Our promotional price reductions on energy drinks have been highly suc

Question

Any comment would be appreciated. Thank you in advance!

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:
Based on the argument provided by the beverage manufacturer, taking the same price reduction strategy that has been used on the energy drinks promotion on all other drinks produced by the manufacturer will improve the firm's profitability. However, the argument is not convincing and based on a couple of the assumptions that have not been tested by the beverage company.

First of all, the price reduction will inevitably decrease the profit per unit assuming that the cost per unit does not change. In order to leads to greater profit, the company would have to make sure the increase in unit sales is considerable enough to offset the loss on the per unit profit. The argument does not provide any specific figures that we can use to analyze the overall impact on the profit of the energy drink.

Moreover, the argument use the result of a customer survey as another evidence to point out the success of the price reduction strategy on the energy drink. However, we are not provided with the information regarding the size/demographics of the participant in the survey.A sample size of only a few people may not be very convincing; a survey group of one train stop in the downtown at a particular time may not be representative of the entire customer group of the energy drink.

In addition to the above two points, a key flaw in the argument is that it assumes the success of the price reduction strategy on one type of the beverage can be emulated by all the beverage products sold by the manufacturer. In reality, different beverages have different key target customer groups; Thus, they may respond very differently to the same strategy. For example, the customer group of the bottle sold by the company may be less price-sensitive compared to the customers of the energy drink, because water is more of a necessity of energy drink, and the price of the water is probably already low compared to the energy drink. Therefore, reducing the price may not bring in a big increase on the unit sales to improve the profit.

In conclusion, the argument in the corporate memorandum of a beverage manufacturer has some key flaws and is not very convincing. Applying a uniform strategy to various products cross the company's production line involves a great level of risk. More market research and consumer surveys have to be conducted to ensure the success of the strategy.

Renzo92 · Answer

Conclusion should be finished with just the 1st sentence. Rest of it feels kinda extra. Nevertheless, your argument was concise and easy to follow.

tkorzhan1995 · Answer

The argument states that similar price reduction should be offered on all drinks produced by the firm based on increased sales as a result of promotional price reductions on energy drinks. Stated in this way, the argument omits key facts based on which it can be evaluated. The conclusion of the argument relies on the assumption for which there is no clear evidence. Hence, the argument is unconvincing and open to debate. 
First of all, it is claimed that similar price reduction as for energy drinks should be implemented for all products to increase sales. 
It is a weak and unsporting claim since price reduction for energy reduction for energy drinks may not produce the same effect for all other drinks. Price sensitivity for all other drinks may be different from price sensitivity for energy drinks. For example, while customers may not be sensitive to increase or decrease in price for milk or water, they may be sensitive to price increase for canned juices. Therefore, price reduction for milk may not lead to an increase in sales because customers may be indifferent for fluctuations in price for essential products. 
The argument could have been strengthened if it is communicated what all products consist of. If all products include essential items, such as milk, water, price reduction may not lead to expected increase in sales.

Secondly, the argument assumes that the same strategy should be used to achieve the intended outcome, in this case increase in sales. 
It is a weak and unsupported claim since all drinks can be placed into different categories based on their characteristics, level of demand, price sensitivity, availability of products in the market, etc. To illustrate, several producers may supply canned juices. As a result, the price of canned juices may be lower due to an availability of the products in the market. Customers may have an option to buy juice from different brands. Therefore, companies may not have a flexibility to increase or decrease significantly price for juices to maintain a profitability for this product. 
The argument could be strengthened if it conveyed supporting information whether strategy for price reduction for energy drinks may produce the same effect for other drinks. For example, survey can be conducted to determine preferences of consumers for other drinks. 
Without answering these questions, one is left with the impression that the argument is a wishful thinking rather than substantive evidence. 
To conclude, for the above listed reasons, the argument is flawed, unconvincing and open to debate. Ultimately, the argument could be strengthened if it communicates what all products consist of, and whether the same strategy as for energy drinks will produce the same effect for all drinks. 
To assess merits of certain situation, it is essential to have a knowledge of all contributing factors. Without this information, the argument remains unconvincing, flawed and open to debate.

