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Please rate my AWA essay [#permalink]
21 Sep 2013, 15:01
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The following appeared as part of a plan proposed by an executive of the Easy Credit Company to the president:
“The Easy Credit Company would gain an advantage over competing credit card services if we were to donate a portion of the proceeds from the use of our cards to a well-known environmental organization in exchange for the use of its symbol or logo on our card. Since a recent poll shows that a large percentage of the public is concerned about environmental issues, this policy would attract new customers, increase use among existing customers, and enable us to charge interest rates that are higher than the lowest ones available.”
Discuss how well reasoned . . . etc
Consumers today have many choices about which credit card to use for their purchases and many have multiple cards that provide specific rewards based on their personal likes (i.e. sport fan merchandize, airline miles, colleges, etc.). While the argument above follows that logic, it is unilaterally flawed in its conclusion. The Easy Credit Company draws a conclusion from an argument with gaps in information and makes leaps to judgment based on flawed assumptions.
Primarily, the argument is based on the information from the recent consumer poll, which makes a connection that is not fully described. The poll found that a large percentage of the public is concerned with environmental issues. However, this does not provide a number that correlates with the number of people who are prospective clients. For example, a “large percentage” could mean 51% and if the company needs 80% of the market to have a competitive edge, this example would not hold.
Furthermore, the poll asked the public about environmental issues, not about the particular environmental organization. This concern could lead to a variety of behaviors that would not necessarily lead the public to donate to the organization. For example, the public concern may lead to using less energy in the home, driving more fuel efficient cars and being more mindful of water usage. Without knowing what types of behavior is resulting from the concern, we have no way to conclude that the concern would result in spending on one particular organization. In addition, since we have no information about how the public feels about the particular organization Easy Credit is targeting, the case may be that the organization is a controversial one that the public would not be interested in donating to, much less using a card with their imagery.
While the flaws in this argument are abundant, it may be strengthened if the information was more precise and the causation was more closely correlated. The argument that Easy Credit would have a competitive edge could be strengthened if the poll was able to tell us that a significant percentage of the prospective and existing clients of Easy Credit would spend more at higher rates if a percentage went to the particular environmental organization. This information would allow us to see a direct relationship between the concerns of the population that Easy Credit is interested in pursuing and the way in which this information would benefit Easy Credit. The argument may be further strengthened with information about Easy Credit’s competitors, such as their inability to provide this donation service to the portion of the population that the companies are targeting.
In conclusion, while Easy Credit’s argument is deeply flawed and missing important pieces of information that would allow a conclusion to be made, it could easily be strengthened with more precise data and context around the claims being made. As credit card companies become more competitive and look to offer personalized incentives for more card use, it becomes extremely important to know one’s audience. A flawed conclusion may result in poor sales and wasted effort. However with the right information, it can certainly result in a competitive edge and lifted card sales and use.