Vorsprung durch Marketing! Audi show the way in how to augment pricing
Example of how Audi have managed to augment their pricing for an A6
Augmenting the product should be a core competence for every product marketer. Starbucks and Ryanair have shown the way, and an earlier blog showed how even the humble M&M sweetie is being used to build a massive augmented empire. A recent article in the Daily Telepraph showed how upselling can add turn a £40,000 Audi into one costing £78,000.
Augmented product has benefits for the customer of course, because it offers more choice and options and therefore the possibility to tailor somthing more closer to their real needs, and you can see this clearly in the example of Audi A6 add-ons. But the upside for the Brand Owner who is creating and offering augmented product is immense, as is shown by this fascinating article I saw in the Daily Telegraph Motoring section the other day (Saturday March 10), which gives a tear down of how the 'standard' A6 3.0 which retails at £40,000 in the UK could increase by another £38k if all the options are added on! Sounds incredible, but have a look at the article here (click on the graphic for a larger size, readable version).
Of course another key point to remember is that all the add-ons are inevitably at much higher margin and each add-on increases the further differentiation from the competition, therefore less opportunity for the customer to haggle or compare. Congratulations to Audi marketers for creating such upsell possibilities! Vorsprung durch Marketing!
Posted on: Tuesday, March 20, 2012