Could really use some help on this assignment. Just a few basic answers for each
ID: 353956 • Letter: C
Question
Could really use some help on this assignment. Just a few basic answers for each question will really help!!
piriche surausry It.kuapan Tacj . MRIG2010. 201and 202 You have been charged with establishing a pricing strategy for a new, independent gas station. What is your "strategy" recommendation? Provide at least 3 reasons for this recommendation. Consider the 5C's of Pricing, and define the Company Objective/Orientation (Profit, Sales, Competitor, Customer) -The closest gas stations (4) are 1 mile away on major streets in a suburban community near small shopping centers. They are franchises of major oil companies - Exxon, Gulf, and Mobil -The independent gas station is located just off an exit for a major highway and at the entrance to an office/manufacturing park that employs 3000. On a typical day,more than 100 semi-trucks enter and exit the office/manufacturing park. -The independent station also offers maintenance services while the competitor gas stations offer fuel (regular, premium, super premium, and diesel) and an on-site convenience store. You offer the fuel options, but no convenience store. -The independent station owner has invested his life savings in this venture and has a reserve for cash flow for a maximum of 6 months. Document any assumptions you would like to make (Rememberyou have been asked to develop a strategy rather than specific pricing)Explanation / Answer
My strategy for sustainable future is to price the product based on cost. The manager can add a reasonable margin on the cost of the product to earn long term profits. My decision to follow this strategy is based on these following reasons:
- The gas is a commodity product and there is no big difference in your's and your competitor’s offerings, so customers won’t mind purchasing the product from the nearest gas station
- In fuel market, there is no brand loyalty towards any of the big giants, customers always look for the cost and location while making a purchase.
- Thirdly, the owner has already invested his life savings in this venture and is currently low on cash. His motive is to earn profits and breakeven as early as possible.
- The target customers are the semi trucks who require maintenance services on a regular basis. The customers won’t mind paying extra at the gas station which is offering them maintenance services and also lies in close proximity to them.