Analysis of an Argument, Please rate

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Analysis of an Argument, Please rate

by Syleena » Tue Oct 11, 2011 6:29 am
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.

YOUR RESPONSE:
Profitability is important for many companies, including beverage manifacturers. It depends on the price of the products as well as on many other factors. The preceding argument lays on some weak assumptions and questionable premises and based solely on the evidence provided, we cannot conclude that offering price reductions for all drinks will surtainly result in increase in profitability.

First, the author assumes that the price reductions are the sole reason for the increase in unit sales. This could not neccessarily be the case if, for example, alongside with the promotional prices the company increased the advertising of its energy drinks. In that case, the commercials could also be a factor in the insreased sales and therefore it cannot be determined what is the role of price reductions.

Futhermore, the argument rests on data from surveys, but no information is provided about these surveys. If, for example, they were carried through young people who usually consume only these types if drinks, it is not surprising that most of them favoured the promotion, but this exerpt of consumers cannot be representative for all of the consumers of all beverage drinks.

Another poor assumption is that the profits depend mostly on prices. This is actually wrong, since profits are a result of both income and costs. Therefore, if the company lowers the prices too much, it will face decreases instead of increase in profitability.

In the sum, the argument is a dubious one and it relies on a series of unproved or poorly explained assumptions. In order to prove the conclusion, the author need to provide more information about the carried surveys and to show the correlation between energy drinks and other beverage drinks.


Unfortunately,I didn't have enough time to write up my last argument and give an example.
Still, please rate the essay as it is :)
Source: — GMAT Essays (AWA) |

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by throughmba » Sat Oct 15, 2011 7:07 am
Even without the last paragraph, your writing and reasoning is wonderful.

Keep it up.
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