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CASinCameroon
- Newbie | Next Rank: 10 Posts
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- Joined: Tue Mar 30, 2010 12:42 am
The following appeared in a memo from the vice president of the Fizzle Soda Company.
"There is apparently a market for new beverages, as can be seen from the fact that other companies have recently introduced new juice drinks and sports drinks. Given this market and customer surveys indicating that many drinkers of regular Fizzle soda add chocolate syrup to their soda, we can increase our company's sales by creating a new chocolate-flavored soda, 'Choco-Fizz.' Choco-Fizz will help us attract new customers and keep our customers who might otherwise switch to our competitors' chocolate beverages. And Choco-Fizz will be more successful than Fizzle Plus, our most recently introduced flavor, because it will be easier to distinguish from regular Fizzle soda."
In the argument above, the author concludes that Fizzle Soda Company should introduce a new beverage called Choco-Fizz in order to maintain its customer base and to attract new customers. The author bases this on the premises that there is a market for new drinks and that consumers prefer chocolate flavoured beverages. Although at first glance it may appear as though the author has made a convincing argument, upon deeper analysis it becomes clear that the author has based his argument on several unsubstantiated assumptions.
The author has falsely assumed that there is a market for new beverages based solely on the fact that other companies have recently introduced new juice and sports drinks. Although this may suggest that there is a demand for juice and sports drinks this does not necessarily translate into a demand for soda drinks. In fact, the increase in demand for juice and sports drinks may reflect a shift in consumers' tastes to more healthy drinks and lifestyles which may even result in a decrease in demand for new soda flavours. For example, in the mid 2000s the introduction of Booster Juice and Jamba Juice and the subsequent shift in consumers preference for more healthy beverages in the United States and Canada. This change in drink preference led to a reduction in sales of soda. In fact, in order to maintain sales, companies such as Coca-cola branched into healthier beverages such as Dasani filtered water instead of expanding their soda product lines.
Another assumption made by the author which is not fully supported is that consumers prefer chocolate flavoured sodas. This assumption is based on the premise that a survey has indicated that many drinkers of regular Fizzle soda add chocolate syrup. This survey result does little to convince the reader of the validity of the author's assumption because it is not clear how representative the survey was and for what reason the chocolate syrup is added. For example, if the chocolate syrup was added in order to add sweetness but not necessarily for the chocolate flavour then it cannot be said that drinkers prefer a chocolate flavour. Without further information regarding the survey and its results the assumption remains unsubstantiated and the reader is unconvinced.
The author claims that choco-fizz will be more successful than fizzle-plus (its most recently introduce flavour) because it will be more distinguishable. This assumption is fraught with gaps. How does being more distinguishable affect whether something is successful or not? Usually success is gauged by financial results, and is determined by uptake in the market, increase in sales, and a developed preference for the good over other goods. It is unclear how distinguishability factors into a product's success. Some may argue that easily distinguishable products are noticed by consumers are more likely to be tried. However, being tried does not guarantee the development of a preference. Take the example of Duracell batteries, with their copper tops they are easily distinguishable, however do people buy Duracell because they have copper tops? No, customers who buy Duracell do so because Duracell has a proven track record of quality products. It is their reputation and quality which has made them successful not their marketing.
Therefore, although the author attempts to convince the Fizzle Soda company that starting a Choco-Fizz beverage would be in its best interest, he does not fully convince the reader of this due to a lack of evidence. The author could strengthen his argument by better showing how an increase in the demand for sports drinks and juices affects the demand for soda. Moreover, he should elaborate on how Choco-fizz will be more distinguishable than Fizzle plus and illustrate how that will directly affect the sales of one soda versus the other.
"There is apparently a market for new beverages, as can be seen from the fact that other companies have recently introduced new juice drinks and sports drinks. Given this market and customer surveys indicating that many drinkers of regular Fizzle soda add chocolate syrup to their soda, we can increase our company's sales by creating a new chocolate-flavored soda, 'Choco-Fizz.' Choco-Fizz will help us attract new customers and keep our customers who might otherwise switch to our competitors' chocolate beverages. And Choco-Fizz will be more successful than Fizzle Plus, our most recently introduced flavor, because it will be easier to distinguish from regular Fizzle soda."
In the argument above, the author concludes that Fizzle Soda Company should introduce a new beverage called Choco-Fizz in order to maintain its customer base and to attract new customers. The author bases this on the premises that there is a market for new drinks and that consumers prefer chocolate flavoured beverages. Although at first glance it may appear as though the author has made a convincing argument, upon deeper analysis it becomes clear that the author has based his argument on several unsubstantiated assumptions.
The author has falsely assumed that there is a market for new beverages based solely on the fact that other companies have recently introduced new juice and sports drinks. Although this may suggest that there is a demand for juice and sports drinks this does not necessarily translate into a demand for soda drinks. In fact, the increase in demand for juice and sports drinks may reflect a shift in consumers' tastes to more healthy drinks and lifestyles which may even result in a decrease in demand for new soda flavours. For example, in the mid 2000s the introduction of Booster Juice and Jamba Juice and the subsequent shift in consumers preference for more healthy beverages in the United States and Canada. This change in drink preference led to a reduction in sales of soda. In fact, in order to maintain sales, companies such as Coca-cola branched into healthier beverages such as Dasani filtered water instead of expanding their soda product lines.
Another assumption made by the author which is not fully supported is that consumers prefer chocolate flavoured sodas. This assumption is based on the premise that a survey has indicated that many drinkers of regular Fizzle soda add chocolate syrup. This survey result does little to convince the reader of the validity of the author's assumption because it is not clear how representative the survey was and for what reason the chocolate syrup is added. For example, if the chocolate syrup was added in order to add sweetness but not necessarily for the chocolate flavour then it cannot be said that drinkers prefer a chocolate flavour. Without further information regarding the survey and its results the assumption remains unsubstantiated and the reader is unconvinced.
The author claims that choco-fizz will be more successful than fizzle-plus (its most recently introduce flavour) because it will be more distinguishable. This assumption is fraught with gaps. How does being more distinguishable affect whether something is successful or not? Usually success is gauged by financial results, and is determined by uptake in the market, increase in sales, and a developed preference for the good over other goods. It is unclear how distinguishability factors into a product's success. Some may argue that easily distinguishable products are noticed by consumers are more likely to be tried. However, being tried does not guarantee the development of a preference. Take the example of Duracell batteries, with their copper tops they are easily distinguishable, however do people buy Duracell because they have copper tops? No, customers who buy Duracell do so because Duracell has a proven track record of quality products. It is their reputation and quality which has made them successful not their marketing.
Therefore, although the author attempts to convince the Fizzle Soda company that starting a Choco-Fizz beverage would be in its best interest, he does not fully convince the reader of this due to a lack of evidence. The author could strengthen his argument by better showing how an increase in the demand for sports drinks and juices affects the demand for soda. Moreover, he should elaborate on how Choco-fizz will be more distinguishable than Fizzle plus and illustrate how that will directly affect the sales of one soda versus the other.
