The costs we have incurred to develop a smartphone application for our

Question

The costs we have incurred to develop a smartphone application for our company's Qoop product has far exceeded the costs to develop our web platform and the mobile-friendly version of our website. The returns, thus far, do not even come close to recouping our initial investment. We should cap next year's marketing budget for Qoop at $100K. If user adoption for Qoop does not increase to a level that would result in conversion in sales that would, in 2-3 years, result in a modest profit, we should stop the project, cut our losses, and focus on developing another product.Our innovative application still hasn't gained attention from media. As with all types of product launches these days, we need to get the word out fast and get this product to go viral. I recommend a marketing budget closer to $400K. This will allow us to use some big name celebrities to help us get the word out on television, in magazines, and even through social networks like Facebook and Twitter. Once we get over the hump, further expense will be neglible as marketing will be largely free and will occur through word of mouth. Without strong celebrity promotion from the very beginning, the product launch will fizzle away and die unspectacularly - we'll never recoup our largest product development cost. For anything to go viral, it must have a cool factor, be funny, and be useful. A big name celebrity can help us get over that hump.Qoop helps complement our existing product offering. While Qoop expenses have been our largest product development cost, the cost should also be shared among the low costs of our other products. In addition, no product should be looked at as a standalone product. It's more important for us to grow our market share and gain competitive advantage in our industry. To do this, we have to launch more products and start generating a portfolio of products to match our big competitors. We should be marketing all of our products alongside Qoop and not just pigeonhole ourselves to promoting just one product whenever we access the TV or social media marketing channels.

j4jeet · Answer

As you read the conversation.. CEO says that  "The costs we have incurred to develop a smartphone application for our company's Qoop product has far exceeded the costs to develop our web platform and the mobile-friendly version of our website"

And in the last tab CEO says that " we have to launch more products and start generating a portfolio of products to match our big competitors"

So we can infer that the app they made was too costly but they had necessary developers to develop other stuff too..

Hope you get the point!

Its tough to explain..

maikikiuu · Answer

If C is the right choice, one must make the assumption that product launch = more developers (C); if so, one could also assume that launch of product = need more fund to develop a product (A). An option requires additional but not universally-accepted assumption(s) is not likely the correct answer of GMAT.

Kripanshi95 · Answer

Can anyone explain this ? 
Should A not be the correct answer ? The passage says that the company can cut its losses and focus on developing new products - for doing so they should have money which is what A points to precisely. Wheras in C, it talks about the number of developers which has not been a point if discussion in the entire passage and cannot be inferred without assumptions

jabhatta2 · Answer

GMATGuruNY  - curious on your thoughts. Is this really C ? I am surprised - i selected A straight because of the line by the CEO

If the CEO is stating we have to launch more products...well unless the products are already prepared beforehand and just kept in an inventory same where - one can infer that these products have to be developed and then launches will begin.

Thus, not only the developers -- but anyone who reads the statement above in blue -- can safely assume -- there is some extra money in the bank to develop and then launch these products THAT the CEO wants us to launch.

jabhatta2 · Answer

GMATGuruNY  - C to me seemed wrong because per the below in purple - the CEO is referring to Qoop's development cost

Option C on the other hand uses the word "financial resource"

Financial resource is a very broad term and in my view, includes a lot more than just product development cost. Financial resources includes ALL kinds of expeneses == development cost + marketing cost + indirect costs (cost incurred but not related to the product - rent / lawyers / day to day business operations like cost of domain name) ... .....

Thoughts

DhruvBadaya · Answer

This is Critical Reasoning. You do not have to select the correct answer. You have to select the best answer. Now, note that everything after  not necessarily  does not count because it can be true or can be false. It is there just to confuse you. So, ignore everything after  not necessarily.  Now, try this RC again.

Blackcrow1972 · Answer

Let's carefully analyze A:

A: "The company has enough funds for development on a new product."
Why it might seem correct:
The CEO mentions that Qoop complements the company's existing product offering and emphasizes building a portfolio of products to grow market share. This could imply that the company might be willing to invest in new products.
The CFO, while critical of Qoop's current performance, does not explicitly say the company lacks funds. Instead, they focus on capping the marketing budget and reevaluating Qoop’s future.
Why it is incorrect:
No direct evidence about available funds:

None of the statements explicitly confirm or imply that the company has enough funds for a new product.
While the CEO supports a long-term strategy of launching more products, this reflects a strategic priority, not a guarantee of financial capacity to fund new development.
Focus on Qoop's costs:

The CFO highlights that Qoop's development costs have been very high, and they even suggest potentially cutting losses if it doesn’t perform better. This implies financial caution rather than confidence in funding new development.
The question is about developers' views:

A doesn't relate to developers’ perspectives. There’s no evidence in the document that developers are concerned about the company’s ability to fund new projects. It focuses on financial considerations rather than developer-specific insights.

hemanthPA · Answer

ITS NOT TOUGH TO EXPLAIN, THERE IS LITERALLY NO INFO ON THE DEVELOPERS, ITS CLEARLY AN ASSUMPTION YOU NEED TO MAKE BECAUSE YOU KNOW THE ANSWER IS "C"

rak08 · Answer

if we try to reason this :
1. Company has enough fund to develop new product : (when it comes to fund i immediately go to CFO)

No mention of funds availability, CEO :  "  It's more important for us to grow our market share and gain competitive advantage in our industry. To do this, we have to launch more products and start generating a portfolio of products to match our big competitors."   
 CEO advocates launching more products to gain advantage but that doesn't mean we have funds. (analogy : Its like saying buying a car will help be save an hour of travel > this doesn't indicate i have funds)

2.  As the adoption of Qoop grows with the company's marketing efforts, more development resources are needed to position the product to scale.  
 "development resources" ?? no not development , just advertisement.

3.  It has taken more financial resources, but not necessarily more developers, to create Qoop than other products.  
 CEO :  While Qoop expenses have been our largest product development cost  
 CFO :  The costs we have incurred to develop a smartphone application for our company's Qoop product has far exceeded the costs to develop our web platform and the mobile-friendly version of our website.

All the points above indicate that its an expensive affair however none of the tabs indicate that "x" no of people were employed for the same.. 
 so CORRECT.

4  Developer can do a better job to gain user adoption for the smartphone application than can marketers with no technical knowledge.  
   No why?   
   Marketers have a plan through influencing and developers have no expressed opinion to gauge that they are better.

5. Marketing - turned 2.0; it is technical marketers who are experienced in programming that are needed to help spread the word throughout the web, not traditional marketers.

This is generic, we are not challenging the marketers competency in any - way here.    
     this is why 4&5 are out.

Dream009 · Answer

I marked option A - and I don't know how can we infer for developers. Can someone explain why A is wrong?

ARJUN0007 · Answer

please provide a sol

	The company has enough funds for development on a new product.
	As the adoption of Qoop grows with the company's marketing efforts, more development resources are needed to position the product to scale.
	It has taken more financial resources, but not necessarily more developers, to create Qoop than to create the company's other products.
	Developers can do a better job to gain user adoption for the smartphone application than can marketers with no technical knowledge.
	Marketing has turned 2.0; it is technical marketers who are experienced in programming that are needed to help spread the word throughout the web, not traditional marketers.

The costs we have incurred to develop a smartphone application for our

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