Sometimes brand is better than new

The topic and case of Cullinarian got me thinking about an advertisement i saw a couple of years ago for BMW pre-owned cars.  The tagline read "sometimes brand is better than new".  The witty ad does seem to capture pricing behavior for premium products likes BMW.  The brand reflects quality and prestige and thus price discounts are not expected, unless of course you are buying a second hand Bimmer.  And even then, you'd be willing to part with a hefty sum of money to own a piece of that German driving machine.

In the Philippines, its very rare that you have discounts on elite brands like BMW or Rolex.  Just like BMW, Rolex watches are sold in second hand stores.  What is really prevalent nowadays are second-hand hand bag stores in Manila.  I've seen these stores in Hong Kong as well but I've yet to spot any in the few recent visits I've had in New York.  These stores look just like a regular high end boutique shop along 5th avenue.  The thing is, the hand bags sold there are second hand Louis Vuitton pieces and the like.  Some brands I've never even heard off, but the grape vine does say you can purchase a small car with them.

When you've commanded a certain degree of prestige as a brand and you strive to protect this image as elite, price discounts may play a lesser role in moving sales even to the point of not being used at all.  In this case I do see VP Janus' apprehension to pricing discounts.  Imagine your brand is so renowned that a second hand vehicle of yours costs way more than a brand new Japanese make!  Don't car's depreciate exponentially when you roll it off the parking lot of the dealership?  And yet, as the ad says "sometimes brand is better than new".

In many cases prices are more about the perceived value or intrinsic value it can convey than the actual cost of goods sold.  This phenomenon occurs more so in premium products and thus promotions may be in the form of gift promotions so as not to damage the brand's reputation.