,TRL3703 ASSIGNMENT 3 PORTFOLIO SEMESTER 2 2025
DUE DATE: 31 OCTOBER 2025
QUESTION 1:
Lowering Prices While Preserving Affordability Amongst Low-C
1.1 Increased Labour Productivity
Increased labour productivity refers to the ability of a workforce to produce more
output per unit of labour input, typically through improvements in skills, technology,
organisational efficiency, and production methods. In sectors that must serve low-
income consumer markets—such as low-cost airlines, budget retail chains, and
mass food services—maintaining high productivity levels is critical to keeping
operational costs low and ensuring that prices remain affordable for consumers. The
principle underlying this is that when employees are able to produce more in less
time, unit labour costs decline, enabling firms to offer goods or services at lower
prices without sacrificing financial sustainability (Samuelson & Nordhaus, 2015). This
approach also allows firms to avoid compromising product quality, since reductions
in labour intensity directly enhance efficiency rather than cheapening the end
product.
For example, in the airline industry, improved labour productivity may arise through
the use of standardized staff training, multi-tasking crew roles, and optimized shift
scheduling that reduces idle time between flights. By ensuring that staff perform
multiple functions—such as cabin crew engaging in boarding assistance, safety
checks, and in-flight services—workers become more versatile, reducing the need
for redundant staffing and, in turn, lowering labour expenditure (Button, 2020).
Furthermore, advancements in digital workflow systems and self-service
technologies, such as automated check-in kiosks, reduce administrative workloads
and free employees to focus on high-value tasks, thereby enhancing overall
productivity (Oum & Zhang, 2018). Importantly, increased productivity must be
supported by fair labour conditions to avoid exploitation or burnout. When paired with
, investment in skill development and supportive work environments, productivity
improvements become mutually beneficial to firms, workers, and low-income
customers.
1.2 The No-Frills Approach
The no-frills business model is a cost-minimisation strategy where non-essential
features and luxuries are removed from a product or service to keep prices as low as
possible. This approach is commonly adopted by firms operating in markets where
customers are highly price-sensitive and willing to sacrifice comfort or additional
services in exchange for affordability (Geroski, 2017). The logic of the no-frills model
is that not all consumers desire premium quality or supplementary services; instead,
many prioritise access and functionality over luxury. By identifying and eliminating
costs that do not affect the core value proposition, firms can maintain profitability
despite selling at significantly reduced prices.
In the case of low-cost airlines, for instance, this approach manifests in several
operational practices: seats are standardized with limited legroom, in-flight meals are
either eliminated or sold separately, entertainment systems are removed, and
luggage allowances are strictly regulated. These exclusions allow carriers to reduce
fuel consumption, aircraft weight, cleaning times, and turnaround delays—all of
which significantly reduce operating costs (Morrell & Zhai, 2020). Consumers who
value basic transportation at minimal cost benefit from this streamlined service
model. However, the no-frills approach is also strategic in shaping consumer
expectations: it openly communicates that affordability is achieved through
simplification rather than low quality. This transparency fosters trust and reduces
dissatisfaction, as customers understand that lower prices are the result of removed
frills rather than hidden compromises in safety or performance (Francis et al., 2021).
Therefore, the no-frills model is crucial for firms attempting to balance cost
leadership with sustainable affordability in low-income markets.
DUE DATE: 31 OCTOBER 2025
QUESTION 1:
Lowering Prices While Preserving Affordability Amongst Low-C
1.1 Increased Labour Productivity
Increased labour productivity refers to the ability of a workforce to produce more
output per unit of labour input, typically through improvements in skills, technology,
organisational efficiency, and production methods. In sectors that must serve low-
income consumer markets—such as low-cost airlines, budget retail chains, and
mass food services—maintaining high productivity levels is critical to keeping
operational costs low and ensuring that prices remain affordable for consumers. The
principle underlying this is that when employees are able to produce more in less
time, unit labour costs decline, enabling firms to offer goods or services at lower
prices without sacrificing financial sustainability (Samuelson & Nordhaus, 2015). This
approach also allows firms to avoid compromising product quality, since reductions
in labour intensity directly enhance efficiency rather than cheapening the end
product.
For example, in the airline industry, improved labour productivity may arise through
the use of standardized staff training, multi-tasking crew roles, and optimized shift
scheduling that reduces idle time between flights. By ensuring that staff perform
multiple functions—such as cabin crew engaging in boarding assistance, safety
checks, and in-flight services—workers become more versatile, reducing the need
for redundant staffing and, in turn, lowering labour expenditure (Button, 2020).
Furthermore, advancements in digital workflow systems and self-service
technologies, such as automated check-in kiosks, reduce administrative workloads
and free employees to focus on high-value tasks, thereby enhancing overall
productivity (Oum & Zhang, 2018). Importantly, increased productivity must be
supported by fair labour conditions to avoid exploitation or burnout. When paired with
, investment in skill development and supportive work environments, productivity
improvements become mutually beneficial to firms, workers, and low-income
customers.
1.2 The No-Frills Approach
The no-frills business model is a cost-minimisation strategy where non-essential
features and luxuries are removed from a product or service to keep prices as low as
possible. This approach is commonly adopted by firms operating in markets where
customers are highly price-sensitive and willing to sacrifice comfort or additional
services in exchange for affordability (Geroski, 2017). The logic of the no-frills model
is that not all consumers desire premium quality or supplementary services; instead,
many prioritise access and functionality over luxury. By identifying and eliminating
costs that do not affect the core value proposition, firms can maintain profitability
despite selling at significantly reduced prices.
In the case of low-cost airlines, for instance, this approach manifests in several
operational practices: seats are standardized with limited legroom, in-flight meals are
either eliminated or sold separately, entertainment systems are removed, and
luggage allowances are strictly regulated. These exclusions allow carriers to reduce
fuel consumption, aircraft weight, cleaning times, and turnaround delays—all of
which significantly reduce operating costs (Morrell & Zhai, 2020). Consumers who
value basic transportation at minimal cost benefit from this streamlined service
model. However, the no-frills approach is also strategic in shaping consumer
expectations: it openly communicates that affordability is achieved through
simplification rather than low quality. This transparency fosters trust and reduces
dissatisfaction, as customers understand that lower prices are the result of removed
frills rather than hidden compromises in safety or performance (Francis et al., 2021).
Therefore, the no-frills model is crucial for firms attempting to balance cost
leadership with sustainable affordability in low-income markets.
