Pricing Strategies of Exxonmobil

When it comes to pricing strategies, it can be assumed that Exxonmobil and other oil companies use two of the pricing strategies. The two pricing strategies used would be location pricing, and time pricing. According to chapter eleven, location pricing is when “a company charges different prices for different locations, even though the cost of offering each location is the same” (Kotler & Armstrong, 2008, p. 313). This strategy is noticeable when viewing gas prices in each state. For example, Mobil gas in Chicago, Illinois is $3.99 per gallon for regular unleaded, but here in Rochester, New York Mobil regular unleaded gas is $3.79 per gallon. The cost of crude is the same no matter which state the gas is going to be sold in therefore, it can be safe to say that location pricing is one of the strategies that oil companies apply.

Referring back to chapter eleven, time pricing is when “a firm varies its price by the season, the month, the day, and even the hour” (Kotler & Armstrong, 2008, p. 313). A good example of this strategy is seen during the summer and winter months. Most gas companies raise their prices during the summer months due to the higher volume of traffic and greater demand of gas, but in the winter months, gas prices tend to go down. Another example of the time pricing strategy would be when a gas station has one price listed one week but the next the cost of gas has gone up by a penny or two. Although the sudden factors that bring about this price change is unknown, it can still be stated that time pricing is a strategy the oil companies like ExxonMobil apply. Out of all the pricing strategies mentioned in chapter eleven, geographical pricing and possibly promotional pricing are strategies oil companies could adopt.

There have been numerous reactions by consumers over the ever rising gas prices. These changes have caused consumers to believe that there is foul play at work. After seeing the market manipulation play out with the...