Question

________ involves the use of a successful brand name for new or modified products in a new category.

Option 1: Brand extension
Option 2: Brand licensing
Option 3: Brand dilution
Option 4: Brand consolidation

Answer 1

Brand extension involves using a successful brand name for new products in a different category. It allows a brand to diversify its product line and leverage its existing reputation to capture more market share, as opposed to other branding strategies like licensing, dilution, and consolidation.

Step-by-step explanation:

The use of a successful brand name for new or modified products in a new category is known as brand extension. This is a common marketing strategy where an established brand leverages its reputation and customer base to introduce new products and diversify its offerings.

An example of this could be a popular beverage company using its brand to sell snacks, assuming customers will trust the new products because they recognize and value the brand. This is in contrast to brand licensing, which allows another company to use the brand name; brand dilution, which can happen if a brand's value is weakened by overextension; and brand consolidation, which reduces the brand portfolio to strengthen or refocus the brand's market position.