Smarter Pricing: How to capture more value in your market

How price conveys security

Security is another element of brand positioning that can be conveyed through pricing. Market entrants often have the advantages of novelty, nimbleness and flexibility. Thus, for incumbents, the alternative virtues of security of supply and security of buying terms can give a differentiation.

British Gas, the leading UK energy supplier, has positioned itself as safe, reliable and secure. The implication is that customers will not receive unpleasant surprises. In keeping with this positioning, during 2005 British Gas offered its domestic gas customers the opportunity to avoid gas price increases for two years. A ‘price protection’ premium of 3.5 percent removed the uncertainty of future price rises. British Gas reported ...