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Analyst: The pace of technological development brings a

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Analyst: The pace of technological development brings a [#permalink] New post 12 Apr 2010, 14:23
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Analyst: The pace of technological development brings a constant stream of new devices to the market, and many of them enjoy commercial success. But announcing new technology too soon after the introduction of a successful device can backfire. Once consumers hear about the new device, they may stop buying the one currently on sale. So, if a company wishes to announce the upcoming sale of a new device, it should wait until purchases of the old device have begun to decline.

Which of the following, if true, would best support the analyst's main assertion?

1 New technology often becomes less expensive after an initial surge in sales.

2 Media outlets, such as television programs and magazines, often report on the planned introduction of new devices while the sales of old devices are still strong.

3 Many consumers are unable to determine whether new technology is superior to current technology.

4 Surveys have shown that some consumers make only one or two technology purchases per year, whereas others make more frequent purchases.

5 Consumers tend to be loyal to technology companies whose products they enjoy using.
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Re: Technological development [#permalink] New post 12 Apr 2010, 22:57
will go for 4.
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Re: Technological development [#permalink] New post 12 Apr 2010, 23:58
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Tricky question.

Only B suffice by PoE, but still its two parts are not in sync as per the conclusion - So, if a company wishes to announce the upcoming sale of a new device, it should wait until purchases of the old device have begun to decline.

Rest are out of scope.
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Re: Technological development [#permalink] New post 13 Apr 2010, 00:13
IMO 3 what's OA?
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Re: Technological development [#permalink] New post 13 Apr 2010, 01:09
I will go with 5 , because it says that the company should not market the new device till the old one is sold out

not saying till the other devices form other companies are sold out ,

so 5 is the most one supporting
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Re: Technological development [#permalink] New post 13 Apr 2010, 02:15
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nverma wrote:
Analyst: The pace of technological development brings a constant stream of new devices to the market, and many of them enjoy commercial success. But announcing new technology too soon after the introduction of a successful device can backfire. Once consumers hear about the new device, they may stop buying the one currently on sale. So, if a company wishes to announce the upcoming sale of a new device, it should wait until purchases of the old device have begun to decline.

Which of the following, if true, would best support the analyst's main assertion?

1 New technology often becomes less expensive after an initial surge in sales. -- This does not support the conclusion because if the prices go down people wil rather wait for the prices to go down and buy the old tech product rather than spending money on the new tech product
2 Media outlets, such as television programs and magazines, often report on the planned introduction of new devices while the sales of old devices are still strong. -- This one is tempting but doesnot support the conclusion that people will buy the new product and wont spend money on the old tech product.

3 Many consumers are unable to determine whether new technology is superior to current technology. -- This one in fact weakens the conclusion because if people cant make out which one is better people wont directly buy the new product instead of the old product

4 Surveys have shown that some consumers make only one or two technology purchases per year, whereas others make more frequent purchases. -- Out of scope

5 Consumers tend to be loyal to technology companies whose products they enjoy using.-- This one supports, because if people are loyal to the company then they will buy the new product even if the old tech product is in market and even if company waits till the time the old tech product sales declines then also it wont their market share as the consumers are loyal to the company
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Re: Technological development [#permalink] New post 13 Apr 2010, 03:31
IMO: 5
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Re: Technological development [#permalink] New post 13 Apr 2010, 17:05
should be 5.....almost fell for 4...:(
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Re: Technological development [#permalink] New post 15 Apr 2010, 07:09
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B should be.

Reason:

Premise 1: If announce too soon -> backfire
Premise 2: If consumers hear abt the new device -> may stop buying
Conclusion: Should wait till the old one fades

Only B connects the two premises, i.e. the company announcement reaches consumers through media outlets. If the company announcement doesn't reach consumers at all, the conclusion won't hold.
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Re: Technological development [#permalink] New post 15 Apr 2010, 07:52
B

It explains how consumers might hear about a new device while the old device is still selling. If, as the author argues, the company does not release information about its upcoming new product, the media will not have anything to report... and, therefore, the consumers won't know about the new device yet. This supports the author's conclusion that the company should delay the news of new devices

Answer choice (E) states that "Consumers tend to be loyal to technology companies whose products they enjoy using." However, loyalty to a company does not necessarily lead to the backfire of strategy.

I choose B

What's OA?


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Re: Technological development [#permalink] New post 15 Apr 2010, 13:04
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calvinhobbes wrote:
B should be.

Reason:

Premise 1: If announce too soon -> backfire
Premise 2: If consumers hear abt the new device -> may stop buying
Conclusion: Should wait till the old one fades

Only B connects the two premises, i.e. the company announcement reaches consumers through media outlets. If the company announcement doesn't reach consumers at all, the conclusion won't hold.


