An Assessment of Competitive Pricing, Strategy and Customer Loyalty in The Oil and Gas Sector in Uganda: A Case Study of Petrol Stations for Selected Petroleum Companies in Arua District

Abstract

The study aimed at assessing of competitive pricing, strategy and customer loyalty in the Oil and Gas sector in Uganda. The study was guided by objectives which included: to assess the factors affecting competitive pricing, to assess pricing strategies for customer loyalty and to assess how competitive pricing, pricing strategy and customer loyalty relate in the oil and gas sector in Uganda. Furthermore, despite the various pricing strategies adopted by different petroleum companies that are new in the industry, they have still failed to win customer loyalty otherwise enjoyed by the leading petroleum. Therefore, the research findings helped in giving a clear insight on how best competitive pricing strategy can be used by petroleum companies to stay competitive in the market.

The study was carried out using a case study research design where both quantitative and qualitative research methods were used. Simple random sampling of 45 respondents was done and data was collected using questionnaires given to the lower employees of both Don (U) Ltd and Vivo Energy and key informant interviews were done with the top management of the two companies.

The study revealed that competitive pricing greatly affects customer loyalty. Several factors have been found to affect competitive pricing of petroleum companies, for example, cost of production, the nature of market competition and the level of demand of new products in the market. It was further found that there are several pricing strategies that have to be considered for customer loyalty to be achieved in the Oil and Gas industry, the main ones being, price skimming, discounting, customized pricing, value-based pricing, group/ segment-based pricing strategy, market-based pricing and cost-based pricing strategy, among others.

The study recommended that companies dealing in the similar products like the petroleum need to always consider improving their quality because this can to lead to increase in prices of their products. It is also recommended that companies need to first study their market before engaging in competitive pricing and that companies need to also first study their inputs in production and transportation before setting a competitive price, among others.