Need an research paper on cost leadership strategy. Needs to be 5 pages. Please no plagiarism. The use of internet and cell phones made the purchasers to shift from ‘marketplace’1 to the ‘marketspace’2. The companies are to appeal both to the cognitive as well as to the emotional aspect of the buyers to sell their products in this fast-changing consumer preferences. The task of diversifying the product or value addition to it to get more consumer acceptability is becoming more and more complex in this era. The marketing stalwarts are to devise different strategies to achieve success in making their product moving. Sometimes they differentiate their product and justify the demand for a premium price for the same while in other cases they reduce the manufacturing cost of the product thereby making it cost-effective. In this paper discussions are made regarding the pros and cons of two such strategies such as ‘Product Differentiation’ and ‘Cost Leadership’ strategies and analysis has been made regarding their applicability in different situations.
Before the globalization process started the national firms were catering to the local needs thus making the choices for the customers restricted. But with globalization new companies with a varied range of products entered the market giving customers ample scope to choose the best among them. This gives rise to hyper-competition for the companies to sell a similar kind of product. As choosing among the multiple products mainly based on differences between various attributes of the same, addition of value to the product as per the requirement of the customer became one of the important marketing strategies. “Product Differentiation is the modification of a product to make it more attractive to the target market” (http://en.wikipedia.org/wiki/Product_differentiation). It can be used as a complement or means of implementing market segmentation. This differentiation is being made to create a perception of uniqueness in the mind of a customer(Irene, Handouts). It gives a brand reputation thus catching the emotions of the customers to buy the particular product even if by giving a premium price. With product differentiation, the changing needs of the buyer are duly addressed. The techno-savvy buyer gets the goods with latest technology with a high price he has to pay for the same. For example “General Motors offers the OnStar system on selected vehicles. It includes GPS(Global Positioning System)for locating the car’s exact position. The Driver can locate the nearest ATM, Hospital, convenience store, gas station and even book a room. The driver can press a button in case of emergency to get immediate aid.”(Kotler 318). Thus differentiation of the product always proceeds market research and study of various market segments.