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# GMAT on saturday. Please rate my AWA

Author Message
Current Student
Joined: 03 Jun 2013
Posts: 11
Concentration: Marketing
GMAT 1: 660 Q V0
GPA: 3.89
Followers: 0

Kudos [?]: 1 [0], given: 1

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06 Aug 2013, 10:00

Read the statement(s) and the instructions that follow, and then make any notes that will help you plan your response. Begin typing your response in the box at the bottom of the screen.

The following appeared in a memo to executives at a company that manufactures industrial equipment:

"We are spending too much on free customer service after a sale has been made; we need to limit our warranty to two years in order to improve our profit margins. The current lifetime warranty can lead to costs decades into a product's life cycle. Also, we pay our customer service employees a premium because they must possess expert skills across the entirety of our very diverse product line, including products we no longer sell."   Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.
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The argument above claims that it is necessary for an industrial equipment company to reduce its lifelong warranty policy to a policy of two years. The argued is flawed in numerous ways and makes many awful assumptions. The value and length of a warrant is crucial in the purchasing decisions of almost all consumers, especially for consumer goods and electronics.

First, the argument presumes that the manufacturer is competing in a vacuum, as the industry standards are never mentioned. It is possible that all major players in this industry offer a lifetime warranty, and the exorbitant costs involved are simply part of doing addition. In addition, even if this company's warranty policy far exceeds the industry standard, reducing the warranty policy at or below industry stand would cause the company to lose one of its core strategic advantages.

Secondly, the memo does not address the customer prospective. A warranty as a security guard that acts to resolve problems if needed. Without a sense of security, many consumers will purchase equipment from competitors. This is especially true for the commercial market segment, where reliability is especially crucial. Even loyal customers will become likely to shop the field. While reducing the cost of servicing would appear to boost profit, the argument incorrectly assumes that decreasing the quality of a service will have no effect on overall revenue. For example, warranty costs are decreased by $250,000 a year, but revenue decreases by$2,000,000 and gross profit decreases by $500,000, the action recommended above would be detrimental to the company's overall profit. Finally, the criticism has a narrow view on the customer service employee situation. Providing good service is important to customer satisfaction. The inherent problem is not with servicing warranties; customer service employees should specialize in certain products. Requiring all employees to "possess expert skills across the entire [product line]" including products no longer in product is a misuse of resources. Long time employees could focus on older products near the end or at the end of their life cycle, while new employees could focus on newer products. Anything new will get old, so as new employees grow with the company, they will move along with the product life cycle, creating an efficient, self-regulating system. By reducing the amount of knowledge needed, overall costs would decrease. Additional market research needs to take place in order for the argument to be substantiated. Perhaps a lifetime warrant is too long and costly to execute, and a middle of the road approach would be beneficially. If research indicates, for example, that a 20-year warranty is sufficient to levy consumer confidence steady, such action would increase profitability. Moreover, this would reduce the amount of expertise and training needed for customer service employees. By reducing the scope of knowledge necessary, costs will decrease. Until all of these avenues are examined, the argument above has too many holes to be considered a viable option. Kaplan GMAT Instructor Joined: 25 Aug 2009 Posts: 644 Location: Cambridge, MA Followers: 81 Kudos [?]: 255 [0], given: 2 Re: GMAT on saturday. Please rate my AWA [#permalink] ### Show Tags 07 Aug 2013, 11:53 Nice job on this essay--I give it a 5! Strengths: You are well organized and well written, with clear opening and closing ideas supported by three clear paragraphs. Your reasoning is spot-on in terms of the flaws you identify; customers, competition, and more effective solutions to the employee knowledge problems are all missing from the prompt. Opportunities: I didn't quite understand the distinction between the first two flaws you identified; they felt very similar. It's okay to have two points whose differences are only subtle, but you must make clear to the reader why you are making that distinction. Also, avoid language like "awful" in your opening paragraph. You are critiquing the author's argument, but you should be businesslike and dispassionate, not judgmental. Overall, this is great work--good luck Saturday! _________________ Eli Meyer Kaplan Teacher http://www.kaptest.com/GMAT Prepare with Kaplan and save$150 on a course!

Kaplan Reviews

Intern
Joined: 03 Feb 2013
Posts: 17
Concentration: General Management, Entrepreneurship
GMAT Date: 06-30-2014
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Kudos [?]: 2 [0], given: 0

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26 Aug 2013, 11:58
KapTeacherEli wrote:
Nice job on this essay--I give it a 5!

Strengths: You are well organized and well written, with clear opening and closing ideas supported by three clear paragraphs. Your reasoning is spot-on in terms of the flaws you identify; customers, competition, and more effective solutions to the employee knowledge problems are all missing from the prompt.

Opportunities: I didn't quite understand the distinction between the first two flaws you identified; they felt very similar. It's okay to have two points whose differences are only subtle, but you must make clear to the reader why you are making that distinction. Also, avoid language like "awful" in your opening paragraph. You are critiquing the author's argument, but you should be businesslike and dispassionate, not judgmental.

Overall, this is great work--good luck Saturday!

Rate my AWA as well plzz...

“To reverse the deterioration of the postal service, the government should raise the price of postage stamps. This solution will no doubt prove effective, since the price increase will generate larger revenues and will also reduce the volume of mail, thereby eliminating the strain on the existing system and contributing to improved morale.”

Postal service has been a hot topic in the US as of late. Many people debate that deterioration of postal services is because of external system, many affirm it. Many assert that internal policy change will not affect the current standings of postal services and many believe that making changes in internal system such as changes in price of postage stamps will definitely bring in the desired change in postal services.

In the preceding statement author claims that to reverse the deterioration of the postal service, the government should raise the price of postage stamps. Author also claims that this solution will no doubt prove effective, since the price increase will generate larger revenues and will also reduce the volume of mail, thereby eliminating the strain on the existing system and contributing to improved morale.

Although his claim may well have merits, author poorly reasoned argument is based on questionable premises and assumptions, and based solely on the evidence author offers. We cannot accept his conclusion valid.

The primary issue in author reasoning lies in his unsubstantiated premises. Author says that government should raise the prices of postage stamps in order to reverse the deterioration of postal services, but what if the people who are presently using the postal services are using this services because it is cheaper. Also, what if the price increase in stamps will further decrease the number of people currently using postal services. This will certainly not increase the revenue, which in turn will neither eliminate the strain nor will contribute in the improvement of the morale. The argument premise, the base of the argument lack many legitimate evident supports that render this conclusion unacceptable.

In addition, author weakens his argument by making several assumptions which are never proven. Author assumes that many people who are currently using the services will not stop using the services even if the prices of the stamps are increased. Which further means that strain on the existing service system will not change. Thus author fails to provide the explication between the increase in the prices of postage stamps and increase in the revenue which he assumes exists.

Although the poorly reasoned argument have several flaws and the conclusion is not consistent with the premises, it is not to say that the complete argument is without base. Author should have provided the support which can prove that price increase will definitely increase the revenue of the postal services. Also, author could have provided the relation between the reduction in the volume of mail and strain reduction. With more research and clarification author could improve his argument significantly.

In sum, the author presents a poorly reasoned argument based on unsubstantiated premises, questionable assumptions and based on the unsupported evidence that render his conclusion invalid.

If author truly hopes to change the readers mind, he would have to largely restructure his argument, fix the flaws in his logic, provide the explication between the links, and provide more evident support, without which few will likely to convince.
Re: GMAT on saturday. Please rate my AWA   [#permalink] 26 Aug 2013, 11:58
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