• EMPOWERgmat Slider
    1 Hour Free
    BEAT THE GMAT EXCLUSIVE

    Available with Beat the GMAT members only code

    MORE DETAILS
    EMPOWERgmat Slider
  • Veritas Prep
    Free Veritas GMAT Class
    Experience Lesson 1 Live Free

    Available with Beat the GMAT members only code

    MORE DETAILS
    Veritas Prep
  • Economist Test Prep
    Free Trial & Practice Exam
    BEAT THE GMAT EXCLUSIVE

    Available with Beat the GMAT members only code

    MORE DETAILS
    Economist Test Prep
  • e-gmat Exclusive Offer
    Get 300+ Practice Questions
    25 Video lessons and 6 Webinars for FREE

    Available with Beat the GMAT members only code

    MORE DETAILS
    e-gmat Exclusive Offer
  • Magoosh
    Magoosh
    Study with Magoosh GMAT prep

    Available with Beat the GMAT members only code

    MORE DETAILS
    Magoosh
  • Varsity Tutors
    Award-winning private GMAT tutoring
    Register now and save up to $200

    Available with Beat the GMAT members only code

    MORE DETAILS
    Varsity Tutors
  • PrepScholar GMAT
    5 Day FREE Trial
    Study Smarter, Not Harder

    Available with Beat the GMAT members only code

    MORE DETAILS
    PrepScholar GMAT
  • Target Test Prep
    5-Day Free Trial
    5-day free, full-access trial TTP Quant

    Available with Beat the GMAT members only code

    MORE DETAILS
    Target Test Prep
  • Kaplan Test Prep
    Free Practice Test & Review
    How would you score if you took the GMAT

    Available with Beat the GMAT members only code

    MORE DETAILS
    Kaplan Test Prep

OG Much research has been devoted to investigating

This topic has 0 member replies
AbeNeedsAnswers Master | Next Rank: 500 Posts Default Avatar
Joined
02 Jul 2017
Posted:
191 messages
Followed by:
2 members
Upvotes:
1

OG Much research has been devoted to investigating

Post Thu Jul 27, 2017 7:47 pm
Much research has been devoted to investigating
what motivates consumers to try new products.
Previous consumer research suggests that both the
price of a new product and the way it is advertised
affect consumers’ perceptions of the product’s
performance risk (the possibility that the product will
not function as consumers expect and/or will not
provide the desired benefits). Some of this research
has concluded that a relatively high price will reduce
a consumer’s perception of the performance risk
associated with purchasing a particular product,
while other studies have reported that price has little
or no effect on perceived performance risk. These
conflicting findings may simply be due to the nature
of product advertisements: a recent study indicates
that the presentation of an advertised message has a
marked effect on the relationship between price and
perceived performance risk.
Researchers have identified consumers’ perception
of the credibility of the source of an advertised
message-i.e., the manufacturer-as another factor
affecting perceived performance risk: one study
found that the greater the source credibility, the lower
the consumer’s perception of the risk of purchasing
an advertised new product. However, past research
suggests that the relationship between source
credibility and perceived performance risk may be
more complex: source credibility may interact with
price in a subtle way to affect consumers’ judgments
of the performance risk associated with an advertised
product.

415) According to the passage, the studies referred to in line 12 reported which of the following about the effect of price on consumers’ perception of the performance risk associated with a new product?
A. Although most consumers regard price as an important factor, their perception of the performance risk associated with a new product is ultimately determined by the manufacturer’s reputation.
B. Price interacts with the presentation of an advertised message to affect perceived performance risk.
C. Price does not significantly affect consumers’ perception of the performance risk associated with a new product.
D. Consumers tend to regard price as more important than the manufacturer’s credibility when they are buying from that manufacturer for the first time.
E. Consumers are generally less concerned about a new product’s performance risk when that product is relatively expensive.

416) The “past research” mentioned in line 25 suggests which of the following about perceived performance risk?
A. The more expensive a new product is, the more likely consumers may be to credit advertised claims about that product.
B. The more familiar consumers are with a particular manufacturer, the more willing they may be to assume some risk in the purchase of a new product being advertised by that manufacturer.
C. Consumers’ perception of the performance risk associated with a new product being advertised may be influenced by an interplay between the product’s price and the manufacturer’s credibility.
D. Consumers may be more likely to believe that a product will function as it is advertised to do when they have bought products from a particular manufacturer before.
E. The price of a particular advertised product may have less impact than the manufacturer’s credibility on consumers’ assessment of the performance risk associated with that product.

417) The passage is primarily concerned with
A. challenging the implications of previous research into why consumers try new products
B. suggesting new marketing strategies for attracting consumers to new products
C. reconciling two different views about the effect of price on consumers’ willingness to try new products
D. describing a new approach to researching why consumers try new products
E. discussing certain findings regarding why consumers try new products

418) Which of the following, if true, would most tend to weaken the conclusions drawn from “some of this research” (see line 8)?
A. In a subsequent study, consumers who were asked to evaluate new products with relatively low prices had the same perception of the products’ performance risk as did consumers who were shown the same products priced more expensively.
B. In a subsequent study, the quality of the advertising for the products that consumers perceived as having a lower performance risk was relatively high, while the quality of the advertising for the products that consumers perceived as having a higher performance risk was relatively poor.
C. In a subsequent study, the products that consumers perceived as having a lower performance risk were priced higher than the highest priced products in the previous research.
D. None of the consumers involved in this research had ever before bought products from the manufacturers involved in the research.
E. Researchers found that the higher the source credibility for a product, the more consumers were willing to pay for it.

Q415: C
Q416: C
Q417: E
Q418: A

  • +1 Upvote Post
  • Quote
  • Flag
Need free GMAT or MBA advice from an expert? Register for Beat The GMAT now and post your question in these forums!

Best Conversation Starters

1 lheiannie07 120 topics
2 ardz24 65 topics
3 LUANDATO 63 topics
4 swerve 61 topics
5 AAPL 59 topics
See More Top Beat The GMAT Members...

Most Active Experts

1 image description Scott@TargetTestPrep

Target Test Prep

186 posts
2 image description Brent@GMATPrepNow

GMAT Prep Now Teacher

171 posts
3 image description Jeff@TargetTestPrep

Target Test Prep

147 posts
4 image description Rich.C@EMPOWERgma...

EMPOWERgmat

133 posts
5 image description GMATGuruNY

The Princeton Review Teacher

128 posts
See More Top Beat The GMAT Experts