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Question: The marketing manager of Western-National Bank (WNB) has suggested launching a new campaign that would offer students reduced interests on loans and a commission-free account. WNB's marketing manager stated that despite the loss of income during their years of schooling, the students are expected to pay larger commissions and fees for years after they graduate.
Which of the following statements is most important to the bank's management in order to assess the marketing manger's suggestion?
(A) Surveys show that only a minority of customers who are 25 or older are willing to consider moving their account to another bank.
(B) WNB’s new campaign is intended to be offered to existing and new customers alike.
(C) The estimated loss of income from an average student account is $200 a year.
(D) The average interest on student loans has been stable for the past 5 years.
(E) WNB’s advertising agency recommends that its campaign be launched on a social media channel that is popular among students.
Answer: A
Explanation
Given that, Western-National Bank's (WNB) marketing manager has suggested starting a new campaign that would offer students lower interest rates on loans and an account with no fees. The marketing manager at WNB said that even though students lose money while they are in school, they will have to pay higher commissions and fees for years after they finish.
Let's approach the answer choices.
A: Correct
This statement is important because it indicates the potential impact on customer retention. If only a minority of customers are willing to move their accounts to another bank, it suggests that the bank might have a relatively stable customer base, and the proposed campaign targeted at students might not significantly affect the existing customer relationships. This information would be crucial for the bank's management to evaluate the potential risks and benefits of the new campaign.
B: Incorrect
While this information provides clarity on the target audience for the campaign, it doesn't directly address the financial impact or the long-term viability of offering reduced interests on loans and a commission-free account to students.
C: Incorrect
This statement is indeed relevant because it provides information about the potential financial impact of the proposed campaign. It helps the bank's management understand the potential monetary loss from offering reduced interests on loans and a commission-free account to students.
D: Incorrect
While the stability of interest rates is relevant, it does not directly address the potential loss of income from offering reduced interest rates to students or the expected increase in commissions and fees after they graduate.
E: Incorrect
This statement is related to the marketing strategy but does not provide essential information about the financial impact or the validity of the marketing manager's claim regarding larger commissions and fees from students after they graduate.
“The marketing manager of Western-National Bank (WNB) has suggested launching a new campaign”– is a GMAT Critical question. To answer the question, a candidate can either find a piece of evidence that would weaken the argument or have logical flaws in the argument. GMAT critical reasoning tests the logical and analytical skills of the candidates. This topic requires candidates to find the argument's strengths and weaknesses or the logical flaw in the argument. The GMAT CR section contains 10 -13 GMAT critical reasoning questions out of 36 GMAT verbal questions.
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