-
KapilKapoor
- Junior | Next Rank: 30 Posts
- Posts: 22
- Joined: Sat Aug 25, 2012 11:50 pm
- Thanked: 2 times
The following appeared in a corporate memorandum of a beverage manufacturer:
"Our promotional price reductions on energy drinks have been highly successful, as we have seen a dramatic increase in unit sales. Further, surveys of our consumers indicate that this promotion was favorably received by the majority of our customers. Therefore, to improve our company's profitability and enhance its perception in the eyes of consumers, similar price reductions should be offered on all drinks produced by our firm."
Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.
Reply:
In the preceding argument the author claims that the improvement of company profit and credibility in the eye of the consumers can be enhanced by following the process of price reduction, as done in case of energy drinks. Though the argument may well have some merits, it is fatally flawed by a number of errors in its uses of wrong logic, unsubstantiated evidences and fallacious assumptions.
The most conspicuously, the author makes a grave mistake in assuming that dramatic increase in unit sales is due to only price reduction. There could be some other reasons i.e. overall market sale of energy drink is increased, energy drinks of other companies are known in a recent survey to be harmful to the body etc. Hence without sufficient evidences it will be premature to assume that the price reduction has caused the improvement in the sales of the company product.
Secondly, the results of the surveys are referring the participation of already connected customers of the company. Even if the promotion scheme is favorably received by the customers, it doesn't warrant the improved sale of all the products. There is a possibility that the other products are already less appreciated in the market and even price reduction may also not able to improve the profit or sale.
Finally, it is premature to assume that the increase in sale (at low rate) will increase in profit. Moreover the new scheme is appreciated by the regular customer, so to increase the sale the company is required to attract other customers also.
In sum the argument is not very convincing. If the author wishes to strengthen the argument, he should provide the data to confirm that sale of energy drink was increased due to reduced cost only and provide the results of analytical study done showing the effect of price reduction on the customers.
word count = 308
Regards,
Kapil
"Our promotional price reductions on energy drinks have been highly successful, as we have seen a dramatic increase in unit sales. Further, surveys of our consumers indicate that this promotion was favorably received by the majority of our customers. Therefore, to improve our company's profitability and enhance its perception in the eyes of consumers, similar price reductions should be offered on all drinks produced by our firm."
Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.
Reply:
In the preceding argument the author claims that the improvement of company profit and credibility in the eye of the consumers can be enhanced by following the process of price reduction, as done in case of energy drinks. Though the argument may well have some merits, it is fatally flawed by a number of errors in its uses of wrong logic, unsubstantiated evidences and fallacious assumptions.
The most conspicuously, the author makes a grave mistake in assuming that dramatic increase in unit sales is due to only price reduction. There could be some other reasons i.e. overall market sale of energy drink is increased, energy drinks of other companies are known in a recent survey to be harmful to the body etc. Hence without sufficient evidences it will be premature to assume that the price reduction has caused the improvement in the sales of the company product.
Secondly, the results of the surveys are referring the participation of already connected customers of the company. Even if the promotion scheme is favorably received by the customers, it doesn't warrant the improved sale of all the products. There is a possibility that the other products are already less appreciated in the market and even price reduction may also not able to improve the profit or sale.
Finally, it is premature to assume that the increase in sale (at low rate) will increase in profit. Moreover the new scheme is appreciated by the regular customer, so to increase the sale the company is required to attract other customers also.
In sum the argument is not very convincing. If the author wishes to strengthen the argument, he should provide the data to confirm that sale of energy drink was increased due to reduced cost only and provide the results of analytical study done showing the effect of price reduction on the customers.
word count = 308
Regards,
Kapil
