Scenario 1-2 Chug Enterprises Is Planning to Create a New Line of Line

question 98

Multiple Choice

Scenario 1-2
Chug Enterprises is planning to create a new line of products and enter into the sports drink market. They plan to advertise the first product to teenagers as being the best-tasting sports drink on the market. The second product will be advertised to adults as being the lowest calorie sports drink one can buy. The third product will be advertised to senior citizens as containing calcium, a mineral needed to maintain a healthy bone structure. Each product will have separate, distinctive packaging. 
-(Scenario 1-2) Chug's three different sports drinks are very popular in markets across the world.Now the company plans to launch a similar range of carbonated drinks by building on the popularity of the previous products.This is an example of ________.

• A) market segmentation 
• B) national advertising 
• C) a brand extension 
• D) a differentiation strategy

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Definitions:

Depreciation

The systematic allocation of an asset's cost over its useful life, reflecting its decrease in value over time.

Periodic Depreciation Charge

A non-cash expense that allocates the cost of a tangible asset over its useful life on a regular basis.

Acquisition Fees

Fees associated with the process of acquiring another company, such as legal, consulting, and accounting fees.

Cost Basis

The original value of an asset for tax purposes, usually the purchase price, which is used to calculate capital gains or losses.