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Jake developed a toothpaste using only natural ingredients, and he has been quite successful selling the product in health food stores and some grocery stores. He has recently developed a toothbrush using bamboo and natural components. Jake is considering a ________________, giving the toothbrush the same brand name as the toothpaste in order to have greater brand awareness.

User Zul
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Answer:

brand extension

Step-by-step explanation:

When we talk about brand extension, we refer to a diversification strategy in which a company decides to enter new markets, sectors or industries using the same brand already established in another category, where it was originally made known and has built a positioning .

Although in this case you could choose to do the opposite; that is, creating a new brand for each category in which the company wishes to enter into competition (or in other words to develop a multi-brand strategy), there are different reasons that can justify brand extensions. One of them is to avoid the high costs of creating a new brand and its consequent market positioning.

In the same way although using the same brand for products that are essentially different also carries risks (since it is the name under which a brand has been made known that is being put into play in a different market than the one it has traditionally served) , reduces the need to invest large sums in the development of new brands while leveraging the positioning of that already established which, at the outset, represents an advantage over that new market that you want to explore.

User Joshua Belden
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