An article in the Wall Street Journal described the marketing philosophy of Whole Foods Market, a supermarket chain that sells many food products that have no preservatives or artificial sweeteners (Amazon.com acquired Whole Foods after this article was published): Whole Foods has long divided its 462 stores into 11 regions, each with distinct product offerings like local maple syrup and gourmet pickles. A quarter of Whole Foods shoppers that visited the chain in the past month did so for items they couldn’t find elsewhere…. For those who shopped at Wal-Mart Stores Inc., only 3% said exclusive brands were the top draw.

a. Explain why Whole Foods does not achieve productive efficiency by offering its customers “distinct product offerings” and “exclusive brands.”

b. Briefly explain how Whole Foods’ product differentiation may benefit its customers more than if the supermarkets achieved allocative and productive efficiency.