ACCA Strategic Business Leader (SBL) Practice Exam

Which strategy is aligned with products that are perceived as low value?

1. Premium pricing strategy

2. Value-added strategy

3. No frills strategy

4. Market differentiation strategy

The correct answer is: No frills strategy

The strategy that is aligned with products perceived as low value is the no-frills strategy. This approach focuses on providing basic products or services at the lowest possible cost, often stripping away any additional features or services that might inflate the price. By doing so, companies can cater to cost-conscious customers who prioritize price over other factors. This strategy emphasizes efficiency and minimalism, allowing businesses to operate on lower margins while attracting a broader customer base seeking affordable options. It is particularly effective in markets where customers are looking for functionality rather than luxury or additional enhancements. In contrast, the premium pricing strategy targets products that are perceived as high value and seeks to attract consumers who are willing to pay more for perceived quality or exclusivity. The value-added strategy looks to enhance a product by adding features or services, thereby increasing its perceived value. The market differentiation strategy involves distinguishing a product from its competitors based on unique features or benefits, typically aimed at a higher-valued market segment. All these strategies are incongruent with a focus on low-value products, reinforcing why the no-frills strategy is appropriate in this context.