Events & Promotions
|
|
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized
for You
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Jul 1010:00 AM IST
-11:00 PM IST
Start your journey with a fully customized action plan and work with a dedicated mentor to achieve a 735+ score.
Jul 1012:00 PM PDT
-11:59 PM PDT
50% off all study plans with code PROGRESS - Expires Monday 7/13
Jul 0608:00 AM PDT
-05:00 PM PDT
Compete to win some amazing Prizes such as Admissions Consulting Packages, Courses, and more. This is your Best Opportunity to improve your GMAT Score! Register to Participate
Jul 0810:00 AM EDT
-11:59 PM EDT
Receive 2 FREE hours of tutoring when you enroll in a 655+ course
Jul 1209:30 AM EDT
-12:30 PM EDT
Increase your score with a powerful GMAT course taught live online + 6 months of access to TTP OnDemand GMAT Masterclass included! Sundays July 12, 2026-October 1, 2026, 9:30am-12:30pm EST.- Jul 12
11:00 AM PDT
-12:00 PM PDT
Join us in a GMAT practice session and solve 25 challenging GMAT questions with other test takers in timed conditions, covering GMAT Quant, Data Sufficiency, Data Insights, Reading Comprehension, and Critical Reasoning questions.
01 Jun 2026, 14:45
Kudos
Bookmarks
A
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
15%
(low)
Question Stats:
82% (01:27) correct
18%
(01:43)
wrong
based on 221
sessions
History
Date
Time
Result
Not Attempted Yet
A certain watchmaker is attempting to increase its market share by deeply discounting the price of its watches for the upcoming holiday season. The discounts will eat into profits, but because they will be heavily advertised the watchmaker hopes that they will attract buyers away from rival watchmakers' products. In the long term, the watchmaker believes that consumers initially attracted by the discounts may become loyal customers.
In assessing the plan's chances of achieving its aim, it would be most useful to know which of the following?
(A) Whether the watchmaker's competitors are likely to respond by offering deep discounts of their own products
(B) Whether the advertisements will be created by the watchmaker's current advertising agency
(C) Whether some of the watch styles will be more deeply discounted than others
(D) Whether the watchmaker will be able to cut costs sufficiently to maintain profit margins even when the discounts are in effect
(E) Whether an alternative strategy might enable the watchmaker to enhance its profitability while holding a constant or diminishing share of the market
In assessing the plan's chances of achieving its aim, it would be most useful to know which of the following?
(A) Whether the watchmaker's competitors are likely to respond by offering deep discounts of their own products
(B) Whether the advertisements will be created by the watchmaker's current advertising agency
(C) Whether some of the watch styles will be more deeply discounted than others
(D) Whether the watchmaker will be able to cut costs sufficiently to maintain profit margins even when the discounts are in effect
(E) Whether an alternative strategy might enable the watchmaker to enhance its profitability while holding a constant or diminishing share of the market
BongBideshini
Joined: 25 May 2021
Last visit: 09 Jul 2026
Posts: 367
Own Kudos:
Given Kudos: 127
Location: India
Concentration: Entrepreneurship, Marketing
Schools: HBS '27 Stanford '27 Wharton '27 Sloan '27
GPA: 3.8
WE:Engineering (Government)
Products:
01 Jun 2026, 19:51
Kudos
Bookmarks
(A) Whether the watchmaker's competitors are likely to respond by offering deep discounts of their own products
The entire plan relies on a relative price advantage to steal customers from rivals. If competitors react by matching the deep discounts, the watchmaker no longer looks cheaper, and consumers have zero incentive to switch brands. The strategy fails. If competitors do not match the discounts, the plan has a high chance of working.
(B) Whether the advertisements will be created by the watchmaker's current advertising agency
It makes no logical difference whether the company uses its existing ad agency or hires a brand-new one, as long as the ads go out.
(C) Whether some of the watch styles will be more deeply discounted than others
Knowing that the watchmaker drops the price of leather-strap watches by 40% and steel-strap watches by 20% doesn't help us evaluate the macro-level success of the plan. The primary question is whether discounting as a whole will attract rival buyers, regardless of the individual item breakdown
(D) Whether the watchmaker will be able to cut costs sufficiently to maintain profit margins even when the discounts are in effect
The text explicitly states two things: the aim is to increase market share, and they already know discounts will eat into profits.
(E) Whether an alternative strategy might enable the watchmaker to enhance its profitability while holding a constant or diminishing share of the market
This introduces a completely different, hypothetical plan. The question asks us to assess the chances of this specific plan achieving its aim of boosting market share.
Ans A
The entire plan relies on a relative price advantage to steal customers from rivals. If competitors react by matching the deep discounts, the watchmaker no longer looks cheaper, and consumers have zero incentive to switch brands. The strategy fails. If competitors do not match the discounts, the plan has a high chance of working.
(B) Whether the advertisements will be created by the watchmaker's current advertising agency
It makes no logical difference whether the company uses its existing ad agency or hires a brand-new one, as long as the ads go out.
(C) Whether some of the watch styles will be more deeply discounted than others
Knowing that the watchmaker drops the price of leather-strap watches by 40% and steel-strap watches by 20% doesn't help us evaluate the macro-level success of the plan. The primary question is whether discounting as a whole will attract rival buyers, regardless of the individual item breakdown
(D) Whether the watchmaker will be able to cut costs sufficiently to maintain profit margins even when the discounts are in effect
The text explicitly states two things: the aim is to increase market share, and they already know discounts will eat into profits.
(E) Whether an alternative strategy might enable the watchmaker to enhance its profitability while holding a constant or diminishing share of the market
This introduces a completely different, hypothetical plan. The question asks us to assess the chances of this specific plan achieving its aim of boosting market share.
Ans A
Bunuel
01 Jun 2026, 22:18
Kudos
Bookmarks
during holiday season, watch company wants to increase market share by giving discount on its watches.
this discount will hurt their profit but they will be advertising heavily so they are hoping that they will attract buyers from rivals.
conclusion- this discounted customers may turn into loyal customers.
A if yes, then their hope of taking rivals customers away wont hold ground. but if no, then they are good on the track with the planning. so keep.
B who cares about who is going to create ads. they can use chatgpt or any AI chatbot to do that. dont really matter. out.
C wrong comparison with regards to point of discussion here.
D this sounds good, but its attacking different part of arguments. and thats not conclusion here, out.
E their goal is to turn the discounted customer into loyal one. this choice has no impact on that claim. reject.
Ans A
this discount will hurt their profit but they will be advertising heavily so they are hoping that they will attract buyers from rivals.
conclusion- this discounted customers may turn into loyal customers.
A if yes, then their hope of taking rivals customers away wont hold ground. but if no, then they are good on the track with the planning. so keep.
B who cares about who is going to create ads. they can use chatgpt or any AI chatbot to do that. dont really matter. out.
C wrong comparison with regards to point of discussion here.
D this sounds good, but its attacking different part of arguments. and thats not conclusion here, out.
E their goal is to turn the discounted customer into loyal one. this choice has no impact on that claim. reject.
Ans A
Bunuel
