All of the Following Are True About Product Line Extensions

question 215

Multiple Choice

All of the following are true about product line extensions except

• A)this strategy can result in lower advertising and promotion costs.
• B)a risk that comes with product line extensions is that sales of an extension may come at the expense of other items in the company's product line.
• C)a product line extension raises the level of brand awareness.
• D)line extensions work best when they provide incremental company revenue by taking sales away from competing brands.
• E)product line extensions involve using a current brand name to enter a different product class.

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Definitions:

Economic Unit

A group of individuals, typically members of a family, seen as a single entity for economic and financial analysis.

Emotionally Committed

Describes a state of being deeply invested in a relationship or cause, involving significant emotional attachment and dedication.

Living Together

The arrangement whereby individuals share a common living space without being married or otherwise legally committed to each other.

Socialization

The process of acquiring the language, accumulated knowledge, attitudes, beliefs, and values of one’s society and culture and learning the social and interpersonal skills needed to function effectively in society.