'Since a competing lower-priced newspaper, The Bugle, was started five years ago, The Mercury’s circulation has declined by 10,000 readers. The best way to get more people to read The Mercury is to reduce its price below that of The Bugle, at least until circulation increases to former levels. The increased circulation of The Mercury will attract more businesses to buy advertising space in the paper.'
Discuss how well reasoned.
The publisher of The Mercury concludes that the main reason for declining sales of The Mercury can be attributed to the starting of The Bugle five years ago and that the best solution to the problem is to lower the price of The Mercury to below that of the Bugle. However, some points need to be examined before such a conclusion can be drawn.
It seems that the publisher of The Mercury feels that there is a direct correlation between the sale of The Mercury and that of The Bugle. However, the publisher has failed to support his assessment with any factual data whatsoever. It’s not necessary that all 10,000 readers that The Mercury has lost have switched over to reading The Bugle. Some of them may be reading other papers; some of them could have even stopped reading papers all together preferring to read their news online. Until and unless there is actual factual evidence, such an assessment cannot be supported.
Secondly, the reason for the declining readership of The Mercury may not be due to The Bugle at all. There can in fact be many reasons like poor marketing strategy, poor news content, bad circulation policy, bad management policies, unappealing presentation formats etc. that can cause the fall in the number of newspapers sold. Before the publisher of The Mercury can claim that his sales have declined due to The Bugle, these reasons should be investigated in detail and if some to these reasons turn out to be the cause, fixing them may as well be a remedy for the situation.
Thirdly, one has also to consider the impact of the price cut on the newspaper. A drop in price will cause an immediate drop in the papers revenues and it may even force the publisher to lay off some of his staff. Such a mood would adversely affect the moral of the employees and should only be pursued if all other options have been thoroughly investigated and disregarded.
Lastly, an increase in circulation of The Mercury may not cause businesses to start buying advertising space in the paper. In this age, where internet penetration has drastically grown, businesses may prefer other forms of Advertising like the internet, electronic billboards, endorsements etc. Before the publisher made this assumption, he should have done a thorough market survey to understand to what extent businesses are interested in advertising in news papers.
In conclusion, I would like to add that lowering the prices may be a solution to the problem The Mercury is facing, but it may not be the best possible solution. The publisher of The Mercury should do a thorough review of his own publication first to find out if they have any problem that can be remedied before he starts blaming others. Only when his conclusions are backed by through research and irrefutable fact can they be accepted by us.