Vauxhall Motors UK is a major car manufacturer in the UK. It is owned by General Motors and is also the sister company of the very successful Opel. Vauxhall uses a six-stage price setting process to set a price for a specific model. The first step is called Product Positioning and it starts by using a similar car price as a reference. Prices have to reflect any manufacturer allowances and discounts, as well as any price variation in the cars product life. An estimated price is needed during the early stages of planning in order to guide the designer's decisions. As plans mature, a market analysis is needed not only to assess the market and competition, but also to evaluate consumer acceptance. The second step is called the Determining Specifications and this also begins with a direct competitor comparison to determine desired extras and their accordance to consumers price expectations. This step is heavily research oriented and it includes surveying consumers with mock models and on specifications such as style, space, safety and comfort. Basically the idea is to see what customers are willing to pay extra for. The third step, Price Modelling, is when profitability becomes much more defined because now the cost-volume-profit estimate comes into play. Benchmarking is also vital to this step. List Price Structure is the fourth step and at this point a price structure is developed starting at the basic model. The prices reflect a customer's willingness to surpass the base model. Therefore, the greater the willingness, the greater the margins for profit. Overall, the actual cost of producing the product is a much smaller factor in its price than our willingness to pay. The fifth step, Price Variations, means that list prices have to reflect the ability to offer allowances for sales promotions. It is crucial for list pricing to be stable, for changes can cause confusion for customers and the trade. Allowances as well as inclusiv...