This is an approach in which a firm purposes to establish and market an exclusive product for various consumer segments. Therefore, this article has been prepared just for you. B. Product/service offerings that are highly focused are subject to competition from new entrants. The choice of price determines the level of sale but poor pricing is the first avenue to business failure. This may come across as perky, but these are crucial questions to see if it is relevant to position a specific differentiator – or not. Which of the following is not a potential pitfall of an integrated overall low cost and differentiation strategy? B. production methods being used to achieve a low-cost competitive advantage. Thus, approach a customer with the product sample through displays and sample stand then gather feedback. They pass along a lot of the benefits of this economy to their customers in the form of lower prices. Which of the following is a risk (or potential pitfall) of a differentiation strategy? o Cost cutting may lead to the loss of desirable features. Introducing product attributes that do not evoke an enthusiastic buyer response. Firms can create long-lasting reputations and earn customer loyalty by producing higher quality products. Which of the following is not a potential pitfall of a focus strategy? Broad differentiation strategy is a competitive strategy used by companies to offer unique product attributes or other characteristics that set the company apart from its competitors. At this stage, they have not yet had the opportunity to establish emotional connections with the audience or earn the loyalty of customers. I look at it this way: you are guaranteed to undermine your credibility with prospects and clients if as a seller you position something as unique – and it actually is not. Not all the cost savings get passed along to the consumers, however. Which of the following is not a potential pitfall of a differentiation strategy? And too expensive and customers will shy away in the interest of their budgets. B. choosing to differentiate on the basis of attributes that buyers do not perceive as valuable or worth paying for.. C. trying to charge too high a price premium for the differentiating features. The focus strategy is really a hybrid of the cost and differentiation strategies. NetJets is a company that buys aircraft and allows corporate clients to buy part-ownership of that aircraft. The beauty of a good use of differentiation is that you don´t have to change your organization and minimal investments are needed. Differentiation strategy also involves a series of risks: The cost differential between low-cost competitors and the differentiated firm becomes too great for differentiation to hold brand loyalty. The pitfalls of a differentiation strategy include . The pitfalls of a differentiation strategy include A. trying to differentiate on the basis of attributes or features that are easily copied. A company having a better product compared to its competitors can carve out its place in the business community. D. Perceptions of differentiation may vary between buyers and sellers. Leading cost leadership brands have obtained a major success by introducing revolutionary business models built on a single base – the lowest possible prices for a given perceived value. These products and services are used in distinguishing a business from its competitors and if the strategy is successful the firm can create a unique market. This does not only mean knowledge of your own offerings, but also knowledge of the client´s world, the marketplace and – not unimportant: potential alternatives to your offering. A poor customer relationship will lead to reduced profits while a good one will earn customer loyalty and ultimately lead to improved profits. 23. A pitfall to avoid in pursuing a differentiation strategy is: A. trying to differentiate on the basis of attributes or features that are easily and quickly copied. ... It’s easier to avoid pitfalls when they’re clearly identified. If you want to stand out in the contemporary competitive market, then you have to also create products and services that will not only appeal to the buyers but also capture their attention in making a purchase and the best way to go about that is by being innovative. Which of the following is not a potential pitfall of a differentiation strategy? A. Uniqueness that is not valuable. Below we illustrated a few examples in relation to an often differentiated product – women’s handbag. A differentiation strategy involves the creation of products that are of high quality and services that are tailored to meet the customers’ requirements. Over differentiation by firms can exceed the firm’s resources as the operation costs become too costly to be covered by the premium prices paid by the consumer? Purpose to give that one customer the experience of their life through the way you attend to them and they will come back tomorrow for more with more. If you have to stand out, you have to be different from the rest and the first step to that is branding your products to appeal to the market. As a product remains in the market for longer consumers become smarter about the prices and thus the premium charges being charged can no longer be sustained. There are many means to carry out differentiation strategy. This has made it very important for businesses to make their customers understand what different they have to The cost leadership strategy can be utilized by large firms and market leaders but not by new firms which are small or medium scale. Not everybody is your target customer. C. charging a premium price for the differentiating features. , Firms that underestimate the challenges and expenses associated with coordinating value-creating activities in the extended value chain.C. A. trying to differentiate on the basis of attributes or features that are easily copied. D. The big risk when using a differentiation strategy is that customers will not be willing to pay extra to obtain the unique features that a firm is trying to build its strategy around. 2. The pitfalls of a differentiation strategy include. Through inventing new products one can differentiate themselves by introducing a new product into the market and establishing themselves as market leaders. All rivals share a common input or raw material. A. perceptions of differentiation may vary B. too high a C. it is easily imitated D. highly valued uniqueness between buyers and sellers premium price Accessibility: Keyboard NavigationDess - Chapter … Difficulty in the pricing of goods that are not new into the market. Is it sales, marketing, product management or the rest of the organization? Pitfalls in Production Differentiation. Pursuing a differentiation strategy requires a larger financial investment from the company, another weakness. Leave your email to receive our newsletter, Get the news that matters from one of the leading news sites in Kenya, Drop your mail and be the first to get fresh news, Sales and marketing job description and salary in Kenya, Strategies in business that will lead you to success, Advantages and disadvantages of outsourcing, Best pricing strategies for your Kenyan business, Top 7 sources of business ideas & opportunities for entrepreneurs, Business Opportunities in Kenya: Cool Ideas to Get You Started, This is your key to successful business. Should fulfill the consumers on if certain capabilities are unique or not to establish and market an product! Development and innovation from the company, another weakness understand your target audience before the choice of price determines level... Planning can yield less than desirable results if you then position your well! By producing higher quality products lead to improved profits buyer group to which a firm dealing with children s. 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