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Pricing Models for Extra Feature in Cars May 17, 2011

Posted by reto wettach in entrepreneurship, gadgets, service design.

After some discussion within the – quite proud of being close to academic thinking – team of our design research firm whether or not it is ok to quote the yellow press, we decided to do so:

The pricing model of extra features in cars is being accused by the Bild-Zeitung for being far to expensive. They use a trick, which we all would hate if it would happen in a restaraunt: to buy a not so expensive feature, one has to buy other, even more expensive features, which are not really related to the original feature.

(detail from price list)

The Number 1 in this article is the  “Pre-Crash-Safety-System” (Anti-Collision-Radar) in Toyota Prius, which costs 1500 Euro, however can only be ordered with  Lederausstattung (leather interior, 1700 Euro) und der Executive-Ausstattung (executive fitting, 3300 Euro), so it ends up with 6700 Euro.
Interesting: only with leather interior…
(It is actually true, you can check the price list here.)

(detail from price list)

BMW does a similar trick when selling a couple of digital features as Sourround View or Spurwechselwarnung (Lane Change Warning). You need – amongst others – to buy the feature “Innen- und Außenspiegel automatisch abblendend” (interior and exterior mirror automatically screening off, 550 Euro)(price list here).

First of all that fits very well to the wonderful book “Predictably Irrational“, which I discussed recently, where the author writes: “it is so easy for a person to add 200$ to a 5.000$ catering bill for a soup entrée, when the same person will clip coupons to save 25 cents on a one-dollar can of condensed soup.”

Furthermore I think that you need to have some reasoning to argue a certain price, whether it makes sense or not as e.g. the leather interior for a anti-collision-radar. In the complex situation of purchasing a car, people might just forget that not every argument is logical.

To protect customers of having the feeling of being cheated maybe it would be helpful to show these dependencies in a more visual way – eventually with some explanation!



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