To persuade consumers to buy its personal computers for home use

Question

To persuade consumers to buy its personal computers for home use, SuperComp has enlisted computer dealers in shopping centers to carry its product and launched a major advertising campaign that has already increased public awareness of the SuperComp brand. Despite the fact that these dealers achieved dramatically increased sales of computers last month, however, analysts doubtthatSuperComp's products accounted for much of that increase.

Which of the following, if true, best supports the claim that the analysts' doubt is well founded?

Which of the following, if true, best supports the claim that the analysts’ doubt is well founded?

(A) In market surveys, few respondents who had been exposed to SuperComp’s advertising campaign said they thought there was no point in owning a home computer.

(B) People who own a home computer often buy a second such computer, but only rarely do people buy a third computer.

(C) SuperComp’s dealers also sell other brands of computers that are very similar to SuperComp’s but less expensive and that afford the dealers a significantly higher markup.

(D) The dealers who were chosen to sell SuperComp’s computers were selected in part because their stores are located in shopping centers that attract relatively wealthy shoppers.

(E) Computer-industry analysts believed before the SuperComp campaign began that most consumers who already owned home computers were not yet ready to replace them.

The passage states that the stores through which SuperComp is selling its computers are experiencing dramatically increased sales. Analysts doubt, however, that SuperComp's plan for selling this computers for home use is really working. The question asks you to identify a fact that justifies the analysts' doubt.

Choice C is the best answer. If consumers who are drawn to a SuperComp dealer find less expensive alternatives that the dealer has a strong incentive to sell to them, the analysts' doubt is justified, since it is likely that the increase in the dealer's sales is due not to sales of SuperComp's computers, but rather to sales of these other brands.

Choice A is incorrect; it suggests that there is a market for home computers, so does nothing to justify the analysts' doubts.

Choice B is incorrect because it provides information about the consumers' buying inclinations, but does not provide justification for the analysts' doubts, given that the dealers were actually selling more computers than usual.

Choice D is incorrect since it suggests that SuperComp chose well-located dealers, and does nothing to justify the analysts' doubts.

Finally, the beliefs mentioned in choice E, which were formed before the campaign, cannot justify the analysts' doubts in the face of the evidence about increased sales.

VeritasPrepBrian · Accepted Answer

Really good question. The conclusion is saying "yes sales are up at these retailers, but analysts don't think that the marketing plan is bringing SuperComp the sales it wants."

A couple common CR themes are in play here:

1) Correlation vs. causation. That's a really common theme in CR problems - just because two things occurred together (the marketing plan and increased sales at the retailers) doesn't mean that one caused the other. The most common way to expose that flaw is finding an alternate cause.

2) "Mismatched" specificity. Notice here that SuperComp implemented the marketing plan...but the increased sales aren't attributed to SuperComp, but instead to "the retailers who sell SuperComp" - that should scream to you "wait, we don't know that sales of SuperComp are up - it could be sales of something else the retailer sells!"

If you're looking at either of those you should be in good shape here. Technically this one is more about #2 (there's a good argument that the marketing plan *is* the cause of extra sales...just not for SuperComp) but as you're training yourself to recognize flaws you can see that this one is a combination of those two.

amit2k9 · Answer

My two cents -

Considering that you have been frequent to the GMAT club forum and have answered good number of questions in SC,CR and RC forums already -

Ill suggest --

1. Take a time bound practice session for CR and see how many correct answers you get.Once you are able to stick with your accuracy,then start decreasing the time limit for each CR and speed up.

2. Figure out which kind of CR troubles you the most and have a random stab through of those CR's quite frequently. This will boost your confidence overall for CR's and hence improve your timing.

Don't be too hard on yourself --Its expectations Vs a Reality check that always keeps things in perspective.

Good luck with your preparations.

Bunuel · Answer

The passage states that the stores through which SuperComp is selling its computers are experiencing dramatically increased sales. Analysts doubt, however, that SuperComp's plan for selling tis computers for home use is really working. The question asks you to identify a fact that justifies the analysts' doubt.

