Final answer:
Market targeting involves evaluating and choosing market segments to enter, often using product differentiation as a strategy within monopolistic competition to make products stand out.
Step-by-step explanation:
Market targeting is the process of evaluating the attractiveness of different market segments and selecting one or more segments to enter. While product differentiation is any action that firms take to make consumers think their products are different from their competitors', it is crucial in achieving effective market targeting. Differentiation can be based on physical aspects of the product, location from which the product is sold, intangible aspects of the product, and perceptions of the product. In a market characterized by monopolistic competition, many firms sell differentiated products, which helps to create a competitive advantage and appeal to selected market segments.