Final answer:
In the 1920s, increased competition among brands led to decreased brand loyalty, requiring companies to establish strong brand recognition and ensure product consistency to maintain market share. Option 2.
Step-by-step explanation:
During the 1920's, the competitive environment was reducing the distinction among brands, resulting in decreased brand loyalty. The presence of many similar products made it difficult for individual brands to stand out, which could lead to consumers being less loyal to a particular brand.
Companies had to protect their brands and ensure consistent quality to build national reputations, which became their most valued assets. Intense competition from firms offering better or cheaper products could lead to reduced profits for businesses that failed to differentiate their products convincingly.
As monopolistic competition intensified, only those with strong brand recognition like Coca-Cola could maintain a significant market share, highlighting the importance of marketing and brand distinction.
On the flip side, consumers benefitted from this competition, gaining access to better or less expensive products, making the gains of such a competitive market outweigh the losses to a nation.
Departments stores and national advertising campaigns helped to inculcate a sense of national identity through standardized consumer goods, reflecting modern patterns of consumerism.
The transition from small family-run shops to department stores marked a shift in consumer behavior, with advertising playing a pivotal role in shaping the brand loyalty and recognition.
So option 2 is correct.