Tireworld's marketing plan previously centered around numerous costly marketing campaigns targeted to individual states. This year Tireworld executive...
GMAT Critical Reasoning : (CR) Questions
Tireworld's marketing plan previously centered around numerous costly marketing campaigns targeted to individual states. This year Tireworld executives plan to switch to a more cost-efficient nationwide marketing campaign. In this way, they hope to increase overall company profits merely by spending less on their marketing.
Which of the following, if true, indicates a flaw in the executive's plan to increase overall company profits?
Passage Analysis:
| Text from Passage | Analysis |
| Tireworld's marketing plan previously centered around numerous costly marketing campaigns targeted to individual states. |
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| This year Tireworld executives plan to switch to a more cost-efficient nationwide marketing campaign. |
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| In this way, they hope to increase overall company profits merely by spending less on their marketing. |
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Argument Flow:
The argument starts by explaining Tireworld's expensive state-by-state marketing approach, then introduces their plan to switch to a cheaper nationwide campaign, and concludes with their assumption that spending less will automatically increase profits.
Main Conclusion:
Tireworld executives believe they can increase overall company profits simply by switching to a less expensive nationwide marketing campaign.
Logical Structure:
The executives assume that cutting marketing costs will directly lead to higher profits, without considering whether the cheaper campaign might also reduce sales or revenue. Their logic is: lower marketing expenses = higher profits, but this ignores potential negative effects on the revenue side.
Prethinking:
Question type:
Weaken - We need to find information that would reduce belief in the executives' conclusion that they can increase overall company profits merely by spending less on marketing
Precision of Claims
The key claim is about 'overall company profits' increasing 'merely by spending less on marketing.' This is a very specific claim that lower marketing costs alone will boost total profits
Strategy
Since this is a weaken question, we need to find scenarios where reducing marketing spend might actually hurt overall profits. The executives are assuming that cutting marketing costs won't negatively impact sales or revenue. We should look for situations where the cheaper nationwide campaign could backfire and cost them more money than they save
This actually supports the executives' plan rather than indicating a flaw. If many smaller tire companies have successfully used nationwide campaigns to increase profits, this suggests that Tireworld's plan could work too. This strengthens rather than weakens their reasoning.
This directly indicates a flaw in the executives' plan. If regional climatic conditions and local competition are extremely important factors in tire marketing, then the executives' shift from state-specific campaigns to a generic nationwide campaign could backfire. The state-by-state approach wasn't just expensive - it was targeting these crucial regional differences. A nationwide campaign might fail to address these important regional factors, leading to decreased sales that could more than offset the marketing cost savings.
The fact that Tireworld sold ten percent of its tires to the military over the last two years doesn't relate to whether their new marketing strategy will succeed or fail. Military sales are typically based on contracts and specifications rather than marketing campaigns, so this information is irrelevant to the flaw in their plan.
This information about emergency tire purchases doesn't indicate a flaw in switching to nationwide campaigns. Whether people buy tires in emergencies or planned purchases, this doesn't specifically relate to whether state-by-state marketing is superior to nationwide marketing for driving overall sales and profits.
Knowing that statewide campaigns often use radio-advertisement stars doesn't indicate whether the nationwide approach will fail. This is just descriptive information about one tactic used in state campaigns, but it doesn't suggest that nationwide campaigns can't be effective or profitable.