Whether a broad differentiation strategy ends up enhancing a company's profitability depends mainly on whether
A)many buyers view the product's differentiating features as having value.
B)most buyers have similar needs and use the product in the same ways.
C)most buyers accept the customer value proposition as unique and the product can produce sufficient unit sales to cover the costs of achieving the differentiation.
D)buyer switching costs are low and customer loyalty to any one brand is low.
E)buyers are prone to shop the market for sellers offering the best price.

Question

Quizplus · Accepted Answer

Differentiation strategy can enhance profitability only if customers perceive the value of the differentiated features offered, and the company is able to generate sufficient sales to cover the costs incurred in achieving the differentiation. If most buyers accept the customer value proposition as unique, and the product can produce sufficient unit sales to cover the costs of achieving the differentiation, it can lead to enhanced profitability. Therefore, option C is the best choice.

Whether a Broad Differentiation Strategy Ends Up Enhancing a Company's