Products sold under a brand name used to command premium

This question is quite interesting and difficult at the same time. The problem some of us have encountered in selecting option D is that we have used our common but outside knowledge. The knowledge is that a branded product has an advantage over a non-branded product. But the main question relevant to this passage is how? How does a branded product has an advantage over a non-branded product?

Think like a Company

Before answering this "how", please understand that we are thinking of this advantage in terms of the company because the last line clearly says that "brand names are a bigger marketing advantage than ever.". This marketing advantage cannot be used for the consumers, it is for the company who owns the product.

So, how does a branded product has an advantage over a non-branded product? There could be only two factors: higher price or higher sales. In other words, the product could generate greater profits per unit or sell more units. In either way, the company would be at an advantage.

In our current case, it is given that the product doesn't sell at a higher price but still it given a marketing advantage. So, now the other way of giving advantage is through increased sales.

So, if an option statement suggests that people will buy branded products more than unbranded products, that would resolve the paradox - The paradox is that even though the branded products don't offer higher price, they are still a marketing advantage



Guaranteed Quality at the same price

Now, as we go through the options, we see that option A provides a very valid reason to suggest that branded products will sell more than unbranded products. Why? Because at the same price, you are getting a guarantee of quality if you buy a branded product.

Therefore, option A is the correct choice.

However, let's also look at option D.

This basically says that brand names are difficult to get established now. But it doesn't say that how these brand names are a marketing advantage even though they don't allow us to charge higher. Here, some of us have used our common knowledge that brand names are an advantage in all situations. But we can't use this common knowledge here.

Hope this helps

Feel free to ask in case of further queries.

-Chiranjeev