GMAT Integrated Reasoning

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Source: Other

Level: 0

from CFO

The costs we have incurred to develop a smartphone application for our company's Qoop product has far exceeded the costs to develop our web platform and the mobile-friendly version of our website. The returns, thus far, do not even come close to recouping our initial investment. We should cap next year's marketing budget for Qoop at $100K. If user adoption for Qoop does not increase to a level that would result in conversion in sales that would, in 2-3 years, result in a modest profit, we should stop the project, cut our losses, and focus on developing another product.



from CMO

Our innovative application still hasn't gained attention from media. As with all types of product launches these days, we need to get the word out fast and get this product to go viral. I recommend a marketing budget closer to $400K. This will allow us to use some big name celebrities to help us get the word out on television, in magazines, and even through social networks like Facebook and Twitter. Once we get over the hump, further expense will be neglible as marketing will be largely free and will occur through word of mouth. Without strong celebrity promotion from the very beginning, the product launch will fizzle away and die unspectacularly - we'll never recoup our largest product development cost. For anything to go viral, it must have a cool factor, be funny, and be useful. A big name celebrity can help us get over that hump.



from CEO

Qoop helps complement our existing product offering. While Qoop expenses have been our largest product development cost, the cost should also be shared among the low costs of our other products. In addition, no product should be looked at as a standalone product. It's more important for us to grow our market share and gain competitive advantage in our industry. To do this, we have to launch more products and start generating a portfolio of products to match our big competitors. We should be marketing all of our products alongside Qoop and not just pigeonhole ourselves to promoting just one product whenever we access the TV or social media marketing channels.

For each of the following statements, select Inferable if the statement is reasonably inferable from the information provided. Otherwise, select Not Inferable.

YesNo 
The attitudes of the CFO and CMO toward development costs are more similar to each other than to the views of the CEO.
It is probable that one of the main points on the agenda for the meeting is marketing strategies.
The attitudes of the CFO and CMO toward marketing strategies are more similar to each other than to the views of the CEO.

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