Using an Existing Brand Name to Introduce a Product That

question 256

Multiple Choice

Using an existing brand name to introduce a product that is new to the company into a totally new,unfamiliar market seems like a good idea.Several years ago,Harley-Davidson introduced perfume under the Harley-Davidson brand name and it failed quickly.This innovation strategy is known as a

• A)radical invention.
• B)product line extension.
• C)disruptive innovation.
• D)product deletion.
• E)brand extension.

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Definitions:

Marginal Revenue

The additional revenue generated from selling one more unit of a good or service.

Externalities

Economic side effects or consequences that affect uninvolved third parties; can be either positive or negative.

Externality

Actions of one party impose costs or benefits on a second party.

Economy of Scale

The cost advantages that enterprises obtain due to their scale of operation, typically resulting in decreased per-unit cost as production increases.