GMAT Reading Comprehension
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Source: OG13th
Level: 3
According to economic signaling theory, consumers may perceive the frequency with which an unfamiliar brand is advertised as a cue that the brand is of high quality. The notion that highly advertised brands are associated with high-quality products does have some empirical support. Marquardt and McGann found that heavily advertised products did indeed rank high on certain measures of product quality. Because large advertising expenditures represent a significant investment on the part of a manufacturer, only companies that expect to recoup these costs in the long run, through consumers' repeat purchases of the product, can afford to spend such amounts.
However, two studies by Kirmani have found that although consumers initially perceive expensive advertising as a signal of high brand quality, at some level of spending the manufacturer's advertising effort may be perceived as unreasonably high, implying low manufacturer confidence in product quality. If consumers perceive excessive advertising effort as a sign of a manufacturer's desperation, the result may be less favorable brand perceptions. In addition, a third study by Kirmani, of print advertisements, found that the use of color affected consumer perception of brand quality. Because consumers recognize that color advertisements are more expensive than black and white, the point at which repetition of an advertisement is perceived as excessive comes sooner for a color advertisement than for a black-and-white advertisement.
Kirmani's third study, as described in the passage, suggests which of the following conclusions about a black-and-white advertisement?
- A It can be repeated more frequently than a comparable color advertisement could before consumers begin to suspect low manufacturer confidence in the quality of the advertised product.
- B It will have the greatest impact on consumers' perceptions of the quality of the advertised product if it appears during periods when a color version of the same advertisement is also being used.
- C It will attract more attention from readers of the print publication in which it appears if it is used only a few times.
- D It may be perceived by some consumers as more expensive than a comparable color advertisement.
- E It is likely to be perceived by consumers as a sign of higher manufacturer confidence in the quality of the advertised product than a comparable color advertisement would be.