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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 companys profitability and enhance its perception in the eyes of consumers, similar price reductions should be offered on all drinks produced by our firm.
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In the argument above the author concludes that the company's profitability and popularity will increase if price reductions are offered on all the drinks produced by the firm. In order to support the claim the author cites that promotional price reductions on energy drink led to increase in the sales. But the argument is flawed in that the evidence provided does not support the conclusion.
First of all the, the author readily assumes that the increase in unit sales is caused by the price reductions. But it is not clear whether the increase in sales led to profits also. Although consumers might have received the pricing favorably, but what about the profit margin. If the company is not earning enough on the sales of this product, then the reduction in pricing is not doing any good to the company. In brief, the first claim is not convincing.
Secondly, the author asserts that similar price reductions should be offered on all the drinks. This is again an unsupported claim because the argument fails to demonstrate any correlation between the markets of different types of drinks. No statistical data is presented to assure that the strategy would work for other drinks the same way it did for energy drinks. To strengthen its claim, the author should provide addition information like what are the markets trends, which drinks are already popular and whether price of the drinks affects the consumer perception. Will Maruti reduce the price of all the other cars, because low pricing of Nano was well received by the consumers ?
Because the argument leaves out many key gaps, it is not sound or persuasive. If the above mentioned points are included, then the argument would be more thorough and compelling. Without strong evidences and supporting data, one gets an impression that the claim is merely a wishful thinking. As a result the argument has no legs to stand on.![]()
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 companys profitability and enhance its perception in the eyes of consumers, similar price reductions should be offered on all drinks produced by our firm.
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In the argument above the author concludes that the company's profitability and popularity will increase if price reductions are offered on all the drinks produced by the firm. In order to support the claim the author cites that promotional price reductions on energy drink led to increase in the sales. But the argument is flawed in that the evidence provided does not support the conclusion.
First of all the, the author readily assumes that the increase in unit sales is caused by the price reductions. But it is not clear whether the increase in sales led to profits also. Although consumers might have received the pricing favorably, but what about the profit margin. If the company is not earning enough on the sales of this product, then the reduction in pricing is not doing any good to the company. In brief, the first claim is not convincing.
Secondly, the author asserts that similar price reductions should be offered on all the drinks. This is again an unsupported claim because the argument fails to demonstrate any correlation between the markets of different types of drinks. No statistical data is presented to assure that the strategy would work for other drinks the same way it did for energy drinks. To strengthen its claim, the author should provide addition information like what are the markets trends, which drinks are already popular and whether price of the drinks affects the consumer perception. Will Maruti reduce the price of all the other cars, because low pricing of Nano was well received by the consumers ?
Because the argument leaves out many key gaps, it is not sound or persuasive. If the above mentioned points are included, then the argument would be more thorough and compelling. Without strong evidences and supporting data, one gets an impression that the claim is merely a wishful thinking. As a result the argument has no legs to stand on.