Last visit was: 11 May 2024, 11:56 It is currently 11 May 2024, 11:56

Close
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Close
Request Expert Reply
Confirm Cancel
SORT BY:
Date
Tags:
Difficulty: 555-605 Levelx   Weakenx               
Show Tags
Hide Tags
Math Expert
Joined: 02 Sep 2009
Posts: 93161
Own Kudos [?]: 622905 [139]
Given Kudos: 81832
Send PM
Most Helpful Reply
RC & DI Moderator
Joined: 02 Aug 2009
Status:Math and DI Expert
Posts: 11238
Own Kudos [?]: 32435 [29]
Given Kudos: 301
Send PM
Target Test Prep Representative
Joined: 24 Nov 2014
Status:Chief Curriculum and Content Architect
Affiliations: Target Test Prep
Posts: 3480
Own Kudos [?]: 5147 [9]
Given Kudos: 1431
GMAT 1: 800 Q51 V51
Send PM
Tutor
Joined: 16 Oct 2010
Posts: 14891
Own Kudos [?]: 65231 [6]
Given Kudos: 431
Location: Pune, India
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
4
Kudos
2
Bookmarks
Expert Reply
Bunuel wrote:
Marketing executive for Magu Corporation: Whenever Magu opens a manufacturing facility in a new city, the company should sponsor, or make donations to, a number of nonprofit organizations in that city. Doing so would improve Magu's image in the community, and thus the money spent on such charitable ventures would lead to increased sales.

Which statement would, if true, point to the most serious weakness in the marketing executive's advice?

A. Magu sells its products internationally, so sales in any one city represent only a small portion of total revenue.
B. Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers.
C. If market conditions change, Magu may have to close any such facility or relocate it.
D. Some nonprofit organizations are poorly organized, so money donated to them would be of little benefit to the community.
E. If workers at the manufacturing facility believed their wages or working conditions were poor, their complaints would outweigh any good impressions generated by Magu's donations or sponsorships.


CR74231.01
OG2020 NEW QUESTION


In a new city, sponsor/donate to non-profits to improve image and hence, increase sales.
So say, spend 1 mil in donations and sales will go up from 100 mil to 110 mil. So a 1 mil donation could rake in $10 mil in revenue.

What points to a weakness in the advice?

A. Magu sells its products internationally, so sales in any one city represent only a small portion of total revenue.

We could be spending a small portion in donations too. It's all relative.

B. Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers.

Spending 1 mil on donations will take away that money from direct advertisements. Say, direct advertisements bring in 20 mil for every 1 mil spent (they are the most effective) while 1 mil donated brings in only 10 mil. So the revenue might actually go down because direct advertisements will decrease. If Magu were spending 5 mil in direct advertisements to get $100 mil, now we may allocate only 4 mil to direct advertisement brining in $80 mil and 1 mil to donations bringing in $10 mil so we might bring in a revenue of only $90 mil.
This is a weakness in the plan.

C. If market conditions change, Magu may have to close any such facility or relocate it.

Irrelevant.

D. Some nonprofit organizations are poorly organized, so money donated to them would be of little benefit to the community.

Irrelevant.

E. If workers at the manufacturing facility believed their wages or working conditions were poor, their complaints would outweigh any good impressions generated by Magu's donations or sponsorships.

Again irrelevant. There will be N number of factors which will work in the company's favour and M number of factors which will work against it. Sum total of all would decide the revenue. The argument just says that one of these N factors could be donations.

Answer (B)

Originally posted by KarishmaB on 12 Jun 2019, 03:42.
Last edited by KarishmaB on 20 Jul 2020, 04:06, edited 1 time in total.
e-GMAT Representative
Joined: 02 Nov 2011
Posts: 4376
Own Kudos [?]: 30884 [5]
Given Kudos: 638
GMAT Date: 08-19-2020
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
5
Kudos
Expert Reply
Bunuel wrote:
Marketing executive for Magu Corporation: Whenever Magu opens a manufacturing facility in a new city, the company should sponsor, or make donations to, a number of nonprofit organizations in that city. Doing so would improve Magu's image in the community, and thus the money spent on such charitable ventures would lead to increased sales.

Which statement would, if true, point to the most serious weakness in the marketing executive's advice?

