Quote:
Originally Posted by w3rkn
Like Diver said, the M2 needs to start at under $50k to be viable against it's new found competition. That also means the 235i will need a redux in price too, to stay competitive in the marketplace.
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Your understanding of market segmentation and product pricing is about as nuanced as a toddler's. BMW has been selling less performant cars at a higher price point than the alternatives for years. It's practically their modus operandi.
BMW's strategy is to make a car that is just different enough from the competition to capture their portion of the market. These buyers rule out the alternative for some reason that may seem marginal to you, but is a core requirement to the BMW buyer. Pay close attention, and you'll see that all auto manufacturers play this game.
Even though it seems like they should, cars don't behave like strict commodities. You can't write down all the specs on paper, extract groupings, and award to the lowest priced competitor. Sure, plenty of people purchase this way, but cars -- like every large purchase in our lives -- involve an affective component. This is the result of years of marketing by BMW and other automotive manufacturers. It's the #1 job of their marketing departments: get the customer emotionally involved with our product so that they don't perceive our product as a commodity.
To clarify, there are plenty of people for whom an automobile
is a strict commodity, but the population is large, and there's plenty of room for BMW to sell to people who don't view them that way. Not to mention, many of the people who proclaim to purchase cars on a commodity basis go out and make irrational decisions (from a pure economics perspective) because of some emotional element.