Question

Quattro is a pizza shop that delivers pizzas without any extra charge. It also refunded the entire amount of the order when the pizza was not delivered within 30 minutes from the order placement. After two years it stopped this policy, but it still delivers pizzas without any extra charge. The fact that it continues to deliver pizzas to households without any extra charge is an example of a _____ strategy.

1) make over
2) loyalty
3) cost leadership
4) differentiation

Answer 1

Quattro's policy of continuing to deliver pizzas without any extra charge is an example of a cost leadership strategy, which involves being the lowest-cost producer, allowing competitive pricing to attract and retain customers.

Step-by-step explanation:

The pizza shop Quattro, by continuing to deliver pizzas without any extra charge even after discontinuing their 30-minute delivery refund policy, is likely implementing a cost leadership strategy. Cost leadership is a competitive strategy where a company aims to become the lowest-cost producer in an industry, often leading to pricing policies that can undercut competitors or offer additional value to customers without extra charges.

In determining their pricing structure, companies must consider the cost of production, including materials, equipment, rent, and labor, as well as their desired profit margin, which influences the final price set for the product. Quattro's price-setting strategy offers insight into how the company has positioned itself in the market to attract and retain customers through competitive pricing.