The local coffee shop chain, BrewMaster, has observed a decline in sales over the past year. The chain's management attributes this decline to the increasing popularity of rival coffee shops in the area that offer lower prices and a wider variety of beverages. In response, BrewMaster plans to lower its prices and expand its menu to include more diverse beverage options. The management believes that these changes will attract more customers and reverse the sales decline.The argument above depends on which of the following assumptions?BrewMaster’s sales fell. Management says the fall is because rivals are popular due to lower prices and more variety. So BrewMaster will lower prices and add variety, assuming this will bring customers back and reverse the decline. The argument
depends on the idea that the customers BrewMaster is trying to win care about those same features and would respond by choosing BrewMaster.
A. Lowering prices and expanding the menu will not negatively affect BrewMaster's profit margins.
Not required. The conclusion is about reversing a sales decline (getting more customers), not about keeping profits the same.
B. Customers who previously visited rival coffee shops are interested in a wider variety of beverages and lower prices.
This is necessary. If those customers do not actually care about price and variety, then matching those features would not bring them back, and the plan would not be supported.
C. Rival coffee shops will not lower their prices further in response to BrewMaster's price reduction.
Not required. Even if rivals respond, BrewMaster could still attract some customers. The argument only needs that BrewMaster’s changes can attract more customers, not that rivals will stand still.
D. BrewMaster's sales decline is due solely to the increased popularity of rival coffee shops.
Too strong. The plan could still help even if other factors also contributed to the decline.
E. The current customers of BrewMaster are dissatisfied with the existing menu options.
Not required. The argument is mainly about winning customers from rivals, not about dissatisfaction among current customers. The key is whether the targeted customers will
switch because of price and variety.
Answer: (B)