A Broad Differentiation Strategy Improves Profitability When

question 46

Multiple Choice

A broad differentiation strategy improves profitability when

• A)it is focused on product innovation.
• B)differentiating enhances product performance and quality.
• C)the differentiating features appeal to sophisticated and prestigious buyers.
• D)the higher price the product commands exceeds the added costs of achieving the differentiation.
• E)the differentiator charges a price that is only fractionally higher than the industry's low-cost provider.

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Definitions:

Market Conditions

The various factors that influence the demand for and supply of products or services within a market.

Dollar Terms

The practice of expressing or measuring financial transactions, values, or performance in units of the U.S. dollar.

Markup

The amount added to the cost price of goods to cover overhead and profit.

Markdown

A reduction from the original or listed price of an item, often used as a strategy to increase sales or clear out inventory.