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by arorag » Thu Oct 30, 2008 4:30 pm
"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."



The argument claims that Excelsior Company will gain customers for its coffee brand by mimicking the market strategy of a company which is already established coffee market. Stated in this way argument fails to mention several key factors such as its current products line, market standing in terms of customer perception, economic stability. To reach the conclusion argument relies on many unwarranted assumption such as its image comapre to other establish company, success assurance by copying the market strategy of other company. The argument is rather weak, unconvincing and has several flaws.


First the argument assume that just by mimicking the market strategy of establish company it will have success of making his own brand and will make profit. But there are no mention about the cuurent standing of company in terms of its products. There are several factors that can hurt it sucess such as what if the company is a successfull coal mining company and it is panning to divert into ceffee market. People will have hard time digest this fact. For example last year when a natural juice company tried his hand in soft drink market, it couldn't make any profit but had lost in its market share from natural juice also.


Second the argument claims that by giving free sample, price reduction and discount coupons it can gain market. For this claim they are relying on data of coffee company which did it in past. There are no data on time issue, when this establish company did it. There could be a possbility that it is 25 year old. And this 25 year old data may not be applicable to today's market. By giving free sample and discount coupons may not help because it could be the case that even after this reduction its coffee cost is higher than cost of coffee from others company.



Finally argument conclusion that it can attract customers has lot of unstated assumption that needs to be prove by having proper evidence. Also market team need to do some research of cuurent market. This argument can't stand without these legs.


In summary the argument has several flaws and is very inconvincing. The arument could be strengthened if proper market reaserch is done.
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Source: — GMAT Essays (AWA) |

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