Question

Whether a broad differentiation strategy ends up enhancing a company's profitability depends mainly on whether:

A. many buyers view the product's differentiating features as having value.
B. most buyers have similar needs and use the product in the same ways.
C. most buyers accept the customer value proposition as unique and the product can produce sufficient unit sales to cover the costs of achieving the differentiation.
D. buyer switching costs are low and customer loyalty to any one brand is low.
E. buyers are prone to shop the market for sellers offering the best price.

Answer 1

A broad differentiation strategy can enhance a company's profitability if buyers perceive the differentiating features as valuable and accept the unique customer value proposition.

Step-by-step explanation:

A broad differentiation strategy can enhance a company's profitability depending on several factors. One of the main factors is whether many buyers view the product's differentiating features as having value. If a large number of buyers perceive the unique features of the product to be valuable, they are more likely to be willing to pay a higher price for it. Additionally, it is important that most buyers accept the customer value proposition as unique and the product is able to generate sufficient unit sales to cover the costs of achieving the differentiation.