The no-frills strategy is intended to shift the system to a low-price, lower PUV position. The main aim behind pursuing a no-frills strategy is to serve price-sensitive customers with an acceptable but basic version of the product or service.
In Figure 10.1 we indicate the changes associated with the no-frills option. The focus of the system shifts to serve price-sensitive customers and the product or service will likely require significant modifications. To successfully pursue the no-frills strategy, it is critical to understand what price-sensitive customers perceive as ‘essential’ product features. With this understanding, we can strip out costs that don’t deliver these essential features.
Whereas the innovation strategy ...