Question

17. “A differentiation strategy is oriented to high quality products or services”. True or false? Explain.

Answer 1

True

The statement given above is true.

Explanation:

Differentiation strategy is a strategy incorporated by the business organisations in order to get a competitive edge over huge number of competitors in the industry through differentiating one's product from the rest of the products in the market.

Since Differentiating strategy is focused on making one's product or service easily distinguishable from others in such a way so that it is preferred as a first choice by the customers. So in order to make it different from other products or services various characteristics of products or service are improved such as brand name, packaging , and one such important characteristic that has most viability for customers is the product or service quality.

Therefore the quality of the product; meaning the product performance or providing desired outcome , or the result which is better than others is one such important characteristic about which the customer is most concerned and what matters to them most. Therefore when companies introduce or initiate a product differentiation strategy the foremost thing they improve is the product or service quality or product performance. Thus the product or a service whose quality is better than its identical products results results in successful product differentiation. Thus it can be concluded that product or service differentiation in terms of improved or high quality makes the product better than the others and the product or service which have intermediate or low quality in a competitive market have a very short survival and are not mostly preferred and do not have a brand recognition.

E.g Apple inc. use product quality and add on features as their product differentiation strategy so as to curb competition. It is a brand well known for its outstanding quality and is preferred over others just because of its performance.

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