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Re: The value of a product is determined by the ratio of its quality to it [#permalink]
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SudiptoGmat wrote:
The value of a product is determined by the ratio of its quality to its price. The higher the value of a product, the better will be its competitive position. Therefore, either increasing the quality or lowering the price of a given product will increase the likelihood that consumer will select that product rather than a competing one.

Which of the following, if true, would most strengthen the conclusion drawn above?


(A) It is possible to increase both the quality and the price of a product without changing its competitive position.

(B) For certain segments of the population of consumers, higher-priced brands of some product lines are preferred to the lower-priced brands.

(C) Competing products often try to appeal to different segments of the population of consumers.

(D) The competitive position of a product can be affected by such factors as advertising and brand loyalty.

(E) Consumers’ perceptions of the quality of a product are based on the actual quality of the product.



Solution

Passage Analysis

The value of a product is determined by the ratio of its quality to its price.
-Value of a product is defined as quality/price.

The higher the value of a product, the better will be its competitive position.
-As value increases, the competitive position gets better.

Therefore, either increasing the quality or lowering the price of a given product will increase the likelihood that consumer will select that product rather than a competing one.
-Thus, increasing quality or decreasing price will increase the chance of being purchased over a competing product.

Prethinking

The conclusion is: Either increasing the quality or lowering the price of a given product will increase the likelihood that consumers will select that product rather than a competing one.

Strengthen framework

What new information will increase our belief in this conclusion given that
Value of a product=Quality/price
Value is directly proportional to a better competitive position

Strengthener 1

The perceived value of the product by the customer is not significantly lower than the actual value.

Strengthener 2

Consumers’ perceptions of the quality of a product is in line with the actual quality of the product.

Answer Choice Analysis

(A) It is possible to increase both the quality and the price of a product without changing its competitive position.
-This being possible does not affect the conclusion in any way. Hence it is irrelevant.

(B) For certain segments of the population of consumers, higher-priced brands of some product lines are preferred to the lower-priced brands.
-The preferences of certain segments of consumers do not change the general rule. Therefore, this option is irrelevant.

(C) Competing products often try to appeal to different segments of the population of consumers.
-Who the products appeal to is also irrelevant to the conclusion. What we are bothered about is the value and the product’s competitive position.

(D) The competitive position of a product can be affected by such factors as advertising and brand loyalty.
-Other factors affecting competitive position do not say anything about the impact of quality and price. Hence, this option is irrelevant.

(E) Consumers’ perceptions of the quality of a product are based on the actual quality of the product.
This option is in line with strengthener #2. Hence it is the right answer.
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SudiptoGmat wrote:
The value of a product is determined by the ratio of its quality to its price. The higher the value of a product, the better will be its competitive position. Therefore, either increasing the quality or lowering the price of a given product will increase the likelihood that consumer will select that product rather than a competing one.
Which of the following, if true, would most strengthen the conclusion drawn above?
(A) It is possible to increase both the quality and the price of a product without changing its competitive position.
(B) For certain segments of the population of consumers, higher-priced brands of some product lines are preferred to the lower-priced brands.
(C) Competing products often try to appeal to different segments of the population of consumers.
(D) The competitive position of a product can be affected by such factors as advertising and brand loyalty.
(E) Consumers’ perceptions of the quality of a product are based on the actual quality of the product.


Has to be E. The potential buyers of the product have to know the quality of the product to determine the value of the product (value = quality/price).
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There are two sides of the deal. Producer and customer.

Producer plays with quality & price, so that the product has the best competitive position.

Consumer bases the decision to buy on quality and price perception.

You need some link to connect these two statements. (E) perfectly connects actual quality, set by producer, with its perception by customer.
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Re: The value of a product is determined by the ratio of its quality to it [#permalink]
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Here's my justification for E.

(A) It is possible to increase both the quality and the price of a product without changing its competitive position. - The conclusion states you either increase the quality or lower the price, not both. Although you can change both, it's out of scope for the purposes of the conclusion

(B) For certain segments of the population of consumers, higher-priced brands of some product lines are preferred to the lower-priced brands. - This could weaken the conclusion. If some consumers make purchasing decisions purely on higher price then lowering the price will decrease the likelihood of some consumers selecting the product.

(C) Competing products often try to appeal to different segments of the population of consumers. - This is irrelevant to the conclusion. We're not talking about price or quality in this answer.

(D) The competitive position of a product can be affected by such factors as advertising and brand loyalty. - This weakens the conclusion. If other factors affect the competitive position then increasing the quality or decreasing the price could have no effect.

(E) Consumers’ perceptions of the quality of a product are based on the actual quality of the product. - Correct answer. An assumption in the argument is the increase in quality is actually observed and noticed by the consumer. This validates the assumption and therefore strengthens the argument.
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Re: The value of a product is determined by the ratio of its quality to it [#permalink]
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The value of a product is determined by the ratio of its quality to its price. The higher the value of a product, the better will be its competitive position. Therefore, either increasing the quality or lowering the price of a given product will increase the likelihood that consumer will select that product rather than a competing one.


the key part is in red.

say consumers give rating 7 out of 10 to quality of some product. So either quality rating should be increased or the price of this product decreased

Hence, consumers’ perceptions of the quality of a product are based on the actual quality of the product.

hence E is clear winner.

(E) Consumers’ perceptions of the quality of a product are based on the actual quality of the product.
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The value of a product is determined by the ratio of its quality to it [#permalink]
SudiptoGmat wrote:
The value of a product is determined by the ratio of its quality to its price. The higher the value of a product, the better will be its competitive position. Therefore, either increasing the quality or lowering the price of a given product will increase the likelihood that consumer will select that product rather than a competing one.

Which of the following, if true, would most strengthen the conclusion drawn above?

(A) It is possible to increase both the quality and the price of a product without changing its competitive position.
(B) For certain segments of the population of consumers, higher-priced brands of some product lines are preferred to the lower-priced brands.
(C) Competing products often try to appeal to different segments of the population of consumers.
(D) The competitive position of a product can be affected by such factors as advertising and brand loyalty.
(E) Consumers’ perceptions of the quality of a product are based on the actual quality of the product.

My reasoning is as follows:

V = Q/P, increase V means increase in competitive position. thus we must increase Q or lower P. Pre-thinking here would be along the lines of if we increase Q we can keep P the same or vice versa.

A) This actually weakens the conclusion. If it's unchanged that means the conclusion falls apart.
B) Irrelevant, in our conclusion we're talking about the entire population not certain segements
C) Ireelevant to our conclusion
D) Irrelevant again because we only care about Price to Value
E) CORRECT, although this wasn't what we though in our pre-think, it makes a lot of sense. If we said the quality of a product is subjective, then the entire conclusion would fall apart since we won't be able to accurately get a product's true value.­
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Re: The value of a product is determined by the ratio of its quality to it [#permalink]
What E basically says is that the actual quality of the product is very closely related to the consumer's "perception" of the product quality.

So, If I improve the actual quality of the product, then the consumer's "perception of the product quality" also increases, which means that my product now has a better chance of being selected by the consumer.

Hence, E is the right option.
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Re: The value of a product is determined by the ratio of its quality to it [#permalink]
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Hi ,
(A) It is possible to increase both the quality and the price of a product without changing its competitive position.

by increasing both quality and price of the product proportionately by keeping value of the product same as earlier is possible, hence achieving unchanged market position.

GMATNinja please state the reason why, (A) is incorrect?
Thank you
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Re: The value of a product is determined by the ratio of its quality to it [#permalink]
Ashma wrote:
Hi ,
(A) It is possible to increase both the quality and the price of a product without changing its competitive position.

by increasing both quality and price of the product proportionately by keeping value of the product same as earlier is possible, hence achieving unchanged market position.

GMATNinja please state the reason why, (A) is incorrect?
Thank you



Quote:
The value of a product is determined by the ratio of its quality to its price. The higher the value of a product, the better will be its competitive position. Therefore, either increasing the quality or lowering the price of a given product will increase the likelihood that consumer will select that product rather than a competing one.

Which of the following, if true, would most strengthen the conclusion drawn above?




Value = Quality/Product
Increase value : consumer choose ; not prefer competitive product

(A) It is possible to increase both the quality and the price of a product without changing its competitive position.
>> Increase Quality and INCREASE price = value may remain same or low or higher ; competitive position still the same
No information is given whether consumer will buy higher value product ( low price or high quality)

(E) Consumers’ perceptions of the quality of a product are based on the actual quality of the product.
When increase in quality then value is increased. It means consumer notices increase in quality
consumer prefer ( perception) high value product
Competitive product ( old value) : consumer notices it is of low quality.
So chances of preferences of high quality product is higher rather than competitive . hence E
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Re: The value of a product is determined by the ratio of its quality to it [#permalink]
What does E say.
Consumers perceptions are influenced by the actual quality of the product and not other factors such as its price, advertising, branding etc.
Therefore increasing quality will increase competitive position and increase product value. But no where its given that customers are attracted (perceptions) to this increased quality.
E says that.

