Lesson 2.2.1c

2.2.1c Importance of differentiating a product or service Quiz: Pearson Edexcel Business, Unit 7

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

In partnership with Revision Ninja

Lesson 2.2.1c, Importance of differentiating a product or service: 20 multiple choice questions for the Pearson Edexcel GCSE Business (1BS0), Unit 7: Making marketing decisions, written with Revision Ninja.

Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.

Host this setFree Play

The 20 questions

  1. Product differentiation means:

    • lowering the price of a product below all of its rivals
    • making a product identical to rivals' products in every way
    • selling a product only in a single shop in one town
    • making a product seem different or better than rivals'

  2. Why is differentiation important to a business?

    • It helps the business compete on more than price
    • It allows the business to avoid paying any tariffs on goods
    • It removes the need for any marketing spending by the firm
    • It guarantees the business will face no competition at all

  3. Which is an example of differentiation through design?

    • Copying a rival's packaging exactly
    • A unique shape and a patented feature
    • Selling at the same price as all rivals
    • Stocking the same products as everyone else

  4. Which is a way a service business can differentiate itself?

    • Offering a faster or more personal customer service
    • Offering exactly the same service as every rival
    • Cutting staff to the minimum possible
    • Refusing to answer customer questions

  5. A business that is differentiated is most likely to:

    • be able to charge a higher price to loyal customers
    • need no promotion whatsoever to keep its sales steady
    • have no brand recognition at all in its home market
    • lose all of its customers to cheaper rival businesses quickly

  6. Which product is differentiated by brand?

    • An unbranded bottle of tap water sold with no label
    • A commodity bag of table salt sold loose by weight
    • A generic plain carrier bag with no printing on it
    • A famous sportswear brand with a recognised logo

  7. A restaurant differentiates by offering locally sourced ingredients. Which element of the marketing mix does this mainly affect?

    • Price
    • Promotion
    • Place
    • Product

  8. Two phones are sold: a well-known brand at £600 and an unbranded phone at £450. What is the price difference?

    • £600
    • £450
    • £150
    • £1,050

  9. A bakery adds a unique gluten-free range that rivals do not offer. What benefit is most likely?

    • Automatic relief from any tariffs on its imported flour
    • A guaranteed fall in the bakery's production costs overall
    • The removal of all competitors from the local market
    • A competitive advantage that attracts a niche group

  10. A café differentiates with free wifi, comfortable seats and extended opening. Why does this matter?

    • It removes the need for any pricing decisions by the café
    • Customers may return more often and pay more
    • It eliminates all of the café's staff costs entirely
    • It means all rival cafés in the area must close down

  11. A hotel adds a spa and a personal concierge service. What type of differentiation is this?

    • Price-based discounting
    • Tariff avoidance
    • Service differentiation
    • A merger strategy

  12. A clothes brand uses a recognisable logo and a unique fabric. Which differentiation is primarily shown?

    • Product design and brand
    • Price cutting only
    • Promotion through a trade bloc
    • Distribution by tariff

  13. A business differentiates its product, but a rival copies the feature within months. What does this suggest?

    • Differentiation always costs nothing to maintain over time
    • Differentiation may be temporary, so keep innovating
    • Differentiation is permanent and cannot ever be copied by rivals
    • Copying proves the rival is the only seller in that market

  14. A firm that differentiates on quality charges 20% more. It sells 5,000 units at £10 each. What is the extra revenue from the premium?

    • £50,000
    • £1,000
    • £100,000
    • £10,000

  15. Which is an example of a differentiating feature for a delivery service?

    • Delivery with no tracking at all
    • Guaranteed delivery within two hours
    • Delivery only on Tuesdays
    • Delivery at the same time as every rival

  16. A supermarket offers 'click and collect'. Which element of the marketing mix is primarily affected?

    • Product
    • Promotion
    • Place
    • Price

  17. Which situation most clearly shows a firm failing to differentiate?

    • Its product has a unique feature that rivals do not offer at all
    • Its product is indistinguishable and sells only on price
    • It designs its packaging to stand out on the supermarket shelf
    • It offers a loyalty scheme with rewards for its regular customers

  18. Why might differentiation be more valuable than cutting prices for a small business?

    • It means customers never compare prices
    • It avoids a price war that a small firm may not survive
    • It guarantees a bigger market share than any rival
    • It removes the need to make a profit

  19. A product sells for £25 with a unit cost of £15. Differentiation adds £3 to unit cost and allows a £6 price rise. What is the unit profit now?

    • £10
    • £19
    • £13
    • £7

  20. Which is the strongest reason a differentiated service might still lose customers?

    • Differentiation makes the services it sells free of charge to all
    • Customers never change their minds about the services they buy
    • Rivals copy its best feature or a cheaper option wins
    • Services cannot be compared with each other by customers at all

All Pearson Edexcel Business quizzes