International Baccalaureate (IB) Practice Exam

What term describes a strategy used by sellers to convince consumers they are getting more value?

1. Product differentiation

2. Brand positioning

3. Value proposition

4. Market segmentation

The correct answer is: Value proposition

The term that describes a strategy used by sellers to convince consumers they are getting more value is value proposition. This concept refers to the promise of value to be delivered to the customer. It communicates why a consumer should choose a product or service over others, highlighting the benefits and value that the offering provides. It essentially positions the product as a solution to the customer's needs or problems, making it more appealing. In contrast, product differentiation focuses on distinguishing a product from its competitors by emphasizing unique features, while brand positioning involves defining how a brand is perceived in the marketplace relative to its competitors. Market segmentation refers to the practice of dividing a broad consumer or business market into smaller sub-groups based on shared characteristics, allowing for more targeted marketing strategies. Each of these concepts supports the overarching goal of providing value, but the specific term for the strategy aimed directly at conveying that value to consumers is indeed value proposition.