Events & Promotions
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01 Jun 2014, 21:43
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I did this timed in 30 minutes. GMAT write gave it a 5. With the breakdown as follows;
Total Score 5
Analyzes the issue 5
Supports ideas 5
Organizes a coherent idea 5
Language control 6
"The Excelsior Company plans to introduce its own brand of coffee. Since coffee is an expensive food item, and since there are already many established brands of coffee, the best way to gain customers for the Excelsior brand is to do what Superior, the leading coffee company, did when it introduced the newest brand in its line of coffees: conduct a temporary sales promotion that offers free samples, price reductions, and discount coupons for the new brand."
The strategy put forward in the Excelsior Company memorandum to copy the strategy of market leader Superior is built upon a presumed success of this strategy, a misunderstanding of the factors that led to the success of that strategy, and an expectation that this success can be replicated.
The memorandum bases the strategy on an assumption that the sales promotion carried out by the Superior company directly resulted in the success of it's newest brand of coffees. The argument assumes that the newest brand has actually been a success but only puts forward the evidence that the Superior company is the leading Coffee company in the market. With a range of coffee brands in the Superior product offering, it is possible that the newest brand of coffee has not been a success at all. The lack of evidence isolating the new brand as a success undermines the entire argument as the sales promotions effectiveness is measured solely by this success. Furthermore, even if we accept that the new coffee brand has been a success, there causal link between the sales promotion and the success of the new brand is undermined by the stated success of the Superior Company as a whole. It is possible that the existing reputation of the Superior company contributed to the success of their new brand, and the sales promotion was not the only contributing factor.
Past success is no guarantee of future success, and the memorandum fails to take this into consideration. Notwithstanding the points discussed already, if we accept that the Superior sales promotion was the sole contributor to the success of their newest coffee brand, there is still no guarantee that the Excelsior Company will see the same results. The market for coffee is not static, and occurances within the market have a permanent change on that market as a whole. Superiors sales promotion is one of those occurances, and it has most likely has a lasting change on the market. Consumers in this market will have adjusted and to the sales promotion carried out by the Superior Company and become resistant to future promotions. Duplicating this strategy will only show dimishing returns to the Excelsior company as it's repetition diminishes it's efficacy. Indeed, the Excelsior company is not operating in the same market that the Superior company was, and cannot expect to achieve the same results with a duplicate strategy.
Overall, this is a poorly devised strategy for the Excelsior company. If evidence was provided that the market for coffee was growing, and other factors show that a duplicated strategy would work, then the argument for it's implementation would be strengthened. At the very least, it must be shown that the newest coffee from the Superior Company was indeed a success in it's own right and that the sales promotion played a large role in this success, in order for the proposed strategy to be sound.
STATS:
Words - 484
Sentences 17
Paragraphs 5
Avg. Sentence (words) 29
Total Score 5
Analyzes the issue 5
Supports ideas 5
Organizes a coherent idea 5
Language control 6
"The Excelsior Company plans to introduce its own brand of coffee. Since coffee is an expensive food item, and since there are already many established brands of coffee, the best way to gain customers for the Excelsior brand is to do what Superior, the leading coffee company, did when it introduced the newest brand in its line of coffees: conduct a temporary sales promotion that offers free samples, price reductions, and discount coupons for the new brand."
The strategy put forward in the Excelsior Company memorandum to copy the strategy of market leader Superior is built upon a presumed success of this strategy, a misunderstanding of the factors that led to the success of that strategy, and an expectation that this success can be replicated.
The memorandum bases the strategy on an assumption that the sales promotion carried out by the Superior company directly resulted in the success of it's newest brand of coffees. The argument assumes that the newest brand has actually been a success but only puts forward the evidence that the Superior company is the leading Coffee company in the market. With a range of coffee brands in the Superior product offering, it is possible that the newest brand of coffee has not been a success at all. The lack of evidence isolating the new brand as a success undermines the entire argument as the sales promotions effectiveness is measured solely by this success. Furthermore, even if we accept that the new coffee brand has been a success, there causal link between the sales promotion and the success of the new brand is undermined by the stated success of the Superior Company as a whole. It is possible that the existing reputation of the Superior company contributed to the success of their new brand, and the sales promotion was not the only contributing factor.
Past success is no guarantee of future success, and the memorandum fails to take this into consideration. Notwithstanding the points discussed already, if we accept that the Superior sales promotion was the sole contributor to the success of their newest coffee brand, there is still no guarantee that the Excelsior Company will see the same results. The market for coffee is not static, and occurances within the market have a permanent change on that market as a whole. Superiors sales promotion is one of those occurances, and it has most likely has a lasting change on the market. Consumers in this market will have adjusted and to the sales promotion carried out by the Superior Company and become resistant to future promotions. Duplicating this strategy will only show dimishing returns to the Excelsior company as it's repetition diminishes it's efficacy. Indeed, the Excelsior company is not operating in the same market that the Superior company was, and cannot expect to achieve the same results with a duplicate strategy.
Overall, this is a poorly devised strategy for the Excelsior company. If evidence was provided that the market for coffee was growing, and other factors show that a duplicated strategy would work, then the argument for it's implementation would be strengthened. At the very least, it must be shown that the newest coffee from the Superior Company was indeed a success in it's own right and that the sales promotion played a large role in this success, in order for the proposed strategy to be sound.
STATS:
Words - 484
Sentences 17
Paragraphs 5
Avg. Sentence (words) 29
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