What is "product differentiation"

n. 1 (context economics marketing English) Perceived differences between the product of one firm and that of its rivals so that some customers value it more. 2 (context economics marketing English) The process of creating such differences.

In economics and marketing, product differentiation (or simply differentiation) is the process of distinguishing a product or service from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as a firm's own products. The concept was proposed by Edward Chamberlin in his 1933 Theory of Monopolistic Competition.