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gmatprep09
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ESSAY QUESTION:
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.
RESPONSE:
The manufacturer claims that the unit sales of the company dramatically increased due to its promotional price reductions on energy drinks. Based on this evidence, it plans to introduce similar price reductions on all the drinks produced by the firm. Stated in this way, the argument fails to mention several important evidences based on which it can be evaluated. The argument relies on assumption for which there is no clear evidence. Hence, the manufacturer's argument is rather weak and has several flaws.
First of all, the manufacturer assumes that what holds true for the energy drink will hold true for all the drinks prodcued by the firm. In this way, the assumption is flawed beacuse the energy drink is assumed to be a representative of all the drinks produced by the firm without proper justification. For example, the energy drink in the stated premises may be popular yet high priced originally and hence the price promotions would be welcomed by the customers. However, the company's price reduction promotion may not benefit other drinks' sales if that drink is not very popular with the customers or if the competitor is already offering a similar drink at a price lower than the promotional price. The argument could have been stronger if there was a strong evidence that the energy drink represents all the drinks produced by the company and that similar market conditions hold for all the drinks produced by the company.
Secondly, the manufacturer claims that the survey of the promotion was welcomed by majority of its customers. The statement is vague in that there is no clear evidence of the sample size of the survey population, demographics of the sample size, questions asked by the survey, criteria on which the survey was successful. In addition, there is no justification that a welcome response would be generated for price promotion on all the drinks manufactured by the firm. Hence, in absence of adequate data and substantial evidence of the success of the promotion, the claim is weakened and flawed.
Further, the argument would have been strengthened if offered examples of similar cases in the past where such promotions on all its drinks were successful in increasing the overall sales of the company. There is also no mention of the fact that the overall costs will increase or remain the same by introducing such promotions. It can so happen that the costs may rise, yet the overall sales may not rise to an extent that the company's profitability has an overall prositive effect.
In summary, the argument lacks several additional evidence to support its claim. It makes vague assumptions with no proper justification and hence the conclusion has no legs to stand on. The arguemnt could have been much stonger in light of all the relevant facts and examples. Hence, the conclusion is flawed and therefore unconvincing.
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.
RESPONSE:
The manufacturer claims that the unit sales of the company dramatically increased due to its promotional price reductions on energy drinks. Based on this evidence, it plans to introduce similar price reductions on all the drinks produced by the firm. Stated in this way, the argument fails to mention several important evidences based on which it can be evaluated. The argument relies on assumption for which there is no clear evidence. Hence, the manufacturer's argument is rather weak and has several flaws.
First of all, the manufacturer assumes that what holds true for the energy drink will hold true for all the drinks prodcued by the firm. In this way, the assumption is flawed beacuse the energy drink is assumed to be a representative of all the drinks produced by the firm without proper justification. For example, the energy drink in the stated premises may be popular yet high priced originally and hence the price promotions would be welcomed by the customers. However, the company's price reduction promotion may not benefit other drinks' sales if that drink is not very popular with the customers or if the competitor is already offering a similar drink at a price lower than the promotional price. The argument could have been stronger if there was a strong evidence that the energy drink represents all the drinks produced by the company and that similar market conditions hold for all the drinks produced by the company.
Secondly, the manufacturer claims that the survey of the promotion was welcomed by majority of its customers. The statement is vague in that there is no clear evidence of the sample size of the survey population, demographics of the sample size, questions asked by the survey, criteria on which the survey was successful. In addition, there is no justification that a welcome response would be generated for price promotion on all the drinks manufactured by the firm. Hence, in absence of adequate data and substantial evidence of the success of the promotion, the claim is weakened and flawed.
Further, the argument would have been strengthened if offered examples of similar cases in the past where such promotions on all its drinks were successful in increasing the overall sales of the company. There is also no mention of the fact that the overall costs will increase or remain the same by introducing such promotions. It can so happen that the costs may rise, yet the overall sales may not rise to an extent that the company's profitability has an overall prositive effect.
In summary, the argument lacks several additional evidence to support its claim. It makes vague assumptions with no proper justification and hence the conclusion has no legs to stand on. The arguemnt could have been much stonger in light of all the relevant facts and examples. Hence, the conclusion is flawed and therefore unconvincing.