Question

Product differentiation that makes the product better for some consumers and worse for others is A) always welfare decreasing. B) vertical differentiation. C) horizontal differentiation. D) never undertaken by firms.

Answer 1

Answer:

C) horizontal differentiation.

Explanation:

Marketing mix can be defined as the choices about product attributes, distribution strategy, communication strategy, and pricing strategy that a firm offers its targeted markets.

Generally, a marketing mix is made up of the four (4) Ps;

1. Products: this is typically the goods and services that gives satisfaction to the customer's needs and wants. They are either tangible or intangible items.

2. Price: this represents the amount of money a customer buying goods and services are willing to pay for it.

3. Place: this represents the areas of distribution of these goods and services for easier access by the potential customers.

4. Promotions: for a good sales record or in order to increase the number of people buying a product and taking services, it is very important to have a good marketing communication such as advertising, sales promotion, direct marketing etc.

Hence, product differentiation that makes the product better for some consumers and worse for others is horizontal differentiation.

On the other hand, vertical differentiation makes it good for all of the customers.