High product differentiation is generally accompanied by
A) higher market share.
B) higher profit margins and lower costs.
C) significant economies of scale.
D) decreased emphasis on competition based on price.

Question

Quizplus · Accepted Answer

Differentiation provides protection against rivalry because brand loyalty lowers customer sensitivity to price and raises customer switching costs. By increasing company margins, differentiation also avoids the need for a low-cost position.

High Product Differentiation Is Generally Accompanied by