Question

Explain how the marketing emphasis of a low-cost provider differs from the marketing emphasis of a differentiation strategy.

Answer 1

A cost leader is banking on mass market to consume its product or services so that its economical for them to produce on large scale and come up with profits with low costs. The marketing emphasis is on effectively communicating that the product/services is available at the lowest possible cost without comprmising on the basic needs of the customers.

On the other hand, a differentiation strategy is targeted at a niche segment which is large enough for the company to generate profits from the sales it makes. The focus here is on delighting the customer with features that are not available in other competitor's products so that the premium charged on the product/service is justified. The marketing focus is on communicating these features that are appealing to the unique preferences and needs of a narrow, well-defined group of buyers.