Question

A company attempting to be successful with a broad differentiation strategy has to:

A. study buyer needs and behavior carefully to learn what buyers consider important, what they think has value, and what they are willing to pay for.
B. incorporate more differentiating features into its product/service than rivals.
C. concentrate its differentiating efforts on marketing and advertising (where almost all differentiating features are created).
D. over-differentiate so that product quality, features, or service levels exceed the needs of most buyers
E. concentrate on offering advanced features, whether or not they have value to the customers, to create unique products

Answer 1

To succeed with a broad differentiation strategy, a company should mainly focus on understanding buyer needs and behaviors (option A), as differentiated products must align with what customers value and are willing to pay for.

Step-by-step explanation:

A company attempting to be successful with a broad differentiation strategy should opt for option A:

study buyer needs and behavior carefully to learn what buyers consider important, what they think has value, and what they are willing to pay for.

This understanding is essential to ensure that the differentiating features added by the company are aligned with customer needs and perceived value.

Differentiating a product or service can be done through physical aspects, locations, intangible benefits like guarantees or superior service, and creating favorable perceptions through advertising—all key in making differentiated products.

While incorporating a variety of features (B) and focusing on marketing and advertising (C) can be elements of a differentiation strategy, these actions alone are not sufficient to guarantee success.

It is important not to over-differentiate (D) by adding features or quality that exceed most buyers' needs, as this can lead to unnecessary costs without adding real value to customers.

Moreover, concentrating solely on advanced features not valued by customers (E) can also detract from a successful differentiation strategy.