This is when firms engage in efforts other than reducing prices to attract consumers. This is because normally firms in an oligopoly face a kinked-demand curve, in which reducing prices will not allow oligopolists to capture the entire market. Therefore by distinguishing their product from rival's they will be able to set the profit maximising price without the fear of retaliation from rivals.
Below is an expample of how the chocolate maker Cadbury's tries to distinguish itself from a heavily saturated market without becoming embroiled in a destructive price war. It has a three-tiered system where the products must be visually and functinally different from other chocolate bars on the market As well as an alternative form of branding and service provision.
