What Should the Price of a Gallon of Fuel Oil Represent to a Customer? What Do You Get for That Price?

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What should the price of a gallon of fuel oil represent to a customer? What do you get for that price? “Purchase decisions are based on how consumers perceive prices and what they consider the current actual price to be—not on the marketer’s stated price” states Kotler (2012). He further goes on to explain that customers may have a lower price threshold at which prices means inferior or unacceptable quality, while a high price threshold at which prices are refused determine that the product is not worth the money. The price of a gallon of fuel should represent what the money customers could have spent using to buy something else. The price a customer is willing to pay represents the value or worth of that product is to the customer.…show more content…
What should Bellemore's management do relative to matching the rebate? How would you approach this if you were at Bellemore? The customer’s perceived value of doing business with Fuller’s company has gone up. Bellemore has two options. Bellemore can either increase their customer perceived value above that of Fuller’s company or prove that Fuller’s perceived value is incorrect and is less than Bellemore. If I were a member of the leadership team at Bellemore, I would opt for the first option. I would create and promote the following Ultimate Loyalty Guaranteed Price program: 1. Customers are to receive for the next 12 months a guaranteed price of $0.44 per gallon for fuel oil. 2. These customers will receive a $75 for every customer they refer at the end of the term or 5 cents off the price per referrals starting the month of the referral and ending the 12th month of the term. The referred customer will get the same price of $0.44 per gallon for fuel oil for the first 3 months. 3. The following conditions must apply: a. Customer must have had paid more than $0.599 per gallon in February 1999 b. Customer must not have any break in service between that time and present day. I would encourage customers to look to the future for savings and expect a display of appreciation for their loyalty to the company with a price that cannot be beat. With our customers given 15 cents off what Fuller’s customers paid in the past over the next

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