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# To entice customers away from competitors, Red Label

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To entice customers away from competitors, Red Label [#permalink]

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18 Oct 2005, 15:31
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To entice customers away from competitors, Red Label supermarkets have begun offering discounts on home appliances to customers who spend \$50 or more on any shopping trip to Red Label. Red Label executives claim that the discount program has been a huge success, since cash register receipts of \$50 or more are up thirty percent since the beginning of the program.
Which of the following, if true, most seriously weakens the claim of the Red Label executives?
(A) Most people who switched to Red Label after the program began spend more than \$50 each time they shop at Red Label.
(B) Most people whose average grocery bill is less than \$50 would not be persuaded to spend more by any discount program.
(C) Most people who received discounts on home appliances through Red Labelâ€™s program will shop at Red Label after the program ends.
(D) Since the beginning of the discount program, most of the people who spend \$50 or more at Red Label are people who have never before shopped there and whose average grocery bill has always been higher than \$50.
(E) Almost all of the people who have begun spending \$50 or more at Red Label since the discount program began are longtime customers who have increased the average amount of their shopping bills
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Director
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18 Oct 2005, 15:37
E
If all the people who spent more than \$50 at red label are old customers, then the program has not 'enticed customers away from competitors'.

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18 Oct 2005, 15:56
Clearly E it is...

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18 Oct 2005, 16:18
OE is D ... for reasons unknown to me!
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18 Oct 2005, 16:33
ritledge wrote:
OE is D ... for reasons unknown to me!

(D) is saying that the red label supermarket attracted new high-spending customers, and why is this weakning the conclusion?

Somebody explain, please.
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18 Oct 2005, 16:40
OA can be incorrect!
As long the question is not from OG or ETS, we can't trust it 100%!

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18 Oct 2005, 18:31
I'll take Chocie E. It states that the people who spend more than \$50 are longtime customers and so the motive of enticing customers away from competitors has not been achieved.

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19 Oct 2005, 10:02
OE might be taking following reasoning.

(E)
Almost all of the people who have begun spending \$50 or more at Red Label since the discount program began are longtime customers who have increased the average amount of their shopping bills.

As most number of existing customers have increased their shopping bills, they might have done so because of new discount offer.

(D)
Since the beginning of the discount program, most of the people who spend \$50 or more at Red Label are people who have never before shopped there and whose average grocery bill has always been higher than \$50.

Clearly, they are receiving new customers (possibly from their competitors). However, we do not know if new customers are enticed by new discount offers. May be new housing complex came up in neighourhood. "cash register receipts of \$50 or more are up" is because of new wealthy customers, not because of discount offers.

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19 Oct 2005, 13:05
The answer should be E since the goal of the discount program is to entice customers away from competitors which is not supported by E as almost all who are availing the discount are long time customers.

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19 Oct 2005, 13:05
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# To entice customers away from competitors, Red Label

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