Wednesday, April 27, 2011

Business Model - Premium Business

In our discussion on business model, we today look at a very unique business model - the premium business model.

A lot of people intent to have a lifestyle, which distinguishes them from the normal people. It is about a status symbol that they try to communicate in everything they do. This is the core value that, this business model relies on.

Most of us have heard about - "Mercedes". Their cars are known world over as being very costly and only affordable by the really elite. What makes these cars cost really such an exorbitant amount?

It is said that Mercedes uses their aircraft components in their cars. Though there is no visible advantage for users with these kinds of components, it focuses on the mindset of the people who want to portray a different lifestyle. This aspiration for a higher lifestyle enable them afford shelling out more for their purchase and thereby makes the companies charge their "extra" which could offset their limited customer base.

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