Marketers Must Judge Each Potential Brand Extension by How Effectively

question 96

True/False

Marketers must judge each potential brand extension by how effectively it leverages existing brand equity from the parent brand, as well as how effectively, in turn, it contributes to the parent brand's equity.

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Definitions:

Departmental Contribution

The amount of revenue contributed by a specific department after deducting its direct and indirect costs.

Overhead

Refers to the indirect costs required to operate a business, such as rent, utilities, and administrative expenses, not directly tied to the production process.

Controllable Costs

Expenses that a manager or business can influence or manage through decisions and actions.

Profit Margin

A financial metric indicating the percentage of revenue that exceeds the costs of goods sold, showcasing the profitability of a company.