We will work on a customer empathy analysis through the fill in the blanks paragraph below. To be able to answer the questions, you are asked to empathize with two target segments for Mercedes and BMW:

Primary target of luxury car buyers

Secondary target of currently mainstream, but ideally prospective luxury buyers

While the video case title suggests cheap luxury cars do not succeed in the automotive industry, there is a subtle point made towards the end: Mercedes reports that $\frac{2}{3}$ of CLA buyers return to buy a higher class Mercedes later on$.$ Given the main goal with cheaper offers, is to expand out of the luxury buyer market and into the top of the mainstream market, one may argue that this strategy is actually successful. Overall customer perception of value luxury car manufacturers offer is one of high quality and high price, in other words a offering. The cheaper makes for these cars, on the other hand, appeal to different target segments, differently. The loyal Mercedes or BMW driver appreciates the $$ benefits enough that they will pay more for the leather seating and upgraded features. When the company offers a lower end model, those customers' expectations are not met. Therefore they perceive it as a low price and $$ quality model $($a$.$k$.$a an Economy offering$).$ For the mainstream customer, though, the offer is still high quality, in comparison to the other brands and yet low price for a Mercedes, so within reach. So the mainstream buyer's perception of the cars is that it is using a Answer strategy.