Question

Titleist's advertising slogan is "The #1 ball in golf." Consumers can also buy generic golf balls. The manufacturers of generic golf balls do not engage in any advertising. Assume that the average total cost of producing Titleist and generic golf balls is the same.
Which producer has a stronger incentive to maintain quality control in the production of golf balls?
1)Titleist.
2) a manufacturer of generic golf balls.

Answer 1

Answer:

1)Titleist

Explanation:

Titleist brand is associated with high quality golf balls and clubs. Their customers purchase them instead of generic balls because of their perceived high quality. So they should maintain quality controls to keep customers perceiving their products as high quality products.

Generic golf manufacturers are probably only worried about selling golf balls at a lower price and don't care that much about quality.