Which statement best distinguishes line extension from brand extension?

• A. A line extension uses a different brand name to enter a new category
• B. A line extension refers to creating a new brand
• C. Line extension adds new items within the same product category; brand extension uses the brand to enter a different product category
• D. Brand extension adds new flavors to the same product line

Answer: (C)

The idea being tested is how a company expands its offerings while using its existing brand. A line extension adds new items within the same product category under the same brand name—think adding a new flavor or variant of the same product. A brand extension uses the same brand name to enter an entirely different product category, leveraging the brand’s reputation to attract consumers to a new type of product.

So the best choice says that line extension adds new items within the same product category, while brand extension uses the brand to enter a different product category. For example, a toothpaste brand launching a new toothpaste variant is a line extension, whereas using the toothpaste brand to introduce a toothbrush under the same brand is a brand extension.

The other ideas don’t fit because using a different brand name would be starting a new brand rather than extending the existing one, and adding flavors to the same product line is a line extension, not a brand extension.