For a differentiation strategy to be considered successful:
A)The organization that is pursuing the differentiation must be highly innovative
B)Customers must be willing to pay more for the uniqueness of a product or service than the firm paid to create that uniqueness
C)Loss of sales cannot reduce the benefits from economies of scale
D)The organization must invest heavily in differentiating its products
E)The organization that is pursuing differentiation must charge approximately the same price as its competitors but make a higher profit

Question

Quizplus · Accepted Answer

The success of a differentiation strategy is dependent on customers valuing the unique features of a product or service enough to pay a premium price. If the cost of creating that uniqueness is greater than the price customers are willing to pay for it, the differentiation strategy will not be successful. Other options are not necessarily prerequisites for a successful differentiation strategy.

For a Differentiation Strategy to Be Considered Successful