- March 18, 2013
- Posted by: essay
- Category: Term paper writing
Gas Natural BAN faced considerable problems in the development of its business. In this respect, the company has developed its new strategy, which focused on the development of the corporate social responsibility of the company. To put it more precisely, the company used the low-income sectors strategy, which has proved to be quite effective. At the same time, it is important to place emphasis on the fact that Gas Natural BAN attempted to improve its relationships with customers and to improve its brand image. In this regard, the low-income sectors strategy was chosen by the company as a tool to change the company-customer relationships. However, the development of the low-income sectors strategy raised a number of ethical concerns because the company has to pay a lot of attention to its company-customer relationships, whereas the position of employees of the company was challenged. In such a situation, the company had to balance its internal and external policies. In such a way, it is important to point out that the company should develop its low-income sectors strategy but it should take into consideration ethical concerns and both internal and external factors that affect the performance of the company and its business development.
On analyzing the application of the low-income sectors strategy by Gas Natural BAN, it is important to dwell upon the pricing policy of the company because the fair pricing is one of the essential conditions of the bottom of pyramid strategy. At this point, it is worth mentioning the fact that Gas Natural BAN attempted to establish the low prices as the company has started to implement the low-income sectors strategy. At first glance, this strategy was fair because the company made gas available to poverty-stricken neighborhoods. As a result, many people in need have got an excellent opportunity to receive the product of Gas Natural BAN at low, affordable price. In such a way, the company conducted socially responsible policies and made gas available to neighborhoods, which could have never afford purchasing gas at the prices established by other companies.
On the other hand, the low pricing policy used by Gas Natural BAN was not absolutely fair in regard to the relationships with other companies operating in the market. What is meant here is the fact that Gas Natural BAN established low prices, which were lower compared to the average prices in the market. As a result, Gas Natural BAN could have gained a larger share of the market but its rivals could not afford maintaining the policy of decreasing their prices because this policy would deteriorate their position in the market. Therefore, Gas Natural BAN’s pricing policy was quite arguable from the ethical point of view because, on the one hand, the company conducted socially responsible policy and gained a larger share of the market, whereas, on the other hand, the company’s pricing policy failed to match the policy conducted by the rivals and was lower than average prices in the industry. At this point, it is worth mentioning the fact that from the standpoint of customers, the company conducted attractive pricing policies making gas available to people living in low-income communities. As a result, they could benefit from socially responsible policies conducted by the company, but the company should cover its possible financial loss at cost of other customers, who paid the higher price.
At the same time, the company saved costs on advertising and promotion because the company did not need to invest substantial funds into its advertising and promotional campaign. Customers would readily accept the offer of the company because they could not afford other offers made by other companies because the price of other companies was too high for them. In such a situation, the low-income sectors strategy allowed Gas Natural BAN to penetrate new markets fast and save costs on advertising and promotion. The company just needed to offer customers the possibility to purchase gas at lower price compared to its rivals. In this regard, competitors of Gas Natural BAN had to spend considerable costs on advertising and costs because they need to promote its product as they were oriented on other customers, but low-income sectors.
In such a situation, the company benefited from its branding because Gas Natural BAN has improved the public image of its brand. In fact, using the low-income sectors strategy, the company created a positive brand image because this strategy was the manifestation of the social responsibility of the company. Therefore, Gas Natural BAN used the low-sectors strategy as an effective tool to improve its public image. Other customers of the company considered the company as the social responsible. In actuality, the public image is extremely important for the position of the company in the market because the positive brand image attracts more customers and improves the financial and marketing position of the company.
At this point, it is important to place emphasis on the fact that Gas Natural BAN used the low-income sectors strategy was a bottom of pyramid strategy. In this regard, it is worth mentioning the fact that the Gas Natural BAN’s strategy of low-income sectors is a non-tradition product delivery strategy because Gas Natural BAN uses the low-income sectors strategy, which focuses on the provision of the product to low-income neighborhoods. What is meant here is the fact that normally companies focus on middle and upper-class customers. In such a way, Gas Natural BAN used the low-income sectors strategy, which was an effective strategy.
Furthermore, the Gas Natural BAN’s strategy serves as the Corporate Social Responsibility strategy that impact the poverty. The company provided low-income communities provided ample opportunities with the supply of gas. As a result, the social responsibility of the company contributed to the consistent improvement of the public image of the company and made gas affordable to low-income communities. In such a way, the company conducted effective strategy, which improved the position of the company in the market.
At the same time, Gas Natural BAN’s strategy is profitable. This strategy brings the company considerable benefits because it opens wide opportunities for the company to expand its market share and penetrate new markets. In such a way, the company benefited from its low-income sectors strategy.
Thus, taking into account all above mentioned, it is important to place emphasis on the fact that Gas Natural BAN conducted effective marketing strategy focused on the low-income sectors, which improved the position of the company in the market. However, this strategy raises a number of ethical concerns but the company can improve its company-customer relationships and public image of the company in the market.