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Part 1–Thinking about product differentiation, a firm with a highly differentiated product can increase the volume of its sales. Volume increases can help the firm lower costs. High volumes with low costs lead to very high profits. This firm can then invest further in differentiating their product. What advice would you give a firm whose competition is enjoying this product differentiation and cost leadership advantage?
Part 2–List two ways that each of the following products are differentiated. Think about the bases of product differentiation that are discussed in the chapter (starts on page 131).
– Ben & Jerry’s Ice Cream
– The Hummer H2
– The X-Games
– Taco Bell
– Disney World
– Maor League Baseball
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