People buy prestige when they buy a premium product. They want to be a

Question

Which of the following best completes the passage below?

People buy prestige when they buy a premium product. They want to be associated with something special. Mass-marketing techniques and price-reduction strategies should not be used because ______.

(A) affluent purchasers currently represent a shrinking portion of the population of all purchasers
(B) continued sales depend directly on the maintenance of an aura of exclusivity
(C) purchasers of premium products are concerned with the quality as well as with the price of the products
(D) expansion of the market niche to include a broader spectrum of consumers will increase profits
(E) manufacturing a premium brand is not necessarily more costly than manufacturing a standard brand of the same product

firasath · Accepted Answer

Option B says that we can only maintain current sales levels if the product is perceived as an exclusive luxury brand. Because of this perception, it's more desirable as more people want to own a prestigious brand.

example: BMW is perceived as a luxury brand and hence it sells alot of cars to people that can afford them. If it were to cut its prices, the people that can afford a BMW would no longer desire a BMW, they will go buy a different luxury brand , say a Mercedez Benz.

firasath · Answer

Premise 1: People buy prestige when they buy a premium product. They want to be associated with something special.
Premise 2: Mass-marketing techniques and price-reduction strategies are bad

you need to connect how making something more available/affordable negatively affects premise 1. The only one that addresses this is B.

A) doesn't explain mass marketings affect
b) correct
c) doesnt explain how mass marketing can affect sales.
d) this says that mass marketing and price reduction is good --> increases profits.
e) we are not concerned with comparing premium with standard brands.

sagarsabnis · Answer

I am still not clear in fact i am not able to understand option B please can you give it a one more try.

thevenus · Answer

People buy a premium product ( which is not very common and not everyone is accessible or eligible to buy it ) and therefore they buy prestige ( exclusivity and the pride to own something special) along with the product.
They want to be associated with some special (which is not common to all) such products.

Mass marketing makes a product common,so a large population uses that product,the exclusivity reduces and the prestige vanishes.Price reduction plays an important role, it means that when larger population to consume or buy that product the aura exclusivity of the product vanishes.

(B) has this in it.

tarunk31 · Answer

People buy prestige when they buy a premium product. They want to be associated with something special. Mass-marketing techniques and price-reduction strategies should not be used because______
Premises: People buy prestige when they buy a premium product. They want to be associated with something special.

Conclusion: Mass-marketing techniques and price-reduction strategies should not be used

You need to strengthen this conclusion. So you need to find a link between premises and conclusion first. The reason the author made such a conclusion is that using such techniques and strategy will take away that premium and special factor from the product and buyers of such product will not feel like buying a special and premium product resulting in a loss of sales.

(A) affluent purchasers currently represent a shrinking portion of the population of all purchasers.

if this is the case then this will weaken the conclusion as such techniques may actually improve the customer base.

(B) continued sales depend directly on the maintenance of an aura of exclusivity

This matches our prethinking. Should be the ans.

(C) purchasers of premium products are concerned with the quality as well as with the price of the products

If purchasers of premium products are concerned about price then price reduction may work. This weakens the conclusion somewhat.

(D) expansion of the market niche to include a broader spectrum of consumers will increase profits

But then why are we concluding that price reduction strategies won't work. This is inconsistent with the conclusion.

(E) manufacturing a premium brand is not necessarily more costly than manufacturing a standard brand of the same product

Again inconsistent with the conclusion as this option also doesn't justify such a conclusion.

Ans. B

vnigam21 · Answer

Which of the following best completes the passage below?

People buy prestige when they buy a premium product. They want to be associated with something special. Mass-marketing techniques and price-reduction strategies should not be used because______

(A) affluent purchasers currently represent a shrinking portion of the population of all purchasers 
 As per this option, the wealthy purchasers currently represent a small chunk of the entire population of all purchasers. So, it favors the usage of mass-marketing techniques and price-reduction strategies in order to attract more customers who maybe poor or impoverished. This option statement goes against the flow, therefore, is incorrect.

(B) continued sales depend directly on the maintenance of an aura of exclusivity 
 This option statement goes with the flow of the last statement of the above argument. In order to maintain the aura of exclusivity or prestige of the premium products, the mass-marketing techniques and the price-reduction strategies should be refrained in order to avoid the reach of these premium products to the impoverished mass of people.

(C) purchasers of premium products are concerned with the quality as well as with the price of the products 
?ANY EXPLANATION FOR THIS OPTION?

