When a company enters a new product category for which its current brand names are not appropriate, it will likely follow which strategy?
A. Product extension
B. Line extension
C. Brand extension
D. New brand
E. Variety seeking
Answer: (D) There are four branding strategies, namely line extensions, brand extensions, multibrands, and new brands. These four strategic options are contingent upon two factors: brand name (existing versus new) and product category (existing versus new). Variety seeking (E) and product extension (A) should be ruled out right at the onset since they are irrelevant to branding options. Only in the new brand option (D) does a firm concoct a new brand name for a new product category. Therefore, the correct answer is (D).