What if BMW radically changed their pricing model?  Imagine if BMW dropped the price of the car.  Significantly.

Same car, same service, same experience, just one difference: They price the BMW to compete with Kia. What do you think would happen?  Mercedes’ sales would take off.

With the BMW price drop, there would be a run on the car.  Everyone and there mother would get one. For a while. Once the BMW became common place, the prestige would be gone.

Mercedes would be the emblem of prestige, and people would stretch their wallets to afford one.

Low prices may get more buyers, but the perception of value will drop.  The long term consequences are both lower margins and lower perceived value.

As Thomas Pain said “That what we obtain too easily we esteem too lightly.”