An experiment on the use of a knowledge support system for dynamic pricing of gasoline products in France

The use of the knowledge support system Price-Strat for managing the day to day prices of various gasoline products at four service stations of an oil company in the French market is described. The four sites were different from one another, and each operated in a trading area with different competitors of different degrees of importance. The knowledge bases of Price-Strat for each of the sites were initialized using information on the strategic stance of the oil company and the expertise of four managers extracted through their responses to a series of what-if pricing scenarios generated by the Price-Strat system. Subsequently, the prices of the products at each site were varied, where necessary, on a daily basis, in the light of the competitor price moves, sales volume targets, and the changing products costs. The experiment was carried out over a three-week period. At each of the sites, Price-Strat enabled the total sales volume targets to be met while yielding improved net margins