University of Central Florida (UCF) MAR3503 Consumer Behavior Midterm Practice Exam

Extending a positive brand name to other products primarily aims to borrow brand equity. This strategy leverages the established positive perceptions and customer loyalty associated with the original brand. When a well-known and trusted brand name is applied to new products, it can significantly reduce the perceived risk for consumers who are considering these new offerings. They are more likely to purchase or try the new product because the brand is already associated with quality and reliability in their minds.

Borrowing brand equity through extension not only helps in attracting customers but also provides an advantage in market positioning. Consumers often rely on the familiarity of the brand as an indicator of the new product’s quality, making it easier for the company to gain traction in competitive markets.

The other choices do not align with the primary objectives of brand name extension. Increasing production costs is generally not an intentional goal and might even be contrary to the benefits sought through brand extensions. Enhancing brand visibility may occur as a side effect, but it is not the core aim of extending a brand name. Creating new brands is a divergent strategy from brand extension, as it involves starting from scratch rather than leveraging existing brand equity.