Products sold under a brand name used to command premium prices because, in general, they were superior to
nonbrand rival products. Technical expertise in product development has become so widespread, however, that
special quality advantages are very hard to obtain these days and even harder to maintain. As a consequence,
brand-name products generally neither offer higher quality nor sell at higher prices. Paradoxically, brand names
are a bigger marketing advantage than ever.

Which of the following, if true, most helps to resolve the paradox outlined above?

(A) Brand names are taken by consumers as a guarantee of getting a product as good as the best rival
products.
(B) Consumers recognize that the quality of products sold under invariant brand names can drift over time.
(C) In many acquisitions of one corporation by another, the acquiring corporation is interested more in
acquiring the right to use certain brand names than in acquiring existing production facilities.
(D) In the days when special quality advantages were easier to obtain than they are now, it was also easier to
get new brand names established.
(E) The advertising of a company’s brand-name products is at times transferred to a new advertising agency,
especially when sales are declining.

I answered D but it is incorrect- D states that it was easier to get brand names established. What it means is that today is it difficult to establish a brand name. I believe that explains the paradox as even though good quality products can be made by any one it is difficult to create a brand name and for those who have created it- they have a marketing edge and that is what the question is asking.Can someone tell me whats wrong with this logic

It seems that the only choice explaining the paradox is A. what is the OA?

+1 for A..

Hi guys, about this question I answered D and I still am not convinced about the OA (answer A).

For me the paradox is that even though the quality of the product is no longer different the Brand still gives now a BETTER competitive advantage. Choice D answers this paradox by saying that, yes the quality is no longer different but this makes now Brand even harder to enter the market and get renowned thus giving the installed brand an even more competitive advantage.

Answer A does not really answer the paradox that Brand now are even more important than before because the argument in A was already true before.

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
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