Final answer:
The concept described in the Oreo cookies example is a product adaptation strategy, not a product extension approach, which refers to Kraft Foods' move to alter the Oreos for the Chinese market preferences. Historical context shows how brand integrity and consistency were vital for building national reputations, as seen with other major brands in the United States.
Step-by-step explanation:
The statement regarding Kraft Foods' strategy with Oreo cookies in China is false. The change in formulation and pricing for the Chinese market would be better described as a product adaptation strategy, not a product extension approach. A product extension approach typically means offering the same product in a new market without significant changes. In contrast, Kraft Foods' strategy involved altering the product to meet local tastes and pricing preferences, exemplifying an adaptation to the product for a specific market's demands. This mirrors historical examples of companies like Coca-Cola and Crisco, which emphasized the importance of delivering consistent products and protecting their brands to maintain their national reputations.
These companies' efforts to uphold their brand integrity often came down to controlling the sales process. In the past, company salesmen would sometimes deviate from corporate guidelines to maximize personal profits, as seen when salesmen of Captain Frederick Pabst's beer diluted beer to increase their profit margins. The transition from such regional discrepancies to nationally recognized, consistent branding became integral to the success of brands in the United States.