(D) expansion of the market niche to include a broader spectrum of consumers will increase profits 
 This option statement also goes against the flow of the last statement of the above argument. As per this option, mass-marketing techniques and price-reduction strategies should be used as that will increase profits. So, its beneficial. Hence, this option statement is incorrect.

(E) manufacturing a premium brand is not necessarily more costly than manufacturing a standard brand of the same product. 
 This option compares the manufacturing costs of a premium brand with a standard brand of the same product. But that is not relevant to why the mass-marketing techniques and price-reduction strategies should not be used.

I am not very clear with the option C, though I picked B as the correct answer. Can someone help me in explaining me why option C is wrong?

Edit : My understanding for option C, purchasers of premium products are concerned with the quality as well as with the price of the products
 PURCHASERS OF PREMIUM PRODUCTS (PURCHASERS WHO WANT TO BE ASSOCIATED WITH SOMETHING SPECIAL) ARE CONCERNED WITH -
a.  quality of the products  - as per my understanding, the quality of those products should be excellent/outstanding, and mass-marketing OR price reduction techniques will result in hampering of the quality only, so such techniques should not be used. so it supports the conclusion
b.  price of the products  - to maintain the prestige of premium products, the price should be high, thereby proving that the price reduction techniques should be avoided.

Thus, option C also seems to be a good contender for this question. But why is this option wrong. Can someone explain??

vnigam21 · Answer

I am not very clear with the option C, though I picked B as the correct answer. Can someone help me in explaining me why option C is wrong?

Edit : My understanding for option C, purchasers of premium products are concerned with the quality as well as with the price of the products
PURCHASERS OF PREMIUM PRODUCTS (PURCHASERS WHO WANT TO BE ASSOCIATED WITH SOMETHING SPECIAL) ARE CONCERNED WITH -
a. quality of the products - as per my understanding, the quality of those products should be excellent/outstanding, and mass-marketing OR price reduction techniques will result in hampering of the quality only, so such techniques should not be used. so it supports the conclusion
b. price of the products - to maintain the prestige of premium products, the price should be high, thereby proving that the price reduction techniques should be avoided.

Thus, option C also seems to be a good contender for this question. But why is this option wrong. Can someone explain??

ChiranjeevSingh · Answer

vnigam21  Your explanations for options A, B, D, and E are correct. Option A would be a good contender for the correct choice if it said the opposite i.e. affluent purchasers currently represent a  growing  portion of the population of all purchasers.

Option C is wrong because neither mass marketing techniques nor price reductions strategies have anything to do with the quality of the product. If you reduce the price of a product, the quality of the product doesn't go down automatically. The "quality" part is what makes this option wrong. The "price" part of option C makes sense in the context of the argument.

- Chiranjeev

adkikani · Answer

nightblade354 generis KarishmaB pikolo2510 GMATNinja gmatexam439 I have a query regarding explanation by ChiranjeevSingh and would like to share my reasoning for the same. Premium = Unique Mass-marketing techniques (MMR) and price-reduction strategies (PRS) would pull sales

Is above correct inference till this stage? In PoE I am looking for striking out anything that helps / supports MMR / PRS This option is discarded since it links PRICE = AFFLUENT (wealthy) Q stem is against price / mass marketing. Out Even if affluent purchasers currently represent a growing portion of the population of all purchasers this rephrase option is against the answer choice. One key word and you won the game: EXCLUSIVITY : (recall mutually exclusive events from quant

) Link products that are exclusive with those that are unique and the fits 'fill in the blank' in apt manner An over exaggeration of (A). This one links one more parameter that I do not want in pic: quality. OUT Profits , hmm not much sure, but wait more importantly : expansion = mass marketing. Opps that is again opposite to what I want. OUT. Why are we comparing manufacturing cost of standard product and premium one. Out of scope. Let me know if my reasoning and PoE is correct.

nightblade354 · Answer

adkikani ,

your explanations look good. I disagree that (A) would be correct if it said wealthy people are a growing sector of their business. It is completely irrelevant, unless the author were to combine (A) and (B). If they are a growing number, it still wouldn't answer the WHY of the question: Why can't we lower prices? I think you were right to question that explanation, so good catch!

Does this help?

VerbalBot · Answer

Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.

People buy prestige when they buy a premium product. They want to be a

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Critical Reasoning (CR) Questions

People buy prestige when they buy a premium product. They want to be a

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards