Tesla

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Tesla’s Tiered Pricing Is a Hurdle, but a Fair One
Tesla model, the pioneering Car Company, offers two variations of models with different software codes. The car’s price starts at $35,000 for the unrestricted models. Tesla engages in price discrimination where it charges different prices for the same service or good. Although Tesla has provided a free upgrade on its customers, it has provoked a backlash from critics with complaints on the model’s restriction. The Tesla’s pricing practices offer the features that make its models look attractive. Its models, despite the problems it is experiencing, it receives good ratings especially due to safety and environmental friendly. Investing extensively in the fast-charging stations, Tesla has developed a network.
Since the features of the Tesla model were costly to develop, its models begin at $68,000. However, a full model is sold at $160,000 to cover the development costs. As a result, Tesla is achieving higher scales that promotes its models ADDIN CSL_CITATION {“citationItems”:[{“id”:”ITEM-1″,”itemData”:{“URL”:”https://www.nytimes.com/2017/10/27/business/teslas-pricing-hurdle-not-hindrance.html”,”accessed”:{“date-parts”:[[“2018″,”11″,”5″]]},”author”:[{“dropping-particle”:””,”family”:”Robert H. Frank”,”given”:””,”non-dropping-particle”:””,”parse-names”:false,”suffix”:””}],”id”:”ITEM-1″,”issued”:{“date-parts”:[[“0″]]},”title”:”Tesla’s Tiered Pricing Is a Hurdle, but a Fair One – The New York Times”,”type”:”webpage”},”uris”:[“http://www.

mendeley.com/documents/?uuid=9923484f-56f3-38f1-a38d-0087c14c7fce”]}],”mendeley”:{“formattedCitation”:”(Robert H. Frank)”,”plainTextFormattedCitation”:”(Robert H. Frank)”,”previouslyFormattedCitation”:”(Robert H. Frank)”},”properties”:{“noteIndex”:0},”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”}(Frank n.p). Tesla portrays transparency in its services with clear communication with the customers about the unrestricted models used for upgrading the software. Therefore, the customers always go for the premium models with the aim of contributing to the development of the company.
Tesla has its price such that the price for smaller sales volume does not affect the higher prices for the premium models. As a result, the Tesla’s pricing practice is known to be price discrimination as it does not allow the observers to approve. The first experience of the customer with Tesla activates the cognitive filter that reinforces the assessment. The reaction of the customers on the first interaction with Tesla interprets the customers’ appraisal.
Tesla’s price discrimination is viewed with skepticism due to a negative evoke. As a result, Tesla’s pricing price is seen as benign ADDIN CSL_CITATION {“citationItems”:[{“id”:”ITEM-1″,”itemData”:{“URL”:”https://www.nytimes.com/2017/10/27/business/teslas-pricing-hurdle-not-hindrance.html”,”accessed”:{“date-parts”:[[“2018″,”11″,”5″]]},”author”:[{“dropping-particle”:””,”family”:”Robert H. Frank”,”given”:””,”non-dropping-particle”:””,”parse-names”:false,”suffix”:””}],”id”:”ITEM-1″,”issued”:{“date-parts”:[[“0″]]},”title”:”Tesla’s Tiered Pricing Is a Hurdle, but a Fair One – The New York Times”,”type”:”webpage”},”uris”:[“http://www.mendeley.com/documents/?uuid=9923484f-56f3-38f1-a38d-0087c14c7fce”]}],”mendeley”:{“formattedCitation”:”(Robert H. Frank)”,”plainTextFormattedCitation”:”(Robert H. Frank)”,”previouslyFormattedCitation”:”(Robert H. Frank)”},”properties”:{“noteIndex”:0},”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”}(Frank n.p). However, Tesla’s pricing practice is better than the hurdle since it offers the customers the choice of the products with eligible discount. Tesla’s allows its customers to pay for the unrestricted car. The customers can also wait for the scratch and dent sales or pay less price with less tolerance on the shorter range of the model. The products of Tesla are of high quality and have the quality for its high price. The features of Tesla does not restrict the consumers’ price for the car.
The buyers always jump to the ideal hurdle due to the price sensitivity. Since the hurdles expand the sales and offer a greater discount as compared to Tesla, it attracts the buyers to cut the prices. As a result, the sellers engage in variant pricing practices ADDIN CSL_CITATION {“citationItems”:[{“id”:”ITEM-1″,”itemData”:{“URL”:”https://www.nytimes.com/2017/10/27/business/teslas-pricing-hurdle-not-hindrance.html”,”accessed”:{“date-parts”:[[“2018″,”11″,”5″]]},”author”:[{“dropping-particle”:””,”family”:”Robert H. Frank”,”given”:””,”non-dropping-particle”:””,”parse-names”:false,”suffix”:””}],”id”:”ITEM-1″,”issued”:{“date-parts”:[[“0″]]},”title”:”Tesla’s Tiered Pricing Is a Hurdle, but a Fair One – The New York Times”,”type”:”webpage”},”uris”:[“http://www.mendeley.com/documents/?uuid=9923484f-56f3-38f1-a38d-0087c14c7fce”]}],”mendeley”:{“formattedCitation”:”(Robert H. Frank)”,”plainTextFormattedCitation”:”(Robert H. Frank)”,”previouslyFormattedCitation”:”(Robert H. Frank)”},”properties”:{“noteIndex”:0},”schema”:”https://github.com/citation-style-language/schema/raw/master/csl-citation.json”}(Frank n.p). With the increase in Tesla production and fixed research with cost development that differentiates prices. Therefore, the sellers would prefer fixed costs that remain intact I case the buyer requires a markup for the cost of producing more units. Also, the customer has to fix the costs of development in order to have a substantial marginal cost.
The hurdle pricing practice allows the buyer to identify the features of the special products. As a result, the buyer has to pay the share of the product for the development of the fair cost with economic efficiency. The hurdle practice, therefore, should be discouraged for effective engagement of different prices of the product design that fits the buyers.
Work Cited
Frank, Robert H. “Tesla’s Tiered Pricing Is a Hurdle, but a Fair One.” Business Day, The New York Times, 27 Oct. 2017, www.nytimes.com/2017/10/27/business/teslas-pricing-hurdle-not-hindrance.html. Accessed 5 Nov. 2018.