Final answer:
When a firm pursues strategies to make their products appear different from those of competitors, it is engaging in a differentiation strategy, which includes modifying physical, locational, intangible aspects, and perceptions of the product to stand out in a monopolistic competition market.
Step-by-step explanation:
When a firm develops ways to differentiate their products and services from their competitors, it is pursuing a differentiation strategy. Product differentiation refers to any action that firms take to make consumers think their products are different from their competitors'. This can include variables such as physical aspects of the product, location from which it sells the product, intangible aspects of the product, and perceptions of the product. A firm can aim for differentiated products to stand out in a market characterized by monopolistic competition, where many firms sell products that are distinguished from one another in one way or another.