Final answer:
Brand extension is the correct term describing when a company introduces new variations of products under the same brand name, such as new flavors or sizes. It is used as a strategy to build upon the existing brand recognition within a monopolistic competition market.
Step-by-step explanation:
The student's question pertains to the concept where a company introduces additional items in a given product category under the same brand name, such as new flavors, forms, colors, ingredients, or package sizes. The correct term for this marketing strategy is brand extension. Brand extension enables a company to leverage an existing brand name to promote new products, which could be different in flavor or style but are related to the original product line, thus benefiting from the established brand's recognition and marketing.
Companies often engage in brand extension to tap into their existing customer base and build upon the strength of their brand name, as seen with brands like Coca-Cola or Pepsi expanding their offerings. This strategy lies within the realm of monopolistic competition, where companies exercise a degree of market power due to product differentiation but still face competition from other brands and flavors.