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Costing and Pricing 11 Activity 2

Miele charges at least 20% more than its competitors by positioning itself as a premium brand. Miele products are engineered to last 20 years and have best-in-class technology and environmental friendliness. While maintaining a price gap, Miele also works to lower costs to ensure its competitiveness. In some markets like Asia and Russia, Miele is seen as a true luxury brand where wealthy consumers want the most expensive options. With $4.25 billion in annual revenue and no debt, Miele has proven its strategy of prioritizing quality over lowest price leads to solid profits over its 100-year history.

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159 views

Costing and Pricing 11 Activity 2

Miele charges at least 20% more than its competitors by positioning itself as a premium brand. Miele products are engineered to last 20 years and have best-in-class technology and environmental friendliness. While maintaining a price gap, Miele also works to lower costs to ensure its competitiveness. In some markets like Asia and Russia, Miele is seen as a true luxury brand where wealthy consumers want the most expensive options. With $4.25 billion in annual revenue and no debt, Miele has proven its strategy of prioritizing quality over lowest price leads to solid profits over its 100-year history.

Uploaded by

Joseph Belen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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BM2209

Names of students Section Date


ACTIVITY
Miele
Miele, a home appliance manufacturer, charges at least 20% more than its competitors. Co-managing
director Markus Miele explained how they do that: "We are at home in the premium segment. Our products
are engineered to last for 20 years. In terms of technology and ecology, they are among the best you can
buy. People are willing to pay higher prices for this promise of quality."
Markus Miele's words capture the essence of exceptional pricing. But even the manufacturers of premium
products need to keep their eye on the competition. Miele's comments: "Of course, Miele needs to ensure
that our price gap to the relevant competitors does not become too big. For that reason, we continuously
work on our cost structure. We never neglect our company's motto, forever better. We cannot win a battle
based on having the lowest price, but we will win when the battle is about having the best product."
Miele is viewed as a true luxury in some parts of the world. Said Reinhard Zinkann, grandson of one of
Miele's founders and co-managing director: "In Asia and Russia, wealthy people want to surround
themselves with the best and the most expensive products on the market. We positioned Miele as a pure
luxury brand in those markets." In 2013, Miele's revenue reached $4.25 billion (Php 250.45 billion). The
company does not publish profit data. But Miele has a very high equity ratio and no debt on its balance
sheet, proving that it must earn solid profits yearly. Its motto, "Forever Better," hasn't changed for 100 years;
it is the core and heart of Miele's strategy, the cornerstone of its lasting success as a superior brand.
Answer the following questions: (3 items x 10 points)
1. Based on the case facts, what price strategy is employed by Miele?
They began with a strategy from day one
2. What factors contribute to the company's success using its price positioning strategy?
the contribution of the price positioning strategy in their company is the low price but have a good
quality. Miele’s just fulfilled the product he wanted to make.
3. How can the company achieve success by using a different price positioning strategy?
they can still achieve this success because of miele's company motto. there is no beauty that should be
applied to a product, what should be its quality and how long it will last. and the product will not be good
if there are no workers who are good and skilled in their work.

Rubric for grading:


CRITERIA PERFORMANCE INDICATORS POINTS
Content Provided pieces of evidence, supporting
8
details, and factual scenarios
Organization Expressed the points in a clear and logical
of ideas arrangement of thoughts in the 2
paragraph
TOTAL 10

Reference:
Simon, H. (2015). Confessions of the pricing man. Switzerland: Springer International Publishing.
11 Activity 2 *Property of STI
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