Question

Which of the following statements is NOT one of the differentiation strategy​ decisions? A. Modular design to aid product differentiation. B. Gather and communicate market research data. C. Use buffer stocks to ensure speedy supply. D. Minimize inventory to avoid product obsolescence.

Answer 1

Answer: C. Use buffer stocks to ensure speedy supply.

Explanation: All options except the use of buffer stocks to ensure speedy supply are included in the differentiation strategy decisions. A differentiation strategy is one of the ways a business distinguishes itself from competition and is defined as the approach in development of new products that a firm employs in order to offer unique products that customers will find superior to others in the market. It is important because it allows businesses not just to distinguish themselves from competition, but to also emphasize the unique aspects that make its product superior, accelerating visibility and perceived expertise, that results in better growth and profitability.

Answer 2

Answer: Using buffer stocks to ensure speedy supply.

Explanation:

Differentiation is a strategy that is used to differentiate a good or service from other products that are similar which are offered by competitors. It is the development of a good or service, that is unique and stands out for the customers, in terms of features, product design, quality, brand image, or customer service.

Modular design to differentiate a product, collating market research data and minimizing inventory are all product differentiation strategies.