Densmore Company, known for its luxury goods, has recently expanded its business and has begun marketing to consumers who, when surveyed, have stated that they usually purchase products priced at or below the prevailing market rate. To attract these customers' business, Densmore is advertising that its new, more inexpensive product lines, already priced lower than its top-selling luxury items, are on sale for 30% off. The Densmore marketing staff has determined that advertising its discounted prices is the most effective way of attracting potential customers.
Which of the following would be most helpful in evaluating the likelihood that Densmore's plan will achieve its goal?
A) How the profit margins on the new product lines compare to those for the top selling luxury items.
B) What percentage of existing Densmore customers are included in the consumer survey.
C) How many consumers surveyed are existing Densmore customers.
D) Whether those consumers most concerned with bargain-hunting will be exposed to Densmore's advertising campaign.
E) How the sale price compare to those for comparable, non-discounted products.
OA: E
Source: VeritasPrep (Advanced)
[spoiler]
[/spoiler]
700+ Densmore
- challenger63
- Master | Next Rank: 500 Posts
- Posts: 113
- Joined: Sun Aug 22, 2010 12:37 am
- Thanked: 16 times
- Followed by:4 members
Last edited by challenger63 on Fri Feb 01, 2013 2:15 pm, edited 2 times in total.
If you find my post useful, please don't hesitate to click thanks button.
I am not an expert, so I can make mistakes. If you see a mistake, please notify me.
I am not an expert, so I can make mistakes. If you see a mistake, please notify me.
- hemant_rajput
- Master | Next Rank: 500 Posts
- Posts: 447
- Joined: Sun Apr 22, 2012 7:13 am
- Thanked: 46 times
- Followed by:13 members
- GMAT Score:700
-
- Master | Next Rank: 500 Posts
- Posts: 341
- Joined: Sun Mar 25, 2012 6:59 pm
- Thanked: 17 times
- Followed by:4 members
- GMAT Score:720
i'd go with B. The plan is to attract potential customers. So if the survey included a high percentage of existing customers then that wont't help attract new customers. On the other hand if the survey included none of the existing customers, then they have a good shot at attracting new customers.
-
- Senior | Next Rank: 100 Posts
- Posts: 78
- Joined: Wed Jan 09, 2013 5:03 am
- Thanked: 9 times
- Followed by:4 members
- GMAT Score:700
I think it's either B or C.
If most of those surveyed were existing Denmore customers, then basing their new policy on the findings of the survey would not necessarily attract NEW customers!
What is the OA?
If most of those surveyed were existing Denmore customers, then basing their new policy on the findings of the survey would not necessarily attract NEW customers!
What is the OA?
- tisrar02
- Master | Next Rank: 500 Posts
- Posts: 130
- Joined: Fri Apr 20, 2012 8:13 am
- Location: Toronto, Ontario
- Thanked: 16 times
- Followed by:4 members
- GMAT Score:650
I would go with C.
Reason: If more customers in this survey are already customers, than this will not help retain potential customers. If those apart of the survey are not existing customers, then this strategy would help retain more potential customers.
OA??
Reason: If more customers in this survey are already customers, than this will not help retain potential customers. If those apart of the survey are not existing customers, then this strategy would help retain more potential customers.
OA??
Dedication is what leads to success...
- charu_mahajan
- Master | Next Rank: 500 Posts
- Posts: 111
- Joined: Tue Jan 31, 2012 1:06 pm
- Thanked: 15 times
- Followed by:8 members
I'm struggling between B and D.
But, I will stick to D.( Though D is making me more nervous right now )
To attract these customers' business, Densmore is advertising that its new, more inexpensive product lines, already priced lower than its top-selling luxury items, are on sale for 30% off.
The Densmore marketing staff has determined that advertising its discounted prices is the most effective way of attracting potential customers.
Nowhere it has been mentioned that they want to attract 'New Customers'. They want potential customers whether Old or new.
D. Whether those consumers most concerned with bargain-hunting will be exposed to Densmore's advertising campaign.
If Yes - Advertising seems like a pretty good idea.