(A) Magu sells its products internationally, so sales in any one city represent only a small portion of total revenue.
(B) Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers.
(C) If market conditions change, Magu may have to close any such facility or relocate it.
(D) Some nonprofit organizations are poorly organized, so money donated to them would be of little benefit to the community.
(E) If workers at the manufacturing facility believed their wages or working conditions were poor, their complaints would outweigh any good impressions generated by Magu's donations or sponsorships.


CR74231.01
OG2020 NEW QUESTION


Solution

Passage Analysis

Marketing executive for Magu Corporation: Whenever Magu opens a manufacturing facility in a new city, the company should sponsor, or make donations to, a number of nonprofit organizations in that city.
-The author is the marketing executive for Magu Corporation. S/he says that every time the corporation opens its facility in a new city, the company should give financial assistance to some non profit organizations in the city.


Doing so would improve Magu's image in the community, and thus the money spent on such charitable ventures would lead to increased sales.
-This activity will enhance the company’s image in society and thus the money spent will help to increase sales.


Prethinking

Weaken framework

Marketing executive’s advice: Financially assist non profit organizations in new cities to increase sales in that location by enhancing the company’s image.

What new information will make us believe that this advice will likely not work?

Weakener1

What if helping non-profits lead to lesser scope for more effective sales strategies?

For example, if the resources used for non-profits take away from resources needed to ensure proper product distribution. Then, instead of increased sales, sales may actually go down.

Weakener 2

What if the company’s image does not translate much into sales due to some reason?

For example, in Magu’s industry, people buy only based on price considerations and do not care about image.

Weakener 3

What if Magu’s image was already tarnished due to some reason in a way that charitable ventures cannot enhance the image in the community?

In all these cases, the marketing executive’s advice is not useful if followed.

Answer Choice Analysis

(A)Magu sells its products internationally, so sales in any one city represent only a small portion of total revenue.
-Even if this is the case, if the plan works in at least some new cities, it will give an increase in sales. Hence, you cannot say this weakens the plan.


(B) Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers.
-This option is in line with weakener #1. If an increase in charitable ventures means lesser direct advertisements which are more effective, the strategy is better not followed. Hence this is the right answer.


(C) If market conditions change, Magu may have to close any such facility or relocate it.
-This option does not affect how or whether the company should increase sales in a new city. Hence it is irrelevant to the conclusion.


(D) Some nonprofit organizations are poorly organized, so money donated to them would be of little benefit to the community.
-How the non-profit organizations utilize the donated money is not relevant to the concern of Magu since all they need is a positive image in the community, made from donating the money. Therefore, this option is also irrelevant.


(E) If workers at the manufacturing facility believed their wages or working conditions were poor, their complaints would outweigh any good impressions generated by Magu's donations or sponsorships.
-This is a conditional situation. As long as the workers do not complain, Magu’s donations will remain useful in the intended manner. Hence this is not an effective weakener.
General Discussion
examPAL Representative
Joined: 07 Dec 2017
Posts: 1050
Own Kudos [?]: 1783 [4]
Given Kudos: 26
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
4
Kudos
Bunuel wrote:
Marketing executive for Magu Corporation: Whenever Magu opens a manufacturing facility in a new city, the company should sponsor, or make donations to, a number of nonprofit organizations in that city. Doing so would improve Magu's image in the community, and thus the money spent on such charitable ventures would lead to increased sales.

Which statement would, if true, point to the most serious weakness in the marketing executive's advice?

A. Magu sells its products internationally, so sales in any one city represent only a small portion of total revenue.
B. Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers.
C. If market conditions change, Magu may have to close any such facility or relocate it.
D. Some nonprofit organizations are poorly organized, so money donated to them would be of little benefit to the community.
E. If workers at the manufacturing facility believed their wages or working conditions were poor, their complaints would outweigh any good impressions generated by Magu's donations or sponsorships.


CR74231.01
OG2020 NEW QUESTION


The argument is basically that 'making donations improves the image which increases sales'. To weaken this, we can show that making donations does not improve the image, that improving the image does not increase sales, or that making donations directly reduces sales. We'll look for an answer with the correct logical bridge, a Logical approach. (Note that an answer which does not link the right parts of the argument is wrong and should be ignored without wasting too much time)

Skimming through our options, (B) and (D) directly relate to these specific links. (B) is stronger as it directly shows how making donations reduces the 'most effective' way to reach customers whereas (D) requires us to assume that 'little benefit to the community' means that the image is unimproved.

