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When Diligence, a nationally --- A new question on Paradox

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When Diligence, a nationally --- A new question on Paradox [#permalink] New post 13 Nov 2013, 06:50
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When Diligence, a nationally popular and basically a dry and wet grocer including general merchandise, opened its grocery supermarket in Mannai very close to Grancers, primarily a restaurant cum seller of general merchandise like toiletries, in order to catch on the elite customers of Grancers, many felt that Grancers, the grand old store of Mannai would soon close shop, unable to sustain the aggressive marketing and fabulous discounts offered by Diligence especially on general merchandise , in which segment it was competing directly with Grancers; On the contrary, a recent report has found that the average foot-fall at Grancers after Diligence opened increased dramatically, in fact sometimes eating into the business of some sections of general merchandise.

How could this Paradoxical occurring, if true, could be explained from one of the following choices?

A. A similar survey found that the number of foot fall remained unchanged after the Diligence opened shop
B. Super markets tend to employ aggressive marketing and discounting only when there is a competitor nearby.
C. Shop keepers tend to open up their new stores or branches very near to established stores in order to snoop on the competitor’s existing clients
D. Due to heavy rush, shopping at Diligence takes a long time , during when housewives find it convenient to dine and buy small general merchandise from Grancers
E. It is likely that the increase in the number foot falls and the higher revenues seen at Grancers would turn out to be a flash in the pan

Source : Question by daagh, Verbal Expert, Gmat club
[Reveal] Spoiler: OA

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Re: When Diligence, a nationally --- A new question on Paradox [#permalink] New post 13 Nov 2013, 08:37
daagh wrote:
When Diligence, a nationally popular and basically a dry and wet grocer including general merchandise opened its grocery supermarket in Mannai very close to Grancers, primarily a restaurant cum seller of general merchandise like toiletries, in order to catch on the elite customers of Grancers, many felt Grancers, the grand old store of Mannai would soon close shop, unable to sustain the aggressive marketing and fabulous discounts offered by Diligence especially on general merchandise , in which segment it was competing directly with Grancers ; On the contrary, a recent report has found that the average foot-fall at Grancers after Diligence opened increased dramatically , in fact sometimes eating into the business of some sections of general merchandise.

How could this Paradoxical occurring, if true, could be explained from one of the following choices?

A. A similar survey found that the number of foot fall remained unchanged after the Diligence opened shop
B. Super markets tend to employ aggressive marketing and discounting only when there is a competitor nearby.
C. Shop keepers end to open up their new stores or branches very near to established stores in order to snoop on the competitor’s existing clients
D. Due to heavy rush , Shopping at Diligence take a long time , during when housewives find it convenient to dine and buy small general merchandise from Grancers
E. It is likely that the increase in the number foot falls and the higher revenues seen at Grancers would turn out to be a flash in the pan

I would go for B.
B gives us a reason why shopping at Grancers will still be a good choice even though DIligence just opened up.
In choice D, there is a reference to housewives which were not part of the stem at all.... How many housewives are there?
Are they the majority of the customers?
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Re: When Diligence, a nationally --- A new question on Paradox [#permalink] New post 15 Nov 2013, 08:03
D it is...
only D explains why the discrepancy presented in the argument.
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Re: When Diligence, a nationally --- A new question on Paradox [#permalink] New post 16 Nov 2013, 13:33
shrikar23 wrote:
D it is...
only D explains why the discrepancy presented in the argument.

I still don't see it...
Can someone explain to me why my reasoning is wrong?
If there is competition, that there is a lowering in prices...
This will cause more shopping.....
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Re: When Diligence, a nationally --- A new question on Paradox [#permalink] New post 16 Nov 2013, 20:30
the discrepancy in the above argument is

A supermarket has opened near grancers. The supermarket offers fabulous discounts and is doing aggressive marketing. So, people think that grancers will soon close shop.
BUT recent report says Grancers is doing great.

out of all the answer choices D explains the discrepancy.
because if housewives find it convenient to dine and buy small general merchandise from Grancers, it explains why grancers is doing great.
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Re: When Diligence, a nationally --- A new question on Paradox [#permalink] New post 16 Nov 2013, 22:52
When Diligence, a nationally popular and basically a dry and wet grocer including general merchandise, opened its grocery supermarket in Mannai very close to Grancers, primarily a restaurant cum seller of general merchandise like toiletries, in order to catch on the elite customers of Grancers, many felt that Grancers, the grand old store of Mannai would soon close shop, unable to sustain the aggressive marketing and fabulous discounts offered by Diligence especially on general merchandise , in which segment it was competing directly with Grancers; On the contrary, a recent report has found that the average foot-fall at Grancers after Diligence opened increased dramatically, in fact sometimes eating into the business of some sections of general merchandise.

How could this Paradoxical occurring, if true, could be explained from one of the following choices?

