A differentiation strategy works well when buyers are sensitive to price changes,when competing firms sell the same commodity products,and when companies can benefit from economies of scale.

Question

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A differentiation strategy works best when buyers are less sensitive to price and are willing to pay a premium for unique features or attributes of a product. It also works well when there is little to no competition offering similar products, and when a company has the resources and capabilities to create and sustain a unique product offering. Economy of scale is not necessarily a central factor in a differentiation strategy.

A Differentiation Strategy Works Well When Buyers Are Sensitive to Price