Which pricing strategy focuses on minimizing costs to provide lower prices for price-sensitive consumers?

The pricing strategy that focuses on minimizing costs to offer lower prices for price-sensitive consumers is economy pricing. This approach is particularly effective for targeting consumers who are highly sensitive to price changes and are looking for the best value. Economy pricing involves keeping production and marketing expenses low, which allows retailers to pass on these cost savings directly to customers in the form of lower prices.

By using this strategy, businesses can attract a larger customer base by appealing to those who prioritize cost over brand or premium features. This makes economy pricing especially common in discount retailers and budget-friendly product lines. The emphasis is on simplicity and efficiency, which makes it suitable for markets where competition is fierce, and price plays a crucial role in consumer decision-making.

In contrast, premium pricing aims to position a product as a luxury item with higher prices that reflect its perceived value, competitive pricing sets prices based on competitor prices, and dynamic pricing adjusts prices based on real-time demand and market conditions. These strategies do not primarily focus on minimizing costs to appeal to price-sensitive consumers.