LR Drill Set 8, Question 12
Last month, Suds laundry detergent made a promotional(56 more words not shown)
Which one of the following,(10 more words not shown)
- AOne of Suds'(23 more words not shown)
- BLoyal purchasers of(15 more words not shown)
- CIn the Suds(17 more words not shown)
- DConsumers are more(22 more words not shown)
- EThe Suds company(15 more words not shown)
Reading the argument
A coupon isn't much help if people still have a reason to buy something else.
Suds is giving its coupons to people who buy a competing detergent. I can see the intended appeal: offer a discount to someone who might otherwise never try Suds. How strong that incentive is would depend on the discount. A tiny reduction might do very little; a coupon for a free box could attract much more interest.
But last month, Suds sold fewer boxes and many competitors sold more, despite no new competing promotions. Why did Suds's promotion go with worse sales? Maybe Suds raised its prices enough to outweigh the coupons. Or perhaps bad publicity made buyers avoid the product despite the discount. Those are possible explanations, not facts we're given.
What we’re looking for
The resolve-the-discrepancy question asks for something that makes the actual sales pattern understandable. We need to explain why Suds could lose purchases while its competitors gain them, even with the coupon offer in place. We shouldn't assume a promotion must work simply because the company intended it to.
Working the answers
- A
A competitor's production problems last year could explain customers turning to other brands then. That doesn't explain why Suds loses sales last month while many rivals gain them. Suds could be among the companies benefiting from a competitor's shortage. A doesn't identify a reason for the particular difference we're trying to explain.
- BCorrect
Suds's regular customers temporarily bought competing products to get the Suds coupons. That turns the promotion's method of distribution into a reason to postpone a Suds purchase. If I normally buy Suds but must buy a rival's detergent to earn a coupon for it, this month's purchase goes to the rival. Suds loses that purchase and the rival gains it. We don't have to suppose all loyal customers switched or that the promotion attracted no new customers. A temporary shift among loyal buyers can help explain both sales movements.
- C
A higher-than-expected redemption proportion doesn't tell us that total sales increased. The company could have expected a very low redemption rate, or coupon purchases could replace purchases that customers would otherwise have made at full price. C concerns how coupon use compares with a forecast. It doesn't explain why Suds's box sales fell while its competitors' rose.
- D
How a coupon reaches someone can affect whether it gets used. But this general comparison between hand-delivered and mailed coupons doesn't tell us what caused the opposing sales trends here. We would need information tying the delivery method to lost Suds purchases and added purchases of competing brands. D supplies neither connection.
- E
Bigger boxes might affect how many boxes people need to buy, so box size isn't inherently irrelevant. But this answer gives the same change for Suds and its competitors without explaining why their sales move in different directions. Perhaps their customers reacted differently, but E doesn't tell us that. B provides a specific reason purchases shift from one side to the other.
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