Choice C is the best answer. If consumers who are drawn to a SuperComp dealer find less expensive alternatives that the dealer has a strong incentive to sell to them, the analysts' doubt is justified, since it is likely that the increase in the dealer's sales is due not to sales of SuperComp's computers, but rather to sales of these other brands.

Answer: C.

MBAPrepCoach · Answer

I would first paraphrase the question which is basically saying why is this a stupid idea. Then I would figure out why they're selling lots of computers but they're not successful. C is the only choice that touches on sales but not successful - when you look at the stimuli, it says they are selling lots of computers but not necessarily super comp computers. So there's a scope shift between super comp and computers. Hope this helps!

Farrell Dyan Hehn, MBA
Admissions Consultant & Verbal Tutor MBAPrepCoach.com

mallya12 · Answer

Despite the fact that these dealers achieved dramatically increased sales of computers last month, however, analysts doubt that the marketing plan is bringing Super Comp the desired success.

what does this conclusion mean? If there is an increase in the sales of computer why do the analysts doubt??

I thought it was not the dealers but the marketing plan(advertisement) is responsible for super comps success.

Can someone please explain the conclusion.

mallya12 · Answer

VeritasPrepBrian

Thank you for all the helpful information.

Well just one doubt, The official Answer posted here tells that "Analysts doubt that SuperComp's plan for selling this computers for home use is really working"

What I thought is Super Comps plans are successful but their success is attributed to their marketing plans(Advertisement) and not because of the dealers.

In short sales of super comps was high - reason: because of marketing and not because of the dealers.

I guess I am misinterpreting the conclusion(whatever I am describing is contradicting to the official explanation i.e the sales of super comps is not high)

Could you please clarify this.

warrior1991 · Answer

VeritasPrepBrian   VeritasKarishma   GMATNinja   generis

I have a question regarding option E

Currently the option E is :-

If the option E were this :-

Would it be correct answer choice then ??

generis · Answer

warrior1991  , I confess, I am at a loss.

I cannot figure out where you want to go with this argument.
Make the argument:
how does this new E support the analysts' doubt?

Given the premises—no, I cannot see how changing E 
to the second version would support the analysts' doubt.

Fact: Supercomp enlisted dealers to carry Supercomp's home computers. 
Supercomp did massive advertising.
Fact: dealers' sales of computers  generally  increased dramatically.

We are never told that any portion of the sales increase went to Supercomp.

Analysts say: Supercomp's products were  not  a big portion of that sales increase.

Why, if computers are selling well generally, 
do analysts think that Supercomp's products account for  very little  of the sales increase?
We want to support the analysts' doubt.

I think E has too many variables to control for.

One, something must distinguish the computers that sell from those that do not: 
Kind (office vs. home)? price? quality? (Answer C, dealer profit plus consumer gets lower price?)
Answer E as written does not distinguish computers that sold from those sold by Supercomp.
I think that you may be assuming that only Supercomp sells home computers.

Two, E assumes that the most important computer purchasers to watch are those people 
who already own a home computer but who aren't ready to buy another yet.

Let's say that every computer sold in the marginal increase was a home computer.
But everyone in E stayed home.

Analysts' doubt per option E in this scenario? Not supported. If the increase was all due to home computer sales, given the marketing campaign, analysts should believe that Supercomp did remarkably well.

Everyone who does NOT fit in the group defined by E must have gone to buy a home computer.
Did almost everyone in that group avoid buying a Supercomp home computer? We don't know.

If home computer sales increased overall, then E, 
however it is formulated, does not support the analysts' doubt.

Option E focuses on too narrow a portion of the home computer buying population.
We need to know 
(1) that Supercomp and only Supercorp makes home computers,
and 
(2) that buyers who already own a home computer are the most important buyers to watch to determine sales patterns.

What if this population in E constitutes only 10% of the home computer buying population?

We have no idea.  When  the analysts figure out that this specific population 
is not yet ready to buy does not matter much . . .

unless we also know that this population is a huge portion of all home computer buyers 
and that only Supercomp makes home computers.

