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# CR: A DISCOVERY!

Author Message
Manager
Joined: 30 May 2003
Posts: 92

Kudos [?]: 2 [0], given: 0

Location: Toronto

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25 Aug 2003, 06:00
I have an observation to share with all about 1 Q in CR.
I observed that in almost all the quesions related to Market situations, if there is a choice mentioning something about Competitor's, just pick up that choice and there are 99.999999% chance that this choice is the right one TRY URSELF!!!!

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GMAT Instructor
Joined: 07 Jul 2003
Posts: 769

Kudos [?]: 240 [0], given: 0

Location: New York NY 10024
Schools: Haas, MFE; Anderson, MBA; USC, MSEE

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05 Sep 2003, 22:08
If you are trying to drawn a conclusion based on what is probably a totally unrepresentative sample, then I challenge your conclusion. (99.9999??). If you are passing this conclusion on as "advice", then I admonish you for recklessness.

Advertisement: Today's customers expect high quality. Every advance in the quality of manufactured products raises customer expectations. The company that is satisfied with the current quality of its products will soon find that its customers are not. At MegaCorp, meeting or exceeding customer expectations is our goal. Which of the following must be true on the basis of the statements in the advertisement above?

(A) MegaCorp's competitors will succeed in attracting customers only if those competitors adopt MegaCorp's goal as their own.
(B) A company that does not correctly anticipate the expectations of its customers is certain to fail in advancing the quality of its products.
(C) MegaCorp's goal is possible to meet only if continuing advances in product quality are possible.
(D) If a company becomes satisfied with the quality of its products, then the quality of its products is sure to decline.
(E) MegaCorp's customers are currently satisfied with the quality of its products.

Manufacturers sometimes discount the price of a product to retailers for a promotion period when the product is advertised to consumers. Such promotions often result in a dramatic increase in amount of product sold by the manufacturers to retailers. Nevertheless, the manufacturers could often make more profit by not holding the promotions.

Which of the following, if true, most strongly supports the claim above about the manufacturers' profit?

(A) The amount of discount generally offered by manufacturers to retailers is carefully calculated to represent the minimum needed to draw consumers' attention to the product.

(B) For many consumer products the period of advertising discounted prices to consumers is about a week, not sufficiently long for consumers to become used to the sale price.

(C) For products that are not newly introduced, the purpose of such promotions is to keep the products in the minds of consumers and to attract consumers who are currently using competing products.

(D) During such a promotion retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular price.

(E) If a manufacturer falls to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's product.

A company's two divisions performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollar sales and 40 percent of profits, and the chemicals division for the balance.

Which of the following can properly be inferred regarding the past three years from the statement above?

(A) Total dollar sales for each of the company's divisions have remained roughly constant.
(B) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.
(C) The chemicals division has realized lower profits per dollar of sales than has the pharmaceuticals division.
(D) The product mix offered by each of the company's divisions has remained unchanged.
(E) Highly profitable products accounted for a higher percentage of the chemicals division's sales than of those of the pharmaceuticals division.
_________________

Best,

AkamaiBrah
Former Senior Instructor, Manhattan GMAT and VeritasPrep
Vice President, Midtown NYC Investment Bank, Structured Finance IT
MFE, Haas School of Business, UC Berkeley, Class of 2005
MBA, Anderson School of Management, UCLA, Class of 1993

Kudos [?]: 240 [0], given: 0

Intern
Joined: 21 Jul 2003
Posts: 41

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Location: India

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09 Sep 2003, 05:36
Please post the correct responses for the above questions.

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SVP
Joined: 30 Oct 2003
Posts: 1788

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Location: NewJersey USA

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24 Dec 2003, 12:00
1 - C
2 - D
3 - C

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Senior Manager
Joined: 05 May 2003
Posts: 424

Kudos [?]: 12 [0], given: 0

Location: Aus

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24 Dec 2003, 12:11
I feel

1. C
2. A (If I say D here how will I account for Manufactureres Profit)
3. C

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SVP
Joined: 30 Oct 2003
Posts: 1788

Kudos [?]: 114 [0], given: 0

Location: NewJersey USA

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24 Dec 2003, 12:46
Here is my thought for chosing D for Q2
Manufactures want to have more sales and hence want to give discount to the retailers so that the discount can be passed on to the consumers. If this happens then more consumers will be attracted and more demand will be there from retailers for any product. If it does not happen then the demand should remain the same.
Since the demand is not going to change slashing prices will lower the profit. Thus the manufactufres need not give this discount because it is ineffective anyway.

Again in choice A it is not guarqnted that consumers will get products at a cheaper rate. I believe D is much stronger then A

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24 Dec 2003, 12:46
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