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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The OA is A.

I chose B initially. But after reviewing the Q and A, here is why I think the answer is A:

The paradox is is why do brands have an advantage over non-brands, considering that manufacturing and quality is relatively the same across the industry. Brands should not have an advantage, but they still do. Why?

So there must be something else that is driving the use of marketing among brands.

Possible considerations-Maybe the consumer responds prefers brand that guarantee performance? Or maybe the marketing advantage that firms have provides those firms with the ability to differntiate themselves from their competition?

A addresses the use of marketing, whereas B describes the behavior of consumers. If you think about it, B makes the problem worse-if the consumer already thinks that the non-brand will degrade over time, then what is the difference between now and before the new manufacturing techniques were employed? This seems to indicate that the firm has alwayes had a marketing advantage, and it does not explain why there may be a greater advantage right now.

Those are my thoughts anyway...

A is by no means a sexy answer but, at least is explains why the brands have a greater marketing advantage despite less differentiation among the products.

just thinking out loud here...the way i picked up the paradox is "...bigger MARKETING advantage than ever...". The paradox, in my opinion, is stressing on the MARKETING advantage of the brand names. Hence it has to do with the impact of brand names on consumers i.e. how brand names (or lack thereof) impact on consumers help market a product.

hence i'll go with option (B) Consumers recognize that the quality of products sold under invariant brand names can drift over time. which tells that brand name still holds some value in consumer's thinking even though there is no special quality associated with brand products.

I guess, the problem with option (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 is that it talks about the difficulty of creating a brand in modern (today's) world but doesn't relate it to its MARKETING impact.

My 2 cents. Do let me know the correct choice though!

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.

Hi Jack,

Let me see if I can explain.

The question simply is:
Branded Products are the same price and quality as non-branded.
BUT
Branded products are at a bigger marketing advantage than ever.
WHY?

To put D in easy to understand language, it is saying: It is now harder to get a brand name established.

This does not say anything about why branded products, whilst they are the same quality and price are still selected. It simply says that it's harder to create a brand - this is slightly different, it would suggest that branded products are more secure in their superior position (harder to get a rival brand set up), but does not say WHY they are in a superior position.

Does that help

Guys, I seriously need some help on this one. What is wrong with B? If quality of invariant brand names is expected to fade in some time, having a brand name definitely helps.

Earlier - Branded Products , were priced at a premium due to perceived superiority to Non Branded Products.

Now - Techncical Expertise has narrowed the gap between branded and Non Branded Products , reducing the product differences.

Concl - Branded Products neither produce higher Quality nor are priced at a premium.

Paradox - Branded Products are bigger marketing tool....




If there is no difference in terms of Product quality , advantages and other aspects between Branded and Non Branded Products then how come Branded Products offer better Marketing Tool....





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.

Seems good - We buy Branded goods with the expectation of Quality...

Consider Apple MAC book to Say XYZ Brand...

Even if Technology someday bridges the gap between Apple and XYZ , we would still prefer Apple Product with the gurantee of a good Brand name in terms of Quality and reputation won over time...

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

Not as good as (A)

(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.

Out of scope and wordy...

(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.

We are trying to resolve the Paradox , and this statement is no way helpful in doing so...

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

Out of scope...

Hence IMO (A) looks the best..
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Hi Josh,

The issue with B, is that it actually goes against what is said in the passage, where it is stated that now non-brand names have come up to the same standard.

So whilst B does give a reason for people choosing branded, it does not over come the paradox, rather stating a different point of view to the author.
James

James, Bingo.. I also thought of this exact line of reasoning but I have 2 reservations in accepting this:
1) I believe that we can definitely bring fresh information in the paradox answer choices, just as we can bring additional information in Strengthen/Weakening answers. So having a new information which can go against one of the facts seems fine to me.
2) The bigger issue is that the information brought by B is from the perspective of non-branded products, so B doesn't refer to or go directly against branded products as in the stimulus. This means I am not directly going against of what I said in stimulus by saying B. Please note that conclusion of argument is: brand-name products generally neither offer higher quality nor sell at higher prices.

Just another observation, A is a perception(from past) and B is also a perception(of future). I couldn't find any way to find A better.

Any suggestions, where I could have gone wrong in assessing this.. Thanks for responding

Hi Josh,

I'm afraid I disagree with your assumption that contradicting the passage can help with paradoxes, at least in this case.

