The following appeared in an Excelsior Company memorandum.
"The Excelsior Company plans to introduce its own brand of coffee. Since coffee is an expensive food item, and since there are already many established brands of coffee, the best way to gain customers for the Excelsior brand is to do what Superior, the leading coffee company, did when it introduced the newest brand in its line of coffees: conduct a temporary sales promotion that offers free samples, price reductions, and discount coupons for the new brand."
My Response
The above argument draws the conclusion that Excelsior, a company planning a foray into the coffee market should imitate Superior's sales promotion and hand out free samples and discount coupons, as well as offer a price reductions. The author of the argument makes several significant assumptions, for instance the author assumes that what worked for Superior Company would work for Excelsior. While the author of the memo hopes that this is the case, it may not necessarily be true. Furthermore, the author assumes that price is an issue for coffee consumers and that there still exists a market for a new entrant. These assumptions are looked into greater detail below.
The first significant assumption is believing that what worked for Superior Company would work for Excelsior. While Excelsior's management would like to place faith in this assumption the author omits details about the details of Superior Company's campaign. For example, was the survey conducted in a particular geographical area? Did it target a particular demographic? Once these questions are answered, details of whether Excelsior can actually replicate the campaign accurately will help strengthen the argument.
The second significant assumption is that the author of the memo assumes that price is the most important factor for a consumer of coffee. This is not the case, would one drink a coffee that costs only 5 cents if it tasted horrible? Most consumers would pay the extra money to ensure they get a good cup of coffee. The author fails to address the strength of the Excelsior brand versus the Superiod Company brand. If the Excelsior brand is known for its superior coffee then it Excelsior might isolate its traditional customer base by offering cheaper coffee. Further details of Excelsior's current market perception, whether it is entering the coffee market for the first time would help strengthen the argument.
The author also fails to address the current situation of the coffee market. Is the market saturated, and is there room for a new entrant like Excelsior? If Superior was already an established player in the coffee market then imitating their promotion might not be effective. It is impossible to identify the success of the Superior Company promotion as the memo fails to shed any light on this aspect.
To conclude the argument as it stands is a weak one, but can be strengthened considerably by addressing the above points. In essence the author needs to justify why the Superior Company is comparable to the Excelsior Company and how the conclusion was reached that the above mentioned promotion was chosen as the best way to gain customers for the Excelsior brand of coffee.
"The Excelsior Company plans to introduce its own brand of coffee. Since coffee is an expensive food item, and since there are already many established brands of coffee, the best way to gain customers for the Excelsior brand is to do what Superior, the leading coffee company, did when it introduced the newest brand in its line of coffees: conduct a temporary sales promotion that offers free samples, price reductions, and discount coupons for the new brand."
My Response
The above argument draws the conclusion that Excelsior, a company planning a foray into the coffee market should imitate Superior's sales promotion and hand out free samples and discount coupons, as well as offer a price reductions. The author of the argument makes several significant assumptions, for instance the author assumes that what worked for Superior Company would work for Excelsior. While the author of the memo hopes that this is the case, it may not necessarily be true. Furthermore, the author assumes that price is an issue for coffee consumers and that there still exists a market for a new entrant. These assumptions are looked into greater detail below.
The first significant assumption is believing that what worked for Superior Company would work for Excelsior. While Excelsior's management would like to place faith in this assumption the author omits details about the details of Superior Company's campaign. For example, was the survey conducted in a particular geographical area? Did it target a particular demographic? Once these questions are answered, details of whether Excelsior can actually replicate the campaign accurately will help strengthen the argument.
The second significant assumption is that the author of the memo assumes that price is the most important factor for a consumer of coffee. This is not the case, would one drink a coffee that costs only 5 cents if it tasted horrible? Most consumers would pay the extra money to ensure they get a good cup of coffee. The author fails to address the strength of the Excelsior brand versus the Superiod Company brand. If the Excelsior brand is known for its superior coffee then it Excelsior might isolate its traditional customer base by offering cheaper coffee. Further details of Excelsior's current market perception, whether it is entering the coffee market for the first time would help strengthen the argument.
The author also fails to address the current situation of the coffee market. Is the market saturated, and is there room for a new entrant like Excelsior? If Superior was already an established player in the coffee market then imitating their promotion might not be effective. It is impossible to identify the success of the Superior Company promotion as the memo fails to shed any light on this aspect.
To conclude the argument as it stands is a weak one, but can be strengthened considerably by addressing the above points. In essence the author needs to justify why the Superior Company is comparable to the Excelsior Company and how the conclusion was reached that the above mentioned promotion was chosen as the best way to gain customers for the Excelsior brand of coffee.
