Which of the Following Is a Danger in Choosing a Differentiation

question 1

Multiple Choice

Which of the following is a danger in choosing a differentiation strategy?

• A) Focusing only on physical characteristics of a product or service and ignoring important psychological factors, such as status, prestige, image, and customer service
• B) Choosing a market that is not large enough to be profitable
• C) Misunderstanding the firm's true cost drivers
• D) All of the above

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Definitions:

Discount Rate

The fee in the form of an interest rate that commercial banks and similar depository organizations incur when they obtain loans from the lending establishment of their regional Federal Reserve Bank.

Required Reserve Ratio

The percentage of deposits that banks must hold in reserve and not lend out to ensure liquidity.

Transfer Payments

Financial distributions by the government to individuals without any expectation of a good or service being provided in return.

Government Securities

Financial instruments issued by a government to borrow money from investors with a promise to pay back with interest.