(B) is our answer.
Manager
Manager
Joined: 24 Mar 2018
Posts: 198
Own Kudos [?]: 41 [2]
Given Kudos: 288
Location: India
GMAT 1: 680 Q50 V31
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
2
Kudos
AjiteshArun DavidTutorexamPAL
Can you please brief why E is wrong ?
If the image can be countered then the sales will decline
Also B say Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers. it doesn't explicitly say decline in the direct advertisement will result in decline in sale.
examPAL Representative
Joined: 07 Dec 2017
Posts: 1050
Own Kudos [?]: 1783 [0]
Given Kudos: 26
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
teaserbae wrote:
AjiteshArun DavidTutorexamPAL
Can you please brief why E is wrong ?
If the image can be countered then the sales will decline
Also B say Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers. it doesn't explicitly say decline in the direct advertisement will result in decline in sale.



Hey teaserbae,

(E) is wrong because it introduces a new element into the argument. While you are correct that this would counter the image, the original argument said nothing at all about the working conditions in the factory. In other words, worker satisfaction was not part of the original logical chain. Therefore, though it is 'real-world important', it is 'GMAT-wrong', i.e. it does not address the question being asked so is irrelevant.

W.r.t (B), I agree that a small logical leap is required. However, the words 'most effective means' mitigate this leap considerably as they directly imply that the direct advertisements translate (directly) into sales. As this is the best possible option, we'll go with it...

Does that help?
GMAT Club Legend
GMAT Club Legend
Joined: 18 Aug 2017
Status:You learn more from failure than from success.
Posts: 8025
Own Kudos [?]: 4119 [1]
Given Kudos: 242
Location: India
Concentration: Sustainability, Marketing
GMAT Focus 1:
545 Q79 V79 DI73
GPA: 4
WE:Marketing (Energy and Utilities)
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
1
Kudos
weakener type question
close option b/w b &e
option e describes a hypothetical situation which is OFS of the question
so option B is in line with argument and will break the conclusion
IMO B

Bunuel wrote:
Marketing executive for Magu Corporation: Whenever Magu opens a manufacturing facility in a new city, the company should sponsor, or make donations to, a number of nonprofit organizations in that city. Doing so would improve Magu's image in the community, and thus the money spent on such charitable ventures would lead to increased sales.

Which statement would, if true, point to the most serious weakness in the marketing executive's advice?

A. Magu sells its products internationally, so sales in any one city represent only a small portion of total revenue.
B. Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers.
C. If market conditions change, Magu may have to close any such facility or relocate it.
D. Some nonprofit organizations are poorly organized, so money donated to them would be of little benefit to the community.
E. If workers at the manufacturing facility believed their wages or working conditions were poor, their complaints would outweigh any good impressions generated by Magu's donations or sponsorships.


CR74231.01
OG2020 NEW QUESTION
Intern
Intern
Joined: 13 Jun 2016
Posts: 3
Own Kudos [?]: 4 [3]
Given Kudos: 94
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
3
Kudos
Marketing executive for Magu Corporation: Whenever Magu opens a manufacturing facility in a new city, the company should sponsor, or make donations to, a number of nonprofit organizations in that city. Doing so would improve Magu's image in the community, and thus the money spent on such charitable ventures would lead to increased sales.

Which statement would, if true, point to the most serious weakness in the marketing executive's advice?

A. Magu sells its products internationally, so sales in any one city represent only a small portion of total revenue.
B. Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers.
C. If market conditions change, Magu may have to close any such facility or relocate it.
D. Some nonprofit organizations are poorly organized, so money donated to them would be of little benefit to the community.
E. If workers at the manufacturing facility believed their wages or working conditions were poor, their complaints would outweigh any good impressions generated by Magu's donations or sponsorships.


My take on this question :

The argument says : Because spending would increase the image of the company , the money spent on such charitable ventures would lead to increased sales.
Premise: Spending would increase the image of the company.
Conclusion: Spending would lead to increased sales.

