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# Seeking a competitive advantage, some professional service

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Senior Manager
Joined: 19 Nov 2007
Posts: 467
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09 Feb 2008, 08:43
1
KUDOS
Question 1
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89% (02:56) correct 11% (00:42) wrong based on 19

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Question 2
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82% (02:44) correct 18% (01:05) wrong based on 17

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Question 3
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80% (02:43) correct 20% (00:47) wrong based on 15

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Question 4
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93% (02:41) correct 7% (01:20) wrong based on 15

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Question 5
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79% (03:15) correct 21% (00:35) wrong based on 14

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Question 6
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67% (04:02) correct 33% (00:55) wrong based on 15

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Seeking a competitive advantage, some professional
service firms(for example, firms providing advertising,
accounting, or health care services) have considered
offering unconditional guarantees of satisfaction. Such
(5) guarantees specify what clients can expect and what the
firm will do if it fails to fulfill these expectations.
Particularly with first-time clients, an unconditional
guarantee can be an effective marketing tool if the
client is very cautious, the firm's fees are high, the
(10) negative consequences of bad service are grave, or
business is difficult to obtain through referrals and
word-of-mouth.
However, an unconditional guarantee can sometimes
hinder marketing efforts. With its implication that fail-
(15) ure is possible, the guarantee may, paradoxically, cause
clients to doubt the service firm's ability to deliver the
promised level of service. It may conflict with a firm's
desire to appear sophisticated, or may even suggest that
a firm is begging for business. In legal and health care
(20) services, it may mislead clients by suggesting that law-
suits or medical procedures will have guaranteed out-
comes. Indeed, professional service firms with outstanding
reputations and performance to match have little to gain from offering unconditional guarantees. And any firm
(25) that implements an unconditional guarantee without undertaking a commensurate commitment to quality of service is merely employing a potentially costly marketing gimmick.

39. The primary function of the passage as a whole is to

A account for the popularity of a practice
B evaluate the utility of a practice
C demonstrate how to institute a practice
D weigh the ethics of using a strategy
E explain the reasons for pursuing a strategy
OA & OE
[Reveal] Spoiler:
(A) Th e passage does not discuss the popularity of guarantees.
(C) Th e passage does not show how to put guarantees into place.
(D) The passage does not discuss ethics.
(E) Th e fi rst paragraph does explain the reasons for off ering guarantees, but that is only a portion of the passage, not the passage as a whole.
Th e correct answer is B.

40. All of the following are mentioned in the passage as circumstances in which professional service firms can benefit from offering an unconditional guarantee EXCEPT:

A The firm is having difficulty retaining its clients of long standing.
B The firm is having difficulty getting business through client recommendations.
C The firm charges substantial fees for its services.
D The adverse effects of poor performance by the firm are significant for the client.
E The client is reluctant to incur risk.
OA & OE
[Reveal] Spoiler:
(A) The sentence begins by noting that unconditional guarantees are particularly important with new clients; clients of long standing are not discussed.
(B) Lines 12–13 include the diffi culty of getting business through referrals and word-ofmouth.
(C) Line 10 cites high fees as such a circumstance.
(D) Lines 10–11 include the severe repercussions of bad service.
(E) Lines 9–10 cite the cautiousness of the client.
Th e correct answer is A.

41. Which of the following is cited in the passage as a goal of some professional service firms in offering unconditional guarantees of satisfaction?

A A limit on the firm's liability
B Successful competition against other firms
C Ability to justify fee increases
D Attainment of an outstanding reputation in a field
E Improvement in the quality of the firm's service
OA & OE
[Reveal] Spoiler:
(A) Th e passage does not mention liability limits.
(B) Correct. Some firms off er unconditional guarantees as a way to compete successfully against firms that do not off er them.
(C) Line 10 mentions that high fees would be a reason to off er guarantees, but fee increases are not discussed.
(D) Th e second paragraph suggests the reverse: offering a guarantee may hurt a firm’s reputation.
(E) Improving the quality of service is not mentioned as a reason to off er guarantees.
Th e correct answer is B.

42. The passage's description of the issue raised by unconditional guarantees for health care or legal services most clearly implies that which of the following is true?

