Define product differentiation.

Product differentiation refers to the process through which a company distinguishes its product from those of competitors to attract a specific segment of customers. This strategy often involves highlighting unique features, benefits, or qualities that set the product apart, making it more appealing to a target audience. Effective differentiation can enhance brand loyalty, justify price premiums, and create a competitive advantage in the marketplace by addressing the distinct needs, desires, or preferences of consumers.

The other options do not capture the essence of product differentiation accurately. While increasing product prices might be a result of perceived value created through differentiation, it is not the primary definition. Marketing all products equally overlooks the unique aspects that differentiation seeks to leverage. Finally, while conducting market research can inform how to differentiate a product, it does not define the differentiation process itself. Thus, the correct understanding hinges on the ability to distinguish a product clearly to attract the desired customers.