Auto Europe for the most part does not compete on price, but rather on quality service. While college students and other young people look to platforms like Priceline to find the lowest possible rental fees, Auto Europe's customers tend to be more affluent. Because they work through travel agents who add about 15-20 percent to travel packages when they take a commission, clients for the most part are willing to pay a premium in order to ensure that they will get a car that doesn't break down at midnight in a deserted European village

Europe tries to be to some degree on fees, but there is a limit to how much Imad and team are willing to cut prices. They prefer to emphasize that customers will receive a very high of service for example if a car does break down in that deserted village, Auto Europe provides free 24-hour assistance to fix or replace it

Still, customers didn't that way by just giving away their hard money many of them do try to get a lower price for the vehicles they book. Imad frequently gots requests to cut prices when a customer finds a similar car that's available for a lower price. For example, a typical request might be an upscale Mercedes E 240 rental that for $1,000 per Because the Mercedes is more in demand and costs more, Imad has to pay a higher price to obtain it for a customer compared to some other models that are available. Many Americans who travel throughout Europe prefer to drive a European car with an (upscale) , Mercedes, the customer may another dealer who a General Motors car for $900 and then ask Imad to match that price for the Mercedes

Option 1

Match the price and provide the Mercedes for $900 instead of $1,000. Imad loses money on this deal, so obviously it's not a very attractive option. On the other hand, this discount makes the customer happy. he or she turns into a repeat client as a result, the short-term loss can turn into a long- term profit.

OPTION 2

Offer to provide the same GM car at $890 to keep things apples-to-apples. This makes the customer happy and Imad still turns a profit. However, Imad makes substantially less than if he rents the Mercedes for $1,000. If the client insists he or she still wants the Mercedes for $900, Imad may lose him or her as a customer. In that case, Imad may try to offer a compromise price for the Mercedes, such as $950, in order to keep the customer.

OPTION 3

Continue to offer the Mercedes for $1,000 and explain that this vehicle is more valuable than the GM car, so it's worth it to pay a premium. The customer may choose to shop further, and he or she may possibly find the Mercedes elsewhere for less than $1,000 (but more than $900). In this case, Imad loses the business completely. However, when the customer does the homework on the pricing environment, he does Imad a favor because he alerts him that he needs to adjust his pricing to be more competitive.

1- Review Here's my problem.

Review the three options listed and for each option answer the follow

A- Would you choose yes or no

B- Explain your answer