Question

Ferrari is well known as a brand of luxury sports cars; accordingly, it has leveraged its brand name to introduce clothing offerings emblazoned with its horse logo. It has also licensed its logo to 68 different products, from sunglasses to guitars. Ferrari might be at risk of which of the following?

Answer 1

Ferrari might be at risk of Brand Dilution

Explanation:

Brand dilution occurs if a label loses its value because of overuse. Price will be lost if a product may not fulfill consumer standards. The brand is diluted. Mark extensions that cause mark dilution unless the new product follows the original product's label guarantee.

It is avoidable to dilute the product. Brand marketers were responsible for protecting the essence of a product to maintain the value.  

This example is intentionally ridiculous, but the descriptions in everyday life are almost as ludicrous (Business Insiders). Ice Tea made nachos in Arizona. A scent of Zippo lighters. The jacket is designed by Smith and Weston. These are all variations that lead consumers to ask: what's the brand really about if they do this? We make the name worthless and dilute the product.