Sajjad1994 · Answer

AWA Score: 5.5 out of 6

I have used a GMAT AWA auto-grader to evaluate your essay.

Coherence and connectivity: 5/5 
This rating corresponds to the flow of ideas and expressions from one paragraph to another. The effective use of connectives and coherence of assertive language in arguing for/against the argument is analyzed. This is deemed as one of the most important parameters.

Paragraph structure and formation: 3.5/5   
The structure and division of the attempt into appropriate paragraphs are evaluated. To score well on this parameter, it is important to organize the attempt into paragraphs. Preferable to follow the convention of leaving a line blank at the end of each paragraph, to make the software aware of the structure of the essay.

Vocabulary and word expression: 4/5 
This parameter rates the submitted essay on the range of relevant vocabulary possessed by the candidate basis the word and expression usage. There are no extra- points for bombastic word usage. Simple is the best form of suave!

PS: Ruthlessly copying and pasting and not making others know from where the paragraph ends and another para starts is very disappointing.

Good Luck

mariachiarafico · Answer

Could anyone give me a score? Thank you

The argument claims that the price’s reduction adopted on the beverage of the company have turned out to be successful. In order to reinforce this claim, the company refers to surveys which have proven that the promotion was favorably received by the majority of its consumers. Therefore, the company assumes it should offer similar promotions to improve its profitability and enhance its perceptions in the eyes of consumers. However, the conclusion of the argument relies on assumptions for which there is no clear evidence. Firstly, the argument readily assumes that the dramatic increase in its product’s sales has happened thanks to the promotion. This statement is a stretch because there is no evident data that leads to think this. The company, before assuming this, should have taken into consideration the fact that an increase in unit sales isn’t necessarily correlated to the promotions applied. Other factors could be the cause of the high degree of purchases such as ads being particularly attractive or the product being sponsored by an influencer. Secondly, the argument claims that similar prices' reductions may lead to a rise in the profitability of the company. Reducing prices doesn’t always turns out as the best way to obtain more revenues. In order to do so the company should necessarily give a look at its business budget. This way they can find out whether there is enough liquidity to cover the price reductions or not. Since the company doesn’t know if the amount of product acquired by the consumers will increase with other price reductions, the company has to assure itself from liquidity loss. Furthermore, the author goes on by assessing that sale will increase the company’s palatability in the eyes of its clients. If the argument had provided the evidence that this could happen, then the argument would have been a lot more convincing. However, the argument makes a weak statement. It doesn’t take into consideration that prices reduction, at the same time, could be seen as a minor capacity of the enterprise to sell its products and consequently as a way of coping with this issue. In conclusion, the argument is flawed for the above-mentioned reasons and is therefore unconvincing. It could be considerably strengthened if the company had done proper surveys and had stated to have given a look at its budget and therefore being able to handle promotional prices on its products. Without these information, the argument remains unsubstantiated and open to debate.

Sajjad1994 · Answer

AWA Score: 5.5 out of 6

Coherence and connectivity: 5/5  
This rating corresponds to the flow of ideas and expressions from one paragraph to another. The effective use of connectives and coherence of assertive language in arguing for/against the argument is analyzed. This is deemed as one of the most important parameters.

Paragraph structure and formation: 4/5  
The structure and division of the attempt into appropriate paragraphs are evaluated. To score well on this parameter, it is important to organize the attempt into paragraphs. Preferable to follow the convention of leaving a line blank at the end of each paragraph, to make the software aware of the structure of the essay.

Vocabulary and word expression: 4.5/5  
This parameter rates the submitted essay on the range of relevant vocabulary possessed by the candidate basis the word and expression usage. There are no extra- points for bombastic word usage. Simple is the best form of suave!

Good Luck

Our promotional price reductions on energy drinks have been highly suc

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