Question

Which of the following strategies often wants to AVOID growth in revenues or market share because it can damage their competitive advantage?

Group of answer choices

Niche (a.k.a., focused differentiation) strategy.

Differentiation strategy based on brand.

Cost leadership strategy

Differentiation strategy based on product characteristics.

Answer 1

Niche (a.k.a., focused differentiation) strategy. Niche marketing is a sales promotion strategy (including advertising) which focuses upon a unique target market. Instead of 'marketing to everyone' who could get the benefit from a product or service, Niche strategy focuses on one group of consumers exclusively, i.e. a niche market or a demography of potential customers who would benefit the most and become, for the product or service, the brand ambassador without a cost, automatically. Niche strategy is what we are looking for here.

Differentiation strategy based on brand. It is true that some brands wants to carry a 'premium' image with themselves, but this does not stop them wanting to increase their revenue and market share. In fact, most of the brands with 'premium' image actually try to encash this image for increasing their market share and revenues. 'Differentiation' is actually no deterrant.This is not what we are looking for.

Cost leadership strategy The cost leader is one in the market who enjoys the benefits of least cost and wants to reap the largest market share by way of selling cheaper and trying to annihilate the existing competition in the market. This is not what we are looking for here.

Differentiation strategy based on product characteristics. Products, in terms of characteristics, meet the 'evolution' everyday. Every company wants to add some 'new features' to their products so that it would help them killing or mitigating the existing competition. Differentiation strategy based on product characteristics is also no excuse from the idea of increasing revenues and market share. This option also, is not what we are looking for.