BMW cars are typically associated with high status and success - a positioning that they have worked
Question:
BMW cars are typically associated with high status and success - a positioning that they have worked hard to achieve. Price is a key aspect of their positioning, with most of their vehicles retailing for $50,000 or more. The management team at BMW has noticed the increasing trend of younger car consumers in buying a new car as their first car. Previously, most first-time car buyers typically bought a used car. However, with a range of small new cars available at around $15,000, more and more younger consumers were pursuing this option.
The concern at BMW is that a number of these consumers will become brand loyal. That is, if they are happy with their first car, say a Toyota, then they are more likely to buy a Toyota next time. Therefore, the concern is for the long-term erosion of BMW's future customer base. Therefore, assume that a product/pricing recommendation that BMW's management team is considering is the introduction of the "BMW-Junior" - a lower quality car that will retail at around $15,000. The goal of this new product would be to gain a major share of the young consumer market.
Does BMW pursue their goal of entering the lower-price end of the market?
What impact will these proposed decisions have on their overall positioning?
How important is the role of price in the firm's marketing mix?
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young