, Firms that underestimate the challenges and expenses associated with coordinating value-creating activities in the extended value chain.C. See the answer. A. trying to differentiate on the basis of attributes or features that are easily copied. A product differentiation strategy is also particularly valuable for the company that is just beginning to build out its brand. The packaging just like branding requires that manufacturer is very careful because it comprises the first impressions the customer get about the product. If you are dealing with products that fit the urban market, avoid overstretching to the rural markets because in so doing the company overstrains and may lead to unforeseen losses. o Too high a price premium. EXECUTION. D. Through inventing new products one can differentiate themselves by introducing a new product into the market and establishing themselves as market leaders. 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. Expert Answer 100% (1 rating) Previous question Next question Get more help from Chegg. Firms that underestimate the challenges and expenses associated with coordinating value-creating activities in the extended value chain. A. But they quickly realized they could be more than just a domain name registrar or web hosting company. And too expensive and customers will shy away in the interest of their budgets. It would not be clever to share your knowledge and information with (potential) clients if your vision is not unique. 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. Learn more here. Introducing product attributes that do not evoke an enthusiastic buyer response. A. Porter’s (1980) put forward three generic strategies i.e. Buyers thus sacrifice some of the features, services, or image possessed by the differentiated firm for large cost savings; Buyers need for the differentiating factor falls. Differentiation focus strategy … Annual strategy: Strategy is only discussed at yearly weekend retreats. A poor customer relationship will lead to reduced profits while a good one will earn customer loyalty and ultimately lead to improved profits. Second, create the brands according to the initial plan and the audience you are trying to appeal to. In order for a company to convince consumers that its product includes unique features, it needs to communicate this information to the consumers. Not all the cost savings get passed along to the consumers, however. When substitutes hit the market at lower prices it negatively affects the differentiating firm since consumers will opt for the cheaper products compared to the products being offered at higher prices by the differentiating firm. There are many means to carry out differentiation strategy. Many organizations are stepping in one of the 4 pitfalls of differentiation. Most of them initially developed parts, or even all of their service technology in house, which resulted in a range of unique and differentiated services. 2. Which of the following is not a potential pitfall of an integrated overall low cost and differentiation strategy? Consumers of differentiated products are not as sensitive to price changes, therefore, the manufacturers can increase their prices. Sounds like an open door right? Sellers are insufficiently aware of their real differentiators . This particular strategy focuses on market research data to understand the client and also to identify what the current competitors are … (CASE STUDY ON DIFFERENTIATION STRATEGY) Target Stores' Differentiation Strategies INTRODUCTION The first Target Store was opened by the Dayton Company … D. Perceptions of differentiation may vary between buyers and sellers. 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. This is an approach in which a firm purposes to establish and market an exclusive product for various consumer segments. A second pitfall is that a company’s differentiation approach produces an unenthusiastic response on the part of buyers. A company having a better product compared to its competitors can carve out its place in the business community. trying ... Get solutions A differentiation strategy calls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. 3. This helps you to move away from difficult head-to-head comparisons. 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. The foundations of the implement of differentiation strategy are customer needs, competitors, products and services levels. B. choosing a product offering that supports buyer's indifference to rival brands' offerings. B. choosing a product offering that supports buyer's indifference to rival brands' offerings. Which of the following is not a potential pitfall of a differentiation strategy? The pitfalls of a differentiation strategy include . The higher the variety of products being offered by a firm can impact the consumer to purchase a different product from the same manufacturer under a similar brand. A. Uniqueness that is not valuable. For example, if you are running a hotel and you are facing stiff competition from other hotels one can differentiate by offering other services like delivery and carrying out outside catering services. Firms that fail to attain both strategies may end up with neither and become stuck-in-the-middle. Recource MP&S Ch. Which of the following is not a potential pitfall of a differentiation strategy? C. The price premium is too high. 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. Superior compared to its competitors can carve out its brand more returns - from means!? ” it cheaper to appeal to the consumers audience before the of! 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