Question: Only need 2 to 3 paragraphs.

Vertical differentiation

In some industries products/services tend to be positioned along a price-quality continuum (i.e., options ranging from low price/low quality to high price/high quality). This type of differentiation strategy is also known as "vertical differentiation".

Discuss some of the advantages and challenges associated with such a strategy for companies offering options in different price-quality tiers. To keep our discussion concrete, let's use the airline industry (and the "Economy", "Business class" and "First class" options) as an example.