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# Following several years of declining advertising sales

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Manager
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15 Jan 2006, 20:57
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65% (hard)

Question Stats:

55% (02:21) correct 45% (01:52) wrong based on 605 sessions

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Following several years of declining advertising sales, the Greenville Times reorganized its advertising sales force. Before reorganization, the sales force was organized geographically, with some sales representatives concentrating on city-center businesses and others concentrating on different outlying regions. The reorganization attempted to increase the sales representatives' knowledge of clients' businesses by having each sales representative deal with only one type of industry or of retailing. After the reorganization, revenue from advertising sales increased.

In assessing whether the improvement in advertising sales can properly be attributed to the reorganization, it would be most helpful to find out which of the following?

(A) What proportion of the total revenue of the Greenville Times is generated by advertising sales?
(B) Has the circulation of the Greenville Times increased substantially in the last two years?
(C) Among all the types of industry and retailing that use the Greenville Times as an advertising vehicle, which type accounts for the largest proportion of the newspaper’s advertising sales?
(D) Do any clients of the sales representatives of the Greenville Times have a standing order with the Times for a fixed amount of advertising per month?
(E) Among the advertisers in the Greenville Times, are there more types of retail business or more types of industrial business?

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Director
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15 Jan 2006, 21:54
A sounds ok to me...
Even if the advertising revenue has increased, we need to find out the ratio of the advertising revenue to that of total revenue....
Wht if the advertising revenue has not kept pace with the toal revenue, in that case the reorganisation has no effect..
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15 Jan 2006, 23:25
D for me
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IE IMBA 2010

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16 Jan 2006, 00:44
Not an easy one! I'll go with A.
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16 Jan 2006, 07:31
A) What proportion of the total revenue of Greenville Times is generated by advertising sales?

(B) Has the circulation of the Greenville Times increased substantially in the last two years?
---- two years is unreleated

(C) Among all the types of industry and retailing that use the Greenville Times as an advertising vehicle, which type accounts for the largest proportion of the newspaper's advertising sales?
---- type of accounts unreleated

(D) Do any clients of the sales representatives of the Greenville Times have a standing order with the Times for a fixed amount of advertising per month?
--- unreleated

(E) Among the advertisers in the Greenville Times, are there more types of retail business or more types of industrial business?
---- type of business not important
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17 Jan 2006, 17:56
OA is B.
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17 Jan 2006, 19:43
Is there some explaination for that? I can't believe it.. This was a tough one.. I would like to know how did they come to the conclusion of the last 2 years? When was this change of advertising taken place?
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17 Jan 2006, 21:06
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The OE:

The reasoning: What additional evidence would help determine the source of the increased revenue? In order to attribute to the reorganization of the sales force, other possible causes must be eliminated. (I was headed this direction though). Newspapers advertising rates are linked to circulation; when circulation increases, higher rates can be charged and revenues will increase. (I though prior knowledge is NOT required in GMAT???) An alternative explanation might be a significant rise in circulation, so it would be particularly helpful to know if circulation had increased.

B: Correct. This statement provides another possible explanation for increased revenue of advertising sales, and so the answer to this question would help to clarifiy the reason for the increased revenue.

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17 Jan 2006, 22:50
Got B.
The line of reasoning I follow for such questions, is whether there was some other reason ? I eliminated the rest , said a prayer and picked B.
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18 Aug 2008, 19:10
IMO B. If correct then will give the reasoning
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18 Aug 2008, 19:29
clear B
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18 Aug 2008, 19:52
IMO D (very tough choice as no clear answers).

Reasoning as follows: The intention of reorganization was to have SR focus on only one clients. Earlier, due to a geographical focus, a comprehensive relationship with a single client might not have developed. However, after the reorganization a better relationship with the client might have developed probably leading to greater standing orders per month.

As I said, this is not a very clear-cut choice, but in my very humble opinion the "best" answer choice.

If you guys could explain why you chose B it would be great.

Also, the OA/OE would be awesome !
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18 Aug 2008, 19:54
One thing I missed out on is that the argument talks about increase in advertising sales. and the effect (or the lack of it ) that the reorg had on the advertising sales.
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18 Aug 2008, 21:32
D sounds best among given choices.
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18 Aug 2008, 22:42
D for me too
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18 Aug 2008, 23:19
Good CR question, straigth D.
B cant be answer, reason argument says that revenue from sales ad has been increased, but dont say anything about the circulation.
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19 Aug 2008, 03:29
Clearly D.

In order to properly attribute improvement in advertising sales to reorg, it is important to know the position of standing orders. Else, even standing orders can be attributed to reorg.

B is not right. Even if circulation increases, it does not guarantee that advertising sales improve. Advertising sales can still be blank.
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19 Aug 2008, 12:33
I think is B. If the circulation increased, it is not sure that the financial performance was a result of the reorganization. I think that D is irrelevant since we don't know nothing about the relation between standing orders and reorganization.
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19 Aug 2008, 13:58
I like B. Circulation will increase advertising sales, without reflecting on the reorg. To take an extreme view, if readership jumped 1000%, advertisers will pay more for space. More eyeballs mean more money.
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19 Aug 2008, 14:19
Premise1: GT ad sales declining for several years.
Premise2: GT reorganized sales team.
Premise3: Before reorganization, Sales team was georaphy based.
Premise4: After reorganization, sales team focus either on one type of industry or on one type of retailing.
Premise5: GT ad sales increased after organization.

Rephrased question: Did sales increase due to reorgnization or some other reason?

(A) What proportion of the total revenue of Greenville Times is generated by advertising sales?
Does not explain sales increased due to reorganization or for some other reason.

(B) Has the circulation of the Greenville Times increased substantially in the last two years?
Question is concerned about ad sales revenue and not about revenue from circulation, so this is irrelevant.

(C) Among all the types of industry and retailing that use the Greenville Times as an advertising vehicle, which type accounts for the largest proportion of the newspaper's advertising sales?
Does not explain sales increased due to reorganization or for some other reason.

(D) Do any clients of the sales representatives of the Greenville Times have a standing order with the Times for a fixed amount of advertising per month?
It does explain the fact. If answer to D is yes, then ad sales increased due to standing order and not because of sales team reorganization, however, if answer to D is no, then sales team reorganization did work.

(E) Among the advertisers in the Greenville Times, are there more types of retail business or more types of industrial business?
Does not explain sales increased due to reorganization or for some other reason.
Re: CR: Greenville Times   [#permalink] 19 Aug 2008, 14:19

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# Following several years of declining advertising sales

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