A Differentiation Strategy Can Be Effective in Controlling the Power

question 58

Multiple Choice

A differentiation strategy can be effective in controlling the power of substitutes in an industry because:

• A) customers have low switching costs.
• B) substitute products are lower quality.
• C) a differentiating firm can always lower prices.
• D) customers develop brand loyalty.

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Definitions:

Self-determination Theory

A psychological theory focused on motivation, concerning people's basic psychological needs for competence, relatedness, and autonomy.

Cannon's Theory

Also known as Cannon's fight-or-flight theory, it describes the body's automatic response to threatening or stressful situations.

Pleasure Principle

The driving force of the id that seeks immediate gratification of all desires, wants, and needs.

Drive Reduction

A theory in psychology suggesting that behavior is motivated by the desire to reduce internal tension caused by unmet biological needs.