Which of the following statements is NOT a reason for downward stretching the product line?
A. The company is attacked at the high end and decides to counterattack by invading the low end.
B. The company finds that slower growth is taking place at the high end.
C. The company at the lower end of the market may want to enter the higher end.
D. The company initially entered the high end to establish a quality image and intended to roll downward.
E. The company adds a low-end unit to plug a market hole that would otherwise attract a new competitor.
Answer: (C) This question pertains to a company's product line-stretching decisions. Line stretching occurs when a company lengthens its product line beyond its current range. A company may stretch downward for any of the above reasons except (C). Therefore, (C) is the correct answer. When a company decides to stretch upward, it may be because the company at the lower end of the market may want to enter the higher end (C).