The principles of Every Day Low Pricing can be applied to a variety of products – from apple sauce to auto mobiles. And in the case of one car manufacturer, the benefits include a level of customer satisfaction that is setting new standards in North America.
Saturn Corporation is a wholly owned subsidiary of General Motors that has carved out a unique place for itself in the auto industry. The company‘s mission is to —market vehicles… that are world leaders in quality, cost, and customer enthusiasm“. It has done so by emphasizing quality control, customer service, and affordability.
Besides providing a high quality vehicle, Saturn was the first company to offer its customers a no haggle, no hassle pricing policy. This means that customers pay the list price for the vehicle as stated by the retailer. Saturn does set a manufacturer‘s suggested retail price as a guideline, but retailers are free to offer a different price. However, once set, the retailer cannot change that price during the selling process. In addition, Saturn does not participate in GM‘s Card agreement, through which credit card users can earn points towards the purchase of a new GM vehicle, and other types of discounts or promotions are rarely, if ever, available.
This type of pricing policy contains some of the same attributes and benefits of Every Day Low Pricing (EDLP). First, Saturn is committed to being a low cost product. Consequently, its every day price is lower than most other new vehicle prices. Second, the pricing approach is consistent. Buyers know that the price listed is the price they can expect to pay, and that everyone else is paying the same price.
This approach discourages customers from asking for special deals or discounts. In addition, it appeals to a particular segment of the market that doesn‘t like the more common approach to car buying where price/option negotiation is the norm. Perhaps just as important, customers know that they are getting the “best“ price for the car, and never have to listen to someone else tell them how much less they paid for the same vehicle.
Has it been successful? J.D. Power, a leading auto industry analyst, ranked Saturn first overall in sales satisfaction for 2007. In addition, Saturn dealers consistently lead the industry in new car sales per retail outlet. While the pricing structure may not be responsible for all aspects of Saturn‘s success, it has played a part in making the company stand out among its competitors. The ultimate indication that the pricing policy is successful may be the fact that GM is testing the same no haggle, no hassle approach with other lines in limited geographic markets.