Suppose Nike's managers were considering expanding into producing sports beverages.

Why might the company decide to do this under the Nike brand name?

The cost of producing sports beverages along with its current products under the Nike brand name is greater than the cost of producing sports beverages separately under a new brand name plus the cost of producing Nike's current products under the Nike brand name. The cost of producing sports beverages along with its current products under the Nike brand name is less than the cost of producing sports beverages under a new brand name plus the cost of producing Nike's current products under the Nike brand name.