Which of the following, if true, most seriously weaken the CEO’s argum

QUESTION

Which of the following, if true, most seriously weaken the CEO’s argument for brand extension?

A) Companies need to find new ways to increase revenues if they intend to stay in business.
B) Grips started off as a bicycle retailer before finding its niche as a tire manufacturer.
C) Most of Grips’ current customers are businesses, which purchase their products in bulk.
D) Research shows that customers associate the name “Grips” with the company’s current products only.
E) Grips has product development expertise in a wide variety of areas.

ANSWER

Answer: D
Explanation: D) Brand extension makes less sense if a new product would not benefit from the brand name. If customers’ image of Grips is limited to the products that Grips makes now (Choice D), then a new product with the Grips name does not sound like a good idea. Choice A is true but does not point to the wisdom (or lack thereof) of brand extension. Choice B, if anything, weakly suggests that Grips may be skilled at brand extension, which slightly strengthens the argument. Choice C does not matter, as both consumer and business markets can be good places to try brand extension. Choice E suggests that Grips might do well with a brand extension.