A : even if the sales in the one city increases it would anyway lead to increase in revenue .

B : Correctly weakens the argument by saying that even if Magu's image increases , they would not have increased sales

C : Irrelevant as talks about hypothetical scenario not needed in the argument

D : this does not address the increase in sales

E: tempting answer. It negates the premise.
We need to weaken the conclusion or strengthen that :”Spending wouldn’t lead to increased sales"
Option E negates the premise by saying that the bad image created by workers would outweigh the current “good” image of the company.
Senior Manager
Senior Manager
Joined: 11 Feb 2018
Posts: 302
Own Kudos [?]: 195 [2]
Given Kudos: 115
Location: India
Concentration: General Management, Finance
GMAT 1: 690 Q47 V37
GMAT 2: 710 Q50 V36
GMAT 3: 750 Q50 V42
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
2
Kudos
Hi everybody.I got why A,C,D,E are wrong...But how is B correct...?

The argument is saying "spending on charitable ventures will increase sales." It is NOT SAYING "spending is the best way to increase sales"

B says "Spending on charity will lead to fall in advertisements(advertisements being the most effective way to get customers)".

I think the correct option in this statement should weaken the fact that "Spending on charity will increase sales".So we need to go with the option that spending on charity is not good for sales.

Does B clearly tell spending on charity is not good for sales..???I don't think so.

B is telling spending on charity is not good because of less advertisements(which is the best).Who cares if advertisements are the best?Spending on charity could still very well increase sales......IMHO.

What do you guys think..?

I know it is an official source.Please excuse me for my complaint.
Verbal Forum Moderator
Joined: 08 Dec 2013
Status:Greatness begins beyond your comfort zone
Posts: 2100
Own Kudos [?]: 8837 [0]
Given Kudos: 171
Location: India
Concentration: General Management, Strategy
GPA: 3.2
WE:Information Technology (Consulting)
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
redskull1 wrote:
Hi everybody.I got why A,C,D,E are wrong...But how is B correct...?

The argument is saying "spending on charitable ventures will increase sales." It is NOT SAYING "spending is the best way to increase sales"

B says "Spending on charity will lead to fall in advertisements(advertisements being the most effective way to get customers)".

I think the correct option in this statement should weaken the fact that "Spending on charity will increase sales".So we need to go with the option that spending on charity is not good for sales.

Does B clearly tell spending on charity is not good for sales..???I don't think so.

B is telling spending on charity is not good because of less advertisements(which is the best).Who cares if advertisements are the best?Spending on charity could still very well increase sales......IMHO.

Marketing executive for Magu Corporation: Whenever Magu opens a manufacturing facility in a new city, the company should sponsor, or make donations to, a number of nonprofit organizations in that city. Doing so would improve Magu's image in the community, and thus the money spent on such charitable ventures would lead to increased sales.

Which statement would, if true, point to the most serious weakness in the marketing executive's advice?

A. Magu sells its products internationally, so sales in any one city represent only a small portion of total revenue.
B. Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers.
C. If market conditions change, Magu may have to close any such facility or relocate it.
D. Some nonprofit organizations are poorly organized, so money donated to them would be of little benefit to the community.
E. If workers at the manufacturing facility believed their wages or working conditions were poor, their complaints would outweigh any good impressions generated by Magu's donations or sponsorships.

I agree with redskull1's position stated above.
When Magu opens a facility in a new city,
Magu should sponsor Non-profit --> improve Magu's image --> increased sales

The argument does not claim that doing so will maximize the sales or is the best way to increase sales.

B. Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers.-- the argument NEVER claims that spending on charity is the best way to increase sales.
Let's say that Magu's revenue for the current year is 100 million $. With direct ads, it might achieve a revenue of 120 million $ in the following year but if it chooses to spend some money on charity, it will have less amount for direct ads. Nonetheless, it is likely to achieve a revenue of greater than 100 million $ in the following year.(based on our argument)
So, the revenue will still increase.

