Discussion Forum : Statement & Assumptions
Question -
Statement:
“Soft drinks’ penetration in rural areas is only 10 per cent. If we have to hook the rural folk we need to give them single-serve soft drink packs at low price points.”
— CEO of ‘X’ Company
Assumptions:
I. Purchasing power of the people living in rural areas is low and it will make the people unable to purchase the beverage of company ‘X’ even at low price points.
II. Low margin-high volumes is a way of successful business.
“Soft drinks’ penetration in rural areas is only 10 per cent. If we have to hook the rural folk we need to give them single-serve soft drink packs at low price points.”
— CEO of ‘X’ Company
Assumptions:
I. Purchasing power of the people living in rural areas is low and it will make the people unable to purchase the beverage of company ‘X’ even at low price points.
II. Low margin-high volumes is a way of successful business.
Answer: Option B
Answer: (b)Low price points have been accepted as instruments for penetration in rural areas. Hence II must have been assumed. I is obviously not implicit. Because if a company decides to penetrate in rural areas by providing the drinks at low price points then the company must be assuming that people in rural areas will be able to purchase the cold drinks at reduced price.
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Answer: (b)Low price points have been accepted as instruments for penetration in rural areas. Hence II must have been assumed. I is obviously not implicit. Because if a company decides to penetrate in rural areas by providing the drinks at low price points then the company must be assuming that people in rural areas will be able to purchase the cold drinks at reduced price.
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