Marketing executive for Magu Corporation: Whenever Magu opens a manufa

Question

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

chetan2u · Accepted Answer

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.

Argument :- Facility in a new city planned ----> sponsor some activity in charitable venture--------> improved image---------> Increased sales 
  So, the argument links the money spent on charitable ventures to increased sales.

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

We are talking of increased sales, no matter how small overall.

Money spent on charitable ventures will come from the money being spent on direct advertisements, and these are the most effective means of reaching its target customers. So there may be some addition due to the money spent on charity, but overall it will not result in increased sales, as we are tampering with the most effective means.
Correct

Hypothetical situation. Does not give a reason to believe that sales will not increase.

The first point is the choice talks of SOME, so this is not a general thing. Secondly, we are talking of improved image through spending. The para never links the amount of benefit to the increase

Again a hypothetical situation. Does not give a reason to believe that sales will not increase due to the spending. Just tells us a case that would lead to drop in image. Out of context.

B

MartyTargetTestPrep · Answer

While we can tell that the writer believed (B) to be the best answer, and while we can tell why the writer felt that (B) is correct, there is a subtle logical flaw in the construction of this question.

First, here's why (B) is basically correct. The MAIN conclusion of the marketing executive is not that making donations will result in increased sales, but rather that the company SHOULD make donations. We can weaken that conclusion by showing that, even though making donations will positively affect the company's image, doing so will result in a reduction in advertising, which is an even stronger driver of sales than donating is. That information weakens the case for the conclusion that the company SHOULD make donations.

However, there is a flaw in the way the question is written, in that the passage says that making donations will result in "increased sales."

Why does this statement constitute a flaw? Because it locks in the idea that sales will be higher with the donations that without them, while (B) indicates that. actually,  making donations will effectively result in a reduction, rather than an increase, in sales .

So, in a way, choice (B) is in conflict with a premise of the argument.

If choice (B) had said, "Increased sales will lead to riots in the streets and destruction of company property," then (B) would have constituted information calling into question the conclusion that the company SHOULD make donations, etc.

In order for this question to be fully logical, the last sentence of the passage has to be adjusted to a form such that the passage says that donations will have an effect but does not say something that conflicts with choice (B). Here's a version that works in that way:

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 the more positively Magu is perceived by a community the more likely it is that people within that community will purchase the company's products.

Given that passage, we can use (B) to call the conclusion into question, by demonstrating that, even if everything said in the passage is true, it is not clear that the company should make donations, etc., because, while doing so may have a positive influence of the company's image in a community, doing so will indirectly result in a reduction in sales.

All that said, this question is totally gettable, even with the flaw, because the conclusion is not that sales will be increased, the support for which is not weakened by (B), but, rather, that the company should make donations, which IS weakened by (B). By correctly identifying the conclusion and seeing the flaw for what it is, a subtle logical issue that the question writing team at GMAC let slip through, one can answer this question correctly.

egmat · Answer

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.

KarishmaB · Answer

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)

DavidTutorexamPAL · Answer

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.

teaserbae · Answer

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.

DavidTutorexamPAL · Answer

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?

Archit3110 · Answer

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

VidhyaN · Answer

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.

redskull1 · Answer

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.

Skywalker18 · Answer

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

AjiteshArun · Answer

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.

jamalabdullah100 · Answer

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.

DavidTutorexamPAL · Answer

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.

jamalabdullah100 · Answer

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.

MAnkur · Answer

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.

KarishmaB · Answer

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.

KaranB1 · Answer

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.

KaranB1 · Answer

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.

Marketing executive for Magu Corporation: Whenever Magu opens a manufa

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GMAT Critical Reasoning (CR) Questions

Marketing executive for Magu Corporation: Whenever Magu opens a manufa

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