Question

In: Economics

Are differentiation and substitutability the same thing? Who decides over the degree of product differentiation? And...

Are differentiation and substitutability the same thing? Who decides over the degree of product differentiation? And how could a business find out (research) to determine the degree of differentiation of its product(s)?

Solutions

Expert Solution

Are differentiation and substitutability the same thing?

Ans: No, they aren't same. Differentiation also known as Product Differentiation is the process of distinguishing a product or service from others to make it more alluring to a particular target market. Example, Any additional features being offered on top of the product becomes a plus point for the customer. The best example for differentiation based on features is Mobile phones, handsets or any technology product. They are separated fundamentally by the quantity of customizations or the extra highlights that they offer.

Whereas, Substitutability refers to the ability of goods or services to be replaced by another good or service in use or consumption.Both the items or administrations help the client in satisfying their needs. The client can fulfill their needs using either of the two products or services.

Who decides over the degree of product differentiation?

Ans: The degree of product differentiation as registered in the strength of buyer preferences ranges from slight to fairly large, tending to be greatest among infrequently purchased consumer goods and “prestige goods,” particularly those purchased as gifts.

And how could a business find out (research) to determine the degree of differentiation of its product(s)?

Ans: They can differentiate their product by size,by origin and by branding,They can differentiate their product by packaging and by adding a simple feature or ingredient to their product which is not found in any other company, They can also differentiate their product by exposing the weaknesses of other competiive brands.


Related Solutions

Are ‘law’ and ‘justice’ one and the same thing? Discuss.
Are ‘law’ and ‘justice’ one and the same thing? Discuss.
What is product differentiation?  Give examples.  How does product differentiation influence buyer and supplier behaviors?  How...
What is product differentiation?  Give examples.  How does product differentiation influence buyer and supplier behaviors?  How does product differentiation influence your behavior?
What is an APR? What is an EAR? Are they the same thing? In general, what...
What is an APR? What is an EAR? Are they the same thing? In general, what is the relationship between a stated interest rate and an effective interest rate? Which is more relevant for financial decisions?
there are those who believe globalization is a good thing and others who believe it is...
there are those who believe globalization is a good thing and others who believe it is horrible. What do you think? Why? In one or two paragraphs state your beliefs re globalization and explain why you believe this
How can we know if the oxidant is strong or not,same thing for reductant?
How can we know if the oxidant is strong or not,same thing for reductant?
One spss is the interval width the same thing as the bind width? If not how...
One spss is the interval width the same thing as the bind width? If not how do I edit bin width?
Scientism is: means the same thing as science A currently popular ideology that science is the...
Scientism is: means the same thing as science A currently popular ideology that science is the only way (or most reliable way) to get knowledge is the only way to do science invited by Aristotle Flag this Question Question 22 pts According to the text there is no such thing as THE scientific method. Different scientific methodologies are used to test different scientific hypotheses. True False Flag this Question Question 32 pts What are some warning signs of bogus science:...
a. Discuss two ways that product differentiation affects demand for the product. b. Explain the difference...
a. Discuss two ways that product differentiation affects demand for the product. b. Explain the difference between collusive and competitive oligopolistic market models and give an example.
In a perfectly competitive market where there is virtually no product differentiation, the focus on the...
In a perfectly competitive market where there is virtually no product differentiation, the focus on the firm would be reducing costs while delivering the same quality products. Reducing costs would start in the production stage and hopefully continue to every stage until the product is sold. Work efficiently and effectively during production is key. Reducing the cost of packaging can be a simple yet effective money saver. Building a reputable firm who makes quality products and is reliable is an...
How does the WWE (World Wrestling Entertainment) Differentiation Strategy? to stay successful and at the same...
How does the WWE (World Wrestling Entertainment) Differentiation Strategy? to stay successful and at the same time continue to grow?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT