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

Question

Quizplus · Accepted Answer

A successful differentiation strategy must result in customers being willing to pay more for the unique features offered by a product or service. This premium pricing should be enough to cover the additional costs associated with creating such uniqueness while still generating profit for the company. If customers are not willing to pay more, the differentiation strategy would be unsuccessful as it would result in higher costs for the company without corresponding increases in revenue.

For a Differentiation Strategy to Be Considered Successful