Question

Suppose the Chester company shifts focus to only competing in the Thrift and Nano segments, while competing on price by reducing costs and passing the savings to the customers, what strategy would they be implementing

Answer 1

Answer: c. Niche cost leader

Explanation:

Niche marketing is when a company focuses on a particular market or good. It is usually done to become more efficient in that niche such that one can dominate the market and become more profitable.

When Chester focuses on these markets with the aim of reducing costs, they are trying to be a cost leader in this niche which means that they are trying to produce at the least cost so that they can charge cheaper prices and capture more market share in this particular niche.