Please rate my response as well.
The following appeared in an announcement issued by the publisher of The Mercury, a weekly newspaper:
“Since a competing lower-priced newspaper, The Bugle, was started five years ago, The Mercury’s circulation has
declined by 10,000 readers. The best way to get more people to read The Mercury is to reduce its price below that of
The Bugle, at least until circulation increases to former levels. The increased circulation of The Mercury will attract
more businesses to buy advertising space in the paper.”
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MY RESPONSE
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The publisher of The Mercury assumes that the lower price of a competing newspaper is the only reason for decrease in the number of The Mercury's readers. Therefore, according to the author, reducing the price of The Mercury below The Bugle is the best way to deal with the competition and improve The Mercury's circulation. Additionally, the publisher concludes that increased circulation will help them to generate revenue by selling advertisement spaces. Publisher's claims and conclusions in the argument seem to be highly superficial because there are no facts and statistics provided to support them.
For example, publisher assumes that the reason behind the decrease in number of readers of The Mercury is only the availability of The Bugle at a lower price. But, there is no statistics provided regrading the number of The Bugle's readers in past 5 years. It is possible that, in general, people have adopted the electronic modes of news and hence, ending the subscription of newspapers. Or, there can be other weekly magazines or newspapers that have been launched in past 5 years that have contributed to the competition. Another reason for decrease in circulation can be the content in the newspaper. For instance, The Mercury might not be paying attention of the changing interests of readers and still publishing the newspapers in old style. A proper analysis on all possible competitions and reasons for decrease in circulation is required to know the actual reason of loosing the readers and take an appropriate action.
Even if the reason for decline in circulation is low price of The Bugle, lowering the price of The Mercury without taking into account, its repercussions on business overall seems to be a hasty decision. Therefore, an in-depth statistical study of effects of lowering the price is necessary to come to such a decision. Other ways to deal with this competition can be to modify the content of The Mercury by adding some columns related to people's interest like providing ratings of online products, providing feedback of restaurants, life-style related articles, volunteering opportunities, newly opened adventure sites etc. This will attract a wider variety of readers from different age groups.
Lastly, the author concludes that The Mercury would be able to makeup for its reduced price by selling advertising spaces. This conclusion lacks proper reasoning because argument does not provide current status of revenue generated by selling advertising spaces. It is possible that the newspaper already is selling all of its advertising spaces at maximum possible prices and there is no scope of selling additional spaces. Also, the conclusion does not consider the possibility of competition in lowering the prices for advertising spaces. There is a good chance that other newspapers including The Bugle may start selling their advertising spaces at lower prices than The Mercury. In that case, The Mercury's revenue will suffer a loss at two ends : low price of newspaper copy and no business to buy advertising spaces.
Hence, it is important for the publisher of The Mercury to collect statistical data from different departments that work on content creation, advertising sales and financial decisions to analyze the actual causes of reduction in circulation of newspaper and take calculated steps to improve the newspaper's popularity. Decisions mentioned in the argument without a proper analysis can leave The Mercury in a much worse condition.