Introduction

Josep Francesc Valls Giménez
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Josep Francesc Valls Giménez: ESADE Business School

A chapter in Beyond the Low-Cost Business, 2013, pp 1-4 from Palgrave Macmillan

Abstract: Abstract Widespread low-price supply and demand across all ranges of products and services has become, in Europe and in America, the dominant trend in the first decade of the 21st century. This is no passing phenomenon; its effects are going to be felt for many years to come. Yet, despite the mass implementation of the low-cost concept, a change that has occurred recently highlights the need for an in-depth analysis of its good and bad points. The good points include, for example, démocratisation of consumption, insofar as all kinds of products and product categories have been brought closer to the customer. Brands that were beyond the reach of the ordinary consumer through traditional channels can now be found at reduced prices in physical or online outlets, or reinvented as basic, low-price products, producing similar level of consumer satisfaction, or some altogether new kind of satisfaction. Businesses have innovated in this way to cut costs and to offer a price to suit any time and any pocket. Consumption, has actually been growing during the low-cost phenomenon, so during the financial crisis consumers are buying practically the same quantity of goods, but for less money. However, on the negative side we cannot ignore the confusion surrounding product and service quality; consumers have some serious questions about how much they should be paying for what they are offered: “Am I paying the right price, or am I spending too much in this transaction for the value obtained?” they wonder. There is too much confusion about how the value of the goods is shown, and that reflects negatively on companies that are unwilling to be clear about it.

Keywords: Dynamic Price; Price Sensitivity; Supply Relationship; Credit Crunch; Traditional Channel (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-27753-4_1

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DOI: 10.1057/9781137277534_1

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