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In the News

Rocket and Feather Pricing - Britain’s biggest gas supplier accused of ‘profiteering’

Graham Watson

12th February 2023

Norwegian state-owned energy firm, Equinor is accused of following 'rocket and feather' pricing and exploiting consumers. As a result, it posted annual earnings of £62bn and is intending to hand £17bn of this back to shareholders. Not a lot of people know that Equinor is the largest supplier of gas to the UK, accounting for a round a quarter of all gas supplies. This is an interesting and important aspect of the current energy price crisis.

What is "rocket and feather" pricing?

Rocket and feather pricing refers to a pricing strategy that uses different pricing for two different segments of customers. It is a way for a company to optimize its pricing for different customer segments based on their willingness to pay for a product or service.

The term "rocket" refers to the high price charged to a segment of customers who are willing to pay a premium for a product or service. These customers are usually seen as more price-insensitive and are willing to pay a higher price for a product or service that they perceive to be of high quality or with unique features.

For example, a luxury car company might charge a "rocket" price for its top-of-the-line models, which are marketed to high-end consumers who are willing to pay a premium for luxury and quality.

The term "feather" refers to the lower price charged to a different segment of customers who are more price-sensitive and are looking for a more affordable option. These customers are willing to sacrifice some quality or features in order to get a lower price.

For example, a fast-food chain might charge a "feather" price for its value menu items, which are marketed to cost-conscious consumers who are looking for an affordable option.

In conclusion, the rocket and feather pricing strategy allows a company to target two different segments of customers with different pricing, which can help to optimize its revenue and profitability. By charging a high price to those who are willing to pay a premium and a lower price to those who are more price-sensitive, a company can appeal to a wider range of customers and maximize its revenue.

Regenerate response

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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