Explain product differentation.

Explanation

The product of each individual firm is differentiated from the products of other firms on the basis of brand, size, colour, shape etc.
Examples of product differenatiation:
TV: Samsung, Sony , Videocon, etc.
Tea: Book Bond, Tata, Tea, Taj Mahal, etc.
Product differentiation creates a monopoly position for a firm as the producer is the monoplist of the brand name.
Such products are neither homogeneous nor completely different.
Higher degree of product differentiation if establishes brand image among consumers, will be able to fetch high price in the market. For example, Colgate is costlier than Babool.