Which of following, if true, strengthens the VP’s argument? A) Grips

QUESTION

Which of following, if true, strengthens the VP’s argument?

A) Grips customers are not very brand loyal and tend to choose Grips based on price alone.
B) Customers are demanding more variety in the present product category.
C) The company’s previous efforts at line extension resulted in the cannibalization of sales of its existing products.
D) The primary goal of the company is to reduce business risk through diversification.
E) Private brands are gaining prominence, especially in sports goods.

ANSWER

Answer: B
Explanation: B) The VP favors product line extension, which makes more sense if Grips’ current customers want more choices with respect to the products that they already buy, as Choice B indicates. Choice A weighs against any extension for the Grips name. Choice C weakens the VP’s argument. Choice D strengthens the brand extension argument, which isn’t the VP’s position. Choice E, if anything, is a reason to create a private label, which isn’t the VP’s position, either.