Gud explanation..!!

The OA is B.
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Re: Technological development [#permalink] New post 15 Apr 2010, 16:40
I will go for B
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Re: Technological development [#permalink] New post 15 Apr 2010, 22:58
Got it wrong ...
anyone seeking more explanation see this:
http://www.manhattangmat.com/forums/ana ... -t403.html
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Re: Analyst: The pace of technological development brings a [#permalink] New post 02 Apr 2013, 22:39
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This is one of the most difficult question I've ever seen. I just went for B by using POE. I saw many a ton of great solutions for this question, I just want to clarify a little bit though.

Premise: people stop buying old products if there's an announcement of new products.
Conclusion: a company should delay the announcement until the sale of old products is declined.
Assumption: the announcement can affect purchasing behavior of many people. if this assumption is not hold, the conclusion is broken.

The answer B is indirect assumption. It says media outlets often report new products while the sales of old products are still strong. It implies that media outlets report --> people know NEW product is coming--> sales of OLD ones will be declined sooner or later. That's exactly the assumption mentioned above.

Still not clear? No problem.

Other way to understand the logic. We can use negation technique. Let negate the logic above: media outlets report NEW products --> People NOT know --> sales of OLD products will NOT be declined. Hey, what's going on? it means the announcement of NEW product does not affect the sale of OLD ones. So the company can announce its new products whenever it wants. Timing doesn't matter. Hence, the conclusion is failed.
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Re: Analyst: The pace of technological development brings a [#permalink] New post 31 Mar 2014, 09:22
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nverma wrote:
Analyst: The pace of technological development brings a constant stream of new devices to the market, and many of them enjoy commercial success. But announcing new technology too soon after the introduction of a successful device can backfire. Once consumers hear about the new device, they may stop buying the one currently on sale. So, if a company wishes to announce the upcoming sale of a new device, it should wait until purchases of the old device have begun to decline.

Which of the following, if true, would best support the analyst's main assertion?

(A) New technology often becomes less expensive after an initial surge in sales.

(B) Media outlets, such as television programs and magazines, often report on the planned introduction of new devices while the sales of old devices are still strong.

(C) Many consumers are unable to determine whether new technology is superior to current technology.

(D) Surveys have shown that some consumers make only one or two technology purchases per year, whereas others make more frequent purchases.

(E) Consumers tend to be loyal to technology companies whose products they enjoy using.

ConnectTheDots wrote:
Hi Mike,

Could you please help on this one ?
in B : If the media reports about the new technology, won't it affect the current sales? The argument says, yes it will affect and hence the company should not announce. Then how this statement supports ?

Thanks and Regards!

Dear ConnectTheDots,
I'm happy to respond to your p.m.

The OA to this question is (B). This is a very well-written question, as MGMAT questions typically are.

The prompt discusses a problem --- if the arrival of the new technology is announced too soon, while sales of the old product are high, it will cut into those sales. Let's say, for the sake of argument, that Company X is selling a device in version 3.0, and at the beginning of July, they will be able to launch the sale of version 4.0. When should they announce that 4.0 is on the way? It doesn't matter for sales of 4.0 --- starting in July, they will make a ton of money on 4.0. But they also want to maximize their sales from now until July, the sales of 3.0, and if they announce right away that 4.0 is coming, most people will no longer be interested in buying 3.0. An early announcement will make their pre-July sales decline.

That's the problem. The prompt is mostly about clarifying this problem. The only recommendation is the weak statement: don't announce too early: "wait until purchases of the old device have begun to decline."

Now, what does (B) say?
(B) Media outlets, such as television programs and magazines, often report on the planned introduction of new devices while the sales of old devices are still strong.
If this is true, this would amplify the problem. If Company X makes an early announcement, and immediately the media broadcasts this announcement to the four corners of the earth, all while sales of the old device were still high, then this would make the problem more pronounced. This absolutely makes clear why it would be such a spectacularly bad idea for Company X to make their announcement too early. The analyst was taking about a problem, and choice (B) makes clear: yes, it's a big problem. If the company announce too early, the media will amplify it, and sales of the old technology will plummet. That's a big problem. This makes it even more clear --- the company should not make the announcement, so sales of the old product don't decline prematurely. In that sense, (B) is very strong support --- it confirms that there is a big problem here, that the analyst is addressing.

Does this make sense?
Mike :-)
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Re: Analyst: The pace of technological development brings a   [#permalink] 31 Mar 2014, 09:22
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