• IF people who already own a home computer 
constitute a huge portion of ALL home computer buyers, 
 and  that population is not ready to buy;  and 
• IF Supercomp is the only company selling  home  computers;
• THEN the increase in sales of computers was NOT an increase in sales of home computers,
(because the group in E stayed home), and the doubting analysts are correct.

Then the analysts could say:
• The vast majority of purchasers who buy and thus drive sales in the home-computer market
did not want to buy right then. No one came out to buy  home  computers.  Doubt supported. 
• Many people came out to buy  not -home computers. They bought office computers instead. 
Sales went up for other kinds of computers.  Facts not contradicted.

I hope that helps.

KarishmaB · Answer

Note that this cannot be the belief of the analysts AFTER the campaign because already super comp would have seen dramatic increase in sales. 
You can hold a belief for future but when the results are already in front of you, how can you still believe something that goes against the result?
Even if the increased sale comes from first time buyers, there could be many more such people.

We need something that says that the campaign may not be having the desired impact, something that gives us a shortcoming of the campaign. So (E) cannot work.

generis · Answer

mallya12  ,
I think that a response will not make sense until the conclusion is clear. I think you got really turned around.

It is easy to get turned around.

Reason backwards in this question. Your assertions do not reason backwards. You keep starting with everything except the conclusion. 
 
No. Sales of Supercomp computers cannot have been high.

Just because the plan was supposed to produce increased Supercomp sales  does not mean  that the plan worked.

If Supercomp sales had been high, why would analysts think that Supercomp's marketing failed?

Reason backwards.

Start with what the analysts think.

Read really carefully.

Fact: Supercomp convinced some computer dealers to sell Supercomp's home computers.

Fact: These dealers may have carried other brands. We are told nothing.

Fact: Supercomp ran a big marketing campaign.

Fact: Dealers' sales of computers GENERALLY increased significantly.

Problem #1: we do not know whether the increased sales came from the purchase of HOME computers, office computers, car computers, spaceship computers, etc.

The words say only that dealers achieved dramatically increased sales  of computers  last month. The words do NOT say "dramatically increased sales of HOME computers."

Problem #2: even if the entire sales increase was created by more sales of  home  computers (the kind that Supercomp makes), we are NEVER told whether the dealers actually sold any  Supercomp  computers.

We think about these problems when we see the conclusion that

analysts doubt that the marketing plan is bringing SuperComp the desired success.

Why would analysts doubt?  Because Supercomp's sales went UP? No. 
Why do analysts doubt? What must they be looking at? Bad sales numbers.

Again: Analysts doubt that the marketing plan worked because  Supercomp's  sales did NOT increase even during a general rise in computer sales.

Marketing Plan success = increased sales 
If MP, then increased sales.
If X, then Y.

Contraposition (valid!) (Reasoning backwards)

If not Y, then not X.
If no increased sales? 
Then marketing plan was NOT successful.

Stated differently: If the marketing plan had been successful, Supercomp would have increased its sales.

There is exactly one reason, in other words, for the analysts to doubt that Supercomp's marketing plan worked.

The one reason is that  Supercomp's  computer sales did not go up.

I hope that I clarified what seems to be a lot of confusion about the conclusion here.

Analysts think that the marketing plan failed because Supercomp's sales were low.

Now we have to find the answer that supports the analysts' doubt.

Something is wrong.

Sales of computers generally increased significantly.

But analysts think that Supercomp's marketing plan did not work. Supercomp should have had high sales.

Analysts doubt that the "increase sales" marketing plan worked almost certainly because sales of  Supercomp  home computers were NOT high, were NOT a big part of the increase.

Why would dealers sell very few Supercomp computers at the same time that dealers are selling a lot more computers generally?

(1) Something is wrong with Supercomp's computers compared to other brands' computers. In a retail market sense, something is wrong.

Maybe: 
-- Supercomp computers cost too much compared to other brands' computers
-- Supercomp computers gave dealers a smaller profit margin than other brands' computers did
-- Other brands offered both buyer and seller incentives that Supercomp did not offer

Or
maybe
(2) the increase in sales of "computers" was NOT an increase in sales of  home  computers.

