Chapter 68, Problem 7MCQ

To determine

To choose: The true option.

Answer to Problem 7MCQ

The correct answer is option b.

Explanation of Solution

Option b is true. With regards to the concept of product differentiation when 2 gas stations selling the same product in different locations are an example of product differentiation.

As we know there are 3 types of product differentiation: Vertical, horizontal, and mixed.

Product differentiation is defined as the characteristic or characteristics that make the product or service of a firm stand out to the target audience. This is the way a firm distinguishes what they are selling from what its competitors are selling, and it increases brand loyalty, growth, and sales.

The most common strategy employed to differentiate a product or service is based on location and Service.

Local businesses can distinguish themselves from their national competitors by highlighting that they upkeep the local community. A local restaurant, for instance, will lease locally and may source its ingredients and food from local farmers and sources.