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Dietz foods

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sumitkhurana Master | Next Rank: 500 Posts
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Dietz foods

Wed Mar 04, 2009 10:21 am
A year ago, Dietz foods launched a year long advertising campaign for its canned tuna. Last year Dietz sold 12 millions cans of tuna compared to the 10 million sold during the previous year, an increase directly attributable to new customers brought in by the campaign. Profits from the additional sales, however were substantially less than the cost of the advertising campaign. Clearly, therefore, the campaign did nothing to futher Dietz's economic interests.

Which one if true, most seriously weakens the argument ?

1. Sales of canned tuna account for a relatively small percentage of Dietz Foods' profits.
2. Most of the people who bought Dietz's canned tuna for the first time as a result of the campaign were already loyal customers of other Dietz products.
3. A less expensive advertising campaign would have brought in significantly fewer new customers for Dietz's canned tuna than did the campaign Deitz foods launchd last year.
4. Deitz made money on sales of canned tuna last year.
4. In each of the past 5 years, there was a steep, industry wide decline in sales of canned tuna.

crossingfingers Junior | Next Rank: 30 Posts
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Thu Mar 05, 2009 7:06 pm
guys IMO...I dont agree with E...

Though there was a steep decline...what if the company retained its market share and the sales of the number of cans of tuna was actually increasing year to year for the past 5 yrs? You just dont know anything abt the sales the first 3 yrs is what I am trying to get to.

IMO C: - C says 'A less expensive advertising campaign would have brought in significantly fewer new customers for Dietz's canned tuna'...which would have resulted in fewer can - according to the argument

whats the OA?

bmlaud Master | Next Rank: 500 Posts
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Thu Mar 05, 2009 7:56 am
IMO E

same eapl.n as given in earlier posts.

It cannot be C because it doesn't tell conclusively anything about the expenses for any other advt. and revenues generated as a result of it.

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schumi_gmat Master | Next Rank: 500 Posts
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Wed Mar 04, 2009 12:20 pm
IMO B

conclusio : Campaign did nothing for the Dietz economic interest.

Evidence : Sales increased but profits < campaign costs

In B, If campaign added customers who have become loyal of Dietz foods then campaign has done good for the Dietz and argument is weaken

sg1928 Senior | Next Rank: 100 Posts
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Wed Mar 04, 2009 12:42 pm
schumi_gmat wrote:
IMO B

conclusio : Campaign did nothing for the Dietz economic interest.

Evidence : Sales increased but profits < campaign costs

In B, If campaign added customers who have become loyal of Dietz foods then campaign has done good for the Dietz and argument is weaken
IMO 4. "In each of the past 5 years, there was a steep, industry wide decline in sales of canned tuna."

Inspite of the indusrty wide decline, Dietz has increase in sales. This weakens the argument.

hitmewithgmat Master | Next Rank: 500 Posts
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Wed Mar 04, 2009 12:52 pm
IMO is E.

B seems strengthen the argument. Since most of the customers were the loyal to Dietz food, campaign really did not work out. Besides, we do not know those whether loyal people bought more canned tunas than they used to purchase the canned tuna.

E seems weaken the argument because people bought more than 2 millions of canned tuna however, the profits were substantially lower (like E described). That's why the profit was not increased.

Musicolo Master | Next Rank: 500 Posts
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Wed Mar 04, 2009 12:59 pm
schumi_gmat wrote:
IMO B

conclusio : Campaign did nothing for the Dietz economic interest.

Evidence : Sales increased but profits < campaign costs

In B, If campaign added customers who have become loyal of Dietz foods then campaign has done good for the Dietz and argument is weaken
Schumi, I think ur mixing fruits and vegetables.
I think its the last one.

schumi_gmat Master | Next Rank: 500 Posts
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Wed Mar 04, 2009 1:46 pm
I concentrated on the Profits rather than sales.

If your argument is based on sales then E is correct choice because it is against the trend because of the advertising.

E does not have any bearing on the profits. Arg says that advertising does not increase profits and hence failed.

I have realised that B also does not talk about profits. So E might be the best choice.

cramya Legendary Member
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Wed Mar 04, 2009 5:34 pm
The conclusion is the campaign did nothing to further Dietz's economic interests

Why not C guys?

A less expensive advertising campaign would have brought in significantly fewer new customers for Dietz's canned tuna than did the campaign Deitz foods launchd last year

More new customers translate to potential(future->further) ecomic interests for Deitz.

Just my opinion.

I eliminated B since the passage stated:

Last year Dietz sold 12 millions cans of tuna compared to the 10 million sold during the previous year, an increase directly attributable to new customers brought in by the campaign.

B neither refers to campaigns or new customers, hence felt like couldnt weaken the conclusion in any way.

Choice E

In each of the past 5 years, there was a steep, industry wide decline in sales of canned tuna

But we know that Deitz sold 12 million canned tunas compared to 10 million so this choice doesnt affect Deitz. This juts means Deitz should have been more profitable since it got more of the market share provided the prcie stayed the same or increased which we dont know.

Regards,
Cramya

quocbao Senior | Next Rank: 100 Posts
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Wed Mar 04, 2009 8:31 pm
I choose E too. Other choices seem to add extra information.

naaga Master | Next Rank: 500 Posts
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Thu Mar 05, 2009 4:54 am
what is OA sumit ?

sumitkhurana Master | Next Rank: 500 Posts
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Thu Mar 05, 2009 9:16 pm
OA is E guys. Explaination - Inspite of the fact that there were steep decline in sales for past 5 years, Dietz did had increased sales. This may actually lead to reversal in industry trend ...

I did not understand it to be frank !!

karmayogi Master | Next Rank: 500 Posts
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Thu Mar 05, 2009 10:00 pm
sumitkhurana wrote:
OA is E guys. Explaination - Inspite of the fact that there were steep decline in sales for past 5 years, Dietz did had increased sales. This may actually lead to reversal in industry trend ...

I did not understand it to be frank !!
Important point: Addition of new customer doesn't mean direct increase in sale. What if, total number of customers increased but total number of cans sold reduced. We are looking for increase in the number of cans.

Option C just talks about bringing new customers, and doesn't talk about increasing the sale or the number of cans.

Hence, E.

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kanha81 Master | Next Rank: 500 Posts
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Sat Apr 11, 2009 2:14 pm
karmayogi wrote:
Option C just talks about bringing new customers, and doesn't talk about increasing the sale or the number of cans.

Hence, E.
I disagree with the above because the stimulus clearly states that the there was an increase in the sales of canned tuna from 10 to 12 million. So we cannot say the above stated fact.

However, I do agree with the important point stated below:
karmayogi wrote:
Important point: Addition of new customer doesn't mean direct increase in sale. What if, total number of customers increased but total number of cans sold reduced. We are looking for increase in the number of cans.
I still do not see this an effective away of answering! Can any expert shed more light on this?

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mharv Senior | Next Rank: 100 Posts
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Wed Apr 15, 2009 1:53 am
I am going a little

A is irrelevant

B does not weaken the argument, because loyal customers can still increase the sales by just buying more having seen the ad on TV. Whether or not customers are loyal or not, does not have any impact on the argument

C is justifying the ad campaign and also making an out of scope comparison with another campaign, that it brought more customers. The number of customers is not the scope of the argument

D is irrelevant and does not provide any reasoning

E tells us that there was an industry wide decline in sales.
Regardless of profits or otherwise Dietz made an increase in sales.

Apparently this weakens conclusion as Dietz out-performed its competitors for that brand of tuna.

I do not buy E either, but A, D are very wrong. B & C are customer centric, and do not justify higher sales, profitability for Dietz.

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