Beyond the Low Cost Business: Rethinking the Business Model by Josep Francesc Valls Giménez

By Josep Francesc Valls Giménez

Will the second one decade of the twenty first Century see the top of the reasonably cheap phenomenon? it is going to in no way be effortless for eu shoppers to forestall difficult the low costs that they have got turn into so used to over the former ten
years. yet over the top efforts by means of many businesses to convey costs down might sound the dying knell for extraordinarily low costs, as they are going to easily turn into unsustainable in lots of sectors, with expenditures forcing them up. evidently there will
always be buyers who wish reduce costs and a person must meet the call for, yet emphasis on promoting on the lowest cost attainable might become very costly.

 

Clients are constantly challenging reduce costs on the time of every buy and corporations can purely react via lowering charges. This quantity indicates that the single option to do that, is to reinvent the enterprise version. New shoppers, new pricing, new manufacturers, new strategies.

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Sample text

For this purpose, we have taken both the internal and external factors identified earlier and compared these with the four consumer types put forward by De Jaime Eslava (De Jaime Eslava, 2007). We drew up a questionnaire that took into account the factors affecting the new scenario (detailed in the previous section), namely the need to be satisfied, the value structure, income, the economy, competitors’ rivalry, price presentation and the sales channel. The sample was formed by 418 individuals in the Barcelona Metropolitan Area, stratified by gender, age (18 or over), education level and income.

Little by little, they are incorporating premium brands into their product portfolios, so as to increase the purchase value compared to the alternatives which the consumer credits with higher quality (“the brands”), and they even go to the extent of producing different ranges or names for their brands. These days it is a known fact that the private labels are also “brands”, and that they are therefore another means of advertising with their own “strength” and their own “value”. In other words, they are market players, which the consumer considers to satisfy his or her needs.

These consumers do not spend much time shopping and are not overly concerned with shopping around or price comparison. They take few risks in their decisions, because they make them within very ordinary environments. Other elements of the marketing mix would be needed to make these consumers change their habits, because they are not particularly drawn by price. The new price sensitivity. Changes in consumption have involved two movements: • The first was produced by the actions of the Low Cost Companies, who offered lower prices and broke into the markets by waging price wars.

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