GMAT Essays (AWA)

Task

The following appeared in an announcement issued by the publisher of The Mercury, a weekly newspaper:
"Since a competing lower-priced newspaper, The Bugle, was started five years ago, The Mercury's circulation has declined by 10,000 readers. The best way to get more people to read The Mercury is to reduce its price below that of The Bugle, at least until circulation increases to former levels. The increased circulation of The Mercury will attract more businesses to buy advertising space in the paper."

Answer

Although the author's argument has some merits, the statement relies on a set of assumptions which undermine the strength of the conclusion that more people will buy The Mercury newspaper if they reduced the price levels below those from The Bugle. Moreover, the argument assumes that if they achieve higher circulation more businesses will be interested in buying advertising space from them which relies again on an unsubstantiated cause and effect relation between two hypothetical events.

The author's primary assumption is that more people will prefer to buy The Mercury newspaper if the price is lowered under The Bugle's level. This assumption is flawed because it omits several aspects which can influence buyers' behavior such as the type of content published, the quality of articles or the regular client base which The Bugle managed to develop during the five years of activity. If clients preferred The Bugle for published articles on a particular topic which does not appear in The Mercury than the price changes would have no impact. Furthermore if clients follow certain editors' columns again the price would have little impact on changing to The Mercury. Clearly if more information about the type of content and article authors' would be provided for both newspapers a more solid comparison basis would exist on which the price change could be properly justified.

Furthermore, the secondary assumption implies that more businesses will buy advertising space in The Mercury newspaper once higher circulation is achieved. Although the implication has some logic, there is no clear evidence that such a cause and effect exists. The interest in buying more advertising space can be influenced by many aspects such as what type of readers the newspaper have, what products would be placed, what is the competition, besides The Bugle, doing for attracting new business clients. All these aspects are not discussed in the argument which leaves a lot of room for interpretation.

In sum, the argument has some general valid points regarding the effect of price reduction on the potential clients and how a higher client base can attract further businesses. However, the assumptions do not addresses key issues mentioned above which would help to strengthen the argument. If more information would be provided on the specified topics the relevancy of the argument would increase.