Final answer:
The tactic of combining an existing brand with a new brand to distinguish product lines is called brand extension. It uses the established brand's reputation to promote new products, differing from product differentiation, diversification through conglomerates, and bundling.
Step-by-step explanation:
Combining a corporate or family brand with a new brand to distinguish a part of its product line from others is a tactic called brand extension. This business strategy involves leveraging the established reputation of a parent brand to promote a new product that may cater to a niche segment of the market or appeal to a new customer demographic.
Brand extension is different from concepts like product differentiation, which is any action that firms do to make consumers think their products are different from their competitors'. Similarly, a conglomerate merger refers to a firm owning businesses that make unrelated products, allowing for diversification. On the other hand, bundling sells two or more products as one, providing a consumer advantage through pricing strategy.
Using brand extension, companies can capitalize on the equity of the main brand to introduce new products, thus potentially reducing the cost of introducing a new brand and associating the new offering with positive pre-existing perceptions of the primary brand.