Here are several reasons that the school asks about this question.
They want to see if you are serious about MBA and their program. If you have chosen
to apply all tier 1schools and their school is not one of them, they will know that
you were using their school as a save choice. So it is unlikely for them to give
you offer.
If the most of the schools you are choosing have lower requirements, they will
think you are not confidence in yourself. If you only choose one or two schools,
they will think you are not totally serious about MBA.
Also they want to get a vibe about what kinda school you are looking for. | 
