A company pursuing a low-cost strategy:
A) Improves non-price factors such as design and customer service
B) Produces a basic offering to reduce cost structures
C) Keeps advertising expenses at a maximum
D) Relies on patent protections to keep costs low
E) Customizes marketing mix to different market segments

Question

Quizplus · Accepted Answer

A low-cost strategy involves producing a basic offering to reduce cost structures, making it accessible to a wider range of customers who are price-sensitive. Improving non-price factors such as design and customer service or customizing the marketing mix will increase costs and go against the low-cost strategy. Keeping advertising expenses at a maximum is not necessary as a low-cost strategy relies on keeping costs low, and relying on patent protections is not a feasible approach for many companies pursuing a low-cost strategy.

A Company Pursuing a Low-Cost Strategy