A Differentiation Strategy Works Well When Buyers Are Sensitive to Price

question 69

True/False

A differentiation strategy works well when buyers are sensitive to price changes,when competing firms sell the same commodity products,and when companies can benefit from economies of scale.

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Definitions:

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Support Departments

Units within an organization that provide essential services or support to the production or primary activities departments.

Indirect Costs

Expenses that are not directly traceable to a specific product, project, or activity, often including utilities, rent, and administrative salaries.

Responsibility Centres

Sections or divisions of a business for which a manager has authority and responsibility, typically including revenue, expense, profit, and investment centers.