AjiteshArun , GMATNinja , MagooshExpert , GMATGuruNY , VeritasPrepBrian , MartyTargetTestPrep , DmitryFarber , VeritasKarishma , generis , jennpt , VeritasPrepHailey , other experts - please enlighten
GMAT Club Legend
GMAT Club Legend
Joined: 15 Jul 2015
Posts: 5188
Own Kudos [?]: 4668 [4]
Given Kudos: 635
Location: India
GMAT Focus 1:
715 Q83 V90 DI83
GMAT 1: 780 Q50 V51
GRE 1: Q170 V169
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
2
Kudos
2
Bookmarks
Expert Reply
Skywalker18 wrote:
Let's say that Magu's revenue for the current year is 100 million $. With direct ads, it might achieve a revenue of 120 million $ in the following year but if it chooses to spend some money on charity, it will have less amount for direct ads. Nonetheless, it is likely to achieve a revenue of greater than 100 million $ in the following year.(based on our argument)
So, the revenue will still increase.
Let's say that there are only two strategies available to us, X and Y, both of which require money.

1. money spent on X + money spent on Y = total budget
2. sales due to X + sales due to Y = total sales

If Y is more effective than X (that is, a dollar spent on Y leads to a greater increase in sales than a dollar spent on X), then shifting some of the budget from Y to X will lead to lower total sales.

In the question: the money spent on such charitable ventures would lead to increased sales.
In option B: spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers.

Option B does not tell us that the total budget cannot change, but it gives us some reason to think that there is at least some change in budget allocation from the most effective strategy to another (and therefore less effective) strategy. At this stage, we should check the other options. If we can easily remove them, we don't have to worry about just how convincing B is.
Intern
Intern
Joined: 02 Nov 2018
Posts: 41
Own Kudos [?]: 12 [0]
Given Kudos: 2
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
DavidTutorexamPAL wrote:
teaserbae wrote:
AjiteshArun DavidTutorexamPAL
Can you please brief why E is wrong ?
If the image can be countered then the sales will decline
Also B say Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers. it doesn't explicitly say decline in the direct advertisement will result in decline in sale.



Hey teaserbae,

(E) is wrong because it introduces a new element into the argument. While you are correct that this would counter the image, the original argument said nothing at all about the working conditions in the factory. In other words, worker satisfaction was not part of the original logical chain. Therefore, though it is 'real-world important', it is 'GMAT-wrong', i.e. it does not address the question being asked so is irrelevant.

W.r.t (B), I agree that a small logical leap is required. However, the words 'most effective means' mitigate this leap considerably as they directly imply that the direct advertisements translate (directly) into sales. As this is the best possible option, we'll go with it...

Does that help?


I understand that the worker satisfaction is not relevant but in this case E) mentions their complaints possibly OUTWEIGHING any good impressions generated by the charitable activities. That suggests that the complaints could lead to the overall image not being positive which in turn wouldn't mean increased sales? So surely this points to a weakness in his advice.
examPAL Representative
Joined: 07 Dec 2017
Posts: 1050
Own Kudos [?]: 1783 [0]
Given Kudos: 26
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
jamalabdullah100 wrote:
DavidTutorexamPAL wrote:
teaserbae wrote:
AjiteshArun DavidTutorexamPAL
Can you please brief why E is wrong ?
If the image can be countered then the sales will decline
Also B say Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers. it doesn't explicitly say decline in the direct advertisement will result in decline in sale.



Hey teaserbae,

(E) is wrong because it introduces a new element into the argument. While you are correct that this would counter the image, the original argument said nothing at all about the working conditions in the factory. In other words, worker satisfaction was not part of the original logical chain. Therefore, though it is 'real-world important', it is 'GMAT-wrong', i.e. it does not address the question being asked so is irrelevant.

W.r.t (B), I agree that a small logical leap is required. However, the words 'most effective means' mitigate this leap considerably as they directly imply that the direct advertisements translate (directly) into sales. As this is the best possible option, we'll go with it...

Does that help?


I understand that the worker satisfaction is not relevant but in this case E) mentions their complaints possibly OUTWEIGHING any good impressions generated by the charitable activities. That suggests that the complaints could lead to the overall image not being positive which in turn wouldn't mean increased sales? So surely this points to a weakness in his advice.


