Final answer:
A company needs to focus on market differentiation to succeed, which involves making their products stand out through various means and is often reinforced by advertising. Differentiated products can gain a competitive advantage through their unique features and brand positioning.
Step-by-step explanation:
A company can only succeed if it creates a reason for customers to choose it over a competitor; in short, it needs to focus on market differentiation. Market differentiation involves any action that firms do to make consumers think their products are different from their competitors'. This could be through the physical aspects of the product, the location from which it is sold, intangible aspects of the product, and perceptions of the product. These are key when developing differentiated products that stand out in a competitive marketplace.
Moreover, advertising plays a crucial role in differentiating products by shaping perceptions and convincing consumers that one product is distinct from the others. Within monopolistic competition, successful advertising can make a firm's perceived demand curve steeper or shift it to the right, resulting in increased profits through higher prices or greater quantities sold. The challenge for new entrants is often not in product creation, but in establishing a brand and marketing efforts that can compete with large, well-known companies.