A The legal and medical professions have standards of practice that would be violated by attempts to fulfill such unconditional guarantees.
B The result of a lawsuit of medical procedure cannot necessarily be determined in advance by the professionals handling a client's case.
C The dignity of the legal and medical professions is undermined by any attempts at marketing of professional services, including unconditional guarantees.
D Clients whose lawsuits or medical procedures have unsatisfactory outcomes cannot be adequately compensated by financial settlements alone.
E Predicting the monetary cost of legal or health care services is more difficult than predicting the monetary cost of other types of professional services
OA & OE
[Reveal] Spoiler:
(A) Although this statement may be true, it
cannot be derived from the cited reference.
(B) Correct. Legal and medical professionals cannot guarantee the outcomes of their work.
(C) This statement cannot be drawn from the description of the issue.
(D) Compensation is not discussed in the reference.
(E) Predicting costs is not discussed in the reference.
Th e correct answer is B.

43. Which of the following hypothetical situations best exemplifies the potential problem noted in the second sentence of the second paragraph (lines 14-17)?

A A physician's unconditional guarantee of satisfaction encourages patients to sue for malpractice if they are unhappy with the treatment they receive.
B A lawyer's unconditional guarantee of satisfaction makes clients suspect that the lawyer needs to find new clients quickly to increase the firm's income.
C A business consultant's unconditional guarantee of satisfaction is undermined when the consultant fails to provide all of the services that are promised.
D An architect's unconditional guarantee of satisfaction makes clients wonder how often the architect's buildings fail to please clients.
E An accountant's unconditional guarantee of satisfaction leads clients to believe that tax returns prepared by the accountant are certain to be accurate.
OA & OE
[Reveal] Spoiler:
(A) In this case, the problem occurs after, not before, the service is rendered.
(B) This situation exemplifies another problem of unconditional guarantees, the suggestion that a firm is begging for business (line 21).
(C) The problem occurs after, not before, the service is rendered.
(D) Correct. Th e architect’s apparent need to off er an unconditional guarantee makes potential clients question the outcome of the architect’s work by suggesting the likelihood of their dissatisfaction with the architectural services.
(E) This situation contradicts the problem.
Th e correct answer is D.

44. The passage most clearly implies which of the following about the professional service firms mentioned in line 22?

A They are unlikely to have offered unconditional guarantees of satisfaction in the past.
B They are usually profitable enough to be able to compensate clients according to the terms of an unconditional guarantee.
C They usually practice in fields in which the outcomes are predictable.
D Their fees are usually more affordable than those charged by other professional service firms.
E Their clients are usually already satisfied with the quality of service that is delivered.
OA & OE
[Reveal] Spoiler:
(A) The statement in the passage concerns the present; nothing is implied about what may have been true in the past.
(B) Th e statement includes no information about profitability, so no inference may be drawn.
(C) No information is provided about specific fields or likely outcomes.
(D) Fees are not discussed in this statement.
(E) Correct. No guarantee is needed when clients are already satisfied with the quality of work provided.
Th e correct answer is E

[Reveal] Spoiler: Question #1 OA
[Reveal] Spoiler: Question #2 OA
[Reveal] Spoiler: Question #3 OA
[Reveal] Spoiler: Question #4 OA
[Reveal] Spoiler: Question #5 OA
[Reveal] Spoiler: Question #6 OA

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Last edited by Vyshak on 24 Nov 2016, 09:32, edited 2 times in total.
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Manager
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09 Feb 2008, 13:30
B
A
B
B
D
E
Senior Manager
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09 Feb 2008, 15:09
ontheway wrote:
B
A
B
B
D
E

bingo!
OA: B,A,B,B,D,E

can you explain 4] and 6]?

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09 Feb 2008, 16:59
1-b
2-a
3-b
4-b
5-d
6-e

6 , refer to the last few sentences. If firms already have a good rep in the community, then putting out a satisfaction guarantee isnt necessary, because they already have a good rep, and they dont need to boost this anymore by using this marketing tactic.
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09 Feb 2008, 17:48
pmenon wrote:
1-b
2-a
3-b
4-b
5-d
6-e

6 , refer to the last few sentences. If firms already have a good rep in the community, then putting out a satisfaction guarantee isnt necessary, because they already have a good rep, and they dont need to boost this anymore by using this marketing tactic.

Yes, but where does it indicate that the legal and healthcare firms's clients are already satisfied?
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Manager
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10 Feb 2008, 03:02
4. The passage's description of the issue raised by unconditional guarantees for health care or legal services most clearly implies that which of the following is true?

