Certified Supply Chain Professional (CSCP) Practice Exam

Which strategy targets niche markets with unique offerings?

1. Focused differentiation strategy

2. Cost leadership strategy

3. Mass marketing

4. Broad differentiation strategy

The correct answer is: Focused differentiation strategy

The focused differentiation strategy is designed specifically to target niche markets by offering unique products or services tailored to the specific needs and preferences of a particular segment of consumers. This approach allows a company to stand out in a crowded marketplace by providing distinctive value that cannot be easily replicated by competitors. By concentrating on a narrow market segment, businesses can develop specialized knowledge about their customers and establish a strong brand identity. This can lead to higher customer loyalty and the ability to charge premium prices for the unique offerings that resonate with the specific audience. In contrast, the other strategies provided do not prioritize niche marketing. The cost leadership strategy aims to achieve the lowest operational costs to appeal to the broadest customer base, while mass marketing focuses on reaching the largest possible audience with a single message or offering. The broad differentiation strategy seeks to offer a diverse range of unique products across a wide market, lacking the targeted specificity of a focused differentiation approach.