MGT 103, UCSD, EHRICH FINAL
Questions And Answers
Individual Branding (Multibranding) Separate brands for each product or product line ex)
Chevrolet, Buick, Cadillac (All general Motors)
Advantages: Allow company to serve multiple segments without diluting the image of brands.
Umbrella (Famil...
Advantages: Leverages equity of existing brand, instant recognition avoid costs of building new
brand.
Brand Repositioning? Change essential aspect of brand, often to increase relevance.
(Changing needs of target consumers, reach new target market, react to competitior positioning,
respond to legal challenges...)
Brand Extensions? Strategy of using established brand in different format contect
(different product category or price tier)
Ex) Starbucks coffee—Starbucks icecream.
, MGT 103, UCSD, EHRICH FINAL
Questions And Answers
Vertical vs Horizontal Brand Extensions? Vertical: Change based on price/luxury ex)
Toyota/Lexus.
Horizontal: Change based on different product but same brand ex) Colgate toothbrushes
inelastic vs. elastic demand? Inelastic: A change in price results in little or no change in
quantity demanded.
Elastic: A Change in price causes a great (opposite) change in quantity demanded.
Fixed costs vs Variable costs? Fixed: Expenses that do not vary as a function of output
volume (Even if no production activity, these remain. ex) rent, mortgage payment, insurance,
computers, salary of full-time workers, advertising.
Variable: expenses that fluctuate in direct proportion to the output volume of units produced. Ex)
Cost of raw materials, credit card fees, piece rate labor, sales commissions, delivery expenses.
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