Certified Supply Chain Professional (CSCP) Practice Exam

What characterizes a broad differentiation strategy?

1. Focus on niche markets

2. Products/services appealing to buyers looking for variety

3. Low pricing across all categories

4. Reduction in marketing efforts

The correct answer is: Products/services appealing to buyers looking for variety

A broad differentiation strategy is characterized by offering products or services that appeal to a wide array of consumers by highlighting unique attributes and superior quality that stand out in the market. This strategy aims to attract buyers looking for variety and distinctive features that meet diverse preferences and needs. By doing so, companies create a perceived sense of value that allows them to command a premium price over competitors who may offer similar products, but without the unique differentiators. The focus is not solely on a specific niche; rather, it encompasses a wider market, addressing various customer segments. This approach can help a company build brand loyalty and reduce the direct price sensitivity of its customer base, as buyers are more likely to choose unique offerings over standard options even at a higher price point. In contrast, targeting niche markets would suggest a narrower focus, low pricing would imply a cost leadership strategy rather than differentiation, and a reduction in marketing efforts would likely undermine the visibility and appeal that differentiate products or services in the marketplace.