Problem:
As the articles mentioned, GMC and other auto manufactures have used pricing incentives extensively to sell vehicles. In Sep-Oct 2005, GMC and Ford tried a "value" pricing approach of lower price with little or no incentives, however sales dropped off and in Nov 2005 considerable price incentives were being offered again. Toyota and some other manufactures offer some "cash back" promotions, but not as large as GMC or Ford. What do you think is the more effective pricing strategy for autos, the use of periodic incentives with deep discounts or a more standard, somewhat lower pricing (value pricing) with minor "cash back" or some reduced financing charge? Why?