CAT 2024 Question Paper | VARC Slot 3

CAT Questions

The only way to master VARC during your CAT Preparation is by practicing actual CAT question paper. Practice RCs with detailed video and text solutions from Previous CAT Question Papers.

The passage below is accompanied by four questions. Based on the passage, choose the best answer for each question.

Moutai has been the global booze sensation of the decade. A bottle of its Flying Fairy which sold in the 1980s for the equivalent of a dollar now retails for $400. Moutai's listed shares have soared by almost 600% in the past five years, outpacing the likes of Amazon. . . .

It does this while disregarding every Western marketing mantra. It is not global, has meagre digital sales and does not appeal to millennials. It scores pitifully on environmental, social and governance measures. In the Boy Scout world of Western business it would leave a bad taste, in more ways than one.

Moutai owes its intoxicating success to three factors—not all of them easy to emulate. First, it profits from Chinese nationalism. Moutai is known as the "national liquor". It was used to raise spirits and disinfect wounds in Mao's Long March. It was Premier Zhou Enlai's favourite tipple, shared with Richard Nixon in 1972. Its centuries-old craftsmanship—it is distilled eight times and stored for years in earthenware jars—is a source of national pride. It also claims to be hangover-proof, which would make it an invention to rival gunpowder....

Second, it chose to serve China's super-rich rather than its middle class. Markets are littered with the corpses of firms that could not compete in the cut-throat battle for Chinese middle-class wallets. And the country's premium market is massive—at 73m-strong, bigger than the population of France, notes Euan McLeish of Bernstein, an investment firm, and still less crowded with prestige brands than advanced economies. Moutai is to these well-heeled drinkers what vintage champagne is to the rest of the world.....

Third, Moutai looks beyond affluent millennials and digital natives. The elderly and the middle-aged, it found, can be just as lucrative. Its biggest market now is (male) drinkers in their mid-30s. Many have no siblings, thanks to four decades of China's one-child policy—which also means their elderly parents can splash out on weddings and banquets. Moutai is often a guest of honour.

Moutai has succeeded thanks to nationalism, elitism and ageism, in other words—not in spite of this unholy trinity. But it faces risks. The government is its largest shareholder—and a meddlesome one. It appears to want prices to remain stable. Exorbitantly priced booze is at odds with its professed socialist ideals. Yet minority investors—including many foreign funds—lament that Moutai's wholesale price is a third of what it sells for in shops. Raising it could boost the company's profits further. Instead, in what some see as a travesty of corporate governance, its majority owner has plans to set up its own sales channel.....

In the long run, its biggest risk may be millennials. As they grow older, health concerns, work-life balance and the desire for more wholesome pursuits than binge-drinking may curb the "Ganbei!" toasting culture [heavy drinking] on which so much of the demand for Moutai rests. For the time being, though, the party goes on.

Question 15 : In the context of the passage we can infer that to succeed in the liquor industry in China, a marketing firm must consider all of the following factors affecting the Chinese liquor market EXCEPT that

---

---

---

Explanatory Answer

Let us consider each option in order.
Both options 1 and 2 relate to the middle class market for liquor in China. Regarding this, the passage says, "Markets are littered with the corpses of firms that could not compete in the cut-throat battle for Chinese middle-class wallets." In other words, the competition for winning over the middle class is very stiff and cut-throat. Many firms tried their hand in competing in this market and failed. So, option 1 is true while 2 is false.
Option 3 is true, based on the penultimate paragraph.
Option 4 is true as well: "And the country’s premium market is massive—at 73m-strong, bigger than the population of France, notes Euan McLeish of Bernstein, an investment firm, and still less crowded with prestige brands than advanced economies."
So, option 2 is the correct answer choice.

---

The question is " In the context of the passage we can infer that to succeed in the liquor industry in China, a marketing firm must consider all of the following factors affecting the Chinese liquor market EXCEPT that "

Hence, the answer is 'there is money to be made from marketing to the middle class.'

Choice B is the correct answer.

Verbal Ability for CAT | CAT Reading Comprehension

Verbal Ability for CAT| CAT Para Jumble

Verbal Ability for CAT | CAT Sentence Elimination

Verbal Ability for CAT | CAT Paragraph Completion

Verbal Ability for CAT | CAT Critical Reasoning

Verbal Ability for CAT | CAT Word Usage

Verbal Ability for CAT| CAT Para Summary

Verbal Ability for CAT | CAT Text Completion

Verbal Ability for CAT | CAT Sentence Correction