The low cost model or the return to price competition

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While consumers worry about model their standard of living, the recent publication of the Beigbeder report on the low cost model draws ourattention. The report proposes to use this economic model as a means for reducing prices and thus to increase purchasing power. For any competition specialist, this report presents an extra, and probably less materialistic, interest. It addresses competition under, what we could called, its “primitive” and original form. It refers to price competition, which means competition before brands, advertising and multi-option products. In other words, when a product is plain and reduced to its most basic form and initial function, when it is devoid of all its accessories and additional services, prices become again an essential vector for consumer choices.

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