Why do you assume that the scenario described in (E) will actually happen?
For the complaints to outweigh good impressions, there must be complaints. We have no information on the existence (or lack thereof) of such complaints so cannot reason about their effect.
Intern
Intern
Joined: 02 Nov 2018
Posts: 41
Own Kudos [?]: 12 [0]
Given Kudos: 2
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
DavidTutorexamPAL wrote:
Why do you assume that the scenario described in (E) will actually happen?
For the complaints to outweigh good impressions, there must be complaints. We have no information on the existence (or lack thereof) of such complaints so cannot reason about their effect.


Does this mean that in Critical Reasoning questions, answers like E) are wrong simply because we have no information that this will be a reality? If so, I did not know this.

Also, does the same logic apply to C) (i.e. can we reject C) based on the same logic)? C) is also a hypothetical situation for which we have no information about its existence in the question.
Intern
Intern
Joined: 30 Dec 2018
Posts: 26
Own Kudos [?]: 6 [0]
Given Kudos: 68
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
AjiteshArun wrote:
Skywalker18 wrote:
Let's say that Magu's revenue for the current year is 100 million $. With direct ads, it might achieve a revenue of 120 million $ in the following year but if it chooses to spend some money on charity, it will have less amount for direct ads. Nonetheless, it is likely to achieve a revenue of greater than 100 million $ in the following year.(based on our argument)
So, the revenue will still increase.
Let's say that there are only two strategies available to us, X and Y, both of which require money.

1. money spent on X + money spent on Y = total budget
2. sales due to X + sales due to Y = total sales

If Y is more effective than X (that is, a dollar spent on Y leads to a greater increase in sales than a dollar spent on X), then shifting some of the budget from Y to X will lead to lower total sales.

In the question: the money spent on such charitable ventures would lead to increased sales.
In option B: spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers.

Option B does not tell us that the total budget cannot change, but it gives us some reason to think that there is at least some change in budget allocation from the most effective strategy to another (and therefore less effective) strategy. At this stage, we should check the other options. If we can easily remove them, we don't have to worry about just how convincing B is.


VeritasKarishma
AjiteshArun

Thanks for the explanations for this question and also detailed analysis. While, I could relate to the analysis provided, I earlier rejected B on the pretext that "something being better than a THING does not make that THING bad, this analogy is said to be used to eliminate options so why it is wrong in this particular context where we are trying to say that just beacuse advertisement are better we cannot infer that the donations are bad. Look forward to your inputs!
Thanks in advance.
Tutor
Joined: 16 Oct 2010
Posts: 14891
Own Kudos [?]: 65231 [2]
Given Kudos: 431
Location: Pune, India
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
2
Kudos
Expert Reply
MAnkur wrote:
AjiteshArun wrote:
Skywalker18 wrote:
Let's say that Magu's revenue for the current year is 100 million $. With direct ads, it might achieve a revenue of 120 million $ in the following year but if it chooses to spend some money on charity, it will have less amount for direct ads. Nonetheless, it is likely to achieve a revenue of greater than 100 million $ in the following year.(based on our argument)
So, the revenue will still increase.
Let's say that there are only two strategies available to us, X and Y, both of which require money.

1. money spent on X + money spent on Y = total budget
2. sales due to X + sales due to Y = total sales

If Y is more effective than X (that is, a dollar spent on Y leads to a greater increase in sales than a dollar spent on X), then shifting some of the budget from Y to X will lead to lower total sales.

In the question: the money spent on such charitable ventures would lead to increased sales.
In option B: spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers.

Option B does not tell us that the total budget cannot change, but it gives us some reason to think that there is at least some change in budget allocation from the most effective strategy to another (and therefore less effective) strategy. At this stage, we should check the other options. If we can easily remove them, we don't have to worry about just how convincing B is.


VeritasKarishma
AjiteshArun

Thanks for the explanations for this question and also detailed analysis. While, I could relate to the analysis provided, I earlier rejected B on the pretext that "something being better than a THING does not make that THING bad, this analogy is said to be used to eliminate options so why it is wrong in this particular context where we are trying to say that just beacuse advertisement are better we cannot infer that the donations are bad. Look forward to your inputs!
Thanks in advance.