A is irrelevant as it says it's possible to increase competitive advantage by increasing both quality and price.
The argument is a prediction made on the truth of certain premises.
If premises are true, then the prediction is likely to occur.
We don't want to change the premises. Rather we want to show the conclusion follows from the premises.
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Re: The value of a product is determined by the ratio of its quality to it [#permalink]
The conclusion states that "either increasing the quality or lowering the price of a given product will increase the likelihood that consumer will select that product rather than a competing one."
For a strengthen question, we think of possible weakeners and look for options that might mitigate those.
A possible weakener could be that despite the lowering of price or increasing of quality, the product continues to not be preferred by consumer.
Only Option E deals with that aspect -> If the increased quality is perceived correctly by consumer, the above situation is dealt with. Hence, that is the correct answer.
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Re: The value of a product is determined by the ratio of its quality to it [#permalink]
The value of a product is determined by the ratio of its quality to its price. The higher the value of a product, the better will be its competitive position. Therefore, either increasing the quality or lowering the price of a given product will increase the likelihood that consumer will select that product rather than a competing one.

Which of the following, if true, would most strengthen the conclusion drawn above?

(A) It is possible to increase both the quality and the price of a product without changing its competitive position. X
This has either a neutral effect or potentially weakening effect on the argument. Neutral – perhaps to price ratio is capped out – so improving it won’t yield any more benefits. Weaken – perhaps quality and price don’t really affect the competition position (implausible). Either way, this doesn’t strengthen.
(B) For certain segments of the population of consumers, higher-priced brands of some product lines are preferred to the lower-priced brands. X
OK, what does this mean though? Are the higher priced brands accompanied by higher quality too? Assuming the two aspects increased by the same factor – then we could have a strengthener. But what if the price increased, without quality increasing? In that case value drops and competition position would presumably weaken. Wrong direction.
(C) Competing products often try to appeal to different segments of the population of consumers. X
OK – that’s nice. So what?
(D) The competitive position of a product can be affected by such factors as advertising and brand loyalty. X
Weakens the argument
(E) Consumers’ perceptions of the quality of a product are based on the actual quality of the product.
Correct. The conclusion is the consumer WILL SELECT (future tense). So if it’s true that they actually care about quality, then this strengthens the conclusion.
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Re: The value of a product is determined by the ratio of its quality to it [#permalink]
VeritasKarishma mam Kindly explain why Option A is incorrect? and How Option E is correct?
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Re: The value of a product is determined by the ratio of its quality to it [#permalink]
VeritasKarishma egmat GMATNinja IanStewart mikemcgarry
Could you please help explain why A is not the correct answer?
I was hesitating between A and E , but I finally chose A since I thought that choice E duplicates with information provided in the argument.
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Re: The value of a product is determined by the ratio of its quality to it [#permalink]
krittapat wrote:
VeritasKarishma egmat GMATNinja IanStewart mikemcgarry
Could you please help explain why A is not the correct answer?
I was hesitating between A and E , but I finally chose A since I thought that choice E duplicates with information provided in the argument.


vasuca10 wrote:
VeritasKarishma mam Kindly explain why Option A is incorrect? and How Option E is correct?




my 2 cents, hope it helps:-

What do we need to find out that YES, consumer will select the product that has HIGH QUALITY or LOW PRICE-competing product

A: says oh , you can increase both , then we don't know value will remain same, low or higher? moreoever A could weaken if you can increase price and still product is competitive.
E: connects gaps what consumer buys and what actual products is in terms of quality.

A talks more on mathemtical terms but E connects with actual conclcusion. If you miss consumer in conclusion then you may find E irrelevant.

in other words, if someone asks you , consumer wants to buy your product then if consumer doesn't think your product is not of high quality then even you makes it high quality product, consumer wil not buy.

I shortlisted A at first, by the time i reached at E. i find why E use consumer and when i refer conclusion, i had no doubt that E is much better than A.
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Re: The value of a product is determined by the ratio of its quality to it [#permalink]
SudiptoGmat wrote:
The value of a product is determined by the ratio of its quality to its price. The higher the value of a product, the better will be its competitive position. Therefore, either increasing the quality or lowering the price of a given product will increase the likelihood that consumer will select that product rather than a competing one.

Which of the following, if true, would most strengthen the conclusion drawn above?



(A) It is possible to increase both the quality and the price of a product without changing its competitive position.
It weakens it sighting that lower price is not the factor but rather pricing it high is the real factor determing the reach of the product

(B) For certain segments of the population of consumers, higher-priced brands of some product lines are preferred to the lower-priced brands.
This too weakens sighting that higher pricing is the key to winning consumer share

(C) Competing products often try to appeal to different segments of the population of consumers.
This is thoroughly out of context

(D) The competitive position of a product can be affected by such factors as advertising and brand loyalty.
This too weakens embedding that it's marketing and not pricing and quality that plays a determing factor

(E) Consumers’ perceptions of the quality of a product are based on the actual quality of the product
This is the only option left and that supports the claim that quality is paramount for the cuatomers

Therefore IMO E .
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