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# Events & Promotions

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Intern
Joined: 30 Sep 2012
Posts: 28

Kudos [?]: 9 [0], given: 30

GMAT 1: 710 Q50 V35

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15 Jan 2013, 18:41

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 argument claims that since promotional price reductions on energy drinks have been successful and the surveys indicate that this promotion has been appreciated by the customers, the company should consider similar price reductions on all energy drinks. Stated in this way the argument manipulates facts and conveys a distorted view of the situation. The conclusion of the argument is based on assumptions for which there's no clear evidence. Hence the argument is weak and unconvincing.

First, the argument makes a causal statement that the 'dramatic increase' in unit sales is a consequence of promotional price reductions. This argument is a stretch and not substantiated in any way. Increase in unit sales might be the consequence of other factors such as festive season, winter vacations etc. Clearly there's no clear evidence that substantiates the author's point. This argument could have been much clearer if the author explicitly gave some concrete evidence that could reduce the likelihood of other factors mentioned above.

Second, the argument claims that the surveys of consumers indicate that this promotion was favorably received. This is again a very weak and unsupported claim as the argument fails to authenticate those who did the survey. To illustrate, consider the situation in which the survey was conducted only among the middle aged. While most of the sales is contributed by youth, the surveys fails to account them properly. If the argument had provided evidence that could authenticate the mode of conduct as well those who conducted the survey, then the argument would have been a lot more convincing.

Finally, the author clearly states that similar price reductions should be offered on all drinks, without providing any supporting statistics. This will influence the revenues heavily and in fact may cause a huge loss to the firm. Is there any statistical data that substantiates the author's point ? No.

In conclusion the argument is flawed for above mentioned reasons and hence unconvincing. In order to assess the merits/demerits of a situation it's essential to have full knowledge of the contributing factors. Without these factors, the argument remains unsubstantiated and open to debates.

Kudos [?]: 9 [0], given: 30

Manager
Joined: 12 Jan 2013
Posts: 57

Kudos [?]: 73 [0], given: 13

Location: United States (NY)
GMAT 1: 780 Q51 V47
GPA: 3.89

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15 Jan 2013, 23:12
I am giving this paper a 2.5. The language/structure is not that terrible, the content is. The main problem of this paper is that it has very little substance.

2.5. This paper does not identify or analyze most of the important features of the argument. Almost no analysis of the argument is present.

The paper is making the following points:
1. Increase in sales may be a consequence of other factors. The observation is made, but no analysis is present.
2. The survey may have been unrepresentative. This contradicts the information in the original argument: "this promotion was favorably received by the [b]majority[.b] of our customers." There is an attempt of a logical analysis: " To illustrate, consider the situation in which the survey was conducted only among the middle aged. While most of the sales is contributed by youth, the surveys fails to account them properly. " In fact, even if the argument included complete data about this survey with phone numbers and addresses, this still wouldn't make it more persuasive.

This point could be improved by questioning the accuracy of the surveys. Perhaps, the team that did the surveys did not do a very good job, or they just faked all the numbers completely. However, this is still a tangential issue. The real problem here is, even if we trust the surveys completely and believe that they are 100% representative, the result of these surveys is still of little use for use. What is it supposed to mean that "this promotion was favorably received by the majority of our customers"? This is almost a joke. After all, which customer would not favorably receive a discounted price?
3. Offering further discounts may cause a huge loss to the firm. Valid point, but no analysis is present.

The paper fails to identify and analyze most of the important features of the argument:
1.A dramatic increase in unit sales does not necessarily constitute success. The beverage manufacturer may not even benefit directly from an increase in unit sales as the distributors may receive all the additional profits, if any.
2. There may be other reasons for an increase in sales, as the paper pointed out. However, it is implausible to assume that the author of the memorandum is so incompetent as to ignore the effects of a major holiday season on the unit sales. The paper could have made suggestions as to what information is needed to evaluate the argument. For example, it would be useful to know the time frame (how long was the promotion?) and how dramatic was the increase in unit sales (how many percents?) The paper could have asked such questions; this would have made the analysis stronger.
3. The statement "this promotion was favorably received by the majority of our customers" is highly ambiguous. What does "favorably received" mean? Does it mean that the customers do not object that a discount was offered and generally approve of the lower prices? It certainly does not have to mean "improved perception in the eyes of the customers".
4. There may be essential differences between energy drinks and other drinks produced by the firm. Just because the promotion worked for energy drinks does not mean that it will have a similar effect for other kinds of drinks. For example, some of the drinks may be branded as expensive products for a healthy lifestyle and offering them at bargain prices may actually hurt the sales. Also, competitors may change their strategy if the company in question starts promotions on all of their products.
5. The connection between the profitability of the company and increased unit sales is unclear. Just because the promotion was very successful does not mean that it was also profitable for the company. If the company is actually losing money on promotions, then it is unclear how further promotions will lead to profitability. The paper only identified a part of this issue, namely, that offering too many promotions may not be a viable option.
6. "...enhance its perception..." is highly ambiguous. If brand quality is the goal, then offering deals is not necessarily a good idea. Imagine Apple Inc. offering promotions on all of their products. Would it enhance the perception of the company? Probably not. Everyone will just assume that they are in big trouble, and they may end up with falling sales at bargain prices, not to mention the price of the stock.

2.5. Almost does not develop ideas, reasons poorly, is somewhat disorganized and illogical

Quote:
Stated in this way the argument manipulates facts and conveys a distorted view of the situation.

There is no reason to assume that the argument "manipulates facts and conveys a distorted view of the situation".

Quote:
First, the argument makes a causal statement that the 'dramatic increase' in unit sales is a consequence of promotional price reductions. This argument is a stretch and not substantiated in any way.

Illogical: A dramatic increase in unit sales is in itself evidence. It is too strong to say that the connection between the price reductions and the increased sales is "not substantiated in any way". Also, the argument does not make this causal statement explicitly; instead, the argument implies it.

Quote:
Second, the argument claims that the surveys of consumers indicate that this promotion was favorably received. This is again a very weak and unsupported claim as the argument fails to authenticate those who did the survey.

Illogical: it is GIVEN that the promotion was favorably received.

Quote:
Is there any statistical data that substantiates the author's point ? No.

Illogical: there may be such statistical data. The author just fails to present it.

3.0. Is limited in the logical development and the organization of ideas

The first paragraph attempts to restate the argument. Then it suddenly claims that "Stated in this way the argument manipulates facts and conveys a distorted view of the situation", as if the author of the paper was not the one who restated the argument in this way.
The second paragraph identifies one weakness in the argument where correlation may not imply causation and attempts to analyze it ("There may be other factors...") The third paragraph attempts to identify another flaw in the argument, which is not really a flaw. The fourth paragraph identifies one weakness in the conclusion of the argument. No analysis is present. The fifth paragraph just basically says that the argument is unsubstantiated hardly adding anything of value. The organization is very simple ("First", "Second", "Finally", "In conclusion"). The separate paragraphs express different ideas and are not connected to each other in any way. There is virtually no development and few ideas to organize.

2.0. Provides little, if any, relevant or reasonable support

Quote:
Increase in unit sales might be the consequence of other factors such as festive season, winter vacations etc.

This sentence provides some support for the critique. However, it is hardly reasonable to assume that the author of the memorandum is so incompetent as to overlook a major holiday season. (Unless they are all complete idiots at this beverage company. )

Quote:
To illustrate, consider the situation in which the survey was conducted only among the middle aged. While most of the sales is contributed by youth, the surveys fails to account them properly. If the argument had provided evidence that could authenticate the mode of conduct as well those who conducted the survey, then the argument would have been a lot more convincing.

This hardly provides any support for the critique. It is already given that, according to the surveys, the majority of the customers received the promotion favorably; no need to analyze the demographics. The expression "authenticate the mode of conduct" only hints that the author of the paper wanted to say that the surveys may not be trustworthy; and this observation would still provide very limited support for the critique.

No other support is provided for the points of the critique.

3.0. Does not convey meaning clearly.

Quote:
This argument could have been much clearer if the author explicitly gave some concrete evidence that could reduce the likelihood of other factors mentioned above.

For example, concrete evidence that could reduce the likelihood of winter vacations... What does it even mean?

Quote:
Finally, the author clearly states that similar price reductions should be offered on all drinks, without providing any supporting statistics. This will influence the revenues heavily

What it "this"? What will influence the revenues heavily? Also, it is not clear, what kind of "supporting statistics" should be provided with the argument.

Quote:
Without these factors, the argument remains unsubstantiated and open to debates.

"Without these factors" - what does it mean?

4.0. Generally follows the conventions of standard written English but may have some flaws

Quote:
Stated in this way the argument manipulates facts and conveys a distorted view of the situation.

"manipulates facts and conveys a distorted view" is hardly appropriate in this context. I consider it an error in usage. There are so few facts in the argument that there really is not much to manipulate.

Quote:
as the argument fails to authenticate those who did the survey

Usage error: should be "identify" instead of "authenticate".

Quote:
the surveys fails to account them properly

"to account for them". Also either "the surveys fail" or "the survey fails".

Quote:
If the argument had provided evidence that could authenticate the mode of conduct as well those who conducted the survey, then the argument would have been a lot more convincing.

"could authenticate the mode of conduct" is wordy and confusing.
Typo/idiom: "as well those" should be changed to "as well as those"
Usage: "conducted the survey" should be changed to "took the survey"

-----------

The paper, as it is, contains very little content. If we remove the restated argument, the conclusion of the argument, and all generic requests for further evidence as well as the irrelevant discussion about middle-aged vs. young customers, here is what we have left:
Quote:
First the argument says that the 'dramatic increase' in unit sales is a consequence of promotional price reductions. Increase in unit sales might be the consequence of other factors such as festive season, winter vacations etc.

Offering price reductions on all drinks will influence the revenues heavily and in fact may cause a huge loss to the firm.

The best way to improve this paper would be to first come up with more ideas about the argument and then to write those ideas down. At least 5-7 different observations. There are other essays on this forum. First, read the topic. Second, spend time writing down all ideas that you have about this topic. Take as much time as you need, even an hour. Third, read the essay and see if they came up with something else, something that you did not think about. For example, in this paper you did not even address the issue that the sports drinks may be very different from the other drinks produced by the company, and thus the same reasoning may not apply. You need to learn to generate more original or not so original ideas for each AWA, without a time limit. Then, only then, you can work on the organization of the essay, use templates, etc. Critical thinking comes first, writing comes second.
_________________

Sergey Orshanskiy, Ph.D.
I tutor in NYC: http://www.wyzant.com/Tutors/NY/New-York/7948121/#ref=1RKFOZ

Kudos [?]: 73 [0], given: 13

Intern
Joined: 30 Sep 2012
Posts: 28

Kudos [?]: 9 [0], given: 30

GMAT 1: 710 Q50 V35

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16 Jan 2013, 01:54
Thanks a lot. Will work hard on it.

Kudos [?]: 9 [0], given: 30

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