PriceCast Fuel: Strategic Business Agility

Different markets and different business strategies requires different approaches to pricing. This is why our intelligent fuel pricing system, PriceCast Fuel, is designed with the flexibility to deploy the right strategy for the local business. By applying Artificial Intelligence to transactional data, PriceCast Fuel determines the best possible price to achive the optimal business results. Listed below you find the three main fuel pricing strategies and how PriceCast Fuel secures their success.

 

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1. ADVANCED AI* PRICING

Pricing based on Artificial Intelligence is the ultimate strategy when the objective is to reach the absolute optimal balance between the volume and margin-budgets. Advanced AI pricing is based on learning algorithms to construct dynamic profiles of customers and their purchasing patterns, as well as competitors and their strategies on both micro and macro scales.

PriceCast Fuel’s AI module uses sophisticated methods for reasoning about uncertainty and dealing with incomplete data to mimic a flexible, almost human-like behavior.

These methods allow PriceCast Fuel to rapidly, intelligently, and continuously react to changing customer behavior, changing markets, and unexpected events. The automated and continuous observation of the complex interactions obscured in the data results in a system with superhuman expertise. That is the key to the superior performance of PriceCast Fuel compared to conventional, less adaptable systems.

*AI stands for Artificial Intelligence

 

2. RESTRICTED AI* PRICING

Restricted AI pricing is efficient when the strategy is to follow the competition with a variable tolerance distance. The strategy could be to allow a tolerance spread from the competition on e.g. plus or minus 1,5 eurocent and then let the AI Optimization Module find the optimal price within this spread. If the strategy is never to be more expensive than competition, the tolerance can be one-sided e.g. plus 0 and minus 3 eurocent. Then the AI module will find the optimal price, just below competition, but still with room for optimization – according to volume and margin objectives.

Restricted AI is a modern and much more dynamic and efficient alternative to conventional price elasticity systems. Where conventional price elasticity is based on static algorithms that have to be recalculated on a regular basis to ensure up-to-date accuracy, restricted AI will in its nature always be self-updating and thereby dynamically staying in close contact with the market. 

*AI stands for Artificial Intelligence

3. STRATEGIC RULE BASED PRICING

Strategic Rule Based pricing is the traditional choice when the business strategy simply is to base the pricing decision on a set of business rules and restrictions. The rules can be linked to a long complex list of input e.g. competitor prices, volume sales targets, time, margin, psychological filters etc.

Often Strategic Rule Based pricing can be a simple and yet very efficient pricing strategy if the brand image of the network ex. is:  “We are always the  cheapest alternative”.

Collaboration between a2i systems and BigBrother

Artificial Intelligence helps gas station owners improve business

Press release November 2015

A Danish and a Dutch company join forces to bring a disruptive technology to the market. The ambition is to help independent gas station owners leap far into the digital future – surpassing even the majority of major oil companies by optimizing fuel prices with help of big data and applied artificial intelligence.

Over the summer and fall of 2015 the IT-companies BigBrother and a2i systems has held a number of workshops and meetings with a selected group of independent gas station owners to introduce them to PriceCast Fuel – an software system using artificial intelligence to calculate the most optimal fuel prices. The majority of the owners attending the workshops were very excited about the new intelligent way of setting fuel prices. Koen van de Knaap, owner of one Shell gas station, said after the introduction:

PriceCast Fuel can give me better insights into my business and makes it possible to calculate the fuel prices more accurate. This will mean a higher margin on gas and less costs in staff and I’m excited about the prospect of this for my business.

Vera de Klerk who is the Commercial Assistant for Calpam SMD Olie B.V. and managing 27 gas stations says:

- The most valuable aspect about PriceCast Fuel is the automated and more efficient price setting. This means freeing up resources to do other tasks instead.

The pricing software PriceCast Fuel has been developed and proven over the past 5 years by a team of PhDs in Artificial Intelligence and is so disruptive that even the majority of the major oil companies do not yet use technologies as advanced as PriceCast Fuel. Ulrik Blichfeldt, CEO of a2i systems, comments on the unique collaboration between a2i systems and BigBrother:

- This collaboration means that small independent business owners now gets access to a Big Data system that most major oil companies are not even ready to use yet. Right now only the most visionary of the major oil companies are using PriceCast Fuel, but through this collaboration with BigBrother we are very excited to be able to offer PriceCast Fuel to small independent business owners as well."

A rapid development in the marked

The last few years there has been a significant development in the dynamics of the retail fuel marked - from setting fuel prices a couple of times a week, it’s now increasingly necessary to set the prices several times a day.

Commercial Director of BigBrother, Aart Van Rooijen, says about the rapid change:

- It’s a development that does not seem to change anytime soon – in countries like Denmark and Germany they set prices up to ten times a day.  PriceCast Fuel uses live transactional and competitor data input to automatically calculate the most optimal price several times a day so that each station can reach its individual business goal.

By connecting two unique IT-systems, BigBrother and a2i has created a path into the future for the small independent gas station owners.

Read the article printed in Dutch press in Tankpro.n , cleaning-station.nl  or in Servicemagazine.be