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Manager
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Sales of telephones have increased dramatically over the [#permalink]
 22 Oct 2005, 21:29
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Sales of telephones have increased dramatically over the last year. In order to take advantage of this increase, Mammoth Industries plans to expand production of its own model of telephone, while continuing its already very extensive advertising of this product.
Which of the following, if true, provides most support for the view that Mammoth Industries cannot increase its sales of telephones by adopting the plan outlined above?
(A) Although it sells all of the telephones that it produces, Mammoth Industries’ share of all telephone sales has declined over the last year.
(B) Mammoth Industries’ average inventory of telephones awaiting shipment to retailers has declined slightly over the last year.
(C) Advertising has made the brand name of Mammoth Industries’ telephones widely known, but few consumers know that Mammoth Industries owns this brand.
(D) Mammoth Industries’ telephone is one of three brands of telephone that have together accounted for the bulk of the last year’s increase in sales.
(E) Despite a slight decline in the retail price, sales of Mammoth Industries’ telephones have fallen in the last year
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Director
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E
If mammoth's sales did not increase when there was an overall dramatic increase sales, increasing the production will not increase the mammoth's sales.
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Re: CR-MAMMOTH INDUSTRIES [#permalink]
22 Oct 2005, 22:07
(C) Advertising has made the brand name of Mammoth Industries’ telephones widely known, but few consumers know that Mammoth Industries owns this brand.
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Manager
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D....Mammoth Industries’ telephone is one of three brands of telephone that have together ALREADY accounted for the bulk of the last year’s increase in sales. So any new brand will not add substantially to its kitty.
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Manager
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E by POE
A) If, only strengthens... MI can sell all phones they produce
B) If, only strengthens... MI inventory is declining->sell more than produce
C) Irrelevant. MI could successfully sell the brand-name without letting customers know who the actual owner is.
D) MI posseses 1/3 of the bulk... Bulk can be 51% or 90%...1/3 of that... too vague to safely conclude that the market is at maturity.
E) Lower prices does not lead to higher sales -> market at maturity
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(D) is the best answer.
Even though they expand their productions, customers won't buy their telephones.
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Re: CR-MAMMOTH INDUSTRIES [#permalink]
23 Oct 2005, 07:47
HIMALAYA wrote: (C) Advertising has made the brand name of Mammoth Industries’ telephones widely known, but few consumers know that Mammoth Industries owns this brand.
i change to E.
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Senior Manager
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for E
already not selling well despite price reduction, why produce more ?
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gamjatang wrote: (D) is the best answer.
Even though they expand their productions, customers won't buy their telephones.
Oops, I meant (E). 
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E as explained above.
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should be E.
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This problem looks awfully familiar to the one below.
http://www.gmatclub.com/phpbb/viewtopic.php?p=80182
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