Analyst: The pace of technological development brings a

[rahul.gmat]

QUESTION

Analyst: The pace of technological development brings a constant stream of new devices to the market, and many of them enjoy commercial success. But announcing new technology too soon after the introduction of a successful device can backfire. Once consumers hear about the new device, they may stop buying the one currently on sale. So, if a company wishes to announce the upcoming sale of a new device, it should wait until purchases of the old device have begun to decline.

Which of the following, if true, would best support the analyst's main assertion?
(A)New technology often becomes less expensive after an initial surge in sales.
(B)Media outlets, such as television programs and magazines, often report on the planned introduction of new devices while the sales of old devices are still strong. CORRECT
(C)Many consumers are unable to determine whether new technology is superior to current technology.
(D)Surveys have shown that some consumers make only one or two technology purchases per year, whereas others make more frequent purchases.
(E)Consumers tend to be loyal to technology companies whose products they enjoy using.

How can (B) be correct? It says consumers are told about new devices when sales of old one are still strong, this is entirely contradictory to the argument's conclusion that such info should be given only after sales of old device have declined. This weakens the argument rather than support. C, D, E are out of scope and (A) seems the best to me.

[StaceyKoprince]

You said this is from CAT 1 and I'm assuming you mean our CAT exams. If not, please post the source of this argument.

The conclusion is based upon why the author thinks consumers stop buying the old device: because they have already heard about the new one and are waiting for it to come out.

Answer B explains how consumers might hear about a new device while the old device is still selling well - from the media. If, as the author argues, the company does not release information about its upcoming new product, the media will not have anything to report... and, therefore, the consumers won't know about the new device yet. This supports the author's conclusion that the company should delay the news of new devices - because when the company does announce that info, it will be reported by the media, and consumers will then hear about it.

Answer A may be true in general, but it does not address this particular conclusion - that the company should delay announcements about its new devices until sales of the old one start to decline so that people will still buy the old devices. If anything, an argument can be made that this choice hurts the author's conclusion - if the old and new devices are competing head-to-head in the marketplace and the old device is cheaper (because it has been on the market longer and so has become "less expensive after an initial surge in sales") then it is not a given that consumers will stop buying the old device. The lower price may make it more attractive than the new device at the higher price.

[rahul.gmat]

Thanx so much Tracy. I get it now, company announces -> TV shows it -> Consumers get to know. This link did not click to me. Great clarification! I really appreciate the prompness and detail of the response. I must say, Manhattan is truly worth the hype that I heard about it! I have never got explanations even closely as satisfactory and so quickly from any other company. Thanx!

[pawanone]

But the argument in B does not provide any extra support to the author's assertion. it is just explaining the process of how customer comes to know about the planned release of new products. Whereas in e, it can be understod that delaying the release along with the information will not impact brand loyalty as people will wait for the new release even though delayed

[JonathanSchneider]

Pawanone,
It is an indirect strengthener, but a strengthener nonetheless. Follow Stacey's reasoning above: if the company reports the info, the media then broadcasts this info, meaning that customers will be aware of new devices about to hit the market. As a result, whenever a company announces this type of info, the reach of that info is far and wide. This does strengthen the analysts's argument by removing the possible objection that customers do not know what individual statements a company makes, etc.

[danielduq]

Hi - I know that I am several years late to this original discussion, but I chose E. Here's why. The argument states that companies should hold off releasing new products until the sales of their old products have slowed. Wouldn't this logic only work if the same people bought products from the same company? For example, let's assume Company A currently has an old product (released and selling) and a new product (unreleased). The only potential downside to releasing the new product would be the potential for it to cannibalize the sales of the current product. IMO, this would only be true if customers were loyal and purchased products from the same company (if consumers did not purchase products from the same company, what is the harm in releasing the new product?).

[Ben Ku]

Hi - I know that I am several years late to this original discussion, but I chose E. Here's why. The argument states that companies should hold off releasing new products until the sales of their old products have slowed. Wouldn't this logic only work if the same people bought products from the same company? For example, let's assume Company A currently has an old product (released and selling) and a new product (unreleased). The only potential downside to releasing the new product would be the potential for it to cannibalize the sales of the current product. IMO, this would only be true if customers were loyal and purchased products from the same company (if consumers did not purchase products from the same company, what is the harm in releasing the new product?).

