Final answer:
Multibranding is true as it allows for targeting different segments, securing more shelf space, and gaining market share through product differentiation. This approach benefits consumers with variety and innovation. Bundling is a somewhat related concept, offering consumers better deals on product packages.
Step-by-step explanation:
Multibranding offers a way to establish different features that appeal to different customer segments, lock up more reseller shelf space, and capture a larger market share. This statement is true. Companies use multibranding and product differentiation to create a monopolistic competition, where a variety of styles, flavors, locations, and characteristics cater to the diverse needs and preferences of consumers. This marketplace diversity leads to an environment where firms innovate and differentiate their offerings in an attempt to attract and retain customers. Factors such as friendlier service, free delivery, guarantees of quality, variations on existing products, and a better shopping experience are utilized to enhance value proposition to diverse customer segments.
A related concept is bundling, which provides consumers with the option to acquire multiple products or services for a better price when sold together than they would individually. While robust competition in product offerings through multibranding can occupy more shelf space and appeal to varied consumer tastes, bundling offers its advantages through special pricing and convenience.