AWA ESSAYS: Analyze Argument
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.
YOUR RESPONSE:
The argument states that the company should reduce the prices of all its drinks to increase the profitability and enhance the image of the company in the eyes of the consumers. This argument is based on an experiment in which when the prices of energy drinks were reduced the unit sales increased dramatically. But this argument is based on a variety of assumptions and it fails to consider several other outcomes. It projects a distorted view of reality and hence this argument is very weak and fundamentally flawed.
First, the argument fails to consider that the reduction in prices will also lead to a reduction in profits. For example if the company earns 5% profit on every unit of drink that it sells, then reducing the price of the drink without any change in the manufacturing cost of the drink will lead to reduced profits and instead of benefiting the company it will reduce the profitability of the company.
Second, the argument also fails to consider the adverse effect of price reduction on the image of the company. If the company suddenly reduces the prices of all its products then the company would lose the its brand value in the eyes of the customers. It would project the image of a dying company desperately trying to hold on to its market share.
Finally, in this argument the reduction of the price of a particular drink is being considered as the basis for the reduction of prices of all drinks. The company had conducted surveys that showed that the price reduction of a particular drink was favorably received by all the customers. But the argument fails to consider the possibility that a similar price reduction in all the drinks might not be received in the same way. The argument does not talk of any surveys that have been conducted to ascertain whether its customers will take the price reduction of all its drinks favorably.
In conclusion, the argument is fundamentally flawed because the author fails to take into account how the price reduction will affect the profitability of the company. It is also based on the assumption that since the price reduction of a particular drink was taken favorably by the customers, a similar trend will be repeated if the prices of all its products are reduced. The lack of proper understanding of the scenario on the part of the author and the inherent flaws and assumptions make this argument very weak and inconsequential.
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.
YOUR RESPONSE:
The argument states that the company should reduce the prices of all its drinks to increase the profitability and enhance the image of the company in the eyes of the consumers. This argument is based on an experiment in which when the prices of energy drinks were reduced the unit sales increased dramatically. But this argument is based on a variety of assumptions and it fails to consider several other outcomes. It projects a distorted view of reality and hence this argument is very weak and fundamentally flawed.
First, the argument fails to consider that the reduction in prices will also lead to a reduction in profits. For example if the company earns 5% profit on every unit of drink that it sells, then reducing the price of the drink without any change in the manufacturing cost of the drink will lead to reduced profits and instead of benefiting the company it will reduce the profitability of the company.
Second, the argument also fails to consider the adverse effect of price reduction on the image of the company. If the company suddenly reduces the prices of all its products then the company would lose the its brand value in the eyes of the customers. It would project the image of a dying company desperately trying to hold on to its market share.
Finally, in this argument the reduction of the price of a particular drink is being considered as the basis for the reduction of prices of all drinks. The company had conducted surveys that showed that the price reduction of a particular drink was favorably received by all the customers. But the argument fails to consider the possibility that a similar price reduction in all the drinks might not be received in the same way. The argument does not talk of any surveys that have been conducted to ascertain whether its customers will take the price reduction of all its drinks favorably.
In conclusion, the argument is fundamentally flawed because the author fails to take into account how the price reduction will affect the profitability of the company. It is also based on the assumption that since the price reduction of a particular drink was taken favorably by the customers, a similar trend will be repeated if the prices of all its products are reduced. The lack of proper understanding of the scenario on the part of the author and the inherent flaws and assumptions make this argument very weak and inconsequential.
