Tuesday, October 04, 2005

GM Employee Discounts

Recent vehicle sales received a stir from auto-manufacturers after having issued employee discount rates for regular buyers. Numerous marketing advertisements have displayed that costumers can buy vehicles for prices equal to the employee rates leading to double the sales from non-GM buyers and greater buyer interest in general. The effectiveness of their ad’s also improved from 21% to 30%. All of these incentives have lead to higher sales; however, prices which have not seen heavy increases since 1995 are now likely to creep upward. The industry which has held back on major price increases will likely raise prices to help restore income to the manufactures.
Has this Ad campaign really helped auto-manufactures or hurt them? Do you think that prices will rise or should they be left the same? What good has the current pricing done for the industry? What Harm?

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