Only one answer fits.

Option C gives us what we need to support what the analysts believe.

(C) SuperComp’s dealers also sell other brands of computers that are very similar to SuperComp’s but less expensive and that afford the dealers a significantly higher markup.

Break it down

SuperComp’s dealers also sell OTHER brands of computers 
 -- the dealers do not sell only Supercomp computers.
-- the dealers sell OTHER brands' computers and the dealers sell Supercomp's computers

are very similar to SuperComp’s

OTHER brands' computers = same quality as Supercomp's computers

. . . but   less expensive than Supercomp's computers.

Same quality, lower price? 
Inference: consumers bought lots of the OTHER brands' computers

... and   afford the dealers a significantly higher markup. 
Another inference: DEALERS have more incentive to sell OTHER brands' computers more than dealers have to sell Supercomp's computers.

Consumers paid less for, and bought more of, OTHER brands' computers.
 
Dealers made more on, and wanted to sell more of, OTHER brands' computers.

Bottom line: Supercomp did not sell a lot of computers even though computer sales rose dramatically.

Supercomp could not compete.

Supercomp sold very few computers, despite its marketing plan, because it couldn't compete.
Supercomp had no increase in sales.
THAT fact is why analysts doubt that the marketing plan worked. The marketing plan was supposed to increase sales. It did not do so.

The answer is C.

Hope that helps.

hrishi760 · Answer

Why not D?
Doesnt option D mean that it is not the marking plan but the shopping centers location that is bringing in more customers?

AnkithaSrinivas · Answer

GMATNinja  
The success of the company was to promote use of computers at home, so i thought it is A. Please correct me

GMATNinja · Answer

The passage describes a marketing plan formulated by SuperComp to increase computer sales. The company will sell its product using dealers in certain shopping centers and launch an advertising campaign to increase public awareness of its brand. The  dealers  increase their computer sales, but analysts doubt that the marketing plan is bringing  SuperComp  the desired success.

In other words, just because the dealers increased their sales doesn’t mean that SuperComp increased its sales.

The question asks for an answer choice that supports the idea that the marketing plan is not brining SuperComp the desired success. With that in mind, here’s (D):

(D) merely explains the reasoning behind SuperComp’s decision to sell its computers in certain shopping centers. The problem is that it gives us no reason to doubt the success of the plan. Even if (D) suggests that the particular shopping centers are what is attracting customers, the shopping centers were part of the marketing plan. So that would still give no reason to doubt that the marketing plan is bringing the desired success.

For that reason, we can eliminate (D).

I hope that helps!

GMATNinja · Answer

(A) has some twisty language:
 
This tells us that "FEW" respondents believed that there was "NO" point in owning a home computer.

In other words, MOST respondents believed that there WAS a point in owning a home computer.

This implies that the marketing campaign might be effective in convincing people to buy a home computer. If anything, this provides some  support  to SuperComp's plan -- although it's really not enough to conclude anything about SuperComp's  sales . People could listen to the advertisements and think that home computers are great, and then choose not to buy a computer (or choose to buy a non-SuperComp computer). Also, we have no idea what people who HAVEN'T heard the advertisements think -- maybe they ALSO believe that home computers are awesome, and the advertisement doesn't have any effect on this opinion.

Regardless, (A) certainly doesn't support the analyst's doubt. Instead, it provides (weak) support for SuperComp's plan.

Eliminate (A).

I hope that helps!

davro · Answer

To correctly answer this question, you should correctly understand the question stem " Which of the following, if true, best supports the claim that the analysts’ doubt is well founded? ". I actually understood the opposite.

Here letter C is the clear winner. The argument tells us that the dealers had a significant increase in revenues, but the analysts doubt that the company is achieving its intended goal (refer back to the argument to check the goal). So, we need to find an answer that tells us that this is a clumsy idea.

Letter C: SuperComp’s dealers also sell other brands of computers that are very similar to SuperComp’s but less expensive and that afford the dealers a significantly higher markup.

VerbalBot · Answer

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To persuade consumers to buy its personal computers for home use

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