Broad differentiation strategies generally work best in market circumstances where:

• A. products are homogeneous and price is the only factor influencing consumer choice
• B. barriers to entry are extremely high and competition is limited
• C. the market is dominated by a single firm with significant pricing power
• D. buyers have diverse needs and preferences that are not fully satisfied by standardized products

Answer: (D)

Verified step by step guidance

1. Understand the concept of broad differentiation strategy: it involves offering products that are perceived as unique across a wide range of buyers, aiming to satisfy diverse customer preferences.
2. Analyze market conditions where broad differentiation is effective: it works best when buyers have varied needs and preferences that standardized products cannot fully satisfy.
3. Contrast this with other market conditions: if products are homogeneous and price is the only factor, differentiation is less effective; similarly, if barriers to entry are very high or a single firm dominates, other strategies might be more suitable.
4. Recognize that broad differentiation leverages diversity in consumer preferences to create value, allowing firms to charge premium prices or build brand loyalty.
5. Conclude that the correct market circumstance for broad differentiation is when buyers have diverse needs and preferences not fully met by standardized products.