Evaluate pricing and non-pricing strategies that car retails might employ as means of competing with rival firms. A business can use a variety of pricing and non-pricing strategies when selling a product or service to maximize their profits for each unit sold. One pricing strategy that a car retailer can employ as means of competing with rival firms is optional pricing, this is widely used in the car industry due to its effectiveness. Optional pricing occurs when an organisation sells optional extras along with the product to maximise its turnover. By using optional pricing it allows car retails to appeal to the mass market. Consumers can add different optional items on to their cars and they can personalise their cars by changing the colour or the interior. This strategy creates a more personal touch to a car. Another price strategy a car retailer can employ as means of competing with rival firms is price discrimination. Price discrimination is a pricing strategy where identical or largely similar goods or services are transacted at different prices by the same provider. For example if a car is being bought for personal use by an individual the car retailer may charge a different price in contrast to a consumer who is buying the car for business use. By using price discrimination it allows car retailer to gain the maximum consumer surplus. …show more content…
This allows consumers to sell their old car and use the value of the old car to pay for a new one. This benefits the firm because they can potentially gain profit from the old car the consumer is selling and the new one the consumer is purchasing. This strategy is also convenient for the consumer as they do not need to sell on their old car. Also car retailers can offer servicing for cars and other offers such as free MOT for 2 years. These are strategy widely used by many car retailers such as