Royal Dutch Shell Business enterprises - Pricing Methods

Running Head: Fin
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Royal Dutch Shell
Business enterprises
Pricing Methods
3/29/2020

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Contents
Introduction......................................................................................................................................2
Advantages and disadvantages of each pricing method..................................................................2
Mark-up pricing...............................................................................................................................2
Price bundling..................................................................................................................................3
Break even pricing...........................................................................................................................3
Target return pricing........................................................................................................................4
Early cash recovering pricing..........................................................................................................5
Conclusion.......................................................................................................................................5
References........................................................................................................................................7

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Introduction
The report is made regarding the different types of pricing strategies used by the company. The
report is made in regards to the company Royal Dutch Shell. It is commonly called shell which
deals in the industry of the oil and gas. It is one of the famous companies in the UK and it is the
Public Limited Company. The company was founded by Samuel Samuel and Marcus and the
headquartered of the company is in the Haagse Hout, Netherland. The registered office of the
company is in London, England. The company offers its products world widely (Jindra and
Moeller, 2015). The company has the greatest revenues in the year 2018 as they were measured
as the third-largest company in terms of the revenues.
The company provides several products to its customers such as LNG, natural gas, Petroleum,
Lubricants, Petrochemicals, etc. In the year 2019, the revenue of the Shell Company has declined
which has impacted the profitability of the company also. In this report, several pricing methods
will be explained such as target pricing cost-oriented pricing method, competition pricing
method, mark up pricing, price bundling, etc. (Toar, et al., 2017). In this report, the advantages
and disadvantages of this pricing method will also be explained so that it can be evaluated each
pricing method has its appropriateness.
Advantages and disadvantages of each pricing method
Mark-up pricing
It is the cost-plus pricing method only where the company Royal Dutch Shell set the prices of
their oil and gas products is evaluated by adding the cost of the products plus the mark up a
percentage of their profit margin (Bellamy and Benson, 2012). The rate of return through which
the company wants the profit is the fixed percentage which is decided by the company Shell.
This method of the pricing is used in the public utility pricing which helps the company in
evaluating the profit by just adding the cost of their product.
Advantages: This pricing method helps the company and the vendors to evaluate the profit of
the company Shell. This method of pricing reduces the cost of decision making and provides fair
prices to the company which can be easily evaluated. There is no as such information is required