name-brand cereals- experts, please help!!!

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name-brand cereals- experts, please help!!!

by westham » Sat Jan 29, 2011 5:39 am
Over the past five years, the price gap between name-brand cereals and less expensive store-brand cereals has become so wide that consumers have been switching increasingly to store brands despite the name brands' reputation for better quality. To attract these consumers back, several manufacturers of name-brand cereals plan to narrow the price gap between their cereals and store brands to less than what it was five years ago.

Which of the following, if true, most seriously calls into question the likelihood that the manufacturers' plan will succeed in attracting back a large percentage of consumers who have switched to store brands?

A. There is no significant difference among manufacturers of name-brand cereals in the prices they charge for their products.
B. Consumers who have switched to store-brand cereals have generally been satisfied with the quality of those cereals.
C. Many consumers would never think of switching to store-brand cereals because they believe the name brand cereals to be of better quality.
D. Because of lower advertising costs, stores are able to offer their own brands of cereals at significantly lower prices than those charged for name-brand cereals.
E .Total annual sales of cereals-including both name-brand and store-brand cereals-have not increased significantly over the past five years.

[spoiler]OA: B, but why d is not correct?[/spoiler]

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by maihuna » Sat Jan 29, 2011 6:19 am
If you have cut other options then among B and D it is easy to go with B as D has flaw: It is just giving additional info that price gap is huge, which ahs to do nothing with the plan that branded manufacturer's are going to reduce prices to a 5 year period.
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by Tani » Sat Jan 29, 2011 2:17 pm
Agree. D is concerned with the cost structure of store versus name brands, not with whether consumers will switch. (And I can confirm this because I used to be product manager on a name brand cereal. :-))
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by arora007 » Wed Feb 16, 2011 9:17 am
Tani Wolff - Kaplan wrote:Agree. D is concerned with the cost structure of store versus name brands, not with whether consumers will switch. (And I can confirm this because I used to be product manager on a name brand cereal. :-))
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