By Subscription: Luxury Vehicles from Cadillac

Subscription businesses are a great business model. They set up a recurring revenue stream and introduce products in front of customers who might normally not use them. We are very familiar with subscriptions from magazines and newspapers, food, shaving products, beauty products, pet food, meals, and movies. And now, for the first time from Cadillac comes a luxury vehicle subscription service called “Book by Cadillac.”

Book by Cadillac includes 10 luxury, high-end car models, all equipped with OnStar, Sirius XM, and 4G LTE. Customers can exchange up to 18 vehicles in 12 months, getting the type of car they need for that particular activity. At $1,500 per month, and currently offered only in New York City, the new programs already has 5,000 customers. The monthly fee covers all ownership costs of vehicles including unlimited mileage, high-end vehicles, insurance, maintenance, repairs, vehicle registration, and taxes. And it is only a month-to-month commitment to try the service.

It is easy to use: Download the app, request a vehicle, schedule delivery date/time, and then drive away!

What do you want to drive today?

Group Activities and Discussion Questions:

  1. Show the WSJ video about the service: http://www.wsj.com/video/latest-auto-trend-car-subscription-services/E8B0F667-33C3-4A50-8B2A-42AB2F6A277C.html
  2. Also show the Web site – Book by Cadillac:

https://www.bookbycadillac.com/

  1. Poll students: Who would try this subscription model? Why or why not?
  2. Discuss the changing model of car ownership and how this service fits into changing consumer behavior.
  3. Divide students into teams and have each team develop a profile of a target market for Book by Cadillac. Include demographics, psychographics, behaviors, values, attitudes, etc.
  4. Based on the target market profile, what makes this product unique for these customers?

Source:  Wall Street Journal   

 

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