zest4mba wrote:
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)
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02 Jul 2020, 21:57
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