Advantages of product differentiation, Managerial Economics

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Advantages of Product Differentiation

We can distinguish between those advantages for the firm itself and those for the consumer:

a. For the firm.

i. The ability to increase prices without losing loyal consumers

ii. The stability of sales, due to brand loyalty. The firm will not be subject to the risks and uncertainties of intense price competition.

b. For the Customer

i. Consistent Product quality

ii. Wide consumer choice, between differentiated products.

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