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655-705 Level|   Resolve Paradox|               
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AndrewN
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AndrewN
We cannot define what, exactly, rival products refers to without further information, but I take it to mean any similar product that is competing with a given brand-name product. For instance, consider three cereals. (Pardon the American references.)

1) Kellogg's Raisin Bran
2) Post Raisin Bran
3) nonbrand raisin bran

Now, if a consumer looks at Kellogg's and believes that it is guaranteed to be as good as either Post or the off-brand, then that consumer is more likely to purchase Kellogg's. The same can be said of a different consumer with Post, but not, according to answer choice (A), of a third consumer who was considering the off-brand product. (There is no belief in its guaranteed quality.) If the price of Kellogg's and Post were no higher than that of the off-brand cereal, then either Kellogg's or Post would be a safer bet, and that thought (conscious or unconscious in the mind of a consumer) could understandably drive sales for both brand-name products.


Thanks so much @AndrewN - i loved this example. If i could take this example - specifically the yellow highlight.

Why doesn't the third consumer have an gaurantee in the non-brand raisin bran ?

I ask because per the blue highlight below - the qualities of Kellogs / Post / Non brand ARE the same

Isn't the consumer AWARE of the blue highlight ?
We cannot assume that a given consumer is aware of the quality of each cereal, in my example, because neither the passage nor the answer choice tells us as much. (We can, however, assume that a consumer would be able to compare prices, since prices are an objective measure, and, well, items are typically marked by price in a store.) The third consumer in my example does not have a guarantee that the nonbrand raisin bran is just as good, qualitatively, as the other two brand-name cereals because the answer choice informs us only about what people believe about brand-name products. You should not be looking to read into information provided in the passage. Stick to what it explicitly tells you or what you can definitely infer from what appears there. If you find yourself following a chain of assumptions or a two-step line of if reasoning, then you are almost assuredly on the wrong track.

Thank you for following up.

- Andrew
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I am still confused. None of the explanations make sense. The "more than ever" continues to be a pain in the ass. GMATNinja kindly throw some light. :)
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Hard question…
I think the logic behind answer choice isn’t obvious (quite subjective) and the MARKETING ADVANTAGE in the question stimuli is ambiguous

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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


In the past, brand names sold better because their products were better quality than non-brand rivals.
Today, brand-name products generally neither offer higher quality nor sell at higher prices. (quality of all is same and the price they command same too)
But still, brand names are a bigger marketing advantage than ever. (people still buy predominantly brand names)

Why? When the quality and price are usually the same, why do people prefer brand names today too?
We need something that will explain this.

(A) Brand names are taken by consumers as a guarantee of getting a product as good as the best rival products.

This tells us that brand names reassure consumers that the quality is at par with best rival products. They do not have this assurance about non branded products. So though technical expertise may have become widespread and quality may not be different, assurance about quality today also comes from brand names only. That is why brand names sell.
Correct. Helps explain the paradox.

(B) Consumers recognize that the quality of products sold under invariant brand names can drift over time.

This is against brand names if their quality drifts over time. So it cannot be the reason why people buy brand names.

(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.

Irrelevant. We need to explain why people buy brand names.

(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.

Irrelevant. The question is about today.

(E) The advertising of a company’s brand-name products is at times transferred to a new advertising agency, especially when sales are declining.

Irrelevant.

Answer (A)
How are you straightaway saying that E is irrelevant?
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arbazfatmi1994
I am still confused. None of the explanations make sense. The "more than ever" continues to be a pain in the ass. [url=https://gmatclub.com:443/forum/memberlist.php?mode=viewprofile&un=GMATNinja%5D%5Bb%5DGMATNinja%5B/b%5D%5B/url%5D kindly throw some light. :)
Boiled way down, we're trying to reconcile two seemingly incompatible facts:

  • Brand names are a bigger marketing advantage than ever
  • The quality of brand name products is no better than the quality of non-brand name products

That seems weird. If the brand name stuff isn’t better, why is a brand name a market advantage?

Well, if consumers believe that "brand name" = "guarantee of quality," that's a big advantage from a marketing perspective, right? The brand name might not be better, necessarily, but if it's perceived as a guarantee that there's not a superior alternative, well, people are still going to buy it.

That's all (A) is saying. People aren't buying brand names because they're better. They're buying because they believe these products are guaranteed to not be worse. So the brand name is still an advantage. Simple as that.

And don't get too hung up on the "more than ever." It just means that the brand name advantage is better now -- when it seems like there shouldn't be an advantage -- than it was in the past.

I hope that clears things up!
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