Paradox to be explained: Even though it was suspected that Grancers would close shop because of discounts by Diligence (supermarket) , reports found that Grancers got more footfall than Diligence, esp in some sections of general merchandise.

A. A similar survey found that the number of foot fall remained unchanged after the Diligence opened shop . Irrelevant. Doesn't explain the paradox.

B. Super markets tend to employ aggressive marketing and discounting only when there is a competitor nearby.
Contender, but fails as soon as you realize this actually weakens the paradox since Diligence is a supermarket, not Grancers. Acc. to this, Diligence should've had more footfall!

C. Shop keepers tend to open up their new stores or branches very near to established stores in order to snoop on the competitor’s existing clients .
Irrelevant.

E. It is likely that the increase in the number foot falls and the higher revenues seen at Grancers would turn out to be a flash in the pan. Out of scope!


The only contender left that makes some sense to me :
D. Due to heavy rush, shopping at Diligence takes a long time , during when housewives find it convenient to dine and buy small general merchandise from Grancers .

BUT if i think more into this, if Diligence has a heavy rush, shouldn't that imply that people are shopping more at Diligence than Grancers?
Housewives find it convenient to buy small merchandise from Grancers WHEN there is a heavy rush at Diligence.
Is it safe to think that heavy rush does not necessarily imply more people shopping at Diligence (ppl could be window shopping? )

Please help understanding D more. I understand why the rest are incorrect though and why D is the best of the lot- but it doesn't make me perfectly happy as it should, being the correct option :roll:
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Re: When Diligence, a nationally --- A new question on Paradox [#permalink] New post 16 Nov 2013, 22:55
shrikar23 wrote:
the discrepancy in the above argument is

A supermarket has opened near grancers. The supermarket offers fabulous discounts and is doing aggressive marketing. So, people think that grancers will soon close shop.
BUT recent report says Grancers is doing great.

out of all the answer choices D explains the discrepancy.
because if housewives find it convenient to dine and buy small general merchandise from Grancers, it explains why grancers is doing great.

Everyone is explaining why D is correct, but I want to know why B is not...

B states that when there is a competitor near bu, a supermarket will make aggressive advertisements and discounts...
So because now there is a new competitor, the old supermarket will discount prices, which will make it more successful?

No?
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Re: When Diligence, a nationally --- A new question on Paradox [#permalink] New post 16 Nov 2013, 23:57
ronr34 wrote:
shrikar23 wrote:
the discrepancy in the above argument is

A supermarket has opened near grancers. The supermarket offers fabulous discounts and is doing aggressive marketing. So, people think that grancers will soon close shop.
BUT recent report says Grancers is doing great.

out of all the answer choices D explains the discrepancy.
because if housewives find it convenient to dine and buy small general merchandise from Grancers, it explains why grancers is doing great.

Everyone is explaining why D is correct, but I want to know why B is not...

B states that when there is a competitor near bu, a supermarket will make aggressive advertisements and discounts...
So because now there is a new competitor, the old supermarket will discount prices, which will make it more successful?

No?


Hello ronr34

I must say beautiful shell game in option B.

B. Super markets tend to employ aggressive marketing and discounting only when there is a competitor nearby.

The SHELL game is that B does NOT say Grancer is the super market which will employ aggressive marketing and discounting. What if the super market which employs those strategies is Delligence! B only says that super markets often employ sales strategies when there is a competitor nearby. We don't know which super market, Grancer or Delligence, employs aggressive discounting? Thus, B can't explain why Grancer has more foot-fall.

Hope it helps.
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Re: When Diligence, a nationally --- A new question on Paradox [#permalink] New post 16 Nov 2013, 23:59
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Well, the central issue here is why the sales at Grancers have gone up compared to previously. This means that we are comparing Grancers with Grancers and not comparing Grancers with Diligence. Basically Grancers is a restaurant with some extra fancy - goods merchandise: it is not a grocer. The point hers is since Grancers already has a steady old clientele, Diligence want to attract them. It has no doubt achieved goal. But it does not mean that the old people are not dining anymore at Grancers.

In addition, if Diligence because of aggressive discounting has got 200 people, when it can only handle 100 what happens to the plight of the incremental 100; They can go and have some refreshments until when the rush turns lean at Diligence; or they can even leave after just refreshments only at Grancers. In any case, these people are at Grancers only because of Diligence. Therefore it is in fact Grancers who has gained, instead of losing; this is what D brings about. What happens to Diligence is not the focus of the question; Will Grancers pack up and go eventually? No, it will not is the final verdict. This is the paradox that is discussed in the topic; So D
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Re: When Diligence, a nationally --- A new question on Paradox [#permalink] New post 17 Nov 2013, 04:54
Thanks pqhai and daagh.

I worry that although I understand your explanations, I will not be able to alter my way
of thinking on test day :(
Re: When Diligence, a nationally --- A new question on Paradox   [#permalink] 17 Nov 2013, 04:54
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