Final answer:
The process of changing the place a product occupies in a consumer's mind relative to competitive products is known as product positioning. So, the correct answer is option 1.
Step-by-step explanation:
The process of changing the place a product occupies in a consumer's mind relative to competitive products is referred to as product positioning. Product positioning is a marketing strategy that aims to make a product stand out from similar products offered by competitors. This could involve highlighting the unique aspects of the product through advertising, product design, packaging, or even the location where the product is sold.
For instance, a gas station at a busy intersection likely sells more gas due to higher traffic, similar to how a supplier might benefit from being close to a factory. These physical aspects and strategic locations contribute to product differentiation, making consumers perceive a product as distinct from others in the market.
While product positioning and product differentiation sound similar, they are not entirely the same. Product positioning is about the perception of the product in the minds of consumers, while product differentiation involves any tangible or intangible characteristic that makes a product unique. Nonetheless, both concepts are crucial for businesses to establish their products in a competitive landscape.
So, the correct answer is option 1.