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26 Mar 2024, 01:30
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A
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
5%
(low)
Question Stats:
89% (01:21) correct
11%
(01:40)
wrong
based on 231
sessions
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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
26 Mar 2024, 10:14
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IMO A
A) This is crucial to know. If competitors also start offering discounts, the watchmaker's plan might not attract as many customers as anticipated.
(B) This is less relevant. Who creates the advertisements doesn't directly impact the success of the discount strategy.
(C) This might influence the level of customer attraction to the discounts, but it won't necessarily determine the success of the overall strategy.
(D) This is important for the company's profitability but not directly related to increasing market share.
(E) This is a broader strategic question. It could be useful but doesn't directly address the effectiveness of the discount strategy for market share growth.
Therefore, the most useful piece of information would be (A) Whether the watchmaker's competitors are likely to respond by offering deep discounts of their own products. This could significantly impact the success of the watchmaker's strategy.
A) This is crucial to know. If competitors also start offering discounts, the watchmaker's plan might not attract as many customers as anticipated.
(B) This is less relevant. Who creates the advertisements doesn't directly impact the success of the discount strategy.
(C) This might influence the level of customer attraction to the discounts, but it won't necessarily determine the success of the overall strategy.
(D) This is important for the company's profitability but not directly related to increasing market share.
(E) This is a broader strategic question. It could be useful but doesn't directly address the effectiveness of the discount strategy for market share growth.
Therefore, the most useful piece of information would be (A) Whether the watchmaker's competitors are likely to respond by offering deep discounts of their own products. This could significantly impact the success of the watchmaker's strategy.
07 Apr 2024, 06:45
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Bunuel
VERITAS PREP OFFICIAL SOLUTION:
Correct Answer: A
It is important to correctly identify the conclusion (goal) in this stimulus: the watchmaker want to increase its market share. Also, remember that a Useful to Evaluate question should be treated as a Weaken question. Which answer choice offers the most relevant skepticism about the watchmaker's plan?
Choice A is correct, because if the competitors match the discounts, the watchmaker's market share may not change.
Choice B is out of scope because it addresses a tangential issue.
Choice C narrows the scope too much: we're interested in overall market share, not the performance of individual styles.
Choices D and E both mistake the watchmaker's goal: the company is sacrificing profitability for market share, so profitability is not the central issue. The goal of this plan is to "increase its market share", so the correct answer must be consistent with that objective.