The paradox is that: branded/unbranded are the same and the same price. Yet the brands have an advantage.

You need something to resolve that tension, by giving a 3rd bit of info. Simply saying you don't agree with one or other is not actually resolving the paradox, just saying you disagree with it.

James

Thanks James, I think I understand your point, it makes sense and we all are here to learn. I will keep this rule/learning/observation in mind till I observe a deviation.

Can anyone please explain to me why E is incorrect?

Thanks!

Paradox :brand-name products generally neither offer higher quality nor sell at higher prices. However, brand names are a bigger marketing advantage than ever.

Option E The advertising of a company’s brand-name products is at times transferred to a new advertising agency, especially when sales are declining.
When Sales are declining company hires new marketing agency in order to revive sales decline . This doesn't help to resolve paradox .

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?

This is how I understood it:


CONCLUSION: "brand-name products generally neither offer higher quality nor sell at higher prices"; HOWEVER, "brand names are a bigger marketing advantage than ever."

- How could this be correct?

(A) Brand names are taken by consumers as a guarantee of getting a product as good as the best rival products.
- Consumers are seeing brand names as KNOWN QUANTITIES. Have you ever heard of the expression "I'd rather go with/choose the KNOWN devil over the UNKNOWN devil?"
(B) Consumers recognize that the quality of products sold under invariant brand names can drift over time.
- Over time = irrelevant, we are talking about now.
(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.
- Acquisitions = out of scope. Who cares?
(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.
- Out of scope. Who cares how easy it was to get 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.
- Why do we care about advertising agencies? they may not even do a good job in the first place...

So I obviously chose "A". Please offer kudos if you find this helpful

OE:

Argument Evaluation

Situation In both quality and price, brand-name and nonbrand products have now become similar. Yet brand names offer a bigger marketing advantage than ever.

Reasoning How can this paradox be explained? It is given that a brand-name product’s only distinction from its rival products is a recognizable name. What must be true to give brand-name products a bigger marketing advantage? Could consumers be relying on their outdated knowledge and believing that brand names continue to guarantee that a product’s quality is at least as good as, and possibly higher than, that of the rival products at the same price? If so, they would choose to purchase the brand-name product trusting they would, at a minimum, get comparable quality for the same price.


A Correct. This statement correctly identifies the consumer behavior that explains the marketing advantage of brand names.
B Consumers would be less likely to buy brand-name products if they were unsure of their quality, so this statement does not resolve the paradox.
C Corporations value brand names, but this statement does not say why, nor does it explain the marketing advantage of brand names.
D The relative ease or difficulty of establishing brand names does not explain why they are a marketing advantage.
E The shift from one advertising agency to another to counteract falling sales does not account for the general marketing advantage brand names enjoy.

The correct answer is A.

Premise:
1. Brand name is better than nonbrand.
2. 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. ---- Basically its very hard to gain advantage
3. result of all this ---- brand-name products generally neither offer higher quality nor sell at higher prices.
4. So in the end two similar things have one difference --- one of them has brand and brand names are a bigger marketing advantage than ever.

pre-thinking:
We need to think in the direction --- after all this brand brings some value, such as trust.

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. --- this one is bringing some trust with brand. Lets hold it.

(B) Consumers recognize that the quality of products sold under invariant brand names can drift over time. --- no trust with any brand not bringing a value.

(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. ---- acquisitions is not our problem here.

(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. --- and those days are might be gone.

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

A seems best of the lot.
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Hello, can someone further explain why B is not a better choice than A? While A gives the guarantee that the product is "as good as" (Of the same quality) this doesnt explain why the brands have a bigger advantage than "ever before". B, however, shows that while people know that the quality right now is the same, brands give them the assurance that it will stay as good or get better. Doesnt B make more sense?
Not satisfied with the explanations provided.

I also chose B. Can an expert explain why not B? Also, what exactly is "invariant" brand names?

Is this really a sub-700 level question

I was thrown off by the word "invariant" as I interpreted it to refer to the no-name-brand products when in fact it means "never changing".

Substituted into (B) Consumers realise that the quality of products sold under never changing brand names can drift over time.

This actually weakens the statement that "brand names are a bigger marketing..." whereas we want something that allows both brand / unbranded facts to co-exist.
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