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.My Answer:The argument, without sufficient evidence, states that reducing the cost for all drinks produced by the company will increase the overall profitability of the firm and also enhance its perception in the eyes of the consumers, as a similar strategy has worked before with their energy drinks.
Firstly, the argument assumes that the market of energy drinks is similar to that of other drinks produced by them. Reducing the price of energy drinks might have worked in the company's favor as a lot of consumers, who wanted to buy their energy drinks, were previously unable to afford them. The promotional prices may have increased the affordability of the product while having a significant number of interested consumers, hence boosting sales.
Further, the argument assumes that cutting down on prices is the only guaranteed way to increase profitability and public perception of the company, without considering other factors like the taste and accessibility of their products. For example, the other drinks might be cheaper than their energy drinks, but do not have as many sales due to its taste. In such a case, improving the taste of other drinks might increase their sales, in turn boosting profits and public image of the brand. The argument might be strengthened by providing further details on more factors such as taste.
Finally, the argument does not provide any details on the accessibility of the company's products (drinks). To illustrate this, let's assume that their drinks are already affordable by the consumers and profitable for the firm. But what if these drinks are not as widely available as the energy drink? Or what if the other drinks aren't sold in regions where they might reach the intended consumers? Moreover, along with details about their accessibility, the argument should provide more information about the target audience of these drinks. The energy drinks might be accessible near places like gymnasiums, and athletic clubs, where such drinks are generally popular among their members, and hence their increased sales. Thus, providing appropriate details about the accessibility and the intended target audience of these drinks may improve the argument.
In conclusion, the argument is flawed due to several reasons and can be made stronger by providing the above-mentioned key details.