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

By Josep Francesc Valls Giménez

Will the second one decade of the twenty first Century see the tip of the reasonably cheap phenomenon? it is going to in no way be effortless for eu shoppers to prevent difficult the low costs that they've develop into so used to over the former ten
years. yet over the top efforts by way of many businesses to carry costs down may possibly sound the loss of life knell for extraordinarily low costs, as they'll easily develop into unsustainable in lots of sectors, with charges forcing them up. evidently there will
always be shoppers who wish reduce costs and anyone should meet the call for, yet emphasis on promoting on the lowest expense attainable may possibly change into very costly.

 

Clients are regularly hard decrease costs on the time of every buy and firms can merely react via lowering expenditures. This quantity exhibits that the one strategy to do that, is to reinvent the enterprise version. New shoppers, new pricing, new manufacturers, new strategies.

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Example text

In terms of type of retailer, quality was valued highest in discount stores, price in supermarkets and labelling in both supermarkets and discount stores. 64 55 Source: Consumption Observatory, MARM (2011). 2 46–55 56–65 over 65 Own brands are sometimes better Own brands are always worse Evolution of consumer mentality towards price Source: Author’s own from Observatory of Consumption and Food, Spanish Ministry of Agriculture and Food (2009). Customers are looking for low prices and special offers (41%), they make more comparisons (18%) and they only buy what they need (16%), jumping back and forth between name brands and own brands (Cetelem, 2009).

Customers are looking for low prices and special offers (41%), they make more comparisons (18%) and they only buy what they need (16%), jumping back and forth between name brands and own brands (Cetelem, 2009). 21 illustrates the evolution of the customer’s thought process, and clearly shows how own brands have become accepted. 5% own brands are only rarely better, and 54% say that they are sometimes better. 9% that they are always better. 9% (Kantar Worldpanel). 9%. Own brands began to offer basic shopping products, in order to build up their range and offer over time.

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. The initial push by Low Cost air companies was followed over the rest of the decade by other economic activities. • The second was brought about by consumers themselves: they accepted the companies’ offer of low prices, and actually started demanding them from then on. These two movements together created a radical change in consumers’ price sensitivity.

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