Please score this AWA. This the frist AWA i have written.

[GunrajS516]

Hi, this is the first AWA I have written and i need to know that i am on the right track.

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:

The author of this argument states that the prices on all drinks produced by the company should be reduced as the price reduction on energy drinks worked in the favor of the company, since sales increased. This conclusion made by the author rests on unsupported claims and assumptions thereby bringing into question the logical soundness of the argument. The author assumes a causal pattern in his judgement, the pattern being that reduction in price on any drinks produced by the company will automatically lead to an increase in profits and will enhance the perception in the eyes of the consumer. He also assumes the fact that all drinks manufactured by the company are relativity the same and consumers treat all drinks the same way. The author also assumes increase in sales and profitability to be the same thing.

Even a superficial inspection of the argument reveals the most basic flaw that the author has assumed the increase in sales to be directly related to increase in profits after reducing the price. This is not true as lessening the price per piece sold will also diminish the profits earned from every drink sold by the company. Even if the number of drinks sold increases the total profit earned might be less than what the company may have earned by selling the drinks at their original price. Thus the profits may not increase and would rather decrease if the company decides to reduce prices of all the drinks.

Next, the author assumes that the tastes and preferences and the reaction of consumers towards all the drinks of the company is relatively the same and they will treat each drink produced by the company the same way they treated the energy drinks when prices were reduced. It could be that the consumers actually liked the energy drink so much but it was too expensive to buy more number of these drinks thus they were waiting for this price reduction to happen on the energy drinks and then they buy it. Also, it could be that the consumers in fact prefer to have only one drink produced by the company and that is the energy drink, and not any other drink made by the company.

The author also assumes that the sales increased only because of the promotional strategies adopted by the company. This could also have been because the energy drinks were now the cheapest among all energy drinks and thus most economical to buy and thus law of demand for substitute goods kicks in here. The author thinks that the same scenario may be possible for the rest of the drinks as well but the fact is that there is no basis for comparison to draw out similarities. Also, it might not be true that the promotional strategies helped in the first place.

The author's argument that the company should offer price reductions on all drinks is not well reasoned. To strengthen the argument and make it sound logical the author needs to give the statistics of how the increase in sales also led to more profitability. Giving the cost structure and evaluating the profits per energy drink sold before and after the price reductions multiplied by the sales before and after the reduction can only help the author make his point and the reader to also get the author's point without being confused. Also, the author should show or conduct a survey for the other drinks as well as to what would happen to the sales of the other drinks manufactured by the company if they reduce their prices. The number of consumers who like the other drinks should also be compared and cross examined with the ones who drink the energy drink to show the sampling pattern that the author portrayed is actually valid. This will convince the reader as well that the argument is well reasoned and logically sound. Lastly, the author needs to show the prices of the competitor's energy drinks in comparison to theirs' to show that the sales actually increased due to promotional strategies and not because of the law of demand for substitute goods and he has to show the same facts for all the other drinks manufactured by the company to remove all the doubt clouding the judgement of the reader and preventing him to reach the same conclusion as the author has.

[StaceyKoprince]

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