This is a strengthening the conclusion question. We want a premise that will support the analyst's suggestion that releasing a new product too early may backfire.

Answer choice (E) states that "Consumers tend to be loyal to technology companies whose products they enjoy using." However, loyalty to a company does not necessarily lead to the backfire of strategy.

The argument does not provide additional information about whether the products with respect to same or different companies. You're making additional, unnecessary, and unjustified assumptions to build (E) to strengthen your argument.

[vijaykumar.kondepudi]

Hi,
Isn't the indicated correct choice "B" making teh following assumption :
The Media gets its information ONLY from the company and the Customer inturn gets his/her information ONLY from the Media?

I chose A becasue, it says:
New technology often becomes less expensive after an initial surge in sales.

If this weren't true, the sales of the device already in the market would always remain the same and then it really doesn't matter when the company decides to make the announcement of the new technology, because it's announcement has no bearing on the profits of the old device.

Am I missing on something ?

[tim]

As for A, no, the sales wouldn't necessarily remain the same at all. In fact, if the price didn't decline, sales could conceivably drop off even more..

In B, getting information only from the sources you describe is not absolutely necessary. Negating your assertion does not cause the argument to crumble, so your assumption is not absolutely imperative. Take a look at our discussion of the negation technique in our CR book for more on what it takes to make a necessary assumption..

[jksmailbox]

Answer B explains how consumers might hear about a new device while the old device is still selling well - from the media. If, as the author argues, the company does not release information about its upcoming new product, the media will not have anything to report... and, therefore, the consumers won't know about the new device yet. This supports the author's conclusion that the company should delay the news of new devices - because when the company does announce that info, it will be reported by the media, and consumers will then hear about it.

Argument: announce product 2 --> lose product 1 sales

Stacy, in my opinion, the Choice doesnt strengthen the argument at all. It merely states what is already taken for granted. That is, we take for granted that when a company makes an announcement, it reaches customers.

If such facts cannot be taken for granted, then i would say even more strongly that the official answer doesnt strengthen the argument. Because though the choice states that media reports, it doesnt explicitly state that the customers follow these reports or take the reports seriously.

[tim]

The fundamental problem here is that you CANNOT take for granted that when a company makes an announcement it reaches consumers. What would make you think this? It certainly wasn't in the passage. Outside knowledge? Not only must you be careful in bringing in outside knowledge, but in this case your outside knowledge isn't even true: The small business i operate makes announcements all the time, and if merely making announcements would ensure the announcements reached the consumer i guarantee my business would be much more successful. BEWARE OF TAKING THINGS FOR GRANTED..

[vishalbansal2]

I think what happened when I was taking this question, is that after reading B, I assumed it meant that the media company's were getting information about the new products some other way (such as through an inside source), and were reporting on the new developments PRIOR (or simultaneously) to any announcement by the company.

Thinking of the answer like this, I felt that this actually weakened the argument, since then something else was hurting the sales, not the company announcement. Why is this logic incorrect? Did I make an incorrect assumption?

[tim]

it's not so much a question of whether you made an incorrect assumption, it's that you made an assumption at all. :) don't make assumptions in questions like this!

[rajit.n]

Hi - I know that I am several years late to this original discussion, but I chose E. Here's why. The argument states that companies should hold off releasing new products until the sales of their old products have slowed. Wouldn't this logic only work if the same people bought products from the same company? For example, let's assume Company A currently has an old product (released and selling) and a new product (unreleased). The only potential downside to releasing the new product would be the potential for it to cannibalize the sales of the current product. IMO, this would only be true if customers were loyal and purchased products from the same company (if consumers did not purchase products from the same company, what is the harm in releasing the new product?).

This is a strengthening the conclusion question. We want a premise that will support the analyst's suggestion that releasing a new product too early may backfire.

Answer choice (E) states that "Consumers tend to be loyal to technology companies whose products they enjoy using." However, loyalty to a company does not necessarily lead to the backfire of strategy.

The argument does not provide additional information about whether the products with respect to same or different companies. You're making additional, unnecessary, and unjustified assumptions to build (E) to strengthen your argument.

Awesome explanation Ben. I got your point now..and also learnt a valuable lesson - "pay attention to the conclusion"!

[jnelson0612]

Great!