Kevin R. Posted February 19, 2008 Report Share Posted February 19, 2008 I am doing a pretty deep industry/business analysis for a "business cluster" I am in here at Ohio University entailing marketing, management, professional business communication, and finance. We are employed in groups and are focusing on a live business situation. In this case it is the growing business of these propane delivery services. Our main focus is the Northern California region from Monteray and north. If some of you could take a minute out of your day to answer some of my questions that would be awesome. No, you are not doing work for me. This is more in the form of a potential consumer survey as I am not aware of a service like this in Ohio. This puts you in the category of a potential consumer which is the goal. Keep in mind, the goal here is to expand the residential market of the delivery service. Commercial accounts are a breeze for this company to obtain, especially with the cool weather in NorCal. If you could answer all or a few of the following questions I would appreciate it immensely: 1. Would you be interested in a propane delivery service for approx. $17-25? The propane would be delivered, old tank removed, and new tank hooked up whether you were home or away. If so, why? Would it make your life easier? If not, why? Do you find it easier to do yourself? 2. Where would you expect to find out about a service like this? (I know personally I never have until this project) Customer referrals from friends and neighbors? Radio? Television? (expensive for company/may not meet cost/benefit) Basically, where do you see a service such as propane delivery catching your eye? 3. Do you know of any markets where similar products have teamed up to market together? For example, propane tanks and mosquito magnets. Anything similar to this would be great. Not pizza and subs, but yet two products that could go in conjunction. My research as not netted me any real-world examples I can work with. 4. (More opinion) Do you see any underlying problems with a service like this? Any thoughts on why it would be difficult to spread business like this through a residential atmosphere? Once the customer is obtained the retention rate is VERY HIGH and the customer satisfaction is VERY HIGH. So why do you think the service does not spread? Propane is something people rarely think about until they run out, as most of you probably know. Should the word simply be put into the consumers minds more? Thank you for any time you spend on this. It is greatly appreciated. PS. Due to confidentiality, I cannot answer any specific questions pertaining to the business. Just an FYI. Quote Link to comment Share on other sites More sharing options...
Dr. Pomade Posted February 19, 2008 Report Share Posted February 19, 2008 Questions answered via PM. Quote Link to comment Share on other sites More sharing options...
Kevin R. Posted February 19, 2008 Author Report Share Posted February 19, 2008 Questions answered via PM. Much appreciated. Quote Link to comment Share on other sites More sharing options...
RedRocket1647545505 Posted February 19, 2008 Report Share Posted February 19, 2008 I would assume we're talking about propane tanks for gas grills, right? Quote Link to comment Share on other sites More sharing options...
Kevin R. Posted February 19, 2008 Author Report Share Posted February 19, 2008 I would assume we're talking about propane tanks for gas grills, right? Yeah. Usually the 20lb. tanks used for grilling and mosquito magnets. Except now some of the larger grills became approved for the 30lb. tanks. They will deliver 20lb, 30lb, or 40lb. I am not sure what the 40lb is used for except outdoor patio heating. Quote Link to comment Share on other sites More sharing options...
RedRocket1647545505 Posted February 19, 2008 Report Share Posted February 19, 2008 Yeah. Usually the 20lb. tanks used for grilling and mosquito magnets. Except now some of the larger grills became approved for the 30lb. tanks. They will deliver 20lb, 30lb, or 40lb. I am not sure what the 40lb is used for except outdoor patio heating. Ah, ok. Going to prepare my answers... Quote Link to comment Share on other sites More sharing options...
Kevin R. Posted February 19, 2008 Author Report Share Posted February 19, 2008 By the way, only a few places do this so competition is not really a problem right now. However, from the owner's mouth, competition could actually help the business because the word would be spread more that this service is even available. Quote Link to comment Share on other sites More sharing options...
RedRocket1647545505 Posted February 20, 2008 Report Share Posted February 20, 2008 1. $17-25 seems reasonable. I believe most exchange stations charge $18-20 around here, and that's you exchanging it yourself. As for whether or not I would be interested; probably not. My situation isn't really relavent to the survey, though. My stepfather's equipment rental company, among multiple other odd things, fills propane tanks. 20lb. all the way up to 100lb. cylinders. We charge our customers $0.65/lb. ($13/20lb.) We get a TON of business, and it really helps during the slower winter months to supplement the lack of equipment renting we get. We pay roughly $0.40/lb for it, and even with a 62.5% markup on it, we're still much much cheaper than other local fill stations. So, main reason I'd personally do it myself; I can do it much cheaper. If I wasn't in the situation I'm in, then sure, I might opt for a service such as yours. 2. I've found that most of our customers either: a. see our sign out front of our building that says we're a propane filling station, b. they see an ad/coupon in the local newspaper that we might run once every few months, or c. they hear about us from friends and family. Radio wouldn't hurt either if you were in the business of strictly propane delivery, IMO. 3. Not really sure here. Purhaps selling/renting construction torpedo style propane heaters as well as selling propane and renting/selling tanks? 4. Can't seem to think of any problems with the business. Purhaps licensing, regulations, and any fees you'd have to pay to the gov't to be allowed to transport large quantities of flammable gas. Also can't think of any reasons why it wouldn't spread. Perhaps the economy is causing people to pinch pennies wherever they can? Final thoughts: Make your delivery trucks run on propane. a. to promote your product, and b. I'm sure you can get it cheaper than gasoline. Quote Link to comment Share on other sites More sharing options...
Kevin R. Posted February 20, 2008 Author Report Share Posted February 20, 2008 I don't know if you got this out of what I wrote as I had to be kind of vague, but this is an existing business Austin. They franchise out and people deliver the propane to commercial as well as residential businesses. The problem lies within getting the business idea out to residential consumers who seem to be either A. not interested or B. don't know it exists. The customers they do get are thoroughly satisfied as they hold a very high retention rate. But, it seems the word does not spread, or does not spread rapidly enough. Radio and television have not netted them the sales they would like to see from these high costs. So, the fact of the matter is that this idea is not spreading as much as they would like to see to keep up with the commercial growth the franchisees can get. I do like the idea of the heaters though. Are those prevalently used? Would they use more than one tank whilst renting the heaters? BTW - this is not in Ohio. Just in case you feel like you are giving me information that could transfer to competition for your stepfather's business. But, much like your stepfather's tank, they only structure these franchises around the fill stations they currently have in place around the country. Quote Link to comment Share on other sites More sharing options...
RedRocket1647545505 Posted February 20, 2008 Report Share Posted February 20, 2008 Nevermind. I was thinking of more towards what problems you'd run into with the business as a whole, not just marketing. Guess I need to read closer. Quote Link to comment Share on other sites More sharing options...
Kevin R. Posted February 20, 2008 Author Report Share Posted February 20, 2008 I don't know if you got a chance to read what I posted above, but they do take care of this. Quote Link to comment Share on other sites More sharing options...
cptn janks Posted February 20, 2008 Report Share Posted February 20, 2008 http://i25.tinypic.com/33w4g2a.jpg i sell propane and propane accessories. Quote Link to comment Share on other sites More sharing options...
cptn janks Posted February 20, 2008 Report Share Posted February 20, 2008 one more for the metalocalypse fans http://i25.tinypic.com/x6j49g.jpg Quote Link to comment Share on other sites More sharing options...
Miller Posted February 20, 2008 Report Share Posted February 20, 2008 If I had more money for barbequables (that's a word that will get you an A) then I would love a service of this sort. Does a piece of chicken come with every tank change? It only seems like the best marketing ploy possible. Quote Link to comment Share on other sites More sharing options...
Kevin R. Posted February 20, 2008 Author Report Share Posted February 20, 2008 If I had more money for barbequables (that's a word that will get you an A) then I would love a service of this sort. Does a piece of chicken come with every tank change? It only seems like the best marketing ploy possible. Ha. You and Tilley are on the same page. People don't like the propane man bringing them food I doubt. Quote Link to comment Share on other sites More sharing options...
Akula Posted February 20, 2008 Report Share Posted February 20, 2008 Ok, so I live in the sticks and someone already brings me propane... I guess you mean those small bottles used for a gas grill? I would expect to find out about the service either when I buy my grill/mosquito destroyer, or when I go to get the tank refilled. So long as they can anticipate me running out of propane and having a new one ready before mine runs out, or include a tank guage visible on the exterior so I can schedule a new one today, I wouldn't be interested. I don't really see me having to run a few miles to the store for a new tank as that big of a deal. Besides, I use a charcoal Weber (way better taste). Quote Link to comment Share on other sites More sharing options...
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