We know that those firms which differentiate their products extensively, they are able to charge a premium price for their products. For example, luxury car makers have been able to differentiate their cars on the basis of performance, extra features or room in the car. However, times have changed. Nowadays, car makers are charging premium prices for their luxury cars on the basis of their cars being climate friendly. Car makers have realized that customer centered product development entails that you produce what the customer wants. So, if the customer cares about the climate and is prepared to pay a high price for such a car, then so be it. This is an extract from the article I read:
"Here's what I mean: We have a couple of new car companies, Tesla and Fisker, making expensive electric cars (actually Fisker still is getting ready to produce). The Tesla is a small sports car and sells for $120,000; the Fisker is to go for around $80,000. Those are luxury car prices".
Guys, check out this article as to how the definition of a luxury car has changed and do give feedback.
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