"Over 75 % of households in Parksboro have Jacuzzi bathtubs. In addition, the average familiy income in Parksboro is 50 % higher than the national average, and a local store reports record-high sales of the most costly brands of hair and boy care products. With so much being spend on personal care, Parskboro will be a profitable location for a new Luxe Spa- a salon that offers premium services at prices that are above average."
When reading the argument of the regional manager of the Luxe Spa first, one might think that his argument is well-reasoned and the action suggested should be taken.
But after taking a close look one can see that there are some other factors that influence such a decision.
First, it should be considered if there are any other Spa's in Parksboro. If any deluxe SPA's already exist, it will be very tough for the new SPA to compete and attract customers, because the "old" SPA's will already have a large customer base. Resulting from this the Luxe SPA would have to spend a lot of money in advertisement and special offers.
Another weak point is that the argument does not say anything about the buyers of the costly products. It could be possible that the SPA owners, operating in Parksboro already, buy these products for their businesses and not the normal inhabitants. Therefore it would have been useful, if there was a proof of who actually buys these products.
Further, the argument states that the income in Parksboro is 50 % higher than the national average and therefore people will be more willing to spend their money on beauty products. But this can not be supported thoroughly. Just because people have a higher income, it does not mean that they will spend their money on beauty products. It might be that people spend their money on other things such as holidays, technology products, cars or eating out.
As the people in Parksboro have Jacuzzi bathtubs at home for example, they might not want to go to a SPA at all. This is also a point that weakens the idea of the regional manager. If they have all these facilities at home they do not necessarily want go to a SPA. The argument only gives information about the Jacuzzi bathtubs which does not mean that the inhabitants of Parksboro do not have swimming pools or steam tubs at home.
However to make the SPA an attractive location for the people, the regional manager should focus on normal prices and not above-the-average prices, if he considers all the aspects that might weaken his plan. If his SPA has normal prices then the manager can still attract customers and compete with other SPAs. Additionally normal prices could motivate people to use Spa's even if they have beauty facilities at home.
When reading the argument of the regional manager of the Luxe Spa first, one might think that his argument is well-reasoned and the action suggested should be taken.
But after taking a close look one can see that there are some other factors that influence such a decision.
First, it should be considered if there are any other Spa's in Parksboro. If any deluxe SPA's already exist, it will be very tough for the new SPA to compete and attract customers, because the "old" SPA's will already have a large customer base. Resulting from this the Luxe SPA would have to spend a lot of money in advertisement and special offers.
Another weak point is that the argument does not say anything about the buyers of the costly products. It could be possible that the SPA owners, operating in Parksboro already, buy these products for their businesses and not the normal inhabitants. Therefore it would have been useful, if there was a proof of who actually buys these products.
Further, the argument states that the income in Parksboro is 50 % higher than the national average and therefore people will be more willing to spend their money on beauty products. But this can not be supported thoroughly. Just because people have a higher income, it does not mean that they will spend their money on beauty products. It might be that people spend their money on other things such as holidays, technology products, cars or eating out.
As the people in Parksboro have Jacuzzi bathtubs at home for example, they might not want to go to a SPA at all. This is also a point that weakens the idea of the regional manager. If they have all these facilities at home they do not necessarily want go to a SPA. The argument only gives information about the Jacuzzi bathtubs which does not mean that the inhabitants of Parksboro do not have swimming pools or steam tubs at home.
However to make the SPA an attractive location for the people, the regional manager should focus on normal prices and not above-the-average prices, if he considers all the aspects that might weaken his plan. If his SPA has normal prices then the manager can still attract customers and compete with other SPAs. Additionally normal prices could motivate people to use Spa's even if they have beauty facilities at home.
