Final answer:
The act of differentiating a brand in a consumer's mind in relation to the brand's competitors is known as E) Positioning. Product differentiation involves physical, location-based, intangible aspects, and perceptions that distinguish a brand from its competitors.
Step-by-step explanation:
The term that refers to the act of differentiating a brand in a consumer's mind in relation to the brand's competitors is E) Positioning. Product differentiation is any action that firms take to make consumers perceive their products as different from competitors'. Firms can differentiate their products through physical aspects, location, intangible aspects, and perceptions. For example, offering a guarantee, a reputation for high quality, and enhanced services such as free delivery are all intangible aspects that contribute to product differentiation.
Not only does product differentiation provide a competitive edge, but it also significantly impacts the consumer's choice and loyalty through brand positioning. Effective advertising can play a crucial role in shaping these intangible preferences, and even when differences are not evident through the product itself, they can be amplified in the minds of the consumers through marketing efforts.