3. Which of the following is not one of the pitfalls of a low-cost provider strategy? A. Overly aggressive price-cutting that confuses customers as to the best time to buy. B. Trying to set the industry's price ceiling C. Not emphasizing avenues of cost advantage that can be kept proprietary or that relegate rivals to playing catch up D. Becoming too fixated on cost reduction that the product or service no longer meets the basic expectations or needs of the customer. E. Having the basis for the firm's cost advantage undermined by a merger of other rivals firms in the industry and thereby creating an even lower cost structure from their combined operations.

The correct option is A. Overly aggressive price-cutting that confuses customers as to the best time to buy is not one of the pitfalls of a low-cost provider strategy.

What is a low-cost provider strategy?

To attract clients to the market, a low-cost provider tries to provide its goods at the lowest possible price while yet turning a profit. Because these businesses want to appeal to a large market, this is the wide interpretation of the low-cost strategy.

Thus, The following is not a pitfall associated with a low-cost provider strategy. Overly aggressive price lowering does not provide increases in unit sales that are sufficient to make up for lost earnings, and relying on a cost advantage that other companies can readily imitate or overcome is unsustainable.

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