The differentiation strategy calls for a firm to provide products that:
A) are at the lowest cost possible.
B) have acceptable features.
C) incorporate features for which the customer will pay a premium.
D) solve the problem of being "stuck in the middle."

Question

Quizplus · Accepted Answer

The differentiation strategy involves incorporating features for which the customer is willing to pay a premium. This allows the firm to differentiate their products from others in the market and command a higher price point. Option A is not correct as it refers to a cost leadership strategy, which aims to provide products at the lowest cost possible. Option B is partially correct as acceptable features are necessary, but the differentiation strategy goes beyond that to provide premium features. Option D refers to a situation where a firm is unable to effectively pursue either a cost leadership or differentiation strategy, and is not relevant to the question.

The Differentiation Strategy Calls for a Firm to Provide Products