One potential pitfall of a differentiation strategy is that identification of the brand in the marketplace may become diluted through excessive product line extensions.

Question

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Potential pitfalls of a differentiation strategy include dilution of brand identification through product-line extensions. Firms may erode their quality brand image by adding products or services with lower prices and less quality. Although this can increase short-term revenues, it may be detrimental in the long run.

One Potential Pitfall of a Differentiation Strategy Is That Identification