The Past 13 And 15 May took place in Madrid and Barcelona respectively the low cost monographs under the title “The low cost business model and the main strategic options of competitors”. The conference was addressed to ESADE alumni, and the truth is that both sessions were a success both from the point of view of attendance and interest. The teacher in charge of the talk, Michele Quintano, had the help of Guillem Recolons to describe the TvLowCost model.
The main objective of the session was to demonstrate that the low cost business model "departs from the low-priced concept and is somewhat different", as he said Michele Quintano, visiting professor in the Marketing Management Department, that started from the idea that low cost "is to raise, through innovation, new processes of production and marketing of products and services", where low price with low value should not necessarily be flirted. First of all, Professor Quintano commented on the traditional "low price" model with typical examples such as the discount on the distribution of consumer goods, white marks, promotions, Etc., where there is a direct relationship between price and quality in the field of expectations. However, low cost is a new model that "attempts to eliminate all complexity costs (Differentiation)", where sales prices are lowered but, at the same time, "value is being offered and consumer satisfaction enhanced". Among the key aspects of this model, Quintano highlighted the optimization of the processes (information management, Distribution, e-business, Etc.), ensuring the maintenance of high levels of quality, even if prices are reduced.
Quintano also referred to the different sectors in which companies apply the business model (Transport, insurance and banking, Car, Fashion, Furniture, computer science and pharmaceuticals, among others) and said they "have contributed to the increase in the size of mature markets". After a few examples, focused on low-cost airlines and the formulas they use to ensure a reduction in costs and prices without sacrificing the quality of their services as a, For example, point-to-point connections or on-demand pricing made by easyJet or Ryanair. On the same line, reviewed other cases of interest (Dacia, ING Direct, IKEA and Insurer Hotline) because of the differentiated business concept they apply.
Michele Quintano concluded his exhibition by commenting on alternative strategies with which organizations can face the success of these low-cost companies: wait and see (observe and wait); coexist through funding; undertake a dual strategy, offer solutions or become low cost.
Then, Guillem Recolons took the floor by continuing with the analysis of the concept and noted that "low cost is an attitude, because deep down it is still a smart purchase influenced by the values that each person gives to the services involved in the purchase process". On the other hand, highlighted the dichotomy that exists between the positioning of companies that use this model, like Zara or IKEA, and consumers' perception of the same.
Subsequently, Recolons recounted how tvLowCost's idea originated, "of an apparent gap in the market", in an environment characterized by the existence of two types of advertising companies: on the one hand, agencies belonging to large multinationals, that offer expensive services and, on the other hand, local small businesses, normally unable to project beyond its scope of action. Thus was born this initiative, "that materializes through a vehicle: the all-inclusive pack", with an offer of preset services (For example, a campaign on national television, Production, investigation and fees included, no monthly fee), at a very attractive price.
Likewise, the founding partner of the multinational TVLowCost indicated that the goal is not to compete with large agencies, but "to generate a new market", targeting those companies with turnovers between ten million euros and thirty million that until now had not considered the use of television to advertise as, usually, have an important budget barrier. Its formula is nothing more than a set of properly combined variables, as a specialization in television, a minimal own structure - and the consequent outsourcing of high-level creatives -, the presentation of multiple creative proposals or the maximum use of new technologies and the Internet.
To end the session, Guillem Recolons commented on several examples of advertising spots made by TVLowCost, where attendees were able to learn about simple productions and different formats designed for medium-sized companies.
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