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14 Feb 2016, 11:59
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Hello,
Apologies for this last minute post,
Topic:
The following appeared in a memo from the regional manager of Luxe Spa, a chain of high-end salons.
Over 75% of households in Parksboro have Jacuzzi bathtubs. In addition, the average family income in Parksboro is 50 % higher than the national average, and a local store reports record-high sales of the most costly brands of hair and body care products. With so much being spent on personal care, Parksboro will be a profitable location for new Luxe Spa - a Salon that offers premium serivces at prices that are above average.
Essay:
The author of the memo claims that opening a branch of the Luxe Spa, a chain of high end salons offering expensive premium services, in Parksboro would prove profitable. He bases this conclusion on various facts such as the presence of Jacuzzi bathtubs in more than 75% of households in Parksboro, the average family income being well above the national average as well as the purchase of expensive hair and body care products at a local store. However, the author makes certain assumptions that are not well founded and significantly undermine his hypothesis.
Firstly, the author assumes that the local store whose sales reports he was refering to was indicative of all stores in the area. This reasoning is flawed as it is possible that this store was reporting higher than normal sales because of a special sales event or other seasonal event occcuring at the time. It could be possible that other stores in Parksboro have actually experienced a decline in sales. Also, the brand of hair and beauty care products sold at the store might have been a driver for the record sales, which is not necessary to be replicated if the Luxe Spa were to open a branch in Parksboro. It would have been helpful if the author had the sales reports from other stores in the area at hand so that a general trend in purchases of beauty and health products across Parksboro could be studied.
Secondly, the author assumes that people willing to spend money on hair care and beauty products would be as willing to spend money on spa services. The services offered by the spa might be different from the functions of the products sold at the stores. The author should have shown how these products were similar in function to the services offered by the spa. Also there is no gauge of how expensive hair care products are compared to how expensive spa services are. If spa services are significantly more expensive than hair care products, the assumption that people would be willing to spend more than average for spa products is incorrect. If the author had provided evidence of the pricing of beauty products being comparable in price to spa services, his conclusion would have been strengthened.
Finally, the author believes that Jacuzzi tubs are indicative of rich households and people who are willing to spend money on Spa services. There is no mention of the cost of installing a jacuzzi and it is possible that installation of the same could be economically viable. The jacuzzis could also have been installed many years ago when the town was more financially sound than it is today. Also, if a significant proportion of households already own a jacuzzi, there will be lower chances that they would spend extra money to go to a salon offering similar services.
In conclusion, while the author makes some interesting points, he fails to follow them up with concrete evidence. The author could have strengthened his argument by providing more information about the sales figures of multiple stores as well as doing a cost comparison of the price of products sold versus the cost of services at the salon. Also by getting more information about the general population and the history of Jacuzzi bath tub installations in households as well as how they are different from the services at the spa, the author could have more satisfyingly proved that the salon would be profitable.
Apologies for this last minute post,
Topic:
The following appeared in a memo from the regional manager of Luxe Spa, a chain of high-end salons.
Over 75% of households in Parksboro have Jacuzzi bathtubs. In addition, the average family income in Parksboro is 50 % higher than the national average, and a local store reports record-high sales of the most costly brands of hair and body care products. With so much being spent on personal care, Parksboro will be a profitable location for new Luxe Spa - a Salon that offers premium serivces at prices that are above average.
Essay:
The author of the memo claims that opening a branch of the Luxe Spa, a chain of high end salons offering expensive premium services, in Parksboro would prove profitable. He bases this conclusion on various facts such as the presence of Jacuzzi bathtubs in more than 75% of households in Parksboro, the average family income being well above the national average as well as the purchase of expensive hair and body care products at a local store. However, the author makes certain assumptions that are not well founded and significantly undermine his hypothesis.
Firstly, the author assumes that the local store whose sales reports he was refering to was indicative of all stores in the area. This reasoning is flawed as it is possible that this store was reporting higher than normal sales because of a special sales event or other seasonal event occcuring at the time. It could be possible that other stores in Parksboro have actually experienced a decline in sales. Also, the brand of hair and beauty care products sold at the store might have been a driver for the record sales, which is not necessary to be replicated if the Luxe Spa were to open a branch in Parksboro. It would have been helpful if the author had the sales reports from other stores in the area at hand so that a general trend in purchases of beauty and health products across Parksboro could be studied.
Secondly, the author assumes that people willing to spend money on hair care and beauty products would be as willing to spend money on spa services. The services offered by the spa might be different from the functions of the products sold at the stores. The author should have shown how these products were similar in function to the services offered by the spa. Also there is no gauge of how expensive hair care products are compared to how expensive spa services are. If spa services are significantly more expensive than hair care products, the assumption that people would be willing to spend more than average for spa products is incorrect. If the author had provided evidence of the pricing of beauty products being comparable in price to spa services, his conclusion would have been strengthened.
Finally, the author believes that Jacuzzi tubs are indicative of rich households and people who are willing to spend money on Spa services. There is no mention of the cost of installing a jacuzzi and it is possible that installation of the same could be economically viable. The jacuzzis could also have been installed many years ago when the town was more financially sound than it is today. Also, if a significant proportion of households already own a jacuzzi, there will be lower chances that they would spend extra money to go to a salon offering similar services.
In conclusion, while the author makes some interesting points, he fails to follow them up with concrete evidence. The author could have strengthened his argument by providing more information about the sales figures of multiple stores as well as doing a cost comparison of the price of products sold versus the cost of services at the salon. Also by getting more information about the general population and the history of Jacuzzi bath tub installations in households as well as how they are different from the services at the spa, the author could have more satisfyingly proved that the salon would be profitable.
18 Feb 2016, 15:21
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It went well. Scored a 720. The AWA section was good as well. Will have to wait for the official scoring.
