Which of the following represents product differentiation?

Study for the VirtualSC Economics Honors Exam. Utilize flashcards and multiple-choice questions, each with hints and explanations. Get prepared for your exam!

Product differentiation refers to the process of distinguishing a product from others in the market, emphasizing unique attributes that make it more appealing to consumers. The choice highlighting a hair product company launching a new organic line of shampoo with new packaging perfectly aligns with this concept.

By introducing an organic line, the company is not just creating a new product but also catering to a specific consumer demand for natural ingredients, thus differentiating itself from competitors that may offer conventional shampoos. The new packaging further enhances this differentiation, as it can improve brand perception and attract attention on the shelves. This combination of product attributes—organic formulation and distinctive packaging—gives consumers a reason to choose this shampoo over others.

In contrast, simply releasing a new smartphone model may not inherently indicate a differentiation if the features do not significantly diverge from current offerings. Seasonal discounts by a clothing brand are more about pricing strategies rather than changing the product itself. Similarly, introducing a new burger at a fast-food chain does not signify substantial differentiation unless it involves unique ingredients or a novel cooking method that stands apart from existing menu items. Thus, the new organic shampoo line exemplifies product differentiation clearly.

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