product differentiation
Quick Summary
In economics, product differentiation refers to a situation where products are similar but not identical, and sellers attempt to distinguish their offerings from competitors'. This can be achieved through various means, such as brand names, unique features, accompanying customer services, or even geographical location.1
This concept is central to monopolistic competition, a market structure characterized by many buyers and sellers, but where competition is imperfect due to these differentiating factors. Companies invest in branding and advertising to create unique associations with their products, appealing to specific consumer desires for quality, prestige, or reliability. This allows sellers to command a partial monopoly over their specific version of the product.123
Ask Britannica AI about this topic
Britannica doesn't have a full article on this topic, so we've curated a list of our relevant coverage.
monopoly and competitionProduct differentiationThe structure of a market is also affected by the extent to which those who buy from it prefer some products to others. In some industries the products are regarded as identical by their buyersāas, for example, basic farm crops. In others theā¦
Read MoreThe structure of a market is also affected by the extent to which those who buy from it prefer some products to others. In some industries the products are regarded as identical by their buyersāas, for example, basic farm crops. In others theā¦
Read More
economicsThe criticsā¦a partial monopoly because of product differentiation, will tend to have an excessive number of firms, all charging a higher price than they would if the industry were perfectly competitive. Since product differentiationāand the associated phenomenon of advertisingāseems to be characteristic of most industries in developed capitalist economies, the newā¦
Read Moreā¦a partial monopoly because of product differentiation, will tend to have an excessive number of firms, all charging a higher price than they would if the industry were perfectly competitive. Since product differentiationāand the associated phenomenon of advertisingāseems to be characteristic of most industries in developed capitalist economies, the newā¦
Read More
- monopolistic competition
ā¦variety of market phenomena, including product differentiation, a situation in which each seller carries goods that have some unique properties in the view of the consumer (brand names, special ingredients, accompanying customer services, etc.) so that the seller may be considered to have a partial monopoly. Also analyzed were oligopoly,ā¦
Read Moreā¦variety of market phenomena, including product differentiation, a situation in which each seller carries goods that have some unique properties in the view of the consumer (brand names, special ingredients, accompanying customer services, etc.) so that the seller may be considered to have a partial monopoly. Also analyzed were oligopoly,ā¦
Read More - monopoly and competitionProduct differentiation and promotion
In industries with significant differentiation of products among sellersāand especially in oligopolies of this sortāthere is a tendency for minor but significant fractions of income to be devoted to persuasive (as distinct from informational) advertising and other sales promotion and alsoā¦
Read MoreIn industries with significant differentiation of products among sellersāand especially in oligopolies of this sortāthere is a tendency for minor but significant fractions of income to be devoted to persuasive (as distinct from informational) advertising and other sales promotion and alsoā¦
Read More