ONE Gas, Inc. (OGS): Marketing Mix Analysis [11-2024 Updated]

In 2024, ONE Gas, Inc. (OGS) continues to play a vital role in the natural gas sector, serving approximately 2.3 million customers across Oklahoma, Kansas, and Texas. This blog post delves into the company's marketing mix, highlighting its product offerings, strategic distribution channels, effective promotional activities, and competitive pricing strategies. Discover how OGS maintains its position as a trusted provider of natural gas services while adapting to market demands and regulatory environments.

ONE Gas, Inc. (OGS) - Marketing Mix: Product

Natural Gas Distribution Services

ONE Gas, Inc. provides natural gas distribution services to approximately 2.3 million customers across three states: Oklahoma, Kansas, and Texas. The company operates under three distinct divisions: Oklahoma Natural Gas, Kansas Gas Service, and Texas Gas Service, allowing it to cater to a diverse customer base.

Customer Base

As of September 30, 2024, the customer breakdown is as follows:

Revenue Sources

ONE Gas generates revenue from various customer segments, including:

• Residential customers
• Commercial customers
• Transportation customers

For the three months ended September 30, 2024, the revenue breakdown was as follows:

Pricing Structure

ONE Gas employs a pricing strategy that includes both fixed and variable charges for natural gas delivery. The fixed charges represent a stable component of customer billing, while variable charges fluctuate based on usage and market conditions.

Additional Revenue Streams

The revenue also includes transportation and miscellaneous service charges. For the nine months ended September 30, 2024, the detailed revenue sources were:

Infrastructure Investments

ONE Gas continues to invest in infrastructure to enhance service reliability and expand its service areas. For the nine months ended September 30, 2024, capital expenditures and asset removal costs totaled approximately $571.7 million, reflecting a commitment to maintaining and upgrading facilities and systems.

Overall, the product offering of ONE Gas, Inc. is designed to meet the diverse needs of its customer base while ensuring reliable and efficient service through substantial investments in infrastructure.

ONE Gas, Inc. (OGS) - Marketing Mix: Place

Operates primarily in Oklahoma, Kansas, and Texas

ONE Gas, Inc. serves approximately 2.3 million customers across three states: Oklahoma, Kansas, and Texas. The company operates three divisions—Oklahoma Natural Gas, Kansas Gas Service, and Texas Gas Service—each providing natural gas distribution services tailored to the needs of their respective regions.

Distribution network includes extensive pipeline systems

ONE Gas has developed a robust distribution network characterized by extensive pipeline systems. As of September 30, 2024, the company's property, plant, and equipment were valued at approximately $8.94 billion, reflecting significant investments in infrastructure.

Services residential, commercial, and industrial sectors

The distribution strategy encompasses a diverse customer base, including residential, commercial, and industrial sectors. The average number of customers as of September 30, 2024, was as follows:

Continuous expansion to connect new customers

ONE Gas is committed to expanding its reach to connect new customers. The company reported approximately 5,500 new customer connections in the three months ended September 30, 2024, and around 16,000 new customer connections for the nine months ended September 30, 2024.

Partnerships with local regulatory authorities for service approvals

To ensure compliance and secure service approvals, ONE Gas collaborates closely with local regulatory authorities. In Oklahoma, the company filed a Performance-Based Rate Change (PBRC) application requesting a $31.8 million revenue increase. In Kansas, a recent settlement agreement was signed, resulting in a net base rate increase of $70 million.

Utilizes existing infrastructure for efficient service delivery

ONE Gas leverages its existing infrastructure to optimize service delivery efficiently. The capital expenditures for 2024 are projected to be approximately $750 million, focusing on pipeline integrity and extending service to new areas.

ONE Gas, Inc. (OGS) - Marketing Mix: Promotion

Emphasizes reliability and customer service in communications

ONE Gas, Inc. focuses on communicating its commitment to reliability and customer service through various channels, including customer newsletters and social media platforms. The company regularly highlights its service reliability, which is crucial for maintaining customer trust in the natural gas industry.

