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.

When B has an equal chance , why is A the OA?

We eliminate B because we are not told that the quality of products under invariant brand names drift for the worst. If anything, we are told that they improve because they are playing catch up to the premium brands hence threatening their ability to command premium prices.

A is correct because the brand names, their image synonymous with high quality products, just make consumers feel a lot more secure about their purchase now that the premium brand is at the same price as that of the less recognized brand.

Here is a real world example:

A sony playstation 3 controller sells for 55 bucks but a third party has developed a similar controller which is a like for like replica of the sony controller and is selling it for 30 bucks. Tomorrow, if Sony lowered the price for the playstation 3 controller to 30 dollars, which one do you think consumers would buy? Most likely the Sony because the brand has just been always known for high quality products and people, psychologically, just believe that it will be more durable than it's unnamed counterpart.

Thanks Ravish ,

I assumed that the quality of the invariant brand names can only reduce as time drifts , missed out the other case.

Thanks for the example , but I believe we shouldn't take the real life examples in to account at least for GMAT

(B) Consumers recognize that the quality of products sold under invariant brand names can drift over time.
Quality is not an issue, the paradox has clear assumption, based on facts, that quality and price while remain same brands have bigger marketing advantage than others. This is a very subtle distraction, but remember paradox is not about quality, but paradox has to be resolve with the fact that quality remains same then why is there competitive advantage. Option A addresses this concern.