How they do it: Rolls-Royce, sold via luxury dealerships, legitimizes their high sticker-prices – the average vehicle price is over $600,000 – with the image and positive associations of the brand. Promotion activities are similarly aligned with this highly exclusive approach.
How they do it: The aerospace manufacturer Rolls-Royce achieved success in the 1980s with its ”power-by-the-hour” model for its aircraft engines. What was billed to the customer was not the price of the aircraft engine – the customers did not purchase the engine, and Rolls-Royce kept ownership and maintenance obligations. Rather, the customer was billed for every hour of performance of the engine. This business now accounts for 70% of Rolls-Royce’s revenue.
How they do it: In 2016, Rolls-Royce only sold a total of approximately 4,000 vehicles. These low production quantities reflect in very high margins and with a very high average price of about $600,000. The customers are attracted by the extremely high quality and exclusive branding. A marketing survey in 1987 showed that only Coca-Cola was a more widely known brand than Rolls-Royce.