In which of the following situations is a differentiation strategy used?
A) The industry is fragmented into customer groups based on needs.
B) Customer needs are primarily satisfied by the price of the product.
C) A company's cost structure needs to be reduced.
D) There is a demand for deep price discounts from powerful buyers.
E) The industry is not allowed to charge a premium price for its products.

Question

Quizplus · Accepted Answer

A differentiation strategy is used when the industry is fragmented into customer groups based on needs. This means that different customers have different needs and preferences which can be served by offering different products or services that are tailored to those needs. By offering unique or differentiated products, companies can charge a premium price and attract customers who are willing to pay for those benefits.

In Which of the Following Situations Is a Differentiation Strategy