Advantages Of Low Cost Strategy

Low cost strategy is a strategy to increase the market share. When two companies are selling same product but one company is charging less money for that than the other company. Customer will be inclined to buy that product which is less money. In the low- cost strategy company must have proper knowledge of costs and how to continually reduce that without compromising the quality of the product.
Another strategy is differentiation, this strategy is also used to increase the market share. In this strategy, company must understand the needs and expectations of the customer to provide a product which is distinct and innovative. In this case company should be driven to address the customer needs and expectation and provide a premium, which cost more money. Both strategies facilitate company in the competitive advantage. It depends on the company which strategy to follow to dominate the market . …show more content…
It is a marketing strategy which occurs when company focus on target market into subsets of customers, organizations and countries that have common needs and interest and afterward planning and executing procedures to target them. There are many forms of market segmentations, like geographic segmentation, cultural segmentation, demographic, occasional, behavioral, physiographic and multi- variable account segmentation. Market segmentation focuses on customers specific needs.
Another method is differentiation strategy , when company understands the needs and expectations of the customer and generate an innovative and different product to satisfy customers needs and expectations that product can be costly but it will be more reliable, advanced and innovative than the existing customer. For instance, Tesla which is automotive and energy storage company and sells electric luxury cars, this car is distinct and different from other available cars in the