{"id":4547,"date":"2017-03-08T21:02:27","date_gmt":"2017-03-08T21:02:27","guid":{"rendered":"http:\/\/fieldservice.kameleon-apps.com\/?p=4547"},"modified":"2024-07-09T19:10:34","modified_gmt":"2024-07-09T19:10:34","slug":"customer-oriented-pricing-for-profit-maximization-a-paradox","status":"publish","type":"post","link":"https:\/\/www.copperberg.com\/aftermarketeurope\/customer-oriented-pricing-for-profit-maximization-a-paradox\/","title":{"rendered":"Customer oriented pricing for profit maximization \u2013 a paradox?"},"content":{"rendered":"

\u201cPricing is actually a pretty simple and straightforward thing. Customers will literally not pay a penny more than the true value of the product\u201d R. JOHNSON (Apple\/J.C. Penny).\u201d<\/strong><\/p>\n

For BMW pricing plays a key role in its Aftersales Strategy. The reason is easy \u2013 if you make it right you can improve your profit situation dramatically. Beyond that today\u2019s customers are not passive price takers. They do not simply refuse incomprehensible prices. They rather reject the firms\u2019 fundamental approach to make money and do not hesitate to abandon companies that cross the line. While emphasizing on a customer oriented pricing approach BMW\u2019s price management is therefore focusing on targets like customer satisfaction, loyalty and price image and strives to develop a price position which customers perceive as fair. Fair prices are achieved if the price perception is concordant with the price expectation and if the price-performance ratio is within acceptable limits.<\/p>\n

The BMW price management process consists of the following main steps:<\/strong><\/p>\n

Understanding the customer needs and expectations is the first step. We conduct thorough market researches to find the needs of our customers. This approach is guided by the knowledge about our customers, their special requirements, how those customers will likely react to various pricing schemes and what their perceptions of price fairness are. Based on that, we create customer segments which will be addressed with specific pricing guidelines.<\/p>\n

Of course we are not alone in the marketplace \u2013 therefore we are looking into the competitive environment in each major market around the globe. The combination of customer oriented pricing and in depth analysis of the individual market competition ensures a country specific optimal price point to generate the profit optimum for the BMW Group. This process is supported by sophisticated systems which allow us to run specific price simulations that calculate the market individual effects of any price changes in terms of volume and revenue.<\/p>\n

But once you got the right price the job is not done. We have to ensure that this price is also perceived as a true value of the product by our customers. This is an intense communication job. Therefore we put a premium on the communication with our partners. We have created a strict process across our wholesale and retail organization to make sure that all prices are transferred correctly and that our worldwide partners are able to explain our pricing logic.<\/p>\n

When prices are perceived as fair, customers often buy more and are more willing to pay a premium. Successful price management for us means that prices are transparent, that they are aligned with the individual situation of the customers and that they are understood as an appreciation of our customers.<\/p>\n

\"\"<\/p>\n

Stephan Reiff<\/strong>
\nVP Aftersales Strategy, Planning and Steering<\/em>
\nBMW Group<\/strong><\/p>\n

\u00a9 Inside Aftermarket Europe \u2013 Aftermarket Conference 2016<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cPricing is actually a pretty simple and straightforward thing. Customers will literally not pay a penny more than the true value of the product\u201d R. JOHNSON (Apple\/J.C. Penny).\u201d For BMW pricing plays a key role in its Aftersales Strategy. The reason is easy \u2013 if you make it right you can improve your profit situation <\/p>\n

Continue Reading<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-4547","post","type-post","status-publish","format-standard","hentry","category-news"],"yoast_head":"\nCustomer oriented pricing for profit maximization \u2013 a paradox? - Aftermarket Business Platform<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.copperberg.com\/aftermarketeurope\/customer-oriented-pricing-for-profit-maximization-a-paradox\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Customer oriented pricing for profit maximization \u2013 a paradox? - Aftermarket Business Platform\" \/>\n<meta property=\"og:description\" content=\"\u201cPricing is actually a pretty simple and straightforward thing. 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