very essence in any retail establishment. Failing to meet customer expectation will mean a business loss and worst, legal expenses to mitigate any dire complains brought by poor customer service. For this very reason, to avoid such unnecessary litigation, responsible oil companies and their dealers invest on training for themselves and their entire service station staff and continuous training to update themselves on the knowledge acquired on ever changing landscape of standard operations, systems design and management information being the core elements as basic foundations on service station management, operations, excellent customer service, forecourt operating items, safety and security, emergency response, standards operations audit, training and people management, retail marketer’s visit and support to the dealer and his or her staff, trade area analysis, business sustainability, legalities and the standards operations procedures and development.