In marketing, Product Differentiation is the modification of a product to make it more attractive to the target market. This involves differentiating it from competitors’ products as well as one’s own product offerings. In economics, successful product differentiation leads to monopolistic competition and is inconsistent with the conditions for perfect competition, which include the requirement that the products of competing firms should be perfect substitutes.,The changes are usually minor; they can be merely a change in packaging or also include a change in advertising theme. The physical product need not change, but it could. The major sources of product differentiation as this.