Answer to Question #262631 in Management for Paia

Question

What are the strengths and weaknesses of the different empirical approaches to describing the bases of product differentiation discussed in chapter? What can these empirical approaches do for a manager that more conceptual approaches cannot do? What can the conceptual approaches do for a manager that the more empirical approaches cannot do?

Answer 1

Approaches to product differentiation are:

Vertical differentiation- In this case two similar products are sold at different prices.

strength

Customers will purchase the products based on their ability.

weakness

I the products had the same price, a customer can opt to buy the one of better quality,but this is not the case.

Horizontal differentiation- products are not associated with the quality or price point.

strength

Customers have the option to purchase products that meets their satisfaction.

weakness

Some producers may take advantage and produce low quality goods so as to reduce the cost of production.

Mixed differentiation

strength

Customers have the chance to buy products of high quality from different companies at the same price point.

weakness

Product prices can increase especially when there are no close substitutes, therefore straining the consumers.

The empirical approaches can guide a manager in choosing the best strategy in marketing company's product in profit realization.

Conceptual approaches give the manager an idea of what to do and how to increase the company's competitive advantage so as to win the hears of consumers.