Traditionally, Keywords used to be the only target options for manual campaigns. Targeting keywords will have your sponsored products appear in Amazon's search results when a customer enters the respective searchterm.
Keywords can be set to broad, phrase or exact.
Product targets consist of ASIN & Category targets.
ASIN targets will have your sponsored products appear on the listing pages of competitor ASINs.
Category targets can be refined by product category, price, shipping method, or avarage rating.
This way you can have your sponsored products appear on the listing pages of products with specific criterias, eg. kitchen category, price between 10$ & 30$ & rating worse than 3.