If No - Defeats the purpose. Say for ex- Many malls in North America have clients (a greater percentage) from Canada which is just a few miles away. Now if these malls extensively advertise in America, how will the larger client base be informed of discounts.
This is just my reasoning. Please correct me if I'm wrong and please share the OA.
But, I will stick to D.( Though D is making me more nervous right now )
To attract these customers' business, Densmore is advertising that its new, more inexpensive product lines, already priced lower than its top-selling luxury items, are on sale for 30% off.
The Densmore marketing staff has determined that advertising its discounted prices is the most effective way of attracting potential customers.
Nowhere it has been mentioned that they want to attract 'New Customers'. They want potential customers whether Old or new.
D. Whether those consumers most concerned with bargain-hunting will be exposed to Densmore's advertising campaign.
If Yes - Advertising seems like a pretty good idea.
If No - Defeats the purpose. Say for ex- Many malls in North America have clients (a greater percentage) from Canada which is just a few miles away. Now if these malls extensively advertise in America, how will the larger client base be informed of discounts.
This is just my reasoning. Please correct me if I'm wrong and please share the OA.
- challenger63
- Master | Next Rank: 500 Posts
- Posts: 113
- Joined: Sun Aug 22, 2010 12:37 am
- Thanked: 16 times
- Followed by:4 members
Guys, you would be surprised, OA is E
A) out of scope
B) we talk about specific group, who cares about other people?
C) but still there are some new customers.
D) "most concerned". it could be one only one person.
E) According to OA, we could conclude that whether the plan attract new customers or refocus existing customers.
A) out of scope
B) we talk about specific group, who cares about other people?
C) but still there are some new customers.
D) "most concerned". it could be one only one person.
E) According to OA, we could conclude that whether the plan attract new customers or refocus existing customers.
Last edited by challenger63 on Fri Feb 01, 2013 11:31 pm, edited 1 time in total.
If you find my post useful, please don't hesitate to click thanks button.
I am not an expert, so I can make mistakes. If you see a mistake, please notify me.
I am not an expert, so I can make mistakes. If you see a mistake, please notify me.
I think that logic is simple that
who, when surveyed, have stated that they usually purchase products priced at or below the prevailing market rate. To attract these customers' business
hence there has to be E since it states that how the pricing is done comparatively w.r.t other comparable items on the shelf will define whether these potential customers will attract or not.
who, when surveyed, have stated that they usually purchase products priced at or below the prevailing market rate. To attract these customers' business
hence there has to be E since it states that how the pricing is done comparatively w.r.t other comparable items on the shelf will define whether these potential customers will attract or not.
-
- Master | Next Rank: 500 Posts
- Posts: 108
- Joined: Thu Feb 12, 2009 8:20 am
- Thanked: 2 times
BOTH "B" and "C" are out of race. whether the percentage of existing customer is 1 percent or 100 percent included in the survey it will not affect the survey as we dont know the total number of people surveyed.
AS for "c" we dont know the total number of people surveyed,MOREOVER co. is advertising its NEW product line whether a new or existing customers come, it will attract them .
AS for "c" we dont know the total number of people surveyed,MOREOVER co. is advertising its NEW product line whether a new or existing customers come, it will attract them .
- varun289
- Master | Next Rank: 500 Posts
- Posts: 298
- Joined: Sun Jun 03, 2012 6:42 am
- Location: New delhi
- Thanked: 10 times
- Followed by:7 members
- GMAT Score:590
This is PLAN TYPE question - here we need to think that waht even plan has made that will succeed for sure
option A - O/S , profit not discussed here
B - sampling questioning - this not a sample type question its simple premise given that
we have to consider that -
what ever we did in survey is correct
c- O/S means out of scope , we don't want number of densmore customers
d- seems little tempting but it has extreme wordings - MOST so reject that
E - yes , if we know that sale price and offer price is drastic difference oviosly people will attract
to new offer so plan will successful
option A - O/S , profit not discussed here
B - sampling questioning - this not a sample type question its simple premise given that
we have to consider that -
what ever we did in survey is correct
c- O/S means out of scope , we don't want number of densmore customers
d- seems little tempting but it has extreme wordings - MOST so reject that
E - yes , if we know that sale price and offer price is drastic difference oviosly people will attract
to new offer so plan will successful
- charu_mahajan
- Master | Next Rank: 500 Posts
- Posts: 111
- Joined: Tue Jan 31, 2012 1:06 pm
- Thanked: 15 times
- Followed by:8 members
But doesn't the argument already mention -
Densmore is advertising that its new, more inexpensive product lines, already priced lower than its top-selling luxury items, are on sale for 30% off.
How can E still stand ?? It's been explicitly mentioned in the argument.
Densmore is advertising that its new, more inexpensive product lines, already priced lower than its top-selling luxury items, are on sale for 30% off.
How can E still stand ?? It's been explicitly mentioned in the argument.
- charu_mahajan
- Master | Next Rank: 500 Posts
- Posts: 111
- Joined: Tue Jan 31, 2012 1:06 pm
- Thanked: 15 times
- Followed by:8 members
- varun289
- Master | Next Rank: 500 Posts
- Posts: 298
- Joined: Sun Jun 03, 2012 6:42 am
- Location: New delhi
- Thanked: 10 times
- Followed by:7 members
- GMAT Score:590
dare 2 dream - plz read answer choice -
it say discount give on NON DISOCOUNTED , u need to comapre discounted VS NON Discounted
no where it said ALREADY DISCOUNTED on all product range
it say discount give on NON DISOCOUNTED , u need to comapre discounted VS NON Discounted
no where it said ALREADY DISCOUNTED on all product range
- charu_mahajan
- Master | Next Rank: 500 Posts
- Posts: 111
- Joined: Tue Jan 31, 2012 1:06 pm
- Thanked: 15 times
- Followed by:8 members
Hi Varun,
I guess I have read the question thoroughly and hence the discussion.
First of all, I do not understand the language here - E) How the sale price compare to those for comparable, non-discounted products.
Like 'Sales Price of what??' , "compared to those for..."..?? Was the question written this way or is it a copy paste error.
Well....so now we already have an inexpensive product, (Densmore is advertising that its new, more inexpensive product lines, already priced lower than its top-selling luxury items, are on sale for 30% off.) and the company is giving an additional 30% off.
So are you trying to tell me that you are comparing the one after 30% off with one before the discount.
In that case I'll try to bring in my knowledge from Manhattan GMAT - The right answer choice in evaluate questions should present a two way path and answering a Yes or NO should either strengthen or weak the CONCLUSION.
The conclusion here is - Advertising its discounted prices is the most effective way of attracting potential customers.
So the correct answer choice here must address the question whether Advertising is the most effective way or not, which is precisely what D does.
I agree that I'm not a genius and am open to discussion.
I'll appreciate if an EXPERT from VERITAS PREP can answer this. Thanks in advance.
I guess I have read the question thoroughly and hence the discussion.
First of all, I do not understand the language here - E) How the sale price compare to those for comparable, non-discounted products.
Like 'Sales Price of what??' , "compared to those for..."..?? Was the question written this way or is it a copy paste error.
Well....so now we already have an inexpensive product, (Densmore is advertising that its new, more inexpensive product lines, already priced lower than its top-selling luxury items, are on sale for 30% off.) and the company is giving an additional 30% off.
So are you trying to tell me that you are comparing the one after 30% off with one before the discount.
In that case I'll try to bring in my knowledge from Manhattan GMAT - The right answer choice in evaluate questions should present a two way path and answering a Yes or NO should either strengthen or weak the CONCLUSION.
The conclusion here is - Advertising its discounted prices is the most effective way of attracting potential customers.
So the correct answer choice here must address the question whether Advertising is the most effective way or not, which is precisely what D does.
I agree that I'm not a genius and am open to discussion.
I'll appreciate if an EXPERT from VERITAS PREP can answer this. Thanks in advance.