Explanation:

- Option 1: New and improved packaging

This is a common method of product differentiation. It makes the product look more appealing and can attract different market segments.

- Option 2: Lower price

While lower pricing can influence consumer choice, it's not typically considered product differentiation. It's more of a competitive pricing strategy.

- Correct Answer

- Option 3: Acceptance of more credit cards than the competition

Offering additional payment convenience can differentiate a company's product or service.

- Option 4: Location of the retail store

This is another differentiation strategy. A prime location can make a store more accessible and attractive to customers.