Pricing Strategy and Market Strategy of British Gas

Crude oil is usually purchased on contract basis by marketing and refining companies for long term with frequent revision of prices as per their international market trading prices. The crude oil is refined by refineries and different products are distilled from it. Cost of transportation of crude oil and refining is a major part of the prices offered to the end product consumers. After era of liberalization of markets’ opening up of many closed economies for international business the consumption of fuel has increased and the market became more competitive. Both government organizations and private industry players are striving to lure the consumers with value added services and their pricing structure. Economic recession has intensified the competition and emerged with the survival concept of Darwin “survival of the fittest” . the organization’s who are able to cut down on their cost’ pass on the benefits to the end product consumers and remain profitable in tougher economic times are only organization’s which can enjoy having a sustainable advantage over their competition and remain profitable and growing in economic recessive times .

UK and European Union market for energy is very competitive in nature. The market is huge with immense consumption capacity and huge potential to grow in future years. The demand for energy is majorly from domestic sector’ power generation companies’ refineries’ automobile industry’ and other manufacturing sector. These industries draw a large amount of fuel and energy and before developing a project they always ensures that their long term energy requirements are fulfilled and guaranteed. Companies like British gas fulfil these needs and draw long term supply contract as well.  For retailing of fuel the companies uses their own retail outlet called as petrol pumps or gas stations. The requirements of domestic and commercial vehicle fuel are fulfilled through these retail outlets. House hold need of energy for cooking’ heating is fulfilled by supplying gas through pipelines and gas connections to individual households and charging them as per the units they have consumed. The British thermal unit of (btu) is internationally recognized unit of measurement of efficiency and energy supplied by the fuel on its consumption.

Pricing strategy is seen as a course of action that is designed to accomplish set goals. The practical problems faced by marketers in setting prices can be solved by using pricing strategies. The prime factors in business which assist in deciding on a subsequent pricing strategy completely rely on its marketing and pricing objectives, on the market for their product, on the product life cycle, on product differentiation and other factors of forum .

Organisations should have a consistent and suitable pricing strategy which will give them an advantage over the other competing organisations in the market. Here the pricing strategy plays two roles in the success of the organisation. Firstly, it helps generate sufficient revenue and, secondly, it aids in affecting the customers thought process when buying things. Lastly, the companies using this strategy should continuously maintain its low prices else the price advantage would only be temporary. Now the organization plays on number and penetrates the market deeply with its low cost product and large number of customer base. This strategy enhances the profitability of an organization to the optimum level since it is using both pricing strategy as and when applicable to earn maximum profits.

This theory defines the role that prices play in consumer demand and the supply of a service. Price theory concerns itself with the creation and transfer of goods and services between different trade and industry agents where the price of one item is comparative to another. The price here is determined by the demand for the commodity and its supply. If demand is equivalent to supply then the market remains very stable and prices does not fluctuates often but in case of gaps in demand and supply and other environmental factors which impacts the prices like political environment’ economic environmentetc then the pricing remain very unstable and volatile.