Which of the following, if true, supports a straight extension strateg

QUESTION

Which of the following, if true, supports a straight extension strategy?

A) The company has a state-of-the-art research and development center.
B) Australian terrain and riding conditions resemble cross-country riding conditions in America.
C) Research shows that most Australians spend 60 percent of their leisure time playing sports or exercising.
D) Most sports goods manufacturers make few, if any, modifications to their product lines when entering international markets.
E) Currently the Australian market is only one-fourth the size of the U.S. market.

ANSWER

Answer: B
Explanation: B) A straight product extension means marketing a product in a foreign market (here, Australia) without making any changes to the product. Choice B tells us that the environment in which the Rider 360 would be used in Australia is similar to the environment in which the product is currently used in the United States. This similarity in environment supports the use of a straight extension for the 360. Choice A suggests that the company would be able to make product modifications, but this doesn’t strengthen or weaken an argument for a straight extension strategy. Choice C suggests that Australia is a good market for the product, but this doesn’t tell us whether or not the product needs to be adapted for the market. Choice D is too general to support the specific issue of whether or not to make a straight extension with this particular product in this particular market. Choice E points to the market being small but does not discuss the extension strategy.