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.
The inherent gap here is that the Mrktg. Exec is assuming that the improved image will convert to increased sales. This is not necessarily true. There can still be competing brands that offer better products than Magu Corporation and maybe customers would buy the products of these competing brands.
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 - Even if the sales represent a small portion of the total revenue, we cannot directly assume that it is insignificant portion. An increased sales in one city can still be a good source of revenue for Magu. But the question is to weaken the advice, which is '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 executive's advice still holds and we have no reason to doubt this advice -
Reject(B) Spending on charitable ventures would require Magu to decrease direct advertisements, which are the most effective means of reaching its target customers - This attacks the assumption the executive seems to have made - 'improved image converts to increased sales'. What this option tells us is that 'the most effective means of reaching its target customers is direct advertisements'. By decreasing spending on direct advertisements, Magu is already losing out on customers. Even if it gains new customers via the long shot of improving image, all that may do is compensate for the lost sales through less spending on direct advertisements. Thus there would actually be no
'increased' sales as such. This is a definite weakener.
(C) If market conditions change, Magu may have to close any such facility or relocate it - Though relocation may call for additional cost for Magu, relocation wouldn't void the executive's advice. Magu still can work to improve its image via donations to non profits and expect improved sales. The very fact that Magu may have to close any facility or relocate doesn't give us a reason to doubt the executive's advice. -
Reject(D) Some nonprofit organizations are poorly organized, so money donated to them would be of little benefit to the community - Does Magu donates to these 'some' nonprofit organizations? We don't know. Even if it does donate to these nonprofit organizations, the fact that the money benefits only little to the community doesn't mean that Magu's image in the community won't be improved. The community may very well blame
the poor organization and poor usage of donated money on the nonprofit org itself. Again, no reason to doubt executive's advice.
Reject(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. -
'if' this was the case, then it would outweigh'. Did the workers at the mfg facility believe that their wages or working conditions were poor? We don't know. Does this option give us a reason to doubt? Yes it does. But it only does for a specific scenario whose probability of occurrence is not given. That is, workers at the manufacturing facility may believe or not believe that their wages or working conditions were poor.
Reject