Network Marketing Is A Business That Relies Heavily On Communication GMAT Reading Comprehension

Reading Passage Question

Network marketing is a business that relies heavily on communication, so every advance in communication technology has a positive effect on its bottom line. These advances have made network marketing an international business, moving billions of dollars of products and services each year.

When the industry began, the telephone was the only form of instant communication. The advent of fax machines, conference calling, and computers in the early 1970s and 1980s were significant factors in the growth of the industry. These technologies lowered the cost of getting information from one place and person to another and sped up the time needed to get this information to the public.

In the 1990s, fax-on-demand, prerecorded conference calling, cellular phones, and portable computers became increasingly popular, less expensive, and faster than ever, greatly aiding the growth of network marketing. But all of these advancements combined don’t equal the impact of the Internet on the networking industry. The Internet is making network marketing a powerful and profitable business force in the 21st century.

One major advantage of the Internet is the implementation of targeted e-mailing. With a single click of a button, a sender can transmit a message to a prearranged list of recipients, all of whom have in some way been targeted as potential clients. The sender can broadcast new products or services, publicize important information, and set up a system for ordering products. In addition to its advantage of instantaneous speed, e-mail is inexpensive and accessible to most households in the U.S.

“Network marketing is a business that relies heavily on communication”- is a GMAT reading comprehension passage with answers. Candidates need a strong knowledge of English GMAT reading comprehension.

This GMAT Reading Comprehension consists of 3 comprehension questions. The GMAT Reading Comprehension questions are designed for the purpose of testing candidates’ abilities in understanding, analyzing, and applying information or concepts. Candidates can actively prepare with the help of GMAT Reading Comprehension Practice Questions.

Solution and Explanation

Question 1
The primary purpose of this passage is to

  1. tout the advantages of using technology to create new products that will appeal to a select target customer.
  2. chronicle the role of new communication technology in a business that relies on networking.
  3. introduce the concept of network marketing as a viable and profitable alternative to Internet sales.
  4. qualify the generalization that innovative communication systems have expedited sales of new products.
  5. define and dispel the conception of network marketing as a competitive force in the commercial sector.

Answer: B
Explanation: Network marketing is a business that relies heavily on communication, so every advance in communication technology has a positive effect on its bottom line. These advances have transformed network marketing into a global industry that transacts billions of dollars' worth of goods and services annually. Cell phones, portable computers, pre-recorded conference calls, and fax-on-demand all helped network marketing expand in the 1990s. As they all became more widely used, more affordable, and faster than before. However, the effect of the Internet on the networking business is greater than the sum of all these technological developments. The use of targeted e-mailing is one of the main benefits of the Internet. A sender may send a message to a predetermined list of recipients. All of whom have been specifically targeted as potential customers, with the press of a single button.

Question 2
It can be inferred from the passage that

  1. transactions that involve communication technology can increase consumer insecurity.
  2. the government has adopted a laissezfaire policy toward businesses that derive more than 40 percent of their incomes from Internet sales.
  3. it is not fiscally responsible for a networking business to spend more than 30 percent of its budget on new product development.
  4. the identification of a specific target consumer is expedited by more efficient communication technology.
  5. that rate at which a company incurs debt can be slowed by reducing reliance on fossil fuels, a cost-cutting measure that will markedly reduce energy demands.

Answer: D
Explanation: Network marketing is becoming a strong and successful economic force in the twenty-first century because of the Internet. The use of targeted emailing is one of the main benefits of the Internet. A sender can send a message to a predefined list of recipients. All of whom have been identified in some manner as potential customers—with the press of a single button. The sender can announce new goods or services, make crucial announcements, and build up an ordering system. E-mail has the benefit of immediate speed in addition to being affordable and available to the majority of American homes.

Question 3
With which of the following statements would the author most likely agree?

  1. More than any other piece of technology, the fax machine has revolutionized network marketing.
  2. Those companies that rely on print material for communication will incur increased costs in the 21st century.
  3. The impact of the Internet on the communication industry is insignificant when compared to the combined effects of the cellular phone and the fax-on-demand.
  4. Expanding a business to include international sales is a risk during a period of economic decline.
  5. The growth of the networking industry increased exponentially as communication technology evolved.

Answer: E
Explanation: As stated. Network marketing is becoming a strong and successful economic force in the twenty-first century thanks to the Internet. The use of targeted e-mailing is one of the main benefits of the Internet. A sender can send a message to a predefined list of recipients—all of whom have been identified in some manner as potential customers—with the press of a single button. The sender can announce new goods or services, make crucial announcements, and build up an ordering system. E-mail has the benefit of immediate speed in addition to being affordable and available to the majority of American homes. This strengthens the claim made in option E.

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