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somtsat99
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Joined: 10 Jan 2016
Last visit: 30 Jan 2021
Posts: 97
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Status:MBA Candidate Class of 2020
Location: India
Concentration: Operations, Strategy
Schools: Rotman '20 (D) Sauder '20 (D) Ivey '19 (D) Schulich Sept 18 Intake (A$) ISB '19 (D) Alberta"20 (WD)
GMAT 1: 620 Q47 V29
GMAT 2: 670 Q50 V31
GPA: 4
WE:Business Development (Consulting)
Schools: Rotman '20 (D) Sauder '20 (D) Ivey '19 (D) Schulich Sept 18 Intake (A$) ISB '19 (D) Alberta"20 (WD)
GMAT 2: 670 Q50 V31
Posts: 97
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20 Aug 2016, 05:57
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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.”
Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.
YOUR RESPONSE:
The argument stating that company`s promotional price reduction is responsible for improving company`s profitability and enhancing its perceptions in the eyes of the customer is not entirely logically persuasive. The argument presented above is flawed based on the following flawed assumptions stated in the below paragraphs.
Firstly, The arguments assumes that increase in unit sales is due to promotional price reduction. This assumption is flawed as there may be some other reasons for the increase in unit sales, for example modification of flavor or other ingredients etc. Hence the argument is flawed as it provides no other details for the increase in unit sales.
Secondly, the argument assumes the report of the survey that its promotional activities has reached majority of the customers. This assumption is flawed as the survey results not always authentic. Hence the argument is flawed since the authenticity of the survey is not known.
Thirdly, the argument assumes that price reduction is only responsible to improve the company`s profitability and its perception in the eyes of the customer. This assumption is flawed as there may be others valid reasons for profitability such as reduction in variable cost related to production etc. Hence the argument is flawed as it provides no other details related to profitability.
Finally, the argument assumes that similar price reduction will work on all drinks.This assumption is flawed as there may be different group of customers for each drink and one may not be related to the other group. Thus the assumption does not hold good. Hence the argument is flawed.
Furthermore the argument concluding that similar price reduction on all other drinks will increase company's profitability and enhance its perception in the eyes of the consumers can be strengthened if the authenticity of the survey was known and also other valid reasons such as cost of production and other details are stated clearly.
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.”
Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.
YOUR RESPONSE:
The argument stating that company`s promotional price reduction is responsible for improving company`s profitability and enhancing its perceptions in the eyes of the customer is not entirely logically persuasive. The argument presented above is flawed based on the following flawed assumptions stated in the below paragraphs.
Firstly, The arguments assumes that increase in unit sales is due to promotional price reduction. This assumption is flawed as there may be some other reasons for the increase in unit sales, for example modification of flavor or other ingredients etc. Hence the argument is flawed as it provides no other details for the increase in unit sales.
Secondly, the argument assumes the report of the survey that its promotional activities has reached majority of the customers. This assumption is flawed as the survey results not always authentic. Hence the argument is flawed since the authenticity of the survey is not known.
Thirdly, the argument assumes that price reduction is only responsible to improve the company`s profitability and its perception in the eyes of the customer. This assumption is flawed as there may be others valid reasons for profitability such as reduction in variable cost related to production etc. Hence the argument is flawed as it provides no other details related to profitability.
Finally, the argument assumes that similar price reduction will work on all drinks.This assumption is flawed as there may be different group of customers for each drink and one may not be related to the other group. Thus the assumption does not hold good. Hence the argument is flawed.
Furthermore the argument concluding that similar price reduction on all other drinks will increase company's profitability and enhance its perception in the eyes of the consumers can be strengthened if the authenticity of the survey was known and also other valid reasons such as cost of production and other details are stated clearly.
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