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.
Nov 2007:30 AM PST
-08:30 AM PST
Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
23 Dec 2016, 12:51
Kudos
Bookmarks
QS: The following appeared in a memorandum written by the assistant manager of a store that sells gourmet food items
from various countries:
“A local wine store made an interesting discovery last month: it sold more French than Italian wine on days when it
played recordings of French accordion music, but it sold more Italian than French wine on days when Italian songs
were played. Therefore, I recommend that we put food specialties from one particular country on sale for a week at a
time and play only music from that country while the sale is going on. By this means we will increase our profits in the
same way that the wine store did, and we will be able to predict more precisely what items we should stock at any
given time.”
Discuss how well reasoned . . . etc.
My response.
According to the assistant manager the discovery made by the local wine store- on the sales of wine from a particular country increasing when it played music from the same country- provides ample evidence to employ a similar marketing tactic in their gourmet food store that would increase their sales and help them plan the stock better.
The argument and evidence provided in the memorandum is flawed as it is based on various weak assumptions.
Firstly, the evidence cited is of a local wine store that may not apply to a gourmet food store that the author manages. The major sales of a wine store would be from the sale of wine while in a food store it would be from the sale of various food items. Both of the stores would cater to different people, age groups etc and hence, comparison would need stronger evidence.
Secondly, since the wine store increased the sales of country specific wine because of the music they played; the assistant manager assumes that a similar activity by the food store would help them increase their overall profit. The manager doesn't give any evidence to show that the wine store increase their sales in totality. Moreover, an increase in the sale of French wine and reduction in the sale of Italian wine or vice versa goes to show that the profits probably balanced out.
Thirdly, the manager doesn't provide any rationale for his recommendation. His/her argument would become stronger if the rationale behind the activity was clear. It is possible that the local wine store organised this type of activity based on the demographics of the area (they could have a large number of French or Italian nationals who would directly relate to the music and get a sense of nationality) that might differ from the demographics of all the gourmet food stores.
It would be advised to include specific information in the memorandum to fill the logical gaps that currently exists. If the manger could send an addendum to the memo after including information on the demographic profile of the wine store region, his rationale behind equating sale of wine to sale of any gourmet food item and whether the wine stores activity resulted in an increase in profits or mere increase in sales, his argument and its validity would become much stronger.
Thanks in advance!
from various countries:
“A local wine store made an interesting discovery last month: it sold more French than Italian wine on days when it
played recordings of French accordion music, but it sold more Italian than French wine on days when Italian songs
were played. Therefore, I recommend that we put food specialties from one particular country on sale for a week at a
time and play only music from that country while the sale is going on. By this means we will increase our profits in the
same way that the wine store did, and we will be able to predict more precisely what items we should stock at any
given time.”
Discuss how well reasoned . . . etc.
My response.
According to the assistant manager the discovery made by the local wine store- on the sales of wine from a particular country increasing when it played music from the same country- provides ample evidence to employ a similar marketing tactic in their gourmet food store that would increase their sales and help them plan the stock better.
The argument and evidence provided in the memorandum is flawed as it is based on various weak assumptions.
Firstly, the evidence cited is of a local wine store that may not apply to a gourmet food store that the author manages. The major sales of a wine store would be from the sale of wine while in a food store it would be from the sale of various food items. Both of the stores would cater to different people, age groups etc and hence, comparison would need stronger evidence.
Secondly, since the wine store increased the sales of country specific wine because of the music they played; the assistant manager assumes that a similar activity by the food store would help them increase their overall profit. The manager doesn't give any evidence to show that the wine store increase their sales in totality. Moreover, an increase in the sale of French wine and reduction in the sale of Italian wine or vice versa goes to show that the profits probably balanced out.
Thirdly, the manager doesn't provide any rationale for his recommendation. His/her argument would become stronger if the rationale behind the activity was clear. It is possible that the local wine store organised this type of activity based on the demographics of the area (they could have a large number of French or Italian nationals who would directly relate to the music and get a sense of nationality) that might differ from the demographics of all the gourmet food stores.
It would be advised to include specific information in the memorandum to fill the logical gaps that currently exists. If the manger could send an addendum to the memo after including information on the demographic profile of the wine store region, his rationale behind equating sale of wine to sale of any gourmet food item and whether the wine stores activity resulted in an increase in profits or mere increase in sales, his argument and its validity would become much stronger.
Thanks in advance!
Moderators:
188 posts
