One Comment

  1. Prof.Dr.Magdolna Csath
    November 2, 2017 @ 5:02 pm

    Dear Prof.Simon,
    This is an excellent article, and I can mainly agree with all your ideas and suggestions. I am absolutely convinced that high price strategies can be very successful provided the companies are able and willing to serve the markets with high innovation and quality content consistently. This is the so –called non-price competition which indeed requires CEO attention. However I have very bad experiences with the so-called low-price oriented companies in Eastern Europe. If I buy some food, including sweets, detergents or e.g. cat food in Vienna and Budapest I will experience the following: the products look the same, put in the same packaging, but the quality and ingredients are different, and of much poorer quality in Budapest. This means that the companies do not create a different, lower price version of the product, like HONDA did. Instead they simply lower the quality secretly. This is cheating on the customers. Also you mentioned ALDI and LIDL in your article. Both retailers are considered to be poor quality product and unfriendly service providers in Hungary. As a matter of fact e.g. LIDL does not even bother using a marketing slogan, which says: „freshly from the tree, it is still dewy and tasty” in late October! This means that the company does not care at all about the opinion of the local customers. These businesses in my opinion do not pursue the well established and long term oriented low-cost strategy you are writing about. They simply take advantage of the less-sophisticated and low competition intensive local market in Hungary. (And I believe also in the other Eastern European countries). They also exploit the low-wage environment, although nowadays they are having more and more problems with finding employees. My opinion is that the mentioned examples show short term orientation and short term profit maxiamalization goals nothing else.
    Prof.Dr.Magdolna Csath (Hungary)


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