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Technological Development

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Technological Development

by rkanthilal » Tue Nov 30, 2010 9:35 pm
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.

(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.

Source: MGMAT practice test.
OA after a few responses...
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by beat_gmat_09 » Tue Nov 30, 2010 9:56 pm
B supports.
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by bakhshaliyev » Tue Nov 30, 2010 10:03 pm
My answer is E
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by Deepthi Subbu » Wed Dec 01, 2010 7:40 pm
Even I go with B
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by rkanthilal » Wed Dec 01, 2010 8:36 pm
OA is B

Below is the OE for each answer...

(A) The typical drop in the price of new technology does not influence whether a company should wait until sales of an old technology begin to decline before introducing a new one.

(B) CORRECT. This choice states that media outlets such as television and magazines often report on the planned introduction of new devices while sales of old devices are still strong. The argument requires that consumers "hear about the new device"; stories in the media provide a means for consumers to do so.

(C) If many consumers are unable to determine the superiority of new technology, then they might be less swayed to wait for a new, recently announced device than otherwise. As a result, this claim may be seen to weaken the analyst's assertion.

(D) The number of technology purchases per year does not directly relate to this argument. The argument is about waiting until the consumer demand declines before announcing a new technology. However frequently consumers typically purchase technology, some will be ready to buy the old device when news of the upcoming device gets out -- and according to the argument, this news will cause some of those consumers to wait.

(E) The passage makes no mention of whether the technologies belong to the same company or different companies.
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by jaymw » Fri Mar 25, 2011 5:23 am
Sorry to bring this thread up again!

Just came across this question in an MGMAT CAT.

I noticed that this thread does not contain any reasoning other than that employed by MGMAT in their explanation.

B is the credited response

BUT I can't seem to grasp even the slightest bit of the logic used to arrive at that answer choice.

The prompt says: "[...]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.

In my words: When sales are still strong it is dumb to announce new product.

and now answer choice B says: 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.

Is it just me or does this answer choice describe exactly what companies should NOT do??? It basically states that in this scenario, new products are announced when their sales have NOT YET declined. This is contradictory to the information in the prompt and should hence be a weakener, rather than a strengthener!

It would be great if an (MGMAT) expert could comment on this problem!

Thanks!
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by fitzgerald23 » Fri Mar 25, 2011 6:57 am
jaymw wrote:Sorry to bring this thread up again!

Just came across this question in an MGMAT CAT.

I noticed that this thread does not contain any reasoning other than that employed by MGMAT in their explanation.

B is the credited response

BUT I can't seem to grasp even the slightest bit of the logic used to arrive at that answer choice.

The prompt says: "[...]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.

In my words: When sales are still strong it is dumb to announce new product.

and now answer choice B says: 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.

Is it just me or does this answer choice describe exactly what companies should NOT do??? It basically states that in this scenario, new products are announced when their sales have NOT YET declined. This is contradictory to the information in the prompt and should hence be a weakener, rather than a strengthener!

It would be great if an (MGMAT) expert could comment on this problem!

Thanks!
Here is how you should look at the passage.

1. Announcing new technology too soon can backfire
2. Once consumers hear about it they stop buying the current product
3. Dont announce sales until your old product sales are falling

I think you might be missing what the question is asking. They want to know the assumption the author makes for points 1 and 2 to lead to the conclusion, which is point 3. The real important part to answering the question correctly lies in statement 2. Consumers need to hear about the new technology before they stop buying the old product. How do they hear about it? The media.

Think about it like this. Apple has a new iPod that it will be releasing in the next year and Steve Jobs sends out a release to all the magazines and newspapers about this great new iPod. But the papers and magazines decide they dont care anymore about Apple and are sick of giving them free publicity so they dont run the release or discuss the new technology in their editorials. How would you, as the consumer, know that there is a new iPod coming? You wouldnt. The consumer typically finds out about new things through media reports. Jobs cant come to everyones home and tell them about the new product. Its the old "if a tree falls in the forest and nobody is around, does it make a sound" type theory.

So if option B was not true than it would damage the analysts reasoning. If the consumer didnt hear about it what difference did it make if you announced it. None because existing sales would not be impacted.
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by Target2009 » Fri Mar 25, 2011 4:03 pm
fitzgerald23 wrote: So if option B was not true than it would damage the analysts reasoning. If the consumer didnt hear about it what difference did it make if you announced it. None because existing sales would not be impacted.
Agree cause only B a little support the given argument. But this is also true It does not supporting without a new assumption that media is only way to let public know about product. So it is supporting the premise "Once consumers hear about it they stop buying the current product " not the conclusion " Dont announce sales until your old product sales are falling" and thats making this choice little confusing.
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