However, an unconditional guarantee can sometimes hinder marketing efforts. With its implication that failure is possible, the guarantee may, paradoxically, cause clients to doubt the service firm's ability to deliver the promised level of service. it may mislead clients by suggesting that lawsuits or medical procedures will have guaranteed outcomes.

6. The passage most clearly implies which of the following about the professional service firms mentioned in line 22?

professional service firms with outstanding reputations and performance to match have little to gain from offering unconditional guarantees. And any firm that implements an unconditional guarantee without undertaking a commensurate commitment to quality of service is merely employing a potentially costly marketing gimmick.

Passage says that professional service firms with outstanding reputation and performance don't gain much from offering unconditional guarantees. In the next sentence author refers to the commitment to the quality of service. Therefore we can infer that their clients are usually already satisfied with the quality of service that is delivered, then only we can say that firms have outstanding reputation and performance.

Other things is that none other answer choice comes close to this.
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11 Feb 2008, 05:27
I had this RC today on GMATPrep1.

Tricky passage.
Senior Manager
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11 Feb 2008, 17:40
I had this RC today on GMATPrep1.

Tricky passage.

can you confirm if the answers I posted are correct?
I am kind of doubtful about the source.
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Concentration: Marketing, Finance
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05 Feb 2013, 22:46
1. The primary function of the passage as a whole is to

A account for the popularity of a practice
The passage mentions that "unconditional guarantees" are performed by "some firms." "Some" is not strong enough to exude "popularity". OUT!

B evaluate the utility of a practice
CORRECT!

C demonstrate how to institute a practice
The passage mentions that the practice entails a promise to customers in case of failure. However, in the second paragraph it discusses the cons of such practice. "How" of the practice is definitely not the primary purpose. OUT!

D weigh the ethics of using a strategy
Ethics is irrelevant to the whole passage. OUT!

E explain the reasons for pursuing a strategy
Reasons are mentioned in the first paragraph but not in the second. Definitely, not the main purpose. OUT!

2. All of the following are mentioned in the passage as circumstances in which professional service firms can benefit from offering an unconditional guarantee EXCEPT:

A The firm is having difficulty retaining its clients of long standing.
CORRECT!

B The firm is having difficulty getting business through client recommendations.
Mentioned in line 11

C The firm charges substantial fees for its services.
line 9

D The adverse effects of poor performance by the firm are significant for the client.
line 10

E The client is reluctant to incur risk.
line 9

3. Which of the following is cited in the passage as a goal of some professional service firms in offering unconditional guarantees of satisfaction?

In the first sentence of the passage: "Seeking a competitive advantage, some professional
service firms(for example, firms providing advertising,
accounting, or health care services) have considered
offering unconditional guarantees of satisfaction"

B Successful competition against other firms
CORRECT!

4. The passage's description of the issue raised by unconditional guarantees for health care or legal services most clearly implies that which of the following is true?

In the first paragraph: "In legal and health care
(20) services, it may MISLEAD clients BY SUGGESTING THAT law-
suits or medical procedures will have guaranteed out-
comes" - This means there is no such guaranteed outcomes.

A standards of practice IRRELEVANT TO THE PARTICULAR SENTENCE

B The result of a lawsuit of medical procedure cannot necessarily be determined in advance by the professionals handling a client's case.
CORRECT

C dignity IRRELEVANT TO THE PARTICULAR SENTENCE
D outcomes cannot be adequately compensated IRRELEVANT TO THE PARTICULAR SENTENCE
E monetary cost IRRELEVANT TO THE PARTICULAR SENTENCE

5. Which of the following hypothetical situations best exemplifies the potential problem noted in the second sentence of the second paragraph (lines 14-17)?

Doubt the firm's ability -
" With its implication that fail-
(15) ure is possible, the guarantee may, paradoxically, cause
clients to doubt the service firm's ability to deliver the
promised level of service"

D An architect's unconditional guarantee of satisfaction makes clients wonder how often the architect's buildings fail to please clients.

6. The passage most clearly implies which of the following about the professional service firms mentioned in line 22?

Indeed, professional service firms with outstandin
reputations and performance
to match have little to gain
from offering unconditional guarantees

E Their clients are usually already satisfied with the quality of service that is delivered.
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17 Sep 2014, 13:10
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Re: Seeking a competitive advantage, some professional service   [#permalink] 17 Sep 2014, 13:10
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