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Gulf brand gas stations returning to Canada after 30 years

A Gulf station in Nobleton, Ont.

The last time Gulf was a prominent gas station brand in Canada, Wayne and Shuster were still on TV.

The Gulf brand has been defunct here since Petro-Canada absorbed it in a $886-million deal in 1985. Now, an Ontario company is bringing it back – and hoping that customers' nostalgia will help revitalize the brand after a long lapse.

Burlington, Ont.-based XTR Energy Company Ltd. has inked a deal with Gulf Oil International U.K. Ltd. for the rights to the retail brand name in Canada. XTR provides petroleum to roughly 150 independently operated gas stations – many of them in rural areas, where the XTR banner on stations is more common – across the country. The company now wants to move into urban markets with a more recognizable brand.

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"Brand recognition in Canada is still high, and it's still a strong brand in the U.S.," said Paul Stannard, business development manager for Gulf Oil in the U.K. "We're very excited that the Gulf brand will be reintroduced into Canada."

"Anyone over the age of 40 will remember the round orange disk," said XTR president Ken Wootton, referring to the Gulf logo that adorned gas station signs across Canada in the 1970s and 1980s. "…They would have the memory of a brand you can trust. There is some nostalgia to it."

But Gulf will need more than nostalgia to compete in a highly consolidated, highly regulated market dominated by big incumbents. XTR is currently planning a Gulf loyalty program because consumer behaviour in the sector is driven partly by such programs and partnerships, said Edgar Baum, a lecturer at the University of Toronto and former managing director for brand-value consultancy Brand Finance Canada.

"People want the sense that they're getting something back, particularly with a product that's annoying to purchase. People don't love filling up their cars," Mr. Baum said. "Can they come out with a differentiating partnership that will encourage people to switch?"

For XTR, the first job is convincing gas station owners and operators to switch when their contracts with other big brands (typically lasting five to 10 years) come up for renewal. The finishing touches are currently being put on the first station to sign on, in Port Colborne, Ont. The company is targeting 20 new locations in the next year, and 100 within five years.

While the deal was in progress a few months ago, XTR did a direct-mail campaign to roughly 2,500 Canadian retailers currently under big banners such as Esso, Shell and Petro-Canada. So far, it has received a response rate of more than 5 per cent, and has met with roughly 50 owners so far.

"The challenge for the operators is to figure out which company brings them the most brand value," Mr. Wootton said. "The brand is what you pay for."

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The name has not been totally absent: Anjou, Que.-based Teklub Canada Ltée owns the rights to Gulf brand lubricants, which will be sold at the new stations.

Gulf Canada may also be able to borrow some marketing equity from its international parent company, which sponsors the Aston Martin Racing team. Mr. Wootton was on his way to this weekend's 24 Hours of Le Mans in France to cement the new partnership.

Until the new stations open and the company begins advertising to consumers more widely – which is still a ways away – most older Canadians will recognize the brand purely from memory. Gulf was a large competitor more than 30 years ago, when comedians Johnny Wayne and Frank Shuster appeared in commercials with their trademark goofball charm.

In 1985, Petro-Canada acquired part of Gulf Canada Ltd. from the Reichmann brothers for $886-million, giving Petrocan 1,800 more stations in Ontario and Western Canada for a total of more than 4,000 and roughly 28-per-cent market share.

Competitors Esso and Shell scrambled to steal customers during the transition. Shell Canada, for example, launched an advertising campaign it called "Project Engulf" to attract visitors. Shell also took out ads noting that the chain's "familiar orange and blue colours" would disappear. "If you're a Gulf customer, this just might have left you feeling a little out in the cold," the ads read.

In marketing, brand history can be a powerful thing. But while it may give the Gulf launch a boost, it will not be enough on its own.

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"When mature brands come back, there's a question about what it is they're retaining from that brand that we knew," said Carolyn Ray, managing director with marketing consultancy Interbrand Canada. "Can they create a different customer experience? Can they offer something that doesn't exist now?"

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