Low-Price Strategy

Low-Price Strategy

In marketing, a strategy in which a newcomer to a market establishes a low price for products, especially when there is already significant competition. This can be advantageous when the seller must rely on high volume for profit; that is, even though profit margins would be low, the net income would still be high because of the large number of sales. A low-price strategy also helps create market share.
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Pinduoduo has been a platform known for its low-price strategy since its establishment.
Walmart, which operates stores under 55 banners in 27 countries outside the U.S., has faced challenges as it tries to import its low-price strategy overseas.
A low-price strategy is a good approach for mass customer acquisition, but can be harder to sustain in the long term and is one of the fundamental reasons that MVNOs fail.
In order to achieve higher penetration, Albert Heijn is pursuing a low-price strategy. Nevertheless, discounters is still gaining value share, which is contributing to falling prices.
A high-volume, low-price strategy is also an effective weapon against oil producers such as Iran, Saudi Arabia's rival for influence in the Middle East, and Russia, which has allied itself with Iran in Syria and elsewhere.
This chain led in terms of outlets, transactions and value sales in 2014, due to strong brand recognition and a low-price strategy. Flunch opened seven new outlets, the majority of them through franchising, located in malls or on motorways, reaching a total of 265 points of sale in France.
Fortescue Metals Chairman Andrew Forrest had been the most vocal backer of the suggestion for a parliamentary inquiry, charging that Australia's two largest iron ore producers, BHP Billiton and Rio Unto, were purposefully pursuing a low-price strategy in order to push smaller, higher-cost iron ore producers out of the market.
Some chains, such as Wegmans Food Markets, Publix and H-E-B, opt for an everyday low-price strategy, with occasional coupons, in an effort to move product consistently, rather than footballing prices to create a spike in sales.
Hospital rooms and follow-up treatments are also cheaper."Malaysia's strength has been at conducting high-end surgeries like the heart bypass and orthopaedic procedures that are done non-invasively, so they don't have to stay too long to recuperate," said Mary Wong, chief executive of the Malaysia Healthcare Travel Council, a government agency.Not all industry players back the low-price strategy."The number of people coming in doesn't necessarily translate into higher revenue," said Suresh Ponnudurai, chief executive of private medical travel company Malaysia Healthcare."Singapore and Thailand are targetting those who are really wealthy, whereas those who come to Malaysia aren't as wealthy."Hospitals say most Gulf governments sponsor their citizens to specific countries.
This low-price strategy has also been adopted by Ajantha Mendis ($50,000, `26.59 lakh), the world record holder for best bowling figures in T20 Internationals.
"The Chinese handset vendors have now extended their reach and low-price strategy to the quad-core phone segment," said Lisa Soh, an analyst with Macquarie, according to a report by (http://http//articles.timesofindia.indiatimes.com/2012-12-13/strategy/35795662_1_quad-core-smartphone-market-chinese-smartphone) Reuters .
That, according to Chen, is clear evidence that brand vendors' low-price strategy has lifted market acceptance of large-size TV models.
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