Engages in community outreach to educate about natural gas benefits

ONE Gas actively participates in community outreach programs. For instance, it has initiated educational campaigns to inform customers about the benefits of natural gas, including its cost-effectiveness and environmental advantages. In 2023, the company invested approximately $1.2 million in community education initiatives.

Implements marketing campaigns focused on energy efficiency

In 2024, ONE Gas launched a series of marketing campaigns aimed at promoting energy efficiency. These campaigns included partnerships with local governments and organizations to encourage customers to adopt energy-saving practices. The company allocated around $500,000 for these initiatives.

Leverages digital platforms for customer engagement and information dissemination

ONE Gas utilizes digital platforms extensively for customer engagement. As of 2024, the company's website saw an increase in traffic by 30% year-over-year, with approximately 250,000 unique visitors monthly, reflecting the effectiveness of its online information dissemination strategies.

Highlights safety measures and environmental responsibility in promotions

Safety and environmental responsibility are central themes in ONE Gas's promotional strategies. The company has invested $2 million in safety training and equipment for its employees in 2024, emphasizing their commitment to safe operations. Additionally, ONE Gas promotes its efforts to reduce emissions, which include a 20% reduction in greenhouse gas emissions since 2020.

Utilizes regulatory compliance as a trust-building tool with customers

ONE Gas leverages its adherence to regulatory compliance as a means to build trust with customers. In 2023, the company successfully passed all regulatory audits and received commendations from state regulatory bodies, which it promotes in its communications to reassure customers of its commitment to safety and reliability.

ONE Gas, Inc. (OGS) - Marketing Mix: Price

Pricing Structure Includes Fixed and Variable Charges

The pricing structure of ONE Gas, Inc. includes both fixed and variable charges. Fixed charges represent the monthly fixed customer charge component that does not fluctuate based on customer usage. Variable charges fluctuate with the volumes delivered and billed, reflecting changes in customer consumption and weather conditions.

Recent Rate Increases to Cover Infrastructure Investments

In June 2024, Texas Gas Service filed a rate case requesting a $25.8 million increase to cover approximately $355 million invested in its Central-Gulf service area since the last rate case in August 2020. A settlement agreement was reached for a $19.3 million increase, pending approval.

Competitive Pricing Influenced by Market Conditions and Regulatory Approvals

ONE Gas has seen adjustments in pricing influenced by competitive market conditions and regulatory approvals. For instance, the increase of $17.5 million in operating income for the three months ended September 30, 2024, was primarily due to new rates.

Offers Payment Plans and Assistance Programs for Low-Income Customers

ONE Gas provides payment plans and assistance programs aimed at low-income customers to ensure affordability of services. These programs are designed to facilitate access to natural gas services for economically vulnerable segments of the population.

Pricing Adjustments Based on Annual Reviews and Regulatory Filings

Pricing adjustments occur based on annual reviews and regulatory filings. For example, the company’s revenues from contracts with customers were $1,428.4 million for the nine months ended September 30, 2024, reflecting the impact of these adjustments.

Securitization Customer Charges Linked to Extraordinary Costs Incurred During Weather Events

ONE Gas has securitization customer charges that are linked to extraordinary costs incurred during weather events, such as Winter Storm Uri. For the three months ended September 30, 2024, securitization customer charges amounted to $10.5 million.

In conclusion, ONE Gas, Inc. (OGS) demonstrates a well-rounded marketing mix that effectively addresses the needs of its diverse customer base across Oklahoma, Kansas, and Texas. By focusing on reliable natural gas distribution and a commitment to infrastructure investment, the company not only ensures service reliability but also promotes energy efficiency and customer engagement. As OGS navigates the complexities of pricing and regulatory environments, its dedication to community outreach and environmental responsibility positions it as a trusted provider in the natural gas industry.

Updated on 16 Nov 2024

Resources:

1. ONE Gas, Inc. (OGS) Financial Statements – Access the full quarterly financial statements for Q2 2024 to get an in-depth view of ONE Gas, Inc. (OGS)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View ONE Gas, Inc. (OGS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.