You are right. Advertisements are better does not mean donations are bad. But when budget is limited and revenue has to be maximised, the budget has to go to the most productive use only. Then advertisements are better means we should not make donations.
e.g.
Say I have $100 to spend on marketing and I need to maximise revenue. There are 3 things I can do with the marketing budget - Give ads, give free samples and donate money to NGO. Say every $1 of money to Ads will bring in $10. every $1 spent on free samples will bring in $8 and every $1 donated will bring in $5 in revenue.

Now note that my aim is to maximise revenue. How should I spend $100 of marketing budget? Should I say that because advertisement is best doesn't mean other two are bad and hence I should distribute equally to all 3 uses? No. I need to maximise my revenue so I should devote the entire $100 to advertisement.

That is the case here too.
Manager
Manager
Joined: 17 Aug 2018
Posts: 119
Own Kudos [?]: 157 [1]
Given Kudos: 150
Location: India
Schools: IIMA WBS '22
GMAT 1: 640 Q46 V32
GMAT 2: 710 Q49 V38
Send PM
Re: Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
1
Kudos
Marketing executive for Magu Corporation: Whenever Magu opens a manufacturing facility in a new city, the company should sponsor, or make donations to, a number of nonprofit organizations in that city. Doing so would improve Magu's image in the community, and thus the money spent on such charitable ventures would lead to increased sales.

Which statement would, if true, point to the most serious weakness in the marketing executive's advice?


Hope it helps!! and let me know if you have any doubts. (A) Magu sells its products internationally, so sales in any one city represent only a small portion of total revenue.- Impact- Increased sale can be miniscule.
(B) Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers.- Impact-This answer choice implies that sale may decrease.
(C) If market conditions change, Magu may have to close any such facility or relocate it.- Impact- Till the time falility relocates, sell may increase.
(D) Some nonprofit organizations are poorly organized, so money donated to them would be of little benefit to the community.- Impact- To some organizations donation may not increase sales, but to other organization sales may increase.
(E) If workers at the manufacturing facility believed their wages or working conditions were poor, their complaints would outweigh any good impressions generated by Magu's donations or sponsorships. Impact- Can't assume that denotation will decrease the wages or make working conditions poor. Therefore, this answer choice does not bear any impact on the conclusion.

Post analysing the answer choices, we can clearly see that answer choice B is the best pick. Remember- Correct weaken answer choice does not need to prove the conclusion wrong. Even if the answer creates a doubt, it can be a right answer choice.

GMATNinja Sir, Kindly share your feedback on this analysis.

Originally posted by KaranB1 on 29 Jul 2019, 22:18.
Last edited by KaranB1 on 29 Jul 2019, 22:26, edited 1 time in total.
Manager
Manager
Joined: 17 Aug 2018
Posts: 119
Own Kudos [?]: 157 [1]
Given Kudos: 150
Location: India
Schools: IIMA WBS '22
GMAT 1: 640 Q46 V32
GMAT 2: 710 Q49 V38
Send PM
Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
1
Kudos
jamalabdullah100 wrote:
DavidTutorexamPAL wrote:
Why do you assume that the scenario described in (E) will actually happen?
For the complaints to outweigh good impressions, there must be complaints. We have no information on the existence (or lack thereof) of such complaints so cannot reason about their effect.


Does this mean that in Critical Reasoning questions, answers like E) are wrong simply because we have no information that this will be a reality? If so, I did not know this.

Also, does the same logic apply to C) (i.e. can we reject C) based on the same logic)? C) is also a hypothetical situation for which we have no information about its existence in the question.



jamalabdullah100

Lets analyse the impact both answer choice C and E.

(C) If market conditions change, Magu may have to close any such facility or relocate it.- Impact- Till the time falility relocates, sell may increase.

(E) If workers at the manufacturing facility believed their wages or working conditions were poor, their complaints would outweigh any good impressions generated by Magu's donations or sponsorships. Impact- Can't assume that denotation will decrease the wages or make working conditions poor. Therefore, this answer choice does not bear any impact on the conclusion.

Let me know if you still have any doubts.
GMAT Club Bot
Marketing executive for Magu Corporation: Whenever Magu opens a manufa [#permalink]
 1   2   
Moderators:
GMAT Club Verbal Expert
6927 posts
GMAT Club Verbal Expert
238 posts
CR Forum Moderator
832 posts

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne