Reading Comprehension

Extensive research has shown
that the effects of short-term price
promotions on sales are themselves
Line short-term. Companies' hopes that
(5) promotions might have a positive
aftereffect have not been borne
out for reasons that researchers
have been able to identify. A price
promotion entices only a brand's
(10) long-term or "loyal" customers;
people seldom buy an unfamiliar
brand merely because the price is
reduced. They simply avoid paying
more than they have to when one of
(15) their customary brands is temporarily
available at a reduced price. A
price promotion does not increase
the number of long-term customers
of a brand, as it attracts virtually
(20) no new customers in the first place.
Nor do price promotions have lingering
aftereffects for a brand, even
negative ones such as damage to
a brand's reputation or erosion of
(25) customer loyalty, as is often feared.
So why do companies spend so
much on price promotions? Clearly
price promotions are generally run
at a loss, otherwise there would
(30) be more of them. And the bigger
the increase in sales at promotion
prices, the bigger the loss. While
short-term price promotions can
have legitimate uses, such as
(35) reducing excess inventory, it is the
recognizable increase in sales that
is their main attraction to management,
which is therefore reluctant
to abandon this strategy despite
its effect on the bottom line.


The passage suggests that evidence for price promotions' "effect on the bottom line" (line
40) is provided by
A. the lack of lingering aftereffects from price promotions
B. the frequency with which price promotions occur
C. price promotions' inability to attract new customers
D. price promotions' recognizable effect on sales
E. the legitimate uses to which management can put price promotions

OA:B

Can anybody explain what exactly this question is asking? I thought that it was asking, why is the bottom line of these companies hurt. And the answer would be C - promotions don't attract new customers. But apparently that answer is wrong.

Hey thanks, that explanation absolutely makes sense. It was a very tricky question.

On the similar passage. Can someone explain why C is wrong?
I chose C over E.

The primary purpose of the passage is to
A. compare the arguments in favor of a certain strategy with those against it
B. attack a certain strategy by enumerating its negative consequences
C. justify the use of a certain strategy in light of certain criticisms that have been
made against it
D. advocate a particular strategy by arguing against an alternative
E. explain the effects of a certain strategy and the primary motivations for adopting
it

Can someone explain why 'D' is wrong?

Thank you!

Extensive research has shown
that the effects of short-term price
promotions on sales are themselves
Line short-term. Companies' hopes that
(5) promotions might have a positive
aftereffect have not been borne
out for reasons that researchers
have been able to identify. A price
promotion entices only a brand's
(10) long-term or "loyal" customers;
people seldom buy an unfamiliar
brand merely because the price is
reduced. They simply avoid paying
more than they have to when one of
(15) their customary brands is temporarily
available at a reduced price. A
price promotion does not increase
the number of long-term customers
of a brand, as it attracts virtually
(20) no new customers in the first place.
Nor do price promotions have lingering
aftereffects for a brand, even
negative ones such as damage to
a brand's reputation or erosion of
(25) customer loyalty, as is often feared.
So why do companies spend so
much on price promotions? Clearly
price promotions are generally run
at a loss, otherwise there would
(30) be more of them. And the bigger
the increase in sales at promotion
prices, the bigger the loss. While
short-term price promotions can
have legitimate uses, such as
(35) reducing excess inventory, it is the
recognizable increase in sales that
is their main attraction to management,
which is therefore reluctant
to abandon this strategy despite
its effect on the bottom line.


The passage suggests that evidence for price promotions' "effect on the bottom line" (line
40) is provided by
A. the lack of lingering aftereffects from price promotions
B. the frequency with which price promotions occur
C. price promotions' inability to attract new customers
D. price promotions' recognizable effect on sales
E. the legitimate uses to which management can put price promotions

D wrong - price promotion effect on sales will impact top line, whereas we have to find evidence that affects bottom line.

gmatrant wrote:On the similar passage. Can someone explain why C is wrong?
I chose C over E.

The primary purpose of the passage is to
A. compare the arguments in favor of a certain strategy with those against it
B. attack a certain strategy by enumerating its negative consequences
C. justify the use of a certain strategy in light of certain criticisms that have been
made against it
D. advocate a particular strategy by arguing against an alternative
E. explain the effects of a certain strategy and the primary motivations for adopting
it

D wrong - author is not advocating the use against it price promotion. He just tries to find why inspite of having little long term effect of price promotion, executives still use this. Here advocate means - recommending the price promotion as a strategy - that author does not do