A friend who worked for Ford, and whose dad toiled at GM, said Detroit could never wean itself from consumer rebates, which started in the late 1970s, and dealer incentives, which started almost the day the first independent dealership opened.
Although GM and Ford offer increasingly larger incentive packages, several name plates like Honda and Toyota have so far resisted the pressure. Honda did offer discounts on Civics and Toyota occasionally uses the sales & promotion trick on close out models. Otherwise, the Japanese name plates simply do not raise sticker price for the upcoming model year, or lower it in several instances.
Which strategy is Detroit following? Which strategy are the Japanese using? Think about the July 12 lecture. We discussed the difference between promotion and price in one of our examples.
How has DiamlerChrysler avoided the path walked by Ford and GM? The underlying assumption is that consumers will perceive Chrysler as a European brand given its parent. Is that a good assumption?
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