Final answer:
The statement is true; the competitive frame of reference helps define which other brands a brand competes with, playing a significant role in brand positioning and market strategy.
Step-by-step explanation:
The competitive frame of reference indeed defines which other brands a brand competes with. This concept is a key component of brand positioning, which helps a company to determine how it can differentiate itself and its products or services from its competitors. The competitive frame of reference is used to identify the market or category in which a brand competes and to ascertain the direct and indirect competitors within that space. By doing so, a brand can emphasize its unique selling propositions (USPs) and craft a marketing strategy that targets the right audience effectively.
In practice, defining a competitive frame of reference involves thorough market research and analysis to understand competitor offerings, strengths and weaknesses, as well as customer perceptions and preferences. Using this information, a brand can position itself in such a way that it stands apart from its competitors, thereby attracting customers looking for distinct value.