Critical Reasoning

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)

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IMO A

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.

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?

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??

Is it E? since the argument is saying that "potential customer" (that can be existing customer as well) and survey says that price (for cmparable product and for discounted one) is prime factor for them

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.

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.

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.

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 .

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

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.

Experts can you please help on this !!

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

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.