Check GMAT Club Decision Tracker for the Latest School Decision Releases https://gmatclub.com/AppTrack

 It is currently 27 May 2017, 16:29

### 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

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

Author Message
Manager
Joined: 03 Jun 2012
Posts: 83
Location: United States
Schools: Tuck '17
GPA: 2.7
WE: Analyst (Investment Banking)
Followers: 1

Kudos [?]: 15 [0], given: 53

### Show Tags

30 Sep 2012, 11:59
“Our promotional price reductions on energy drinks have been highly successful, as we have seen a dramatic increase in unit sales. Further, surveys of our consumers indicate that this promotion was favorably received by the majority of our customers. Therefore, to improve our company’s profitability and enhance its perception in the eyes of consumers, similar price reductions should be offered on all drinks produced by our firm.”

The beverage company claims that the prices of all their beverages should be lowered because a previous price reduction strategy on energy drinks was successful. This thinking is somewhat correct but clearly fails to mention several key factors.

First of all, additional detailed information about the company and its products is needed to analyse this situation. The success of this promotional price reduction could be related to other factors. Perhaps the energy drinks were overpriced prior to price reduction. We also need to know the prices of company's other beverages. After all, the conceived value of an item is what counts.

Another important point is the demand for a particular product. Maybe there was a sudden increase in demand in the market for energy drinks. This might be the reason for increased sales as well. The sales would have increased in this case even if there were no price reductions.

Finally, the advertising activities of the company need to be accounted for. This might have boosted sales too. The reasons behind the increased sales must be investigated thoroughly first to understand this success.

Due to above mentioned reasons, the argument is flawed and therefore unconvincing. Without further information, we cannot conclude that the same strategy applied to other products will succeed. The argument could be considerably strengthened by clearly mentioning all relevant factors and giving more detailed information.
Similar topics Replies Last post
Similar
Topics:
1 Please rate my AWA 2 23 Aug 2014, 18:15
1 Please rate my AWA 2 15 Aug 2012, 03:59
Please Rate my AWA 1 26 Nov 2010, 01:53
1 Please rate my AWAs 0 14 Oct 2010, 07:01
Please rate my AWAs...... 1 29 Sep 2010, 10:37
Display posts from previous: Sort by