GMAT Critical Reasoning
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.
Correct Answer: A