Low Cost = Low Value

Low cost = low value… is it true?

Pricing is rarely expensive or cheap in absolute terms. In reality, price only makes sense when analyzed as part of an equation in which at least two variables always intervene: what is paid and the value received in return. When either of these is considered in isolation, the resulting judgment is usually superficial and, in many cases, incorrect.

When we say something is “expensive,” what we are really saying is that the perceived value does not justify the price. And when we say something is “cheap,” what we usually mean is that the perceived value exceeds—or at least justifies—what we have paid.

However, reality is more complex, which is to be expected when emotional factors are part of the analysis and valuation.

“Delivered value can be built from objective elements—measurable, comparable, verifiable—but also from subjective ones: emotions, perceptions, brand narrative, status, experience, expectations.“

These subjective elements are far from negligible; in fact, they lubricate many purchase decision processes. But they do not eliminate the existence or importance of the objective elements.

And this is precisely where the concept of low cost begins to reveal its limitations.

Low cost and what is objectively measurable

When we talk about low cost, we almost always encounter clear and objectively measurable trade-offs. In a world where absolute truths seem increasingly scarce, what can be objectively measured leaves little room for debate.

Some clear examples:

• In low-cost airlines, seats are narrower, legroom is reduced, and overall comfort declines. This is not a matter of opinion—it is measurable in centimeters.
• Checked luggage is no longer included. Priority boarding comes at an extra cost. Customer service is outsourced or automated to the maximum extent.
• In low-cost hotels, rooms are smaller, common services are minimized, and cleaning is standardized to the maximum.
• In low-cost restaurants, ingredients are cheaper, processes are hyper-optimized, and the time spent per customer is reduced to the minimum viable level.

None of this is debatable. These are operational decisions consistent with an extremely tight cost model. The problem arises when low price is confused with high value.

Low-cost fashion: quality can be measured

The fashion sector is particularly illustrative, because for years the discussion around quality has often been obscured under the umbrella of subjectivity.

But quality in fashion can be objectively measured, and it can be analyzed through two concrete variables:

1. Material quality
   Cotton is not all the same. Fiber length, strength, treatment, and origin directly affect the durability of the fabric, its feel, and its behavior after washing.
2. Construction
   Construction is not just “sewing.” In the fashion industry, it includes:
   • Type of stitch
   • Stitch density
   • Reinforcements in high-stress areas
   • Patterning
   • Quality control at every stage of the process

Simplifying construction to accelerate production and reduce costs involves eliminating steps, reducing controls, and standardizing to the extreme. The result is a product that inevitably deteriorates faster than what would be considered a reasonable standard.

When a garment loses shape, unravels, or degrades after just a few uses, quality ceases to be a perception and becomes a fact.

Perceived value: the true buffer

So, why do we keep buying low cost? Because another key element comes into play: perceived value. This perception acts at two critical moments:

• Before purchase, justifying the decision.
• After purchase, cushioning disappointment.

It is the mental analgesic that allows us to say:

“It didn’t last even two washes, but for what it cost, I expected that.”

This psychological mechanism is extremely powerful. It reduces cognitive dissonance and protects our self-esteem as “rational” consumers. But it does not change the reality of the product or the value delivered.

Low cost does not aim to deliver objectively measurable quality, nor does it avoid it—it delivers adjusted expectations.

Low cost and the coherence between trade-offs and expectations

The low-cost model is neither inherently good nor bad. It works when there is coherence between what is promised, what is delivered, and what is paid, and when the customer understands—and accepts—the trade-offs implicit in that exchange.

In that context, a low price does not generate frustration because expectations have been adjusted in advance, and three conditions are met:

• The customer is aware of the trade-offs.
• The delivered value is aligned with the price.
• The experience delivers exactly what it promises, no more, no less.

The problem arises when cost-cutting is presented as value, or when competition focuses exclusively on price without accepting the structural consequences that decision entails.

Price always represents giving up something that has inherent value—because it allows the acquisition of goods, services, and experiences—but the trade-off must be understood and assumed, as it may affect comfort, durability, experience, or time.

Understanding this is key, because low cost does not eliminate the value equation: it simply shifts its weight toward other elements that the customer ends up paying for, one way or another, even when convincing themselves that, for the price paid, they could not have expected more.