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17 Jan 2016, 07:48
Kudos
Bookmarks
Hi all, I would greatly appreciate some feedback or input on the quality of my "Analysis of an argument" below:
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.”
MY RESPONSE:
The argument presented in the memorandum is not well reasoned, as it is based on a number of assumptions and does not provide sufficient information to support the conclusion.
The first assumption made in the memorandum is that the reduction in the price of energy drinks, as a result of the promotion, was the only reason for the increased sales of these type of drinks. Additional information is not provided on whether the promotion was run in a hot summer season or during a big sporting event which in itself would have resulted in an increase in sales. Further information on the length of the promotion and whether sales were consistently higher during the period of the promotion, versus a couple of days during the promotion, could also prove useful in determining whether the promotion itself, versus other external factors led to an increase in sales.
A second assumption that the argument rests on is that an increase in sales based on lower promotional prices would lead to increased profitability. This fails to consider the complex set of variables that determine a organisation's profitability as well as external factors that can negatively influence profitability despite an increase in sales. Additional information, on whether a comprehensive price reduction across all products would be sustainable for the organisation in the long term and how the lower revenue from reduced prices will be absorbed into the balance sheet, would be required to strengthen the argument.
Finally, it is assumed that the increase in sales, due to price reductions, is an indication of an enhanced perception of a company in the eyes of its customer base. It may be the case that customers's perception of the company did not improve at all despite the fact that sales increased. The memorandum simply states that surveys show a favorable reception of the promotion and not that the company's perception was enhanced as a result of the promotion. Additional information would be required to support the conclusion that a price reduction across all products would enhance the company's perception in the eyes of its customers.
In conclusion, as stated in the preceding sections the argument and its conclusion is based on various assumptions and additional information would be required to act as support for the conclusion, before this argument can be seen as well reasoned.
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.”
MY RESPONSE:
The argument presented in the memorandum is not well reasoned, as it is based on a number of assumptions and does not provide sufficient information to support the conclusion.
The first assumption made in the memorandum is that the reduction in the price of energy drinks, as a result of the promotion, was the only reason for the increased sales of these type of drinks. Additional information is not provided on whether the promotion was run in a hot summer season or during a big sporting event which in itself would have resulted in an increase in sales. Further information on the length of the promotion and whether sales were consistently higher during the period of the promotion, versus a couple of days during the promotion, could also prove useful in determining whether the promotion itself, versus other external factors led to an increase in sales.
A second assumption that the argument rests on is that an increase in sales based on lower promotional prices would lead to increased profitability. This fails to consider the complex set of variables that determine a organisation's profitability as well as external factors that can negatively influence profitability despite an increase in sales. Additional information, on whether a comprehensive price reduction across all products would be sustainable for the organisation in the long term and how the lower revenue from reduced prices will be absorbed into the balance sheet, would be required to strengthen the argument.
Finally, it is assumed that the increase in sales, due to price reductions, is an indication of an enhanced perception of a company in the eyes of its customer base. It may be the case that customers's perception of the company did not improve at all despite the fact that sales increased. The memorandum simply states that surveys show a favorable reception of the promotion and not that the company's perception was enhanced as a result of the promotion. Additional information would be required to support the conclusion that a price reduction across all products would enhance the company's perception in the eyes of its customers.
In conclusion, as stated in the preceding sections the argument and its conclusion is based on various assumptions and additional information would be required to act as support for the conclusion, before this argument can be seen as well reasoned.
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