Attributes like maintenance contracts and emergency roadside assistance can be b
ID: 1139441 • Letter: A
Question
Attributes like maintenance contracts and emergency roadside assistance can be bundled into the purchase price but not quoted separately (as with BMW maintenance contracts), or alternatively, they can be quoted separately even though purchase is mandatory (such as freight costs at Amazon or landing fees in airline fares). This partitioning practice is appropriate: (1)when the extra expense is trivial (freight at Amazon), (2)when the seller does not control the imposition of the expense (landing fees in air travel), (3)when the basic product or service is subject to intense price comparison shopping, and (4)when the attribute is not pivotal to the customer’s primary benefit. In light of these points, should emergency roaside assistance for EVs be partitioned for the segment of customers who commute?
Explanation / Answer
Emergency roadside assistance for EVs (electric vehicles) should not be partitioned, because the user segment of the EV focuses upon the service delivery by the seller company and the segment is less sensitive to the price. So, the segment does not focus upon the price comparison. Here, the emergency roadside assistance is the part of primary benefit to the consumers as they want is to be delivered as and when they require it w.r.t. their vehicle. Further, it is the exclusive service that is to be delivered via the seller company and its network partners. So, there is a control upon this service by the seller company. So, it is good for emergency roadside assistance to be bundled with the EVs.
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