“Since our company started manufacturing and marketing a deluxe air filter six months ago, sales of our economy filter — and company profits — have decreased significantly. The deluxe air filter sells for 50 percent more than the economy filter, but the economy filter lasts for only one month while the deluxe filter can be used for two months before it must be replaced. To increase repeat sales of our economy filter and maximize profits, we should discontinue the deluxe air filter and concentrate all our advertising efforts on the economy filter.”
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The author concludes that his company should discontinue deluxe air filter and concentrate all advertising efforts on economy filters so as to increase repeat sales and maximise profits. The line of reasoning is based on the information that since deluxe air filter lasts twice longer than economy flter before replacement, there is decrease in repeat sales and thus profits have dropped significantly. Speaker assumes that a product's long life is the main deciding factor behind the decrease in profits. The argument is unconvincing for several reasons.
Firstly, the author attributes the decrease in profit solely to the product's long life. Decrease in profit can be caused by sevral factors such as improper pricing strategy, improper marketing strategy etc., Without providing enough information regarding other factors it would be improper to arrive at the conclusion that deluxe filter's longevity is the main reason behind decrease in profits.
Secondly, there is no information in the argument regarding the current trends in the market. People might switch to new technologies which are effective, innovative and look or feel better than the old ones. Without knowing whether people's tastes have changed it would be dangerous to concentrate entire effortson only economy filters as it might raise doubts on company's survival.
Furthermore, if people find that deluxe brand is equally or more effective and lasts longer than economy filter, it will increase the brand value of the company and it will benefit more in the long-run.
In order to make the argument persuasive, author should have provided information regarding the pricing strategies, marketing strategies employed, quality comparison of both the products. A study to find the current trends in the market and the competitor's products and their performance is needed to derive at a proper conclusion.
In whole, the argument cites information about only one factor and it doesn't appear to have studied thoroughly about other factors which might have under-lied the decrease in profits. Author appears to have hastily concluded that the company should concentrate only on economy class to maximize profits.
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The author concludes that his company should discontinue deluxe air filter and concentrate all advertising efforts on economy filters so as to increase repeat sales and maximise profits. The line of reasoning is based on the information that since deluxe air filter lasts twice longer than economy flter before replacement, there is decrease in repeat sales and thus profits have dropped significantly. Speaker assumes that a product's long life is the main deciding factor behind the decrease in profits. The argument is unconvincing for several reasons.
Firstly, the author attributes the decrease in profit solely to the product's long life. Decrease in profit can be caused by sevral factors such as improper pricing strategy, improper marketing strategy etc., Without providing enough information regarding other factors it would be improper to arrive at the conclusion that deluxe filter's longevity is the main reason behind decrease in profits.
Secondly, there is no information in the argument regarding the current trends in the market. People might switch to new technologies which are effective, innovative and look or feel better than the old ones. Without knowing whether people's tastes have changed it would be dangerous to concentrate entire effortson only economy filters as it might raise doubts on company's survival.
Furthermore, if people find that deluxe brand is equally or more effective and lasts longer than economy filter, it will increase the brand value of the company and it will benefit more in the long-run.
In order to make the argument persuasive, author should have provided information regarding the pricing strategies, marketing strategies employed, quality comparison of both the products. A study to find the current trends in the market and the competitor's products and their performance is needed to derive at a proper conclusion.
In whole, the argument cites information about only one factor and it doesn't appear to have studied thoroughly about other factors which might have under-lied the decrease in profits. Author appears to have hastily concluded that the company should concentrate only on economy class to maximize profits.
