BMW Pricing Strategy

Pricing Concept & CVP

• Price discrimination

• “Ultimate Driving Machine” “Joy is BMW”

• For customers looking for a superior driving experience, BMW provides the performance of a sports car while not compromising luxury.

Utilization of Pricing Strategy

Prices Across Product Offerings

• Free Maintenance

10 models and 60 variations across models

Lexus – 11 models 28 variations

Mercedes – 13 models 40 variations

1 Series – has no competitors in luxury market

Utilization of Pricing Concept

Effectiveness to raise BMW’s Profits

Strategically pricing lower than competitors help to gain sales volume in the market.

Due to experience curve, lower unit margin leads to lower unit cost

BMW is also effectively doing price segmentation based on the different underlying characteristics of different customer segments.