How Different are A Cost-Centric Strategy and A Value-Centered Strategy?

Marketing strategies provide attractive information or offer related to the products, to attract the audience. Businesses need to understand each strategy's meaning to apply for each case properly.
How Different Are A Cost-Centric Strategy And A Value-Centered Strategy
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What is the difference between a cost-centric strategic approach and a value-centered strategic approach? Originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.

A cost-centric strategic approach focuses on cutting costs and developing cost-effective strategies, to keep the price of the product low and profits high.

A value-centric strategic approach focuses on excelling in product quality and customer satisfaction. Such companies thrive on the psychological demands of customers that invoke a sense amongst them where they feel contented and satisfied.

Given below are the differences between the two approaches on various parameters:

End Goal

The difference between aims mainly differentiates the two types of companies. Cost-strategic companies aim to cover most of their niche market by cutting costs. Value-centric companies aim to maximize customer satisfaction by providing exemplary quality.

Costs and Expenses

The costs borne by cost-strategic companies are comparatively less than value-centric companies.

Product Pricing

Cost-centric companies usually keep the prices of their products low to offer a product that can ideally fulfill the niche market demands. Samsung uses such an approach. The products of the value-centric approach bear a high price as quality specialization is the main focus. Apple uses such an approach.


A cost-centric approach is an essentially driven strategy. Companies look t how much it costs to make a product, keep a profit margin and then quote the price accordingly. A value-centric approach is essentially externally driven. Companies look at their customer values and requirements and then design the product accordingly.

Final Thoughts

To decide the better approach between cost-centric and value-centric, you must understand your business offering well. There are great examples of both kinds. If your product has something unique that your competitors cannot offer, go for value-centric. Otherwise, it’s better to stick to a cost-centric approach to keep the prices of the product low.

Contributed by Metvy

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