Question

Suppose that Toyota introduced a small, inexpensive car under its Lexus brand. This action might harm consumers' current luxury-oriented brand associations for the Lexus brand. This is an example of ______, a risk companies face when adding a new product to an existing brand.

Answer 1

Answer:

This is an example of brand dillution, a risk companies face when adding a new product to an existing brand.

Explanation:

Brand dilution happens when a brand loses its value from overuse. Value is lost when a product does not meet the expectations customers have of the brand. By adding an inexpensive car the brand loses its value in the eyes of the consumers who sought a more luxurious product.