Blind taste-tests have shown that the taste of premium-priced vodkas and inexpensive vodkas are indistinguishable even to regular drinkers of vodka. But the sales of premium vodkas are thriving. This is an example of:
A) the perception of perceived prestige and status as a means of differentiating a product.
B) the importance of high-quality raw materials when using the differentiation strategy.
C) the risk of product imitation by competitors.
D) the danger counterfeiting holds for firms pursuing the differentiation strategy.

Question

Quizplus · Accepted Answer

This phenomenon is a clear example of consumers associating high prices with quality, and perceiving prestige and status as a means of differentiation. The taste-test results suggest that there is no actual difference in the product itself, yet consumers are willing to pay more for the perception of a higher quality product.

Blind Taste-Tests Have Shown That the Taste of Premium-Priced Vodkas