Final answer:
The act of distinguishing a brand in a consumer's mind in comparison to competitors is called Positioning. Product differentiation includes changes in physical, intangible, and perceived aspects of the product, and is a key strategy in brand positioning.
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 A. Positioning. Product differentiation is any action that firms take to make consumers think their products are different from their competitors'. A firm can achieve this by altering various aspects of their product, such as the physical attributes, the location from which it is sold, intangible aspects like guarantees or reputation, and directly through consumer perceptions, often influenced by advertising.
When consumers favor a brand over another due to habits or the influence of advertising, despite a lack of discernible differences in the product's quality or taste, this is a success of brand positioning. Therefore, creating differentiated products is a strategic way that firms can position their brand uniquely in the marketplace.