In Your Neighborhood There Is a Small Men's Store That

question 28

Multiple Choice

In your neighborhood there is a small men's store that has a limited selection of clothing, but the selection that is carried is of very high quality and price. Services include free alterations and tailoring, personalized record keeping, and free dry cleaning. The inside of the store has deep leather chairs and couches and thick pile carpet. Upon entering the store, a customer feels "special and rich." In terms of differentiation, what is this retailer trying to communicate by its decorations and service level?

• A) differentiation based on services mix and atmosphere
• B) differentiation based on prepurchase services
• C) differentiation based on postpurchase services and atmosphere
• D) differentiation based on ancillary services and atmosphere
• E) differentiation based on prepurchase and postpurchase services

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Definitions:

Behaviour

The actions or reactions of a person or system in response to external or internal stimuli.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, contributing to covering fixed expenses and profit.

Variable Expenses

Expenditures that change in direct relation to production levels or sales quantities.

Mixed Cost

A cost composed of a mixture of fixed and variable components. Costs are fixed for a set level of production or consumption, becoming variable with further production or consumption.