This paper develops a model in which consumers pick a bundle consisting of the numeraire and one of the available brands on the basis of rational behavior of consumers. A quasiconvex utility function is introduced to deal with demand for brands. After the existence of a Nash-Cournot equilibrium in prices in differentiated markets is demonstrated, we take up interesting properties of the markets: a firm can capture a larger market share if it can succeed in developing new technologies or in undertaking more advertising. The welfare effects of RD and advertising are more complicated: cost reductions of any firm lead to a welfare improvement, whereas advertising of a top quality brand does not improve welfare but that of a low quality brand does improve welfare.