The Birth of the Low-Cost Phenomenon

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

Chapter 1 in Beyond the Low-Cost Business, 2013, pp 5-63 from Palgrave Macmillan

Abstract: Abstract As had already happened with US air-traffic deregulation in 1978, the European low-cost phenomenon first appeared in the wake of the price war between certain airlines attempting to break into the market following European air-traffic deregulation in 1997. Another cause was the widespread demand for low prices on the part of consumers as a result of heightened price sensitivity. The confluence of supply and demand, which came about over the last decade, caused the position of price as a deciding factor in the valuation of a product to change definitively. Where it had once been towards the end of the pre-purchase process, it now had a new, pre-eminent position as the absolute initial purchase discriminator, at the moment that the purchase is first conceived.

Keywords: Brand Loyalty; Price Sensitivity; Brand Awareness; Special Offer; Luxury Brand (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_2

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DOI: 10.1057/9781137277534_2

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