The argument claims that six months ago the company started manufactur
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03 Feb 2021, 04:37
The argument claims that six months ago the company started manufacturing a deluxe air filter, since then the sales of their economy filter and the company profits have decreased significantly. states that since the economy filter needs to be replaced every month and the deluxe filter needs to be replaced every two months. On the basis of these premises the argument states that the company should stop the sales of the deluxe air filter and focus all their efforts on advertising and selling the economy air filter. The argument is based on an assumption for which there is no clear evidence and is therefore unconvincing and has many flaws.
Firstly, the argument readily assumes that the decrease in profits is the fault of the deluxe air filter being sold in the market, however the argument does not take into consideration that there could be several reasons for a decrease in profits, for example, since the product is only six months old there must have been heavy manufacturing costs and advertising costs incurred in the past six months and yet the company has managed to make a profit, which is a good sign for the company and could mean that the company will see an increase in profits in the long term if they simply stick to their original strategy.
Secondly, the argument states that the price of the deluxe air filter is 50% more that the price of the economy air filter, it also states that the economy air filter needs to be replaced twice as often as the deluxe air filter, the customer would definitely prefer to have a longer lasting air filter and if the company suddenly stops manufacturing the deluxe air filter, it may potentially lose it’s customer forever. There is also no information given about the amount of money already spent on advertising the new product and cost of setting up manufacturing, closing down the division would mean a forever loss of that money spent, without a guarantee of ever making back that money.
Finally, the argument could have been much clearer if it mentioned two very important facts, firstly to asses profits we need to know the profit margins on both the products, the cost of manufacturing both products could be almost the same therefore the deluxe air filter maybe making almost twice as much profit as the economy filter which is good for the company, secondly, the argument mentions the sales of economy air filters have gone down, this maybe in part because there could have been a staggering amount of growth in the sales of the deluxe air filter, which again is a good thing for the company.
Without considering the above-mentioned information it is impossible to jump to a conclusion that to increase company profitability the company should stop the sales of the deluxe air filter, in fact following this advice would make the company go into extra turmoil and the company may face loses next year. The following argument is therefore unsubstantiated and open to debate.