The characteristics of a monopolistically competitive market are almost similar to those ones exhibited in perfect competition. The only difference is that a monopolistically competitive market has heterogeneous products (this is not the case with perfect competition). Another distinctive feature is that in this market, there is a great deal of nonprice competition. In addition, the market is characterized by many consumers and producers where nobody has control over the price that will be charged in the market. In this market, consumers tend to believe that competing products do not have any price differences. This means that the different competitors’ products have nonprice differences. Those who want to enter these markets are free to do so since there is no barrier to entry. In addition, these parties can exit the market without any restriction. Producers in this market do not have a significant influence. However, they have the capacity to control prices.
Products that are sold by milk bars are similar in the sense that they are the same type of products. The only difference is that they have different tastes and preference specifications that will make them be demanded from different perspectives. The unification point is that milk bars are selling products that are related to milk which strengthens the point that they are similar.
Since the products that are being sold are similar, there is a need to differentiate them from one another. Differentiation is necessary for one to capture a sizeable share of the market. This can be achieved by ensuring that the milk products have a distinct taste, and this will help to tell one from the other. It can also be done by giving them a different design that will make it easy for consumers to differentiate them. Sizes can also be used to differentiate products. In doing this, it will be necessary to ensure that products come in different sizes for the market to choose from.