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Two entrepreneurs sell the same product. One offers a lower price while the other provides better service and a longer warranty. What is the second entrepreneur's main competitive basis?

Answer and explanation

Correct answer: Value-based differentiation

Value-based differentiation competes by offering customers benefits beyond the basic product, such as reliable service, support, convenience, assurance, or warranty. The customer may accept a higher price because the total value and reduced risk are greater. This differs from competing mainly through the lowest price or production quantity.

Related tags

Competitive AdvantageValue DifferentiationIntroduction To EntrepreneurshipEntrepreneurial Skills IArtificial IntelligenceClass 9 Mcq

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