I recently took my MGMAT. I need someone to grade my essays. Please find below the questions and my responses:
AWA ESSAYS: Analyze Argument
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.
The beverage manufacturer has reasoned out that the price reductions strategy has worked in its favor and that it has been well received by the customers. However, the conclusion has been reached without looking at a number of other points which determine a company's profitability. The memorandum fails to reason out the basic factors which led to the conclusion that the price reduction scheme was indeed profitable for the company. Also, profitability and perception in the eye's of the customer are entirely distinct issues and need to be addressed individually.
Firstly, The memorandum doesn't specify the climatic conditions, such as temperature, in which the promotional scheme was launched. A promotional scheme during summer would do much better than a scheme launched in the winters. The temperature is one of the basic factors to be considered while evaluating a scheme like this as has been neglected in the reasoning presented by the memorandum.
Secondly, the perception of the beverage in the eye's of the people depends a lot on the prices being offered by the company. People will usually give good reviews about the same product when they get it for lesser amount of money. The survey mechanism which led to the memorandum stating that the consumer perception of the company's beverage has improved needs to be put under the scanner. At times, cheaper products are also perceived as low quality products, in the long term, but consumed because of economic factors. Since, there is no discussion regarding the survey mechanism and the long term impact of the promotion, the memorandum fails to convince me.
Thirdly, the price of undertaking the promotion has never been discussed. Sometimes, beverage companies end up spending a lot on their promotions and then end up gaining much lesser. The price of the campaign undertaken must be considered as a factor before deciding on the profitability of the campaign.
Fourthly, local festivals have a huge bearing on the beverage sales. It is however, not discussed if the promotion was undertaken in a festive season. Such factors contribute a lot to the mood of the people and also to their spending.
Overall, the above four factors combine to make a think that the arguments in the corporate memorandum are not well reasoned and need a reconsideration. Also, many basic factors like climate, festival season, price of promotion as well as long term perception of the beverage in the eyes of the people need to be considered before commenting on the success of a promotion.
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