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 uniqueness being important to firms following the differentiation strategy.
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 can be explained by the perception of uniqueness being important to firms following the differentiation strategy. Premium vodka brands have successfully created a perception of exclusivity and luxury, which attracts customers willing to pay more for the brand and the perceived status it brings. The taste may be indistinguishable, but the perceived value is higher for the premium brands.

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