Joined: 04 Sep 2013
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23 Sep 2013, 12:47
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.”
The author concludes that the company should offer price reductions on all drinks produced in order to improve company's profitability and enhance its perception in the eyes of costumers. The author offers two reasons to believe that this plan will work: first, price reductions on energy drinks have bring about a sharp increase in unit sales; secondly, surveys of company's costumers have indicated that they appreciated the promotion. The argument is not too convincing for several reasons.
To begin with, the fact that an event follows another one doesn't mean that the former caused the latter. The only reason offered by the author to believe that the promotional price reductions have caused the increase in sales is that the increase followed the promotion. There might be other reasons to explain the increase. For example, maybe the promotion has been contemporary to a boom in local economy that has increased sales of a lot of companies. Moreover, it might be that the company has obtained a partnership with an international supermarket chain that has ordered an incredible number of energy drinks. Since the author fails to consider and rule out the factors stated above and other possible ones, its conclusion is seriously undermined.
In addition, the author claims that the majority of company's costumers favorably received the promotion. The reference to the surveys from which this claim follows is too general. If, for example, only ten percent of the costumers responded to the surveys, they surerly not represent the majority of company's costumers. If, instead, eighty percent of costumers responded, the surveys would be reliable.
Furthermore, even if the survey is reliable, the fact that the promotion was favorably received by the majority of company's costumers doesn't mean that the sales will increase. For example, the area where the company sells its energy drinks might fall in recession and the costumers could not have the money to buy energy drinks.
In conclusion, as it stands the argument is weak. To strengthen the argument, the author have to show that the increase in sales was caused by the promotion. To better evaluate the argument, the author should also give additional information about how the survey was conducted and should demonstrate that costumers will buy more energy drinks.