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Exam 5: Product Differentiation

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Question 21

True/False

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Firms able to successfully differentiate their products and services are likely to see a decrease in their volume of sales.

A) True
B) False

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Question 22

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A ________ exists when firms are committed to engage in several related product-differentiation strategies simultaneously.

A) policy of substitution
B) policy of extrapolation
C) policy of exploration
D) policy of experimentation

E) A) and B)
F) None of the above

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Question 23

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With regard to the threat of suppliers,product differentiation

What is the relationship between product differentiation and managerial creativity?

McDonald's is an excellent example of a firm that simultaneously employs both a product-differentiation and a cost-leadership strategy since their product differentiation based on cleanliness,consistency and fun in its fast food outlets allowed the company to become the market share leader in the industry and to reduce its costs.

Edward Chamberlin described firms selling differentiated products and facing a downward-sloping demand curve as being in an industry characterized by monopolistic competition.

Warby Parker exemplifies a firm pursuing a product-differentiation strategy while Victoria's Secret exemplifies a firm pursuing a cost-leadership strategy.

In fragmented industries firms can use product differentiation to help consolidate a market.

Which of the following bases of product differentiation attempts to create the perception that a firm's products or services are unusually valuable by focusing on links within and between firms?

While cost leadership requires rewards for cost reduction,product differentiation requires rewards for ________.

The U-form structure used to implement a product-differentiation strategy

Which of the following bases of product differentiation is by far the most popular way for firms to try to differentiate their products but is identified as almost always being easy to duplicate?

In a declining industry

Coach's agreement with Lexus to produce automobiles with Coach leather interior is an example of

Which of the following bases of product differentiation attempts to create the perception that a firm's products or services are unusually valuable by focusing directly on the attributes of the products or services a firm sells?

The most obvious way that firms can try to differentiate their products is by

Through which bases of competitive advantage do firms attempt to alter the perceptions of current and potential customers,whether or not specific attributes of a firm's products or services are altered?

Describe the role of product differentiation and how product differentiation helps firms take advantage of opportunities in fragmented industries,in emerging industries,in mature industries and in declining industries.

Identify the three broad categories of product differentiation and identify two bases of differentiation under each category.

Product differentiation is ultimately an expression of the creativity of individuals and groups within firms and is limited only by the opportunities that exist,or that can be created,in a particular industry and by the willingness and ability of firms to creatively explore ways to take advantage of those opportunities.