Question

Product differentiation refers to the: ____________.1. fact that as more of a product is produced the cheaper it becomes per unit. 2. response of incumbent firms to new entrants. 3. belief by customers that a product is unique. 4. ability of the buyer of a product to negotiate a lower price.

Answer 1

Answer:

Product differentiation refers to the 3. belief by customers that a product is unique.

Explanation:

Product differentiation is one of the focus strategies proposed by Porter. In product differentiation, instead of focusing on attracting consumers for the low prices of the product, companies focus on offering something that is unique. If the consumer sees a product as superior, innovative, and unlike any other, he will be willing to buy that product even if it costs more. Before choosing how to differentiate their product, thus, a company must choose a niche, find or create a need for that niche, and the create or adapt a product so that customers feel it is tailored specifically for them.