Schwab Case

After hearing the Charles Schwab case along with the recommendations and refutation, I feel the company should have done all it could to cater to the customer looking for customer service, even if the price is a little higher than etrade, ameritrade, etc.  The company was founded on high customer service. Getting away from that model would alienate much of their customer base.  This coupled with trying to compete on price after so many others have gained significant market share would more than like prove to be too great of a challenge for them.

Mercedes Benz, BMW, Lexus.  How do these brands profit?  Customers aren't always looking for the cheapest product they can get.  These companies typically provide quality products coupled with higher customer service than other companies.  Greater care is taken to make sure the car is safe and reliable.  Many times customers are willing to jump to the next price point for these services.  Schwab is offering the same thing.  The customer gains a sense of confidence in going with a proven industry leader. 

I'm not sure if it applies so much to this case, but there is a phenomenon in which increased price can lead to increased profit.  Customers often look at price to judge a products quality.  Slightly raising price can make a product more sought after.  This and brand recognition can go a long way.  I've done it myself.  I'll see a new car for example and think to myself  how good it looks.  Then I see who makes it and it isn't as impressive.  Of course, with web products, consumers can evaluate products much more quickly, and this might not work as well. 

Anybody have any thoughts?