Final answer:
Product differentiation is the marketing strategy that targets separate product lines to different market segments, enabling companies to offer variety and creating monopolistic competition.
Step-by-step explanation:
The marketing strategy that involves targeting separate product lines for unique segments is known as product differentiation. This strategy utilizes the product-market grid to identify opportunities to provide distinct products for different market segments. Product differentiation is a crucial action taken by firms to make consumers perceive their offerings as different from competitors' products.
Product differentiation can reflect various aspects, such as style, flavor, location, and characteristics. It creates a perceived value among consumers, leading to monopolistic competition. By offering a diverse array of products, companies can meet the specific needs and preferences of different customer segments, moving away from a perfectly competitive market scenario where products are undifferentiated.