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Automobile manufacturers often offer incentive programs thro

This topic has 2 expert replies and 1 member reply

Automobile manufacturers often offer incentive programs thro

Post Thu Nov 09, 2017 4:44 pm
Automobile manufacturers often offer incentive programs through which they discount the price of a car to their dealers for a promotion period when the product is advertised to consumers. Such incentive programs often result in a dramatic increase in the amount of product sold by the automobile manufacturers to dealers but may hurt the manufacturers' profitability.
Which of the following, if true, most strongly supports an argument for the incentive programs?

A. The amount of discount generally offered by manufacturers to dealers is carefully calculated to represent the minimum needed to draw consumers' attention to the product.
B. For many consumer products, the period of advertising discounted prices to consumers is about a week, which is not sufficiently long for consumers to
become used to the sale price.
C. More prestigious auto makers do not use incentive programs because they dilute the company's brand name.
D. During such a promotion, retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular
price.
E. If a manufacturer fails to offer such promotion but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's
product.

I'm confused between A and D. Can any experts help?

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GMAT/MBA Expert

Post Sat Nov 11, 2017 5:06 am
Mo2men wrote:
Dear Mitch,
I understood the question stem as we need to strengthen the argument. This means that the choice Must show BENEFIT and express HURT to the manufactures. Choice D fits those two points as you described above. However. Choice D is incorrect.

1- In you quote the following
'Premise:
Incentive programs...may hurt the manufacturers' profitability.
Should not it be the conclusion of the argument? I believe it is a CONSEQUENCE of the Program.

2- How did you interpret the question STEM? Does the stem mean that we need to find an choice the advocate using the discounted sale regardless of the hurt to the manufacturers? does the question ask for Strengthening part of the Premise or Conclusion[/i] which is " a dramatic increase in the amount of product sold by the automobile manufacturers to dealers" and Ignoring the other part "but may hurt the manufacturers' profitability"?

Something unclear between the stem and the correct choice, could you help please?
Thanks for your help
The conclusion is not in the passage but in the question stem:
Which of the following, if true, most strongly supports an argument for the incentive programs?
An argument FOR the incentive programs = an argument IN FAVOR OF the incentive programs = an argument with the following conclusion:
Manufacturers should offer the incentive programs.
The correct answer choice must support this conclusion by showing how the incentive programs BENEFIT manufacturers.
As noted in my post above, D shows how the incentives programs HURT manufacturers.
Eliminate D.

The CR above is modeled after CR121 in the OG10:
http://www.beatthegmat.com/manufacturers-sometimes-discount-the-price-of-a-product-to-t286678.html
In CR121, the correct answer choice must show how promotions HURT manufacturers.

_________________
Mitch Hunt
GMAT Private Tutor
GMATGuruNY@gmail.com
If you find one of my posts helpful, please take a moment to click on the "UPVOTE" icon.
Available for tutoring in NYC and long-distance.
For more information, please email me at GMATGuruNY@gmail.com.

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Mo2men Legendary Member Default Avatar
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Post Fri Nov 10, 2017 1:04 pm
GMATGuruNY wrote:
ardz24 wrote:
Automobile manufacturers often offer incentive programs through which they discount the price of a car to their dealers for a promotion period when the product is advertised to consumers. Such incentive programs often result in a dramatic increase in the amount of product sold by the automobile manufacturers to dealers but may hurt the manufacturers' profitability.
Which of the following, if true, most strongly supports an argument for the incentive programs?

A. The amount of discount generally offered by manufacturers to dealers is carefully calculated to represent the minimum needed to draw consumers' attention to the product.
B. For many consumer products, the period of advertising discounted prices to consumers is about a week, which is not sufficiently long for consumers to
become used to the sale price.
C. More prestigious auto makers do not use incentive programs because they dilute the company's brand name.
D. During such a promotion, retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular
price.
E. If a manufacturer fails to offer such promotion but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's
product.
Premise:
Incentive programs...may hurt the manufacturers' profitability.

To support the usage of incentive programs, the correct answer must show that they provide a BENEFIT, despite the negative impact on profitability.

E: If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's product.
Here, the incentive programs provide a clear benefit: they prevent consumers from turning to competitors.

The correct answer is E.

A. The amount of discount generally offered by manufacturers to dealers is carefully calculated to represent the minimum needed to draw consumers' attention to the product.
This option does not show how incentive programs provide a benefit.
Eliminate A.

D. During such a promotion, retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular
price.

Here, accumulated inventory is purchased from manufacturers AT A DISCOUNT, confirming the premise that promotions may HURT manufacturers' profitability.
Since the correct answer must show a BENEFIT provided by the promotions, eliminate D.
Dear Mitch,
I understood the question stem as we need to strengthen the argument. This means that the choice Must show BENEFIT and express HURT to the manufactures. Choice D fits those two points as you described above. However. Choice D is incorrect.

1- In you quote the following
'Premise:
Incentive programs...may hurt the manufacturers' profitability.
Should not it be the conclusion of the argument? I believe it is a CONSEQUENCE of the Program.

2- How did you interpret the question STEM? Does the stem mean that we need to find an choice the advocate using the discounted sale regardless of the hurt to the manufacturers? does the question ask for Strengthening part of the Premise or Conclusion[/i] which is " a dramatic increase in the amount of product sold by the automobile manufacturers to dealers" and Ignoring the other part "but may hurt the manufacturers' profitability"?

Something unclear between the stem and the correct choice, could you help please?
Thanks for your help

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GMAT/MBA Expert

Post Fri Nov 10, 2017 4:16 am
ardz24 wrote:
Automobile manufacturers often offer incentive programs through which they discount the price of a car to their dealers for a promotion period when the product is advertised to consumers. Such incentive programs often result in a dramatic increase in the amount of product sold by the automobile manufacturers to dealers but may hurt the manufacturers' profitability.
Which of the following, if true, most strongly supports an argument for the incentive programs?

A. The amount of discount generally offered by manufacturers to dealers is carefully calculated to represent the minimum needed to draw consumers' attention to the product.
B. For many consumer products, the period of advertising discounted prices to consumers is about a week, which is not sufficiently long for consumers to
become used to the sale price.
C. More prestigious auto makers do not use incentive programs because they dilute the company's brand name.
D. During such a promotion, retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular
price.
E. If a manufacturer fails to offer such promotion but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's
product.
Premise:
Incentive programs...may hurt the manufacturers' profitability.

To support the usage of incentive programs, the correct answer must show that they provide a BENEFIT, despite the negative impact on profitability.

E: If a manufacturer fails to offer such promotions but its competitor offers them, that competitor will tend to attract consumers away from the manufacturer's product.
Here, the incentive programs provide a clear benefit: they prevent consumers from turning to competitors.

The correct answer is E.

A. The amount of discount generally offered by manufacturers to dealers is carefully calculated to represent the minimum needed to draw consumers' attention to the product.
This option does not show how incentive programs provide a benefit.
Eliminate A.

D. During such a promotion, retailers tend to accumulate in their warehouses inventory bought at discount; they then sell much of it later at their regular
price.

Here, accumulated inventory is purchased from manufacturers AT A DISCOUNT, confirming the premise that promotions may HURT manufacturers' profitability.
Since the correct answer must show a BENEFIT provided by the promotions, eliminate D.

_________________
Mitch Hunt
GMAT Private Tutor
GMATGuruNY@gmail.com
If you find one of my posts helpful, please take a moment to click on the "UPVOTE" icon.
Available for tutoring in NYC and long-distance.
For more information, please email me at GMATGuruNY@gmail.com.

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