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.
The passage suggests that Kirmani would be most likely to agree with which of the following statements about consumers' perceptions of the relationship between the frequency with which a product is advertised and the product's quality?
- A Consumers' perceptions about the frequency with which an advertisement appears are their primary consideration when evaluating an advertisement's claims about product quality.
- B Because most consumers do not notice the frequency of advertisement, it has little impact on most consumers' expectations regarding product quality.
- C Consumers perceive frequency of advertisement as a signal about product quality only when the advertisement is for a product that is newly on the market.
- D The frequency of advertisement is not always perceived by consumers to indicate that manufacturers are highly confident about their products' quality.
- E Consumers who try a new product that has been frequently advertised are likely to perceive the advertisement's frequency as having been an accurate indicator of the product's quality.