Pricing products

Circuit City: Selling Used Cars Like Stereos 
A Hassle
Answers:
1)
The Product mix pricing strategy which is used is “ Optional Feature Pricing “
new car prices. During the past ten years,the average new car price has risen 70 percent to about $19,500. Government-mandated pollution controls and safety features have driven the price increases.
For some consumers, today's new cars costas much as their houses! Consumers also understand that new-car quality has improved and that the average used car on dealers' lots today is only 3.5 years old. Thus, they reason, they can get alow-mileage used car that will be very reliable and save $5,000 to $10,000 in the process.
To encourage consumers to buy new cars, many manufacturers and dealers have turned to leasing programs thatallow consumers to drive new cars and turn them in after two to three years.
2)
Usually the car dealers use the “Haggle Price Adjustment Strategy “ , where they quote the higher price and during thebargaining with the customer they reduce the price.
Moreover, although it used to be difficult to finance used cars, banks and finance companies are offering financing for used cars at interestrates only slightly above those they charge for new car loans.
A recent survey indicated that a used-car sale produced an average net profit of $265, versus a $130 profit for a new car.
3)
CarMaxused the “No Haggling Pricing Strategy “ where they quote the fixed price of the product and during selling they doesn’t bargain on the price. Buyers were very must satisfied with this policy becausetheir reliability on price was more. On the other hand the competitors were not much sure about the success of this strategy.
Consumers have to negotiate the price of the used car as well as the pricethe dealer will pay for any trade-in that is involved. Consumers worry about whether they are paying too much or getting too little. They worry about the car's quality. The process produces...